Could Canadian marketers lose access to U.S. programming?

Yet another ominous warning about the future of television in Canada has been circulating recently, this one predicting the rupture of the U.S. programming pipeline into Canadian networks.

Yet another ominous warning about the future of television in Canada has been circulating recently, this one predicting the rupture of the U.S. programming pipeline into Canadian networks.

The premise is that U.S. studios will realize the financial advantages of selling their combined U.S. and Canadian television audiences (both tuned to the U.S. signal with no Canadian simulcast) in conjunction with the growing numbers of potential computer viewers with high-speed connections.

While this scenario is certainly conceivable, I have to believe that our U.S. studio and network friends will think twice and give due consideration to the numerous hurdles.

The obvious one is the assumption that U.S. advertisers’ marketing needs and media solutions will be equally effective in Canada. This flies in the face of the reality that most international advertisers operate independent marketing arms north and south of the border. It also contradicts prevalent marketing trends towards deeper consumer insights and the pursuit of relevant and innovative consumer contact opportunities.

From a practical standpoint, the reporting fallout from this one-stop shopping scenario is massive. Besides the obvious need to quantify Canadian Target Rating Points delivery from the U.S.-originated buy, most of us would predict endless debates and analyses surrounding the allocation of cost-versus-value that would be palatable to our clients’ Canadian and U.S. marketing arms. Within the predicted scenario, commercial unit pricing would presumably reflect the larger audience base derived from the combination of U.S. and Canadian viewers.

But besides the obvious attributes of program quality and scheduling, the size of the Canadian audiences tuning to U.S. product is also due to the intense promotional efforts supplied by Canadian networks. Typically, we have seen multi-media campaigns behind the majority of their costliest U.S. purchases – some maintained year after year. It is not reasonable to expect that the U.S. studios will go to this extent to protect their Canadian audiences (and value), which could thereby undermine the venture by delivering a lower combined audience.

Meanwhile, what could we expect from Canadian broadcasters deprived of their top prime-time sitcoms? They will obviously find other programming to replace the lost U.S. product; and more importantly – thanks to the sheer volume of currently-airing U.S. programs – the Canadian networks will be compelled to provide strong alternatives.

They will source these alternatives from a combination of good international product (particularly Britain, Ireland, Australia, and New Zealand); joint advertiser/network productions (a resurgent area of interest); and Canadian productions. The end result is that the Canadian viewer will have yet more choices – the U.S. title on the U.S. station, as well as many alternatives on Canadian stations.

We planners and buyers of television have survived the growth of cable, the VCR onslaught, the specialty wave, and most recently, the birth of diginets. The potential move by U.S. studios under discussion here is merely another stage in the evolution of television that, along with some initial issues, could also lead to more media opportunities.

Undeniably, Canadian buyers would lose access to high-rated U.S. product; however, let’s not forget that this product’s value is diminishing as ratings continue to slide. Canadian buyers would be facing greater fragmentation; however, armed with the right tools, we can turn this challenge into a tighter targeting opportunity for our clients.

Finally, this hypothesis is partly dependent on the successful roll-out of high-speed Internet access. According to Starcom IP, high-speed market share (of households with Internet access) currently resides in the 30% area. Looking ahead, high speed access is predicted to reach 50% share by the end of 2002. If these predictions hold true, it does appear as if the critical mass for computer ‘viewing’ potential will be in place.

However, the big question that still remains unanswered is whether high speed-enabled viewers will be inclined to watch television programs on their computer screens (not withstanding the uncertain impact of next generation PVRs that are just beginning to trickle into Canada). Internet usage to date would suggest otherwise, as online activity tends to be for information gathering or interactive entertainment purposes.

My overall conclusion can be summed up with the old song title It Ain’t Necessarily So – wrong tense, right sentiment. If, however, we eventually find ourselves in the position of having to go down this road, our history tells us that we will not only survive but find the surest track.

Theresa Treutler is SVP, broadcast investment director at Toronto-based Starcom Worldwide. She can be reached at: theresa.treutler@starcomworldwide.ca.