Ask someone what their deepest fear is and you’ll usually hear something like ‘running across Ronald McDonald in a dark alley’ or ‘a liposuction procedure gone horribly wrong.’
Not so with Canadian broadcasters: Their deepest fear is that the U.S. nets which supply them with most of their programming will somehow find a way to skip the middlemen and sell their airtime directly to Canadian advertisers.
No wonder then that three proposals currently before the CRTC have set off the broadcasters with flailing limbs and aghast rhetoric. The proposals, two from the Canadian Cable Television Association (which represents Rogers Cable, Shaw and others), and one from a new venture called 49th Media (helmed by former Bell Globemedia convergence guy Kevin Shea), are complex – but the upshot is that if they pass, Canadians will have direct access to more U.S. programming, and existing broadcasters won’t see a cent in new revenue.
In brief, the CCTA’s first proposal is that it be allowed to carry 29 U.S. specialty services – such as HBO, Showtime and Nickelodeon – that currently aren’t available in Canada. The second proposal allows the cablecos to sell the two minutes of available ad space per hour that come packaged with such carriage deals.
Shea’s proposal, meanwhile, is to suck up the existing U.S. satellite signals for five top U.S. specialty channels, replace the U.S. ads with Canadian ads, then rebroadcast a ‘Canadian’ satellite signal. (For details on the three applications, see ‘Casters fight U.S. specialty invasion’ on page 5.)
For Canadian broadcasters, implementing these changes would be a complete and utter nightmare for all sorts of obvious reasons.
But for Canadian advertisers, the issue is much more complicated: Some of the proposed changes would definitely be a boon, some definitely would not, and some, well…it’s hard to say.
The 49th Media proposal falls in the definite boon category, and it has already been endorsed by the Association of Canadian Advertisers. If granted, that application would basically give Canadian advertisers access to programming streams that Canadians are watching anyway. That’s the easy one.
The CCTA proposals have both a downside and an upside, but the ACA has decided that the downside is way down, and won’t back either.
The upside is advertisers would gain some access to U.S. specialties such as HBO that they currently don’t have. But Canadian advertisers would only get a measly two minutes of ad space per hour, and as the Canadian Association of Broadcasters points out, Canadians currently getting HBO for free via the grey market are unlikely to sign up for a paid subscription. If that were the only issue, the ACA could probably go either way.
The sticking point is that if the CCTA got its way, cable companies such as Rogers and Shaw would be allowed to get into the ad sales game, and that changes everything. Think of the power that Rogers would have if it became both de facto broadcaster and carrier for a slew of hit U.S. specialty stations. For advertisers, competition among broadcasters is good, consolidation of power is bad. It’s as simple as that.
Personally, I side with the advertising community on this one, but it’s mainly because I think viewers will ultimately lose out if the CCTA proposals are passed.
Both the CCTA and 49th Media have pledged 25% of their ad sales revenue to the Canadian Television Fund to support Canadian TV production, but I don’t think that’s enough to offset the damage that would be done to our broadcasting community.
Showcase is a distinctly Canadian channel – even if much of the programming is sourced from America – while Showtime and HBO are not. And if the cablecos can offer Showtime and HBO direct to Canadian consumers, that will eat into the subscription base for Showcase. Same with YTV and Nickelodeon, and many others. Even the big nets, such as CTV, will find smaller audiences for shows such as The Sopranos if they no longer have a broadcast first-run exclusive.
So we have damage done to Canadian broadcasters, which employ Canadian people in Canadian offices to create Canadian channels, and have done their share (more or less) to support Canadian production, and what do we gain?
We (or rather Rogers, Shaw and other cablecos) gain revenues on two minutes – that’s four spots – per hour, and give a chunk of that money to support Canadian production. It’s a case of selling the chicken for a few eggs, and it doesn’t make sense for anyone except the cablecos.
Duncan Hood, editor
