GATINEAU – It looks as though a portion of a CRTC decision that flew under the radar for many people has wrecked what was an excellent promotional outlet for Canadian specialty services and charities.
In decision CRTC 2015-86, part of the Let’s Talk TV process, the Commission surprised the industry by tightening the rules surrounding how the two minutes of local advertising time made available each hour by U.S. channels such as CNN, A&E, Golf Channel and TLC could be used.
Dubbed “local avail” time, American cablecos and other pay TV carriers have turned the sales of those two minutes into a multi-billion-dollar industry in the United States. That lucrative business has also been the financial impetus behind the development of targeted advertising and the monetization of set top box data in the American marketplace, led by the US MSOs.
Here however, the CRTC has always prevented Canadian carriers from selling the time in order to protect local TV and radio stations. The rules, which stood for a long time, held that the carriers could use 25% of the time to promote its own goods and services, while 75% of the time had to be made available to Canadian broadcasters, where the carriers could only demand cost-recovery payments from those broadcasters, with whatever is left over going for free to public service announcements from local charities.
(In fact, there have been many ideas on how to use the local avails, from independent broadcasters suggesting in the Let’s Talk TV hearings that they should be allowed to access them at no charge at all to this plan where a third party would have been set up to try and monetize the time, returning the bulk of the revenue to the Canada Media Fund for the production of Canadian content.)
In the decision that changed the rules, however, the Commission inexplicably altered the regs so that only first run Canadian content could be promoted in the 75% chunk – so public service announcements of local charities were prohibited altogether.
Now, as we’re finding out in the licence renewal hearing, that resource, two minutes of time on some very popular television real estate, is going to waste. So much so that Shaw has asked that the rule be changed at least to allow PSAs once again – and just about everyone who has been asked about it during the hearing’s first two days has agreed it’s a good idea.
However, because the local avail rules now also restrict the promotion of anything other than first run Cancon, it is punishing certain Canadian specialty services as well (and to tell the truth, everyone we’ve contacted would like to go back to the old rule). Independent broadcasters such as Channel Zero, or Hollywood Suite or Blue Ant’s group of channels can’t use the local avails to promote their classic movies or exclusive foreign content or try to boost subscriptions – nor can they even push any free previews they are running.
“It was a well-intentioned, but huge step backward for indies by the Commission." – David Kines, Hollywood Suite.
“It was a well-intentioned, but huge step backward for indies by the Commission,” said Hollywood Suite president David Kines in an email when asked about the issue by Cartt.ca. Even Corus Entertainment has reined in usage of the avail time.
“Once the new rule came down and required that it only be used for Canadian programs, that meant that we had to turn away many charitable organizations who had been used to (having access to the) unused portion of the 75%,” said Rogers Cable VP regulatory Pam Dinsmore on Monday. Now, Rogers is only seeing Canadian broadcasters use 15% of the avail time they could be using.
Shaw’s executives noted that “well under” 50% of the time is currently being used by Canadian broadcasters, and Cogeco on Tuesday said just 23% of the time Canadian broadcasters can use is being used.
Telus vice-president of broadcasting policy and regulatory affairs Ann Mainville-Neeson added in her appearance: “it makes no sense that we would not be able to offer PSAs,” while noting carriers are able to target individual regions so that messages can directly reach their needed audience – often in places with no other local TV stations.
Of course, the decline in local avail usage is not all about the rules. While the carriers are limited by regulation to only charge for cost recovery, some broadcasters find even those rates are far too high and that’s also a big reason behind the decline in the usage of those 120 seconds. For example, there are BDUs who have rate cards where Canadian broadcasters are charged more for booking local avail spots in prime time than during other dayparts.
"That's not cost recovery," said one broadcaster who spoke on condition of anonymity. "It costs no more to simply play out an ad at 8 p.m. versus 2 p.m."
This story has been updated from its original posting.
