CAB blasts bid to sell ads on foreign satellite local avails

This isn't the first time a company has asked the CRTC for the right to sell ads on local avails of non-Canadian satellite services. When the regulator holds a public hearing on Only Imagine's bid in Calgary next month, the Canadian Association of Broadcasters wants to be there - with a long list of reasons why this proposal could damage, not improve, the Canadian media landscape.

Only Imagine, a Toronto-based start-up, wants a seven-year licence to insert Canadian ads into local avails – the two minutes of air time per hour US channels make available for regional ads. Top US nets coming in by satellite would be up for grabs: CNN, A&E, TBS, Spike, Headline News, CNBC, Golf Channel and BET. Under the model proposed to the CRTC, Only Imagine says 70% of the ad time would be sold to national advertisers in Canada, and another 25% used to promote programming from other cable and distribution companies. Only Imagine claims the model will generate millions of dollars (an amount CAB vehemently disputes) for a fund devoted to the creation of high-quality Canadian drama.

Last week, CAB president/CEO Glen O’Farrell shot back with a submission to the CRTC consisting of a 21-page litany of objections to Only Imagine’s application, citing ‘fundamental flaws’ and mixed-up methodology. The CAB points out that if foreign services were no longer packaging partners, they would instead be vehicles for national advertising, and thus competition for Canadian broadcasters.

Only Imagine, says CAB, would in effect be given all the benefits of a broadcasting licence without any real stake in Canadian programming. Minimal operating costs would allow the company to compete with Canada’s broadcasters on an unprecedented level, with deeply discounted rates for advertisers, ultimately draining revenues from conventional Canadian players amid the expensive transition to digital and HD broadcasting.

On top of this, notes CAB, Only Imagine hasn’t received consent from the foreign services in question – a key reason the CRTC turned down a similar proposal from 49th Media in 2003. The Commission denied another proposal in 2005, by CCTA and Videotron, based on the potential negative impact on the Canadian broadcasting system.