Elimination of advertising on CBC/Radio-Canada Services would be bad public policy

Canada has a mixed public-private broadcasting system; private broadcasters have access to public subsidies and regulatory protection to their ad revenue base to help them meet Canadian content requirements. The national public broadcaster has access to advertising revenues to help meet Broadcasting Act objectives. Private and public broadcasters compete on many levels, but each has a unique contribution to make.

Additional Information:

There is no good public policy reason to eliminate or seriously reduce advertising on the TV services of CBC/Radio-Canada. It does not detract from its public broadcasting mandate.

  • The PSBs of most industrialized countries carry advertising. Most western countries (13 out of 18), and the majority of public broadcasters in these 18 countries (20 out of 32) count on advertising as part of ongoing funding for public broadcasting.
  • There is also no correlation between use of advertising revenue and the amount of public funding a public broadcaster receives.
  • All public broadcasters seek to reach national and regional audiences regardless of their financing models.
  • The Public Broadcasting System in the US is not a viable alternative model for CBC/Radio-Canada.

Without advertising revenues and no replacement in CBC/Radio-Canada's budget, the effect on the public broadcaster would be devastating.

  • The elimination of all advertising would have a $533M financial impact on CBC/Radio-Canada. Not only would it lose advertising revenue of $368 million, but it would face some $190 million in additional costs in order to fill the airtime freed-up by the loss of ads and sports programming. In other words, the loss of advertising revenue would actually be compounded by incremental programming costs.
  • The elimination of advertising revenues would make it exceedingly difficult for CBC/Radio-Canada to fulfill its existing mandate and, of course, severely compromise the Corporation's ability to roll-out the "Everyone, Every way" initiatives planned by 2015.

There would be significant negative implications for Canadian programming, independent producers and indeed for the Canadian economy as a whole.

  • The elimination of advertising on CBC/Radio-Canada would see Canadian programming expenditures decrease by $160M annually, and lead to a $150M overall decrease in independent production activity.
  • Private broadcasters would attract much, but not all, of TV advertising formerly on CBC/Radio-Canada. There would be leakages out of the Canadian economy resulting in a net loss in GDP of $165 million - which translates into more than 3,600 job losses.
  • The loss of CBC/Radio-Canada as an advertising vehicle would also be negatively perceived by advertisers who see considerable value in the audiences CBC/Radio-Canada is able to deliver. With reduced inventory, TV ad rates would be pushed up, especially in smaller markets

Additional information:

Why Advertising on CBC/Radio-Canada is Good Public Policy - Nordicity Report

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