Could local avails offer a new solution in the seemingly intractable debate over fee for carriage–or value for signal, as it’s being called now?
The notion of selling surplus ad space on U.S. networks to Canadian advertisers came up yesterday at the CRTC hearings in Gatineau on the nation’s television industry and the future of the broadcast structure.
Currently, US channels like A&E and CNN must make two minutes of air time per hour available to regional advertising–known as local avails–though the time is used to promote Canadian programming, PSAs or cable companies’ non-programing services. Though the possibility of freeing up local avails to Canadian advertisers has long been discussed, a new twist would see additional revenue derived from the sales going to support local programming.
A focus of the hearings has been the call from broadcasters like CTV and Global for Canadian cable and satellite companies–or broadcast distribution undertakings (BDUs)–to pay broadcasters a fee to distribute their signals (fee for carriage) in part to defray the cost of local programming.
BDUs, like Rogers, Bell TV and Shaw, say any new fee would amount to a bailout, effectively a tax since the costs would be passed onto consumers. The CRTC has said it will not impose a fee for carriage systems, but wants broadcasters and BDUs to negotiate a new system that may include some compensation for broadcasters’ signals–value for signal.
The local avails proposal, floated by Telus as part of its presentation but credited to MédiadeNovo, would make local avails available to advertisers, with 70% of the revenues flowing to Canadian programming.
According to MédiadeNovo the proposal would increase investment in Canadian programming without additional cost to consumers.
MédiadeNovo made an application to the CRTC months ago to sell the avails but has been waiting for a hearing before the commission, said Glenn O’Farrell, MédiadeNovo CEO and former president of the Canadian Association of Broadcasters.
The CRTC has previously denied other applications to sell those avails to Canadian advertisers, but MédiadeNovo said its application is “fundamentally different” from other applications because it includes funding solutions for Canadian programming.
Because the application hasn’t been heard by the CRTC, O’Farrell said he could not say much about the proposal, but that he was glad Telus endorsed it as a possible option for the industry.
“We had discussion with Telus and they in turn saw it as a good idea that they wanted to talk about [yesterday].”
“At the end of the day we think that this is a solution that goes to the middle ground between broadcaster interested and BDU interests,” he said.
