Also in this report:

– Shuffle pits Baton against Global: Bidding wars expected to drive up program prices, national advertising rates p.20

– Ontario: local players aiming regional p.20

– English Quebec picture favors buyers: Global’s arrival expected to increase competition, lower prices in one of Canada’s most expensive TV markets p.22

– Delight and skepticism greet changes in West: Many expect arrival of new Vancouver station will bring only temporary relief from high rates p.24

– Aggressive branding the name of the game: Newer specialty services face greatest challenge in establishing distinct identity p.24

In a matter of a few short months, the television landscape in Canada has changed dramatically.

A series of recent developments on the ownership and licensing front promise to alter the broadcast playing field at both the national and regional levels.

The most attention-grabbing, by far, is Baton Broadcasting System’s move to acquire majority ownership of CTV Television Network – a deal now awaiting final approval from the Canadian Radio-television and Telecommunications Commission. That spells tougher competition nationally for CanWest Global Communications.

Global is also facing new challenges in the Ontario market, where formerly local stations are remaking themselves as regional players. And it is moving into Quebec, where it will battle the long-dominant cfcf for a share of the English-language market.

Add to all of this the licensing of new stations in Vancouver, Calgary and Edmonton, and suddenly it starts to look like a brand new broadcasting ball game. To help make sense of it all, Strategy has asked media directors to offer their analysis of these changes from an advertiser’s point of view.

In addition, we check in with Canada’s specialty tv channels, for a discussion about the challenges of establishing their brands in an increasingly crowded environment.

Brad Alles is vice-president, sales for Toronto-based Life Network.

Sue Warden CraftScapes outdraws Seinfeld!

Sounds a little outrageous? Well, the truth often lies in the absurd, so let me explain what I mean.

With the proliferation of new specialty television channels in the last two years, and four more coming this fall – plus new conventional stations in Vancouver, Edmonton, Calgary and Montreal – competition for viewers’ attention will increase.

In this ever-expanding and increasingly fragmented environment, how will advertisers continue to find their consumers?

In point of fact, many are discovering that they can target their consumers more closely than ever. And they’re thriving by doing so. It all flows from the recognition that the biggest audiences aren’t necessarily the best audiences.

Among advertisers, there is growing awareness and acceptance that specialty audiences, while relatively small, are well targeted. So a show like Sue Warden CraftScapes on Life can be more attractive to certain advertisers than Seinfeld.

While CraftScapes, according to ACNielsen, garners nowhere near the total audience that Seinfeld brings to Global Television Network each week, the show does attract an audience that is 88% female, compared to Seinfeld’s 43%. Given the disparity between the two programs in terms of costs for commercial time, it’s easy to see why some advertisers would opt for a smaller but devoted audience when targeting female viewers.

Does this mean that advertisers prefer specialty channels and their niche programming to the large audiences delivered by conventional broadcasters? No. But they are allocating more and more of their advertising budgets to the specialties – and, instead of concerning themselves solely with the number of viewers watching, are paying more attention to who those viewers are.

One reason for this is that advertising agencies, as well as the specialty channels themselves, have made great headway in educating clients about this quality-over-quantity equation. They have utilized reliable research – PMB Print Measurement Bureau, Roper, ACNielsen and the like – to build compelling cases for clients to include those channels in their advertising mix. The result: broad-based, mass-appeal programs may still form the backbone of most tv campaigns, but they are increasingly being augmented with niche programs.

The kind of research available today can offer very specific measures of viewers’ buying propensities in selected product categories. That, in turn, means that advertisers can place their commercials, promotions and billboards in specialty programs whose viewers’ expenditures and consumption patterns relate well to a particular product.

Whether they’re looking to catch the attention of a viewer who eats frozen entrees, who plans to buy a certain type of car in the next year, or who uses nasal spray, there is probably research available to help them choose the right shows, or the channels on which to advertise.

If not, the research that is available can be used to extrapolate what they need to know. If, for instance, an advertiser wants to target consumers who would be interested in buying a new modem, one can reasonably expect that home Internet access would be a good indicator. If the advertiser wants to catch the attention of senior business managers or upscale prospects, viewers who are also members of a frequent flyer program would be a good start. And so on.

Note that this selection process does not rely on how many people are watching, but rather on who is watching. It personalizes the viewers, rather than merely treating them as so many pairs of eyeballs glued to a television set. While a critical mass of these qualified viewers still needs to be present to warrant consideration by advertisers, no longer is the biggest number necessarily the best.

Certainly the future of niche broadcasters looks bright, as long as they can continue to deliver such viewers in relevant numbers. How many specialty services can be supported remains to be seen, but the fact that conventional broadcasters are behind some of the newest services would seem to suggest where the viewers will come from.

One thing’s for sure: the arrival of these new kids on the dial will further increase audience fragmentation, making it ever more important that the specialty channels and their programs be judged not by their total audiences, but by the quality of those audiences.

Sure, Seinfeld will continue to attract a legion of loyal viewers and advertisers. But until Kramer starts to garden, or George takes up pottery, there will be a growing need for targeted programs like Sue Warden CraftScapes.