"Advertising and Media Sector Slump Eases"

Media sector slump eases

GRANT ROBERTSON

MEDIA REPORTER

It's winter outside, but it may be springtime in the media sector. After a year in which most media firms were frozen by declining advertising revenue, Ian Greenberg figures the industry may be starting to thaw.

The CEO of Astral Media Inc. told analysts yesterday that his company is starting to see advertising sales pick up. Though too soon to declare the slowdown over, Mr. Greenberg figures the worst is past.

"It's the tail end of the storm," he said as Astral announced a $64.6-million profit, boosted by a one-time accounting gain. "We remain optimistic that [the next six months] hopefully will show signs of a revival."

Montreal-based Astral is watched closely as a barometer of the Canadian advertising market, since it owns the largest chain of radio stations - with more than 80 AM and FM outlets across the country - along with billboards and pay-television channels.

Mr. Greenberg said Astral has started to see more interest from advertisers after a mass retrenching that went on during the past recessionary year.

"There is no question [advertisers] are at least much more interested in discussing possible promotions. We're getting much more incoming calls, they're receptive to new ideas, much more than they were six months ago," he said.

Though cautious not to declare the downturn finished, his optimism mirrors comments from analysts and rival companies, who are also hinting at slightly better times.

In a research note to clients, RBC Dominion Securities Inc. analyst Drew McReynolds suggested "a gradual recovery in advertising spending is under way" in the sector. Ad spending is expected to recover from a 9-per-cent drop in 2009 to a 3-per-cent gain this year, he said.

Telecom advertising will drive much of the rebound, with the influx of new competition for cellphones expected to force wireless companies to advertise more across Canada as they try to lure subscribers.

Other promising signs have emerged in the media sector. Despite being under protection from creditors, CanWest Global Communications Corp. said revenue at its Global Television network increased 2 per cent in the first fiscal quarter, while revenue at its specialty channels rose 6 per cent.

Winnipeg-based CanWest reported revenue of $571-million late Wednesday, down 10 per cent from the previous year, and profit was $653-million, of which $570-million came from CanWest's sale of its Australian TV network.

CanWest is now looking to sell assets, but Mr. Greenberg restated his comments from the fall that Astral would only be willing to buy some of the company's specialty TV channels, such as HGTV and Food Network, if they came up for sale, rather than pick up the Global Television network. "I think we've been quite clear, we have absolutely no interest in operating conventional television," Mr. Greenburg said.