Decision Time

Issues and Chal­lenges for the CBC

The CRTC hear­ings on the CBC’s license renewal will begin on Novem­ber 19th. It is impos­si­ble to deny that things have changed in the world of com­mu­ni­ca­tions in the 13years since the Corporation’s last license renewal. The broad­cast­ing ecosys­tem has been turned upside down. “We could already sense it in 2000 dur­ing the last CBC renewal. The CBC had begun to mark its pres­ence. But the last two years con­firmed the mag­ni­tude of the phe­nom­e­non,” says Pierre Bélanger.

The Major Changes Since 1999

Dig­i­tal

The rapid evo­lu­tion of the dig­i­tal world is one of the major changes that have defined the last decade. The CRTC has held pub­lic hear­ings on top­ics such as new media, value for sig­nal, and ver­ti­cal inte­gra­tion. We have seen an explo­sion in the num­ber of spe­cialised com­mu­ni­ca­tions ser­vices in the last five years. The CBC has made major invest­ments in dig­i­tal plat­forms; the web is now very inte­grated with its radio and tele­vi­sion pro­gram­ming. This graphic, from the CBC’s most recent quar­terly report, denotes the inte­gra­tion – 82% of expenses went toward radio, tele­vi­sion and Inter­net con­tent. The CBC is res­olutely focused on the future. The dig­i­tal realm has also repeat­edly been the focus of suc­ces­sive CRTC hear­ings on new media, value for sig­nal, HDTV, and inte­gra­tion of broad­cast­ing businesses.

Gov­er­nance Models

Accord­ing to Pierre Bélanger, change in the Corporation’s gov­er­nance mod­els is another one of the main trans­for­ma­tions that has taken place. Inte­gra­tion of ser­vices is now fully estab­lished, with vice-presidents in the two prin­ci­pal cen­tres of Mon­treal and Toronto respon­si­ble for radio, tele­vi­sion and Inter­net con­tent. Far from being a mere adjust­ment in orga­ni­za­tional charts, this rep­re­sents a major change in the oper­a­tions of these ser­vices. Another major change over the last 13 years has been in new require­ments for greater trans­parency on the part of the pub­lic broad­caster. Polit­i­cal pres­sures have made it nec­es­sary for the CBC to pro­duce reports much more fre­quently and much more openly. Access to infor­ma­tion reports, expense reports for exec­u­tives, quar­terly reports on rev­enues and expenses and offi­cial lan­guages are requested by numer­ous agen­cies and lib­er­ally requested of the CBC. A desire for bet­ter con­tact with Cana­di­ans and for ongo­ing pub­lic dis­cus­sion is in motion.

Fund­ing

We can’t talk about the CBC with­out men­tion­ing fund­ing, Bélanger says. “I am con­tin­u­ally dis­mayed with the inces­sant cuts to the CBC. We aren’t giv­ing them the means to carry out their mandate.”

It is impor­tant to stress that at $1.134-billion (in nom­i­nal value), the total par­lia­men­tary appro­pri­a­tion to the CBC in 2010–2011 is only slightly higher than the amount from 1990–1991 ($1.078-billion). Even more impor­tantly, one must note that if the amount from 1990–1991 had been adjusted accord­ing to cost of liv­ing indexes, the Cor­po­ra­tion would have been given $1.649-billion last year in order to deliver its man­date. Despite slow growth from 1999–2010, the bud­get cuts made in the ‘90s were never off­set, and those that are com­ing will only exac­er­bate the pub­lic broadcaster’s finan­cial challenges.

Below is a sum­mary of the finan­cial sit­u­a­tion that the CBC has faced over the last two years, and up to 2014:

• Cuts of $115-million over 3 years (includ­ing $60-million awarded in 2001 as one-time funding);
• Absorb­ing the costs of infla­tion up until 2013 – $41.3-million;
• Changes to the Canada Media Fund – loss of $12.6-million;
• Local Pro­gram­ming Improve­ment Fund (LPIF) – loss of $47.1-million.

“The CBC is a trend­set­ter, an inno­va­tor. In a lab­o­ra­tory, things don’t always work every time; there are errors, things that don’t work. If the CBC doesn’t take risks, who will? How­ever we put the CBC in a very dif­fi­cult posi­tion by giv­ing it this huge man­date and respon­si­bil­i­ties, but not giv­ing it the means to pay the bills and by forc­ing it to gen­er­ate a large part of its bud­get through com­mer­cial rev­enue,” con­tin­ues Bélanger. The cuts force the CBC to envi­sion com­mit­ting the “mor­tal sin” of sell­ing adver­tis­ing on Radio2 and Espace Musique. The oasis cre­ated by the absence of adver­tis­ing on these radio ser­vices, which had been its strongest dis­tin­guish­ing fea­ture from pri­vate radio, has been aban­doned. Accord­ing to the request sub­mit­ted to the CRTC, the French ser­vice could fetch $2.2-million, and Radio 2 could even­tu­ally gen­er­ate $31-million in adver­tis­ing revenue.

To sur­vive the cumu­la­tive cuts and losses of rev­enue, the CBC has to do more and bet­ter than sim­ply sell­ing com­mer­cials on these two radio sta­tions. It has to pro­pel itself into the future, not only rein­ter­pret­ing radio and tele­vi­sion con­tent, but rein­vent­ing the dig­i­tal lan­guage. The CBC needs to look ahead and admit that things have changed. Again, the means must fol­low the respon­si­bil­i­ties, and it is unclear where the required resources will come from.

What Will the CRTC do?

Pierre Bélanger says that: “The CRTC has its hands tied to a cer­tain extent. They will look at the Broad­cast­ing Act and use this as a frame­work. Hav­ing said that, the pres­i­dent of the Coun­cil, who we have seen in action dur­ing the Bell-Astral hear­ings, knows the port­fo­lio and the gov­ern­ment machine very well. I think he knows how far the Coun­cil can go with­out hav­ing its deci­sion reversed by the government.”

CBC’s strat­egy, in this con­text, is to avoid being con­stricted by the old way of doing things and the tra­di­tional dis­course. CBC-Radio-Canada is a pub­lic broad­cast­ing ser­vice, but it is in oper­a­tion in the 21^st cen­tury. Pierre Bélanger is of the mind­set that the CBC is on the right track with its five year plan. “The plan is forward-looking and reflects the chang­ing habits of media con­sump­tion and all those who are part of the gen­er­a­tion of dig­i­tal natives. The CBC must be able to prove that it has the intel­li­gence and cre­ativ­ity to invent dig­i­tal media in the Cana­dian way. I think the sur­vival and rel­e­vance of CBC ser­vices are closely linked to its abil­ity to imple­ment multi-platform strate­gies (includ­ing radio). This is why the CRTC should allow the CBC to invest freely in dig­i­tal con­tent.” This doesn’t mean that it should let go of the rest of its ser­vices, but really means that we shouldn’t pre­vent the CBC from inno­vat­ing and invent­ing in a multi-platform environment.

Does the Broad­cast­ing Act allow for such a tech­no­log­i­cal change? Admit­tedly, to re-open the Act to take into account these new real­i­ties, includ­ing those of the CBC, would be like open­ing Pandora’s Box. “How­ever, mod­ernising the Act every 25 years isn’t exactly unwar­ranted.” Bélanger sug­gests that we could mod­ernise only cer­tain arti­cles of the Act relat­ing to meth­ods of dis­tri­b­u­tion and production.