As you may have surmised from the title of this post the article is about our beloved mother corp, the CBC (Canadian Broadcasting Corporation). Now as a Canadian I have learned long ago not to be too shocked by any decision or course of action CBC undertakes, remember these are the same clowns that cancelled The Simpsons (a ratings giant) because it was not Canadian content, yet have force fed us Coronation Street (a British soap opera) for the last quarter century. So what was it that nearly made me fall out of my chair?
Well here it comes. The CBC has decided to venture into the online music industry to compete with Apple and their incredibly successful iTunes store? Seriously, I am not making this up.
Now lets keep in mind that Apple basically reinvented the retail music industry with the initial introduction of the iPod and the launch of the iTunes store. In doing so they virtually drove a stake through the heart of the brick & mortar retail music sector which for all all intents is on its last legs. The thinking behind this was a stroke of genius (for the most part credited to the late Steve Jobs) as they sell and profit on both the sale of the hardware and the intellectual property. Consumers love it for all the right reasons, and the music industry supports it wholeheartedly. Apple then followed up with the iPhone and iPad, both incredibly successful devices that amongst other features act as platforms for iTunes music. All three platforms have been assaulted by dozens if not hundreds of copycats, many who in short order fell by the wayside, and some (Backberry/RIM) who are still holding on for dear life in search of a small piece of the pie. Apple's profits last year were in the range of $26 Billion and they currently sit on a cash reserve of around $98 Billion, equally as impressive is the fact that iTunes currently accounts for 88% of the legal online music market.WOW! Add to that the fact that most Apple customers are die hard raving fans ( for that matter so are most Apple employees) and you have by any definition what would be considered a retail business juggernaut.
Now lets take a peek at CBC's current position and history On the positive side the CBC celebrated it's 75th birthday in 2011, but on the not so positive side....
- The CBC juggles ten unions internally, many of them who have brought the mothercorp to a grinding halt in the past with "pie in the sky" wage and benefit demands, and will probably do so again in the future.
- It's top management are political appointees, not business executives by any stretch of the imagination, something that is very apparent in many of their decisions.
- The mind set of the workforce within the corporation is one of stale thinking, entitlement, and do as little as you have to to get by each day.
- The CBC does not have to prove its performance in the market to raise capital for this venture, they have a "sugar daddy" (Canadian government) that will simply underwrite the project. The CBC goes to the Canadian Government annually with it's hand out for more funding, in 2011 they received $1.1 Billion of taxpayer money. Have they ever in 75 years actually turned a profit?
- After 75 years in service CBC is showing its age, what was once a necessary service that brought this country together is now viewed by many Canadians as a dinosaur on it's last legs. CBC no longer has a monopoly on providing television and radio programming to many Canadian communities, the internet and satellite broadcasting have opened the world for everyone regardless of where they reside. This has led to viewers voting for their favourite programming with their remote controls and based on who's watching, CBC is not even in the game anymore.
- The CBC has no (zippo, nada, zilch) experience in the retail or e-commerce sectors, so they will be starting virtually from scratch, against one of the kings of on-line retailing..
- The CBC mandate about Canadian content appears to be a moving target. So does that mean their music store will lean heavily towards Canadian content? Face it guys you can only sell so much Anne Murray, Gordon Lightfoot, or Feist in todays world.
The only answer I can suggest is that the CBC is like an aging boxer, one that during his long career once held the title and all the glory that came with it. Now as the years go by he hangs around the ring and watches as the young up and comers spar, and recalls how he was once the champ. After much reminiscing he has concluded he still has what it takes to get in the ring and take back the glory from the current title holder, a younger fighter who has defeated every other contender and shows no sign of weakening. Unfortunately what our aging boxer (CBC) forgets is that most of his wins were fixed by his owner (Canadian Government) and with the help of his promoter (CRTC) by rigging the rules in his favor. On the other hand the current title holder is young, lean, strong, and earned his title the honest way, through hard work. My guess is this latest bout probably shouldn't last the first round, but like many an aging boxer the CBC may not know when to throw the towel in. As in the past the owner (Canadian Government) will be responsible for financially nursing our battered boxer back to health so that he can go back to watching from the sidelines.