A lot of ink has been spilled about our own situation: evolving technologies, adapting to new consumer habits, restructuring, layoffs, financial viability. But what we too seldom discuss is just how generalized these challenges really are – and the opportunities that come with working together with our peers and partners to overcome them.
The fact is the entire media industry is struggling. Here at home, it’s painfully clear the model is broken. Alarm bells are ringing.
Just over a year ago former Rogers President, Keith Pelley, was before the CRTC predicting nothing short of the collapse of conventional television business. Even then he was saying things like: “The industry is not changing yearly, it is changing monthly, weekly, daily…”
More recently Bell Media’s former president Kevin Crull warned that current regulatory policies are undermining Canadian TV. He cited a perfect storm. The rising cost of content and Canada’s fundamentally broken revenue model.
And they’re right. We know from our own experience that declining revenues – both public and self-generated, in our case – combined with our need to innovate and invest in our own future is placing severe pressure on our finances and on our people. In fact, we were among the first to see and speak out about the broken model across the industry. And we’ve been coping in our own well-publicized way. Planning to reduce our real-estate footprint in half, scaling back our infrastructure, building-in reserves and reducing our workforce. All that, without the kinds of management tools – line of credit, streamlined approvals for speed of reaction – that others take for granted. It is a little like changing the tires on a car while it is cruising down the highway.
We’re not alone. Global’s parent company, Shaw Communications Inc., announced this past February that it is relocating 1,600 employees. Overall Shaw says it lost about 36,000 cable TV customers, 12,000 land-line telephone subscribers and 1,800 Internet customers in the last quarter.
Again in February, Sun News Network went dark; and, the entire Sun Media English Language Newspapers and Digital Properties were recently acquired by Postmedia. Job losses are looming as the parent chain itself continues to cut spending.
Even more recently Rogers – yes, Rogers – reported its profits were down 19% this past quarter citing, in part, “lacklustre broadcast revenues from mid-season NHL hockey games” and regulatory changes.
Corus Entertainment had a rough quarter too, posting an $86 million dollar net loss for its second quarter, and lowering its outlook for 2015 due to uncertainty in the advertising market.
In the 11 months since we launched our own strategy, Bell Media, Rogers, Shaw, Star Media Group, Transcontinental, V, Musique Plus, Quebecor, Corus and Postmedia have all reduced staff or announced restructuring of some kind.
In the midst of all this the CRTC concluded Let’s Talk TV, its review of the television industry in Canada. Among other decisions it announced “pick and pay” (meaning that specialty channels must eventually be offered by cable and satellite providers on a stand‐alone basis and in small packages), which will constitute a major shake-up of the television market over the next five years.
Meantime, the CRTC did not address local programming funding issues and chose to maintain the requirement for conventional TV broadcasters (like CBC Television and ICI Radio-Canada Télé) to broadcast over-the-air.
The CRTC also recognized in its decision that the rules that ensure that Canadians have access to Canadian programming will not survive into the Internet age. While they did not offer any new direction, it is a sign that we need to start looking at how we transform the services we provide to Canadians in even more radical ways on a five to seven year time horizon. More on that in the coming months.
Canada’s not alone. As I have said recently, the picture for public broadcasters around the world is much the same.
It’s always interesting to note the many parallels between the BBC and ourselves. Despite their funding being nearly six times our own, they too are making headlines like: BBC risks having to cut more services after it misses targets.
In March, Tony Hall, the Managing Director of the BBC, laid out the ambitious role it intends to play in what he calls the “Internet age”, placing big data, social media and more collaboration and partnership at the centre of his plans. Their own restructuring has affected thousands of employees in the last few years, most recently announcing an additional reduction of 600 positions in news and radio.
Lord Hall says he needs to “…reinvent the BBC once more.” Here are two quotes I think are particularly striking, both from a speech he gave on March 2 in London:
“This is the start of a real transformation – the myBBC revolution. How to reinvent public service broadcasting through data. But we’ll always be doing it our way – not telling you what customers like you bought, but what citizens like you would love to watch and need to know.” (March 2, 2015)
“So this future is a choice, for our decision-makers. A big choice. The BBC is at a cross-roads.
Down one path lies a BBC reduced in impact and reach in a world of global giants. Damaging the UK’s creative industries. A sleep-walk into decay for the BBC, punching below its weight abroad, and Britain diminished as a result. Which means a UK dominated by global gatekeepers, partial news and American taste-makers. Down the other path is a strong BBC helping bind the country together at home and championing it abroad. A British creative beacon to the world. Providing a universal service for a universal fee. An internet-first BBC which belongs to everyone and where everyone belongs.”
Australia is in much the same situation. A budget cut of Aus$207 million means that the Australian Broadcasting Corporation (ABC) is cutting services, reconsidering spending priorities and implementing a “smarter and more focused” approach to how it services rural and regional Australia – including closing stations.
Switzerland is holding a referendum on June 14 to transform their funding model from a licence fee currently paid by anyone who owns or operates a television set or radio, to a universal fee applicable to every household and business in the country.
In France last month, a committee of four federal cabinet ministers announced and endorsed an inter-ministerial working group report on France Télévisions’s relevance in 2020. It recognises that the broadcast framework that has delivered public service media in France for the last 40 years needs to be totally revamped.
The picture is clear. Adapt or die. We’ve chosen to adapt. And most others are too.
Take Norway for example… just this week it announced it will become the first nation in the world to eliminate FM Radio. It will be phased out in 2017 – and digital offerings will take its place.*
And back to Britain for a minute. The digital shift there is nothing short of revolutionary.
On April 9, the BBC’s Chief Technology Officer, Matthew Postgate, has been tasked with making sure that the BBC can compete with online rivals such as Netflix and Amazon. To do that, he says the BBC will become “Internet first” to appeal to younger audiences. And, he says: “Rather than trying to deliver one large project, we’ve been taking off the different components and moving forward.” Yet, even despite this focus, The Guardian still claims that: A digital public space is Britain’s missing public institution.
Even at a quick glance we see that our challenges, though very real, are far from unique. That’s why when we developed our strategic plan we spoke to nine other public broadcasters, and representatives from the European Broadcasting Union (EBU) to discuss everything from brand affinity to revenue models. Earlier this month, researchers from Japan’s public broadcaster, NHK, traveled from Tokyo to meet with us as they look to their own future. Why? Because around the world – Public broadcasting is under increasing pressure to prove its worth, legitimize its funding and justify its very existence.
Together, we face:
- the growing abundance of available media content – both linear, digital and OTT (Over-the-top meaning bypassing traditional television and going straight to the consumer through the internet);
- changing media consumption habits;
- constant tightening of the public purse strings across the developed world;
- higher expectations for effectiveness, efficiency and value for money;
- increased demand for transparency and accountability of public bodies; and,
- strengthened reporting and assessment requirements from governments, legislators, regulators and other oversight bodies.
Meantime, the case for public broadcasting has never been stronger. Countries built their public broadcasters to give themselves a voice. To ensure a presence on their own airwaves – to make sure their citizens, their stories and their history were celebrated. It’s based on the premise that Canadians deserve Canadian content. Australians deserve Australian content. Belgians deserve Belgian content. In an increasingly global and fragmented media environment, public broadcasters create the spaces where local communities can find themselves and thrive, where national identity is expressed and national cohesion is built, and where the political debates that ensure the health of a democracy are given air and space. Public broadcasters do that wherever they are, even though each is purpose-built to meet the specific needs of the population they serve.
So we are all unique but we all face similar problems. And we can learn from each other to find the best way to meet the challenges of today and tomorrow. I believe CBC/Radio-Canada can play a leadership role in finding, sharing and applying these solutions. We can do that through our longstanding relationship with the Public Broadcasters International (PBI), and support for its members in their endeavours. We can do that through bilateral discussions with other international public broadcasters. And, finally, it’s why we need to engage Canadians, our employees and our peers, both in the media sector and the public sector, to help identify the needs, opportunities and innovations that will define the era beyond broadcasting. As we implement our strategy and set our sights for the future, we have no intention of going it alone. Collaboration. Partnerships. Cooperation. That is the way forward.
– Hubert T. Lacroix, President and CEO, CBC/Radio-Canada
*We have made a clarification to the original text.