The Canadian Broadcasting Corp. will not change its online music service to satisfy private broadcasters who complain the taxpayer-financed site is unfair competition.
The CBC launched the free music site, CBCmusic.ca, in February, allowing users to listen to an endless stream of music over the Internet. Last week, a group of companies, including Stingray Digital and Quebecor Inc., filed a complaint with Heritage Minister James Moore and the Canadian Radio-television and Telecommunications Commission, arguing that the public broadcaster overstepped its mandate when it launched the site.
The competitors offer similar services, but charge monthly access fees to subscribers. They are demanding that the CBC either close the site, begin charging for access, or change the site's scope to play only Canadian artists, in keeping with its mission to promote Canadian content.
The CBC said it is "awaiting direction from the CRTC," but has no plans to change the way it offers music on the website. The site has been hugely popular, attracting one million unique visitors who have played five million hours of music since its launch.
The site offers about 40 streaming music channels sorted by genre, as well as hundreds of concerts previously recorded by the CBC. It also has regular features, such as channels dedicated to a specific Canadian artist. It launched with a Leonard Cohen channel, and currently offers a Gordon Lightfoot channel.
"We see this as core to our mandate," Chris Boyce, CBC's executive director of radio and audio, said in an interview.
"Music and other cultural reflections have always been an incredibly important part of what we do. The reality is the music industry has shifted in the past decade and how people consume music has changed radically in a short period of time. We are simply moving with our audience," he said.
The dispute is part of a broader debate about the role of the CBC, which saw its financing slashed in last month's federal budget; and about how online music services should compensate rights holders for music played on such sites.
The group of competitors – which also includes Cogeco Inc., Jim Pattison Group and Golden West Radio – are also concerned that the CBC service will sell advertising, competing directly with their terrestrial radio stations which are also eager to move more of their business to the Internet.
That concern was heightened when the CBC said it would begin selling advertising on CBC Radio 2 to make up for a reduced operating budget.
"It has been an ongoing debate as to whether CBC should be allowed to use public funds to compete directly against private broadcasters for sports content or foreign television programs," the group wrote in their letter to Mr. Moore. "It appears that this debate is now relevant to the radio and music industries as well."
Mr. Moore's office will not get involved in the debate, saying it is "a matter between a private company, an arm's-length Crown corporation and our national regulator. It does not involve the government."
The competitors also complain that the CBC receives preferential treatment from organizations that collect royalties in Canada. But the amount it pays is renegotiated whenever the scope of its activities changes, Mr. Boyce said, and the CBC expects to pay the same as other broadcasters for its online music rights.
"We launched [the site]knowing that we were heading into budget cuts, so it is largely funded by redirecting how we deploy staff and resources," Mr. Boyce said. "It isn't about getting out of radio and into digital, it's about making music content that can be consumed across platforms … We're trying to go where the audience is, and increasingly it is in the digital space."
He said it is not possible to say if the site would ever pay for itself, because it uses resources from different areas of the CBC. The team that programs the classical channels on CBCmusic.ca, for example, also determine the classical music schedule for Radio 2.