Source : Vancouver Sun

As if traditional broadcasters don't have enough to worry about with video-on-demand, personal video recorders, DVDs, specialty channels and the coming of Internet TV, they now must consider even the digital flat screen in the local bank as a competitor for ad dollars.

In North America there are now more than 700 digital networks -- all of them unregulated -- feeding these screens in the local Royal Bank or Wal-Mart with advertisers messages, Canadian sales and marketing expert Jack Tomik told the Canadian Association of Broadcasters gathered in Vancouver Tuesday for their annual convention.

"In the United States this year, Procter and Gamble, one of the major foundation stones of advertising and broadcasting took five per cent out of their budget and dedicated it to these digital out-of-home networks," said Tomik. "By the way, this new unregulated business is selling for about 25 per cent of the cost of television."

Tomik also talked about other competitors to both traditional and specialty broadcasters, including what he called "strip malls on steroids" that rely on their size and location, rather than advertising to draw consumers.

As well, he said, new business categories, such as eBay, take in $80 billion in retail sales with "not a radio or television ad in sight."

As well, loyalty programs like Air Miles -- with $3 billion being paid to them in North America last year -- are also sucking up what used to be ad dollars.

Tomik's talk was part of a session on how broadcasters should deal with government regulations in the face of declining ad revenues and an onslaught of new services.

Tackling the issue from another angle was Telus executive vice-president for corporate affairs Janet Yale. She said IPTV -- television over the Internet, which Telus has launched in Vancouver, Edmonton and Calgary -- is the future of broadcasting because it has the capacity to deliver niche programming to homes, and will no longer be lost in a sea of content. "As video search engines gain in sophistication, niche content will have a true place to flourish and won't depend on being included in a broader program schedule to survive. It won't be lost any more in a sea of lowest common denominator programming."

Another issue raised was private conventional broadcasters' desire to earn subscription fees, just as specialty channels get a percentage of the fees paid to cable and other providers.

Charlotte Bell, vice-president of regulatory affairs for CanWest MediaWorks, said most consumers already know that TV isn't free. Only 10 per cent of Canadian homes don't pay for TV signals through a subscription to cable or direct-to-home services, she said.

"Consumers don't only pay for television, they know they pay for it," said Bell. "Specialty services have enjoyed two revenue streams since day one and over time [the CRTC] has allowed most of those services to increase their advertising from eight to 12 minutes [in an hour].

"Our only revenue source is advertising and now it has to be shared with those other services that are now competing with the same amount of inventory. So we don't think we've proposed anything revolutionary here."

Ken Engelhart, regulatory vice-president of Rogers Communications, the giant cable company, said: "I think this is absolutely the wrong approach because it will load up costs on to the traditional media platform.

"And that will drive people off the traditional media platform on to the unregulated platform."

© Vancouver Sun