Clearly, advertising makes a significant economic contribution to our country. It is the fuel for Canada’s economic engine. Furthermore, advertising makes it possible for the broadcasting system to fulfill the public objectives established by the Broadcasting Act. Without advertising revenues, Canada’s broadcasting system could not survive.
It is because of this that advertisers favour universal access to media. We believe that all broadcasting, and print and Internet services as well, should permit, and indeed would benefit from, commercial advertising.
This extends to the CBC as well. Advertisers have always supported the CBC, and we are proud of the role that we have had in its success. Advertising support of the public broadcaster allows governments to be fiscally prudent while still advancing public policy goals.
CBC television, both English and French, currently supplies substantial amounts of commercial inventory to the advertising marketplace, providing advertisers with opportunities to sponsor distinctive programming that delivers value to audiences. CBC audiences are particularly interesting to advertisers since they routinely run at diminished levels of commercial clutter compared to private broadcasters.
Some have suggested that CBC-TV should reduce its reliance on commercial revenues. This is a non-starter for advertisers, since it would take some $400 million—estimated—in commercial inventory out of the market, significantly diminishing supply and inevitably leading to increased TV advertising costs that would have to be passed on to consumers.
In our opinion, there are not enough existing conventional outlets, especially at the local level, to safely replace this market inventory. Without replacement inventory that does not add to clutter, and without adequate competition, the cost of TV advertising would be driven up, and advertisers would naturally divert some portion of their spending to other, less costly media and be forced to raise prices to consumers. This would only serve to diminish overall advertising funding, add consumer costs, and ultimately end up weakening the broadcasting system.
Canada's advertisers have had to cope over the years with increasingly restricted access to Canadian audiences. Approximately one-quarter to one-third of all TV viewing in this country is to signals that cannot be commercially accessed by advertisers in Canada. A non-commercial CBC would only exacerbate this problem.
An independent third-party researcher engaged by ACA to examine the effects on advertisers of a non-commercial CBC has estimated that advertiser costs in English Canada would rise approximately 10%, and in French Canada, where SRC is more dominant, by 24%. And this estimate was done before the current round of staggering consolidation that has occurred in Canadian broadcasting, such as the CTV-CHUM merger, and the competitive and cost implications that flow from this.
There is also the question of how to fill the time that would be left open by the elimination of commercials, and of course how to pay for it as well. Taking commercials off CBC-TV, for instance, would necessitate the production or purchase of over 1,000 new hours of programming per year, obviously at significant cost. Advertisers believe that a commercialization policy should also be extended to CBC's radio service. CBC radio listeners are already quite used to commercial content in the form of free public-service-type announcements for cultural and community events, as well as many program promotion spots, a practice that is essentially, in our opinion, discriminatory.
Many unique, desirable, and commercially viable audiences are generated by CBC radio, audiences that could easily be monetized to help contribute to the achievement of a public broadcaster's goals. This need not necessarily be traditional 60- or 30-second intrusive advertising, but rather corporate recognition spots as employed, for instance, by the National Public Radio service in the United States. Corporate sponsorships currently account for a substantial part of NPR's revenues, derived from an average of only one minute and thirty seconds per hour of sponsored commercial time.