Rogers 2009 Annual Report Download - page 36

40 ROGERS COMMUNICATIONS INC. 2009 ANNUAL REPORT
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Media’s publishing group (“Publishing”) publishes more than 70
consumer magazines and trade and professional publications and
directories in Canada.
Media’s sports entertainment group (“Sports Entertainment”)
owns the Toronto Blue Jays Major League Baseball (“MLB”) club
and Rogers Centre sports and entertainment venue.
MEDIA’S STRATEGY
Media seeks to maximize revenues, operating profit and return on
invested capital across each of its businesses. Media’s strategies to
achieve this objective include:
• Continuing to leverage its strong media brand names and
content over its multiple media platforms and in association with
the “Rogers” brand;
• Focusing on specialized content and audience development
through its broadcast, publication and sports properties, as well
its growing portfolio of specialty channel investments;
• Investing in technology and content to support audience
migration to the web, wireless and other mobile platforms; and
• Enhancing the Sports Entertainment fan experience by
continuing to invest in enhancing the Blue Jays fan
experience, including upgrades to both the player roster and
the Rogers Centre.
RECENT MEDIA INDUSTRY TRENDS
Increased Fragmentation of Radio and TV Markets
In recent years, Canadian radio and television broadcasters have
had to operate in increasingly fragmented markets. Canadian
consumers have a growing number of radio and television services
available to them, providing them with an increasing number of
different programming formats. In the radio industry, since the
introduction of its Commercial Radio Policy in 1998, the CRTC
has licenced numerous new radio stations through competitive
processes in most markets across Canada. In that time, the CRTC
has also licenced a large number of additional new FM stations
through AM to FM station conversions. In 2005, the CRTC licenced
two satellite radio providers, both of which are affiliated with U.S.
satellite operators and both of which began offering service in
Canada. In the television industry since 2000, the CRTC has licenced
a small number of new, over-the-air stations and a significant
number of new digital television services. The new services,
additional licences and the new formats combine to fragment the
market for existing radio and television operators.
Additions to Cable PP&E include continued investments in the
cable network to continue to enhance customer experience
through increased speed and performance of our Internet service
and capacity enhancements to our digital network to allow for
incremental HD and on-demand services to be added.
The decline in Cable Operations PP&E additions for 2009, compared
to 2008, resulted primarily from lower spending associated with
lower levels of subscriber additions.
Rogers Retail PP&E additions are attributable to improvements
made to certain retail locations.
MEDIA
MEDIA’S BUSINESS
Media operates our radio and television broadcasting and
speciality television businesses, our consumer and trade publishing
operations, our televised home shopping service and Rogers Sports
Entertainment. In addition to Media’s more traditional broadcast
and print media platforms, it also provides content and conducts
e-commerce over the Internet.
Media’s broadcasting group (“Broadcasting”) comprises 54 radio
stations across Canada; multicultural OMNI broadcast television
stations; the five station Citytv broadcast television network;
specialty sports television services including regional sports service
Rogers Sportsnet and Setanta Sports Canada; other specialty
services including OLN, The Biography Channel Canada and
G4TechTV Canada; and Canada’s only nationally televised shopping
service (“The Shopping Channel”). Media also holds 50% ownership
in Dome Productions, a mobile production and distribution joint
venture that is a leader in HDTV production in Canada.
Summarized Cable PP&E Additions
Years ended December 31,
(In millions of dollars) 2009 2008 %Chg
Additions to PP&E
Customer premise equipment $ 185 $ 284 (35)
Scalable infrastructure 259 279 (7)
Line extensions 40 48 (17)
Upgrades and rebuild 20 35 (43)
Support capital 138 183 (25)
Total Cable Operations 642 829 (23)
RBS 37 36 3
Rogers Retail 14 21 (33)
$ 693 $ 886 (22)
Radio 16%
Television 33%
Sports Entertainment 14%
The Shopping
Channel 18%
Publishing 19%
MEDIA REVENUE MIX
(%)