MARKHAM, ON – “Re-commercialization of CBC Radio is a terrible idea” and would be “extremely detrimental to smaller market operations” says Douglas E. Kirk, President, Ontario Association of Broadcasters (OAB).
In a letter to the CRTC dated Dec. 11, Kirk responds to the CBC’s proposal made at its recent license renewal hearing that it be allowed to run commercial ads on its radio properties and responded to the CBC’s claims regarding revenue growth.
In the letter Kirk questions whether CBC Radio is actually facing a “financial crisis” given the $327.3 million in parliamentary appropriation it receives.
“What we are talking about regarding re-commercialization is 5-6% of the funding currently provided. Yet the CBC is still establishing local stations, namely Kitchener and Hamilton, Ontario, where they already have excellent regional coverage and where the incremental benefits versus substantial incremental costs have not been demonstrated at all,” writes Kirk.
The OAB suggests that the CBC can avoid re-commercialization of its radio services through a mandate review which prioritizes its national and regional mandates and restricts CBC radio’s local strategy to markets which are not served by commercial broadcasters.
Kirk also disputes the CBC’s figures that the radio industry forecasts revenue growth of 4-5%, and that in fact it’s closer to 0.5-1.5%.
“The impact of the CBC’s re-commercialization will take at least that much revenue out of the system and will withdraw it from Canada’s private broadcasters, thereby compromising their ability to provide service.”
He added that while the plight of smaller market stations was dismissed by the CBC it is where the impact of re-commercialization will be most acutely felt.
“National advertisers do use radio in smaller markets but the commercials are often booked locally, so the revenue appears as “local.” Having the CBC deliver this advertising, with no limits as to advertisers or number of commercials, is potentially extremely detrimental to smaller market operations.”
He summed up that the OAB is steadfastly and vigorously opposes re-commercialization of the CBC’s radio services for the following reasons:
i) Re-commercialization would destroy the essence and uniqueness of CBC radio; thousands of interveners have told us that over the course of the proceeding.
ii) Re-commercialization of CBC will introduce new commercial radio services in virtually every Canadian radio market, without case by case consideration to determine whether these radio markets can support new commercial service.
iii) Since CBC listenership is already in the market, re-commercialization will only result in a redistribution of radio revenues from private broadcasters to the publicly funded CBC. The impacts will likely be felt more acutely in the smaller markets.
“The listeners don’t want re-commercialization. The internal staff of the CBC don’t want re-commercialization. Private broadcasters don’t want it. We cannot see anyone who wants this, other than the management of the CBC,” writes Kirk.
He added that there are alternative strategies to maintain and enhance CBC at lower cost without destroying the essence of its value to Canadians.
