The CBC has applied to change its broadcasting licences for CBC Radio 2 and its French language counterpart, ICI Musique, to allow the stations to continue to air paid national ads through 2018.

The public broadcaster was first granted a licence by the Canadian Radio-television and Telecommunications Commission to sell ads on its flagship music stations in 2013, but this is due to expire at the end of August.

The decision to air commercial advertising on public radio – for the first time in Canada in more than three decades – was not without controversy. At the time, then-CRTC Vice-Chair Tom Pentefountas made a scathing dissent of the regulator’s decision, saying there would be “a slippery slope once the door is opened to the commercialization of public radio… As a consequence, a distinct service that is highly appreciated by the public will be completely altered and lost forever.”

But the experiment has mostly been a financial disappointment, at least when stacked up against the CBC’s initial expectations. Filings with the CRTC show that CBC Radio brought in just $1.1 million in ad revenue in 2014 and $1.3 million in 2015, well short of the $10 million the broadcaster originally told the CRTC it was hoping to make. According to the CRTC, $407 million in national radio ads were sold last year.

“There seems no good reason for CBC continue ads on radio,” Barry Kiefl, President of Canadian Media Research and a former Director of Research for the CBC, said in an interview. “The cost has to be greater than the revenue. When CBC was considering cutting ads on television years ago, there were staff who argued that the ads make us look like real broadcasters!”

The CBC acknowledges it is new to the radio advertising market.

Spokeswoman Alexandra Fortier said that being able to offer radio ads works as a function of the corporation’s advertising strategy across platforms.

“Advertisers want to be able to reach their audiences in the most efficient and effective ways possible, and across as many platforms as possible in order to implement coherent and impactful advertising strategies. This is why we offer cross-platform packages which include digital, TV and radio.

“It is important that we are able to retain the ability to offer advertisers a full suite of platforms, which includes radio, in order to continue to offer this flexibility because a loss of advertising flexibility could result in a loss of both radio and non-radio advertising.”

The CBC also says that all advertising revenue goes into programming.

The public broadcaster’s application to extend its licence to air advertisements will allow Radio 2 and ICI Musique to sell a maximum of four minutes of ad time per hour.

The CBC can look forward to more stable funding, however, in the form of new government support. In March, the Trudeau government announced it will invest $675 million in the public broadcaster over the next five years, beginning with $75 million in the current fiscal year and followed by $150 million in each of the next four years.

The deadline for comments to be submitted to the CRTC regarding the CBC’s application is June 22.

Financial Post

seancraig@nationalpost.com