CRTC tells CBC to drop ads on Radio 2, ICI Musique

The end of August also marked the final day CBC/Radio-Canada could broadcast national advertising on its Radio 2 and ICI Musique stations, following a CRTC decision denying a request to extend their ability to air ads for another two years. In a decision posted to its website and coming into effect on Wednesday, the regulator rejected the public broadcaster’s May application to continue the practice that was initially granted on a three-year temporary basis because it wasn’t spending enough money on radio during its leaner years. The commission said that it had “concerns over whether the licensee has maintained its level of investment in radio in light of revenues received from paid national advertising on Radio 2 and ICI Musique and whether continued authorization to broadcast such advertising is therefore warranted.” Operating expenses went from $283 million in the 2012-13 broadcast year to $261 million in the 2014-2015 broadcast year, the CRTC said. CBC’s licence changed in 2013 to allow up to four minutes of national ads per hour on the two radio services after the previous federal government cut millions of dollars in funding doled out to the Crown corporation. At the time, CBC president Hubert Lacroix estimated the new ads would bring in between $6 million and $9 million per year. According to its May renewal application, the public broadcaster brought in $1.1 million in 2014 and $1.4 million in 2015 from both Radio 2 and ICI Musique. In a press release, CBC expressed its disappointment in the CRTC’s decision. “Quite simply, the CRTC’s decision means CBC/Radio-Canada has fewer resources to invest in the programs and services it provides to Canadians,” the release said. The public broadcaster also said it was “surprised” that the CRTC made its decision “on the final day of its existing authorization to broadcast such advertising,” saying that the move “is simply not in keeping with modern business practices.” It added that while the required changes will be made to the programming schedule, “this simply cannot be completed by the end of day” Wednesday. Maintaining its investment in radio was one of four criteria CBC had to meet in order to satisfy a renewal for ads. Despite opposition from groups such as Friends of Canadian Broadcasting, the Canadian Association of Broadcasters and Quebecor Inc., the CRTC was actually satisfied that CBC met the remaining criteria, i.e. that there was no negative effect on advertising markets for commercial radio, that the ads weren’t disruptive to listeners and that the stations maintained diversity in programming. CBC’s application said the level of investment in radio has been maintained, “however, in light of the cuts to the Corporation’s Parliamentary appropriation… it has not been possible to keep the funding of the services at the pre-cut levels.” It added that it had said “during the licence renewal process” that the “Corporation had clearly identified that it intended to reduce costs in its music programming.” ICI Musique programming and production costs dropped by 25.9 per cent and Radio 2 costs dropped 9.2 per cent because of the cuts to CBC’s Parliamentary appropriation, the application said, adding that “overall, while CBC/Radio-Canada was unable to maintain the same level of funding for ICI Musique and Radio 2, the cuts to these services were in line with cuts in other services.” For example, programming and productions costs decreased by seven per cent for Radio 1, 20.8 per cent for CBC TV and 9.8 per cent for ICI Radio-Canada Première, CBC said in its application. “The flexibility to broadcast paid national advertising was granted to help the CBC mitigate the effects of reductions in its parliamentary appropriations and to help it sustain investments in radio,” the CRTC said. It added that since the federal government has reinstated cut funding “the distinct nature and high quality of the services’ programming can be preserved and their respective mandates fulfilled without the need for revenues from the broadcast of paid national advertising. But the government’s promise of $675 million over five years “is not the panacea the opposing interveners claim it to be,” CBC said in its July 4 reply to interventions, some of which cited the investment as a reason to not renew the condition of licence. Unlike TV, the commercial radio advertising market “has been and is predicted to continue to be relatively stable,” CBC said in its reply. And though CBC says it was being conservative in its new projection for radio ad revenues, “this is one area where the Corporation may be able to maintain or possibly even improve its advertising revenues.” It also said regulatory changes stemming from Let’s Talk TV proceeding will have a “negative effect” on the ad revenue and subscription revenue from CBC services carried by BDUs. “This fact reinforces the need for CBC/Radio-Canada to maintain and improve other revenue sources, including radio advertising revenues.” — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

CRTC tells CBC to drop ads on Radio 2, ICI Musique

News | August 31, 2016

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CRTC tells CBC to drop ads on Radio 2, ICI Musique

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