Tough times may be ahead for the CBC

Andy Radia
Politics Reporter
Canada Politics

Surprise surprise! The CBC is losing money on yet another venture.

The Globe and Mail is reporting that CBC Music — a web-based digital music portal launched in February — is poised to lose about $5 million this year. Moreover, according to the Globe, they don't expect to be in the black for the foreseeable future.

Heritage Minister James Moore defended the music service's paltry financial record in a tweet to Sun News reporter David Akin on Thursday evening.

"CBC mandate in Broadcast Act, their funding approved by Parliament, and their programming decisions are (sic) ams-length," he wrote.

[ Related: Canadian Heritage Minutes are making a comeback ]

If you haven't been on the site, you should. It's actually quite impressive with its web radio stations, video concerts, and as many as 12 genres of on demand music — and hey, it's all free (except for our tax dollars, of course).

The free-service has, however, upset private on-line digital music providers in Canada.

This past Spring, several companies complained to the CRTC that the public broadcaster had an unfair competitive advantage because of its not-for-profit status, which gives it preferential copyright rates.

"Due to its government funding and preferred copyright treatment, CBC is now positioned — whether it intends to do so or not — to harm private enterprise, and to inhibit competition in the online music environment in Canada," Stingray Digital Group argued in their CRTC submission according to the Winnipeg Free Press.

CBC quashed the bid arguing that they're just promoting Canadian talent.

If a $5 million loss and financial pain for private enterprises doesn't alarm you, perhaps this will.

Earlier this week, broadcast watchdog Friends of Canadian Broadcasting released a statement claiming the CBC would suffer a "devastating financial loss of as much as $200 million annually if it loses the rights to Hockey Night in Canada in 2014 when its agreement with the NHL expires."

"The CBC is hooked on hockey and the lockout could be just a bitter foretaste of the future for the CBC," Ian Morrison, spokesperson for the group said in the statement.

"All told, the loss of hockey would be much worse than the most recent round of cuts from the federal budget. It would be a game changer for our national public broadcaster."

While CBC TV would save about a $115 million on broadcast rights, they would lose more than 50 per cent of their ad revenue and almost one-third of its audience.

"If the CBC were to lose hockey, it would need to replace some 400 hours of hockey programming with a similar quantity of the very best, most attractive — and expensive ­ Canadian shows. Any other replacement strategy designed to minimize costs, such as American movies or repeats of Canadian shows, would prevent the CBC from meeting its Canadian content requirements and lower audiences," Morrison said.

In other words, look for the CBC to overpay for the rights and squeeze-out our enterprising private broadcasters.

Our tax dollars hard at work.