MONTREAL – Heading into a long weekend, CBC CEO Hubert Lacroix sent out a memo to staff on Thursday bringing everyone up to date on all the changes that are happening (layoffs last week) – and still have to happen (more will be announced) – singing the praises of the public broadcaster (TV and radio ratings wins, and better than expected English TV ad revenue), and explaining the massive challenges that remain for all pubcasters.
Here it is in its entirety.
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Tuesday was the end of the fiscal year. It was a turbulent year full of accomplishment, change, challenge, difficulty and success. I have fallen out of the habit of providing regular quarterly updates to you on the state of the broadcaster. Starting with the first quarter of 2015-2016, I will reinstitute that quarterly touch point. Meantime, here is an update on where we are as we start a new year.
Tough week last week. I want to thank Jennifer McGuire, Patricia Pleszczynska and their local teams for working so hard to put together a plan that maintains our regional presence across the country, albeit in a different, more sustainable way. The goal, as we’ve said many times, is both financial sustainability and a new engagement with local audiences across the country. More local, at less cost.
The cost of the local plan, in human terms, is high. Some dedicated and talented people are affected. Regions have been and remain an essential priority. If we want to truly serve Canadian communities, we need to do it in a way that is sustainable over the long-term. The local plan reduces the cost of our service and starts to reshape it for how content is being, and will be, consumed in the future. But last week was still painful.
Is that kind of radical change necessary? Look at what is happening around the world…
The U.K. will spend the next two years planning and debating how to ensure that their public broadcaster plays a commanding role, not just in Britain but also in the whole world. Last month the Managing Director of the BBC laid out the ambitious role it intends to play in what he calls the “internet age”, placing big data, social media and more collaboration and partnership at the centre of his plans. He said: “The BBC will be a central meeting-place for that discussion and participation.”
Sounds a lot like our own plan, doesn’t it? The BBC is also saying things like:
“Because the BBC exists not only to enhance individual lives but also to enhance our collective and national life. It helps unite the nation… As our society fragments further, who else will bring us together? Where else can the nation speak, listen and respond? Where else can we reflect on our differences and diversity together?”
And it’s not just in Britain.
Faced with a budget cut of Aus$207 million beginning of July of this year, the Australian Broadcasting Corporation (ABC) is cutting services, reconsidering spending priorities and implementing a “smarter and more focused” approach to how it services rural and regional Australia – including closing stations.
In France last month, a committee of four federal cabinet ministers announced and endorsed an inter-ministerial working group report on France Télévisions’s relevance in 2020. It recognises that the broadcast framework that has delivered public service media in France for the last 40 years needs to be totally revamped.
This week, researchers from Japan’s public broadcaster, NHK, traveled from Tokyo to meet with us. They view what we are doing as progressive and ahead of the curve and want to better understand how we are proceeding. None of those other public broadcasters have the financial limitations that we have. And so, none of them is changing as rapidly as we are. But all see the train coming down the track.
Here at CBC/Radio-Canada, it is hard work.
We are stabilizing our financial situation. Last Wednesday a balanced budget for 2015-2016 was approved. It sees us create some room for significant reinvestments in the programming schedules of French and English, television, radio and digital as we promised we would last June. As planning for the next season takes shape, Heather, Louis and I will have more details on those reinvestments. This will be the first time we have been able to up our investment in schedules since 2009.
Here are some highlights as we closed our 2014-2015 fiscal year:
• Radio, on both sides of the house, is bucking trends that indicate radio audiences are declining among privates. Our four radio networks continue to see strong audiences and in many cases record share. The only sour note for radio has been the underperformance of ad revenue associated with music radio. That experiment has not achieved what we had hoped. On the flip-side, the introduction of advertising to music radio has had no adverse effect on listenership.
• CBC’s prime time schedule is having a great year with the three new shows, Book of Negroes, Schitt’s Creek and X Company all breaking the 1 million viewer mark and can now boast 20 Canadian Screen Awards!
• ICI Radio-Canada Télé has seen continued success with original dramas like Nouvelle adresse and Unité 9, which sustains ratings of 2.1 million viewers on average. On New Year’s Eve, Bye bye 2014 broke records with over 3.9 million viewers.
• We’ve been very active with community events like Vancouver’s Junior J-school, the recent Hack-a-thon in Montreal, celebrating the 50th anniversary of Radio-Canada television in Quebec City and the World Acadian Congress last August.
• In fact the number of web, mobile and social innovations coming out of the regions every week is already breathtaking. It makes last week’s announcement all the more heartbreaking when you think of all we could do with the right funding. But it also speaks to the potential of the local strategy to reach more Canadians in new ways and add real value.
• English Services advertising revenue projections were lowered for 2014-2015 given the end of the NHL contract. It is, however, on track to exceed its projected ad budget by about $14 million.
• The Quebec ad market dipped significantly and French Services will likely fall short of its budget by approximately $15 million. We have made the necessary adjustments to transfer funds to French Services to ensure that we didn't have to make additional service cuts as a result of this shortfall.
• No further cuts beyond those already planned are expected in order to balance the 2015-2016 budget.
• CBC and Radio-Canada remain the top media brands in the country.
There is a theme that runs through almost all those highlights. It is that we are doing an excellent job of delivering distinct and relevant content to Canadians. But we are challenged with coming up with the funding to continue doing that in a way that is sustainable in the long term.
Just balancing the budget was a feat given the tough ad market that we’re in and the funding hits we have taken. Self-generated revenue represents about 36% of our total revenues. It looks like the Canadian advertising market as a whole will end the 2014-2015 fiscal year down about 5%. We expect the ad market to be flat over the coming year.
This past weekend, I received an email asking “…when will this end?” It is a fair question. And the answer comes in a few parts.
1. We have so far implemented about half of the workforce reductions we announced last June.
2. We’re looking to stabilize our operations as quickly as possible.
3. We will be, from now on, an organisation that continuously adapts to the needs of Canadians. We do not expect the pace of change to ease up. If we stay true to our values and our core identity, and are ready and able to evolve in every other sense, we will thrive. Those that cannot adapt will fade.
These are tough times. But they are leading somewhere. We are as creative, as efficient and as ambitious as any broadcaster in the world. Sure we need more funding. But even without more funding, our plan is to challenge ourselves to be great.
I hope to be talking to many of you in the next weeks and months. And I know Heather and Louis are looking forward to meeting with you as well.
Hang tough and as always don’t hesitate to reach out to me if you have questions or comments.
Hubert
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Photo by Steve Faguy
