- Directly impacting Canada’s creative and cultural sectors, the CRTC’s decision has already cost the national economy an estimated $158 million
MONTRÉAL, August 1, 2017 – The National Football League (NFL), national union Unifor, the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), the Association of Canadian Advertisers (ACA) and the Canadian Media Directors’ Council (CMDC) today reaffirmed their support of Bell’s call for the Canadian Radio-television and Telecommunications Commission (CRTC) to suspend its simultaneous substitution ban for Super Bowl LII in 2018 and permanently rescind the ban going forward.
“There are no benefits to Canadians when our broadcast regulator favours US advertising, but there have been significant negative economic and cultural impacts in our country resulting directly from the CRTC’s decision,” said Mirko Bibic, Bell’s Chief Legal & Regulatory Officer and Executive VP, Corporate Development. “The damage is being felt across the Canadian creative, cultural and broadcasting communities, including drastic reductions in Super Bowl audiences and revenues at CTV. The reality of the impact is reflected in calls from a wide spectrum of Canadian organizations and the NFL itself to lift the simsub ban.”
For decades, multiple Canadian broadcasters have supported cultural development, domestic economic growth, and employment through simultaneous substitution, or simsub, which offers Canadian rather than American advertising in US television network programming viewed by Canadians, like the Super Bowl. While the Super Bowl’s US commercials are readily available to Canadians online in advance of the game, simsub enables them to see television advertising from Canadian companies about products and services they can actually buy here, and the advertising revenue helps fuel domestic creative production and talent development.
In 2015, however, the CRTC abruptly banned simsub only for the Super Bowl, the single biggest broadcast event of the year, effective with Super Bowl LI in 2017. As a result, Bell Media networks lost 40% of their Super Bowl audience while advertising revenues dropped $11 million. The harm created by the simsub ban is further amplified at a time when creators and broadcasters are struggling to adjust their business models to ensure a viable Canadian broadcasting system in the face of rapid competitive and technological change.
Now, new independent research confirms the broader impact on creators, broadcasters and Canadian businesses after just a single year of the CRTC’s Super Bowl simsub ban. Conducted by Communic@tions Management Inc., the research reveals the ban has cost the overall Canadian economy approximately $158 million. It found that Canadian businesses have been driven to spend their advertising dollars with US border television stations in an attempt to reach Canadian viewers, transferring that revenue from Canada to the US economy while at the same time undermining longstanding government tax policy. Based on revenue impacts, the Canadian creative community has been deprived of $3.3 million in direct funding and $4 million in promotional time for homegrown content.
“The NFL values the long-standing relationship that we have with our fans in Canada, and we are proud that the Super Bowl is the most watched television program each year. The CRTC’s decision to single out the Super Bowl for disparate treatment is arbitrary and should be reversed. Not only does it undermine the value of our programming, it also undermines Canadian content creators, and, ultimately, the Canadian economy. We’re pleased to join with our partners at Bell Media as well as with others in the business, labor, cultural and creative communities to ask the CRTC to restore rules of the road that promote fairness and growth in Canada,” said David Thomson, NFL Canada Managing Director.
“The original CRTC decision was a foolish one,” said Unifor National President Jerry Dias, speaking for 12,000 Canadian journalists and media workers. “Thirty cents of every advertising dollar earned by CTV on the Super Bowl goes directly into making new Canadian TV content, including local news. Allowing American border stations to grab those ad dollars after CTV has paid top dollar for the game’s Canadian distribution rights is beyond belief.”
“Simultaneous substitution has been a cornerstone policy supporting Canada’s film and television sector for many decades. The CRTC’s decision to exempt the Super Bowl broadcast undermined that foundation and put thousands of Canadian performers, and the stories they tell, at risk. Now that some of our worst fears about the impact have been confirmed we hope the Commission will revisit this damaging decision,” said Stephen Waddell, National Executive Director, ACTRA.
“Simultaneous substitution not only protects the program rights negotiated and acquired by Canadian broadcasters, it also gives our advertiser member companies across the country the opportunity to reach Canadian consumers with advertising that is relevant to them,” said Ron Lund, President and CEO, ACA. “Such marketing opportunities are essential for many businesses to grow their sales and build their companies, in turn creating jobs and providing fuel to grow a robust and productive economy.”
“What is the fuss over one program out of 52 weeks of television?” says Janet Callaghan, President of the Canadian Media Directors’ Council. “It is because Super Bowl delivers a huge audience which is irreplaceable. Super Bowl is a live program event with a high entertainment factor, engaging families and friends to view together. This audience can be monetized because the almost 8 million 2017 viewers are 100% Canadian despite the origin of the program, which begs the question as to why the CRTC made a ruling which does not appear to be evidence based on stable consumer data and which returns no financial benefit to the Canadian economy.”
A poll by Nanos Research also reveals that for Canadians who watch the Super Bowl, the actual game and halftime show are significantly more important than the commercial breaks. Nearly 60% of viewers were uncertain whether products being advertised, such as US-only pharmaceuticals and financial services, were available in Canada. Of those interested in watching the US Super Bowl advertising, over 40% did not know the commercials were readily accessible on the Internet in advance of the game. Once they learned this, 60% of those who indicated strong interest in the US ads said that watching them during the game was no longer as important.
Bell Media recognizes there is interest in the US Super Bowl advertisements. If the simsub ban is lifted, Bell Media would produce a special broadcast of US Super Bowl commercials airing on game day and make it available free of charge to all Canadian broadcast distributors to offer as a video-on-demand service, supported by a promotional campaign to ensure more Canadians know they can access the US commercials in advance of the game.