Canuck TV industry seeks funding solutions

CRTC to consider plan for selling ads on U.S. local avails

TORONTO -- Could selling ad time on U.S. cable channels' local avails help solve Canada's broadcast woes?

Glenn O'Farrell thinks so.

As an industry fight over retransmission fees heats up on both sides of the border, the former broadcast lobbyist is looking to convert local avails on U.S services like A&E and CNN into Canadian commercials and cash for homegrown programming.

Now O'Farrell, chairman and CEO of Toronto-based MediadeNovo, has been invited by the CRTC, Canada's broadcast regulator, to pitch his plan on Feb. 22 in Ottawa.

The CRTC needs a solution to replace Canada's broken broadcast model, and quickly.

Fox and Time Warner Cable may have settled their rebroadcast fee fight over the holiday break. But Canadian broadcasters and cable operators have so far refused to even come to the negotiating table to hammer out their own rebroadcast fee deal.

Both sides instead continue to wage a very public fight via print and TV ads that includes mutual accusations of over-spending on American programming.

During recent public hearings into the so-called fee-for-carriage issue here, CRTC chairman Konrad von Finckenstein said Canadian broadcast and cable execs were arguing like schoolyard kids.

"Why are we frightening consumers, why are we putting out big figures, rather than trying to figure out how to solve this problem?" a frustrated von Finckenstein questioned at one point during the hearings.

"Instead, we seem to have a debate that nobody understands, we have a huge publicity campaign that nobody understands, and we have figures and concepts swirling around that don't make sense," he added.

Complicating the Canadian retransmission fee debate are broadcasters asking cable subscribers to pay a monthly fee to watch U.S. series on local TV station signals that they can also watch for free on U.S. border station feeds.

So MediadeNovo could be tossing the CRTC a welcome bone as it proposes to turn two minutes per hour of local avails on U.S. network signals used by carriers to promote Canadian shows into cash for "Canadian-content" programming.

"This would measurably take unleveraged or squandered assets and make use of them in a way that would benefit the system," O'Farrell explained.

Pending CRTC approval, MediadeNovo would replace the local avails on U.S. cable channel feeds with Canadian commercials, and direct 70% of the revenue to homegrown programming, or around $100 million during the first three years of business.

O'Farrell's upcoming pitch to the CRTC has backing from Canada's ad community.

"The existing policy prohibiting the sale of U.S. cable local avails precludes Canadian advertisers from using channels that reach up to 50% of English speaking Canadians on a weekly basis," Hugh Dow, chairman of Mediabrands Canada, argued.

"Both the size and audience demographics of the currently unavailable U.S. cable channels are extremely attractive to Canadian advertisers, and will result in both new incremental revenue and revenue diverted from other non broadcast media," Dow added.
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