Monday, 22 June 2015

Ghomeshi/Soloman Are the Tip of the CBC Iceberg

David Cooper via Getty Images
The Jian Ghomeshi and Evan Soloman scandals signal that CBC managers have lost control of CBC. The Corporation has resorted to hiring an outside labour lawyer to investigate what went wrong with management processes, an admission of failure. But the signs of trouble have been there for some time.

CBC is a relative bargain. In 2014 Canadians paid on average only $18 per capita in public monies to fund CBC Radio and TV, a tiny fraction of what they spent on other TV-related services, such as cable TV or Netflix. (We paid only $11 per person to fund Radio Canada.) We also pay smaller amounts for CBC specialty channels, such as CBC News Network ,and CBC benefits from other, smaller government funds.

The finger-pointing for CBC's problems has become a national pastime but its roots are fairly obvious.
For over a decade CBC Presidents, who, along with the CBC Board of Directors, are appointed by the government, have hired outsiders to manage CBC English Radio and TV. Hubert Lacroix, the current President admitted when he accepted the job he knew very little about the CBC. For the President to in turn rely on outsiders to manage the programming services is a departure from a long practice of relying on staff who came up through CBC ranks to become vice-presidents. This is proving disastrous as the CBC once again has suffered government funding cuts and is trying to maximize other revenues. But it is evident to me that the current senior management team knows very little about the organization they are in charge of, the result of broken management systems and practices. The Ghomeshi scandal is the tip of the iceberg.

Some other examples:
- CBC senior managers have recently given three different estimates of CBC's commercial revenue, including advertising. Which is it? The difference amounts to about $300 million. How can one budget properly without knowing?
- Hubert Lacroix asserted recently that TV advertising revenue accounts for 93% of "business revenue." According to CBC's annual report he is off the mark by 30 percentage points. 
- Mr. Lacroix should know but he has been busy with extracurricular activities. While President of CBC he has been a director of several private companies, one of which paid him almost $100,000 in 2011. He's been so busy he misread the policy on travel and inadvertently billed the CBC for $30,000 in ineligible travel expenses. 
- Ad revenue currently accounts for about 30% of CBC TV's total revenue, substantially less than 15 years ago, yet the President has claimed it was between "40% and 50%." Have senior managers lost track of tens of millions of dollars?
- For years CBC managers boasted that NHL hockey was a profit centre. Yet, after CBC lost the NHL rights to Rogers, the CBC President admitted that at best hockey broke even. What kinds of decisions are made with such conflicting information? 
- The President told the CRTC that CBC Radio would be protected from further cuts but CRTC data reveal that cuts to radio continued and radio's annual budget is $100 million less today, which may be in violation of the Broadcasting Act
- CBC says it has cut over 2,100 staff in recent years. But CRTC data reveal that the staff reductions are about a third of the number claimed (most are in radio). Do senior managers monitor staffing?
- Journalistic policies are being ignored by those in the trenches. There is evidence that policy on expressing opinion is being violated, most notably by Rex Murphy. Mr. Murphy and others have been criticized for accepting large fees for public appearances, even from charities such as the Salvation Army. This has not always been the case for CBC-branded celebrities. Is the lack of management oversight the cause? 
- Despite overall TV viewing levels at all time highs and CBC radio audience shares at modern-day record levels, CBC managers have announced that they are planning on making murky, new "digital" services a higher priority than radio and TV! The new digital strategy comes with no business plan, no estimates of costs or revenues. Is this simply an invention of managers with little broadcasting experience?
Is it surprising that CBC is in such crisis?

The last decade has taken a toll. The President and the majority of his Board are supporters of the Conservative party, which seems to have handcuffed efforts to fight for funding from a government they personally fund. Ironically, they don't seem to know that the majority of the Conservative "base" also support CBC

The result is acquiescence in government cuts and a reluctance to make the case for new sources of revenue. The best they can come up with is to cut staff and then rent out the space once occupied by the departed.
Source: Friends of Canadian Broadcasting

If you wanted to slowly strangle the CBC, you couldn't imagine more ideal circumstances. With a stacked Board of Directors and senior management team so inexperienced in TV/radio programming, how could they possibly make the case for CBC? The first step to righting the ship is to put in place an experienced captain and crew.

(A version of this post first appeared in Huffington Post)

Tuesday, 9 June 2015

CBC Radio: Q the Decline?

CBC is like a crazy, old aunt, unwilling to accept the reality of her circumstances. In CBC's case it is the reality that its radio audience is comprised mostly of older Canadians. CBC senior managers have recently boasted about the record high audiences of CBC Radio. They gush over CBC Radio's audience share in speeches and public appearances, such as last month's appearance before a Senate Committee, but never acknowledge that loyal, senior citizen listeners are responsible for creating a mathematical illusion. Mark Twain would say there are lies, damn lies.
While CBC Radio is undoubtedly the jewel in CBC's crown and virtually a necessity for a large number of Canadians, managers have been close to deceitful about its audience performance. Why?
As reported elsewhere, CBC managers have scooped over $100 million (about 30 per cent) from the annual budgets of CBC English and French Radio over the past six years. CBC TV has had its budget spared in comparative terms. This has crippled CBC Radio: many programs have disappeared and been replaced with repeats of the remaining programs; radio staff has been cut by 20 per cent. while TV has lost but 3 per cent; local noon hour shows have been reduced to one hour ; local morning shows now constantly repeat sports, weather and traffic information and fill airtime with syndicated segments which were once occupied by local reporters and serious discussion of local issues. Radio staff do their best with much reduced resources.
What better way of deflecting criticism of all these cuts than to tout the audience success of the hollowed out service? But a careful review of the data CBC released to the Senate shows CBC Radio's audience is not at record levels.
CBC Radio 2 has been turned into a service with a split personality. It once was a classical music and arts service but about the time budgets were being gutted, it became a strange mélange of classical and contemporary music. For the first time since the 1970s commercial advertising was introduced. Radio listeners on average only tune to a handful of stations in any given week, as few as three, and they expect the programming 'format' to be consistent whenever they tune to a particular station. This is Radio 101. The split format of Radio 2 goes against established programming strategy and likely satisfies neither old nor new listeners. Apparently it hasn't satisfied advertisers either, since ad revenue has been disappointing, pulling in a fraction of what was anticipated.
CBC Radio 1, which is primarily news and information, has suffered most of the massive budget cuts. It just announced that one of its flagship morning shows, Q, will be hosted by Shad, a rapper, and the program will feature more music and try to attract younger listeners. All music has a place but in an important time slot on Radio 1? Does it signify another break with reality and blindness as to who really listens to CBC? I have no explanation for these counter-intuitive programming decisions but I once heard the president of CBC, Hubert Lacroix, declare at a luncheon speech that his mother liked the music on Radio 2 rather than citing audience research. 
CBC Radio is not for everyone. But about one in three Canadians listen to CBC Radio for at least an hour per month, according to our surveys. That is a very substantial plurality, as many as vote for the winning party in federal elections. Those who listen regularly are intensely loyal and spend many hours a month with the service but is the audience growing, as claimed by CBC?
Radio listening overall has been declining since 2000, according to ratings data CBC provided to the Senate. Within some age groups weekly average hours spent with radio have declined by as much as 40 per cent (see graph below), as people, especially younger people, are turning to other alternatives to listen to music, including iPods, smartphones, Internet streaming, etc.
However, when CBC claims that its audience is at record levels, it doesn't use average hours spent with CBC Radio. Rather it switches to another metric, audience share. Yes, the CBC share has grown since 2000 but the base for the calculation of share, hours spent listening, is down by as much as 40 per cent. The CBC share has increased because many non-CBC listeners have abandoned radio for other music alternatives, while CBC's mostly older, beleaguered listeners have stayed with CBC despite the diminished service. In effect, CBC has a larger share of a much smaller pie. Again, Twain would say reports of an increase in CBC Radio's audience are greatly exaggerated (and the result of demographic trends, especially an aging population).
Among older adults, who are the heaviest radio listeners, as shown in the graph, CBC Radio registers more than a 33 per cent share, while among younger adults, who are lighter radio listeners, the share is less than 10 per cent . Despite the stunning fact that one third of all seniors' listening is captured by CBC Radio, managers are loath to acknowledge that it is overwhelmingly a service for older persons, a group that will only get larger. 
So the decline in CBC Radio and the real audience story has been covered up, along with the serious negative effects of disproportionate budget cuts. Meanwhile managers continue to ignore how people use radio, going after the younger, hip audience that long ago abandoned radio for other media choices. Poor auntie Bee denies it and withdraws into fantasy.

(This post originally appeared in Huffington Post)