New OTA TV policy most notable by what’s absent

For those broadcasters in favour of fee-for-carriage but against adding more advertising minutes to the broadcast hour, last week's release of the new policy framework governing over-the-air television was the worst of all worlds."This is not good news for us," says Serge Bellerose, VP of new media and corporate affairs at TQS Inc. "Obviously the commission did not take a close look at the particular situation of the French-language market, and that's one of the things we're really surprised about in this decision."On the advertising front, he says the commission's determination to allow broadcasters to increase the number of ad minutes per programming hour will undoubtedly harm many broadcasters by diluting the value of their available timeslots and driving down prices. Those limits will rise from current 12 to 14 minutes for the peak viewing hours of 7 p.m. to 11 p.m. as of September 1. Twelve months later, that limit will be raised to 15, and will apply to the entire broadcast day, not just the prime-time slot."The problem in this market is that there is already too much inventory in the market, and the price is already less than in the Anglophone market," Bellerose says. "We'll take a close look in the coming months, in September, this fall, on the real impact of such a measure." He adds that he's been told that Radio-Canada and TVA both plan to adopt a cautious approach to adding those incremental minutes, in order to preserve the value of their inventory.Bob Reaume, VP of policy and research at the Association of Canadian Advertisers, concurs with Bellerose's assessment of the wisdom of adding more ad minutes in the long run.He believes that those broadcasters who came out in favour of the ad minute increase - such as CTV Inc., Quebecor Media Inc., and CanWest Global Communications Corp. - likely believe that it may buy them time to come up with a new model not dependent on conventional commercial breaks."I guess broadcasters think maybe they can get a couple more years out of this at increased commercial levels, and maybe that's what they're trying to do," Reaume says.But if the new policy framework is meant to ensure the financial health of conventional broadcasters - as the original Notice of Public Hearing intended to do - Reaume says it misses the mark."They think that just increasing the amount of commercial time that broadcasters can insert in their products is taking care of the financial health of that industry," he says. "It is not going to have that effect."Reaume adds that the decision didn't address other key policies pertaining to OTA services, some of which include transfer of ownership benefits and small-market TV stations. The latter has been deferred until the commission's review of DTH undertakings and other BDUs this fall. "It seems that the big decision was letting broadcasters run more ad time - what about all of the other areas that were part of the notice of public hearing?" Reaume asks. "Yeah, they set a date for conversion to digital...they have something in there about closed captioning...it doesn't seem like a comprehensive policy. It's tinkering basically."Of course, with the commission deciding against a fee-for-carriage regime, advertising sales remain the predominant source of revenue for over-the-air TV broadcasters. However, TQS' Bellerose says the broadcaster will reiterate its request for carriage fees when its licence comes up for renewal later in the 2007-2008 year, adding that if the financial situation worsens for OTA broadcasters, the commission will have no choice but to approve it."It will just take 12 or 15 more months before we are in a position to get those fees," Bellerose says.One question PN 2007-53 did clear up was whether or not implementing a fee-for-carriage regime fell at all within the CRTC's purview. The regulator stated in the notice that such a move would indeed be "within its mandate and authorized under the Act."Like Reaume, Bellerose says the commission skirted some of the other issues that the original call for comments was supposed to address, such as BDUs' carriage of distant signals and simultaneous substitution of in-market signals, by leaving them up to negotiations between the parties involved.However, notes Bellerose, referring to the now-expired agreement between the Canadian Association of Broadcasters and the BDUs, "there is an upcoming negotiation with BDUs regarding the blackout and compensation for non-carriage, we'll have an opportunity to make our point there."

New OTA TV policy most notable by what’s absent

Broadcast | May 22, 2007

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