Less than 24 hours after the CRTC had announced it was ending CBC's Radio 2 and ICI Musique's three-year run of accepting paid advertising, the CBC expressed their unhappiness with the broadcast regulator's decision.
The CBC also said that because the decision was announced only hours before it was to come into effect, it was impossible for them to end the practice on such short notice, so they would continue winding down their business.
"We are disappointed that the Commission has denied CBC/Radio-Canada the ability to continue to earn revenue from advertising on its music services; Radio 2 and ICI Musique," the CBC said in a statement issued yesterday.
"Quite simply, the CRTC’s decision means CBC/Radio-Canada has fewer resources to invest in the programs and services it provides to Canadians.
"The decision shows a lack of understanding about the reality of public broadcasting. CBC/Radio-Canada depends on a combination of government funding and commercial revenue to finance its services. It has been managing a significant drop in both those sources of funding.
"The Commission states that the government’s reinvestment makes additional revenue from radio advertising unnecessary. That is incorrect. The Government’s reinvestment ($75M this year, rising to $150M in following years) is vital to stabilizing the Corporation so it can implement its 2020 strategic priorities to make its programming and services more Canadian, more local, and more digital. By cutting off a source of revenue, the CRTC is simply ensuring there are fewer resources available to do that. That does not help CBC/Radio-Canada serve Canadians.
"We are also surprised the CRTC made its decision on the final day of its existing authorization to broadcast such advertising. That is simply not in keeping with modern business practices. We will make the required changes to our programming schedule and wind down this part of our business, however this simply cannot be completed by the end of day today."
The CBC said when the CRTC allowed CBC and Radio Canada to carry limited advertising back in 2013, they were given four criteria of standards to maintain: that advertising did not impact advertising markets; that advertising did not affect the distinctiveness of the services, that advertising was not disruptive to listeners and that CBC's level of investment in radio be maintained.
While the broadcaster says the CRTC acknowledged that the first three mandates were honoured, they were unable to maintain the fourth because the order "was simply not possible to meet given the $115 M in reductions to the Corporation’s Parliamentary Appropriation beginning in 2012. That cut, combined with the continued industry-wide decline in advertising revenue on television meant CBC/Radio-Canada was forced to reduce the budgets for all of its services – including for Radio 2 and ICI Musique," the CBC explained. "Additional revenue from limited advertising on Radio was not sufficient to offset those cuts."
No timeline was given by the CBC in terms of final airings of exisiting advertising commitments.