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Bell presses CRTC to overturn ad policy ahead of next Super Bowl by Christine Dobby

Aug 1, 2017

Source: Globe and Mail

In the run-up to the NFL season, Bell Media has launched yet another attempt to spike a regulatory ruling that blocked the company from substituting its own television feed – including Canadian ads – over the U.S. broadcast of the Super Bowl.

BCE Inc., which owns Bell Media, on Tuesday filed an application with the Canadian Radio-television and Telecommunications Commission asking it to overturn the January, 2015, order that barred the practice known as simultaneous substitution, or “simsub,” during the National Football League championship game starting in 2017.

The ruling responded to complaints from viewers who felt they missed out on the high-budget U.S. ads often seen as integral to the Super Bowl experience. It does not apply to the broader simsub regime but in addition to Bell itself, it has raised the ire of many in Canada’s media production and advertising industries, who question why the regulator is chipping away at a central policy of the country’s television business.

“We are asking the commission to rescind the order in exchange for a commitment to make the U.S. commercials available broadly as part of a curated program to air in advance of the game and to launch an awareness campaign around where to find the ads,” Bell said in its application.

Bell has already turned to the courts and lobbied the Canadian government, but has so far been unsuccessful in overturning the ruling. The Federal Court of Appeal is still considering an appeal of the CRTC order.

As a result of the ruling, which applied to last February’s Super Bowl broadcast, Canadian viewers could tune to U.S. channels to watch the popular American commercials. Many still tuned into Bell Media stations but the company said Tuesday its Super Bowl audience declined by 40 per cent and advertising revenue dropped by $11-million.

Bell’s latest move to push back on the order comes weeks after the federal government appointed a new chairman to lead the CRTC after the five-year term of career civil servant Jean-Pierre Blais came to a close in June.

Ian Scott, a former government relations executive at Telesat Holdings Inc. and Telus Corp., takes over in September. A new vice-chair of broadcast also starts then and an interim vice-chair of telecom started last month.

“I thought Blais put forward a series of forward-looking policies that upset a number of the established players in the marketplace. And the notion that they’re going to test those with the new commission is not a surprise,” said University of Ottawa professor Michael Geist, adding that the ruling was a first step in recognizing that the old broadcast world will eventually be supplanted by streaming content online.

He said the CRTC could take a similar approach to what the federal government did earlier this year and dismiss the application as premature based on the fact that the issue is still before the courts.

Mr. Geist characterized Bell’s arguments in the application as frequently inconsistent, pointing for example to the company’s assertion that few viewers – only 0.001 per cent – have actually complained to the CRTC about the lack of U.S. advertising in Canadian Super Bowl broadcasts.

“I don’t see how you can, on the one hand, argue that nobody cares and on the other hand argue that millions of Canadians cared enough to watch a different broadcast,” he said.

Yet, Bell has lined up the support of a large coalition of groups, many with a stake in both the Super Bowl broadcast as well as the larger “simsub” regime. Those in Bell’s corner include groups representing creators and advertisers as well as Unifor, a national union that represents journalists and media workers (including those at The Globe and Mail) and the NFL itself.

Unifor national president Jerry Dias called the CRTC ruling “a foolish one,” saying in a statement Tuesday: “Thirty cents of every advertising dollar earned by CTV on the Super Bowl goes directly into making new Canadian TV content, including local news. Allowing American border stations to grab those ad dollars after CTV has paid top dollar for the game’s Canadian distribution rights is beyond belief.”

There were several examples of Canadian advertisers spending money with U.S. border television stations in an effort to reach viewers north of the border. That led to a “[transfer of] that revenue from Canada to the U.S. economy,” according to Bell, which also cited new research saying the decision had a negative impact on retail sales, e-commerce and jobs.

It’s hard to know how much of the decline in audience was due to viewers migrating to Fox stations (which was the U.S. broadcast rights holder this year): Numeris, which tracks TV ratings in Canada, says it does not track all the Fox stations, and earlier this year would not share the data for the Fox stations that it does track.

Ratings for the game were also softer in the United States compared to the 2016 broadcast (declining to an average of 111.3-million viewers from 111.9-million last year), but the drop Bell saw was more extreme.

Last year, CTV drew an average audience of 7.32-million people for the Super Bowl. This year, Bell put the game on more of its channels – CTV, CTV Two and TSN – but combined, they drew an average audience of just 4.47-million, which is a 39-per-cent decline. The French-language audience on RDS drew similar ratings compared with last year.

Examples of Canadian ads that ran on U.S. stations include a commercial for the Canadian chain Pizza Pizza that ran on a Fox affiliate in Buffalo, N.Y., and ads for Leon’s Furniture Ltd. and a group of Canadian Mitsubishi dealers that aired on the Fox station in Spokane, Wash.

In the United States, the broadcast rights holder sells most of the ads – particularly the splashiest ones – on a national basis. However, a smaller number of commercial slots are set aside for local affiliates to sell.

Lynn Stryker, national sales manager at Fox 28 in Spokane, told The Globe and Mail in February that the CRTC’s rule change boosted demand for the 13 commercial slots that the local station had to sell. Fox 28 reaches more households in Calgary and Edmonton than in its home market, Ms. Stryker said. “I hope they don’t shut it down for when we have [the Super Bowl TV rights] again in three years,” she said.

Bell Media attempted to mitigate the impact of the ruling, by putting the game on more of its channels than in previous years – hoping that viewers cruising the TV dial would be more likely to happen upon the Canadian broadcaster’s feed. It also promoted its broadcast with a “Watch and Win” contest offering cash and prizes to those watching the game on Canadian channels. However, the contest became a PR headache for Bell when viewers took to social media to complain about glitches in the entry process.

© Globe and Mail