Nordicity Corrects Factual Errors in Critique of Advertising Study for CBC/Radio-Canada Television
Posted by Nordicity in Toronto on Oct 01, 2012

TORONTO – October 2012 – In December of 2011, Nordicity completed an assignment for the Canadian Broadcasting Corporation (CBC) and Radio-Canada that sought to assess the impact on the CBC/Radio-Canada and on the wider Canadian broadcasting system if the CBC/Radio-Canada were to remove advertising from its television offerings. The report, entitled Why Advertising on CBC/Radio-Canada is Good Public Policy is available here (PDF, 1.6MB).

In September of 2012, Barry Kiefl posted a critique of this report on this “Canadian Media Research” blog. Nordicity’s response to Mr. Kiefl’s response follows below.

To: Barry Kiefl, CMRI

From: P. Lyman, Nordicity

Re: your blog entry entitled: CBC TV: Domino Effect Snowballing into a Chain Reaction

It has come to our attention that you have written a critique of the advertising study we prepared for CBC/Radio-Canada. While criticism is a natural result of most research and analysis, your article is based on erroneous information and makes factual errors, including the following:

Your article states “Nordicity dismisses PBS as a model for CBC to emulate because of its puny 1.3% audience.” Quite to the contrary, audience is a secondary concern of our analysis. The primary concern is clearly stated in conclusion #4 on page 13: “The PBS operating structure, revenue model, and program production financing could not be readily replicated in Canada.”

Your article implies we misled readers about PBS’s viewing level: “The Nordicity report refers numerous times to audience share and then slips in the reference to PBS's 1.3% … Well, the 1.3% is PBS’s prime time household rating.” In fact, we clearly state on page 13 of the report that PBS has a 1.3% rating: “Its [PBS’s] primetime ratings for US networks … is still only 1.3%.” [Emphasis added].

Your article states that: “Since only about 35% of people are watching TV in the average minute of prime time, a 1.3% rating translates into a share of almost 4% (i.e., 1.3%/35%). That is not much different than CBC TV's current share.” [Emphasis added]. In fact, CBC TV’s prime time audience share is double, which in audience terms is a very significant difference.

You suggest that we were negligent by overlooking a key data source: “The actual cost of CBC sales and promotion was reported by the CRTC to be in excess of $136 million in 2011, data overlooked in Nordicity's report.” In fact, we cited the CRTC as a source for our estimate in our report on page 16, Table 1.

In addition to these factual misrepresentations of our work, you make basic audience research errors and misrepresent your own survey data. For example:

Throughout your article you make statements about the views and opinions of Canadians based on your CMRI survey. Your survey cannot purport to state any facts about Canadians, since your survey is of “900 Anglophone respondents” and by definition excludes all francophone Canadians.

Finally, while anyone can formulate positions that represent different views of the same observed information, we are confused by many of your interpretations, as the following examples attest:

You state that the CRTC would insist that all or a substantial portion of the additional advertising revenues accruing to private broadcasters (in the scenario of elimination of CBC advertising) be spent on Canadian content. However, your opinion contradicts the historical behaviour of the private broadcasters which have opposed any increase in their conditions of licence – much less spontaneously investing in Canadian content.

In your article, you indicate that “CBC rates are lower than those for private stations" and "CBC undercuts the rates of private TV stations." Yes, in general CBC rates are lower, but the objective of sales managers in CBC/Radio-Canada – which include some of the brightest talent from private broadcasting - is to maximize advertising dollars based on ratings on prime properties such as Hockey Night in Canada. Lacking the top-rated prime time US shows, CBC gets market rates that are commensurate with its ratings.

In sum, the Nordicity research findings are based on clear statements of our data sources, assumptions and methodology.

 

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Nordicity is an international consulting firm providing private and public sector clients with solutions for Strategy and Business, Policy and Regulation and Evaluation and Economic Analysis across four priority industries:

Arts, culture and heritage Digital and creative media Information and communications technologies (ICT), and innovation Telecommunications and spectrum

Nordicity was founded in Ottawa, Canada in 1979. We now have offices in London, United Kingdom; Toronto, Ottawa and Vancouver, Canada; and clients across North and Central America, Europe, Africa, and Asia.

For more information about Nordicity, visit www.nordicity.com.