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Without hockey, the CBC model is now fundamentally broken by Scott Stinson

Nov 29, 2013

Source: National Post

Let’s acknowledge this right away: Of course the CBC is much more than just hockey.

The public broadcaster is vast, with a huge news operation, radio stations that provide content unmatched by private outlets, and a television network that includes everything from family-oriented dramas to homespun comedies to noble documentaries to reality shows that exhort the harsh realities of capitalism.

But it can be all those things, and it doesn’t change the fact that the loss of its hockey programming, a result of the deal announced on Tuesday that gives Rogers exclusive national multi-platform rights to the NHL for 12 years, leaves the CBC with a fundamentally broken model.

Because the public broadcaster has a government-mandated hybrid setup that forces it to compete in the commercial space while also fulfilling a public-service mandate, it has always tried to find the balance between the two. Some of its programming fits the “telling Canadian stories” part of the mandate, some of it fits the “attracting viewers and advertisers” part. Hockey Night in Canada did both, allowing the broadcaster to provide an element of Canadiana — what do we identify with in this country if not hockey? — while also drawing its biggest audiences of the week, by a considerable margin. For the week ending Nov. 18, Hockey Night was the eighth-most watched program in Canada, averaging more than 1.8 million viewers. No other CBC program cracked the top 30 list released by BBM Canada.

Hockey Night in Canada’s ratings tell only part of the story, though. When the CBC tries to sell its network to advertisers and media buyers, it is selling its entire lineup of programming. This always put it at a disadvantage relative to Canada’s private broadcasters, who build the bulk of their prime-time schedules around imported U.S. shows that already have built-in exposure. The CBC would develop shows at considerable cost, even sometimes find success with them, and then still end up going up against lineups full of The Blacklist and Agents of S.H.I.E.L.D. and six different versions of CSINCIS or whatever. In that same recent list of the top 30 broadcasts, the only Canadian entries were the CFL playoffs and three evening newscasts. The remaining 25 were U.S. imports.
Public broadcasting

Different countries use wildly different models to fund their national broadcasters. A look at some of them:

Canada
The CBC in 2012 received just under $1-billion in direct funding from the federal government, which is referred to as a parliamentary appropriation. That works out to roughly $30 per citizen. The CBC also earned about $330-million from advertising sales, $170-million from its specialty services and $130-million from a variety of other measures including retransmission rights. Its television, radio and new media costs in 2012 were about $1.5-billion.

United Kingdom

The BBC is funded primarily through a television licence fee that costs about $250 per household. A chief difference between the BBC and CBC is that the former receives funding on a multi-year basis and does not have to wait for annual government approval. It does not allow advertising on its main television network, but does sell ads on some of its services. Britain also has Channel 4, which is publicly owned but derives all of its revenue from commercial sales.

United States
PBS stations are largely viewer-supported, with donations accounting for 65-75% of revenues. They will also run what are effectively advertisements for corporate sponsors. PBS stations tend to have a much smaller program lineup than other public broadcasters, with much of the schedule given over to reruns — and solicitations for donations.

Norway
The country has the most well-funded public broadcaster in the world. Every household that has a TV or device that can receive a TV signal must pay the annual kringkastingsavgiften, which works out to about $450. Norway’s main public network, NRK, has pioneered the phenomenon of Slow TV, which is hours and hours of not much: sunsets, a train rolling through the countryside, the view of the sea from the deck of a cruise ship. More than 1.3 million viewers tuned in as people knit for eight hours earlier this month.

Australia
The Australian Broadcasting Corporation used to be funded by licence fees, but has for several decades received money directly from the federal government. It does not sell commercial advertising on its television network.

Germany
Its public broadcasters are also funded through a licence fee that is the equivalent of about $300 annually. Each household must pay it, as does each company that receives a TV signal and even government institutions. Commercial revenues make up about 6% of their budgets.

How does that imbalance impact revenues? CTV, which has 15 U.S. imports among those top 30 programs, had ad revenue from conventional television in 2012 that was about three times the amount earned by CBC, according to documents filed with the CRTC. But NHL hockey was the thing that gave the CBC a fighting chance.

Now, that asset is gone, scooped up — inevitably, given the way rights for live sports telecasts have shot up in price in recent years — by one of those private broadcasters. The hollow shell of the new arrangement, where CBC will air Rogers-produced hockey games, won’t be anywhere near the same thing. The CBC used to have an exclusive hold on those Saturday night broadcasts — as well as those in the later rounds of the playoffs — which meant it could sell that programming as premium space to advertisers. Now it is reduced to using the platform to promote its other shows, while Rogers reaps the benefit of the ad sales.

Short of some miraculous uptick in the ratings for the rest of its schedule, then, the CBC will be selling a lineup at a much greater disadvantage to the private networks than it did before. And the word “lineup” is key: Television advertisements are generally sold in bundles, so a company that wants to buy into a high-end slot also ends up with ads that run during soft spots in the network’s schedule.

But there should be a glimmer of hope amid the gloom. The CBC, and the government, must realize that the present hybrid model can’t continue, not when the broadcaster just lost its Holy Grail, as Rogers boss Nadir Mohamed called it Tuesday, and amid an already fracturing media landscape. There’s an opportunity for the CBC to get out of the competing-for-eyeballs business altogether, and to retrench and refocus as a programmer that focuses on high-quality shows that aren’t intended to have the broad mass-audience appeal of The Mentalist or The Amazing Race.

Could a pared-down CBC lead the way for a Canadian industry with a small slate of, say, serialized dramas and dark comedies? Two big successes in the U.K. in recent years were The Fall, a five-episode series about the hunt for a serial killer, and Getting On, the wince-inducing comedy about working in an extended-care facility. It is hard to imagine either of them being produced at today’s CBC, where ratings numbers remain paramount; both are what broadcasters call “challenging” programs. Denmark and Sweden, meanwhile, have each produced series in recent years — The Crime and The Bridge — that were critical hits and went on to be adapted by U.S. premium cable channels.

Privately, creative types who work on even successful CBC series will acknowledge that they do so always with one eye fixed firmly on the ratings. A show that is too edgy or too serialized — too cable, in other words — is at risk for low numbers, even if it draws a smaller viewership that loves it. Boutique audiences don’t help sell ads.

But, freed from the fight for a commercial audience, the public broadcaster could more freely produce shows that served some sort of niche.

Such a move would have to be part of a cascade of changes at the broadcaster. If it were to emphasize content that is not being delivered by the country’s private broadcasters, then one could argue that large parts of it are unnecessary. Its Internet news operations, to pick one example, are taxpayer-funded services that compete directly with private businesses — including this one, obviously — that have their own challenges in the modern media market.

My colleague, Andrew Coyne, has called for CBC television to be transformed to a subscription-only model, similar to premium-pay cable services such as HBO. The argument here is simple: If the public broadcaster’s content really is as unique and essential as is often claimed, then the market should be able to support it.

None of these have to be binary solutions: A wholly public CBC on one hand, a completely privatized CBC on the other. But it seems an appropriate time to consider what Ottawa wants out of its public broadcaster. So far, the Conservatives have responded to CBC’s loss of Hockey Night in Canada by saying that it has all the public money it needs, thank you very much. The opposition parties have expressed more concern, with NDP heritage critic Pierre Nantel noting the “monstrous impact” of the loss of the hockey contract and Liberal leader Justin Trudeau saying he wants the CBC to be fully funded. “I certainly believe, as do most Canadians,” Mr. Trudeau said, “that we need strong, secure, stable funding for our national broadcaster.”

Those terms, however, are close to meaningless. The CBC’s public funding per capita is about $30. In Canadian dollars, the per-capita amount of public broadcasting funding in the United Kingdom is more than $100; in Germany it is closer to $150. (In the United States it’s less than $5.)

So, what is “stable” public funding? Would the opposition parties support a CBC that stops chasing commercial advertising and gets an injection of public funds, and uses it to focus on producing only what private broadcasters will not? Would the Conservatives like to see fundamental reforms, or would they prefer it suffer the death of a thousand cuts?

Fundamentally changing the broadcaster’s business model would be a bold move, and as such it’s hard to see anyone at the CBC, or the federal government, supporting it.

But something needs to change. The status quo is the obvious route. It’s just not the right one.

© National Post