A four-year erosion of viewership at conventional TV networks has flattened out in Canada despite increased competition from the rest of the dial, a trend industry executives are calling "the Desperate Housewives effect."
In the face of a growing number of specialty channels, which have been able to zero in on specific audiences, the emergence of blockbuster programs on the major networks appears to have helped reclaim viewers.
"The decline that many people were talking about frankly stopped and has risen a little bit," Jay Switzer, chief executive officer of CHUM Ltd., said yesterday.
"Some in the industry call that the Desperate Housewives effect," Mr. Switzer said.
Between 1999 and 2003, conventional channels dropped from 45 per cent of viewership in Canada to nearly 35 per cent, Mr. Switzer said.
However, since 2002, those numbers have risen back to just below 40 per cent as shows such as the CSI franchise and Desperate Housewives have dominated ratings.
The viewership of Canadian specialty cable channels has been rising steadily since 1999 and now makes up more than a 25 per cent share of the market. Digital channels represent less than 5 per cent.
"You're seeing a maturing in Canadian specialty tuning and a flattening of the loss in conventional [television]," Mr. Switzer said.
Alliance Atlantis Communications Inc., which distributes CSI, CSI:NY and CSI: Miami outside of the U.S., has leveraged the show's success for its specialty channels.
The program now runs in syndication higher up the dial on Alliance-owned channels such as Showcase. The company plans to continue that strategy.
While the most successful shows are drawing broad audiences, Phyllis Yaffe, chief executive officer at Alliance Atlantis, said the impact of specialty channels on the industry has been significant. Much of their growth has relied on viewers looking to tailor their watching habits.
"This vast switch in people's viewing habits is really what's happened in a very short period of time," Ms. Yaffe said. "People have been given choice on television and said 'I see it and I like it and I'm coming back to it on a regular basis.' "
Despite the rapid growth in channels in recent years with the rise of digital TV, that segment of the industry is still struggling to draw viewers on a per-network basis, a Quebec City conference on institutional investing heard yesterday.
Digital TV has about five millions subscribers in Canada and is expected to grow to seven million by 2008. However, the best-performing digital channels are drawing only up to 1.5 million of those subscriptions, Mr. Switzer said.
"So although the digital universe is growing, the actual penetration of an average channel into a home is shrinking because of choice. And that is a challenge that is facing our industry," Mr. Switzer said.
Since many of the specialty channels are bought in packages, it's tough to tell what will happen if the market opens up and allows viewers to pick and choose, he said.
"We know what the world is going to look like in six or seven years when digital is everything. [But] we don't know how we're going to get there," Mr. Switzer said.
© The Globe and Mail
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