CBC does not need radio ad revenues, private broadcasters say

GATINEAU, Que.—CBC/Radio-Canada has the financial resources necessary to support its Radio 2 and Espace Musique services without advertising, the Canadian Association of Broadcasters (CAB) said at a CRTC hearing Thursday. As part of a two-week hearing into the public broadcaster’s licence renewals, CAB said CBC has not provided any “public policy rationale” or financial evidence to justify advertising on its national music networks, Radio 2 and the French-language Espace Musique. CBC announced last spring that it would cut 650 full-time positions, shut down its 607 analog transmitter system, migrate Radio-Canada International (RCI) online, and, if approved, place advertising on Radio 2 and Espace Musique to help deal with annual budget reductions of $115 million starting in 2014-2015. Last year, CBC received $1.1 billion in parliamentary appropriations. Paul Ski, CEO of radio at Rogers Broadcasting Ltd. (owned by Rogers Communications Inc.), who appeared before commissioners with CAB, said CBC redirected funds it used for the two radio services to CBC television programming. According to CRTC and CBC data compiled in an 81-page report commissioned by CAB, titled “A statistical profile of CBC/Radio-Canada” and dated Oct. 5, 2012, CBC Radio had total revenue of $415 million in 2009, $358 million in 2010, and $336 million in 2011. “In other words, CBC management removed $78 million from its radio services in a two-year period, starting in 2009—long before the budgetary and regulatory changes of 2012,” Ski said. CAB said CBC’s total operating revenue for radio, conventional and specialty television operations was $1.78 billion in the 2010 broadcast fiscal year, which rose to $1.84 billion in 2011, the report said. “In 2010, $1,140.3 million (64.5 per cent) came from CBC/Radio-Canada’s Parliamentary Appropriation, and $627.5 million (35.5 per cent) came from other sources,” the report said. “In 2011, $1,166.4 million (63.4 per cent) came from the Parliamentary Appropriation, and $672.4 million (36.6 per cent) came from other sources.” CAB, which represents small and large commercial radio companies, said that though CBC’s parliamentary appropriation increased by $26 million from 2010 to 2011, “CBC/Radio-Canada chose to allocate an additional $45 million to its conventional television services, while reducing the allocation to its radio services by $19 million.” Ski said CBC has the money to support its radio services. “There is no public policy or business rationale that justifies such a reallocation of resources between the CBC’s radio and television services,” he said. CAB said CBC’s proposal to advertise on the two radio networks fails to acknowledge its impacts on small market radio. Rick Arnish, chair of the radio broadcast company Jim Pattison Broadcast Group, said at the hearing Thursday that Radio 2 and Espace Musique can be received in small communities on various platforms. “In those smaller markets, those CBC services face much less competition than in the larger markets, so their impact may be greater,” Arnish said. The CAB report said CBC Radio was the second-largest broadcaster in 2010 and the third-largest broadcaster in Canada in 2011. According to the report, CBC’s radio properties held a 14.6 per cent share of English-language radio revenues, second to Astral Media Inc. at 14.7 per cent. In 2011, the report said, CBC held a 13 per cent share of English-language radio revenues, behind Astral at 14.8 per cent. Ski said Radio 2 and Espace Musique were established as “complementary services” to CBC Radio One and La Première Chaîne and that the music networks are meant to fill a public radio niche that would not impact commercial radio services. Chris Pandoff, executive vice-president of Corus Entertainment Inc. and president of Corus Radio, also a member of CAB, said CBC delivers a wide range of mainstream and alternative programming to the public as a public broadcaster. “Such choice would be radically changed were the CBC to shift its radio services from the public to the private content domain,” he said. Pandoff said allowing CBC to advertise on Radio 2 and Espace Musique would start the commercialization of public radio and that it would not be long before CBC requests to put advertising on CBC Radio One and La Première Chaîne. “If the intention of CBC is to offer Radio 2 and Espace Musique as commercial services, then the privileges of a public broadcaster no longer apply,” Ski said. CBC projects Radio 2 and Espace Musique advertising revenues, if approved, to start at $15 million in their first year, growing to $35 million in the seventh. Executives with the Crown corporation said this week they would not propose to exend advertising to any other services. CBC president and CEO, Hubert Lacroix, told commissioners Monday that the extra ad revenues would make a difference. “Every single dollar that we can raise to protect content, jobs, and to ensure that we can deliver 2015, is important to us. Those millions of dollars count,” Lacroix said. The hearings continue into next week with 12 interveners including Quebecor Media Inc. and the Ontario Association of Broadcasters (OAB) scheduled to appear Monday. dgrenier@thewirereport.ca

CBC does not need radio ad revenues, private broadcasters say

Broadcast | November 23, 2012

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CBC does not need radio ad revenues, private broadcasters say

Broadcast | November 23, 2012

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