Licence Renewal – English Services Panel Opening Remarks

November 20, 2012, Ottawa

Steve Guiton:

Good morning Mr. Chairman, Vice-Chairman, Commissioners, staff.

Again, for the record my name is Steven Guiton and I am Vice President and Chief Regulatory Officer at CBC/Radio-Canada. With me this morning on the English Panel are:

Front Panel:

  • Hubert T. Lacroix, President and CEO of CBC/Radio-Canada
  • Kirstine Stewart, Executive Vice-President, English Services
  • Neil McEneany, General Manager, Finance and Strategy
  • Jennifer McGuire, General Manager and Editor in Chief, CBC News and Centres
  • Christine Wilson, Executive Director, Content Planning, English Services
  • Chris Boyce, Executive Director, Radio and Audio, English Services

Back Panel:

  • Sally Catto, Executive Director, Scripted and Commissioned Programming
  • Mark Starowicz, Executive Director, Documentary Programming
  • Julie Bristow, Executive Director, Studio and Unscripted Programming
  • Jeffrey Orridge, Executive Director, Sports Properties and General Manager, Olympics
  • Alan Dark, General Manager, CBC Revenue Group, Media Sales and Marketing
  • Fred Mattocks, General Manager, Media Operations and Technology
  • Bev Kirshenblatt, Senior Director, Regulatory Affairs

I will now turn it over to Kirstine Stewart to begin our presentation

Kirstine Stewart - Introduction

At the risk of dating myself, I wanted to let you know that this coming spring marks my 25th year in the media industry.

I started my career licensing the best Canadian shows of their time like Degrassi, Ready or Not to major broadcasters worldwide BBC, ITV, France 2, Channel 9 Australia, Rai, and many more. I sold the first ever western show to a newly formed Gostelradio Russia after the Soviet lines were redrawn - that Canadian landmark show was the animation series "The Raccoons".

After that, I programmed a Canadian owned US cable network called Trio, I then moved to the US to run Hallmark Channels' 23 networks worldwide. I returned to Canada to head up Alliance Atlantis' channels from HGTV to BBC Canada and 12 others, and arrived here at the CBC almost 7 years ago, where I am currently responsible for all media under English services, and now I sit before you today.

I don't tell you this to impress you with my resume - I tell you this to frame a story of the recent evolution within the media industry. From the perspective of watching and participating in the growth of this incredibly active and expansive quarter century of media, there are things I've learned to be some of the universal truths that drives its successes.

The experiences I have had, and the work I have done, has also taught me about the role Canada plays - and could in the future play - on the evolving world stage.

I have worked a total of 18 years in private media, and now another 7 years here at CBC. I have made decisions at the private broadcasters' boardroom table, and I have made them at the table at the CBC. Naturally, unsurprisingly, the way decisions are made, the criteria up against choices are measured and plans are made are, quite plainly, different. That's not to say there is anything wrong or incorrect in either circumstance, but it is clear from my own personal experience that the priorities and motivations of a public broadcaster are different than a private broadcaster. And that is fine, that is good - we need to accept those differences, and together work so that those differences balance and benefit of the overall Canadian media system.

I know and am deeply committed to the important place the CBC, Canada's public broadcaster, holds within the delicate balance of the Canadian media ecosystem, as a major contributor and driver of great Canadian content. Content that is engaging increasing numbers of Canadians by being accessible, responsive, and reflective of what they expect from their public broadcaster.

In a submission from our independent production partners, the CMPA says– “The CBC should be commended for continuing, in difficult and challenging financial circumstances, to deliver numerous services that are meaningful to millions of Canadians”

And from one producer in particular Robert Lantos of Serendipity Points Films wrote – “The CBC is one of the few ties that bind all Canadians. In today’s information and entertainment cultured universe, the CBC’s strategic importance is greater than it has ever been… Despite all the abundance of services, the CBC remains the only one whose real, unmitigated priority is to create and deliver Canadian programming”

Managing Today & Planning for the Future

We're proud of the work we've done at CBC since we were last in front of the CRTC (Anglo) - the sheer number of Canadians who connect with a CBC English Services on a daily basis is now 51% or 11.3 million daily.

The quality of information and news programming together with the content we produce and commission has been rewarded with more than 200 national and international awards in the past year. A quantitative survey of the public told us that 89% percent of Canadians who use our services agree that CBC programming is of high quality.

But we know we have work to do to further evolve CBC and the service it brings to Canadians. And we do this work in a challenged environment - reduced commitment in funding from government, the loss and reduction of some of the traditional funding sources like LPIF, CMF, and production tax credits. Like everyone in media in Canada, we as well face the challenge of a market of multiplying demand and increasing choice with diminishing ability to control major aspects of costs and revenue.

English Services benefits from the appropriation and receives 57% of CBC/Radio-Canada's total government appropriation. The recent reduction of the appropriation hit English Services hard as 57% of the total cut was absorbed by English Services. Television took the brunt of those reductions and the cuts were allocated 86% to Television budgets and 14% to Radio. The cut to Television meant show cancellations - 175 hours of programming taken out of the schedule which we launched September 2012.

The cuts were managed in the various departments of the CBC through the prism of 2015 as you heard Hubert explain earlier. At CBC we employed strategic reductions planned to not just weather the cuts, but also to prepare CBC for a new reality of permanent change. The goal is to come out the other side of the next 3 years a more focused CBC which drives the best of Canadian programming by using Canadian talent, savvy and technological advantages to give Canadians what they expect from their public broadcaster, delivered in accessible ways that keep the control of usage in their hands.

The cuts left us with difficult choices, but listening to Canadians concerns and desires about what they want and need from CBC set the criteria for making the changes. Because it is the public who are at the heart of what we do at CBC. We monitor usage, interact with listeners and viewers on their experience with CBC. We work through our regional offices and with our partners in business and in content creation across the country and we react, as we must, to reflect as much as we can to be in service to Canadians.

I read with interest a number of the interventions solicited by the CRTC as part of this process. It is encouraging to see the energy, passion, thoughtfulness and care which has gone into these responses, and they reflect themes we see regularly in our day to day business working to serve the Canadian public.

Ultimately, in the context of diminishing funding and finite 24 hour a day linear schedules, our challenge is to meet the needs of Canadians and maintain the quality of service they have told us they expect from the CBC. As we can all see in the interventions filed, there are many competing demands from all sides. Some interveners want more PNIs (programs of national interest), some specifically more documentaries, others more children’s programming; some want more regional and also some would like CBC to commit to more independent production.

But the reality is although we strive to be the best public broadcaster, we cannot take on all requests. It doesn't serve anyone particularly well to try to be present in everything, and end up mastering nothing. A decision to increase one type of programming invariably means a decrease in another – this is the balance we strive to maintain. This is the financial reality in which we live.

We risk the opportunity to build on our significant relationships with and between Canadians if we spread ourselves 'too thin' as a broadcaster. And paradoxically, we risk irrelevancy if we allow CBC to be boxed into a corner serving only a special few.

With reference to how CBC is doing balancing the demands of Canadians within the constraints of our resources I'll read you a quote from Marketing Magazine (Alicia Androich) – “It’s hard to strike a balance of trendy and traditional, but CBC nailed it in 2011, keeping the public broadcaster on top of its game as it turned 75”

CBC’s Place in the Landscape

CBC has an important part to play in the delicate media ecosystem of Canada, and being the largest commissioner of content in the country, we hold a vital position in preparing and nurturing our collective future.

We commission and create the bulk of Canadian programming used by Bell, Shaw, Rogers, Cogeco and more on their multiple platforms VOd, online etc, and license Canadian programming to Netflix, itunes and distribute via Youtube and other indirect distributors. Our programming content drives sales and subscriptions, in this way the public/private relationship is quite symbiotic.

I read many of the interventions filed in this process, and in many I found a central theme - that we could "lose our way" as a public broadcaster in the pursuit of needed revenue, and a few point to what they see as signs that we have already abandoned a mandate.

To these I must respectfully disagree. Our mandate is clear and it's focused. To create and commission the best Canadian programming. To provide platforms and the forums for Canadians to tell their stories and reflect their own communities, their concerns, their aspirations and their unique experiences as Canadian.

CBC is part of a worldwide 'club' of public broadcasters who similarly work to serve their citizens. BBC is widely held as a harbinger of how the CBC should model itself in its quality and its programming. As mentioned within the Writer’s Guild of Canada submission, BBC is “seen by many as the cradle of public broadcasting.” Its situation is different than ours, the BBC is primarily funded through license fee, to the tune of approximately $111 per capita with a population of 62.6 million compared with our $34 per capita, which will decrease to approx $31 in 14/15 and at a population of 34.8 million. And yet it is interesting, and it's natural, to compare our programming choices to theirs, as we both work under a public service goal.

Even in the absence of ad sale revenue, the BBC’s offering is on balance, largely popular. On radio Kanye West and Jay-Z are heard on BBC One. On television you could see The Apprentice, The Voice and Dragon's Den alongside the BBC's heralded dramas and comedies. And ironically but pleasantly for us, you can watch CBC's Being Erica, just as you can also see Republic of Doyle on the public broadcaster ABC. Being Erica, anecdotally, was the 2nd only to BBC's Top Gear as the most sold series for BBC Worldwide, the producers' chosen distributor.

It's also interesting to note that the BBC bids on and carries a plethora of professional sport from Premiere League Football to Formula One and tennis, rugby, MLB and even the NFL. All in a commercial free, publicly funded television model in competition with ITV, Sky and other commercial UK broadcasters. BBC also has a vibrant digital offer of both television and audio programming, most recently breaking digital records with its US election coverage.

I point this out to illustrate some universal themes and strategies shared between public broadcasters. Firstly, it’s likely educational for some who hold BBC to be something it isn't in terms of its program offer. And secondly, it shows that even in a completely advertiser- free environment the BBC makes programming choices in an effort to serve its public with a range of cultural, popular and other imperatives, as we do here at CBC.

Our programming mix and choices are connecting and engaging more and more Canadians. They feel they are getting service and content value in exchange for the tax support they pay into our system. CBC works with close to 230 independent production companies from every province across the country. Independent producers contributed 2,456 of our broadcast hours in 2010/11 (makes up 50% all day and about 75% in prime). We are proposing a PNI of 7 hours weekly in prime time of which 75% would be independently produced to back our commitment to this programming.

Our cbcmusic site holds over 30,000 artist pages with everything from their album to touring information. We want to continue and strengthen our commitment to Canadian music which we can do with the revenue generated by our proposed funding via ad sales revenue on R2. Dragons' Den alone has put millions of dollars into Canada's venture capital system and was awarded this year by the Canadian Chamber of Commerce. We are an economic driver and play an important role in the support of various communities across the country. This is something we take seriously.

We are also willing to go where no other private broadcasters can, due to the restraints of their financial models. For every Dragons' Den there is CBC's Marketplace, a commercially risky current affairs program. For every Q there is a World Report. We are often the first, and usually the only news teams on the ground internationally bringing back news from locations like Syria. For every headline breaking news there is the investigative Fifth Estate. For every Hockey Night in Canada there is a Hockey Nation program, on the ground with clinics teaching kids and families to play safely. Our reality shows don't make people cry out of embarrassment, they motivate. It is all about balance.

As they say a picture is worth a thousand words, so I'll ask that we roll a short reel we brought to show you what we've been doing.

videoVideo Presentation

Not dissimilar to the kerplunk example used recently to describe how the CRTC sees its role in moving strategically in support of the broadcast system, CBC also makes strategic choices with its budget, its programming, its outreach. It is a constant struggle for balance. We don't always get it right, and I want to thank the interveners for feedback on what they feel the CBC could do more to serve each of their interests. And I honestly wish we had more than a 24 hour television and radio service to serve all their different needs and request. And I'm envious, admittedly, of budgets like the BBC's to invest even more in programming. But that isn't our reality, and we must deal with practicality.

So at CBC we do what we can to establish priorities, to invest costs into the programming Canadians tell us matter to them. To provide Canadians with a service they cannot get without CBC, and to make the right choices that provide the balance of service Canadians expect from their modern public broadcaster.

We look forward to speaking with you today to answer the questions you have about CBC's past performance, our goals and plans for the next license term. I am proud to have with me representing CBC some of the most qualified and talented media executives I have worked with in my 25 year career. And behind all of us here today is a similarly strong and talented workforce located across Canada. We look forward to answering your questions.

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