June 2001
A Dose of Reality for the CBC
by Jason Clemens & Lydia Miljan
Notwithstanding the recent buckets of government money thrown at the CBC, the national broadcaster is still doomed to irrelevance and obscurity for most Canadians. This inevitability has to do with both the proliferation of choice, whether it is cable, the Internet, or satellite TV, and the fact that most of us just don't watch CBC.
Let us first understand why the government thinks we need the CBC. According to its mission statement, "CBC has a singular responsibility and a unique capacity to make Canadian voices heard, allow Canadian stories to be told, build mutual understanding among Canadians and help Canadian culture flourish" (www.cbc.ca).
As lofty as these goals are, they were written at a time when bandwidth was an issue, and there were only a limited number of television and radio stations—not at all representative of the current media landscape.
The CBC's mission is hopeless given that Canadians simply are not tuning in. How heard are the voices, how told are the stories, and how flourishing is the culture if no one is watching?
In a random sample of 10 viewing weeks in 2000, as measured by Nielsen, Canada's principal rating company, CTV far surpassed CBC in top 20 program viewership. In fact, the only CBC program consistently making the top 20 was "Hockey Night in Canada," and no one argues that this program requires subsidies. At the same time, Canadians are tuning into specialty programs on cable television, and indeed, many of those programs are Canadian produced—they just aren't produced by the CBC.
This apparent failure by the CBC to achieve its goals hasn't stopped the prime minister from heaping new and additional resources onto the public network. The prime minister recently announced $60 million for the CBC as part of a larger "reinvestment." This puts the total amount of annual subsidies for the CBC on a path to breaching the $1 billion threshold this year or next.
The CBC simply could not exist in its current form without those subsidies. The financial statements for the CBC paint a gloomy picture of government dependence. In fact, 2 out of every 3 dollars received by the CBC comes from government.
The competitiveness of modern media not only makes the CBC irrelevant but also expensive for taxpayers. As we'll see, the roughly $65 each taxpayer contributes to the CBC is not at all competitive with the market rate for such services.
Rogers and Shaw Cable, two of Canada's largest cable providers, offer subscribers between 28 cable channels (basic) and 58 channels (premium) for prices ranging between about $16 and $40 a month, depending on the provider and region.
Let's put this into perspective. Canadians can purchase 28 channels for about $7 per channel per year. A premium option that includes 58 channels costs about $8 per channel. The federal government, on the other hand, offers us one CBC—albeit in two official languages, along with radio programming—for about $65 per year. In other words, what we get from the CBC is nearly 10 times more expensive than what we get from cable television. While the CBC does offer its own programming, it does so at a substantially higher rate than the rates we pay for speciality cable stations.
Ignore the rapid changes in the Internet and digital cable for the time being. The services offered by satellite television alone are further testament to CBC's irrelevance.
Bell ExpressVu, Canada's largest legal satellite provider, offers a number of services ranging from 30 local stations for $11 a month, to local and theme stations totalling over 100 channels for $37 a month. Putting this into perspective, Canadians can purchase over 100 channels for about $4.50 per channel per year. This, of course, does not include the $200 or so dollars you have to pay for the satellite. Still, $4.50 per channel per year is a much better deal than $65 per year for the CBC.
Yet proponents of the CBC call for even greater subsidies. Herein lies an unfortunate reality of both government and the CBC: both lack imagination and the ability to innovate. Specifically, if the goal is to promote voices being heard, or a sense of national culture, then why not simply sponsor a series of programs on mainstream or cable television? The reason: government has great difficulty innovating. Government's greatest attribute is its perseverance in the face of incontrovertible evidence that change is necessary.
The CBC continues to drain valuable resources from taxpayers across the country and precludes many Canadians from purchasing alternative and more desired services. The nation's broadcaster will only slip further into irrelevance and obscurity as competition forces further price reductions and even greater product innovation.
The longer the federal government ignores this reality, the more it prolongs the inevitable and wastes precious taxpayer resources. It is time to privatize the CBC and return the power of choice to taxpayers.
Jason Clemens (jasonc@fraserinstitute.ca) is the Director of Fiscal Studies
at The Fraser Institute. He has a Masters Degree in Business Administration
from the University of Windsor.
Lydia Miljan (lydiam@fraserinstitute.ca)
is the Director of the Alberta Initiative, as well as the the National
Media Archive, of The Fraser Institute. She received her Ph.D. in Political
Science from the University of Calgary.
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