CBC proposes ad-free future

WANTS $318M

The Canadian Broadcasting Corp. has submitted a proposal to the federal government requesting $318 million in additional funding in order to allow the public broadcaster to move to an ad-free model.

Inspired by the British Broadcasting Corp., the CBC is also recommending that its funding level be “depoliticized” by tying its subsidy to its current five-year licence cycle, indexing it to inflation, and keeping it separate from election and government budget announcements.

“Canada today is the thirdworst-funded public broadcaster in the world,” said Heather Conway, CBC’s executive vice president of English services, in an interview with the Financial Post. “I think it’s an important conversation for Canadians to have, to decide whether they want public broadcasting or not. If we don’t shift the financial model for supporting public broadcasting, there is a question as to its ultimate survival.”

Conway said the decision to ask for the increase in funding came after Heritage Minister Melanie Joly indicated that “everything is on the table” with regard to the government’s current review of federal Canadian content policy.

The investment would bring the per capital annual support for the public broadcaster to $46, up from $34.

The CBC says the $318 million figure it is requesting will act as a “replacement” if the broadcaster were to eliminate advertising, noting it would require $253 million to make up for ad revenue and $105 million to produce content to fill the gaps in airtime left open free of ads. Going ad-free would also save $40 million that would otherwise be spent selling ads.

The public broadcaster has faced a storm of criticism in recent months from executives of private newspaper companies testifying before a panel of MPs studying the future of media in Canada. Those critics have argued that while the CBC is the recipient of a fiveyear, $675-million increase in funding from the federal government in addition to its annual $1-billion largesse, its digital operations have taken away potential ad revenue from struggling private competitors.

However, the CBC says that its proposal to go ad-free would help Canada’s media economy, with two-thirds of its ad revenue set to “migrate to other Canadian media, including private TV and digital, for a net gain to them of $158M.”

“There’s a lot of tools the private sector has at its disposal: they have telephones, cellphones, Internet fees; and the opportunity to merge or grow or make acquisitions and sell off their businesses,” added Conway. “We have no other tools at the CBC.”

The CBC says the economic benefit of moving to an ad-free model would be a gain of $488 million in GDP, a $355-million labour income impact and the creation of 7,200 new jobs.

“When we looked at what happened when Creative Britain was put in place, and the investment in the BBC tripled, we saw that employment in that sector has doubled, the exports have doubled,” said Conway.

While Conservative leadership candidates Kellie Leitch and Brad Trost last week called for the dismantling of the broadcaster, Conway said the broadcaster’s role in Canada is more vital than ever.

“It doesn’t go without notice that our private sector competitors run American content 95 per cent of the time,” she said. “I have every opportunity to be reminded of American culture. I don’t have every opportunity to be reminded of Canadian culture.”