CBC asks for 35% funding boost to go ad-free

CBC/Radio-Canada is asking the federal government for an increase in its funding so that it can eliminate advertising on its platforms. In a submission made as part of a government review of Canadian content in a digital age, CBC asked for an increase of $12 per person in funding, to $46. “This would enable CBC/Radio-Canada to remove advertising from its services, complete its transformation, and strengthen Canada's creative economy,” the public broadcaster said in a press release Monday, noting that figure is “still well below comparable public broadcasters around the world, like the BBC, which receives $114 per person.” Removing advertising would allow it to “focus squarely on the cultural impact of our mandate. It would also free up advertising revenue to help private media companies transition to a digital environment,” it added. Digital advertising on CBC platforms has come up as an issue during the review, as news media representatives said it was taking away ad revenue from newspapers. There have also been calls for an ad-free CBC, including from the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) as well as Conservative leadership candidate Maxime Bernier. In its submission, the CBC said it was dealing with dropping advertising on conventional television, while subscription revenue from its specialty channels is under pressure from cord-cutting and the CRTC’s new pick-and-pay rules. “In the meantime, the advertising revenue that once helped fund Canadian programs is going to new competitors; large, global technology platforms like and Google have established a dominant position,” it said. The document added the public broadcaster is “uniquely damaged” by such revenue losses and it “does not have other business interests or sources of revenue, like other Canadian vertically integrated broadcasting distribution companies, to mitigate the impact of these changes.” The increased funding made available by the Liberal government won’t solve the problem in the long term, the report said. It added that while eliminating ads would “yield a net loss in advertising revenue of $253M to CBC/Radio-Canada … two-thirds of this revenue would migrate to other Canadian media, including private TV and digital, for a net gain to them of $158M.” In order to be able to go ad-free, CBC would need $318 million in replacement funding, a number it said “takes into account the lost advertising revenue ($253M), the cost to produce and procure additional Canadian content ($105M) which is required to replace the advertising programming and the cost savings associated with the reduced cost of sales ($40M).” Simply replacing the lost advertising revenue would only require a $9-per-person increase, but the remaining $3 and subsequent $100 million — bringing the total ask to $418 million — is proposed as “additional funding of new investments to face consumer and technology disruption,” the CBC submission said.

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CBC asks for 35% funding boost to go ad-free

Brief | November 28, 2016

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