Did signal substitution kill the Canadian conventional television industry?

crtc_logoEvery week when Canadian television ratings are released, the bulk of top rated shows in this country are American shows that have been rebroadcast on Canadian conventional television networks.

According to critics, the lack of Canadian programming during primetime and the recent failure of the Canadian conventional television industry  is the consequence of a CRTC policy known as simultaneous signal substitution.

Critics say the policy has allowed Canadian over-the-air television broadcasters, such as the CTV and Global, to reap billions of dollars in windfall profits for many years by becoming resellers of American television programming.

In April of 2007, in response to growing pressure from taxpayers fed up with the lack of Canadian content during primetime, high television costs and the apparent lack of consumer choice, the CRTC commissioned Laurence Dunbar and Christian Leblanc to conduct a comprehensive review of the existing regulatory framework for broadcasting services in Canada.

Released in August 2007, the report tabled numerous recommendations including one which proposed the CRTC reassess the impact that simultaneous substitution was having on the Canadian broadcasting system.

Dunbar and LeBlanc concluded that rather than encouraging more Canadian programming on Canadian networks during primetime, simultaneous substitution rules actually provided an incentive for broadcasters to simulcast more American content during primetime.

In its report, Dunbar and LeBlanc clearly came down on the side of the critics. Supporters of simultaneous substitution – the CRTC, conventional broadcasters and various national arts organizations – however, continued to argue that the critics were wrong and the practice was necessary to foster a strong and financially viable domestic television industry.

The result was the CRTC did not act on the recommendations of Dunbar and LeBlanc and carried on with a business as usual report.

Fast forward two years and we find a Canadian television production and broadcasting industry that appears to be in its death throes. For the week ending October 11th, 2009, the top 15 shows in Canada were all simulcast viewings of shows developed and produced in the United States. Not one of the top 15 shows during primetime was developed and produced in this country.

In addition, rather than fostering a strong and financially viable broadcasting industry” CTV and Global are now begging the government for money, selling off stations for a dollar and pleading with the CRTC to even further reduce their Canadian content requirements.

Despite earning windfall profits for decades by reselling U.S. programs and despite receiving close to a billion dollars annually in subsides, conventional broadcasters are still not financially viable.

In summary, the policy of simultaneous commercial substitution has been a miserable failure.

Rather than throw more money at conventional broadcasters, perhaps it’s time the CRTC and federal government took the Dunbar / Leblanc report off the shelf, dusted it off, and thought about implementing many, if not all, of its well reasoned recommendations.

Comments

11 Responses to “Did signal substitution kill the Canadian conventional television industry?”
  1. Moose57 says:

    When did Canadians get their taste for American style programming?
    At the early days of cable when distant U.S. station were relayed across the country to cities too far North of the border or more through the then legal use of U.S. Satellite television?

    During the times of direct U.S. viewing, what was the landscape of the Canadian broadcast system?
    Would viewers then subscribe to both products as they were more clearly either U.S. or Canadian?

    As for CTV & Global, are they not making profits in the specialty programming services?
    It’s not as black and white as either side would have you believe.
    Each has a hidden agenda.

    And other than Superbowl ads, how bad is simultaneous substitution?
    If we can’t get the products shown on U.S. ads in some cases.
    And the implementation of the ruling various across providers with some it’s a wholesale program swap nationally and others it’s regionalized as I believe the intent was.
    Is the problem less the simsub but the abruptness and handling of it?
    When PVR’s on a simsub fail to capture the subtleties like start and end times, then yes, simsub may have added to the situation we now face.

    Cleanly and accurately done, the effect should be minimal.
    Why have we deviated from 30 and 60 minute programs to used to start/end on time.
    Maybe it’s the PVR trend that contributes to broadcasters dismay.

    How much of this is backlash from BDU’s forcing Canadians to the products when before we had a choice?

    Has the CRTC outlived it’s usefulness? Who are they accountable to? The broadcaster or the viewing public?
    Often these would be mutually exclusive.

    If one believes in a free market system and that quality survives competition, then I say open the doors so Canadians reveive the best options from any and all providers of content and delivery.

  2. Constitution says:

    simultaneous commercial substitution. Also known as censorship.

    Freedom of communication is a right and for the Canadian cablevision/satellite industry to offer American channels and then substitute the Canadian signal is just criminal.
    When you tune into a United States station, it is to avoid crappy Canadian commercials.
    And lets not forget about those wonderful superbowl commercials that you can’t see during the game in Canada.
    And also missing those special promo’s of the United States Fall lineup of shows.

    For the Canadian Heritage Minister to force censorship down our throats is a crime. By the way, this censorship was originally tilted for the profit of Canadian advertisers, then it became a Heritage thing, since it is illegal.

    • Moose57 says:

      It was a heritage thing and the worst part was when Tequila Shiela Copps closed the door on U.S. DBS programming was that the heritage ministers web site made it clear that Canada welcomes people form all over the word and promotes the preservation of their language, culture and religion amongst others.
      So what about the Americans living/working in Canada?
      I agree it’s censorship, plain and simple.
      Either we have the right to watch what we want or we don’t.
      Which is it?, They can’t have it both ways.
      Maybe if we denied ALL U.S. programming, then the Canadian industry would have to ante up some content to sell their product. How would they like that!

      I’m a firm believer in NAFTA and if Canadian Television can’t compete with U.S. programming, then that’s their problem. Their is more than enough talent up hear to enjoy both.
      Why do we allow foreign FTA signals that target other niche markets, why are some signals disallowed? Clearly their preservation efforts have failed horribly.

      They filmed Defying Gravity in Vancouver and then failed to air the balance of the shows.
      What’s up with that?

      I don’t feel sorry for them as they brought it all upon themselves.

  3. Canadian defender says:

    This article displays a fundamental lack of understanding of the broadcast business in Canada. Three examples:
    1. A Canadian station buys the right to air a certain US program in Canada. If Cable brings in a US station carrying that same program, then they must cover that program with the Canadain version – with commercials. This is not a windfall. It is simply a protection of program rights that have been purchased.
    2. A Canadian station can get large audiences and advertising rates and profit from a US program. It is this profit that pays for the Canadian programs. So, the arithmetic is simple – no US programs = no Canadian programs. Whether or not a Canadian station buys the US program, it will still be available in Canada via cable/satellite/internet. Who wins then?
    3. CTV and Global do own profitable Specialty channels. A rational business would not take profit from one product line to finance another Global should not take profit from Food Network or the National Post and use it to finance news gathering in Red Deer?

    And a final thought. When you say “Not one of the top 15 shows during primetime was developed and produced in this country.” Number 16 and 17 are proud Canadian programs: Battle of the Blades and Flashpoint. Nuff said.

  4. Ronald Mears says:

    Frankly, as far as I’m concerned, Canadian advertisers should NOT be allowed to advertise themselves during the Super Bowl at all. They should be purged from any commercial space during the game, and not be allowed to make any new commercial campaigns for themselves that debut during that game either.

    Canadian commercials are just simply not interesting AT ALL, are not fun to watch AT ALL, make no sense nor point AT ALL, and are not thoughtful and intelligent AT ALL. There hasn’t been a fun commercial Made in Canada since the mid-90s, and I’d rather see U.S. commercials during the Super Bowl. If you support the CRTC’s position, then you, to me, are just plain ignorant, arrogant, and incompetent to think that Canadian avertisers actually count for something.

    I’d say it IS high time for the ‘simultaneous signal substitution’ policy to be PERMANENTLY RETIRED, and for those who, in the Canadian TV industry who support it, to either resign or be fired. They constantly harm the TV industry here maliciously, and would rather see it completely collapse.

    And, frankly, CTV and Global should only program the hours of 8-11PM local time, with local stations going independent and airing whatever the crap they want the rest of the day. If I want to watch The Daily Show and The Colbert Report, then I’d rather tune to The Comedy Network and watch it there, than having it air on 5-minute delay on CTV. It makes more sense for me to do so, because I’d be watching the show on it’s appropriate station, which I think should be renamed Comedy Central Canada. Be honest about it, not liars.

    And yes, Canadian advertisers have been double-dipping for years and the cable and satellite companies have been openly supporting them, and forcing the networks to abide to the advertisers rules, meaning the advertisers do as they please while they continue to shut the CRTC up, with threats to bankrupt the Canadian TV industry, thereby running all TV shows indiscriminate off the air, and killing the TV world in Canada.

    There, how’s that?

    • brink0949 says:

      Obviously you are quite agitated about this issue Ronald but I don’t believe you have a comprehensive viewpoint of what is going on here.

      If you don’t think that Canadian commercials should be in the Super bowl, your appeal should not be made to the Canadian broadcasters or the CRTC. You need to talk to the NFL.

      You see, Canadian broadcasters pay them millions of dollars to license the rights to their programming (including Super Bowl). If simulcast were not allowed, the value of the games would be so low to advertisers that Canadian broadcasters would pay a small fraction of what they do for the rights. Alternately, they might not buy them at all.

      So this is quite simple, write the NFL and convince them to forego their $20 or 30 million in rights fees because you need to see American commericals. You will also have to explain to them that they need to forego another $10-20 million from their Canadian sponsors who will refuse to buy in to the NFL Canada sponsorships because they won’t receive any Canadian television exposure.

      That’s the real way this business works. (And for all programming from the States, not just Super Bowl) . It really all comes down to money. If you can find a way to pay the American distributors back for the money they’ll lose you might have a chance.

      You should also be disabused of any notion that if Canadian channels did not broadcast American fare, that you would get this programming for free. It is their right to seek compensation. Part of your cable bill already goes to U.S. border stations. If Canadian stations go away, you will e paying through the nose for American programming (still filled with American commercials) via your cable and satellite bills. The American producers will need to get their Canadian rights money back somehow, and this will be the way. Good luck with your cause.

  5. Bent says:

    What killed the industry was the watering down of CanCon. This was foretold 10 years ago but allowed to happen.

    We’re reaping what is sowed. Why is anyone surprised?

  6. MistahTibbs says:

    Quote: “In April of 2007, in response to growing pressure from taxpayers fed up with the lack of Canadian content during primetime…”

    LOL!

    Yeah.

    EVERYONE I know is in a tizzy because there isn’t enough Cancon on TV.

    Geez. That first bit of the statement is pure BS. Most people don’t give a rat’s *ss where the programming originates. They just want to be entertained. Not preached at which is often how Canadian dramatic and comedy productions come across.

    MT

  7. Fred says:

    So, the arithmetic is simple – no US programs = no Canadian programs. Whether or not a Canadian station buys the US program, it will still be available in Canada via cable/satellite/internet. Who wins then?
    ===========

    What Canadian programmes do CTV and Global show in Primetime? other than Flashpoint? Global BC shows 7.5 hours a day of news and two showings of ET Canada and simi subs US soaps and Talk shows the rest of the day an din primetime it is all US Shows.

    News should not count towards cancon. They should produce Canadian shows. It is time to end their free ride. If they can not compete, then go under like any other business.

  8. M. Dubois says:

    The system is broken as it does not promote Canadian Television, period.

    BTW, Canadian Defender, we understand how it works, and no your math (So, the arithmetic is simple – no US programs = no Canadian programs.) does not make sense. Look at children’s programming: Corus, TVO, TFO, CBC, SRC and the others are all into it, and it doesn’t take US programs to get Canadian programs. The money they make is to buy more American shows.

    It is clear that the CRTC is not working in our best interest when they made illegal to get anything else than from Canadian providers (and FTA, which I’m sure they’ll try to block one day at this rate).

    The head of the CRTC, while talking about the new 1.5% “tax”, said that Canadian love their TV as subscription to cable and satellite is going up. He should know that the population is, too. We have no choice, so if we want to watch anything, we must subscribe.

    Speaking of US channels, why aren’t all the networks treated equal (CW, USA, …)?

    Let’s stop the insanity.

    The CRTC is also slowing down other businesses (like asking the new entrants in the wireless industry to prove to them that their ownership follows the rules, etc… – after having proved it to Industry Canada. Begs the question: what is their role? One thing they do well, handle complain. Most listened show in Quebec City gets 32 complains, guy gets fired…

  9. Buck says:

    The author of this article is a hopeless idealist that understands nothing of the broadcasting business. He/She lives in a fantasy land where if all TV from the outside world can be cut off, suddenly the Canadaion prgramming produced at a fraction of the cost of US programming, well somehow be better than the US programs.

    Give your head a shake, people! Ther reason that Canadaion programming sucks is becasue it is competing against the mega-buck Hollywood industry!

    By analogy: If there were no Penguins, no Rangers, no Capitals, no Blackhawks, no Red Wings, no Oilers, no Senators, no Flames, no Canucks, no Canadiens, no Blue Jackets, no Blues, no Coyotes, no Kings, no Sharks, no Panthers, no Lightning, no Wild, no Stars, no Hurricaines, no Thrashers, no Devils, and no Islanders, then yes, the Leafs would look like a good hockey team,. But all these teams exist, and it is clear from head-to-head competition that the Leafs, try as they might, are not as good. THE SAME GOES FOR CANCON television programs.

    Sim-sub did not destroy the Canadian system; it saved it. At least with rights to show the best programming in the world, then CTV andGlobal can sell enough commercials to produce Cancon, which occasionally is good.

    By the way, did you know that the CRTC has proposed banning thr U.S. networks from Canada altogether? When that day comes, there will be anger everywhere but in the mind of the author of this deporable article.