Tuesday, 1 May 2012

CBC’s advertising debate

CBC’s advertising debate

April 26, 2012 | Graham F. Scott                                        
 As Canada’s public broadcaster contends with its shrunken budget, the public broadcaster contemplates advertising while competitors and allies wait for regulatory bodies to have their say. Is CBC Radio 2 even worth the wait?

When CBC president and CEO Hubert Lacroix took the stage at an all-hands town hall the afternoon of April 4, employees knew to expect bad news — it was just a question of how bad. On a stage engulfed in funereal black, Lacroix outlined how the CBC intends to cut its budget by 10% over the next three years.
The speech wasn’t a stirring call to arms or a combative volley back at the federal government. Instead, Lacroix’s tone was one of resignation and inevitability.
“Is this a fair reduction? Today, questions of this kind, and answers thereto, are not very important,” he said. “I will let Canadians decide for themselves if this is a fair cut. For our part, we need to adjust and move on.”
The plan calls for CBC to cut $150 million in spending through 2015, and raise $50 million in new revenue. Among the many cuts and changes it announced, it also declared its intention to sell advertising on two of its radio properties: Radio 2 and Espace musique.
Of all the measures Lacroix announced, it was this one — a relatively small measure, revenue-wise — that seemed to represent not just a budgetary, but a spiritual crisis. “I realize that for many of you, the idea of commercials on Radio 2 will be hard to accept,” Chris Boyce, CBC’s executive director of radio, wrote in an internal memo. “I’ll admit it’s something that I’ve struggled with.”
CBC has implicitly positioned the move as a compromise: accept ads on Radio 2 in order to preserve a fully non-commercial Radio One. But can that firewall last? Nearly everyone seems to agree that Radio One, with its drastically larger audience and more local programming, would be a much richer prize for advertisers.
If ads become a success on Radio 2, opening Radio One may prove increasingly tempting. However, that’s a big “if.”
Untangling exactly what an ad on Radio 2 might be worth will be arcane, says David Bray, president of Toronto agency Bray and Partners Communications. “It would add a little breadth to the market,” he says, but “the numbers are very weak, competitively speaking.”
Following a string of programming changes that have proven unpopular with listeners, Radio 2′s share has slipped below 3.0 and that audience is spread thin across the country — an awkward venue for most ad buyers.
“Qualitatively, there are going to be CBC listeners that are perfect for certain products,” says Bray, but “to find an advertiser that is truly national — and I mean every nook and cranny — there aren’t many of them.”
Pleasing advertisers will be easy, however, compared to assuaging the famously protective and change-averse Radio 2 audience.
“A lot of people are going to be upset,” said Friends of Canadian Broadcasting spokesperson Ian Morrison. The group believes the move threatens the “distinctiveness” of Radio 2, especially niche programming that private broadcasters are unlikely to step in to replace.
The announcement was met with derision by competitors as well (or, in some cases, chilly silence). Astral Media quickly circulated an e-mail saying it was “fiercely opposed to seeing the public broadcaster start selling advertising,” adding that “CBC has to decide if it wants to continue being funded by Canadians and fulfill its mandate or if it wants to operate commercial radio stations.”
The Association of Canadian Advertisers (ACA) led the small band of observers that applauded the move. “Advertisers are often looking for niche opportunities,” said ACA vice-president of policy and research Bob Reaume. “We expect some of these on Radio 2 and Espace musique are a pretty unique sort of audience. So why not?”
A CBC spokesperson declined to discuss specifics of what advertising on Radio 2 might sound like, but CBC’s official statement specified “advertising and sponsorship,” implying some combination of NPR-style “Brought to you by” messages and the possibility of traditional 30- or 60-second ad slots.
Ultimately, the choice to put ads on Radio 2 and Espace musique will not actually be up to the CBC. Both radio networks broadcast with strictly non-commercial licences, which can only be amended by the CRTC. It’s not at all certain that the broadcast regulator will play along.
It was a 1974 CRTC decision that removed ads from CBC radio in the first place, and while there is precedent for reintroducing them, instances of the commission converting a non-commercial licence to a commercial one are rare. That makes handicapping the odds futile at this point. “Impossible to predict,” says Bray; “50-50,” says Reaume.
And opposition to the plan will be fierce. While Reaume says the ACA will speak in favour of the idea whenever hearings begin, “there will be 10-to-one arguments against this than for it — maybe higher.” Rival private broadcasters, media unions, Friends of Canadian Broadcasting and other citizen groups are all expected to line up against the move.
What all of this means for the eventual outcome is obscure — but what is clear is that CBC, already in difficult financial circumstances, has few friends amongst the deficit hawks in the Harper cabinet. That suggests resigned and gloomy town halls yet to come.

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