GATINEAU – The sale of advertising time on American cable channels, by a new third-party company, is now back on the industry’s agenda.
In its presentation to the CRTC this morning Telus advocated an approach by Mediadenovo which would see the new company (Italian for “media of the new”, we’re told) – which is headed by former Canadian Association of Broadcasters president and CEO Glenn O’Farrell – sell the two minutes per hour of local availability ad time to national advertisers.
American cable channels like CNN, A&E, Golf Channel and others make that time available to distributors to sell into local markets. While in the States it’s a multi-billion-dollar business where dynamic ad insertion is being directly launched, in Canada it’s a far different story. CRTC regs prohibit the sale of that ad time and instead mandate that 75% must be provided, at cost, to Canadian broadcasters for promotion while 25% can be used to market carrier services.
Mediadenovo proposes to send the money from those national ad sales to both broadcasters and BDUs, a departure of past proposals which contemplated sending dollars to the former CTF, or to creating a new fund altogether.
“Telus considers that this third-party solution is the best means of monetizing the avails without threatening or causing any market and/or regulatory distortions. More importantly, monetizing the avails provides a new source of revenue for broadcasters and BDUs without any impact on consumers. It is truly win/win,” reads Telus’ opening statement to the CRTC, which it will present today, just after lunch.
Former broadcast executive Kevin Shea brought an idea like this (then dubbed 49th Media) to the Commission in 2003, as did Drew Craig under the “Only Imagine” banner in 2006. Neither of those business plans contemplated returning the cash right back to both local TV as well as cable and satellite companies and the Commission rejected both ideas.
The cable industry has made several requests to do the same over the years, the latest in 2005, saying the added revenue to their bottom lines would then boost the CTF (now CMF).
The CRTC has consistently turned down all of these proposals over the years but with the Commission grasping for new proposals to raise more funds without corresponding increases to monthly cable/satellite/telco TV rates, this proposal seems certain to get some serious thought this time around.
More to come later once we hear Telus and chat with O’Farrell.
