The Quebec-based media giant Quebecor Media released its second quarter earnings report on Thursday.
The company’s results revealed a revenue of $992.5 million CAD, up $28.7 million from this time last year. Furthermore, Videotron is heavily contributing to these efforts with a seven percent jump in revenue per subscriber totalling the majority of the company’s revenue, or $780.4 million.
As of the end of the second quarter, Videotron’s mobile service had increased by 33,200 subscribers to a total of 828,900. This dropped slightly year on year compared to an increase of 40,800 in the second quarter of 2015.
Furthermore, wireless subscriptions stood at 1,571,700 alongside a household and business penetration rate of 2,825,300. This represents a decrease of 6,400 subscriber units this quarter, compared to a decrease of 4,000 during the same period of 2015 and following a 12-month increase of 32,600.
The company’s video streaming service, Club Ilico, which has been growing slowly but steadily for the last eight quarters, reached 266,300 subs at the end of June. This represents an increase of 1,100, compared to an increase of 6,000 this time last year.
Interestingly, however, Videotron’s cable television and cable telephone services were the only sectors of the company’s telecom operations to finish the quarter with with less subscribers than they had at the beginning of the second quarter after eight quarters of almost consecutive growth. Revenue for cable television decreased by $14.7 million while revenues for cable telephone decreased by $19 million.
This can likely be attributed to the declining demand for cable television and telephone services due to the rise of mobile and video streaming services such as Netflix.
“Once again, Videotron’s flagship products helped drive up its results, particularly mobile telephony, Internet access, business solutions and Club illico,” said Manon Brouillette, the president and CEO of Videotron said in a statement.
In July, 2016, Videotron launched its Giga Fibre Hybrid Internet access service for residential and business customers which provides download speeds of up to 940 Mbps. While the company benefitted from its current business solutions segment due to the acquisition of Fibrenoire Inc in January, next quarter will likely reflect further improvements in this segment due to the addition of Giga Fibre Hybrid Internet access.
While telecom services are, all in all, on the rise, it’s media services seem to have hit a snag. Quebecor’s media assets experienced a $22.4 million decrease this quarter. Respectively, this translates into a $5.5 million decrease in broadcasting revenues, a $7.2 million decrease in film production revenues, a $10.8 million decrease in newspaper revenues, and a $2.1 million decrease in magazine revenues.
As media companies across Canada are struggling, this doesn’t come as a surprise. Consecutive losses have been recorded across Postmedia, TorStar Corporation as well as other organizations.
Increases in the company’s media assets can be credited to a $800 thousand increase in music production and distribution revenues, and surprisingly, a $1.9 million increase in book distribution revenues.
“In the first half of 2016, our Corporation continued investing and pursuing its business plan, focused on lines of business with strong growth potential” and, concluded Dion i a statement.
“Quebecor remains well positioned to achieve its shareholder value‑maximization objectives.”