##### 



SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
 FORM 40-F o
    
    Registration statement pursuant
to Section 12 of the Securities Exchange Act of 1934
 or þ
    
    Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
 For
the Fiscal year ended:
Commission File number:
    
    August 31, 2004
001-14992
 CORUS ENTERTAINMENT INC.  Canada
(Province or other jurisdiction of
incorporation or organization)
    
    4832, 4833
(Primary standard industrial classification
code number, if applicable)
    
    Not Applicable
(I.R.S. employer identification
number, if applicable)
 BCE Place
181 Bay Street, Suite 1630
P.O. Box 767
Toronto, Ontario
M5J 2T3 Canada
(416) 642-3770 (Address and telephone number of registrants principal executive office) CT Corporation System
111 8thAvenue, 13thFloor
New York, New York 10011
(212) 894-8700 (Name, address and telephone number of agent for service in the United States) Securities registered pursuant to Section 12(b) of the Act: Title of each class
    
    Name of each exchange on which registered:Class B Non-Voting Shares
    
    New York Stock Exchange
 Securities registered or to be registered pursuant to Section 12(g) of the Act:       None
  Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:8 3/4% Senior Subordinated Notes due 2012
For annual reports, indicate by check mark the information filed with this form: þ   Annual Information Form     þ      Audited Annual Financial Statements Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report: Class A Shares
    
    1,724,929 As of August 31, 2004Class B Non-Voting Shares
    
    41,014,099 As of August 31, 2004
 Indicate by check mark whether the registrant by filing the information contained in this form is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange
Act of 1934 (the Exchange Act). If Yes is marked, indicate the file number assigned to the
registrant in connection with such rule. Yes o
    
    No þ
 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by
Section 13(d) or 15(d) of the Exchange Act during the proceeding 12 months (or for such shorter
period that the registrant has been required to file such reports); and (2) has been subject to
such filing requirements in the past 90 days. Yes þ
    
    No o




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##### 



(CORUS ENTERTAINMENT LOGO) RENEWAL ANNUAL INFORMATION FORM Fiscal year ended August 31, 2004 Corus Entertainment Inc. October 31, 2004




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##### 



RENEWAL ANNUAL INFORMATION FORM
CORUS ENTERTAINMENT INC. Table of Contents INCORPORATION OF CORUS
    
    
    3Organization and Name
    
    
    3Subsidiaries and Affiliates
    
    
    4GENERAL DEVELOPMENT OF THE BUSINESS
    
    
    5Historical Background
    
    
    5Significant Acquisitions and Divestitures
    
    
    5DESCRIPTION OF THE BUSINESS
    
    
    7Radio
    
    
    7Description of the Industry
    
    
    7Competition
    
    
    8Business Overview
    
    
    8Operating Strategy
    
    
    10Television
    
    
    11Description of the Industry
    
    
    11Competition
    
    
    13Business Overview
    
    
    13Operating Strategy
    
    
    15Content
    
    
    16Description of the Industry
    
    
    16Competition
    
    
    17Business Overview
    
    
    17Operating Strategy
    
    
    19SEASONALITY
    
    
    19FOREIGN REVENUES
    
    
    20CANADIAN COMMUNICATIONS INDUSTRY REGULATORY ENVIRONMENT
    
    
    20Canadian Radio-television and Telecommunications Commission
    
    
    20Industry Canada
    
    
    20Restrictions on Non-Canadian Ownership
    
    
    20Broadcasting Services
    
    
    21Radio Undertakings
    
    
    21Specialty and Premium Television Network Undertakings
    
    
    22Local Television Undertakings
    
    
    22Pay Audio Services
    
    
    23Cable Advertising Services
    
    
    23Canadian Content Requirement for Broadcasters
    
    
    23Film and Television Tax Credits and Grants
    
    
    23International Treaty Co-Productions
    
    
    24Competition Act Requirements
    
    
    24Investment Canada Act
    
    
    24Copyright Act Requirements
    
    
    25PRINCIPLE ACCOUNTING FEES AND SERVICES  INDEPENDENT AUDITORS
    
    
    25GENERAL INFORMATION
    
    
    26Intellectual Properties
    
    
    26Employees
    
    
    26Legal
    
    
    26Environmental
    
    
    26Controls and Procedures
    
    
    27Code of Ethics
    
    
    27DIVIDEND POLICY
    
    
    27CORPORATE GOVERNANCE PRACTICES
    
    
    28MANAGEMENTS DISCUSSION AND ANALYSIS
    
    
    28MARKET FOR SECURITIES
    
    
    28TRANSFER AGENTS
    
    
    28DIRECTORS AND OFFICERS
    
    
    29Audit Committee Financial Expert
    
    
    30ADDITIONAL INFORMATION
    
    
    31
 2




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##### 



FORWARD-LOOKING STATEMENTS This Annual Information Form contains forward-looking statements. The results or events predicted
in these statements may differ materially from actual results or events. These forward-looking
statements can generally be identified by the use of statements that include phrases such as
believe, expect, anticipate, intend, plan, likely, will or similar words or phrases.
Similarly, statements that describe Corus objectives, plans or goals are or may be forward-looking
statements. These forward-looking statements are based on Corus current expectations and its projections about
future events. However, whether actual results and developments will conform with the Companys
expectations and projections is subject to a number of risks and uncertainties, including, among
other things: its ability to attract and retain advertising revenues; audience acceptance of Corus
radio stations, specialty television networks and the television programs produced; the ability to
recoup production costs, the availability of tax credits and the existence of co-production
treaties; the ability to compete in any of the industries in which the Company does business;
conditions in the entertainment, information and communications industries and technological
developments therein; changes in laws or regulations or the interpretation or application of those
laws and regulations; the ability to protect the Companys trade-marks, copyrights and other
proprietary rights; and changes in accounting standards. These are not necessarily all of the
important factors that could cause actual results to differ materially from those expressed in any
of the forward-looking statements. Other unknown and unpredictable factors could also harm Corus
results. Consequently, there can be no assurance that the actual results or developments
anticipated by Corus will be realized or, even if substantially realized, that they will have the
expected consequences to, or effects on, the Company. Unless otherwise required by applicable
securities laws, Corus disclaims any intention or obligation to publicly update or revise any
forward-looking statements whether as a result of new information, future events or otherwise. 
 INCORPORATION OF CORUS 
 Organization and Name Corus Entertainment Inc. (Corus or the Company) is a Canadian based media and entertainment
company with interests in radio broadcasting, television broadcasting, and production and
distribution of childrens media content. The Company was originally incorporated under the Canada
Business Corporations Actas 3470652 Canada Inc. on March 3, 1998. Corus amended its articles to
change its name to Corus Entertainment Inc. on May 28, 1999 and subsequently amended its articles
on August 26, 1999 to create additional classes of shares. Corus commenced operations on September 1, 1999. On that date, pursuant to a statutory plan of
arrangement (the Arrangement), Corus was separated from Shaw Communications Inc. (Shaw) as an
independently operated, publicly traded company, and assumed ownership of Shaws radio
broadcasting, specialty television programming, digital audio services and cable advertising
services businesses, as well as certain investments held by Shaw. Corus commenced trading on the Toronto Stock Exchange (CJR.B) on September 3, 1999 and on the New
York Stock Exchange (CJR) on May 10, 2000. Corus registered office and a corporate office is located at 501, 630  3rd Avenue
S.W., Calgary, Alberta, T2P 4L4. An executive office is located at BCE Place, Bay-Wellington
Tower, Suite 1630, 181 Bay Street, P.O. Box 767, Toronto, Ontario, M5J 2T3. 3




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##### 



Subsidiaries and Affiliates The following table describes the significant operating subsidiaries and affiliates of Corus as at
August 31, 2004, their jurisdiction of incorporation or organization, the percentage of voting and
non-voting securities owned by Corus directly or indirectly and the nature of the business in which
each subsidiary or affiliate is engaged. JURISDICTION
    
    %
    
    % OWNEDINCORPORATION/
    
    OWNED
    
    NON-NAME
    
    ORGANIZATION
    
    VOTING
    
    VOTING
    
    NATURE OF BUSINESSRadioCorus Radio Company
    
    Nova Scotia
    
    
    100
    %
    
    
    100
    %
    
    Radio BroadcastingMetromedia CMR Broadcasting Inc.
    
    Canada
    
    
    100
    %
    
    
    N/A
    
    
    Radio BroadcastingCorus Premium Television Ltd.
    
    Canada
    
    
    100
    %
    
    
    100
    %
    
    Radio Broadcasting591989 B.C. Ltd.
    
    British Columbia
    
    
    100
    %
    
    
    100
    %
    
    Radio Broadcasting591991 B.C. Ltd.
    
    British Columbia
    
    
    100
    %
    
    
    100
    %
    
    Radio BroadcastingCKIK-FM Limited
    
    Alberta
    
    
    100
    %
    
    
    N/A
    
    
    Radio BroadcastingTelevisionYTV Canada Inc.
    
    Canada
    
    
    100
    %
    
    
    100
    %
    
    CRTC License Holder (YTV and Treehouse TV)YTV Productions Inc.
    
    Ontario
    
    
    100
    %
    
    
    N/A
    
    
    Television ProductionW Network Inc.
    
    Canada
    
    
    100
    %
    
    
    100
    %
    
    CRTC License Holder (W Network)Country Music Television Ltd.
    
    British Columbia
    
    
    90
    %
    
    
    68.5
    %
    
    CRTC License Holder (CMT)591987 B.C. Ltd.
    
    British Columbia
    
    
    100
    %
    
    
    100
    %
    
    CRTC License Holder (Ontario Television)Movie Central Ltd.
    
    Alberta
    
    
    100
    %
    
    
    N/A
    
    
    CRTC License Holder (Premium Television)Encore Avenue Ltd.
    
    Alberta
    
    
    100
    %
    
    
    N/A
    
    
    CRTC License Holder (Premium Television)Corus Audio and Advertising
Services Ltd.
    
    Alberta
    
    
    100
    %
    
    
    N/A
    
    
    Advertising Services (Digital ADventure)Max Trax Music Ltd.
    
    British Columbia
    
    
    100
    %
    
    
    N/A
    
    
    CRTC License Holder  Residential Pay Audio
Services (Max Trax)Telelatino Network Inc.
    
    Ontario
    
    
    50.5
    %
    
    
    N/A
    
    
    CRTC License Holder (TLN Television)TELETOON Canada Inc.
    
    Canada
    
    
    40
    %
    
    
    N/A
    
    
    CRTC License Holder (TELETOON)ContentNelvana Limited
    
    Ontario
    
    
    100
    %
    
    
    100
    %
    
    Animated Television Program ProductionNelvana Marketing Inc.
    
    Ontario
    
    
    100
    %
    
    
    N/A
    
    
    Merchandising and Consumer ProductsNelvana Enterprises Inc.
    
    Ontario
    
    
    100
    %
    
    
    N/A
    
    
    Sales and Distribution of Television ProgramsNelvana Communications Inc.
    
    United States
    
    
    100
    %
    
    
    N/A
    
    
    Sales and Development of Television ProgramsNelvana International Limited
    
    Ireland
    
    
    100
    %
    
    
    N/A
    
    
    Sales and Distribution of Television ProgramsNelvana Enterprises (U.K.) Limited
    
    United Kingdom
    
    
    100
    %
    
    
    N/A
    
    
    Sales and Distribution of Television ProgramsKids Can Press Limited
    
    Ontario
    
    
    100
    %
    
    
    N/A
    
    
    Childrens Book Publishing
    4




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##### 



GENERAL DEVELOPMENT OF THE BUSINESS Corus is a leading, integrated Canadian media and entertainment company with an established global
distribution network for the programming the Company produces. Corus has strong established brands
in each of its businesses: Radio, Television, and Content. The principal assets consist of 50
radio stations; a number of specialty television networks focused on children and adult genres;
western Canadas premium television services; Nelvana Limited (Nelvana), an international
producer and distributor of childrens programming and products; Kids Can Press, Canadas largest
publisher of childrens books; three conventional television stations; a local cable advertising
service (Digital ADventure); and Max Trax, a digital audio service. 
 Historical Background Certain of the businesses of Corus were operated by Shaw prior to September 1, 1999. On that date,
the shareholders of Shaw approved an Arrangement which had the effect of creating Corus as an
independently operated, publicly traded company. Under the Arrangement, the assets of Shaw were
separated into two distinct, publicly traded corporations: one continued under the name Shaw
Communications Inc. and the other one became Corus Entertainment Inc. Shaw continues to carry on
Shaws cable television, Internet access, telecommunications and satellite businesses. Corus now
owns and operates the media businesses which had previously been carried on by Shaw. Pursuant to the Arrangement, Class A shareholders of Shaw received one Class A participating share
(Shaw Class A Share) of Shaw and one-third of a Class A participating share of Corus (Corus
Class A Voting Share) for each Shaw Class A Share previously held by them. Class B non-voting
shareholders of Shaw received one Class B non-voting participating share of Shaw (Shaw Class B
Share) and one-third of one Class B non-voting participating share of Corus (Corus Class B
Non-Voting Share) for each Shaw Class B Share previously held by them. Pursuant to the Arrangement, 1,907,665 Corus Class A Voting Shares and 28,492,618 Corus Class B
Non-Voting Shares were issued. On September 3, 1999, the Corus Class B Non-Voting Shares were
listed and posted for trading on the Toronto Stock Exchange (CJR.B) and commenced trading at $18.90
per share. On May 10, 2000, Corus Class B Shares were listed for trading on the New York Stock
Exchange (CJR) and commenced trading at US$26.125 per share. 
 Significant Acquisitions and Divestitures Since September 1, 1999, Corus has become one of Canadas leading media and entertainment companies
and one of the largest radio broadcasters and specialty and premium television operators in Canada.
Corus radio and television divisions have expanded through a number of acquisitions. As well,
Corus expanded its business to include production and distribution of television programs,
merchandise licensing and publishing. The most significant acquisitions and divestitures in the
past three fiscal years include the following: Klutz Effective April 8, 2002, Corus completed the sale of Klutz, a publisher of childrens books in the
United States which was a subsidiary of Nelvana, to Scholastic Inc. for approximately $68 million
(US$43 million) in cash plus a three-year earn-out based on revenue. Max Trax Music Ltd. (formerly DMX Music Inc.) For accounting purposes, Corus recorded, effective March 1, 2002, the exchange of ownership
interests in digital music subscription services to residential and commercial customers in Canada
with DMX Music, Inc. The transaction resulted in Corus acquiring the remaining 20% ownership of
the existing Canadian
residential subscription business in exchange for DMX Music, Inc. gaining 100% ownership of the
Canadian commercial business. Corus acquired assets with an assigned fair value of approximately
$19 million for which cash of approximately $11 million was paid. 5




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The Locomotion Channel On May 17, 2002, Corus acquired a 50% interest in The Locomotion Channel, an action-oriented
animation cable service targeting young adults aged 18-35 available throughout Latin America, for a
maximum consideration of approximately $16 million (US$11 million in cash) less a holdback in the
event of certain economic changes that may impact revenue projections. The service is operated in
conjunction with the other 50% shareholder, Hearst Corporation. Corus VC Ltd. Effective May 31, 2002, Corus sold to Shaw all of its outstanding shares in Corus VC Ltd., which
operates the Viewers Choice pay-per-view service in western Canada, for cash consideration of $33
million. 6




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##### 



DESCRIPTION OF THE BUSINESS Corus principal business activities are conducted through three operating groups: Radio,
Television and Content, as described below. 
 RADIO Corus radio group (Corus Radio) is comprised of 50 radio stations situated primarily in eight of
the ten largest Canadian markets by population and in the densely-populated area of southern
Ontario. Corus Radio is Canadas leading radio operator in terms of revenues and audience reach. 
 Description of the Industry The Canadian radio industry has historically been fragmented, with most stations being owned
locally and oriented towards local advertisers and markets. In April 1998, the Canadian
Radio-television and Telecommunications Commission (the CRTC) adopted a new radio multiple
ownership policy. In any market where there are at least eight commercial radio stations in
English or French, a single owner can own as many as two AM and two FM stations in that language.
Since then, there has been a significant amount of consolidation of ownership within the radio
industry. According to the CRTC, as of August 31, 2003, there were 532 commercial radio stations in Canada of
which approximately 62% were FM stations and 38% were AM stations. The industry is dependent upon advertising revenues for economic performance and growth. According
to the CRTC, the industry generated over $1.19 billion in revenues in 2003. Radio stations compete
for advertising dollars with other radio stations and many other forms of media. According to
industry sources, the radio industry captures approximately 10% of an estimated $11 billion spent
on advertising in Canada, compared to the newspaper and television industries, which capture
approximately 23% and 24% of the total, respectively. According to the CRTC, in 2003, local
advertising and national advertising represented 77% and 23%, respectively of total radio
advertising revenues. Radio is an efficient, cost-effective medium for advertisers to reach specific demographic groups.
Stations are typically classified by their on-air format, such as country, adult contemporary,
oldies and news/talk. A stations format and style of presentation enables it to target certain
demographics. By capturing a specific share of a markets radio listening audience, with particular
concentration in a targeted demographic market, a station is able to market its broadcasting time
to advertisers seeking to reach that specific audience demographic. Advertisers and stations
utilize data published by audience measuring services, such as Bureau of Broadcast Measurement
(BBM), to estimate how many people within particular geographical and demographic markets listen
to specific stations. The number of advertisements that can be broadcast without jeopardizing
listening levels, and the resulting ratings, is determined primarily by the format of a particular
station and the local competitive environment. The number of advertisements that can be broadcast
is not regulated. Radio broadcasters are continuing to see the importance of new media outlets to work in tandem with
the traditional radio stations. There is a growing need to ensure that strong local websites exist
for each station to offer advertisers an opportunity to complement on-air campaigns with an
interactive element not previously possible through radio streaming alone. A successful combination
of on-air and on-line streaming will lead to increased brand awareness for the radio broadcaster
and the advertiser and should translate to a rise in ratings and advertising revenues. The industry may experience new methods of distribution in the future as applications have been
made to the CRTC by two groups that want to distribute at least 78 channels of digital radio
signals by satellite across Canada, and another group that wants to provide a similar service of 50
channels from land-based transmitters. All three applicants intend to charge a monthly
subscription fee varying from $9.95 to $12.99 per month. The CRTC will review these applications
in public hearings starting November 1, 2004. These
hearings will address important issues including levels of Canadian-content, support of Canadian
Talent Development, impact on existing radio broadcasters, etc. 7




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##### 



Competition Radio stations compete for advertising dollars with other radio stations in their respective market
areas as well as with other forms of media such as conventional television, specialty television
networks, daily, weekly, and free-distribution newspapers, outdoor billboard advertising,
magazines, other print media, direct mail marketing, and the Internet. In each market, Corus radio
stations face competition from other stations with substantial financial resources, including
stations targeting the same demographic groups. In markets near the U.S. border, such as Kingston,
Corus also competes with U.S. radio stations. On a national level, Corus competes generally with
Standard Radio, Rogers Media, CHUM Radio and Astral Media, each of which owns and operates stations
across Canada. Factors that are material to competitive position include the stations rank in its demographic,
market share of audience, authorized power, assigned frequency, audience characteristics, local
program acceptance and the number and characteristics of stations in the market area. 
 Business Overview Corus Radio is the largest radio operator in Canada in terms of advertising revenues and reach. In
Spring 2004, Corus led the industry with a market share of 29.1% in terms of reach, compared to its
closest competitors, Standard Radio and Rogers Media, which had market shares of 23.1% and 18.1%
respectively, in terms of reach, during that same period. Corus Radio reaches one in three
Canadians. In terms of audience tuning, Corus Radios share was 26% larger than its next
competitor. Corus Radio operates stations primarily in urban centres in Canada, including Montreal, Toronto,
Hamilton/Burlington, Winnipeg, Edmonton, Calgary and Vancouver, and in the densely-populated area
of southern Ontario. Based on Spring 2004 BBM targeted demographics, more than half of Corus
stations ranked #1. Corus Radio operates news/talk stations in eight out of Canadas 10 largest
markets by population (Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, London, Toronto and
Montreal). Corus leads the Toronto market through its three stations that focus on adults 18 to
49: Q107, Edge 102 and The New Mojo Radio. In Summer 2004 BBM rankings, Q107 was the #1 station
for M25-54 and the #2 station for A25-54. Edge 102 was the #1 station with A18-34. Corus
increased its market share with the success of Dave FM in Kitchener/Cambridge/Waterloo which has
become the #2 station in the market following its reformat. As well, according to Summer 2004 BBM
rankings, the news/talk stations were the most listened to AM stations in Edmonton, Vancouver and
Winnipeg, measured by audience tuning. The following table sets out particulars of Corus radio stations as at October 31, 2004: AudienceTargeted
    
    Rank within
    
    share withinLocation
    
    Call letter
    
    Frequency
    
    Format
    
    demographic(1)
    
    demographic(2)
    
    total market(3)B.C.Vancouver
    
    CKNW (CKNW 980)
    
    AM
    
    News/Talk
    
    A35+
    
    
    1
    
    
    
    17.6CFOX (The Fox)
    
    FM
    
    Active Rock
    
    M18-34
    
    
    2
    
    
    
    14.3CFMI (Rock 101)
    
    FM
    
    Classic Rock
    
    M25-54
    
    
    2
    
    
    
    14.4CHMJ (MOJO 730)
    
    AM
    
    Sports
    
    M25-49
    
    
    11
    
    
    
    1.2AlbertaCalgary
    
    CKRY (Country 105)
    
    FM
    
    Country
    
    A35-54
    
    
    2
    
    
    
    15.8CHQR (QR77)
    
    AM
    
    News/Talk
    
    A35+
    
    
    3
    
    
    
    11.3CFGQ (Q107)
    
    FM
    
    Classic Rock
    
    M25-49
    
    
    3
    
    
    
    10.8Edmonton
    
    CHED (630 CHED)
    
    AM
    
    News/Talk
    
    A25+
    
    
    1
    
    
    
    14.3CKNG (JOE)
    
    FM
    
    80s 90s
    
    A25-49
    
    
    1
    
    
    
    18.8CISN (CISN Country)
    
    FM
    
    New Country
    
    F35-54
    
    
    2
    
    
    
    16.8CHQT (Cool 880)
    
    AM
    
    Oldies
    
    A35-54
    
    
    7
    
    
    
    5.9Red Deer
    
    CIZZ (ZED 99)
    
    FM
    
    Mainstream Rock
    
    A18-44
    
    
    1
    
    
    
    41.3CKGY (KG Country)
    
    FM
    
    Country
    
    A35-54
    
    
    2
    
    
    
    22.6ManitobaWinnipeg
    
    CJOB (CJOB 680)
    
    AM
    
    News/Talk/Sports
    
    A35+
    
    
    1
    
    
    
    23.7CJKR (Power 97)
    
    FM
    
    Rock
    
    M18-34
    
    
    1
    
    
    
    31.4
 8




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##### 



Audience shareTargeted
    
    Rank within
    
    withindemographic(1)
    
    demographic(2)
    
    totalLocation
    
    Call letter
    
    Frequency
    
    Format
    
    
    
    
    
    market(3)OntarioBarrie
    
    CIQB (B101)
    
    FM
    
    Hot Adult Contemporary
    
    A25-54
    
    
    2
    
    
    
    10.5CHAY (The New CHAY)(4)
    
    FM
    
    Adult Contemporary
    
    A25-54
    
    
    3
    
    
    
    8.6Burlington
    
    CING (Country 95.3)
    
    FM
    
    Country
    
    A25-49
    
    
    3
    
    
    
    6.2*Cambridge
    
    CJDV (DAVE)(7)
    
    FM
    
    80s/90s
    
    A25-49
    
    
    2
    
    
    
    10.4Collingwood
    
    CKCB (The Peak)
    
    FM
    
    Adult Contemporary
    
    A25-54
    
    N/A(5)
    
    N/A(5)Cornwall
    
    CFLG (Variety 104.5)
    
    FM
    
    Adult Contemporary
    
    A25-49
    
    
    1
    
    
    
    31.8CJSS (Rock 101.9)(8)
    
    FM
    
    Rock
    
    M25-54
    
    
    2
    
    
    
    11.7CJUL (Jewel 1220)
    
    AM
    
    Oldies
    
    A50+
    
    
    1
    
    
    
    25.8Guelph
    
    CJOY (1460 CJOY)
    
    AM
    
    Oldies
    
    A35+
    
    
    2
    
    
    
    10.0CIMJ (Magic 106.1)
    
    FM
    
    Adult Contemporary
    
    A25-49
    
    
    1
    
    
    
    22.0Hamilton
    
    CJXY (Y 108)
    
    FM
    
    Rock Hits
    
    M25-49
    
    
    1
    
    
    
    15.6CHML (AM 900)
    
    AM
    
    News/Talk
    
    A35+
    
    
    2
    
    
    
    11.4Kingston
    
    CFMK (JOE)
    
    FM
    
    80s 90s
    
    A25-49
    
    
    3
    
    
    
    8.8CFFX (Oldies 960)
    
    AM
    
    Oldies
    
    A35+
    
    
    5
    
    
    
    4.8London
    
    CFPL (FM 96)
    
    FM
    
    Rock
    
    M18-49
    
    
    1
    
    
    
    22.6CFPL (AM 980)
    
    AM
    
    News/Talk
    
    A35+
    
    
    8
    
    
    
    4.5St. Thomas
    
    CFHK (Energy)
    
    FM
    
    CHR
    
    A18-34
    
    
    3
    
    
    
    15.7Peterborough
    
    CKWF (The Wolf)
    
    FM
    
    Rock
    
    A25-49
    
    
    1
    
    
    
    31.7CKRU (980 Kruz)
    
    AM
    
    Oldies/Sports
    
    A35+
    
    
    4
    
    
    
    12.1Toronto
    
    CFNY (102.1 The Edge)
    
    FM
    
    New Rock
    
    M18-34
    
    
    1
    
    
    
    16.6CILQ (Q107)
    
    FM
    
    Classic Rock
    
    M25-49
    
    
    1
    
    
    
    14.3CFMJ (The New Mojo Radio)
    
    AM
    
    News/Talk
    
    M25-49
    
    
    10
    
    
    
    3.7Woodstock
    
    CKDK (The Hawk)
    
    FM
    
    Classic Rock
    
    M25-49
    
    
    3
    
    
    
    12.1QuebecAmqui
    
    CFVM
    
    FM
    
    Adult Contemporary
    
    A25-54
    
    N/A(5)
    
    N/A(5)Drummondville
    
    CJDM
    
    FM
    
    Adult Light Rock(9)
    
    A18-49
    
    
    1
    
    
    
    46.6Montmagny
    
    CFEL
    
    FM
    
    Soft Rock(9)
    
    A25-54
    
    N/A(6)
    
    N/A(6)Montreal
    
    CFQR (Lite Rock Q92)
    
    FM
    
    Adult Contemporary
    
    F25-54
    
    
    1
    
    
    
    26.7CKOI
    
    FM
    
    Contemporary Hit Radio(9)
    
    A18-49
    
    
    2
    
    
    
    14.2CINW (940 News)
    
    AM
    
    News/Talk
    
    A25-54
    
    
    5
    
    
    
    2.8CHMP(10)
    
    FM
    
    News/Talk(9)
    
    A25-54
    
    
    5
    
    
    
    4.1CINF (Info 690)
    
    AM
    
    News/Talk(9)
    
    A25-54
    
    
    7
    
    
    
    1.4Rimouski
    
    CIKI
    
    FM
    
    Contemporary Hit Radio(9)
    
    A18-54
    
    
    1
    
    
    
    37.9CJOI
    
    FM
    
    Adult Light Rock(9)
    
    A35-54
    
    
    1
    
    
    
    37.7St. Jean
    
    CFZZ
    
    FM
    
    Adult Light Rock(9)
    
    A25-54
    
    N/A(6)
    
    N/A(6)St.
Jerome
    
    CIME
    
    FM
    
    Adult Contemporary(6)
    
    A25-54
    
    N/A(6)
    
    N/A(6)
   Source: Spring 2004 BBM and Fall 2003 BBM for Fall only stations.(1)
    
    Targeted demographic specifies male (M), female (F) or adult (A) and the age range.
    
    
    (6
    )
    
    Single station market.(2)
    
    Based on cumulative weekly audience in the targeted demographic.
    
    
    (7
    )
    
    CIZN was relocated to a new
frequency 107.5 in Summer 2003 and was relaunched as DAVE-FM (CJDV-FM).(3)
    
    Share of hours tuned by listeners in stations target demographic.
    
    
    (8
    )
    
    CJSS was reformatted as Rock 101.9  Classic Rock in Aug. 2003.(4)
    
    CHAY was repositioned to Adult Contemporary focused on A 25-54 in Aug. 2003.
    
    
    (9
    )
    
    French language broadcast.(5)
    
    Unmeasured market.
    
    
    (10
    )
    

CHMP-FM was relaunched as news-talk in Winter/Spring 2004.
 Corus Radio derives the majority of its revenues from advertising sales. Revenues for fiscal
2004 and 2003 were approximately $228 million and $226 million, respectively. Revenues from Corus Radio are derived mainly from two types of advertising: (a) advertising by
local advertisers who are generally local merchants and who operate in the trading area encompassed
by the stations signal; and (b) advertising by national businesses such as automotive
manufacturers, breweries, banks, fast food chains and similar operations which develop national
advertising campaigns. The extent to which Corus advertising revenues are from local or national
advertising depends on the given market, although, on average, approximately 77% of Corus Radios
revenues were derived from local advertising. In
order for FM stations to access advertising revenues in markets served by more than one commercial
radio station, the CRTC requires that each FM radio licensee broadcast at least 42 hours of local
programming each week. Each group of radio stations in a market has its own sales force, which is responsible for
acquiring and maintaining local advertising revenues. This local sales force is paid primarily on a
commission basis at a rate of 9




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approximately 13% of the revenues from the advertising obtained.
National advertising is placed by advertising agency representatives. The commissions paid to these
agencies are approximately 5%. The rates charged are determined in part by ratings, intensity of
competition in the market, and frequency and demographic characteristics. In addition to advertising revenues, Corus Radio derives a smaller portion of revenues through
non-traditional revenue sources (non-airtime). Events such as sponsorships, concerts and other
events are allowing Corus Radio to diversify revenue streams and reach more potential listeners.
Websites have proven to be extremely popular with audiences and advertisers and it is a growing
source of revenue. Corus has very loyal listeners that continue to be connected to the station for
the music, the hosts, the events and information-entertainment that is present on our websites.
With close to 500,000 people registered to the Companys stations web-clubs and permission-based
email, the stations are able to develop one-to-one relationships and connect audiences with
advertisers in areas that meet their needs. 
 Operating Strategy Corus Radio has a focused strategy for the coming fiscal year. It will continue to emphasize
growth in the listener and advertising base in the top ten markets of Canada. It will strengthen
core competencies of both sales management and programming. Corus will seek to dominate its target
demographics. The Company will leverage new media to connect audiences with advertisers. In part of its ongoing strategy of focusing on Canadas top ten markets, Corus has entered into an
agreement with Astral Radio to swap five FM stations in regional Quebec for seven AM stations and
one FM station, including the heritage AM station in Montreal (CKAC) and an FM station in Quebec
City (CFOM). Pending approval by the CRTC, this swap will allow Corus to enter into the larger
Quebec City market and allow the Company to strengthen its current position in the Montreal market. Corus Radio is committed to providing the best quality in programming for the listener. Corus
Radio stations boast key proprietary personalities that are both highly recognized in their
communities and dedicated to Corus programming standards. The Company is committed to reformatting
stations when research shows that there is a need. In fiscal 2004, Corus reformatted five of its
stations across the country in an attempt to better meet the needs of Corus listeners. Included in
this reformatting exercise was CKOO-FM in Montreal which was reformatted from a Rock format to
News-Talk-Sports CHMP-FM, Canadas first private radio News-Talk-Sports FM station. Corus Radio aims to be rated by audience measuring services, such as BBM, as number one or two in
the targeted demographic for their relevant markets, by continuing to provide attractive
programming. Corus Radio has a clustering strategy pairing AM and FM radio stations to the limits
allowed by the CRTC for the given market. Such clustering improves operating performance by
expanding demographic coverage of the market, thereby providing local and national advertisers with
one stop shopping. Clustering also provides opportunities to share costs between radio stations,
thereby improving operating margins. Corus Radio is also committed to having the best radio sales force in the industry. In 2002, Corus
launched Corus Radio Sales University, an internal training course designed to provide the sales
team with the tools to succeed. Stage one is an 80-hour on-line training session that is an
orientation to customer-focused selling. Stage two involves on-site training and customer calls
with the trainer who visits every major market cluster at least twice a year. To date, all of the
Corus radio sellers and managers in the major markets have completed both stage one and two of the
training. All new sales representatives and managers hired by Corus must participate in the
training. Corus owns a 50% stake in Canadian Broadcast Sales (CBS), in partnership with Rogers Media. CBS
is Canadas leading national sales representation firm. Corus Radio will continue to leverage new media to expand its audience and give new opportunities
to advertisers through a series of strong local websites to complement Corus radio stations.
On-line audio streaming through websites affords the broadcaster and advertiser a more personal
connection with the listener not available through traditional radio. Currently, Corus Radio has a
listener database of close to 500,000 10




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listeners and it is growing monthly. Advertisers are able to
complement their on-air campaigns with more information on their products and can offer an
interactive element through permission based e-mail available through Corus websites. 
 TELEVISION Corus television group (Corus Television) is comprised of specialty television networks, premium
television services, three conventional television stations, and other media services. 
 Description of the Industry According to the Canadian Cable Television Association, as of September 2003, the Canadian
television industry served approximately 11.9 million homes with televisions, of which 97.3% are
passed by cable. Also as of September 2003, there were approximately 7.8 million cable subscribers
and 2.2 million direct-to-home satellite subscribers. Total digital subscribers were approximately
3.8 million, up from 3.2 million a year earlier. In 2003, the four largest cable operators
controlled approximately 87% of total cable subscribers in Canada. Specialty and Premium
Television Networks
Specialty and premium television networks generated $1.9 billion of combined advertising and
subscriber revenues in 2003. Specialty and premium television networks are available to those
Canadians who subscribe to the service package of a particular broadcasting distribution
undertaking (BDU) (i.e. cable television, direct-to-home satellite and multipoint distribution
systems). Specialty television networks provide special interest, news, sports, arts and
entertainment programming, while premium television networks provide commercial-free movies, series
and special event programming. Specialty and premium television networks each obtain revenues by charging a monthly subscriber fee
to cable and direct-to-home satellite operators. Subscriber fees are the sole source of revenues
for licensed premium television services, while specialty services can also generate advertising
revenue. The CRTC regulates the maximum subscriber fee if the network is included as part of the
basic cable service of a large cable operator, but not if the network is carried on a discretionary
tier. Regardless, the amount of the subscriber fee is specified in the networks agreement with the
BDU. Digital specialty services are carried on a new discretionary tier of digital only theme
packages, as a stand-alone digital offering, or as part of individual premium services provided to
digital subscribers. Specialty and premium television networks benefit from these subscriber fees,
which are supported by the high level of cable and satellite penetration in Canada. Subscribers to
discretionary tiers pay monthly fees to their BDU that reflect an amount for the basic service,
plus an additional amount for specialty and premium television networks for which they subscribe on
discretionary tiers. Because all subscribers receive at least basic service, specialty television networks that are
carried on a basic tier typically have a much higher number of subscribers. The number of
subscribers for a cable network in a discretionary tier depends primarily upon pricing and
subscriber preference. A specialty television networks subscriber penetration will also benefit to
the extent it is packaged or tiered with other popular specialty television networks. As a
consequence, discretionary specialty television networks that are popular (or are otherwise
packaged with popular specialty television networks) can generally be priced at rates above those
for specialty television networks on basic service. Unlike premium television networks, which are prevented by CRTC regulations from obtaining
advertising revenues, specialty television networks may obtain both subscriber and national
advertising revenues. Specialty television networks appeal to advertisers seeking highly targeted
markets. The CRTC limits national advertising to 12 minutes an hour but does not regulate
advertising rates, and specialty television networks are not required to share a portion of their
advertising revenues with the cable and direct-to-home satellite operators. According to the CRTC,
in 2003 television advertising comprised approximately $2.8 billion in Canada. Specialty
television networks received a 21% share of total television advertising revenues, or approximately
$606 million, up from $508 million, or a 19% share of total television advertising revenues in
2002. Canadian specialty and premium television networks have experienced subscriber growth over the past
decade due to the advances in cable-based delivery systems and the growth of direct-to-home
satellite services. In November 2000, a number of new digital specialty television network licenses
were awarded by the CRTC for 11




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launch commencing September 2001. Of these licenses, 21 were Category
1 and 262 were Category 2. Since the initial awarding of 262 Category 2 licenses, additional
Category 2 licenses have been granted. However, as of August 2003, only 48 Category 1 and 2
digital networks are in operation. It remains unclear how many of the remaining Category 2
networks will be launched in the future. The trend in the television sector is on innovative new products and services in the digital
environment. The emphasis on instant gratification for consumers is dominating the industry. New
product offerings will fuel growth in the digital sector, reduce churn and contribute to
incremental revenue growth. Video-on-demand (VoD); Subscription video-on-demand (SVoD); High
Definition Television (HDTV); and Personal Video Recorders (PVR) all provide greater choice in
delivery to the consumer and increase the amount of digital subscriptions for the provider. A
description of these new digital products is as follows:  
    VoD provides an alternate method for the supply of video and related
content material over cable and telecommunications networks. For broadcasters it
represents a fundamental shift from a linear program service to the consumer having
complete control over the programming segment.
    SVoD is a video on demand service offered at a flat subscription price that
provides viewers with unlimited access to select programs from the libraries of featured
cable networks.
    HDTV is a high-resolution digital television service combined with Dolby
Digital surround sound. This combination creates an unparalleled combination of sound
and image. HDTV requires new production and transmission equipment at the HDTV stations,
as well as new equipment for reception by the consumer. The higher resolution picture is
the main selling point for HDTV.
    A PVR is an interactive television recording device. Like the VCR, a PVR
records and plays back television programs, but unlike the VCR, it stores the programs
in digital as opposed to analog form, allowing the user the ability to watch what they
want when they want. Conventional Television Local television stations are licensed by the CRTC and provide over-the-air television signals to
viewers within a local geographical market or on a network basis. The CRTC has licensed three
English-language television networks, two private commercial networks and one public network. The
private commercial networks are operated by CTV Television Network Inc. (CTV) and Global
Television Network (Global) with the Canadian Broadcasting Corporation (CBC) operating the
public broadcasting network. In addition to receiving conventional television signals off-air, the
majority of Canadian viewers have access, either directly or through a BDU, to the television
signals of U.S. border stations which are generally affiliated with one of the four U.S. commercial
networks (ABC, NBC, CBS and Fox) and a Public Broadcast System station. Canadian conventional
television stations generate revenue from advertising and receive no subscription revenues. The
number of commercial messages that a station may broadcast is restricted to 12 minutes an hour and
in some instances, as in the case of Corus Oshawa television station, is dependent on the
production of local programming. The success of conventional television is dependent on the
quality of programming which results in audience ratings that in turn attract advertisers to a
station or network. In the
case of stations affiliated with the CBC, the local, private affiliated station receives a fee from
the CBC to air or broadcast CBC national programming at certain designated times, in addition to
being able to generate advertising revenues. Other Media Businesses Digital audio services distribute music in a digital mode to homes served by BDUs. A digital stream
is delivered via cable or satellite to a set top box and converted to a signal that a residential
customers television or audio system can understand. A variety of music formats are available,
including channels devoted exclusively to classical, rock, jazz, country and many other music
genres. Residential digital audio services are subject to licensing requirements by the CRTC. Cable advertising services provide commercial customers with wide coverage, high-frequency
advertising at rates that are competitive with other forms of media. The business is exempt from
licensing or regulatory requirements. An access fee is paid to the cable provider. 12




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Competition Corus Televisions specialty and premium television networks compete for subscriber fees with other
specialty and premium television network operators, including Bell Globemedia, Alliance Atlantis
Communications Inc., CHUM Limited and Astral Media Inc. According to the CRTC, in 2003, the
Canadian specialty television and premium television network industries generated $1.9 billion of
combined advertising and subscriber revenues. Corus specialty services also compete directly for
advertising revenues with the operators of cable networks listed above and with broadcast networks,
including Global, CBC and CTV, and with other advertising media. Corus conventional television
stations compete principally for viewers and advertisers with other television stations that
broadcast in Central and Eastern Ontario. 
 Business Overview Corus had the following interests in specialty and premium television networks in Canada as at
October 31, 2004: NETWORK
    
    DESCRIPTION OF PROGRAMMING
    
    INTERESTYTV
    
    Children/Family
    
    
    100
    %Treehouse TV
    
    Preschool Children/Parents
    
    
    100
    %W Network Inc.
    
    Lifestyle and Entertainment geared to women
    
    
    100
    %Country Music Television (CMT)
    
    Country Music /Country Lifestyle
    
    
    80
    %Telelatino Network Inc.
    
    Canadian-Italian and Spanish
    
    
    50.5
    %The Locomotion Channel
    
    Action-Orientated Animation
- Aired in Latin America
    
    
    50
    %TELETOON Canada Inc.
    
    Children/Family/Adult Animation
    
    
    40
    %The Food Network Canada
    
    Food Related
    
    
    19.9
    %Movie Central
    
    Premium Television  Premium Movies and Series
    
    
    100
    %Encore
    
    Premium Television  Classic Movies
    
    
    100
    %Discovery Kids (Digital Service)
    
    Children/Family
    
    
    54
    %SCREAM TV (Digital Service)
    
    Horror Movies and Series
    
    
    51
    %The Documentary Channel (Digital Service)
    
    Documentaries
    
    
    53
    %
 Specialty Television Networks Corus Televisions group of specialty television networks appeal particularly to kids, teens and
women, much-coveted target groups among Canadian marketers. Corus Televisions specialty networks
have a 73% higher cumulative average minute audience (2-54 demographic) than its nearest
competitor, based on Nielsen Media Research 03/04 broadcast year surveys. Each of the analog
specialty television networks is ranked among the top three analog television networks that compete
within its genre, based on targeted demographics. YTV is a specialty television network dedicated to programming for children and youth aged two to
17. Based on the Nielsen 03/04 broadcast year survey, YTV broadcast 14 of the top 20 childrens
shows in Canada in the Kids 2-11 genre. YTV saw a 7% increase in kids 2-11 average minute audience
compared to the 02/03 broadcast year. This network reaches children beyond the television with
interactive events and initiatives including ytv.com,the top Canadian kids website. YTV is
generally carried on the basic tier. Treehouse TV is the only specialty service in Canada dedicated to preschoolers (ages two to five).
Treehouse TV operates on a 24-hour basis offering a commercial-free television environment in its
preschool programming that reflects the interests and developmental levels of young children. W Network is a specialty television service dedicated to serving the needs and interests of women.
On April 15, 2002, the service, which was previously known as WTN, was rebranded, reformatted and
relaunched as W Network. Since the relaunch, W has achieved a 53% growth in its core demographic
of women 25-54. Recent Nielsen statistics indicate that W Network has the highest average minute
audience of all Canadian specialty networks for W25-54 and is watched by over 10.4 million
Canadians in an average month. Country Music Television,or CMT,is a specialty service dedicated to exhibiting country music
videos and related programming. CMT mixes country music with country-themed movies and specials.
Corus has a 90% 13




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voting interest and an 80% equity interest in CMT.The remaining 10% voting
interest and 20% equity interest is held by Country Music Television Inc., the operator of a
similar service in the United States. CMT has become the fastest growing specialty channel over
the past three years, seeing a remarkable 88% growth in the adult 25-54 demographic, according to
recent Nielsen statistics. Telelatino, in which Corus acquired a controlling interest in November 2001, is an ethnic specialty
service that offers general interest domestic and international programming in the Italian, Spanish
and English languages. Currently, Corus offers three digital specialty television networks: The Documentary Channel,
featuring documentaries from Canada and around the world; Discovery Kids,which offers children
informative and entertaining programming with an emphasis on action, adventure and the environment;
and SCREAM TV,which offers a horror theme through a movie-rich schedule of classic and modern
thrillers, cult favorites and popular series. These services were launched in September 2001.
Corus also holds interests in the following specialty television networks:  
    A 50% interest in The Locomotion Channel (Locomotion), an action-oriented animation
premium television service. Locomotion is Corus first international venture, offering
service in over 20 countries and 4.9 million homes throughout Latin America.
    A 40% interest in TELETOON,which is a Canadian specialty service featuring a wide range
of animation programming in all forms. TELETOON is available in both an English language
version and a French language version.
    A 19.9% equity interest in The Food Network Canada,a specialty service which provides
information and entertainment programming related to food and nutrition. Revenues from Corus specialty television networks are derived primarily from subscriber fees and
advertising. In fiscal 2004, subscriber fees accounted for 41% and advertising accounted for 55%
of total revenues from the specialty television networks. Premium Television Networks Movie Central and Encore Avenue are the exclusive licensed providers of premium television services
in western Canada, featuring blockbuster movies, series and specials from diverse genres on six
distinct channels. Each channel broadcasts commercial-free 24 hours a day, seven days a week. The
Movie Central
brand consists of four thematic channels: Movie Central, Adrenaline Drive, Shadow Lane and
Heartland Road. The Encorebrand consists of two thematic channels: Encore Avenue and Comic Strip. Revenues from premium television networks have experienced significant growth over the past two
years as a result of increased direct-to-home satellite and digital cable subscribers. As at August
31, 2004, Corus Movie Central service had over 707,000 subscribers, a 7% increase in
year-over-year subscribers, representing penetration of approximately 56% of digital cable and
direct-to-home satellite subscribers in western Canada. Local Television Corus owns three local
television stations  one in each of Kingston, Peterborough and Oshawa,
Ontario  all of which are CBC affiliates. They were acquired in April 2000 as part of the Power
Broadcasting acquisition. Revenues are almost exclusively derived from advertising. In fiscal 2004, national agency directed
clients and local advertisers accounted for a combined 84% of revenues. CBC network affiliate
payments amounted to 11% of revenues, with the remaining 5% originating from a variety of sources. Other Media Services Digital ADventure primarily operates TV Listings channels, providing viewers with current and
easily accessible listings for the local cable television program lineup. Revenues for Digital
ADventure are derived through advertising. 14




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Max Trax is a residential digital audio service launched in the Spring of 1997. Max Trax is a
partner in a joint marketing agreement with CBC to offer a 40 channel service package. Max Trax is
carried by cable operators and direct-to-home satellite operators. Revenues from Max Trax are
earned through subscriber fees. 
 Operating Strategy To allow for strategic development and integration, the various television assets are internally
organized under two categories. The adult television group includes the operations of W Network,
CMT, Telelatino, The Documentary Channel, SCREAM TV,our conventional television stations, Digital
ADventure and Max Trax. Management is responsible for adult-targeted programming, developing
strategies for integrating operations where possible, as well as cross-promotion and marketing
opportunities and joint sales initiatives. The kids television group includes YTV, Treehouse TV,
TELETOON and Discovery Kids,allowing management to consider shared programming, cross-promotion
and value-added content opportunities. Corus Televisions operating strategy remains focused on four key areas: (i) increasing its
position in the kids and womens genres, (ii) leveraging our competitive position of Corus Premium
Television, (iii) building key relationships with our BDUs and (iv) maximizing operational
synergies across all of our brands. Kids and Women Corus Television continues to lead the kids entertainment marketplace in Canada through
programming on YTV, Treehouse TV, TELETOON and Discovery Kids. Corus Television intends to drive
revenue growth in the kids sector by building program ratings, building the kids market by
attracting new advertisers and building new revenue sources. Corus Television will also focus on
programming and operational synergies across its properties. The kids market and new media provide growth opportunities. Corus Television will capitalize on
the growth in the home entertainment industry by constructing and investing in the new media
platforms such as
VoD, SVoD and interactive games to create new revenue streams. Sales of interactive CD-roms,
branded DVDs, CDs and other merchandise will also fuel revenue growth in our kids area. Corus Television has achieved a leadership position in the womens genre with its W Network
targeting women aged 25-54. The viewing audience in this demographic has increased 53% since the
2001-2002 season, making W Network the #1 ranked specialty service for women. In fiscal 2004, W
Network held the highest average minute audience of all Canadian specialty networks for women
25-54. W Network intends to invest in its programming to maximize audience growth and revenue
potential. W Network is building an outstanding programming schedule anchored on movie blocks and
design shows. The Company will focus on new media opportunities and platforms to deliver the
programming that the target audience wants, in the format they want it in through the wnetwork.com
website and other merchandise offerings. Premium Television Corus Premium Television services, Movie Central and Encore Avenue, will continue to focus on
customer retention and attracting new subscribers to the service. Corus will capitalize on the
growth in the number of digital households in western Canada and the increased demand for movies.
As well, being the only premium movie channel licensee in western Canada, Movie Central has secured
output agreements with major Hollywood studios for exclusive programming, such as first windows on
blockbuster feature films and new HBO and Showtime products. Beginning with the fall programming
schedule, Movie Central will air all HBO programming at the same time as HBO in the United States,
a very attractive feature for current and potential subscribers. Corus Premium Television is also leading with innovative new digital product offerings which will
fuel digital growth, reduce churn and contribute incremental revenues. In this regard, Corus
Premium Television, in conjunction with Shaws VoD service, provides the first SVoD product in
Canada, Movie Central Express. Movie Central Express showcases programming from four major
Hollywood studios and offers up to 90 hours of unique programming each week that subscribers can
view on demand for a monthly subscription. 15




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In addition to the growth of digital products, opportunities are developing on two mainstream
platforms  broadband and mobile, that are creating new revenue opportunities for Corus Premium
Television. Although still quite nascent, Corus believes the potential is substantial and is
actively exploring and developing these opportunities with the BDUs now. Other Media Services The Canadian Broadcasting Corporation (CBC)-affiliated television stations improved operating
efficiencies by consolidating with Corus local market radio stations. Revenue growth is being
achieved through an improved program schedule, expansion of news service and joint selling of radio
and television. Each of the stations represents the only local television broadcaster in their
respective communities. Corus believes cable advertising services such as Digital ADventure are a cost-effective
advertising vehicle for national accounts and local merchants, particularly in areas where there
are no local television stations. Corus operating strategy involves optimizing existing products
and services through product quality enhancements. Digital ADventure is also investigating new
types of advertising-related businesses that are complementary to its core competencies. Digital
ADventure has streamlined operations by creating regional hubs to service advertisers. 
 CONTENT The Content group consists of the operations of Corus wholly-owned subsidiary, Nelvana, an
integrated childrens production and distribution company that develops, produces, markets and
distributes quality branded media content and related products for children worldwide. Its brand
portfolio includes internationally recognized animated characters such as Babar, Franklin,
Beyblade, Miss Spiders Sunny Patch Friends,and The Berenstain Bears. Kids Can Press, a Canadian
publisher of childrens books, is a
wholly-owned subsidiary of Nelvana. Nelvanas operations consist of the production and
distribution of film and television programs, and branded consumer products (comprised of
merchandise licensing and publishing). 
 Description of the Industry In recent years the launch of numerous segmented networks in the North American television
broadcasting industry has provided viewers with greater channel selection. There are now numerous
television networks around the world that program dedicated childrens blocks and other programming
exclusively for children. Nelvanas content is seen in more than 180 countries on over-the-air,
analog and digital platforms. However, over the past few years, the childrens television market has fundamentally changed.
Demand for production has slowed due to consolidation and vertical integration of U.S. production
studios and television networks, world economic downturn resulting in an advertising slump, and the
collapse of the German market. Despite the current environment, the long-term outlook for the worldwide animation business and the
childrens entertainment sector is favourable. Future growth in the sector is being fueled by:  
    the growth of the 3D animation market;
    the shift of audiences from traditional broadcast networks to cable networks;
    the growth of digital television services, providing a new platform for additional cable
and satellite services and thereby new programming opportunities;
    continuing international expansion by all types of programming services, including major
U.S. broadcasters and domestic childrens services;
    the growth in demand for content featuring recognizable characters on the Internet; and
    emerging platforms for content distribution (i.e. VoD, SVoD, broadband, cell phones and video games). According to industry sources, total spending on filmed entertainment, which includes feature
films, video, television shows, animation and other programming in the U.S. is expected to grow
from an estimated US$75.3 billion in 2003 to US$108.0 billion in 2008. In part due to the
proliferation of cable and satellite services, channels targeting children have increased
substantially in recent years. 16




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Merchandising has grown from the popularity of toys that are associated with movies, books and
television characters. According to industry sources, in 2003 licensed retail sales in the U.S. and
Canada were approximately US$71 billion. All of Nelvanas character brands fall into the
entertainment/character property type category, which according to industry sources, accounted for
US$13.6 billion of retail sales in the U.S. and Canada in 2003. The entertainment/character
property type category is the second largest category of licensed retail products, accounting for
19% of total sales in the U.S. and Canada in 2003. The home entertainment market is a huge market and continues to grow. In 2003, the estimated
worldwide market for home entertainment is expected to be approaching $34 billion marketwide.
There has been a purchasing shift from VHS to DVD as the advancement of DVD technology has made it
more user friendly and more affordable. 
 Competition The business of producing and distributing childrens television programs is highly competitive.
We compete with a variety of international companies, including HIT Entertainment, DIC, 4KIDS, TV
LOONLAND and several U.S. studios such as the Walt Disney Company, Warner Bros, and Nickelodeon (a
division of Viacom International Inc.). These U.S. studios are substantially larger, and have
greater financial resources. Many have their own television networks on which their in-house
productions are aired. In Canada we also compete with several producers and distributors such as
Cookie Jar Corp. and Decode Entertainment Inc. 
 Business Overview Production and Distribution Nelvana is an animation production and distribution company specializing in childrens and youth
programming for television. Nelvana distributes programming to broadcasters in over 180 countries,
including some of the worlds leading networks, such as Nickelodeon, the Disney Channel, HBO, ITV
in the United Kingdom and France 3. Nelvana has 59 television programs on the air in Canada, and 34
in the U.S. Nelvanas production facility in Toronto houses state-of-the-art 2D and 3D digital
animation technology as well as traditional animation capabilities. A new digital post-production
facility opened in June 2003, allows for finishing and packaging within the studio. Programming is
distributed internationally through five sales and distribution offices. Over the past five years, Nelvana has grown its proprietary production deliveries from 135
half-hour equivalent episodes in fiscal 1998 to a peak production level of 252 in fiscal 2002.
However, the growth was achieved with significant investment in the new programs. In 2002, in
response to a leaner marketplace, Nelvana committed to reducing cash flow requirements with the
goal of achieving operating cash flow neutrality within one year while continuing to grow its
library. This was successfully achieved. Nelvana reduced its production slate to 121 new episodes
for fiscal 2004. This amount of production maintained Nelvanas leadership position in the
industry while reducing cash flow requirements to produce the years slate. Following are some
highlights from the production and distribution business in fiscal 2004:  
    Produced six episodes of The Backyardigans, a series which premiered in
September 2004 on Nickelodeon in the U.S. and on Treehouse in Canada;
    Produced 20 additional episodes of Jacob Two Twofor YTV;
    Produced 12 episodes of Miss Spiders Sunny Patch Friendsbased on the
preschool book by David Kirk and featuring the voice of Kristin Davis;
    Established a relationship with the Academy Award winning studio, Weta
Workshop, for the production of Jane and the Dragon;
    Produced 24 episodes of Braceface, bringing the total to 65 episodes; and
    Produced a Care Bears CGI direct-to-video, Journey to Joke-A-Lotwhich is being
distributed by Lions Gate Entertainment in North America and by Universal Studios in the
rest of the world. At August 31, 2004, Nelvanas program library totaled over 2,590 half-hour equivalent episodes,
comprising 62 animated television series, 16 specials, 15 animated feature length films and 12 live
action series. Childrens 17




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animated programs generally have longer life spans than those of live
action programs because they can typically be resold continually to new generations of audiences
around the world. The U.S. is the biggest market, accounting for 25.3% of production and
distribution revenues in fiscal 2004, compared to 22.5% from the Canadian market and 52.2% from
other countries. Branded Consumer Products Nelvanas merchandising business contains some of Nelvanas most popular characters, including
Beyblade, Rescue Heroes, Babar, Little Bearand Franklin, which have achieved recognition and
popularity worldwide and have become valuable long-term merchandising brands. Nelvanas
merchandising efforts focus on marketing its most popular brands and co-ordinating with retailers
to promote its character merchandise in North America and around the world. Nelvana acquires brands
from which it produces media content and becomes either the licensor or agent, on behalf of the
owner of the property, for most product categories, including toys, plush, apparel, gifts, book
publishing and interactive products. In January 2002, Corus entered into a master toy agreement
with Hasbro for the distribution of Beyblade, a property owned by d-rights, Inc. Highlights in
fiscal 2004 include the following:  
    Nelvana announced that Fisher Price would be the international master toy partner for Miss Spiders Sunny
Patch Friends;
    Beyblademerchandise continued to sell well in fiscal 2004; and
    Nelvana signed several new licensing deals for Fairly OddParentsin Canada with products expected to hit the
shelves for Christmas 2004. Nelvanas publishing business is conducted through its subsidiary Kids Can Press, acquired in 1998.
Kids Can Press is the largest Canadian-owned English language publisher of childrens books with a
broad and growing backlist of titles. Highlights of the Kids Can Press catalogue include: 
    Franklin more than 50 million books sold worldwide. Franklin is taking Europe by
storm. New and recent product lines launched in North America include Franklin First
Readersand Franklin Workbookswhich focus on the educational market;
    The Mob the first book in the trilogy Feather and Bone: The Crow Chronicalswas
released in August 2004. This book is also being developed into an animated feature with
award winning animator Chris Landreth and will be produced by Nelvana. International book
rights have been sold in the U.K. to Bloomsbury, in Germany to Berlin Verlag, in Holland to
Gottmer and in Brazil to Rocco.
    Monkey Business the second book by Wallace Edwards, the author of the Governor
Generals Award winning book Alphabeastswas released. Revenues from branded consumer products have shifted from 39% of total Content division revenues in
fiscal 2003 to 44% in fiscal 2004. 18




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Operating Strategy The operating strategy for Nelvana is based on the diversification of revenue streams. In a
marketplace where dependence on worldwide license fees is no longer viable, Nelvana is seeking to
maximize revenue from all streams including:  
    Broadcasting;
    Merchandise licensing;
    Home entertainment;
    Interactive; and
    Music To capitalize on the dominance that Nelvana enjoys in the kids broadcast market in Canada, Nelvana
is putting a Made in Canada strategy into effect. This strategy will see Nelvana covering the
hard costs of production by maximizing the use of Canadian funding. In addition, Nelvana will
optimize brand success by aligning all of Corus resources (both broadcast and marketing) to
establish great ratings which will drive strong consumer product performance. The success in
Canada can then be used to roll the brand worldwide. Nelvana will focus on the strong near term revenue growth potential of the home entertainment
market. With the worldwide DVD business expected to double by 2008, Nelvana is in a perfect
position to exploit this market with a strong catalog of existing titles and titles in production.
As well, home entertainment products will drive significant merchandise sales in North Americas
major retailers. Many existing outlets are expanding and new markets are emerging for branded kids content. As the
market place changes with new distribution platforms, Nelvana is investigating how this new
technology can benefit our stable of shows. Many of these distribution platforms  VoD, SVoD, cell
phones and broadband  are in the early stages and are not expected to generate significant revenue
for at least five years. Nelvana is in dialogue with all of the major strategic players in the
On-Demand space including Comcast Corp., Microsoft Corp., Yahoo! Inc. and Sony Corporation in order
to determine the best fit for our properties. This ever growing number of outlets for the distribution of kids content creates a need for Nelvana
to be focused on rights management. We need to ensure that the best deals are being made for Corus
to protect Nelvana and allow us to explore and exploit all of the new emerging distribution
platforms that are arising. 
 SEASONALITY Corus operating results are subject to seasonal fluctuations that can significantly impact
quarter-to-quarter operating results. Accordingly, one-quarters operating results are not
necessarily indicative of what a subsequent quarters operating results will be. Corus
broadcasting businesses (Radio and Television) and the Content business each has unique seasonal
aspects. For the Companys broadcasting businesses, operating results are dependent on general advertising
and retail cycles associated with consumer spending activity. Accordingly, operating results for
the first quarter tend to be the strongest, reflecting pre-Christmas advertising activity and the
second quarter tends to be the weakest, consistent with lower consumer spending in winter months. For Corus Content business, operating results are dependent on the timing and number of television
programs made available for delivery in the period, as well as timing of merchandising royalties
received, none of which can be predicted with certainty. Consequently, Contents operating results
may fluctuate significantly from quarter to quarter. As well, cash flows may also fluctuate and
are not necessarily closely related to revenue recognition. 19




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FOREIGN REVENUES A significant portion of the revenues in the Content division are in currencies other than Canadian
dollars and therefore subject to fluctuation in exchange rates. Approximately 77% of revenues for
the Content division and 13% of Corus consolidated revenues for the year ended August 31, 2004
were derived from foreign operations. 
 CANADIAN COMMUNICATIONS INDUSTRY
REGULATORY ENVIRONMENT 
 Canadian Radio-television and Telecommunications Commission Under the Broadcasting Act(Canada), the CRTC is responsible for regulating and supervising all
aspects of the Canadian broadcasting system with a view to implementing broadcasting policy
objectives set forth in the Broadcasting Act. Since 1996, the CRTC has been implementing a competitive policy framework and has focused its
attention on strengthening the creation of Canadian content and programming. The current objectives of the CRTC, as articulated in its 1997 Vision Statement and revised in May
1998, are to:  
    promote an environment in which existing and new communications services are available to
Canadians;
    ensure a strong Canadian presence in content that fosters creative talent and reflects
Canadian society, including its linguistic duality and cultural diversity;
    promote choice and diversity of high quality communications services; and
    foster strong competitive and socially responsive communications industries. On April 1, 2004 the CRTC issued its so-called CRTC 3-Year Work Plan which included four
objectives for the broadcasting sector which expand upon the aforementioned Vision Statement:  1.
    Increased availability of Canadian content and programming that reflects Canadian
creative talent and Canadas linguistic duality, cultural diversity and social values, as
well as its national, regional and community characteristics.2.
    Increased access to a variety of innovative, high-quality communications services, at
reasonable prices, that meet consumers needs and reflect their values.3.
    A sustainable competitive Canadian Communications industry.4.
    Commission processes that are fair, transparent and effective. 
 Industry Canada The technical aspects of the operation of radio and television stations in Canada are also subject
to the licensing requirements and oversight of Industry Canada, a Ministry of the Government of
Canada. 
 Restrictions on Non-Canadian Ownership The legal requirements relating to Canadian ownership and control of broadcasting undertakings are
embodied in a statutory order (the Order) from the Governor in Council (i.e. Cabinet of the
Canadian federal government) to the CRTC. The Order is issued pursuant to authority contained in
the Broadcasting Act. Under the Order, non-Canadians are permitted to own and control, directly or
indirectly, up to 33 1/3% of the voting shares and 33 1/3% of the votes of a parent company which
has a subsidiary operating company licensed under the Broadcasting Act. In addition, up to 20% of
the voting shares and 20% of the votes of the operating licensee company may be owned and
controlled, directly or indirectly, by non-Canadians. The Order also provides that the Chief
Executive Officer and 80% of the members of the board of directors of the operating company must be
Canadian. In addition, where the parent company is less than
80% Canadian-owned, the parent company and its directors are prohibited from exercising any control
or influence over the programming decisions of a subsidiary operating company. There are no
restrictions on the number of non-voting shares that may be held by the non-Canadians at either the
parent company or licensee operating company level. The CRTC, however, 20




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retains the discretion under
the Order to determine as a question of fact whether a given licensee is controlled by
non-Canadians. The Companys articles currently give our board of directors the authority to restrict the issue,
transfer and voting of our Class A participating shares and the transfer of our Class B non-voting
participating shares for the purpose of ensuring that we remain qualified to hold or obtain
licenses to carry on any broadcasting or programming business. 
 Broadcasting Services Corus radio stations and conventional television undertakings, specialty and premium television
networks and pay audio services are subject to licensing and regulation by the CRTC. The
Broadcasting Actgives the CRTC the power to issue and renew broadcasting licenses for a maximum
term of seven years. Historically, all licenses issued by the CRTC have been consistently renewed
except where there have been serious breaches of license conditions or regulations, in which case
the licenses have been renewed for less than seven years, or in a very limited number if instances,
not at all. In order to conduct our business, Corus maintains its licenses in good standing and are
in material compliance with conditions of license and regulatory requirements. All licenses held by
Corus are in good standing and the CRTC has never declined to renew a license held by any
broadcasting undertaking in which Corus holds an ownership interest. Licenses issued by the CRTC generally set out the terms and conditions of the broadcasters program
offering, including Canadian content expenditures, Canadian exhibition requirements and signal
delivery terms for our specialty, premium television and pay audio services. The CRTC also imposes
restrictions on the transfer of ownership and effective control of all licensed broadcasting
undertakings. Transferees of ownership or control of a licensed undertaking must demonstrate to the
CRTC that the transfer is in the public interest, and the purchaser is required, in most instances,
to provide a specific package of tangible benefits designed to benefit the Canadian broadcasting
system. For transfer of ownership applications involving profitable radio stations, tangible
benefits are required to represent a financial contribution equal to 6% of the purchase price and
for acquisitions of television, or specialty or premium television network services, a financial
contribution of 10% of the value of the transaction is expected. The CRTCs regulations that apply to radio, conventional television and specialty and premium
television services require these broadcasting undertakings to obtain the prior approval of the
CRTC in respect of any act, agreement or transaction that, directly or indirectly, would result in
(i) a change in the effective control of a broadcasting undertaking; or (ii) a person together with
any associate acquiring control of 30% or more of the issued voting securities, or 50% or more of
the common shares of a broadcasting undertaking, or (iii) of a person that has, directly or
indirectly, effective control of that broadcasting undertaking. 
 Radio Undertakings The CRTC no longer regulates the formats of commercial FM radio stations except in the case of
specialty radio licenses which, by definition, requires that (i) the language of broadcast is
neither French nor English; (ii) more than 50% of the programming is spoken word; or (iii) less
than 70% of the musical selections broadcast are not pop, rock, dance, country or
country-orientated selections. For non-specialty format FM stations, the CRTC continues to require
that less than 50% of the musical selections broadcast each week be hits which are defined in
English markets as any selection which, prior to December 31, 1980, achieved a Top 40 position in
any of the charts recognized by the CRTC. Each commercial station is required to make a
contribution to Canadian talent development initiatives ranging from an annual payment of $27,000
for major market stations to $400 for small market stations. On April 30, 1998, the CRTC announced certain changes to its commercial radio policy. By
regulation, the CRTC increased Canadian popular music content levels broadcast to 35%. For
French-language radio stations, at least 65% of popular, vocal music selections must be in the
French language. The CRTC also
changed ownership restrictions on the number of stations that could be owned within a particular
market. The ownership changes allow a single owner to operate up to three stations provided only
two may be in the same band, in a given language in smaller markets and, in markets with eight or
more commercial stations in a given language, one owner may hold up to two AM stations and two FM
stations. In assessing transactions involving a change in 21




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control or ownership, the CRTC has stated
it will examine the impact on diversity of news voices, the level of competition and, if the
applicant has equity holdings in other local radio stations or media, cross-media ownership levels
in a given market. Under its new policy, the CRTC also stated that it would no longer apply market
entry criteria in assessing applications for new radio services in a particular market. Radio
broadcasters derive substantially all of their revenues from advertising. There is no regulatory
limit on the number of commercials that can be broadcast. In markets with more than one commercial
FM station, FM licensees are required to broadcast at least 42 hours per week of local programming
in order to access local advertising. The CRTC will be conducting a review of its 1998 commercial
radio policy in 2005 following its consideration of applications seeking a license to operate a
satellite radio service in Canada. 
 Specialty and Premium Television Networks Undertakings Specialty and premium television networks each have varying Canadian programming and expenditure
requirements set by a condition of license. These requirements depend on a number of factors,
including the nature of the service and the types and availability of programming offered. The
Canadian content conditions of license are reviewed by the CRTC at the time that the networks renew
their licenses. Licensees are also required to make financial contributions to the creation of
Canadian programming which is imposed by condition of license. Specialty television networks derive substantially all of their revenues from subscription and
advertising. Premium television networks derive their revenues from subscriptions and by regulation
are required to be commercial free. The CRTC generally requires cable and direct-to-home satellite
distributors to carry all licensed specialty and premium television networks appropriate to the
markets in which they are distributed with the exception of Category 2 digital services as
described below. The maximum wholesale subscriber fee that can be charged to subscribers for the
carriage of the service is regulated if it is carried as part of the basic service, but is not
regulated if it is carried on an extended or discretionary tier. Subscriber fees payable to premium
television network licensees are not regulated by the CRTC. On November 24, 2000, the CRTC announced that it would license 16 new English-language and five
French-language digital programming services for mandatory distribution on a digital basis known as
Category 1 services. The CRTC stated that all Category 1 services must commence operation on or
before November 24, 2001, but subsequently extended this date until September 30, 2002 for certain
of the French-language Category 1 services. An additional 262 Category 2 digital services were also
approved by the CRTC for distribution on a digital basis and continue to be licensed by the CRTC.
Category 2 services may be competitive with one another but may not be directly competitive with an
existing licensed analog specialty or premium television network or a Category 1 digital service.
Category 2 services have no guaranteed distribution rights except that, if a cable or
direct-to-home satellite operator carries a Category 2 service in which it or an affiliate owns
more than 10% of the issued equity, it must distribute at least five non-related Category 2
services for each related service carried. The Category 2 services licensed in the Fall of 2000 are
required to implement service no later than November 24, 2004, unless the CRTC approves an
extension before that date. New applications for Category 2 services are considered on an ongoing basis. 
 Local Television Undertakings The CRTC reviewed its policies and regulations pertaining to Canadian television, primarily as they
affect local broadcasters, and, on June 11 1999 issued a new policy entitled Building on Success 
A Policy Framework for Canadian Television. This policy introduced changes to the regulatory
environment in an attempt to provide more flexibility and diversity for broadcasters while still
providing a predominant amount of Canadian programming content. Under this new policy, Canadian content levels for conventional private television broadcasters
will remain at 60% overall and 50% in prime time. As part of its new policy, the CRTC also
announced that it would not require licensees to make quantitative commitments to local news
programming but would require licensees to demonstrate how they intend to respond to the demands of
local viewers as part of a license renewal application. The CRTC retained its policy of requiring
the provision of local programming in order to access local advertising. The CRTC also retained the
existing 150% dramatic programming credit for stations not part of a 22




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large multi-stations group applicable to Canadian programming in the calculation of Canadian
content requirements. As of September 1, 2000, the CRTC eliminated the Canadian programming
expenditure requirements and the expectations that had been imposed on stations. As well, in a
departure from past practice, the renewal of all conventional television licenses held by an
ownership group is considered at the same hearing. 
 Pay Audio Services Pay audio musical programming services provided to residential Canadian subscribers by BDUs are
licensed and regulated by the CRTC. The CRTC has established an open licensing framework and has
imposed identical requirements on each licensee regarding Canadian content and French-language
selection requirements. Canadian-originated pay audio channels may be linked on a 1:1 basis with
foreign originated channels. The CRTC has also imposed access requirements in the Broadcasting Distribution Regulationsfor
third party pay audio services. If a Class 1 cable licensee distributes a pay audio service in
which it or an affiliate controls 30% or more of the issued shares of the pay audio licensee, the
Class 1 cable licensee is required to distribute at least one other third party pay audio service. 
 Cable Advertising Services Still image and teleshopping advertising services are exempted from having to hold a CRTC license.
If the CRTC is satisfied that the licensing of an undertaking will not contribute in a material
manner to the implementation of the broadcasting policy outlined in the Broadcasting Act, it shall
exempt such undertaking from licensing requirements. The CRTC has issued a number of exemption
orders which allow an undertaking to be operated without a license, provided it satisfies any terms
and conditions contained in the particular order. Still image and teleshopping cable advertising
services operate under the terms of exemption orders. 
 Canadian Content Requirement for Broadcasters As mentioned previously, Canadian conventional television services, specialty television networks
and premium television networks are required to devote a certain amount of their programming
schedules to Canadian productions. These requirements provide support to the market for Canadian
programs (such as the ones we produce through Nelvana) as long as they qualify as Canadian programs
for purposes of the Canadian Audio Visual Certification Office (CAVCO) as an officially
recognized co-production of the CRTC. CAVCO and the CRTC determine the criteria for qualification of a program as Canadian. Generally,
a program will qualify if it is produced by an individual Canadian producer with the involvement of
individual Canadians in principal functions, and where a substantial portion of the budget is spent
on Canadian elements. In addition, the Canadian producer must have full creative and financial
control of the project. 
 Film and Television Tax Credits and Grants Nelvana generally receives various federal and provincial tax credits on its television series and
feature films, which typically provide benefits of between 10% and 25% of the Canadian production
budget. These tax credits are calculated on the basis of each individual production. Nelvana is also eligible to receive additional funding for its productions from various Canadian
industry funding sources including the Canadian Television Fund and Telefilm Canada in respect of
feature films. However, given the limited resources of these programs, Nelvana has no assurance
that it will obtain these funds for future productions. 23




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International Treaty Co-Productions Canada is a party to co-production treaties with many countries throughout the world, excluding the
U.S. These international co-production treaties allow for the reduction of the risks of production
by permitting the pooling of creative, technical and financial resources of Canadian producers with
non-Canadian producers under prescribed conditions. Canadian co-production treaty partners include
China, France, Great Britain, Germany, New Zealand and Australia. A production that qualifies as a
co-production for treaty purposes is considered to be a domestic product in each of the
participating countries and, as such, is entitled to many aspects of national treatment in each
country. More specifically, the co-production usually qualifies for domestic treatment under
applicable broadcasting legislation and certain government subsidies. The co-producers jointly hold
the copyright in the production. Sharing of foreign revenues is based on the respective
contribution of each co-producer, subject to negotiation between the co-producers and approval by
the appropriate government authorities. Many of Nelvanas productions are produced through
international treaty co-productions. 
 Competition Act Requirements The Commissioner of Competition has the authority pursuant to the Competition Act(Canada) to
inquire into mergers and apply to the Competition Tribunal for remedial orders, including an order
blocking a merger, where the Commissioner determines the merger is or will likely prevent or lessen
competition substantially in a market. To facilitate the Commissioners review of mergers, parties
to a merger transaction are required to pre-notify the Commissioner of Competition prior to
completing the transaction when specified party and transaction-size thresholds are satisfied. For
example, in the case of an asset purchase, a transaction is notifiable if the parties to the
transaction, together with their affiliates, have assets in Canada or annual gross revenues from
sales in, from or into Canada that exceed $400 million and if the aggregate value of the Canadian
assets to be acquired or annual gross revenues from sales in or from Canada generated from those
assets exceed $50 million. Ownership transfers of licensed broadcasting undertakings exceeding these financial thresholds thus
require the approval of both the CRTC and the Commissioner of Competition according to their
respective statutory mandates. The two authorities could come to different conclusions on a given
transaction. For example, the CRTC could approve a broadcasting companys acquisition of radio
stations as being in accordance with its commercial radio policy, whereas the Commissioner of
Competition might conclude that the acquisition would substantially lessen competition in the
market or markets under consideration. 
 Investment Canada Act Under the Investment Canada Act,(ICA), certain transactions which involve the acquisition of
control of a Canadian business by a non-Canadian require the approval of the Canadian government.
The Ministry of Industry (Canada) is responsible for reviewing proposed acquisitions of control of
Canadian businesses by non-Canadians. However, where the Canadian business is a cultural
business, the proposed acquisition would also be subject to review by the Minister of Canadian
Heritage. Cultural businesses include those involved in the publication, distribution or sale of
books, magazines, periodicals and newspapers, as well as businesses involved in the production and
distribution of film and video recordings, audio and video music recordings. Radio, television and
cable television broadcasting undertakings are also considered cultural businesses under the ICA,
but they are also the subject of other, more stringent, Canadian ownership and control regulations
under the Broadcasting Act,as discussed above. Before an acquisition of a cultural business by a non-Canadian can be completed, the non-Canadian
must be able to demonstrate that the proposed acquisition is likely to be of net benefit to
Canada. In determining whether this test has been met, the Ministry is required to take into
account a number of factors outlined in the ICA, including compatibility with Canadas cultural
policy objectives, as well as any applicable government policies and any written undertakings that
may have been given by the non-Canadian investor. 24




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Copyright Act Requirements Corus radio, conventional television, specialty television, premium television and pay audio
service undertakings rely upon licenses under the Copyright Act(Canada) in order to make use of
the music component of the programming and other uses of works used or distributed by these
undertakings. Under these licenses, Corus is required to pay a range of royalties established by
the Canadian Copyright Board pursuant to the requirements of the Copyright Act (Canada)to
collecting societies (which represent the copyright owners) and individual copyright owners. These
royalties are paid by these undertakings in the normal course of their business. The levels of the royalties payable by Corus are subject to change upon application by the
collecting societies and approval by the Canadian Copyright Board. The Government of Canada may,
from time to time, make amendments to the Copyright Act (Canada)to implement Canadas
international treaty obligations and for other purposes. Any such amendments could result in
Corus broadcasting undertakings being required to pay additional royalties for these licenses. 
 PRINCIPLE ACCOUNTING FEES AND SERVICES  INDEPENDENT AUDITORS Fees payable to the Registrants independent auditor, Ernst and Young LLP, for the years ended
August 31, 2004 and 2003 totaled $1,300,549 and $1,048,346, respectively, as detailed in the
following table. All funds are in Canadian dollars: Year Ended August 31, 2004
    
    
    
    Year Ended August 31, 2003Audit Fees
    
    
    
    926,565
    
    
    
    
    832,905Audit Related Fees
    
    
    
    221,833
    
    
    
    
    82,956Tax Fees
    
    
    
    152,151
    
    
    
    
    132,485All Other Fees
    
    
    
    
    
    
    
    
    Total
    
    
    
    1,300,549
    
    
    
    
    1,048,346
 The nature of the services provided by Ernst and Young LLP under each of the categories
indicated in the table is described below. Audit Fees Audit fees were for professional services rendered by Ernst and Young LLP for the audit of the
Registrants annual financial statements and services provided in connection with statutory and
regulatory filings or engagements. Audit-Related Fees Audit-related fees were for assurance and related services reasonably related to the performance of
the audit or review of the annual statements and are not reported under Audit Fees above. These
services consisted of employee benefit plan audits, assistance with the Companys plans to comply
with Section 404 of the Sarbanes- Oxley Act of 2002, and translation services in respect of the
financial statements and other regulatory filings. Tax Fees Tax fees were for tax compliance, tax advice and tax planning professional services. These
services consisted of tax planning and advisory services relating to common forms of domestic and
international taxation (i.e. income tax, capital tax, goods and services tax, and value added tax)
as well as assistance with various tax audit matters. All Other Fees Fees disclosed in the table above under the item all other fees were paid for products and
services other than the audit fees, audit-related fees and tax fees described above. The Companys Audit Committee has implemented a policy restricting the services that may be
provided by the auditors and the fees paid to the auditors. Prior to the engagement of the
auditors, the Audit Committee pre-approves the provision of the service. In making their
determination regarding non-audit services, the Audit 25




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Committee considers the compliance with the policy and the provision of non-audit services in the
context of avoiding impact on auditor independence. Each quarter, the CFO makes a presentation to
the Audit Committee detailing the non-audit services performed by the auditors on a year-to-date
basis, and details of any proposed assignments for consideration by the Audit Committee and
pre-approval if appropriate. As required by the Sarbanes-Oxley Act of 2002, all audit, audit-related and non-audit services
rendered by Ernst and Young LLP pursuant to engagements entered into since May 6, 2003 were
pre-approved by the Audit Committee pursuant to the Companys policy and pre-approval procedures.
In 2004, no audit-related or non-audit services rendered by the auditors were required to be
approved by the Audit Committee pursuant to the DE MINIMIS exception set out in paragraph
(c)(7)(i)(C) of Rule 2-01 of Regulation S-X. 
 GENERAL INFORMATION 
 Intellectual Properties Corus uses a number of trademarks for its products and services as well as trademarks, logos and
other representations of characters used in our productions. Many of these trademarks are
registered by Corus, and those trademarks that are not registered are protected by common law.
Corus has taken affirmative legal steps to protect its trademarks, and Corus believes its trademark
position is adequately protected. Distribution rights to television programming and motion pictures are granted legal protection
under the copyright laws of Canada, the U.S. and most foreign countries, which impose substantial
civil and criminal sanctions for unauthorized duplication and exhibition of television programming.
Corus believes that it takes and plans to continue taking all appropriate and reasonable measures
to secure, protect and maintain or obtain agreements from licensees to secure, protect and maintain
copyright protection for all of the television programming produced and distributed by us under the
laws of all applicable jurisdictions. 
 Employees As at August 31, 2004, Corus had approximately 2,800 full-time, part-time and casual employees.
The Company operates in a non-union environment except for 124 employees in conventional television
and radio; 60 employees in our premium television operations who are members of the Communications,
Energy and Paperworkers Union of Canada, and 33 employees in Quebec radio operations who are
members of the Syndicat Général de la Radio. 
 Legal Corus is involved from time to time in various claims and lawsuits incidental to the ordinary
course of our business, including intellectual property actions. Adverse determinations in
litigation could result in the loss of proprietary rights, subject the Company to significant
liabilities, or require Corus to seek licenses from third parties, any one of which could have an
adverse effect on the business and results of operations. Actions which are incidental to the
business are typically covered by insurance and management has estimated the potential liability
and expensed the amount in its financial statements. Corus does not anticipate that the damages
which may be awarded in any material action of which the Company is currently aware will exceed its
insurance coverage. While no assurance can be given that these proceedings will be favorably
resolved, Corus does not believe that the outcome of these legal proceedings will have a material
adverse impact on its financial position or results of operations. 
 Environmental The Companys operations do not have any significant impact on the environment. The Company has
not made and does not anticipate making any significant capital expenditures to comply with
environmental regulations. 26




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Controls and Procedures As required by Section 302(a) of the Sarbanes-Oxley Act of 2002, Corus Chief Executive Officer and
Chief Financial Officer will be making certifications related to the information in Corus Annual
Report on Form 40-F. As part of such certification, the Chief Executive Officer and Chief
Financial Officer must certify that they are responsible for establishing and maintaining
disclosure controls and procedures and have designed such disclosure controls and procedures (or
caused such disclosure controls and procedures to be designed under their supervision) to ensure
that material information with respect to Corus including its consolidated subsidiaries, is made
known to them and that they have evaluated the effectiveness of Corus disclosure controls and
procedures as of the end of the period covered by this Annual Report. Disclosure controls and
procedures ensure that information required to be disclosed by Corus in the reports that it files
or submits under the U.S. Securities Exchange Act of 1934 as amended (the Exchange Act) is
recorded, processed, summarized and reported, within the time periods required. Corus has adopted
or formalized such controls and procedures as it believes are necessary and consistent with its
business and internal management and supervisory practices. Evaluation of disclosure controls and procedures The Companys Chief Executive Officer and Chief Financial Officer, after evaluating the
effectiveness of the Companys disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) as of the end of the period covered by this annual report, have concluded
that as of the end of such period the Companys disclosure controls and procedures were effective. Changes in internal control over financial reporting As of the end of the period covered by this AIF, there were no changes in the Companys internal
control over financial reporting that occurred during the period covered by this AIF that have
materially affected or are reasonably likely to materially affect the Companys internal control
over financial reporting. 
 Code of Ethics Corus is committed to fair dealing, honesty and integrity in all aspects of its business conduct.
The Company takes its responsibility to its employees, shareholders and other stakeholders very
seriously. The Companys Code of Business Conduct (the Code) aims to demonstrate to its
stakeholders and the public the Companys commitment to conduct itself ethically. The Code applies to all employees and members of the board of directors of Corus Entertainment Inc.
and its subsidiary companies. For purposes of rules promulgated under Section 406 of the
Sarbanes-Oxley Act of 2002, portions of this Code shall comprise the Companys Code of Ethics for
senior executives and financial officers. The Code of Ethics is available on Corus website at
www.corusentertainment.com under Investor Information. 
 DIVIDEND POLICY The decision to pay dividends on the Corus Class A voting shares or Class B non-voting shares is
made by the board of directors of Corus on the basis of income (loss), financial requirements and
other considerations. On December 9, 2003, the board of directors of Corus approved a semi-annual dividend for holders of
Class A and Class B shares of $0.02 and $0.025, respectively. The Company paid two semi-annual
dividends on December 31, 2003 and June 30, 2004 to shareholders of record at the close of business
on December 19, 2003 and June 15, 2004, respectively. The total amount of each payment was $1.06
million. 27




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CORPORATE GOVERNANCE PRACTICES The Board of Directors of the Company (the Board) endorses the principles that sound corporate
governance practices (Corporate Governance Practices) are important to the proper functioning of
the Company and the enhancement of the interests of the shareholders. The Companys Statement of Corporate Governance Practices as they compare to the Toronto Stock
Exchanges Guidelines on Corporate Governance, a statement of the significant ways that the
Companys corporate governance practices differ from the New York Stock Exchange Corporate
Governance Rules, charters of the Board and its committees, and the Code of Business Conduct may be
found on the Companys website. 
 MANAGEMENTS DISCUSSION AND ANALYSIS For Managements Discussion and Analysis of Financial Condition and Results of Operations, see
pages 19 to 41 of the Companys 2004 Annual Report incorporated herein by reference. 
 MARKET FOR SECURITIES The Corus Class B Shares are publicly traded on the Toronto Stock Exchange under the symbol
CJR.NV.B and on the New York Stock Exchange under the symbol CJR. 
 TRANSFER AGENTS In Canada, CIBC Mellon Trust Company acts as Corus transfer agent. In the U.S., Chase Mellon
Shareholder Services, L.L.S acts as Corus transfer agents. 28




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DIRECTORS AND OFFICERS The following are the names and municipalities of residence of the directors and executive officers
of the Company as of October 31, 2004 or as otherwise noted, their positions within the Company and
their principal occupations during the last five years. The term of office for each director will
be until the next annual meeting or until his or her successor is elected or appointed. Name and Municipality of Residence
    
    
    Director/Officer
    
    
    Position with Corus/Principal OccupationPierre Béland (4)
Montreal, Quebec
    
    
    Director
    
    
    President, Metromedia PlusFernand Bélisle (1)
Breckenridge, Quebec
    
    
    Director
    
    
    President of 19 FB Inc. (a consulting company)John M. Cassaday (2)
Toronto, Ontario
    
    
    President, Chief Executive
Officer and Director
    
    
    President and Chief Executive Officer,
Corus Entertainment Inc.Dennis M. Erker (2)(4)
Edmonton, Alberta
    
    
    Director
    
    
    Partner, The FE Advisory Group (a financial and estate
planning company)Wendy A. Leaney (1)
Toronto, Ontario
    
    
    Director
    
    
    President, Wyoming Associates Ltd. (a private investing
and consulting firm)Dorothy Zolf McDonald, PhD
Toronto, Ontario
    
    
    Director
    
    
    Corporate Director, former Associate Professor, Graduate
Program in Communication Studies, University of Calgary
and Visiting Professor, University of AlbertaRonald D. Rogers (3)
Calgary, Alberta
    
    
    Director
    
    
    Corporate Director, Former Senior Vice-President & Chief
Financial Officer, Shaw Communications Inc.Catherine Roozen (1)(3)
Edmonton, Alberta
    
    
    Director
    
    
    Director and Corporate Secretary of Cathton Holdings Ltd.Terrance E. Royer (2) (3)
Calgary, Alberta
    
    
    Director
    
    
    Executive Vice Chairman, Royal Host REIT and Royal Host
Corp. (a hotel and resort ownership, franchising and
management company)Heather A. Shaw (2)
Calgary, Alberta
    
    
    Director
    
    
    Executive Chair, Corus Entertainment Inc.Julie M. Shaw (4)
Calgary, Alberta
    
    
    Director
    
    
    Vice President, Facilities, Design and Management, Shaw
Communications, and Secretary, Shaw FoundationThomas C. Peddie, FCA
Toronto, Ontario
    
    
    Officer
    
    
    Senior Vice President and Chief Financial Officer, Corus
Entertainment Inc.Paul W. Robertson
Toronto, Ontario
    
    
    Officer
    
    
    President, Television, Corus Entertainment Inc.John P. Hayes
Toronto, Ontario
    
    
    Officer
    
    
    President, Radio, Corus Entertainment Inc.Gary Maavara 
Toronto, Ontario
    
    
    Officer
    
    
    Vice President, Corporate and Regulatory Affairs,
General Counsel, Corus Entertainment Inc.Judy Adam, C.A.
Oakville, Ontario
    
    
    Officer
    
    
    Vice President, Controller, Corus Entertainment Inc.Hal Blackadar
Oakville, Ontario
    
    
    Officer
    
    
    Vice President, Human Resources, Corus Entertainment Inc.Pierre Arcand
Montreal, Quebec
    
    
    Officer
    
    
    President, Quebec Radio, Corus Entertainment Inc.John R. (Jack) Perraton
Calgary, Alberta
    
    
    Secretary
    
    
    Senior Partner, PerratonLaw
 29




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(1)
    Member of the Audit Committee in fiscal 2004(2)
    Member of the Executive Committee in fiscal 2004(3)
    Member of the Human Resources Committee in fiscal 2004(4)
    Member of the Corporate Governance Committee in fiscal 2004 Each director named above was appointed a director on December 9, 2003 and will hold office
until the next scheduled annual meeting of shareholders. Thereafter, each director will be elected
at the annual meeting of shareholders to serve until the next annual meeting or until a successor
is elected or appointed. Each officer or director of Corus has been engaged for more than five years in his or her principal
or prior occupation, as the case may be, except as follows: Pierre Béland was the President of
Corus Radio Quebec prior to July 25, 2002 and was President of Metromedia CMR prior to August 31,
2000; prior to August 2004, Ronald D. Rogers was Senior-Vice President and Chief Financial Officer
of Shaw Communications Inc.; prior to July 2001, John P. Hayes was Chairman and CEO of RadioAmp and
prior to 2000, he was a consultant to Goldman Sachs International; Gary Maavara was Vice
President, Public Relations for CanWest Global Communication Corp. prior to July 2004, 2001-2003 -
Senior Vice President, Global Television Inc. and concurrently Senior Vice President and Chief
Operating Officer, CanWest Interactive Inc.; from 1999-2001 Gary Maavara was Director of Special
Projects, CanWest Global Communications Inc.; Hal Blackadar was the General Manager of Corus Radio
Ontario prior to June 2002; and prior to July 2002, Pierre Arcand was Executive Vice President of
Metromedia CMR. As of October 31, 2004, the directors and executive officers of the Company beneficially owned,
directly or indirectly, or exercised control or direction over 896,638 Class A participating shares
and 1,163,043 Class B non-voting participating shares, representing 51.98% and 2.84% of the issued
and outstanding Class A participating shares and Class B non-voting participating shares,
respectively. 
 Audit Committee Financial Expert As required by Section 407 of the Sarbanes-Oxley Act of 2002, Corus must disclose in its annual
report on Form 40-F whether its board of directors has determined that it has at least one audit
committee financial expert, as defined by Section 407, serving on its audit committee, or if not,
the reasons why it does not. At the annual and special meeting of shareholders held on December 9, 2003, Mr. Fernand Bélisle was
appointed as a director of the Company and will serve until the next annual meeting. Mr. Bélisle
was also appointed as a member of the Audit Committee. The Companys board of directors has
determined that Mr. Bélisle is an audit committee financial expert. 30




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ADDITIONAL INFORMATION Corus shall provide to any person, upon request to the Secretary of the Company:  a)
    when the securities of the Company are in the course of a distribution pursuant to a
short form prospectus or a preliminary short form prospectus has been filed in respect of a
distribution of its securities:  1)
    one copy of the Annual Information Form of the Company, together with
one copy of any document, or the pertinent pages of any document, incorporated by
reference in the Annual Information Form;2)
    one copy of the comparative financial statements of the Company for its
most recently completed financial year together with the accompanying auditors
report and one copy of any subsequent interim financial statements of the Company;3)
    one copy of the information circular of the Company in respect of its
most recent annual meeting of shareholders that involved the election of directors
or one copy of any annual filing prepared in lieu of that information circular, as
appropriate;4)
    one copy of any other documents that are incorporated by reference into
the short form prospectus or preliminary short form prospectus that are not
mentioned in (1), (2) or (3) above; and  b)
    at any other time, one copy of any documents referred to in (a)(1), (2) and (3) above,
provided the Company may require the payment of a reasonable charge if the request is made
by a person who is not a security holder of the Company. Additional information including directors and officers remunerations and indebtedness,
principal holders of the Companys securities, options to purchase securities and interests of
insiders in material transactions, where applicable, is contained in the Companys Information
Circular dated December 9, 2004. Additional financial information is provided in the Companys
consolidated financial statements for its most recently completed financial year. A copy of
such documents may be obtained upon request from the Company. The Secretary of the Company can be contacted at: Corus Entertainment Inc.
501, 630  3rd Avenue S.W.
Calgary, Alberta
T2P 4L4
Phone: (403) 444-4244 31




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(CORUS ENTERTAINMENT LOGO) 32




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UNDERTAKING AND CONSENT TO SERVICE OF PROCESS A. Undertaking Corus Entertainment Inc. (the Registrant) undertakes to make available, in person or by
telephone, representatives to respond to inquiries made by the staff of the Securities and Exchange
Commission (the SEC), and to furnish promptly, when requested to do so by the SEC staff,
information relating to the securities in relation to which the obligation to file an annual report
on Form 40-F arises or transactions in said securities. B. Consent to Service of Process The Registrant has previously filed with the SEC a written irrevocable consent and power of
attorney on Form F-X in connection with the Class B Non-Voting
Shares and 8 3/4% Senior Subordinated
Notes due 2012.




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SIGNATURES Pursuant to the requirements of the Exchange Act, the Registrant certifies that it meets all
of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on
its behalf by the undersigned, thereto duly authorized. CORUS ENTERTAINMENT INC.Date: January 11, 2005
    By:
    /s/  THOMAS C. PEDDIEName:  Thomas C. PeddieTitle:
    Senior Vice President and
Chief Financial Officer




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EXHIBIT INDEX SequentialPage No.1.
    
    Comparative consolidated financial statements for the year endedAugust 31, 2004, together with the auditors report thereon
    
    2.
    
    Managements Discussion and Analysis of Operating Results andFinancial Position
    
    3.
    
    Consent of auditors  Ernst & Young LLP dated January 11, 2005.
    
    4.
    
    Officers certifications required by Rule 13a-14(a) or Rule 15d-14(a).
    
    5.
    
    Officers certifications required by Rule 13a-14(b) or Rule 15d-14(b)and Section 1350 of Chapter 63 of Title 18 of the United States Code.
    
    6.
    
    Business Code of Conduct
    
    