January 29, 2015 4:13 pm
Updated: January 29, 2015 8:16 pm

CRTC grants access to U.S. Super Bowl commercials, but silent on future of local TV

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TORONTO – The CRTC has decided that Canadians can watch U.S. commercials during the Super Bowl starting in 2017, but the regulator has remained silent, for now, about the future sustainability of local television stations.

Canadian networks have simulcast big television events like the Super Bowl or the Oscars for decades, substituting in their own Canadian commercials during the broadcast. It’s also done for highly-rated prime time programming such as Global’s Survivor.

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“Viewers dislike it, particularly when it is exercised during major live broadcasts such as the Super Bowl or the Academy Awards,” CRTC chair Jean-Pierre Blais said Thursday. “They tell the CRTC — and we receive many complaints — that they want to see the newest American commercials as and when they are broadcast. And they rightly resent the fact that simsub is often mistimed, causing viewers to miss, for example, key plays during a big game.”

The CRTC decision allows local television affiliates but not specialty channels to simultaneously substitute commercials. The so-called “simsub” rule is a key source of revenue for Canadian broadcasters and helps support the production of Canadian programs.  Blais suggested simultaneous substitution generated approximately $250 million annually for Canadian broadcasters.

WATCH: The chairman of Canada’s broadcast regulator is telling Canada’s television networks not to drop over-the-air transmitters unless they want to face repercussions. As Sean O’Shea reports, the CRTC is also making changes to what Canadians will see on the Super Bowl broadcast.

“Sure viewers will get to watch Wells Fargo ads in the Super Bowl instead of RBC, or Target and Wal-Mart instead of Canadian Tire. But those advertising dollars will go directly to American companies instead of Canadian content creators and broadcasters” said Scott Henderson, vice-president of Communications for Bell Media. “Canadian companies will also have a diminished opportunity to market their products to Canadians watching U.S. ads for products they probably can’t buy.”

“We’ve been waiting for fundamental change to the television regulatory framework for a number of years,” said Carmi Levy, a tech analyst and writer.  “There was hope that today they would start the process towards much needed change, unfortunately that hope remains unrealized after today’s announcement.”

The CRTC is correct about the desire of Canadians to watch U.S. Super Bowl advertising, but the fact is they’ve been watching them online more so than on TV.  Many of the American ads were posted to Globalnews.ca this week.

According to Google.ca, Canadians are increasingly searching Google and YouTube for Super Bowl ads. In fact, Canadian search traffic for the ads was 37 per cent higher than south of the border.

“There’s a delicious irony to this in that as the CRTC announces a slight relaxation in the rules, at the same time Canadians are going online as never before to find these previously unavailable to them ads.” Said Levy.

Thursday’s announcement by the CRTC came out of recent Let’s Talk TV hearings that sought the opinions of viewers and broadcasters about the future of television in Canada. The CRTC is expected to make a number of similar announcements in coming months to address other changes to Canada’s broadcasting landscape.

“There are much more significant issues facing local television stations currently that the CRTC failed to address today,” Levy said. “For example, advertising revenues have been failing fairly steadily in recent years, forcing local televisions stations to pare back their programming and lay off staff.”

Canada’s broadcasting industry has been struggling since the mid-2000s. As new multi-platform technology developed like smartphones, tablets, and web-enabled TVs, more and more people started shifting their TV viewing from cable to online for services such as Shomi and Netflix. The industry has only had one profitable year, 2011, since 2009, according to the CRTC. The revenue of private local television stations fell by $100 million between 2011 and 2012.

UNIFOR, Canada’s largest union representing some 300,000 workers (including some Global  News employees), criticized the CRTC for saying nothing about extending the Local Program Improvement Fund (LPIF) – a subsidy created to help broadcasters hurt by the 2008 recession and the still stumbling economy.

“Motherhood statements about the importance of local TV news do nothing to address the structural changes confronting our broadcasters today,” Howard Law, UNIFOR’s media director said in a press release.

“We had hoped to hear an announcement about much-needed local TV funding.”

A $100 million fund was established in 2009 in order to support local Canadian TV programming at a time when advertising dollars were drying up quickly. The fund was discontinued in 2014 after, according to the CRTC, the advertising sector recovered from the recession.

The CRTC also announced that Canadian broadcasters would have to continue broadcasting their signals over-the-air for free so people can watch local television without a cable subscription.

Levy suggested the transmitters are a “technological equivalent of an albatross around the neck of many of these local operators” and actually pull resources away from Canadian content.

“Being able to turn them off and walk away from them would have represented a significant saving to them which would have allowed them to redirect some of that money into local programming and other local resources that are visible to viewers,” Levy said.

Shaw Media, the parent company of Global News, is studying today’s decision.

“We are in the process of reviewing this latest decision, and have no comment to provide at this time,” Chethan Lakshman, the vice president of external affairs for Shaw Communications said.

© 2015 Shaw Media

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