Let’s talk simultaneous substitution

Industry execs discuss the implications of ending simultaneous substitution, as the CRTC moves to examine the practice as part of Let's Talk TV.
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Super Bowl ad watchers have made their voices heard at the regulatory level, comprising 20% of all complainers to the CRTC on the subject of simultaneous substitution.

While consumer complaints about signal-subbing are not new, it has gained new prominence with the CRTC’s Let’s Talk TV program and the regulator has opened the floor to debate on the topic ahead of the Sept. 8, 2014 public hearings.

Out of the 458 complaints about simultaneous substitution received in 2013, almost 100 were regarding Super Bowl ad substitution, which sees Canadian ads appear instead of American ads during the highly rated broadcast.

While it may be a pain for consumers, the elimination of simultaneous substation is a significant concern to the industry, on both the network and production sides.

The proposal to remove the practice altogether “is an incredibly dangerous road to go down,” said Stuart Garvie, chief commercial officer, GroupM Canada.

“I think if you take out simultaneous substitution, the real worry is, what happens to Canadian-only advertisers and really strong Canadian companies that have the majority of their business in Canada, like Tim Horton’s?” Garvie said of ending the practice.”If you take it out, you would basically be saying to those advertisers, you can’t advertise in those tentpole live events.”

Garvie also expressed concerns about what the potential elimination of simultaneous substitution could mean for Canadian-produced content.

“As soon as you start taking away Canadian broadcasters’ ability to make revenue on their content, you are absolutely doing the opposite of encouraging them to invest in content. You’re taking money out of their mouths, with which they would invest in Canadian content,” Garvie said.

The threat the removal of simultaneous substitution to the production of Canadian content was a sentiment echoed by Michael Hennessy, president and CEO of the Canadian Media Production Association (CMPA).

Hennessy noted that thus far, simultaneous substitution has been “critical” to raise the funds for Canadian programming expenditures. In addition to the proposal to look at the elimination of simultaneous substitution, other recent moves from the CRTC – such as the recommendation that broadcasters should offer content on a pick-and-pay basis - means the Canadian industry has been pushed into a particularly uncertain period.

“All of us in that supply chain, as we are facing uncertainty, there will be a lot of pressure to reduce spending, to reduce obligations,” Hennessy said.

In addition to consumer complaints about the practice, the CRTC said it also hears complaints about simulcast programming schedules. Matching US network schedules  “restricts [broadcasters'] ability to schedule and promote Canadian programs to Canadian audiences effectively, especially in primetime.”

While previous estimates have put the value of simultaneous substitution to broadcasters as about $200 million annually, the report says that there are no up-to-date numbers on the monetary value of the practice to broadcasters.

“In light of the above, the Commission requests comments on whether simultaneous substitution remains an appropriate mechanism to enable local stations to maximize audiences and advertising revenues,” the report says.

- with files from Michael Kolberg 

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