Canadian media companies stung by weak advertising
By Alastair Sharp
TORONTO (Reuters) - Sluggish advertising demand continued to hit revenues at Canadian television and radio companies in the latest quarter as economic uncertainty spurred big brands to hold off on spending, forcing broadcasters to cut costs sharply to get profit growth.
Corus Entertainment Inc (CJRb.TO: Quote), which focuses on content for children and women, had an 11 percent fall in specialty advertising revenue in its third quarter. Its shares fell sharply on Thursday after it released its results.
"Our specialty advertising revenues in the quarter were impacted by soft demand in the kids segment," Chief Executive John Cassaday said in a statement.
He attributed the company's 7 percent rise in profit to "rigorous cost controls".
Competitor Astral Media Inc ACMa.TO, which is in the process of being acquired by Canadian telecom giant BCE Inc (BCE.TO: Quote), also reported a drop in revenue, while posting a 3 percent rise in third-quarter profit. Its television advertising revenue fell 7 percent.
Astral shares were flat.
The specialty-TV channels of Astral and Corus, which have typically devoted much of their schedules to popular U.S. programming, have had this comfortable niche usurped by Netflix (NFLX.O: Quote) and other Internet offerings, which buy a more limited array of content and deliver it for a low monthly price.
Astral Chief Executive Ian Greenberg took comfort in the company's ability to notch profit growth "in spite of the challenging advertising market in which we operate". Continued...