Advertisers off the leash

New policy from the CRTC lifts limits on ad time and sets the deadline for the switch to digital, but it turns down calls for carriage fees. M2 Universal's Hugh Dow says it's a good news/bad news situation.

The CRTC is preparing to eliminate advertising time limits for conventional television stations but will not allow them to charge carriage fees to cable companies according to a new policy paper released on Thursday.

The current limit – 12 advertising minutes per hour between 7 pm and 11 pm – will increase to 14 minutes on Sept. 1, 2007 and to 15 minutes on Sept. 1, 2008. After Sept. 1, 2009, the restrictions will be removed completely.

‘We are getting out of the business of regulating advertising. We don’t think it’s necessary for us to restrict something Canadians can do themselves with their remote control,’ Konrad von Finckenstein, the chairman of the CRTC, tells Playback Daily and Media in Canada.

The CRTC says it is making the move to help broadcasters increase revenues in order to adapt to changes in the industry, but will not allow conventional broadcasters to charge carriage fees to cable companies because, says von Finckenstein, they didn’t make a strong enough economic case when they came before the CRTC.

‘The data is insufficient. Relaxing advertising restrictions will give them access to more revenue,’ he says.

The changes have brought mixed reactions.

‘The good news is that it expands the commercial inventory. And obviously, where the supply increases, that is good news for advertisers, both in terms of availability and pricing,’ says Hugh Dow, president of the ad firm M2 Universal Communications. ‘The concern I have, of course, is about increased commercial clutter and declining ad effectiveness – not so much in the short term but over the longer term, in years two and three, where it becomes unlimited commercial time in 2009.’

Since acquired network programming is timed for U.S. commercial pod lengths, expansion beyound 14 minutes of ad time per hour would encroach into program formats, and as per Finkelstein’s sense of the issue, utlimately consumers will keep it in check.

The CRTC also ruled that English- and French-language broadcasters must provide closed captioning for all of their programs over the 18-hour broadcast day, with the exception of advertising and promotions.

The regulator set August 31, 2011 as the deadline for switching from analog transmission to digital and HD but says it will allow exceptions for remote regions. The deadline in the United States is February 17, 2009.