Tuesday November 29, 2016

CBC president defends ad-free proposal, asks Ottawa for $400M to 'unshackle' broadcaster

Hubert Lacroix, president and CEO of the Canadian Broadcasting Corporation, seeking additional funding from Ottawa to make the public broadcaster's programming ad-free.

Hubert Lacroix, president and CEO of the Canadian Broadcasting Corporation, seeking additional funding from Ottawa to make the public broadcaster's programming ad-free. (Sean Kilpatrick/CP/Mark Blinch/Reuters)

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Hubert Lacroix thinks the CBC's business model is broken.

On Monday, the president of the public broadcaster delivered his assessment as part of a pitch that would see the CBC stop running ads, if the government agrees to give it more cash.

"This investment in our broadcaster would mean that for an additional one dollar per Canadian, per month, you would have an ad-free environment. I think that's a very compelling number." - CBC President Hubert Lacroix

Lacroix spoke with As It Happens host Carol Off about the proposal. Here is part of their conversation.

Hubert Lacroix

CBC/Radio-Canada CEO Hubert Lacroix says its time for the CBC to get rid of its ads and he wants Ottawa to replace that revenue with a lot more taxpayer cash. (CBC)


Carol Off: Mr. Lacroix, you say that that the business model and policy framework of CBC is profoundly and irrevocably broken. What exactly is broken?

Hubert Lacroix: Broken means that even if the current federal government has reinvested $75 million for the first year and $150 million for the next four, those dollars do not allow us, over time, to actually fix the issues that are about ensuring that we can continue giving services to Canadians, as Canadians expect. We're not the only ones to feel that way. Every other conventional broadcaster feels the difficulty of ad revenues moving and of the digital transformation that we're all coping with.



Carol Off: You have proposed many things in this presentation but the big headline is that you're proposing that CBC get out of the business of selling advertising. Why do you want to do that?

HL: This proposal is about investing in culture. What we think we do best at is trying to focus the mandate of the public broadcaster in public service and allow the privates to continue doing what they do. For example, on the conventional television networks they take American content and they put it in prime time. We want to continue differentiating ourselves from that business model in promoting Canadian artists, Canadian culture, Canadian films — and we think that going ad-free allows us to do this in a much better way.
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(Nathan Denette/CP)


CO: How so? How is it that getting out of advertising allows you to do something that you're mandated to do?

HL: It allows us to take more risks. It allows us to not always have the filter of commercial revenue, it clearly influences some programming choices. By unshackling ourselves from that focus, we allow our programming choices to be more flexible and to actually now start focusing on compelling Canadian content.

CO: You know it's not just the broadcasters that would like the CBC to leave the business of selling ads — other private media, the newspapers, and we spoke with James Baxter at iPolitics. These are people who feel that CBC is cutting their grass. That they've moved into the area of selling ads for the online content, which is doing the job that they believe they should be doing.

HL: Firstly, I'll say that this proposal actually has something in that for them. The consultant that we worked with says about two thirds of our current ad revenues, which is about 160 million dollars per year, would flow to the other media companies in the country, helping them through this transition period and the impact of the digital world. Privates will be private and the other Canadian media intervenors will have their environment, and we will have ours.



CO: Alright, let's get to the price tag for this because in order to do this initiative you would need, from the taxpayers of Canada, another $400 million.

HL: Absolutely. This investment in our broadcaster would mean that for an additional $1 per Canadian, per month, you would have an ad-free environment. I think that's a very compelling number and when you look at where that situates us in the world for the 18 most important public broadcasters, right now we're number 16 at $34 per Canadian, per year. This would move us to $46, very far from the $87 average, which is what citizens give to their public broadcaster in those 18 most important countries.
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CBC President Hubert Lacroix hopes that Melanie Joly, Minister of Canadian Heritage, will support his proposal for increased funding of the public broadcaster. (Sean Kilpatrick/CP)


CO: Well, those numbers only matter to taxpayers if they think they are going to get something for the extra investment. There are those who argue that the ship has sailed, in many regards. That the reduction in local programming, the increase in revenue generating programming, has broken faith with the public. They don't have a strong desire to further this commitment. So give me the pitch for why taxpayers should be willing to do this.

HL: If you want American values, you'll get them. We are bombarded by that. But if you want Canadian content, if you want examples and you want conversations about being a Canadian in this world, CBC/Radio Canada is the only place to go right now. We would like to be, as the BBC was in the UK, the central piece, the locomotive of that investment strategy and then multiply the promotion of Canadian content for its export across the world.
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A man sits inside the Canadian Broadcast Corporation (CBC) broadcasting centre in Toronto. (Mark Blinch/REUTERS)


CO: But if you don't get the money, if the $400 million is not something the Liberal government is willing to do, what is plan B?

HL: Plan B is we continue championing Canadian culture and democracy. This is the mandate and why we wake up in the morning. But the broadcaster needs a more sustainable funding model and we are only a part of this environment that needs a new funding model. I think that is why the Minister of Canadian Heritage, Mélanie Joly, has gone across the country since April trying to figure out how she will reinvent this. I think she also sees the broken aspects of the ecosystem in the country right now.

CO: But if you don't get it, if they decide that they can't do that and they don't have the public support for that, is CBC back in the business of competing with the other public media for ads?

HL: Our models absolutely don't change. Yes, we continue doing what we do. The $253 million of ad revenues allowed us to tell great Canadian stories, ensure news services across the country, international coverage, drama — everything we do, a big piece of it, because that's the model under which we are funded, depends on ad revenues.

This interview has been edited for length and clarity. For more on this story, listen to our full interview with CBC President and CEO, Hubert Lacroix.