Imagine yourself loafing around the house on a Sunday afternoon. It’s RRSP season, so you channel surf your favourite Canadian stations looking for interviews with investment experts. You settle on a half-hour, made-for-TV special.

It stars Canadian actors and personalities and, when the credits roll, turns out to have been written in Canada by Canadian writers, produced in Canada by Canadian producers and edited in Canada by Canadian technicians.

Quick: Is it Canadian content?

Not if said program is an infomercial, or so says the Canadian Radio-television and Telecommunications Commission (CRTC).

Despite their obvious homegrown nature, long-form (30-minute) DRTV spots produced in Canada are defined as ‘neutral’ by the commission as far as national origin is concerned. And while that may seem an odd-but-trivial bureaucratic glitch, industry leaders say it has placed an artificial ceiling on the growth of the medium.

‘It’s probably the most serious hamper to the growth of infomercials in Canada,’ says Ian French, president of Northern Lights Direct Response Television in Toronto. ‘If you look at it as a product, there’s just not enough shelf space.’

Canadian content regulations, he points out, mandate that at least 60% of all airtime on Canadian TV networks be set aside for Canadian content. As a result, the only 30-minute time slots available for non-Canadian content are during the 40% of the broadcast day dominated by American TV programming.

‘You can’t buy 60% of the available inventory, and the 40% of American or non-Canadian time that you can buy is all the network’s most profitable time,’ he says. ‘The result is that the airtime is more expensive than it could be and, as a result, it’s more expensive to run a campaign and more difficult to make returns.’

The problem lies in the wording of a 1994 CRTC ruling that allowed infomercials to be broadcast at any time on Canadian networks.

Prior to the ruling, DRTV spots reached only chronic insomniacs and university students since they were restricted to the midnight-to-6 a.m. timeframe. They were also subject to the rule restricting the amount of advertising in any given broadcast hour to 12 minutes, which had the effect of bombarding already-groggy infomercial viewers with a kind of hyperspeak designed to cram those 12-minute spots with as much information as possible.

All that changed with ruling 1994-139, otherwise known as ‘Amendment to the Television Broadcasting Regulations, 1987.’ The time of day restriction for infomercials was removed and an exception was granted that allowed long-format infomercials to sidestep the 12-minute rule.

However, criterion three of the ruling states that ‘infomercials should be logged as having no program nationality,’ while another section states that ‘because they are essentially long-form commercial messages, infomercials cannot be accepted as contributing to the meeting of regulatory obligations for local or Canadian programming, or for any other requirement.’

With the push of a pencil, the commission defined DRTV spots as neither indigenous nor foreign, despite the fact that they were and almost always are written, produced, performed and financed by Canadians working for Canadian production houses.

‘Our (1994) decision was fairly comprehensive,’ says Denis Carmel of the CRTC’s media relations office. ‘(Infomercials) don’t fit anywhere. When you compute your Canadian content ratio, that hour is not Canadian content. It’s considered neutral, so it’s not counted as a broadcasting hour, period.’

To qualify as Canadian content, the CRTC says television programs are ‘evaluated using criteria based on the producer and key creative personnel used, the amounts paid to Canadians for services provided to make the program and on post-production, as well as amounts spent in Canada on lab processing.’

None of that, on the face of it, would necessarily exclude long-format infomercials.

Which is not to suggest that the CRTC has been resolutely standing in the industry’s way. In addition to the provisions of 1994-139 that eased the way for long-form infomercials to be seen during daylight hours, another 1994 directive changed the rules to permit phone companies to offer consumers the option of having their over-the-phone purchases charged directly to their telephone bills.

The introduction of enhanced-service 1-900 numbers charged the medium with new vitality by simplifying at-home shopping. Consumers ordering an item from a DRTV spot can now use their monthly phone bill as a payment option while the phone companies pass on the revenues to the retailer, less a flat fee and a 10% levy on the amount charged.

Still, industry leaders say the neutral designation with regard to CanCon means the growth of long-form infomercials is unnaturally stymied.

‘If it was considered Canadian programming, it would improve the picture for stations and they would be much more willing to put this type of programming on air,’ says Rod Bell, president of Channel 500, a DRTV production company in Toronto. ‘I would like it to be considered Canadian content because in fact it is Canadian programming. It’s produced by Canadians, it’s written by Canadians, the companies that are financing them are Canadian. So that is an issue that has to be brought forward.’

Sidebar: No hope from specialities: Fastest-growing TV segment closed to infomercials

In the short-term, the best hope for expanding the available inventory for long-format DRTV spots lies with the specialty channels. But clients and media buyers have a long way to go before they’ll convince the CRTC to change its current licensing rules prohibiting the specialties from airing commercial spots over two minutes long.

Citing the fact that specialty services generally have access to both subscriber fees and advertising revenues, the CRTC decided against loosening the rules to allow them to reap the added revenues that long-format infomercials would bring.

That means the fastest-growing segment of the television medium has effectively been closed off.

Since long-format spots are also banned from the CBC, TVOntario or any other television broadcaster that receives public money, infomercials are forced to bid for airtime on CTV, Global and privately owned local stations.

CRTC rules drive up prices there even further since long-form infomercials aren’t considered Canadian content and, therefore, compete for time in the 40% of the broadcast day private broadcasters set aside for highly profitable American programming.

With supply so restricted, competition for the available spots is heated, and the bidding process often favours larger, U.S.-based media buyers who have the money and resources to gobble up the best chunks of the private networks’ inventory.

‘We were 10 years behind the U.S. in terms of deregulating and, as a result, they have a huge, well-developed, multi-billion dollar industry,’ says Ian French, president of infomercial production company Northern Lights Direct Response Television of Toronto. ‘The big U.S. infomercial companies have 15 or 20 programs running at any given time, so they can come up, buy a lot of time and, if one program isn’t working, they’ll just rotate the next one into that slot.’

French, who sits on the Canadian Marketing Association’s DRTV council, says he recently sent a letter to the CRTC on behalf of the council asking that the commission consider opening up the specialties to 30-minute infomercials and reconsider the neutral designation for infomercials relating to CanCon. As of this writing, the CRTC had not responded to the letter, though it is understood that the matter is under consideration by the national regulator.

Industry leaders hope that’s the case. Short-form (two-minute) infomercials have to compete with regular 15-, 30- and 60-second TV commercials in an increasingly cluttered environment. So the proliferation of longer-format spots may well offer the best hope for increasing the size of the industry.

‘You have more and more Fortune 500s using the (long-format) medium,’ says Rod Bell, president of Channel 500 in Toronto. ‘They accept the medium as a viable marketing tool. So there’s going to be a lot of pressure on the availability of time slots.

‘I think you’ll see them get a modification or amendment to their licensing,’ he adds. ‘The economics will be attractive.’ MD