CBC wants to play ads on Radio 2, Espace Musique for 2 more years

TORONTO – The Canadian Broadcasting Corporation says increased federal funding is not enough to offset the need to continue to sell national advertising spots on two of its radio networks.

The CBC wants the broadcast regulator to extend for another two years its ruling that allows the CBC to play paid national advertising on CBC Radio 2 and ICI Musique, formerly Espace Musique, for another two years.

The CRTC ruled in favour of the CBC’s request in 2013, allowing it to play paid national commercials until the end of this August. Now, the CBC wants that deadline struck from the licences of the two radio services, and thus extended until August 2018 to align with license renewals for its radio and TV services.

The CBC initially requested permission to play ads to help offset declining federal subsidies.

In first budget, the new liberal government of Prime Minister Justin Trudeau allotted $675 million over five years to the public broadcaster, an increase over earlier funding which had been cut sharply by the previous Conservative government.

In questioning the CBC’s application, filed in early March and released by the CRTC Wednesday, the regulator asked, among other things, why the public broadcaster would need to continue seeking advertisers after getting more government money.

In response, the CBC said that while it is grateful for the extra funding, it is not enough to make up for the need to bring in other revenue streams.

The federal funding only covers a portion of the CBC’s budget and will not reverse the funding cuts and freezes that have already taken place, the CBC said, adding that Canadians pay less than many other Western countries to subsidize their public broadcaster.

Additionally, TV advertising revenues continue to drop, and regulatory changes are expected to continue to decrease advertising and subscription revenues. The corporation wants to at least maintain, if not improve, its radio advertising revenue.

The CBC said it feels it important to be able to offer potential advertisers the ability to advertise on radio in addition to other platforms in order to attract clients.

National advertising revenue from the two radio services fell well below the CBC’s initial expectations, which it now says were far too optimistic. They brought in $1.1 million in revenue in the 2013-14 broadcast year and $1.4 million the following year.

The broadcaster described itself as new to the radio advertising market and still learning how to sell available inventory as it seeks advertisers that align with its Canadian music strategy.

The CBC estimates the ads could bring in nearly $2 million in revenue over the 2016-18 broadcast years.

The initial ruling was met with heavy opposition from listeners and industry insiders, the CRTC said.

At the time, the regulator said the CBC would have to prove the decision would not negatively impact advertising markets or excessively disrupt listeners if it wanted to continue broadcasting ads past August 2016.

The broadcaster also had to maintain its level of investment in radio and continue to offer variety and diversity on the two services.

The CBC said in its application that it had abided by all these conditions.

The CRTC is accepting comments on the public broadcaster’s request until June 22.