By Greg O’Brien
TORONTO – With 3.2 million Canadians tuning into see Meghan and Harry talk to Oprah on Global Television, more than 500,000 subscribers to Corus Entertainment’s StackTV and Nick+, and ongoing growth in advanced ad sales, CEO Doug Murphy told a conference call on Friday the narrative about the decline of TV is wrong.
Corus reported its second quarter results Friday, which showed an ongoing recovery from the pandemic in the advertising market (except for radio) and increased demand for content made by its Nelvana and Corus Studios divisions.
While overall revenues and profit declined compared to the non-Covid impacted second quarter of last year, the broadcaster is seeing sequential improvements this fiscal. Corus saw a decrease of 7% in TV ad revenues for the period ended February 28, 2021, compared to Q2 2020. But that is much better than the “declines of 31%, 25% and 14% for the three months ended May 31, 2020, August 31, 2020, and November 30, 2020, respectively,” reads the company’s press release.
Subscriber revenues were flat in both Q2 and year-to-date. For the full Corus release, please click here.
However, Corus’s work to diversify and the results being shown thus far reveal the negative narrative surrounding the television business is overheated, Murphy told analysts during the Q2 conference call.
Just look at how broadcast TV can still be destination viewing, he said, pointing to the recent broadcast of the interview of Prince Harry and Meghan Markle by Oprah Winfrey. Global had the rights to that in Canada and viewership of 3.2 million almost surpassed the gold medal game of the World Junior Hockey Championships.
Plus, that “massive audience drove massive free trials to our Stack TV product, further accelerating its growth,” Murphy said. Stack TV of course is a suite of 12 Corus channels available exclusively to Amazon Prime Video customers. The Nick+ streamer is more widely available on Prime, AppleTV, Fibe and others.
“Big is still big in television. Big is front and center when we reflect on the reach and frequency of television,” Murphy explained. Plus, “according to the latest CTAM Canada research, 73% of Canadians subscribe to a channel bundle.”
Plus, just look at the National Football League, which chose to cast its media lot mostly with traditional broadcasters in the States. If the biggest, most lucrative media property in the world still loves TV, so should investors – because advertisers and viewers still do, said the Corus CEO.
The NFL deal “is an important tell as to what some of the smartest programmers are thinking about the resiliency of the channel business. This deal effectively anchors the bundle and underscores the sustainability of the channels business in the decade ahead. Corus has a strong and resilient core channels business and we demonstrate again and again that our very attractive economics generates significant free cash flow to pay down debt and invest in new opportunities to grow our company,” he said.
Another important consideration is Canada is one of the most lucrative licencing markets in the world for American studios and broadcasters, because it is so highly concentrated where Corus, Bell Media, Rogers Media and Quebecor account for so much viewership. It’s easy for them to earn hundreds of millions from just a few deals, so despite much talk of the imminent demise of the business of renting content from American sources and broadcasting it here, Murphy said there are many more years of that when responding to a question on the timing of its content licencing renewals.
“There are things underneath the surface that aren’t being caught in the narrative of the decline of television, which we’re pursuing in order to ensure the resiliency of the channels business.” – Doug Murphy, Corus Entertainment
“As far as what renewals are up when, we do not disclose that, but what I can say is every year for the last decade, we’ve been working on various sorts of renewals extensions, or recharacterization of our output deals or content supply agreements, and we have every confidence we’ll be successful in renewing those that come up in the years ahead.”
Besides, with the growth of Nelvana and Corus Studios, the company is becoming more of a trading partner than just a buyer, he pointed out.
“There are things underneath the surface that aren’t being caught in the narrative of the decline of television, which we’re pursuing in order to ensure the resiliency of the channels business,” he said.
“We’ve changed the conversation from a one-way rental to a two-way content partnership. We started that with Nickelodeon, and we now have various conversations going on with all of our content providers for our channels business, and we’re engaging in discussions with our streaming partners about co-producing content.
“So the key is to establish ourselves as a source of revenue in the Canadian market, a lucrative market, but at the same time as a source of content for the global market in partnership with the same players. That’s the notion we talk about at Corus – becoming indispensable to our partners so there’s a lot of stickiness in the business and the commercial relationships,” Murphy continued.
“That’s a fundamental part of our confidence in terms of being able to retain content for our linear business and be able to continue to work, to pursue new revenues on the digital platforms, whilst all the time rolling our content internationally in partnership with those very same content players.”
