Speeches and Interviews
November 14, 2003
Managing Canada's National Public Broadcaster: Challenges and Progress
Speaking Points for Robert Rabinovitch, President and Chief Executive Officer, CBC/Radio-Canada, McGill University, Montreal, Quebec
Introduction
Thank you for inviting me to speak to you today.
Here to speak to you about the CBC and its importance to Canada.
About why we still need a public space, a Canadian voice in an environment largely dominated by foreign programming.
Why the economics of broadcasting are such that profit-oriented private broadcasters can't … and won't … deliver Canadian programming.
Also wish to tell you about changes we've been making over the past four years.
Changes to our programming.
Improvements to the way we do business.
How we are reinforcing our role as a national public broadcaster and bringing greater value to Canadians for their investment.
CBC/Radio-Canada's Scope of Operations
Before getting started, I'd like to offer some basic facts about CBC/Radio-Canada.
Many of you may be surprised by the scope and the impact of our services.
The Corporation is unique in the Canadian broadcasting system.
We are the only broadcaster providing coast-to-coast-to-coast traditional and new media services in French, English and 8 Aboriginal languages in the North.
Our services include:
Two conventional national television networks, one in English and one in French.
Four national radio networks, two in English and two in French.
Two all-news television specialty services: CBC Newsworld and RDI.
Three specialty services: ARTV, The Documentary Channel and Country Canada.
Galaxie, our pay audio service on cable and satellite that reaches over 2 million paying households in Canada.
Radio Canada International, our short-wave radio service which operates in seven languages.
Our award-winning Internet sites: CBC.ca and radio-canada.ca
Innovative, interactive sites for youth:
NewMusicCanada.com
JustConcerts.com
120seconds.com
bandeapart.fm
CBC/Radio-Canada is also one of the top news providers on wireless.
All told, we offer more than 18 different platforms designed to serve and reach Canadians where, when and how they wish to be reached.
® With a budget of $1.4B, $860M from the government
When created, CBC had two mandates:
Universal coverage completed in mid-seventies with coverage in English and French of communities of 500 and more.
A monopoly, therefore needed to present a mixed programming schedule, including a significant amount of US light entertainment.
Today, in English Canada, the broadcasting system is a partnership of public and private broadcasters with over 200 services to choose from and over 250 digital licenses recently granted. Basically, anyone who wants a digital license can get one.
In French Canada, the situation is similar with about 50 choices on the dial.
My focus in these comments is mainly on English television, but the French reality is not far behind.
In the 80's and 90's, we tried to be both
a regular conventional network soliciting ads and hence showing a fair amount of American light entertainment
and a public broadcaster with the unique responsibilities of Public Broadcasting
quite frankly, we presented a confusing message
We were encouraged by government to solicit ads = eyeballs. The result, we looked and acted no different from private television.
We have another unique aspect to our broadcasting system - Canadians own the channels but we fill them mainly with ‘dumped' albeit popular American programs.
‘Dumped' because the cost of purchase of an American program averages about $125,000 Cdn per hour while the cost of production is in the millions.
The business case is quite overwhelming. Buy US product for $125,000 per hour — sell $300,000 to $400,000 in ads for a gross profit of over $200,000 per hour on average.
On the other hand comparable Canadian programming costs about $1.5 million to produce, the broadcaster pays $200,000 - $250,000 to purchase it, sells an average of $65,000 - $90,000 in ads for a loss of $185,000 per hour.
So it is no wonder that all the major conventional channels in prime time are almost totally programmed with US products simulcast to Canadians.
Private broadcasters, even with significant tax incentives and grants, have failed to produce Canadian content (drama) and will continue to fail because it is in their economic interest not to produce Canadian content.
Canadian content is to them the license fee that allows them to import "dumped" American content on which to make a profit.
So it is within this environment that the role of the public broadcaster in Canada must be defined.
The case for public broadcasting in Canada
Essentially, television production is based on an industrial imperative rather than a cultural one. In a profit-driven business environment, that's not a bad thing. But, in a world where Canadians are bombarded by wave after wave of foreign sounds and images, the cultural imperative cannot be overlooked.
CBC's motivation as a public broadcaster is to make quality programming about Canadians, for Canadians. Public funding creates a completely different economic reality for us. Without the CBC there simply wouldn't be Canadian alternatives to choose from.
-Tax credits
I can't emphasize this enough. Without a CBC:
Canadian stories to reflect our culture will not be made.
Regional stories explaining one region to another will not occur.
Canadian interpretation of news events will not occur. And this as well is critical. Canadians in surveys have indicated that they want international news and a Canadian interpretation of international events. Only the CBC can afford the high cost of newsgathering and Canadians come to CBC for news in unprecedented numbers.
For us, the cultural imperative trumps the business imperative.
That is not to say we can ignore the tenets of good business practice. We have an obligation to Canadians to ensure we deliver top-quality Canadians programming in the most efficient manner possible. We must be as efficient as any private broadcaster.
Bringing greater value to Canadians
Almost four years ago, we recognized that CBC/Radio-Canada needed to improve … both on a programming and management front.
In the face of rising costs, more intense competition than ever and after a decade of continuing cuts to our budget, we recognized we had to make fundamental changes.
We had to improve our internal operations … to make CBC a well-managed entity where new efficiencies could deliver dollars for programming.
We had to find the resources we needed to invest in delivering top-quality, distinctively Canadian programming.
And we had to restore Canadians' confidence that we were delivering real value for their tax dollars … delivering programming that would not otherwise exist … and delivering it as efficiently as possible.
We have achieved a great deal over the past four years.
One of our most extensive projects has been the transformation of CBC English Television into a more clearly defined public broadcaster.
1. We've delivered highly successful high impact programming to enhance Canadians' understanding of their country and history.
Canada: A People's History and Trudeau proved to be hugely popular.
Random Passage a co-production with Irish Television about the settling of Newfoundland was also very powerful.
Just a few weeks ago we aired Shattered City: The Halifax Explosion. It has received outstanding critical and audience acclaim and an audience of over 1.6 million.
It confirms that there continues to be a strong demand for high-impact — nation-sharing programming that we can bring to Canadians.
It is another excellent example of how we stand apart from other broadcasters by connecting with viewers across the country and awakening a desire to learn more about Canada's past.
2. Over the past four years, we've redefined the way that national and regional news programming is broadcast. We have created the first Canadian national newscast in the supper hour - with no commercials during that half-hour.
® About 20 new news bureaus opened across Canada.
Our flagship news broadcast, The National, was revitalized with a fully integrated format, with no commercials in the first half-hour. And we show The National four times nightly, on conventional and Newsworld, so that you can watch when it suits you. This definitely cannibalizes our 10pm show but it is designed to serve Canadians not advertisers.
One of our responsibilities is to present programming catered to specific audiences; audiences that would not otherwise receive any programming they would like to watch. And we do this regardless of audience numbers.
3. We've increased children's and youth programming by one-third (innovative, commercial-free with thirteen new series).
4. Arts programming has expanded with the addition of Opening Night — a two-hour prime-time showcase for the performing arts — again commercial free.
5. And we've re-balanced our sports coverage to give greater profile to the outstanding accomplishments of Canada's amateur athletes at the national and international levels.
In short, we want to return CBC English Television to its roots as a public broadcaster — distinct, different from private broadcasters to give Canadians real choice.
Our French Television network has also undertaken a major repositioning exercise entrenched in public service values.
Our Radio networks continue to build on their success and to deliver unique programs to Canadians. They are clear success stories of what can be done when you see your role as public broadcaster.
Both French and English Radio are achieving record-high audience ratings and support. You simply won't hear programs like Basic Black, Go, with Brent Bambury, As it Happens or the Vinyl Café on conventional private radio.
New arrivals to Canada get in a taxi in Toronto or Vancouver and what are they listening to?
Operational Renewal
On the management and operational side, we've also made major changes.
We have reviewed human resources, finance and other corporate services to improve our business practices in these areas. Last week we were named one of Canada's Top 100 Employers to work for, primarily because of our training programs and atmosphere.
Through the strategic disposition of real estate assets, we have achieved $15.3 million in savings and new annual revenues. We have saved another $4.3 million per year by negotiating new maintenance contracts and through energy conservation.
Our investments in technology are expected to yield $7-10 million in annual savings.
In Ottawa, Edmonton and Quebec City we will be bringing all our media lines together under one roof. These moves will mean enriched programming by facilitating more cross-media collaboration and sharing of resources, technologies and know-how.
We've also adopted new business approaches in various areas.
Through partnerships, we've been able to launch new services such as ARTV, The Documentary Channel, and Country Canada.
We have established a new Merchandising division, which will leverage the CBC brand further than ever.
Just this week, we created a new Mobile Division to maximize our return on this substantial investment through aggressive marketing and revenue generation.
Our coverage of the War in Iraq is an excellent example of the programming and financial benefits of cross-media cooperation.
We invest considerable amounts in our News and Information programming … it's one of the biggest part of our business.
We firmly believe Canadians want a Canadian perspective on international developments … particularly on important stories like Iraq.
But the costs of this are astronomical and hence we must leverage our investment as far as we can.
In the lead up to and during the War, our journalists offered accurate, unfiltered account from locations throughout the Middle East and around the world. We had over 40 journalists in the area and covering the war including Amman, Cairo, Tel Aviv, Jerusalem, Kuwait, Bagdad, Turkey, Northern Iraq, and of course Washington, London, and Paris.
Many filed their reports in English and French for Radio, Television and the Internet … their talent, dedication and hard work meant we could leverage our hefty investment to reach audiences where and when they wanted. Just think of our reporters such as Patrick Brown, Don Murray, Céline Galipeau, Michel Cormier to name but a few. Many report in English and in French; others for Radio and Television.
We know that Canadians appreciate this approach.
They ranked our news programming as having the most balanced and objective stories about the war and international events.
While they may go to CNN for breaking news, they return to us for analysis and we beat Canadian competitors by more than 2 to 1.
We also had many listeners in the US through Newsworld International, and C SPAN.
Challenges of current environment
Today's challenges for all broadcasters are significant:
Multi-channel, multi-platform universe — requires massive investment to keep pace
Competition for audience share and fragmentation has an impact on costs, audience delivered and revenue.
New technologies will change the face of TV — HDTV, Digital and Personal Video Recorders will improve quality and emancipate the viewer, returning choice and timing to the viewer while frustrating the advertiser.
CBC/Radio-Canada as a public broadcaster faces challenges in addition to these:
Reflecting Canada's growing multi-cultural diversity is critical, expensive, and calls for unique programming.
There is also a demand for more local and regional programming. Recently, the Heritage Committee called upon the CBC to expand regional and local programming and to come forward with a costed strategic plan. This we will do.
And the cuts continue.
Internal savings simply are not enough to meet these challenges:
Cutbacks over the past decade have left us $319 million short of funding levels in 1990 in real terms.
Another $10 million cut from Parliamentary appropriation this year.
Lack of stability and predictability in our funding levels undermines our ability to create programming.
On average it takes over three years for an idea to get to the screen. Without stable multi-year funding, it is difficult to make the programming commitments.
Compelling Canadian alternative programming cannot be done cheaply. Shattered City cost $11M for a 4-hour production. At the same time Canadians will not and should not accept a second rate product.
Conclusion
Pressure of globalization, harmonization in business and economics is enormous. As an economist I would not want to unravel progress on this front. However at the same time as Canadians have indicated a desire to participate in the global economy they have insisted on protecting their rights and independent decision-making.
Against this backdrop, the case for public broadcasting is stronger than ever:
Around the world it is seen as a key tool in preserving a nation's unique sense of identity … and social cohesion.
Case is even stronger here in Canada, so closely intertwined with the US.
If we are to survive as a strong, independent nation, we must recognize the importance of having a strong sense of who we are and how we are unique in the world.
Must actively support those institutions that tell our stories, reflect our history, protect and project our values.
Thank you.
FACTS
Our total appropriation for English TV is $330,869
58% of the funding for television comes from appropriation, 42% from entrepreneurial activity — advertising, program sales, rentals and other activities.
PBS
$730M US comes from public funding = $1B Cdn
$379M US comes from subscribers and fund raising = 1% of total funding
48% of the $380M = cost of raising funds
therefore, 1/10 = $20M
Give me a break!
