October 5, 2012
Mr. John Traversy Secretary-General CRTC Ottawa, K1A 0N2
Dear Mr. Traversy: Re: CRTC 2011-379: Licence Renewals for the CBC’s French- and English-language services
“With more specific reference to English-language CBC, its radio services have remained non-commercial, giving its audiences a programming with which they are generally satisfied and which is seen as unique. However, English-language television has tended to become more commercial, more in direct competition with private television and more driven to use American programming to attract advertising dollars – an approach which does not appear to be successful. “We believe that CBC English-language television should become, and will have to become, more distinctive if it is to remain viable and fulfill its role as a unique public broadcaster. We should consider giving it a mandate that clearly articulates its role as a unique Canadian broadcaster, and seek to reduce or eliminate mass-audience American programming from its schedule. In terms of foreign content, CBC could concentrate on non- North-American, international programming, that tends to be under-represented in the system. “Along the same lines, we would seek to reduce CBC’s dependence on advertising revenue and its competition with the private sector for these valuable dollars, especially for non- sports programming. This refocused CBC will, obviously, have to be provided with stable and long-term public funding.” Stephen Harper, November 29, 2004
CRTC 2011-379
Executive Summary
Hockey Night in Canada accounts for 10% of CBC English Television’s schedule, one-third of its audience share and 50%+ of its advertising revenue. Losing HNIC to Bell or Rogers in next year’s negotiations with the NHL would create a 400 hour hole in the ETV schedule and affect its bottom line by some $200M. In that event, ETV should be called back before the Commission to explain the impact on its operations and business plan. Over the past decade the ETV has become substantially more commercial, running ads for 20% of its broadcast hours, to the displeasure of the public. The Commission should review this trend and continue its condition of licence regarding 80% Canadian content, including an expectation that ETV meet this CanCon commitment weekly. The existing expectation regarding children and youth programming should also be renewed. To stem a trend towards ever-increasing repeat programming on both radio and television, the Commission should issue an expectation that at least 50% of CBC programming be original content during the forthcoming licence period.
Radio Two’s format should return to its emphasis on world classical culture. The Commission should deny CBC’s request to place unlimited advertising on Radio Two and Espace Musique. Implementation of new radio services in several Canadian cities promised by CBC to address under-service should become a condition of licence.
1. Friends of Canadian Broadcasting is an independent watchdog for Canadian programming in the English-language audio-visual system supported by 175,000 Canadians, and is not affiliated with any broadcaster or political party. Friends asks to appear at the forthcoming public hearing in order to discuss with the Commission its views on the future of public broadcasting in Canada, as outlined herein.
2. Friends supports the renewal of CBC’s various licences subject to the comments, recommendations and proposed conditions which follow. 3. Since the June 2011 announcement of this public consultation, Friends has brought the Commission’s invitation to comment to the attention of interested persons throughout the country. As a result, to our knowledge, 3,466 individuals have submitted personal, unique comments to your Commission during the 2011 and 2012 consultation periods.
4. Recently we commissioned a content analysis of the first 2,007 of these comments and for the Commission’s interest we can report the following topics as the top ten issues articulated therein – a snapshot of these Canadians’ priority comments:
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5. Friends also placed the 2,007 comments into a Wordle program, which created the following word picture:
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6. In the lead-up to this public consultation, Friends has also sponsored public meetings in six Canadian cities in order to discuss priorities for Canadian public broadcasting from a local perspective – “The CBC We Want”. Summaries of these discussions are available at friends.ca. 1
7. During the period leading up to the most recent general election, scores of government Members of Parliament and Ministers promised their constituents that the Conservative government was committed to maintain or increase funding to our national public broadcaster. On May 3rd, 2011, the day after that election, Canadian Heritage Minister James Moore repeated this promise: “We believe in the national public broadcaster. We have said that we will maintain or increase support for the CBC. That is our platform and we have said that before and we will commit to that.” 2
8. Notwithstanding this promise, the newly-elected government introduced a massive cut to CBC’s parliamentary appropriation in its March 2012 Budget. The impact of this cut, projected forward to 2015 based on Department of Finance and Treasury Board data (including inflation estimates) has opened a 37% gap between the CBC’s parliamentary appropriation and overall program spending during the period 2006 to 2015: 3
1 http://www.friends.ca/TheCBCWeWant/ 2 http://www.friends.ca/news-item/10188 3 http://www.friends.ca/Campaigns/CBC-cuts Reproduced from a full-page advertisement in the National Edition of the Globe and Mail, April 19 and 21, 2012.
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9. We recognize, of course, that your Commission has no control over CBC’s finances. We do, however, recommend that you exercise your discretion to send a clear message to the government regarding the increasing gap between the CBC’s Broadcasting Act mandate 4 and its parliamentary allocation – a gap that affects our national public broadcaster’s capacity to meet the needs of Canadians from coast to coast to coast, who depend on it daily to deliver on that mandate.
10. An international comparison of investment in public broadcasting in western democracies commissioned by the House of Commons Standing Committee on Canadian
Figures expressed as a percentage of 2006/07 amounts. Percentages based on C$millions adjusted to year 2012 dollars using Statistics Canada Consumer Price Index data (February 2012), and Consumer Price Index inflation projections in Table 2.1 of Economic Action Plan (Federal Budget) 2012. Years reflect Government of Canada fiscal year ending March 31. Total program expenses for 2006/07-2010/11 are as stated in Summary Statements of Transactions published in 2008-2012 Federal Budgets. Total program expenses for 2011/12-2014/15 reflect projections contained in Table 6.4 of Economic Action Plan 2012. Program expenses exclude public debt service. CBC figures for 2006/07-2011/12 reflect Treasury Board Main Estimates for operations, working capital and capital expenditures combined with one-time additional funding, if any, in Supplementary Estimates. CBC figures for 2012/13-2014/15 reflect base funding for 2011/12 contained in Treasury Board Main Estimates, reduced by the amount of annual reductions stated in Table A1.11 of Economic Action Plan 2012, and increased by $60 million in each year to reflect assumption that historical one-time additional funding will be continued. CBC figures do not reflect production fund or tax credit contributions to CBC productions.
4 Section 3 (1)(l&m)
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Heritage in 2003 demonstrates that CBC’s funding, expressed as a share of the Gross Domestic Product, is tied for 20th place with Spain, and fifth from the bottom of the list: 5
11. Canadians look to the Commission – as an arms-length agency of Parliament – to address some very serious and searching questions about CBC’s priorities. This submission focuses on the following topics:
• English Television: Hockey • English Television: Commercial Advertising • English Television: Program Content • Radio Two: Format Change • Radio Two: Commercial Proposal • Regional Service and Regional Reflection • Repeat Programs on Radio and Television • Corporate Governance and Accountability
5 Our Cultural Sovereignty, House of Commons Standing Committee on Canadian Heritage, 2003. Page 178.
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CBC English Television: Hockey
12. The current broadcast rights contract between the CBC’s English Television Network (ETV) and the National Hockey League expires in 2014 – early in the proposed new licence term. In recent months, senior representatives of at least two other major Canadian broadcasting organizations with deep pockets and ample shelf space signalled their desire to win this contract away from the CBC.
13. A headline in the Toronto Star on May 29, 2012 reads: “Hockey Night In Canada rights expected to produce fierce battle between media companies.” 6 In that story, Rogers Media president Keith Pelley is quoted as follows: “the possibility now exists that we could be a candidate for Hockey Night In Canada,” while Bell Media’s Vice-President of Communications, Scott Henderson, states: “We would most likely take a look at it when the time comes.”
14. Friends is not advocating that the CBC relinquish its rights to hockey broadcasts, nor is it expressing a preference for such an outcome. However, we do strongly recommend that the potential loss of Hockey Night in Canada be taken into account during the current licence renewal process. Otherwise, in licensing the ETV for at least a five-year term, the Commission would be writing the CBC a blank cheque, as explained below.
15. Perhaps the most iconic program on Canadian television, Hockey Night In Canada first aired in 1952. For six decades it has been an important Canadian institution and has become synonymous with the CBC brand. HNIC is much more than a program: it is a shared experience that brings together the entire spectrum of the English-speaking population.
16. The importance of hockey to the Corporation can hardly be overstated, in terms of its contribution, both to the ETV’s viewing share and reach, and to its business model. Hockey represents as much as a third of the ETV’s audience share, and more than half of its advertising revenue.
17. Beyond these statistics, hockey connects CBC to millions of Canadians – persons whom it might not otherwise reach. It strengthens the entire schedule, deepens the network’s regional roots and community connections, and is a critical component of the ETV’s multi- platform and merchandising strategies for additional revenue generation.
18. The possibility that CBC will lose its hockey rights to a competitor is a highly plausible threat, for several reasons:
• Bell and Rogers are the parent companies of TSN and Sportsnet, Canada’s leading sports specialty channels, which have dual streams of revenue (cable subscriptions as
6 http://www.thestar.com/sports/hockey/nhl/article/1202357--hockey-night-in-canada-rights
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well as advertising) and existing contracts with the NHL. They also now jointly control Maple Leaf Sports and Entertainment, which in turn owns the Toronto Maple Leafs, the NHL’s most lucrative franchise.
• Hockey is no longer by any measure the exclusive domain of the CBC. TSN, like CBC, has national rights, and airs almost 200 games per season on either its TSN or TSN2 services. Sportsnet annually broadcasts more than 200 games on one or another of its four regional networks. RDS shows more than 200 NHL games in a typical season, including all Montreal Canadiens games. Many NHL games are also available on NBC stations, US superstations such as WGN Chicago, and the NHL network – all imported to Canada via cable and satellite. As well, virtually all NHL games are also available via NHL Centre Ice, which can be purchased from cable and satellite operators, or directly from NHL.com.
• There was a time when CBC Television, as an over-the-air network, had a distinct distribution advantage over TSN and Sportsnet, which are available only on cable and satellite. However, when CBC shut down more than 600 analogue transmitters on July 31st of this year, it lost that advantage. While the proportion of the population affected may be relatively small, those viewers represent a disproportionately large segment of CBC viewership. In many communities, the only way to receive CBC now is via cable or satellite. The result: sports specialty channels are now almost as widely available as CBC Television.
19. The impact on the CBC of losing the NHL contract would be nothing short of devastating. In financial terms, this loss would be significantly more severe than the most recent round of federal budget reductions (which led the CRTC to postpone the present licence renewal proceedings by a further year). As the former Executive Vice- President of CBC English Services, Richard Stursberg, has written: “Hockey Night In Canada is also central to the CBC’s financing. Without Hockey Night In Canada, the CBC would fall into a grave financial crisis that would imperil its survival.” 7
20. One need not take a former CBC executive’s word for it. After assembling and analyzing publicly available data, and examining the comments of knowledgeable industry players, Friends offers the Commission the following assessment of CBC English Television’s hockey business model. 8
21. Hockey still makes money for the CBC – though less than it used to, because of the substantially (50%) higher rights payments negotiated in 2007 with the NHL. 9 Annual ‘profits’ above 20% dipped to modest losses during the economic downturn of 2008-2009, but have since rebounded to positive margins of up to about 10%. In the 2011/12 season,
7 Stursberg, Richard. The Tower of Babble: Sins, Secrets and Successes Inside the CBC. Vancouver: Douglas & McIntyre, 2012. p. 148. 8 The Commission will have an opportunity to test and confirm these assertions in an in-camera briefing on hockey, which the Corporation has proposed in a recent exchange of correspondence. 9 The current contract is significantly “back-end loaded,” with annual rights payments at or above $100M in the final two years of the agreement.
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CBC English Television’s hockey revenues were approximately $130M 10 and its costs approximately $115M. 11
22. Historically, HNIC has accounted for 50% or more of total advertising revenue on CBC English Television. The CRTC reported CBC English Television ad revenues of approximately $246M in the 2011 broadcasting year. Of this, hockey represented approximately $130M (or 53%). We understand that about $80M of this revenue derives from the regular season, and $50M from the playoffs. The pattern over previous years has been similar.
23. To this must be added a further $10M or more of “packaging” benefits. “Packaging” refers to the linking of commercial sales in hockey programming to other ad sales elsewhere on the schedule. This is a particularly important factor for some of CBC Television’s western stations. Therefore, the loss of hockey could have a further negative impact on the business rationale for CBC remaining viable in local markets.
24. The revenue impact of hockey is directly related to its audience impact. But a change in audiences would not only seriously affect the Corporation’s financial bottom line; it would also reduce substantially its demonstrable impact on the lives of Canadians – a key element of CBC’s raison d’être as the national public broadcaster.
25. Hockey’s contribution to total viewing on CBC-TV is disproportionately high, compared to its total hours on the schedule. Hockey accounts for about 10% of all program hours, and 15% of all prime-time hours. Yet it accounts for approximately 30% of all viewing in both cases: a “multiplier effect” of 200 to 300%.
26. The measured audience of Hockey Night in Canada has grown dramatically since the advent of Personal People Meters (PPM), which began to capture out-of-home tuning in the fall of 2009. A significant amount of sports viewing takes place in bars, restaurants and other locations where people gather, and this is now being captured. As a result, the reported audiences for hockey games on CBC have risen between 25% and 60% as a result of PPM introduction, while those for some other program genres, such as news, have declined.
27. Hockey contributes about 2 of 6 share points to the overall CBC English Television schedule, and about 3 of 8 to 9 share points to its prime-time schedule. In other words, losing Hockey Night in Canada would see CBC suddenly drop close to a third of its audience in one blow.
28. Some might argue that given the relatively high cost and low profit margins of hockey, its loss, while traumatic, could be borne by CBC English Television. After all, some $130M in foregone revenue would be largely offset by $115M in avoided costs – and surely the replacement programming could generate at least some income. However, it is precisely
10 Net of agency commissions. 11 Including rights fees, production costs and other related expenses associated with hockey.
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here – on the issue of replacement programming – that the truly devastating implications for CBC of losing Hockey Night in Canada become starkly evident. Consider the following key points:
• Hockey represents approximately 400 hours per year of Canadian content, or about 6% of CBC English Television’s total CanCon. (However, given the “multiplier effect” mentioned earlier, this translates into some 12-18% of viewing to Canadian programs on the ETV.)
• It might cost English Television approximately $500K per hour to produce first- run, high-impact CanCon replacement programming, at a total cost of some $200M.12
• The most optimistic estimates suggest that this replacement programming might generate ad revenue of only $15M, thus contributing to a net loss of $185M.
29. This high-level analysis does not take into consideration a number of other factors, particularly with regard to the scheduling of such replacement programming. It is well- known that Saturday night is a time of the week when relatively fewer households watch television. Moreover, if Saturday night hockey games were to be aired post-2014 on Bell or Rogers stations, this would further erode the potential viewing to CBC’s replacement shows that evening. 13
30. Nevertheless, the fact remains that CBC would have no choice but to use all the scheduling strategies at its disposal to replace some 400 hours of hockey programming with a similar quantity of the very best, most attractive (and expensive) Canadian shows – wherever during the broadcast week it decided to present them. Any other replacement programming scenario designed to minimize net costs (e.g. American movies and/or repeats of Canadian shows) would have other negative consequences such as failure to meet Canadian content requirements and even lower audiences.
31. The bottom line: the impact of losing Hockey Night in Canada on CBC English Television would be approximately $200M annually.
32. Savvy industry observers are also speculating about a variety of “compromise” scenarios. For instance, suppose CBC were to retain the rights to 26 Game One telecasts on Saturday nights (presumably heavily weighted in favour of Toronto Maple Leafs games), while relinquishing the rights to Game Two and all post-season play (playoffs and Stanley Cup finals). This could have certain benefits, such as keeping CBC in the hockey franchise, putting an end to playoff disruption of The National, etc. On the other hand, giving up Game Two and putting even more emphasis on the Leafs could be expected to alienate
12 CBC costs only, not counting Canadian Media Fund contributions or other funding sources. 13 Similarly, the playoff season in the spring coincides with American sweeps and season finales – another tough counter-scheduling challenge for the CBC.
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Western Canadian fans and advertisers. And this scenario would reduce the impact of truncating Hockey Night in Canada by only approximately $50 million – still a hit of some $150 million to the English Television Network’s bottom line.
33. Friends advances this line of argument in order to present for the Commission’s consideration our view of the magnitude of the problem facing CBC English Television in the short-term future. For this reason we wrote to the Commission on July 12, 2012 as follows:
“It seems clear that the potential impact of the loss of NHL rights on the CBC’s audiences, revenues, overall business model and ability to discharge its mandate could constitute nothing less than a ‘game changer.’ In these circumstances, Friends recommends that the Commission carefully examine the importance of hockey rights to the overall CBC English Television commercial revenue model, and put on the public record all possible facts and figures which facilitate transparent understanding of this situation without, of course, unduly compromising the CBC’s competitive position…. Various alternative scenarios for replacement programming, and its projected audiences, revenues, and rights and production costs as compared to hockey, should also be part of the picture. Moreover, we recommend that the Corporation be asked to describe its contingency plans to discharge its mandate and live up to its commitments, in the absence of NHL hockey.
34. Friends is pleased to note that the Commission has, in fact, raised these matters with the Corporation in supplementary questions, and that the Corporation, in its reply of September 14, 2012, has suggested an “in-camera information session” on this topic, which ought to provide the Commission with an opportunity to obtain necessary background while protecting the Corporation’s competitive confidentiality.
35. However, Friends strongly urges the Commission, following that in-camera briefing, to discuss this subject during the public hearing in November. The Corporation’s September 14th reply states that “the Corporation has developed plans to address such a contingency and therefore anticipates being able to meet its proposed condition of licence throughout the licence term should it be unsuccessful in reacquiring hockey broadcast rights.” Given the magnitude of this potential turn of events on the ETV’s and therefore the CBC’s finances and audiences (as outlined above) this is an assertion that should not be accepted at face value.
36. Friends recommends that the Commission not renew the CBC’s licences for a seven- year term – or even the five-year term mooted in recent correspondence between the Commission and the Corporation – without putting in place a mechanism to review the CBC’s plans should it lose the NHL rights within the first two years of that licence term.
37. Friends also recommends for the Commission’s consideration one of the following two possible courses of action:
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• The renewal of the Corporation’s English Television Network licence should be made conditional on the continued existence of a rights agreement between the CBC and the NHL substantially similar to the present one; or
• The renewal decision should include a statement by the Commission that, in the event such an agreement ceases to exist, or is substantially changed during the licence term, the CBC will be required to come forward to the CRTC on a timely basis to explain its contingency plans in detail through a public process, and to present proposals for appropriate amendments to its English Television Network licence.
CBC English Television: Commercial Advertising
38. According to the CBC’s 2010-2011 Annual Report, total advertising revenue of $368M represented about 20% of overall income from all sources of approximately $1.8B. According to the Corporation’s Quarterly Report for the first three months of fiscal year 2012-2013, CBC’s English Services generated about $75M of ad revenue against operating expenditures of some $252M, or a little over 30% of the English Services budget.
39. English Television generates at least half of its income from commercial revenue. In other words, ETV today operates on the basis of a business model which is as much that of a commercial broadcaster as a public broadcaster. This represents an obvious and serious obstacle to its ability to function effectively as a public service broadcaster. Friends supporters tell us that they see a direct cause-and-effect relationship between reduced government funding, increased reliance on commercial revenue, and declining standards of quality and distinctiveness on the English Television Network.
“It is important that the CBC fulfill the admonition “to reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions”, because such programming would have the tendency to knit the country together as a community, introducing the audience to the wonderful fullness to be found in our regions and districts. This kind of programming might not bring in the dollars, in TV, but we should be willing as a community to make up for that in the public grant, because it would pay big dividends in the long runs.” John Boan, Regina
40. Our supporters also complain about a sharp and most unwelcome rise in commercial “clutter” on the English Television schedule. They are not wrong about this. As part of its preparation for this proceeding, Friends had the opportunity to analyze data drawn from
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a comparison of the program logs of one typical ETV station (CBLT Toronto) during the two broadcast years 2000-2001 and 2010-2011 – i.e. relatively near the beginning and end of the current (extended) licence term. This information is available from the CRTC’s own data base. 14
41. The results of this analysis are quite startling. They reveal large increases in the number and duration of commercial messages over the decade. Unfortunately, the CBLT logs for the six months inclusively between November 2000 and April 2001 failed to include any commercial messages, for reasons that are not known. However, after correcting for this anomaly, the average number of commercial messages aired increased by 88%, while the average number of commercial minutes went up by 91%. 15
42. There were between less than seven minutes of commercials in an average hour during 2000-2001, and 12 or more minutes of commercials in an average hour during 2010- 2011. In other words, commercial content on the CBC’s flagship English Television station effectively doubled over the decade “based on the CBLT logs). 16
43. We recognize that the historic limit of 12 minutes per hour of advertising content ended in 2007, and that program formats on Canadian and US private stations are generally designed to accommodate breaks totalling 16 minutes per hour. Nevertheless, the fact remains that Canada’s national English-language public television network appears to be twice as commercial as it was a decade ago. The following table summarizes the data from which the foregoing analysis is drawn:
44. It is relatively easy to trace the direct relationship between the declining value of the CBC’s Parliamentary appropriation and the apparent imperative to compensate for it as much as possible through increased commercial revenue. This raises fundamental
14 This information is readily available from the CRTC’s database. 15 Partly as a result of the commercialization of traditional non-commercial programs such as The National and Marketplace. 16 Note that CBLT broadcast 20 hour days in 2001 and 24 hour days in 2011 and also that a number of programs ran with no commercial messages in 2001.
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questions about the potential impact of this shift on CBC English Television’s ability to discharge its mandate.
45. In 2011, the Corporation commissioned a study from Nordicity, which concluded that advertising on CBC Television does not detract from its mandate, and that eliminating ads would be “devastating.”17 On September 5, 2012, the former head of CBC Research, who now runs an independent company, Canadian Media Research Inc., posted an entry on his blog presenting a detailed critique of this study. 18
46. This critique suggests that the Nordicity study “mixed up basic audience metrics, used seriously flawed assumptions, questionable data and made ill-formed projections based on that data.” It also presents research contradicting Nordicity’s assertion that Canadians accept ads on television – and by extension on CBC Television. Nine out of 10 Canadians agree or strongly agree that there are too many commercials on television. And if on television in general, then surely even more so on CBC Television – the supposed national public television service.
47. The chart summarizing these results is reproduced below:
17 Why Advertising on CBC/Radio-Canada is Good Public Policy, November 2011. http://cbc.radio- canada.ca/_files/cbcrc/documents/latest-studies/nordicity-advertising-impact-analysis-en.pdf 18 http://mediatrends-research.blogspot.ca/2012/09/cbc-tv-domino-effect-snowballing-into.html
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48. Advertising is inconsistent with the principles of public service broadcasting. Private broadcasters are in business to deliver audiences to advertisers; public broadcasters exist to deliver programs to audiences. Private broadcasters treat audiences as consumers; public broadcasters treat audiences as citizens. The two approaches, though fundamentally incompatible, tussle for the fidelity of CBC Television’s leadership. And this is not a new problem for the Corporation: since 1936, advertising has been one of its continuous revenue streams.
49. Increasing dependence on commercial revenue means increasing emphasis on audience ratings. Thus advertising warps CBC Television’s programming and scheduling decisions in an effort to attract the largest numbers in the most desirable demographic segments, rather than offering, as the Broadcasting Act demands, “a wide range of programming that informs, enlightens and entertains… all ages, interests and tastes.”
50. The Act calls upon the CBC to offer a “distinctive” service. Yet on television for at least 20% of the time, its television content is virtually indistinguishable from that of private stations and networks. Like them, it is running advertisements. Like them, its scheduling decisions are driven by commercial imperatives.
“Sure, commercial radio and television have their place. In fact they have almost all the place - which is why CBC and SRC are so important.” Nicolas Kadima, Toronto
51. In short, notwithstanding the misplaced title of the Nordicity study, advertising on CBC Television is not good public policy since it seriously impairs the CBC’s ability to deliver fully on its commitment to provide public service broadcasting. The question remains: is it good business strategy?
52. On the face of it, the answer must be “no.” The Corporation’s efforts to replace declining public funds with increased commercial revenue have not prevented deep cuts to programs, staff and services, and seem only to have succeeded in alienating some of its potentially strongest supporters and most loyal constituents.
53. It may seem counter-intuitive to suggest, at a time when the CBC is facing such dire resource constraints, that it should consider reducing or even eliminating its reliance on advertising. However, it is worth remembering the lessons of history in this regard.
54. In 1974, the removal of commercials from the Corporation’s radio services was one of the key catalysts in what subsequently came to be known as “The Radio Revolution” that led to a strong resurgence of public support and audience popularity for CBC Radio.
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55. The Corporation accepted the Commission’s directive with regard to radio, but ultimately rejected a related proposal, which would have started a process of gradual reduction in commercial activity on television. The matter was eventually appealed to Cabinet, which ruled in favour of the CBC’s position (though perhaps not in favour of the CBC’s long-term best interests).19
56. More recently, in Decision CRTC 2000-1, the Commission made the following statements with regard to the issue of commercials on CBC services in general:
“36. Canadians' expectations of their national public broadcasting service stem from their keen awareness that they fund its operations. Canadians expect decisions affecting the programming of the CBC to be dictated first and foremost by the public interest. . . .
“38. During the consultations and the oral hearing, a number of interveners argued that the CBC should reduce or eliminate its dependence on television advertising revenue. Certain interveners suggested that the emphasis on advertising revenue affects programming choices. Many interveners also noted a growing similarity in programming between private and public broadcasters…. “39. … [A] public broadcaster is expected to take risks; to offer diversity, even controversy, and to venture into new innovative forms of programming. Responding to these objectives requires programming choices that are made with a clear understanding of the CBC's role and the public interest. Such choices should not be unduly influenced by commercial considerations. These considerations, more often than not, lead the CBC's services to become similar to, rather than distinct from, the services of commercial broadcasters….
“40. …The CBC will remain a general interest broadcaster providing a wide array of programming choices. It must nevertheless ensure that in the final analysis its programming choices are founded on its mandate as a public broadcaster. In maintaining this criterion as the overriding rationale for programming, the CBC can fulfill its public trust by providing Canadians with programming which is not driven solely by the demand for revenues and ratings….
19 It is fascinating to re-read what the CBC President of the day, the late Laurent Picard, had to say on this subject during the final phase of the 1974 public hearing: “We are going to propose to our Board [that we] get out of radio commercials altogether. . . . We want to get out of children’s advertising’ and in drama, the CBC might stress ‘high- quality program advertising’ i.e. corporate sponsorship. . . . ‘At the other end of the spectrum,’ continued Mr. Picard, hockey and similar programs are really not substantially impaired by commercial advertising. ‘All that is going to cost money,’ he said. ‘I don’t know what the real implication of that is, but we’ll look at it. We are ready to look at it.’” Radio Frequencies Are Public Property: Public Announcement and Decision of the Commission on the Applications for Renewal of the Canadian Broadcasting Corporation’s Television and Radio Licenses: Report on the Public Hearing, March 31, 1974, pp. 130-131.
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“41. … The Commission urges the CBC to study other avenues for further diversifying its sources of revenue in order to permit a reduced reliance on advertising revenues.”
57. More than a decade later, quite the reverse has occurred. The CBC is more reliant on advertising revenues now than ever before. Because we do not expect that the Corporation will act of its own accord on these repeated cues from the regulator, Friends urges the Commission to undertake its own comprehensive independent review of this very important issue, taking into account all available information, carefully balancing the respective public policy and business strategy parameters, and in due course making recommendations to both the Corporation and the Government.
58. The matter could take on much greater urgency if the CBC’s business fortunes reach the tipping point outlined in the previous section of this intervention, through the loss of the NHL hockey contract and the 50%+ of total commercial revenue which it represents.
59. As our earlier analysis shows, in a post-hockey world, CBC Television’s ad revenue would plummet to approximately $120M, as follows:
60. It is also vital to take into account the considerable cost of earning this revenue. Over the past few years, CBC’s sales and promotion expenses for English Services, as reported to the CRTC, have shot up by an astounding 67-70%, while those of its main competitors have remained relatively stable:
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61. While one might be tempted to argue that in a post-hockey world, CBC Television could walk away from its remaining $120M of ad revenue, avoid the associated $80M of sales and promotion expenses, and be faced with a net price tag of just $40M for getting out of the commercial advertising business altogether, this logic would omit some crucial considerations.
62. Even in the absence of commercial sales, a portion of promotion expenses would still be required to promote the schedule to audiences. On the other hand, there are other potential cost avoidance opportunities associated with exiting commercial sales beyond sales and promotion expenses; e.g. substantial portions of the traffic and distribution operations and infrastructure, etc.
63. At the same time, there would be some additional costs, primarily associated with the production or acquisition of program content to fill the time previously occupied by commercials. However, Friends does not find credible the CBC’s and Nordicity’s assumption that this cost would be as high as the pro-rated cost for that amount of first- run Canadian programming.
64. All things considered, we make a conservative assumption that getting out of conventional sales activity could save CBC English Television approximately $40M in related costs (which would no longer be required). At this point, the net value of advertising would fall to something in the neighbourhood of $80M.
65. Though not an inconsiderable sum, this does radically recalibrate the ‘cost-benefit’ ratio between the financial advantages of a commercial CBC Television and the public policy liabilities that accompany it.
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66. A gap of $80M – as opposed to $250M – is of a magnitude which could conceivably be filled, in whole or in part, by a variety of other means. Chief among these certainly ought to be the restoration of some the disproporionately draconian cuts to the CBC’s parliamentary appropriation – in line with the Prime Minister’s 2004 musings (referenced above).
67. Other possible measures could include some form of tax or levy on the windfall of increased revenues and profits of private broadcasters that would result from no longer having the CBC as a commercial competitor for a quarter-billion dollars of advertising every year.
68. Friends’ initial assessment is that limited corporate sponsorship activity on CBC Television could net perhaps $15M in additional revenue.
69. Other “compromise” options could be imagined, e.g. eliminating commercials in News, Current Affairs, Drama and Documentary programs, but retaining them in Sports – although since this scenario imagines a “post-hockey” CBC, the question needs to be asked how much sports programming would remain on the schedule in the long run – perhaps as little as the Olympics, the Pan Am Games, the FIFA World Cup and the Commonwealth Games for a few weeks periodically.
70. Even if, after all these avenues were exhausted, a relatively small portion of the funding gap remained unfilled, it is certainly worth asking whether it might not be worth paying the price of a somewhat smaller CBC, in order to create a much more distinctive CBC – and one more valued by Canadians.
71. The apparent crisis that would result were the CBC forced to terminate its “addiction” to hockey revenue could in fact be an opportunity to rethink and transform the fundamental role of the national public broadcaster in the overall Canadian broadcasting system, including its funding.
72. We recommend that the Commission take advantage of this opportunity to lay the groundwork for this eventuality now, through the comprehensive independent review proposed above. And it should guarantee the opportunity for a thorough and open public discussion of all the options, by ensuring in its licence renewal decision (as recommended in the previous section of this intervention) that the Corporation return to the regulatory table if and when its hockey rights negotiations were to fail.
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English Television: Program Content
Introduction 73. In its previous decision renewing the licence of the CBC’s English-language Television network, 20 issued in January 2000, the Commission enunciated a series of detailed quantitative requirements regarding various types and categories of program content. Some of these were drawn from commitments made by the Corporation during the course of the licence renewal process, while others were conditions and expectations imposed by the Commission itself. The Commission also required the Corporation to submit an annual self-assessment, reporting in detail on its progress in living up to these requirements.
74. In Public Notice CRTC 2000-1 and Decision CRTC 2000-1, the Commission explained that it adopted this approach in order to help ensure that the Corporation lived up to what Canadians expect of it in certain critical areas, e.g. a balanced schedule of distinctive, high-quality programming, representative of all parts of the country:
“CBC accountability” “43. As a public broadcaster, the CBC is ultimately answerable to all Canadian citizens, who pay the greater part of its operating costs…. The Commission expects the Corporation to fulfil all the commitments it made during this proceeding…. The Commission has also imposed requirements and specific conditions of licence in areas that it considers to be critical.” 21 75. As we approach the forthcoming CBC licence renewal hearings, some thirteen years later, it is appropriate to identify whether the approach taken by the Commission in 2000 to program content regulation has worked, and whether it should be continued, renewed and updated in the coming licence period.
76. In spite of the fact that the Commission has, in the intervening years, generally continued its evolution towards a less detailed form of content analysis and regulation for most licensees, Friends suggests that such an approach continues to be both appropriate and necessary in the case of the CBC.
77. Secondly, we need to examine the extent to which the CBC has, or has not, lived up to the Commission’s key expectations, and what levels of performance ought to be expected of it during the forthcoming licence term. This examination is
20 As with other sections of this intervention, this one deals only with English-language CBC services. A parallel but different analysis and recommendations could be undertake with regard to French-language services, but is beyond the scope of this submission. 21 Public Notice CRTC 2000-1.
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particularly relevant in those areas where the CBC proposes to relax or eliminate any specific requirement.
78. It is well known that the Commission follows a longstanding practice of denying licence amendments filed by non-compliant licensees. 22
79. Rather than relying on the Corporation’s own annual self-assessment reports for this purpose, Friends has taken the opportunity to analyze data drawn from a comparison of the program logs for one typical ETV owned-and-operated station (CBLT Toronto) during the two broadcast years September 2000 through August 2001 (the 2001 broadcast year) and September 2010 through August 2011 (the 2011 broadcast year). This analysis covers a period from approximately the beginning of the current (much extended) licence term to one relatively near its end. 23
80. In common with other broadcasters, the Corporation submits its program logs to the Commission with a certificate attesting to their accuracy. Friends has detected numerous errors and anomalies in the logs under review – especially concerning program titles and program origination sources, as well as other coding irregularities. However, given the CBC’s attestation, no attempt was made to correct the data.
81. Friends recommends that the Commission conduct its own investigation of this matter, to satisfy itself that the Corporation (and perhaps other television broadcasters) are meeting this basic standard of regulatory accountability. However, we are confident that the conclusions we draw from the data are sufficiently robust to be relied upon.
82. Four tables summarizing highlights of the findings are attached in an appendix to this intervention (page 52ff). It is important to note that the total number of program hours rose significantly between the two years under review, from 7080 hours in the 2001 broadcast year (an average of some 136 hours per week) to 8754 hours in the 2011 broadcast year (approximately 24 hours/365 days).24 Thus comparisons between the two years are based on percentages, rather than numbers of hours.
83. For the purposes of this intervention, Friends has focused on a few particularly significant issues and variables within the wealth of information revealed by this analysis. They have been chosen for one or more of several reasons: their
22 See, for instance, Decision CRTC 98-112, where the Commission denied a proposal to reduce local news from an applicant which had not met its previous commitments in this area. 23 This information is available from the electronic broadcast logs posted on the CRTC’s website. 24 While a complete week contains 168 hours (24 hours x 7 days), the CRTC has traditionally regulated the 126-hour portion of this period that is based on an 18-hour broadcast day, as defined in Section 2 of the Television Broadcasting Regulations, 1987. The increase in program hours over this decade on CBLT presumably reflects a shift from broadcasting 18 hours per day to 24 hours per day.
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obvious relevance as matters of broadcasting policy, their stated importance to Friends supporters, concerns about the CBC’s performance in this area over the duration of the previous licence term, and/or the fact that the CBC proposes to reduce or eliminate commitments or expectations in a given area in the forthcoming licence term. 25
Canadian Content 84. Section 3(1)(m) of the 1991 Broadcasting Act requires the CBC’s programming to be “predominantly and distinctively Canadian.”
85. The CBC proposes to maintain its Canadian Content commitment during the next licence period at the same level as the last one: at least 75% across the full day and at least 80% in “peak time”. 26
86. As shown in Table 1, the level of Canadian programs broadcast by CBLT went up from 76% in the 2001 broadcast year to 81% in the 2011 broadcast year. The sources of non-Canadian programming remained relatively constant, with the bulk of them coming from the United States.
87. However, Table 4 reveals some cause for concern, as it shows that this increase occurred almost entirely outside of prime time, where Canadian content rose from 74% to 81%. In prime time, it remained virtually unchanged, at between 80 and 81% – very close to the minimum level of commitment.
88. Note that these measurements are averages across the entire broadcast year. There were certainly many weeks when CBC’s prime-time CanCon level fell below 80%.
89. Friends urges the Commission to establish the CBC’s proposed minimum CanCon commitments as a condition of licence for the forthcoming licence term.
90. The Commission should encourage the Corporation to meet these minimum commitments consistently every broadcast week, to exceed them whenever possible, and to rebalance the country of origin of non-Canadian programming to place greater emphasis on programs from countries other than the United States – perhaps by reducing the proportion of US programming from its present level of two-thirds of all non-Canadian content to one-half or less, consistent with the Prime Minister’s suggestion (quoted above).
25 Several other topics deriving from the same study are addressed in other sections of this intervention; namely: Commercial Messages (in the section on TV Advertising), Source of Programs (in the section on Regional Service and Regional Reflection), and Original vs. Repeat Programming (in the section entitled “Other Matters”). 26 Under the Television Regulations, the “evening broadcast period” is defined as the hours between 6 pm and midnight. For policy purposes, the Commission has, over the years, used various definitions of “peak time.” Conventionally, “prime time” is between 7 pm and 11 pm.
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91. It should also be noted that, of the 81% CanCon broadcast in prime time during 2011, 58% consisted of first-run programming, while the other 23% consisted of repeats – in other words, about 70% original content. Outside of prime-time, the ratio is more troubling: 29% original and 52% repeat programming – 65% repeats. The proportion of non-original CanCon, particularly in off-prime, has risen substantially over the past decade. While we recognize that a modest level of repetition is desirable to reach viewers, and necessary to amortize investments, the Commission may wish to consider adding expectations about the proportion of Canadian programming that consists of original first-run programming, rather than repeats, in both prime and non-prime time. Friends suggests 50% original content. 27 Documentaries
92. Long-form documentaries (Program Category 02B) are an important hallmark of a balanced and distinctive public television schedule. As Table 2 shows, the proportion of such programming on CBLT remained relatively constant from 2001 to 2011, at just over 3%. Table 4 confirms that the bulk of this programming was aired in prime time, where it rose to almost 9% of the schedule by 2011. The vast majority of this content was Canadian – a commendable result.
“As far as CBC TV goes, the documentaries & investigative journalism programs produced by CBC TV & CBC Newsworld as well as special events coverage by both stations are first class, especially considering the funding cuts over the past years.”
Karilyn & Myles Nelson, Regina
“For those that enjoy the CBC, their production philosophy that values encouraging thoughtful exploration over high-throughput of shallow facts and/or infotainment is irreplaceable. Please continue to support the CBC. There is something special and uniquely Canadian going on there.” Joshua LaForge, Edmonton
93. However, Friends understands that very substantial reductions are being made to the CBC’s in-house documentary production unit, and to its documentary commissioning budget. In our view, large cuts in this area would dangerously weaken the CBC’s ability to provide distinctive, in-depth treatment of important contemporary and historical topics.
27 The subject of repeat programming is dealt with at greater length elsewhere in this intervention.
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94. Friends encourages the Commission to specify an expectation for the coming licence term regarding minimum levels of program content from Category 02B, at approximately current levels. Friends opposes lumping documentaries in with other categories such as drama, comedy and awards shows. Game Shows, Reality Television and Factual Entertainment 95. As noted above, a significant number of Friends supporters who submitted interventions during the 2011 phase of this licence renewal process expressed concerns about what they see as a trend towards “dumbing-down” of the programming on CBC Television, and an increased emphasis on “infotainment.”
96. This is the type of programming generally classified under CRTC Program Categories 100 (Game shows), 110 (General entertainment including reality TV) and 05B (Informal education, recreation and leisure).
97. Table 2 indicates that there has been a dramatic four-fold increase in these categories of program content across the full CBC TV schedule, from 4% in 2001 to 16% in 2011. Table 4 confirms that the proportion of programming in these content categories has risen by a factor of five times: from 3% in 2001 to 15% in 2011. 28
98. Friends urges the Commission to specify an expectation regarding maximum levels of program content from Categories 100, 110 and 05B combined. Friends recommends that the maximum levels be set significantly below the levels of such content found in the CBLT logs in 2011. Children’s Programming 99. The Commission put forth expectations regarding programming for children and youth in the 2000 licence renewal. The Corporation has asked to have all such expectations removed from the next licence renewal.
100. As shown in Table 2, the amount of time devoted to Program Category 05A (Formal education and pre-school) on CBLT plummeted from 10 hours per week (more than seven percent of the schedule) in 2001 to five hours per week (3% of the schedule) – in other words, a 50% reduction.
101. This is a seriously retrograde move on the part of the CBC, and Friends urges the CRTC to reinstate its 2000 expectations for programming to children and youth for the next licence term.
102. Friends recognizes that since the 2000 CBC licence renewal, the quantity and availability of children’s programming on other Canadian licensed services has increased significantly. The CBC should not confine itself to occupying those
28 Likely associated with the establishment of the Factual Entertainment group in 2006/07.
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niches in which the private sector chooses not to operate. As a public broadcaster, it has as much of a responsibility, and as much of an opportunity, to make a distinctive contribution to children’s programming as to news, drama or other genres in which all broadcasters participate.
“I have been recently informed about the CBC's request to drop the requirement of providing children's programming from their licence. Currently, the CBC is the only provider of quality Canadian children's programming, given the fact that the commercial providers in Canada simply play re-runs of CBC programs. As a parent, I feel that the CBC should cater to all Canadians, and it's important that the CBC produce quality children's programming that reflects Canadian values, and culture. This includes programming that is in both English and French, since this is often children's only exposure to the other official language.” Joe Bowser, Vancouver
Drama 103. Decision CRTC 2000-1 accepted the CBC’s commitment to broadcast a minimum of 5.5 hours of Canadian drama per week. In the applications before the Commission, drama and comedy are combined with documentaries and awards shows for a total commitment of 7.0 hours per week.
104. As shown in Table 2, the total amount of drama of all types (including comedy) in all sub-categories of Program Category 07 declined as a proportion of the CBLT schedule from 46% in 2001 to 40% in 2011. Table 3 indicates that the Canadian proportion of this content also declined slightly from 33% in 2001 to 30% in 2011. The declines were substantially similar across the prime-time and non- prime portions of the schedule (Table 4).
105. In addition to these declines in total program content in the drama category, CBC has come to rely more and more on repeat broadcasts to make up its quota in this key genre. In 2001, the 46% of the schedule made up of drama was 19% first-run and 27% repeats. By 2011, the composition of the 40% of the schedule devoted to drama was a stunningly low 5% original and 35% repeats!
106. With regard to the key sub-category of ongoing dramatic series (07A), Table 3 shows that CBLT broadcast less than five hours per week of Canadian programming of this type in 2011, little more than a third as much as the almost 13 hours broadcast in 2001. Non-Canadian content in this sub-category more than doubled over the same time period, from just under seven hours to 16 hours per week.
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107. Friends recommends that the Commission retain a distinct expectation for Canadian drama, at a level commensurate with the Corporation’s previous commitment of 5.5 hours per week. Given the increasingly heavy reliance on repeats in this category, the Commission should include a provision for a minimum amount of original or first-run programming of this type.
Music and Variety 108. The CBC’s abandonment of arts and culture programming, on both Radio and TV, is one of its greatest and most disappointing failures during the last licence term, and has been deplored by many Friends supporters.
109. To quote from Decision CRTC 2000-1:
“46. The national public broadcaster has an important responsibility to bring to Canadians the best of Canadian popular culture, as well as performances by Canadian orchestras, dance ensembles and theatres across the country. The Commission notes that performance and variety programming has represented a very small portion of the CBC’s peak time schedule in recent years…. “47. In this regard, the Commission expects the CBC to adhere to its commitment for the new licence term, to: “Each year, broadcast a minimum of 24 presentations of complete or substantially complete performances by a Canadian performing arts company.
“Broadcast twelve of these performances each year in peak viewing periods.”
110. In the early years of 2000 licence term, this commitment was fulfilled largely through a program series entitled Opening Night, which presented two hours of arts and culture programming in prime time each Thursday evening. That series has been cancelled (and not replaced). Arts programming on ETV is now confined to a handful of occasional specials. The ETV’s current licence renewal application is silent on this matter.
111. Table 2 confirms this, by showing that music and variety programming from categories 08A, 08B and 90, which represented a scant 2% of the schedule in 2001, had fallen to virtual invisiblity: less than half of 1% in 2011.
112. Possibly the requirement to present “complete or substantially complete performances by Canadian performing arts companies” is no longer the most appropriate criterion in this area. Nevertheless, however formulated, Friends urges the Commission to retain a meaningful expectation with regard to
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Canadian arts, music, variety and cultural programming, especially in prime time.
CBC Radio Two: Format Change
113. In its January 1999 submission for the renewal of the Corporation’s English Radio network licences, the CBC offered a clear and unequivocal description of the nature of the Radio Two service:
“CBC Radio Two is primarily a classical music and fine arts service. In addition to the classics, Radio Two also plays other musical genres that are under-represented on other radio stations, such as jazz, folk, world music and alternative pop. Considerable time is devoted to national and regional arts journalism, as well as regular CBC Radio national and regional newscasts and other essential information.” 29
114. In September 2008, CBC radically altered the format of Radio Two. 30 The effect of the changes was to reduce substantially the amount of airtime devoted to classical music, restricting it to mid-day and weekend listening ghettos on the schedule. There have been further incremental reductions in classical music since then.
115. The format change prompted immediate, loud and sustained outcries of protest from Radio Two listeners. Three years later, approximately one-third of the more than two thousand individual letters of intervention filed by Friends supporters in response to the Commission’s 2011 call for comments specifically mentioned the demise of classical music on Radio Two as a major concern.
116. The CBC has explained that it made these changes in order to attract a larger and younger audience to Radio Two, and has since claimed that this strategy has been successful. In fact, BBM data indicates that several years later, Radio Two’s overall audience share is still smaller than it was before the format change, albeit slightly younger.
CBC Radio Two Share of Listening Among Anglophones 12+ in CBC Areas 31
Fall 2003 3.2
29 p. 9, paragraph 22. 30 Parallel, though not identical, changes were made around the same time on the French-language Espace Musique. This intervention focuses on the English-language Radio Two service. 31 Source: BBM data.
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Fall 2004 3.0
Fall 2005 3.3
Fall 2006 3.7
Fall 2007 3.5
FORMAT CHANGE
Fall 2008 2.9
Fall 2009 2.7
Fall 2010 2.7
Fall 2011 3.0
CBC Radio Two Share of Listening by Age Group Before & After Format Change
Fall 2007 Fall 2011
12-17 1.0 0.7
18-24 0.5 1.1
25-34 0.9 1.5
35-49 1.8 2.5
50-64 4.3 3.4
65+ 9.4 5.5
CBC Radio Two Audience Profile by Age Group Before & After Format Change
Fall 2007 Fall 2011
12-34 5% 13%
35-49 15% 20%
50-64 29% 31%
65+ 51% 36%
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117. In short, marginal gains among younger listeners have been more than offset by substantial losses among older listeners who are disproportionately impacted because of the penchant of most commercial radio stations to target younger audiences, thereby leaving older Canadians with much fewer listening options.
118. Friends’ opposition to this format change is not predicated on an assumption that classical music is somehow superior to other musical genres. Nor are we implying that the CBC’s desire to support Canadian singer-songwriters and expose under-played Canadian popular music is not a worthy objective, deserving of support.
119. Moreover, we recognize that any public broadcaster’s mandate needs to be delivered across a full range of platforms, including digital media as well as conventional broadcasting – although we question the wisdom of deciding that classical music should be relegated almost entirely to the digital arena, in favour of popular music on one of only two over-the-air channels.
120. However, we consider that the Canadian public was denied a legitimate opportunity to discuss these issues openly, before a decision was made. This is as much a question of corporate governance, and of public accountability, as of programming philosophy.
121. Our inventory of other English-language public broadcasting systems, such as those of the United Kingdom, the United States of America and Australia, shows that Canada is now the only jurisdiction without a dedicated classical music service – a traditional and precious hallmark of public radio offerings around the world.
122. Had the Radio Two situation arisen in the UK – i.e. if the BBC had proposed to drop classical music from Radio 3 – it would have had to submit its plans to the BBC Trust, where they would have been subject to the Public Value Test, as with any proposals by the public broadcaster to launch new services or make significant changes to existing ones.
123. In Canada, this is apparently no longer the case. Since the CRTC by and large applies the same regulatory regime to public and private stations, and since it has stepped away from detailed oversight of program content, it would seem that the Commission no longer possesses an effective mechanism to insist on public accountability from the national public broadcaster, even in such egregious cases as the manner of the Radio Two format change.
124. As part of the current licence renewal process, the Corporation responded to a series of supplementary questions from the Commission regarding programming changes to Radio Two. The CBC’s reply contains a number of questionable assertions and several blatant misstatements of fact – for example with regard to
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the history of Radio Two and its predecessor, CBC Stereo, and also with regard to the audience performance of the network since the format change. 32
125. Our point is that these questions should have been asked – and the answers discussed and debated in public – before the changes were made, not several years after the fact.
126. In another recent response to supplementary questions for the current proceeding, the CBC asserted that it was “not necessary” for it to make specific commitments to minimum amounts of music from particular content categories or sub-categories. Given the Corporation’s track record in making sweeping format changes unilaterally, without reference to the Commission or to public opinion, Friends asks how, in the absence of such commitments, the CRTC can hold the CBC accountable for living up to its programming proposals – or at least being required to explain and defend its reasons for deviating from them so substantially – in advance and in public?
127. In Friends’ view, the Commission ought to require the CBC to show cause why, having stepped so completely away from its own previous commitments regarding the format of Radio Two, it should not be required to relinquish the licences for those stations, so that they can be made available for competitive applications by other potential licensees, willing to operate in a classical music format.
128. Failing that, Friends encourages the Commission to learn from this experience and put in place a separate regulatory regime for the CBC that recognizes its unique status and obligations as the national public broadcaster. Those responsibilities include not only qualitative and quantitative differences in programming standards from those expected of the private sector, but also a much higher standard of public accountability.
129. This would seem to be the only way to ensure that something of this sort never happens again. Otherwise, proceedings like the current one become effectively meaningless, since the Corporation apparently considers itself to be unconstrained to live up to commitments made, or expectations and conditions imposed, through such a process.
32 The national Stereo Service was launched in the 1970s, not in 1984. It followed a classical music format from the outset, rather than from the early 1990s. And the audience share remains well below its level prior to September 2008.
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“In most parts of Canada, no other broadcaster is supplying the need for classical music, and opportunities to browse and purchase music are disappearing as well.” Melia Helson, Middleton
“Canada has produced a disproportionate number of classical performing artists over the years, and there is absolutely no doubt that the classical music programming of CBC Radio had a major role in this development. Many artists tell me even now how much they miss the day-to-day education, enlightenment and entertainment in classical music they used to count on prior to 2007-08.” Howard Dyck , Waterloo “No listener input was ever sought by CBC radio. Letters we sent went unanswered. Many of our favourite announcers seemed to have been either fired or ‘retired’.” David & Sally Cumming, Toronto
CBC Radio Two: Commercial Proposal
130. The Corporation has asked the Commission’s approval to carry an unlimited quantity of national advertising on Radio Two and Espace- Musique. Friends urges the Commission to deny this request. 33
131. Friends advocates this position for the following reasons:
• Allowing this proposal would effectively reward the Corporation for reneging on its programming commitments for this service.
• It would have a profoundly deleterious effect on the public service orientation of the network, and deeply alienate its remaining audience.
• If this proposal were to be approved, it would be very difficult for the Commission to deny, at a later date, a parallel proposal to re-introduce commercials to Radio One and La Première Chaîne.
33 This intervention focuses on the English-language Radio Two service.
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• The proposal would also have an extremely negative effect on private stations’ ability to discharge their regulatory obligations – especially stations in smaller markets.
• It would be impossible for the Commission to monitor and enforce effectively the restriction to “national” advertising.
132. These points are elaborated in the following paragraphs.
133. CBC Radio stopped broadcasting commercials in 1974, at the insistence of the CRTC. 34 In retrospect, it is obvious that this was a key turning point for the renaissance of CBC Radio and the subsequent “Radio Revolution.”
134. As the Commission itself observed during the previous CBC licence renewal process: “Canadians’ special attachment to CBC Radio is due in large part to the sense that it is a unique, non-commercial public service.” 35
135. The Commission is now being asked to approve a move which, if implemented, will almost certainly be seen by future historians not as an essential and welcome short-term financial reprieve, but as a fundamental policy shift contributing to the eventual demise of public service radio as we know it in Canada.
136. CBC’s Executive Director of Radio, Chris Boyce, could have been speaking for many Canadians, as well as his own staff, when he wrote in an internal memo: “I realize that for many of you, the idea of commercials on Radio Two will be hard to accept. I’ll admit it’s something that I’ve struggled with.”
137. In 2011, CBC commissioned a study from Nordicity, which purported to demonstrate that advertising on CBC Television does not detract from its mandate. As described above, that study is deeply flawed. Moreover, Friends is not aware of any comparable evidence that the re-introduction of advertising on CBC Radio would be acceptable to audiences or the public at large.
138. On the contrary, Friends has heard from many of its 175,000 supporters across Canada a loud and clear message that they believe CBC’s services are already too commercial, and that this negatively affects both programming decisions and the listening/viewing experience. Most of all, Friends supporters are adamantly opposed to the return of commercials to CBC Radio.
34 “We are going to propose to our Board [that we] get out of radio commercials altogether.” CBC President Laurent Picard at the CRTC hearing February 22, 1974, quoted on p. 130, Radio Frequencies Are Public Property: Public Announcement and Decision of the Commission on the Applications for Renewal of the Canadian Broadcasting Corporation’s Television and Radio Licenses: Report on the Public Hearing, March 31, 1974. 35 Public Notice CRTC 2000-1.
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139. Friends believes that the financial projections filed by the Corporation in support of this licence amendment application are significantly under-estimated – as are their impacts on the rest of the Canadian broadcasting system. Our analysis suggests that by Year 3 of commercial operations, Radio Two could be generating up to $30M or more of advertising revenue, rather than the $22.5M projected by the CBC.
140. There are approximately 730 commercial stations across the country that stand to be adversely affected if CBC’s proposals were to be approved. The Corporation has argued that it will somehow create new revenue sources, but a far more plausible assumption is that almost every dollar siphoned off to CBC is a dollar less of revenue for private stations – a dollar less for them to spend on providing local service to audiences.
141. While the CBC has asserted that it intends to restrict its ad sales activities to the “national” level, it has proposed a condition of licence that actually leaves it wide scope to sell on a market-by-market basis: “For purposes of this condition, the term ‘paid national advertising’ shall mean advertising material that is purchased by a company or organization that has a national interest in reaching the Canadian consumer.” In other words, it is the client that defines “national,” rather than the advertising campaign.
142. On page 20 of its August 13, 2012 response to supplementary questions from the Commission, the Corporation provided a categorical “no” in reply to an enquiry whether its definition of “national” advertising would allow for “regional” advertising. However, given the realities of the advertising business, it is impossible to understand how this could, in fact, be the case.
143. It is well known to everyone in the industry that there is no clear dividing line between “national” and “selective” radio buys. Many national advertisers routinely make targeted purchases of time, with targeted creative content, for specific regions and markets. The Corporation has the technical capacity to deliver different commercial messages to different transmitters or groups of stations through its centralized distribution system, and thus is ideally placed to offer this customized service to advertisers, placing it in an even more preferential position compared with other broadcasters. 36
144. It is a much broader definition of “national” that the CBC’s proposals imply, with correspondingly broader implications for impact on the ecology of the
36 Friends has heard from reliable sources that the Corporation has already been at work modifying its radio master control facilities, in anticipation of future commercial operations.
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advertising marketplace and the bottom lines of private commercial radio stations.
145. Moreover, whatever conditions, definitions or limits on the CBC’s sales activity might be imposed or negotiated, it is highly unlikely that the Corporation’s sales department would be motivated to turn away any business, or that the CRTC would engage a covey of analyst/inspectors to enforce such rules. It will, in effect, be “open season” for ads on Radio Two.
146. Much more significantly, Friends’ analysis indicates that if a similar move were made on Radio One, it could generate as much as $135M or more by Year 3. Given the Corporation’s severe ongoing financial constraints, it is simply not credible to believe that it will be able to resist the temptation to go down this road for very long.
147. Past experience also leads us to place little credence in assurances to the contrary by the CBC management of the day. As recently as September 25th, during the Corporation’s most recent annual public meeting, the current President & CEO said that management did not contemplate putting ads on CBC Radio One because it would “de-nature” the service, whereas Radio Two and Espace Musique are "more amenable" to ads. However, at the 1999 licence renewal hearings, when a proposal for corporate sponsorship on Radio Two was under discussion, “the licensee stated that it has no intention of reverting to on-air advertising.” 37 Yet here they are two Presidents later, at the very next renewal proceeding, seeking to do precisely that.
148. Were the Corporation to seek in the future to extend its commercial activities to Radio One, Friends’ analysis shows that the cumulative effect would be a decline of approximately 10% in the revenues of private radio stations in English Canada.
149. Analysis of the Corporation’s filings in support of this amendment application reveals a further set of related issues that are in some ways even more serious and relevant, and which Friends urges the Commission to pursue during the public hearings.
150. In its letter of April 4, 2012, the CBC states: “Without such a revenue infusion, the Corporation will be unable to maintain these services in their existing form, with the commitment they make to Canadian programming and to the celebration of Canadian music.”
151. This assertion is supported in the financial tables submitted on April 20, 2012, which show “Other” revenue sources for Radio Two (including the Parliamentary appropriation and corporate revenues) falling from almost $2M in the first year of commercial operation, to about $350K thereafter.
37 Decision CRTC 2000-1.
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152. This shift is much more dramatic if one makes the reasonable assumption that today, in the absence of commercial income, virtually all the roughly $14M annual cost of Radio Two ($17M total costs minus $3M projected sales costs) comes from these “Other” revenue sources.
153. In this table, the Corporation has signalled its intention to implement a basic shift in long-standing corporate practice. Until now, revenue from all sources has flowed to the corporate centre, and been reallocated to all CBC services on the basis of corporate priorities. Now, the Corporation seems to be saying that for Radio Two alone, unless it pays its own way, it is cut off.
154. Moreover, the same submission reveals another major break with longstanding corporate policy and practice: the principle of proportionate parity between the English and French services. Because it is obvious that Espace Musique can never become self-sufficient from commercial income, the financial projections show an ongoing annual infusion of $22-23M of corporate resources to support it – in contrast to the precipitous and almost total withdrawal of such funding from the English counterpart service.
155. It is also worth noting that, notwithstanding the longstanding historic split of approximately 60/40 between the budgetary levels required to sustain comparable English and French services within the Corporation, these financial projections show Espace Musique costing virtually half as much again as Radio Two.
156. What these tables demonstrate is that, according to the Corporation, Radio Two costs about $17-18M a year and would be charged with earning virtually all of that money from advertising, while Espace Musique, costing $24-25M a year would continue to get the vast majority of its resources from the public purse.
157. The picture painted in this portion of the CBC’s filings is partially contradicted by a more recent financial summary, submitted on September 14th in reply to supplementary questions from the Commission, and identified as “Appendix A – Financial Projections – Question 15.”
158. Here, in response to a request for financial projections for Radio Two and Espace Musique if the commercial amendment is denied, CBC indicates that funds from the Parliamentary appropriation will continue to be provided to these services, albeit at a sharply reduced level for Radio Two in particular.
159. As a result, the programming budget for the English-language network would drop by one-third, from $9M in the commercially funded scenario to $6M in 2013-2014, and even further to $4M thereafter: an effective drop of more than 50%.
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160. By contrast, the programming budget for the French-language network, shown at $15M in the commercially funded scenario, would decline under the non- commercial model by just $2M in the first year and then remain relatively constant: an effective drop of just 20%.
161. Friends recommends that the Commission take advantage the opportunity of the public hearing to clarify these inconsistencies and anomalies, and understand more clearly CBC’s intentions with regard to the future of these services, as well as pursue an indication of the apparently changed view of senior management on the principle of proportionality in the allocation of resources between French- and English language services, as noted above.
162. In summary, Friends urges the Commission to deny the Corporation’s application to amend its licences to permit the carriage of commercial messages on Radio Two and Espace Musique.
163. Moreover, we suggest that the Commission ought to take the Corporation at its word, when it says that in the absence of such a condition, it can no longer afford to operate these services. As a result, the Commission should indicate to the Corporation that it expects it to return the licences for these stations.
164. Friends believes that there are other applicants waiting in the wings, ready and able to operate the former Radio Two stations as a non-commercial, classically based national radio network. A competitive application process, imposing these fundamental conditions with regard to programming format and business model, would almost certainly result in the restoration of the status quo ante, notwithstanding the Corporation’s unfortunate decision to withdraw from this area of activity.
Regional Service and Regional Reflection
165. Section 3(1)(m)(ii) of the Broadcasting Act requires the CBC to “reflect Canada and its regions to national and regional audiences, while serving the special needs of those regions.”
166. Friends supporters deeply value the CBC’s local and regional programming services, and the way in which the CBC both reflects the unique characteristics of the places where they live to the rest of Canada, and also brings them a better understanding of the events, personalities and issues of other parts of the country.
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“I also love the CBC because I love knowing what's going on in my region of Canada. Not just knowing what the big metropolis of Vancouver is up to or how Toronto’s hockey team is doing. You can find that information anywhere that boasts a pathetic level of Canadian content. It's the localized information that is so wonderful. I can find out about the event and situations that are literally ‘close to home’. Allysa Gredling, Kamloops “Bring in more regional and local broadcasting. This would be both a public service, an act of cultural survival, a national conversation, and an economic investment (the most famous example is the Atlantic music industry).” John Saxby, Ottawa
“CBC radio provides local programming that gives a voice to communities large and small across the country. It is a way to keep us connected and engaged with our own community and our larger community, a way for people who may have never been outside of their own province or area to know what happens in other communities and what it is that binds us together as Canadians.” Carol Gibson, Vancouver
167. At the same time, our supporters tell us that they have noticed a decline in both the quantity and quality of both local/regional service and region-to-region reflection in recent years – a decline which they attribute to financial pressures and budget cuts.
“The weekday programming from 4 to 6 is too Toronto-centric. Ontario is a big province, and I believe the London area needs it's own station, like Windsor has. There's too much geography and a large population base between Windsor and Toronto. As well, Fresh Air seems to be heavily influenced by Toronto people and events.”
Linda Cryderman, Aylmer “CBC Radio 1 should have more local news and news commentary programming. Many programs are replayed over and over again during a week. The news reporting has turned to sensational and entertainment news included as filler. There must be a return of investigative reporting on issues really concerning the local community and province...”
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Deborah Jasinoski, Sherwood Park
168. While this cause-and-effect relationship may be true, nevertheless the CBC does have, and does make, choices about how it spends the approximately $1B in public funding it receives each year. Friends believes that it should not choose to divert resources from the high priority of regional service and regional reflection to support other priorities.
169. The loss of the Local Programming Improvement Fund has been a further major blow to an already financially challenged Corporation. In its September 14, 2012 response to supplementary questions by the Commission, the CBC said: “In July 2012, the Commission announced the phase-out of the LPIF by September 2014, which will result in an elimination of $47M of funding to CBC and Radio-Canada’s local television programming in smaller markets.”
170. This is a most regrettable turn of events, and Friends urges both the Commission and the Government of Canada to seek ways to offset this additional financial blow to the CBC. At the same time, Friends expresses the hope that the Corporation will not absorb this additional budget reduction through cuts to local programming services alone, but in a balanced way, and we encourage the Commission to carefully review CBC’s financial plans to ensure that this is the case.
Local and Regional Service: English Radio 171. Friends commends the Corporation on its commitment, in the Strategy 2015 document, to extend local programming services to currently underserved areas, using all available means, including conventional radio and television, as well as new media.
172. In spite of the growing use of new media for both information and entertainment, they are not substitutes for over-the-air media. Therefore, we urge the CBC to continue extending service via radio and television wherever this is technically feasible.
173. In its August 13, 2012 response to supplementary questions from the Commission, the Corporation wrote: “CBC/Radio-Canada cannot address its financial pressures without making changes to the services it offers. For its English services, the Corporation will be scaling back its plans in a number of areas, including a delay in the launch of new radio stations in four communities and implementing a digital-only strategy for any additional, as yet unannounced, communities. The delays for announced radio stations will be as follows: Kamloops will open this fall, London and Waterloo Region
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will open later this winter or spring 2013 and new local programming from Saskatoon will launch later in 2013.” 174. The 1,500,000 residents of these four communities and their surrounding listening areas have had repeated assurances from the Corporation that plans for local CBC Radio service will be implemented. In view of past broken promises, Friends urges the Commission to make the CBC’s implementation schedule for these four stations a condition of licence.
“In Saskatoon, Saskatchewan's largest city, I can presently watch local CBC TV through Sasktel Max, but in Tisdale, with only Shaw satellite, even CBC Saskatoon is not available. The most local news is from Regina. So local CBC TV coverage is wanting, and closing the Saskatoon station would make me feel more estranged from my community.”
Deanna Gruending
Local and Regional Service: English Television 175. Friends notes with approval that the Corporation has indicated that it is prepared to accept, as a condition of licence, the requirement to broadcast a minimum of 14 hours per week of local programming on its metropolitan stations in Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal and a minimum of 7 hours per week of local programming on its non-metropolitan stations in Regina, Winnipeg, Yellowknife, Windsor, Fredericton, Charlottetown, Halifax and St. John’s.
176. Friends notes that this condition is not contingent upon the continuation of the LPIF, and therefore expects the Commission to ensure that financial pressures will not be used as a rationale for attempting to reduce this condition of licence during the forthcoming licence term.
177. In its licence renewal application for the ETV network, the Corporation described numerous additional enhancements to local programming, over and above these minimum commitments, which were made possible by the LPIF in eligible markets. The application states: “Without the LIPF as part of our overall financial picture, the increase in the quantity of local news and the increase in the number of original stories would not have been possible.”
178. Friends trusts that, in spite of the demise of the LPIF, the Corporation will do its best to sustain these very important and highly valued improvements in local television service.
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179. In the renewal application, the Corporation states that the vast majority of its local television programming is news content, and proposes to eliminate any licence conditions, expectations or commitments with regard to local or regional television programming in genres other than news. Friends deplores CBC TV’s abandonment of local and regional non-news programming, and encourages the Commission to explore with the Corporation ways of address this deficit.
180. In this regard, we note that Decision CRTC 2000-1 required the CBC to live up to its commitments with regard to levels of non-news programming in each of nine regions, and we therefore ask what steps the Commission plans to take to call the Corporation to account for unilaterally abandoning that commitment during the past licence term.
Regional Reflection on the National Networks: English Radio 181. The reflection of all parts of Canada to the country as a whole is one of the central and invaluable roles played by CBC Radio – one that is frequently referenced by Friends’ supporters. Traditionally, in general terms, this regional reflection takes the form of information programming on Radio One and performance programming on Radio Two.
182. As part of both the ongoing changes to the programming orientation of Radio Two and the ongoing budgetary reductions facing the Corporation, a very significant and negative step has been taken by the CBC – a sharp reduction in the human, technical and financial resources associated with the recording and broadcasting live music performances across the country, and their complete elimination in many centres, notably right across the Prairies.
183. Friends urges the Commission to raise this subject with the Corporation, and to put in place firm expectations for both Radio One and Radio Two regarding levels of regionally originated production in general, and of regional live music production in particular. These expectations might take the form of a minimum number of hours of such productions broadcast annually by region – taking into account the differing sizes and capacities of each region.
Regional Reflection on the National Networks: English Television 184. Throughout its licence renewal application, the Corporation makes repeated reference to its desire for “broader and more streamlined regulatory obligations,” and states repeatedly that there is “no need for the CRTC to set expectations” to ensure that certain desirable outcomes are delivered.
185. To the contrary, throughout this intervention Friends has argued that detailed regulatory conditions and expectations are essential to ensure that the Corporation lives up to its commitments and discharges its mandate. We have
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also outlined why we disagree with the Corporation’s desire to be governed by the same broad policies that apply to the rest of the Canadian broadcasting system, rather than ones that are tailored to the unique responsibilities of the national public broadcaster.
186. Nowhere is this more evident that in the important case of regional reflection to the country as a whole on the CBC’s English-language Television network. This topic was a major preoccupation at the 1999 licence renewal hearing, and was addressed at length and in detail in the resulting Decision CRTC 2000-1. The central provision in this regard is quite clear:
“24. The Commission therefore imposes a condition of licence requiring the CBC to broadcast on its English-language television network during peak viewing periods, in each year of the licence term, certain minimum hours of priority programming for which the principal photography occurs more than 150 kilometres away from Toronto. In each of the first two years of the licence term, the minimum of such programming must be an average of 5 hours per week. In each of the next five years of the licence term, the minimum average must be 6 hours per week…. In fulfilling this condition, the Commission expects that the CBC will draw this priority programming from across the country in a reasonably balanced manner, over the licence term.”
187. In its recent annual self-assessment reports filed with the Commission, the Corporation has asserted that it has met or exceeded this condition of licence. However, the reports fail to provide sufficient evidence to confirm that this is in fact the case.
188. Moreover, an examination of the program logs for CBLT, the CBC’s owned-and- operated station in Toronto, for the entire broadcast year of 2011 failed to identify so much as a single entry coded as “REG,” as programs meeting the above criteria ought to be identified. 38
189. In the present licence renewal application, the CBC proposes to remove any and all conditions, expectations, requirements or commitments with regard to regional production for the English Television network.
190. It would appear that the Corporation has unilaterally decided to ignore this issue and walk away from this condition of licence, even before the present application
38 A program may be logged as “REG” if it is “at least 30 minutes long (less a reasonable amount of time for commercials, if any) in which the principal photography occurred in Canada at a distance of more than 150 kilometres from Montréal, Toronto or Vancouver. Programs in which the principal photography occurred on Vancouver Island will also be considered regionally produced programs.” CRTC Television Log Guide (Ottawa, 08/04/2009) at 24, sec. 13 (“Canadian regionally-produced programs”).
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has been considered. This flies in the face of both a crucial aspect of the CBC’s regional mandate as well as a fundamental principle of regulatory oversight.
191. As has been observed earlier, it is long-standing Commission practice not to provide relief from regulatory obligations to licensees that cannot demonstrate compliance with those obligations during the preceding licence term.
192. Friends strongly urges the Commission to take up this matter with the Corporation in some detail, so that it can, in the first instance, determine with accuracy and confidence the extent to which the CBC has or has not been living up to this condition of licence.
193. Then and only then should discussion turn to the question of what type of obligation or commitment in this area might be appropriate in the next licence term. Friends recommends retention of the previous condition of licence. Repeat Programs on Radio and Television
194. It is a well-known principle in broadcasting that repeating programming makes good sense in terms of both audience service and business practice, as long as it is done strategically. Carefully scheduled repeats can expand the audience for good programs, while additional plays are a sound way to amortize costs.
195. However, Friends supporters have recognized an increasing trend towards more and more repeats on CBC Radio and Television in recent years – a trend that they believe is directly related to budget reductions.
“Many of the pieces crafted for TV are unsuitable for radio, but they are used just the same. Programs are repeated over and over again, so that it is rarely possible to find something that has not been viewed before, except the News, and then you are lucky if you haven't already heard the same thing on radio a day earlier.
Barbara Wyatt, Cherry Valley
196. Friends encourages the Commission to raise the issue of repeats with the Corporation during the forthcoming public hearings, in order to understand more clearly the programming and financial considerations that underlie these decisions, and to determine what, if any, appropriate limits ought to be placed on the use of repeat programming.
197. As a contribution to that discussion, Friends offers the following observations and recommendations. News
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198. Over the past several years, the Corporation has implemented a policy of “news integration,” designed to leverage all of its journalistic resources across all delivery platforms. While this policy has had many benefits, it has also led to some drawbacks.
“Very often that minute is taken up with a repeat of what has just been said on the national news, thus cutting out the few seconds that could be devoted to local news. Several times, we have had to phone CBC (to speak to a machine) to tell them that they have just given us the weather forecast for the previous week.” Louise Bourgault, Ottawa
199. One of these is the tendency for similar or identical news reports to be seen and heard over and over again on local and network Radio, local and network Television, and on-line. As one Friends supporter recently said at a town hall meeting in Saskatoon: “I want some new news!”
200. The Commission might wish to undertake a quantitative analysis of the repetition of news items across all CBC services during a representative time period, as a basis for further exploration of this subject, which goes to the very heart of the principle of maximizing diversity of voices and views on the public airwaves.
Radio Programs 201. When CBC Radio anthologizes local radio current affairs items and packages them for network broadcast, it provides a valuable service to listeners in terms of both regional reflection and the exchange of regional perspectives.
202. On the other hand, when CBC Radio repeats, in whole or in large part, flagship daily programs like The Current and Q later on the same day as their original airing, one inevitably wonders whether this is motivated by audience service or resource constraints. Increasing numbers of repeats of other programs, such as Ideas, and extended summer seasons filled with repeat broadcasts, also exacerbate this tendency.
203. The issue is especially relevant today, given the increasing availability and use of CBC Radio programs on an “on-demand” basis, via podcasts, which ought to reduce the need for, and value of, repeat broadcasts over-the-air.
204. Again, it would be helpful for the Commission to undertake, or to request from the Corporation, a quantitative assessment of the number of repeat programs on CBC Radio, in order to establish a baseline for further investigation.
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Television Programs 205. Data about repeats on CBC Television is already available from program logs. In its examination of data from a comparative review of the program logs for CBLT Toronto in the 2001 and 2011 broadcast years, Friends was interested to discover the following revealing statistics:
2001 2011
1st Repeat Total 1st Repeat Total play Play
Canadian 45.3% 30.4% 75.7% 34.8% 46.0% 80.8%
Non- 12.2% 12.1% 24.3% 6.5% 12.7% 19.2% Canadian
Total 57.5% 42.5% 100.0% 41.3% 58.7% 100.0%
206. The table shows that the ratio of original to repeat programming has effectively been reversed over the past decade, from roughly 60:40 to roughly 40:60.
207. The same pattern is true for Canadian programming. What this means is that the increase in Canadian content on the CBC Television schedule over the past decade has been made up entirely of repeat rather than first-run shows. In fact, there is actually 10% less original Canadian production being aired on CBC Television now than there was a decade ago. We believe that this ought to be a matter of deep concern to the Commission.
208. Friends recommends that the condition of licence regarding minimum levels of Canadian content on CBC Television include a provision requiring at least half of that Canadian content to consist of original, first-run programming.
Corporate Governance and Accountability
209. Canadian practice, since the dawn of the audio-visual era, has been for the Governor-in-Council, effectively the Prime Minister, to appoint members of the CBC Board of Directors, including the Chair of the Board and the President & CEO. This practice, unusual in other western democracies, creates several problems of governance and accountability:
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• Political patronage appointments reduce the quality and experience of Board appointees, thereby undermining public confidence in the senior leadership of the Corporation. 39
• The current President & CEO entered his position lacking previous experience in radio or television management, programming and scheduling – an experience deficit he shares with several of his predecessors.
• Unlike other large corporations, the Board of Directors has no power to hire or fire the President & CEO. As it would provoke a scandal if the Prime Minister were to attempt to do so, the President & CEO is effectively accountable to no one – except the Commission.
210. While the Commission has no role in supervising CBC’s governance, the periodic requirement that the Corporation appear before the Commission to apply for the renewal of its various network licences provides a (rare) occasion when the CBC’s senior leadership engages in an a genuine accountability relationship with an agency which can represent the interest of its shareholders, while arms-length from political control in journalistic, creative and programming matters, as provided under the Broadcasting Act. 40
211. Hence the legitimate public concern when the Commission, for whatever reason, refrains from exercising this critical function for a period of thirteen years, and an enhanced appetite on the part of the interested public to see evidence that the Commission is exercising its special accountability role vis-à-vis the Corporation with appropriate gravity, in a manner distinctly different from the Commission’s relationship with any other licensee. 41
212. The various recommendations herein should be considered from this perspective.
Yours sincerely,
39 For example, seven of the current eleven CBC Directors are visibly associated as financial supporters of the current governing political party on Elections Canada’s website. 40 Section 46 (5). 41 Friends uses the word ‘accountability’ in a macro rather than a technical sense. The latter can be found here: http://cbc.radio-canada.ca/_files/cbcrc/documents/financial-reports/q1-2012-2013-en.pdf and here: http://cbc.radio-canada.ca/en/reporting-to-canadians/transparency-and-accountability/ During an appearance before the House of Commons Standing Committee on Canadian Heritage on the occasion of his proposed reappointment as President of the CBC for an additional three years in 2004, then President Robert Rabinovitch was asked by an MP: “Mr. Rabinovitch, who do you consider to be your boss”? Rabinovitch reflected, then replied: “The people of Canada”, paused, then added: “through this Committee”. To which the MP replied: “You mean I’m your boss”?
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Ian Morrison Spokesperson
For information: Jim Thompson 613-567-9592
(Appendix follows on pages 52-59.)
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APPENDIX: PROGRAM CONTENT TABLES
Table 1: Canadian and non-Canadian content over the average week broadcast by CBLT in 2001 and 2011
2001 2011 Average Average % of % of Weekly Weekly Total Total Hours Hours Canadian 103.1 75.7% 136.1 80.8%
Non-Canadian
US 22.4 16.5% 23.2 13.8%
UK 8.9 6.6% 7.9 4.7%
France 0.2 0.2% 0.1 0.1%
Other 1.5 1.1% 1.1 0.6%
Subtotal, non-Canadian 33.1 24.3% 32.3 19.2%
Total 136.2 100.0% 168.3 100.0%
Source: CBLT program logs for 2000/01 and 2010/11
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Table 2: Average hours per week of programs broadcast by CBLT, by CRTC program category, in 2001 and 2011
2001 2011
Hours % Hours %
News & information
News (010) 18.8 13.8% 24.9 14.8%
Analysis and interpretation (02A) 6.2 4.6% 13.7 8.1%
Long-form documentaries (02B) 4.4 3.2% 6.1 3.6%
Reporting and actualities (30) 1.0 0.7% 0.0 0.0%
Subtotal, news and information 30.4 22.3% 44.7 26.6%
Religion (40) 0.2 0.1% - 0.0% Human interest
Game shows (100) - 0.0% 6.0 3.6%
General entertainment including reality TV (110) 2.3 1.7% 0.6 0.4%
Subtotal, human interest 2.3 1.7% 6.6 3.9%
Education/recreation
Formal education and pre-school (05A) 10.1 7.4% 5.0 3.0%
Informal education /recreation and leisure (05B) 3.5 2.6% 20.3 12.1%
Subtotal, education/recreation 13.6 10.0% 25.3 15.0%
Sports
Professional sports (06A) 11.5 8.5% 9.9 5.9%
Amateur sports (06B) 11.2 8.2% 8.8 5.2%
Subtotal, sports 22.7 16.7% 18.8 11.1%
Drama
Ongoing dramatic series (07A) 19.7 14.5% 20.7 12.3%
Ongoing comedy series (07B) 1.0 0.7% 2.3 1.4%
Specials, made-for-TV films (07C) 2.4 1.7% 4.6 2.7%
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2001 2011
Hours % Hours %
Theatrical films (07D) 9.9 7.3% 10.2 6.0%
Animated television programs (07E) 22.7 16.7% 20.1 11.9%
Comedy sketches, improv, stand-up (07F) 6.8 5.0% 8.3 4.9%
Other drama (07G) 0.3 0.2% 1.0 0.6%
Subtotal, drama 62.9 46.2% 67.1 39.9%
Music & variety
Musical and dance performances (08A) 1.3 0.9% 0.5 0.3%
Music video clips or concert excerpts (08B) 0.0 0.0% - 0.0%
Variety (90) 1.7 1.3% 0.1 0.1%
Subtotal, music & variety 3.0 2.2% 0.6 0.4%
Interstitials (120) 1.0 0.7% 5.2 3.1%
Total 136.2 100.0% 168.3 100.0%
Source: CBLT program logs for 2000/01 and 2010/11
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Table 3: Programs broadcast by CBLT in 2001 and 2011, by country of origin and program category
2001 2011
CRTC program categories Canadian Non-Canadian Canadian Non-Canadian
Hours % Hours % Hours % Hours %
News and information
News (010) 18.8 18.2% 0.01 0.02% 24.9 18.3% 0.04 0.1%
Analysis and interpretation (02A) 6.1 5.9% 0.1 0.3% 13.7 10.1%
Long-form documentaries (02B) 3.6 3.5% 0.8 2.3% 5.9 4.3% 0.2 0.5%
Reporting and actualities (30) 1.0 1.0% 0.04 0.03%
Subtotal, news and information 29.5 28.6% 0.9 2.6% 44.5 32.7% 0.2 0.7%
Religion (40) 0.2 0.2%
Human interest
Game shows (100) 0.04 0.03% 6.0 18.5%
General ent’ment incl reality TV (110) 2.0 1.9% 0.3 1.0% 0.6 0.4% 0.0 0.1%
Subtotal, human interest 2.0 1.9% 0.3 1.0% 0.6 0.5% 6.0 18.6%
Education/recreation
Formal education and pre-school (05A) 7.6 7.4% 2.5 7.5% 5.0 3.7%
Informal educ’n /recr’n & leisure (05B) 3.5 3.4% - 0.0% 20.3 14.9%
Subtotal, education/recreation 11.1 10.8% 2.5 7.5% 25.3 18.6%
Sports
Professional sports (06A) 11.1 10.7% 0.5 1.4% 9.9 7.3%
Amateur sports (06B) 11.2 10.9% 8.8 6.5% 0.01 0.03%
Subtotal, sports 22.3 21.6% 0.5 1.4% 18.8 13.8% 0.01 0.03%
Drama
Ongoing dramatic series (07A) 12.9 12.5% 6.8 20.7% 4.6 3.4% 16.0 49.7%
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2001 2011
CRTC program categories Canadian Non-Canadian Canadian Non-Canadian
Hours % Hours % Hours % Hours %
Ongoing comedy series (07B) 0.8 0.8% 0.2 0.6% 2.3 1.7%
Specials, made-for-TV films (07C) 0.9 0.9% 1.4 4.3% 4.0 3.0% 0.6 1.7%
Theatrical films (07D) 1.6 1.5% 8.4 25.3% 1.8 1.3% 8.4 25.9%
Animated television programs (07E) 11.2 10.9% 11.5 34.8% 19.5 14.3% 0.6 2.0%
Comedy sketches, improv, st-up (07F) 6.6 6.5% 0.2 0.6% 8.3 6.1%
Other drama (07G) 0.3 0.3% 1.0 0.7%
Subtotal, drama 34.3 33.3% 28.6 86.3% 41.5 30.5% 25.6 79.4%
Music and variety
Musical and dance performances (08A) 1.0 1.0% 0.3 0.9% 0.2 0.1% 0.3 0.9%
Music video clips, concert excrpts (08B) 0.0 0.0% - 0.0%
Variety (90) 1.6 1.6% 0.1 0.2% 0.1 0.1%
Subtotal, music and variety 2.7 2.6% 0.4 1.1% 0.3 0.2% 0.3 0.9%
Interstitials (120) 0.9 0.9% 0.1 0.2% 5.1 3.8% 0.1 0.4%
Grand Total 103.1 100.0% 33.1 100.0% 136.1 100.0% 32.3 100.0%
Source: CBLT program logs for 2000/01 and 2010/11
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Table 4: Programs broadcast by CBLT in 2001 and 2011, by country of origin, program category and time of day
2001 2011 Time of day and program category Non- Non- Canadian Total Canadian Total Canadian Canadian
PRIME TIME: 7-11 PM News and information
News (010) 19.1% 0.01% 19.1% 17.3% 0.02% 17.4%
Analysis and interpretation (02A) 8.6% 8.6% 7.6% 7.6%
Long-form documentaries (02B) 6.8% 0.9% 7.7% 8.7% 0.1% 8.8%
Reporting and actualities (30) 0.4% 0.4% 0.1% 0.1%
Subtotal, news and information 34.9% 0.9% 35.9% 33.8% 0.1% 33.9%
Religion (40)
Human interest
Game shows (100) 0.0% 0.1% 10.8% 10.8%
General entertainment incl'g reality TV (110) 2.1% 0.6% 2.7% 1.1% 1.1%
Subtotal, human interest 2.1% 0.6% 2.7% 1.2% 10.8% 12.0%
Education/recreation
Formal education and pre-school (05A) 0.0%
Informal education /recr’n and leisure (05B) 0.01% 0.01% 2.6% 2.6%
Subtotal, education/recreation 0.01% 0.01% 2.6% 2.6%
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2001 2011 Time of day and program category Non- Non- Canadian Total Canadian Total Canadian Canadian
Sports
Professional sports (06A) 18.7% 18.7% 16.9% 16.9%
Amateur sports (06B) 2.9% 2.9% 1.6% 1.6%
Subtotal, sports 21.7% 21.7% 18.5% 18.5%
Drama
Ongoing dramatic series (07A) 6.0% 1.4% 7.5% 7.6% 1.4% 9.0%
Ongoing comedy series (07B) 2.0% 0.3% 2.3% 4.1% 4.1%
Specials, made-for-TV films (07C) 1.7% 2.4% 4.0% 1.2% 0.4% 1.6%
Theatrical films (07D) 3.5% 12.4% 15.9% 0.7% 4.7% 5.3%
Animated television programs (07E) 0.3% 0.4% 0.7% 0.1% 0.6% 0.6%
Comedy sketches, improv, stand-up (07F) 5.5% 0.3% 5.8% 10.7% 10.7%
Other drama (07G) 0.6% 0.6% 0.2% 0.2%
Subtotal, drama 19.6% 17.2% 36.8% 24.6% 7.0% 31.6%
Music and variety
Musical and dance performances (08A) 1.9% 0.7% 2.6% 0.4% 0.8% 1.3%
Music video clips or concert excerpts (08B) 0.0%
Variety (90) 0.1% 0.2% 0.3% 0.2% 0.2%
Subtotal, music and variety 2.0% 0.9% 2.9% 0.6% 0.8% 1.4%
Interstitials (120) 0.1% 0.0% 0.1% 0.1% 0.1%
Prime Time (7-11 pm) Total 80.3% 19.7% 100.0% 81.3% 18.7% 100.0%
NON-PRIME TIME
News and information
News (010) 11.6% 0.0% 11.6% 14.1% 0.0% 14.1%
Analysis and interpretation (02A) 2.8% 0.1% 2.9% 8.3% 8.3%
Long-form documentaries (02B) 0.9% 0.4% 1.4% 2.1% 0.1% 2.2%
Reporting and actualities (30) 0.8% 0.8% 0.0% 0.0%
Subtotal, news and information 16.2% 0.5% 16.7% 24.4% 0.1% 24.6%
Religion (40) 0.2% 0.2%
Human interest
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2001 2011 Time of day and program category Non- Non- Canadian Total Canadian Total Canadian Canadian
Game shows (100) 0.0% 1.6% 1.6%
General entertainment incl'g reality TV (110) 1.2% 0.1% 1.3% 0.1% 0.0% 0.2%
Subtotal, human interest 1.2% 0.1% 1.3% 0.2% 1.6% 1.8%
Education/recreation
Formal education and pre-school (05A) 7.9% 2.6% 10.5% 3.8% 3.8%
Informal education /recr’n and leisure (05B) 3.7% 3.7% 14.6% 14.6%
Subtotal, education/recreation 11.5% 2.6% 14.1% 18.4% 18.4%
Sports
Professional sports (06A) 3.8% 0.5% 4.2% 2.9% 2.9%
Amateur sports (06B) 10.4% 10.4% 6.2% 0.0% 6.2%
Subtotal, sports 14.2% 0.5% 14.7% 9.1% 0.0% 9.1%
Drama
Ongoing dramatic series (07A) 10.9% 6.5% 17.4% 1.4% 11.7% 13.2%
Ongoing comedy series (07B) 0.0% 0.1% 0.1% 0.6% 0.6%
Specials, made-for-TV films (07C) 0.3% 0.5% 0.8% 2.7% 0.3% 3.0%
Theatrical films (07D) 0.2% 3.6% 3.8% 1.2% 5.1% 6.2%
Animated television programs (07E) 11.5% 11.8% 23.3% 14.7% 0.3% 15.0%
Comedy sketches, improv, stand-up (07F) 4.6% 0.1% 4.7% 3.4% 3.4%
Other drama (07G) 0.1% 0.1% 0.7% 0.7%
Subtotal, drama 27.6% 22.5% 50.1% 24.7% 17.4% 42.1%
Music and variety
Musical and dance performances (08A) 0.3% 0.3% 0.03% 0.03%
Music video clips or concert excerpts (08B) 0.0% 0.0%
Variety (90) 1.7% 1.7% 0.04% 0.04%
Subtotal, music and variety 1.9% 1.9% 0.1% 0.1%
Interstitials (120) 0.94% 0.05% 1.0% 3.8% 0.1% 3.9%
Non-prime time total 73.8% 26.2% 100.0% 80.7% 19.3% 100.0%
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