CBC Needs a Rethink

CBC recently appeared before a Senate Committee examining its future and demonstrated that it has no real strategy for the future. Instead of a strategy, CBC has an agenda. The agenda is to shrink the CBC.

Before he became president of CBC, Hubert Lacroix, told Parliament it was his job to find new sources of revenue but after taking the job he said CBC doesn't need more money.

This month CBC submitted a document to the Committee and a 90-page slide presentation that contained contradictions, errors and misleading information.

Here are some of the problems that a quick reading reveals:

-CBC told the Senate it relies heavily on public funding, over $1 billion per year, "as do the privates." According to CBC, the privates receive production tax credits and funds from the Canada Media Fund. No mention that CBC also receives these additional benefits, above and beyond its Parliamentary funding. Rather than whining about the privates, why doesn't management make the case that the public broadcaster should receive all the public funding?

-More importantly, these so-called benefits relate only to TV. Private radio has no similar benefits, while CBC Radio receives over a quarter of a billion dollars in public funding.

-Total revenues of CBC TV and Radio amounted to almost $1.9 billion in 2013-14, a sizable sum given that the government has reduced funding by $115 million per year. In one part of the document it is claimed that 26 per cent of the total revenue comes from advertising; in another section it is claimed that ad revenue represents 21 per cent. The difference is almost $100 million. But ad revenue is not what public broadcasting is all about. Even private broadcasters like HBO Canada, Netflix, shomi and Crave TV are going commercial-free.

-CBC's basic "strategy" is to concentrate less on radio and TV, which are expensive, and focus on cheaper digital, Internet services. CBC claimed it is "a leader among news and information digital properties" and in its appearance said it was the number one digital news site. Neither statement can be verified. The monthly audience reach data CBC submitted is for cbc.ca, the portal that encompasses not only CBC news and information but also all CBC drama, comedy, sports and other entertainment programs and all of CBC Radio. One can watch full episodes of Heartland, 22 Minutes, etc. or listen to radio on cbc.ca. One would have to separate out the news audience (cbc.ca/news) to fairly compare to Huffington Post, CNN, etc.

-The Internet audience data for cbc.ca could mislead the Senate, as it appears to have misled CBC management. The CBC online audience is really quite small. In an average minute of the day cbc.ca has about 5,000 users. That is, roughly the audience that Sun TV News had when it shut down recently. 

-CBC has never released information on cbc.ca advertising revenue and would only tell the Senate that it is doing "very, very well." Expenditures on CBC Internet-based services may exceed $100-million but we have no idea how much revenue comes in. Advertising revenues of the Internet are growing but are not going to web sites like cbc.ca. It's fair to conclude that public funds are being spent on cbc.ca, which competes with private radio and TV and even newspapers. Did Parliament create CBC for this purpose? 

-CBC detailed how its web audience is currently nine-million monthly users and set a goal to double it to 18-million or about half of all Canadians by 2020. That should be easy. The data CBC submitted show that cbc.ca alone has nine-million monthly users; but (a mostly additional) two million use its French website, so that is a good first step to achieving the goal. Other CBC data claimed that half of Francophones and about a third of Anglophones use CBC websites, so the good news is that the managers have basically already achieved their goal (but don't seem to know it.) 

-CBC also referred to monthly audience reach of its other services. The source was a CBC survey but we have no way of knowing how the reach numbers were arrived at. Without knowing how much time a person must spend with a service to be counted in the audience, it is of dubious value. Audience share, like average audience, is a better tool for measuring performance.

-CBC did provide audience share to the Senate. CBC claimed its English TV prime time share is 8.2 per cent. In fact, it was 8.2 per cent in 2013-14, according to the CBC. Audience share in 2014-15 to-date, that is, the first full year with Rogers controlling NHL hockey was not provided. Oddly, a letter to the Committee refers to the prime time share in a single week of January 2015. 

-Also missing is the whole day audience share. More total viewing takes place in the hours outside of prime time. Audiences start to grow about 4 p.m. and are almost as high as in prime time. The whole day share encompasses performance not only in prime time but also the other hours of the day. CBC told Parliament it had about a 5 per cent whole day share prior to this season and it makes sense that it has dipped below 5 per cent in 2014-15. Why would CBC managers conceal the effect of budget cuts, the loss of NHL and increased competition and not make the case for additional funding? Are they in a conflict of interest and ignore shortcomings?

-CBC said Canadians spend about 27 hours per week watching TV; 17 hours per week listening to radio; and about 20 hours per week on the Internet. What is CBC's share? CBC TV has about a 5 per cent share of TV viewing; it has an impressive 15 per cent share of radio listening. Results are even better for Radio-Canada. But despite its large monthly reach CBC has only about a 0.2 per cent share of internet usage. Not 1 per cent, much less than 1 per cent. Not much of an ROI. Where do you think it should focus its resources? On radio and TV, which will be around for decades to come or on web-based services that compete with thousands of other web services?

-If CBC slowly withdraws from traditional radio and TV, which is the strategy being proposed, it will mean the end or the diminution of CBC. Is a public broadcaster really necessary on the Internet, which has no scarcity of content providers? 

CBC should have an audio/video presence on the web but its radio/TV infrastructure is far more important and will be for many years. The valuable service provided by CBC Radio and CBC TV (which may be starting a renaissance with programs such as Book of Negroes and X Company) should not be starved of funds to provide digital services that few will use. If CBC managers think otherwise, then make all web services pay services, as do many newspapers. Besides, shouldn't the core strategy be to find new sources of revenue, as Mr. Lacroix promised?

(This post originally appeared in Huffington Post)