Source :  www.cartt.ca

November 30, 2012

By Greg O’Brien

GATINEAU – On the second to last day of the CBC license renewal hearing, we heard perhaps the most blunt opposition yet to the public broadcaster’s request to be able to sell ad time on Radio 2 and Espace Musique, from Moses Znaimer’s company.

MZ Media, a division of Znaimer’s Zoomer Media which owns Classical 96.3 and 103.1 FM and AM 740 (as well as Vision TV and some other television assets) told CRTC commissioners Thursday that letting another station in the Toronto market sell advertising will make an already tough market, worse. And, to allow an organization already funded by government to do it is unthinkable, said the independent broadcaster.

“To be allowed to be funded by taxpayers while competing for advertising with commercial radio broadcasters who must earn their own way… is unconscionable,” said MZ Media president and CEO George Grant, who disputed CBC’s claims that the slice of the market it will be targeting is so small as to not hurt anyone. Later in the Q&A portion of the appearance when asked by CRTC chairman Jean-Pierre Blais if there were any conditions where MZ would accept allowing Radio 2 to sell ad time, Grant was unwavering.

“I still have a fundamental problem with the fact they want to suck and blow. Basically they’re getting already tax revenues that are being utilized to run the Corporation, now they want to add advertising to the mix. Wouldn’t we in the private sector love to have the same deal,” he said. “We just think that they should not be getting it from two areas. Either become a broadcaster and don’t take the government revenue or continue taking the government revenue and don’t run commercials.”

Given its focus on classical music, MZ already targets a pretty small slice of listenership and the advertisers who want to reach them – and competes for those listeners with Radio 2, whose playlist is 30% classical. “We accept that Radio 2 already has an existing audience, so it would not be cannibalizing our audience,” Grant explained. “However, this should not be confused with the cannibalizing of our base of advertisers… Radio 2 is hanging its hat on the desirability of its format to potential advertisers, especially new advertisers. In this economy, and in the foreseeable future, there is no long line of new national advertisers waiting to spend new dollars on radio.”

In fact, MZ Media even dove deep into some numbers to dispute the CBC’s claim that it will be able to sell Radio 2’s unique listeners to advertisers. “When you actually go to the BBM data, they have one-half of one percent of their audience that’s unique to Radio 2. That is 15,000 listeners, in a market of about seven million, who only listen to that radio station,” said MZ’s legal counsel Mark Lewis. “We can’t see how advertisers are going to suddenly flock to Radio 2 to get access to 15,000 listeners when they buy on a cost per point basis. It just doesn’t make any sense to us in terms of how the advertising market operates.”

After MZ, Ross Porter, a long-time CBC radio man (on both sides of the mic) who is now president and CEO of not-for-profit station Jazz.FM91, backed up what many other broadcasters have said all week about the flatness of the radio ad market and the fear he has of how CBC would end up behaving if granted permission to sell ads on Radio 2/Espace Musique.

“I have a lot of difficulty getting my head around an organization that can’t work on a billion dollar plus budget,” he told commissioners. Besides, he added, in pursuit of maximizing revenue, CBC would pull out all the stops it has, to the detriment of the broadcast market, especially niche broadcasters like his.

“I think there is a distinct unfair advantage here. This is not fair competition,” Porter said. “If I were running CBC Radio, I would be talking to the people in television, finding out when they are not 100% sold out, and I would be doing spots to drive traffic to Radio 2. I would be promoting the daylights out of Radio 2 on Radio One, which historically performs in the top tier in markets across Canada. I would be driving more traffic to Radio 2 and I would be moving some of the more popular programs from Radio One over to Radio 2.

“It’s not a level playing field… It’s unethical.”

BEFORE MZ AND JAZZFM91 another independent broadcaster, music service Stingray Digital – which has complained publicly, to no avail, about the CBC’s free online music service – appeared and did its best to acquiesce to CRTC chairman Blais’s request not to re-argue the decision already made on its complaint. “CBC heavily promotes this service as a free service, which only helps perpetuate the unfortunate perception that music should not be paid for,” said CEO Eric Boyko, in reference to CBCMusic.ca.

Stingray noted, however, that the service is costing the CBC millions and the return doesn’t seem to have amounted to very much so far as few ads are being sold against CBCMusic.ca’s listenership. However, said Stingray’s executives, it doesn’t know how much CBCMusic.ca costs or how much it makes because the CBC won’t say – and that should change with the license renewal.

The company made four recommendations to the Commission on making the CBC more transparent on the digital side, especially since the pubcaster has said it will spend 5% of its budget, or $75 million a year, on digital media. They are:

1. The CBC should provide greater financial details regarding its plans for digital media as a part of this renewal process
2. It should demonstrate that its digital media plans do not detract from CBC’s core broadcasting services
3. With respect to CBC Music, CBC should demonstrate how this service meets CBC’s own stated objectives for digital media initiatives, including very high levels of Canadian content and reflecting partnerships with the private sector
4. CBC should provide financial information to the Commission and the public regarding its digital media initiatives so that the public may evaluate whether these ventures represent a worthwhile expenditure, or detract from CBC’s core mandate.
The public hearing wraps up Friday with the CBC responses. Interveners have until December 11th for final responses and the CBC then has until December 18th for it’s last written reply.