CBC to focus spending on content, Conway says

OTTAWA — CBC/Radio-Canada will emphasize "content over all other expenditures going forward," Heather Conway, the public broadcaster’s executive vice-president of English services, told the Senate's transport and communications standing committee Tuesday. “So that means when we have the choice of spending money on infrastructure or real estate or content, we will privilege the spending on content,” she said. Conway said the last five years have been difficult for the CBC, and that “when you’re faced with having to execute cuts, a lot of those choices were made to cut programming, to cut frankly the promotion of programming, because it’s an easy, quick cut.” Conway made the comments Tuesday in response to a question about what the CBC is doing to increase ratings. She said part of reason CBC has seen good ratings for series like Schitt’s Creek is because it has been spending on marketing in addition to content. In a press release on Feb. 6, CBC said the premiere of the Book of Negroes drew an audience of 1.9 million viewers, while the premiere of comedy Schitt’s Creek drew almost 1.6 million. The Conservative government brought CBC funding down by $115 million in 2012, which was implemented over three budget cycles, and ended a $60-million content-creation subsidy that the CBC had been getting every year since 2001. In response, CBC announced it would eliminate 650 jobs, and in April 2014 said it would cut more than another 650 jobs and $130 million in spending. In November, CEO Hubert Lacroix found himself under fire at the broadcasters’ annual meeting by some employees who said the cuts went too far, while NDP Leader Tom Mulcair recently promised to reverse the cuts made by the Conservatives if elected. Conway said Tuesday that the CBC must compete with premium dramas and comedies, such as Netflix Inc.’s Arrested Development and HBO’s True Detective. “It’s very, very difficult to do that, and do it in a cost-effective manner,” Conway said, adding that CBC may do more mini-series like its recent Book of Negroes, because “you can get six episodes at a high quality that you can’t always get at 13.” Lacroix, who also appeared at the committee Tuesday, noted that while the loss of NHL hockey rights didn’t directly lead to significant revenue losses, it did affect the broadcaster. “It was a locomotive to sell our schedule. We could bundle some of our shows with Hockey Night in Canada. Not saying that it didn’t have an indirect impact also on the ad revenues,” he said. Lacroix noted advertising makes up 20 to 25 per cent of revenues at the public broadcaster. The Senate committee recently returned from a trip to the United Kingdom. Conservative Senator Donald Plett said BBC has a 35 to 40 per cent share in its market, compared to the 8.2 per cent national share CBC has, and asked Lacroix to explain the difference. Lacroix said the leader in the Canadian market, BCE Inc.'s CTV, only has a 12.8 per cent share, which “gives you an idea of the fragmentation, of the choices that are available, on the English side particularly,” he said. “So the environment is completely different. The culture is different.” During a recent CRTC hearing, CBC asked for conventional television broadcasters to be paid fees by broadcast distributors. Private broadcasters have also spoken about the challenges faced by conventional stations in attracting advertising revenue, with Bell executives telling the CRTC that an advertising-only revenue stream for local TV is no longer feasible, while Rogers Communications Inc. has also sounded the alarm about the viability of conventional television. In a five-year plan released in June, CBC said it would re-focus its priorities on its digital and mobile presence. Conway noted that there are challenges in earning advertising in digital as well. “Even with the No. 1 digital news site in the country, the vast majority of ad dollars that are going to digital are going to search. So they’re going to Google. They’re going to Facebook. They’re not going to display ads on news websites,” she said. Conway said replacing TV ad dollars with money for online ads is "not an automatic one-to-one. And I think you’ve probably heard the phrase that a lot of people use, which is you’re trading analog dollars for digital dimes,” she said. “So it’s a real issue.” In response to a question about how CBC’s ratings and advertising revenue compare to private-sector conventional networks, Lacroix said CBC has a different mandate. “In prime time, we make choices which allow Canadians to watch public affairs, to see drama,” he said, citing documentary programs like the Nature of Things. “Nobody else makes these kinds of choices, because the only thing that they’re interested in is the return to the shareholder, and that’s correct,” he said. “We have a concept of return to citizens.” Conway added that another challenge is not only that the content shown on competing stations is American, “but the promotional and advertising dollars associated with that content staggering,” citing the example of entertainment magazines writing about U.S. programs and the actors that appear in them. “So if I’m going to put Doc Zone up against the Big Bang Theory, that’s a tough competitive slog.” She added that companies like Bell and Shaw Communications Inc. also have numerous specialty channels they can use to promote their shows and those they’ve bought from U.S. broadcasters. “And I’ve got News Network and the Documentary Channel." — With reporting by Anja Karadeglija at akarad@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

CBC to focus spending on content, Conway says

Broadcast | February 17, 2015

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CBC to focus spending on content, Conway says

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