CBC would lose $532-million annually if forced to give up advertising, loss would have devastating impact on Canadian television production industry, says groundbreaking report

PARLIAMENT HILL—CBC revenue losses and new programming costs would total more than $500-million if it is forced to give up all its English and French-language advertising space to private networks, says a groundbreaking study the Crown corporation commissioned from an independent media consulting firm.

The national broadcaster would face a $368-million “hole” in its budget and, with new programming required to fill air time created by lost advertising placements and most likely sports programming, particularly the lucrative NHL market, net costs would rise by $532-million, says the study by Nordicity Group Ltd.

The chain of reaction started by the loss of ad revenues would likely lead to a devastating impact on the Canadian television production industry with the eventual loss of the equivalent of 3,600 full-time jobs in the section and a drop of $165-million in Canada’s GDP, the study says.

The study was released Monday after nearly two months of Conservative pressure against the CBC in Parliament, led by Prime Minister Stephen Harper's (Calgary Southwest, Alta.) Parliamentary Secretary, Conservative MP Dean Del Mastro (Peterborough, Ont.). The CBC has also been under assault from Quebecor Inc., the private-sector media giant in Quebec.

The study warned that without ad revenues, CBC would likely eventually reach a “tipping point” where it would be unable to meet its mandate under the Broadcasting Act.

The study noted CBC, including the French-language Radio-Canada, receives about $1-billion annually from the government, which it says is the lowest on a per-capita basis of government funding for public broadcasters in North America and Europe.

“If CBC-Radio-Canada removed sports and administered severe cuts in its programming budget, presumably its audience figures would decline, perhaps precipitously,” the report says.

“It might approach the one to two per cent share of TVO in Ontario, or two to three per cent market share of Tele-Quebec in Quebec. If it reached anywhere near that point, low audience appeal would surely enter into any calculus of value for money when reviewed by the federal government and Parliament,” the report says.

The Nordicity consultants included an exhaustive analysis of the PBS network of public broadcasting stations in the United States, concluding that approach, often used as a comparison by Conservatives who want to end CBC’s ability to raise revenues through advertising, would not work in Canada, and the CBC network would lose its current coverage and programming abilities.

In the meantime, the report says, while the impact of eliminating advertising from CBC/Radio-Canada would a dramatic “shake-up” for CBC, it would be a “windfall for private broadcasters who, says the study, would be unlikely or unable to fill the CBC’s shoes in Canadian programming production and broadcast.

Origin
Source: Hill Times