French-language ad market more vulnerable to economic downturn, Radio-Canada says

GATINEAU, Que.—CBC/Radio-Canada’s French-language broadcast services are vulnerable to the impacts of a potential economic downturn in a market characterized by consolidated ad spending, said Louis Lalande, principal vice-president of French services at Radio-Canada. Lalande discussed requests for regulatory flexibility and other licence conditions to CRTC commissioners at a hearing Tuesday, saying Radio-Canada’s French-language ad revenues are vulnerable to economic conditions. “The French-language advertising market is also in a precarious position, which we ignore at our peril. We’re currently witnessing a consolidation of ad spending by advertisers in the North American market, part of a worldwide trend in the industry,” Lalande told commissioners. “Advertisers seek to maximize their investment by targeting only the largest markets. We’re obviously keeping a close eye on this situation to assess the potential impact on our ad revenues.” Lalande appeared before the commission with a panel of CBC executives, including CBC president and CEO Hubert Lacroix, to discuss licence renewals for the public broadcaster’s French-language services. His presentation followed a panel of CBC corporate executives who appeared Monday to start the hearings. Prime Minister Stephen Harper said Monday that he is monitoring the economic situation in the United States, where Congress is looking for ways to avoid automatic tax increases and spending cuts in the new year—called the “fiscal cliff”—which economists say would trigger a recession. "Whatever happens in the United States, especially something that could happen that would significantly slow the American economy, would be of great concern to us," Harper said. Lalande reiterated Lacroix’s call for regulatory flexibility. He said CBC wants to make “solid commitments” to programming while “staying flexible enough to adapt to Canadians’ rapidly changing needs and our shifting competitive environment. This need for flexibility isn’t a fad or a whim—it’s essential for maximizing our creative resources to better serve Canadians.” Lalande said nearly one quarter of French-speaking people in Canada use Radio-Canada’s online, on-demand platform Tou.tv, which provides content from about 30 partners. CBC is seeking fewer licence conditions in part so that it can move around spending and distribute programming in a multi-platform environment. Steven Guiton, vice-president and chief regulatory officer at CBC, said Monday that CBC is not seeking "conditions of licence light" but fewer “conditions of licence strong.” “Rather than have a whole variety of conditions that may or may not be useful to achieving what I described to you before … as the commission trying to make sure there is effective Canadian content produced by the system while granting them that balance of flexibility, we wanted to come forward with some really strong conditions of licence for you,” he said. “We don't have to worry about foreign feature films, because they are stepping up, and their Cancon is going to become conditions of licence it's very high.” Faced with a $115-milllion cut to its public funding within three years, CBC has asked the CRTC to approve new sources of revenue, including fees for cable and satellite broadcast distributors’ carriage of its local TV signals and advertising on two of its national radio networks, CBC Radio 2 and the French-language Espace Musique. Radio-Canada is also seeking mandatory distribution, or a “must offer” right, for arts and culture specialty channel ARTV in anglophone markets. The channel currently receives mandatory distribution in francophone markets. Lalande said CBC specialty channels CBC News Network, and the French-language ARTV and Réseau de l'information (RDI), are important to the broadcaster and viewers given the popularity of French-language specialty channels in Canada. He said ARTV dedicates part of its budget to producing programming outside Quebec. Jean Mongeau, director general of the broadcaster’s revenue group, said there are a million TV subscribers outside Quebec who don’t have access to ARTV. In Manitoba, he said, no cable TV subscribers with Shaw Communications Inc. have access to the channel, and the same issue exists with many TV customers in Ontario who are with Bragg Communications Inc. “It’s not a question of revenue, it’s a question of access for the francophone population outside Quebec,” Mongeau said. Cable distributors Shaw and Bragg said in submissions to the CRTC for the proceeding that they oppose mandatory distribution for ARTV, and that CBC is seeking higher subscriber revenues from must offer privileges. “Despite all of these regulatory benefits, the Corporation is seeking to entrench and even enhance the distribution of its specialty services, in particular on digital basic ,” Shaw wrote in its submission to the CRTC. Lalande said Radio-Canada has doubled its radio market share since 1999 and over the past decade increased its presence in Canada’s regions, in part by reactivating licences for TV stations in Sherbrooke, Trois-Rivières, Saguenay, and Rimouski, Que., as well as Toronto. sdoyle@thewirereport.ca

French-language ad market more vulnerable to economic downturn, Radio-Canada says

Broadcast | November 20, 2012

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French-language ad market more vulnerable to economic downturn, Radio-Canada says

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