CBC Music

Free, tax-payer funded CBC Music losing millions on content acquisition, says report

Friday, October 12, 2012 - 12:35pm

According to a report, the Canadian Broadcasting Corp.'s (CBC) new streaming music service CBC Music is losing millions of dollars because of the cost of content, and lack of advertiser support.

In an article in today's Toronto Globe and Mail, the paper predicts the service, launched in February, will lose millions annually "as the high cost of content surpasses the advertising revenue the service earns."

[Find our prior CBC Music coverage here.]

CBC offers users, who pay nothing, 40 channels of streamed music, with much of the CBC's vast collection of archived music available on-demand, plus written content and videos.

While wildly popular with listeners (7.8 million visits to the site since launch, 17.6 million hours of music streamed), advertisers have been less enthusiastic. CBC expects only $750,000 in 2012 ad revenue, for a service that will cost $6 million in royalties, production, and launch expenses this year.

Those operating similar commercial operations have complained that it's unfair to compete with a service that is free to use and funded by taxpayers. Moreover, organizations like SOCAN (which represents music composers and publishers) say the volume of music CBC Music uses should make them ineligible for the "flat rate" royalty (granted to non-commerical operators) they're allowed to pay. Commerical services pay a "per-song" royalty.

"Other companies operating in the space estimate it costs about $6 a customer to run an online service, once copyright fees, infrastructure and marketing costs are considered," the paper noted.

Commercial competitors to CBC Music in Canada include Galaxie (owned by Stingray Digital and most known for its streaming music channels on pay television systems), U.S.-based on-demand streamer Rdio, satellite radio SiriusXM Canada, and U.S.-based Internet radio and on-demand service Slacker.

Read more in The Globe and Mail here

Canadian gov't rules publicly-funded CBC's music service not unfair to private operators

Wednesday, August 15, 2012 - 1:30pm

The Canadian Radio-Television and Telecommunications Commission (CRTC) has decided it's not competitively unfair to private operators for the publicly-funded CBC to have launched the CBC Music portal.

In February (RAIN coverage here), Canada's national broadcaster launched the CBC Music service, with CBC FM streams, 40 Internet-only radio streams, on-demand music, and other audio content. Since then, private broadcasters like Stingray Digital (which operates cable television music service Galaxie and Stingray-music.com) have argued public funding and supposed preferential royalty rates gave CBC an unfair advantage in the field (see more in our coverage here).

The CRTC ruled, "SDG has not demonstrated that the CBC has given anyone, including itself, a preference, or that it has subjected anyone to a disadvantage." Read more from CBC here.

CBC Music a "controversial topic" at Canadian broadcasting conference

Monday, May 14, 2012 - 11:35am

CBC MusicThere's reportedly "growing anger" from commercial broadcasters over the Canadian Broadcasting Corporation's (CBC) new online music service, according to Radio-Info. The service, CBC Music, was a "controversial topic" at the British Columbia Association of Broadcasters, reports Sean Ross.

One group head said during the Presidents Panel "that having the cash-hungry CBC invest in an online service that won’t bring in any revenues seems like 'misplaced resources.'" Another panelist, Jim Pattison Broadcast Group Chairman Rick Arnish, said “It astounds me that the CBC would go ahead and launch” CBC Music.

A third panelist, Vista chairman/CEO Margot Micallet, "says if that’s how the CBC wants to play it, then the CBC should be have a bigger responsibility for programming Canadian content than the commercial broadcasters," writes Radio-Info. "She says 'Why not let us have pure formats?'

CBC Music offers 40 Internet radio stations, along with on-demand content and the streams of Radio 2 and Radio 3 stations (RAIN coverage here). It's already facing funding, royalty and content pressures (RAIN coverage here).


One month in, CBC's online music service facing funding, royalty, and content pressures

Friday, March 30, 2012 - 12:15pm

Just a month after the launch of the Canadian Broadcast Company's brand new online music service, CBC Music (you can see our coverage of it here), the service is facing the pressures of cuts in its funding, calls from songwriters and publishers for higher royalties, and from artists questioning the CBC's dedication to Canadian art.

Canada's government has announced its new budget, which slashes CBC funding 10% -- dropping more than $100 million of its $1.16 billion -- which a Spinner.com article suggests "will no doubt have a tremendous effect" on CBC Music.

Meanwhile, the Society of Composers, Authors and Music Publishers of Canada (SOCAN) is calling to revisit CBC's "flat-rate" royalties deal. Commercial radio and other online services in Canada pay royalties "per-song;" as it technically doesn't earn any profits, the CBC gets the flat rate. SOCAN argues the sheer volume of music CBC is offering for free makes a flat fee unrealistic. Some artists and competitors agree.

"As there is a new format [live-streaming] and the CBC is currently paying a nominal fee, it only seems fair that a new rate be negotiated," said singer-songwriter Jim Cuddy. "What concerns private industry is that in the face of massive cutbacks CBC sees fit to launch a new service that won’t generate meaningful revenue," said Rob Braide, of Stingray (more in RAIN here), a commercial webcaster.

Read more about SOCAN's calls for new royalty terms in the Globe and Mail here.

Finally, while Canada's "CanCon" law requires broadcasters to play at least 35% Canadian-produced content, this doesn't apply to online programming, including the CBC's new service. "Therefore (there is) no requirement to direct that percentage of overall royalties to the Canadian music industry... even though CBC Music uses tax dollars for its royalty payments," writes Spinner.com. While some maintain the mandate of the CBC itself ensures its relevance to Canada's people and music, some would like a content requirement formalized for online.

"We come at everything with a Canadian perspective and the focus is much more heavily Canadian than it would be on most surfaces," CBC spokesperson Steve Pratt explains.

But artist Paul Banwatt disagrees: "The whole point of CanCon is the recognition that we're a small population and we want to make sure that our voices, with distinctly Canadian things to say, aren't drowned out. Cultural expression crosses borders more easily now than ever, so you would think the need for protection is at its height."

Read more from Spinner.com here.

CMW speakers: "As an industry, we need to embrace digital media... the opportunity is now for radio to reinvent itself"

Monday, March 26, 2012 - 11:40am

Canadian radioCanadian radio's digital future is coming and, though what that future may be remains unclear, it's up to broadcasters to shape it. That was the "big idea" put forward by broadcasters -- most of whom have launched some type of new Internet service -- at last week's Canadian Music Week in Toronto.

Digital music is "a very important space," said Bell Media Radio president Chris Gordon. "We don't know which way it's going to go at any time, but these are valiant efforts that are going to be invested in, until they prove that they're profitable or not." Bell Canada is acquiring Astral Media (RAIN coverage here), which recently launched a new on-demand web music service, offering "niche format channels" and "personalized streaming music" (more here). 

Astral Media VP Rob Farina said the company has hired more than 100 new staff members to tackle such digital endeavors. "As an industry, we need to embrace digital media to strengthen the relationship and value of our brands to the consumer," he said. "I don’t believe it will always be towers delivering our signal, with more audio and streaming options heading to the dashboard. The opportunity is now for radio to reinvent itself."

Daniel Anstandig recently argued Bell's acquisition of Astral would result in "a more integrated media hub than anything the world has ever seen before" (RAIN coverage here). That mimics thoughts shared by CBC Music executive director Chris Boyce, who said, "We think our biggest opportunity is music content across all of our platforms: TV, radio, digital... Our goal with CBC Music is really quite simply to connect Canadians with the music that they love." CBC in February launched a new online music service featuring 40 web-only radio stations (pictured; more coverage here.)

CBC Music's recently launched music service

"We continue to learn about this digital space. Anybody who says they are an expert in this digital space is lying," said Corus Radio VP Dave Farough during CMW's "Social Radio" panel. Farough said Corus recently merged its interactive and radio divisions ("We realized that we’re not radio and interactive – we’re ‘this’ now. It really is all one big pot, if you will."). To illustrate that focus, he said Corus now expects on-air talent to be content creators, too, especially online.

"To those old dogs that refuse to learn the new tricks in our business, I say to them: Get another job. Go find another industry, because this is the way it is," Farough said. "The Internet is here to stay, and let’s embrace it and use all of the tools at our fingertips, instead of fighting against it."

Cartt.ca has more coverage here.

New CBC Music includes 40 web-only radio streams

Wednesday, February 15, 2012 - 12:10pm

CBC MusicCBC (Canadian Broadcasting Corporation) Monday launched an online music service featuring 40 Internet radio stations.

CBC Music -- a free service that appears to be open to all listeners, not just Canadian users -- also offers selections of on-demand music and content from CBC personalities. It's reportedly made possible through an "umbrella" deal with 1,000 music labels.

The service also includes streams of Radio 2 stations and Radio 3.

CBC reports that 25% of Canadians listen to web radio. Jeff Vidler, SVP of Vision Critical Communications, says web radio is "underdeveloped in Canada, relative to other territories. If you look at the U.S. or Britain, it's much higher in terms of use of internet radio services or online music-streaming services."

That's in part due to the absence of major players like Pandora, due to Canada's "tricky rights negotiations." Writes the CBC: "that reticence has now opened the way for Canadian-born initiatives."

CBC's launch comes soon after private radio network Astral launched an on-demand music service (RAIN coverage here and here).

CBC has more coverage here and you can find CBC Music's site here.

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