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Simulcast overshadows Canadian content Add to ...

There’s no shortage of drama premiering on Canadian television this fall: CTV has the Batman backstory Gotham; Global has NCIS: New Orleans, the latest spinoff in a growing procedural franchise, and even hockey-mad City has the social comedy Black-ish. Of course, all of these programs, plus many other new and returning prime-time offerings, are U.S. shows that are being broadcast in the same time slots as they appear on the U.S. networks where they originate. That’s simulcasting: The life-giving elixir – or dangerous narcotic – of commercial Canadian television.

Elixir because federal regulations allow the Canadian networks to drop their ads into the competing U.S. signals when they simulcast, thus permitting them to generate ad revenue off the most-watched programs on TV. (Canadians occasionally complain about the practice, known in the industry as simultaneous substitution or sim sub – particularly during the Super Bowl, when they miss the big-budget U.S. ads created for that event.) And narcotic because the system hooks the Canadian networks on U.S. shows and U.S. schedules, dampening their appetite for commissioning Canadian programs and forcing those shows into marginal Saturday-night or summertime slots. So, what would Canadian TV look like if we killed off simulcasting?

That used to be a question posed only by starry-eyed idealists, critics barely acknowledged by an industry that currently estimates it makes about $250-million in direct ad revenue off simulcast shows and could lose up to $460-million in total ad revenue if it could no longer build prime-time schedules around the Hollywood hits.

But as Internet television and the Netflix model make the very notion of a prime-time schedule seem a bit quaint, the simulcasting question is finally getting some respect: The Canadian Radio-television and Telecommunications Commission (CRTC) has put it on the agenda for its “Let’s Talk TV” hearings that start on Sept. 8, asking Canadians what the future of TV should look like and, among many other questions, whether sim sub should go.

The three main commercial broadcasting groups, which have been crying poor ever since the 2009 recession took a bite out of ad revenues, are predictably opposed and have told the CRTC so in interventions they have filed leading up to the hearing. They even banded together to commission the report that provides that $460-million estimate of lost revenue, a big increase from the $200-million that previous studies have associated with sim sub – and which the CRTC itself points out is not actually that much money.

“Elimination would irrevocably change the Canadian television system and shake the very foundations of an already structurally challenged local television business,” Bell Media (which owns CTV) told the CRTC, while Shaw Communications (which owns Global) said that sim sub was critical to the economic viability of all Canadian television.

The industry has always argued that sim sub protects costly program rights: Why would you pay for the right to broadcast NCIS: New Orleans on Global in Canada if Canadian viewers can just as easily watch it on CBS?

The trouble is that the Canadian networks’ spending on those U.S. shows just keeps rising: As a percentage of their revenues, it has more than doubled over the past 20 years, according to the CRTC’s numbers. Sim sub was instituted by the commission in 1971, part of a series of clever Canadian cultural policy moves aimed at repatriating ad dollars that might be lost when Canadians consume American media. The idea was that financially healthy cultural industries would have more money with which to create Canadian content, but in television the system increasingly seems to protect the businesses rather than advance the policy objective.

“Forty-three years later are we any further ahead? We have reduced Canadian-content requirements,” said Monica Auer, executive director of the non-profit Forum for Research and Policy in Communications, in an interview. “We have an opportunity to wean ourselves from American content.… If we are not going to do it now, when are we going to do it? Are we just going to say, ‘It’s really hard?’”

Auer’s group is one of the rare intervenors that actually recommends pulling the needle out of the industry’s arm. Not that the Forum isn’t offering some methadone: It suggests a gradual withdrawal of the sim sub capability in prime time, but also a significant change to Canadian-content requirements. It would reduce them from the current 50 per cent in prime time to a mere 35 per cent, but stipulate that this quota must be exclusively devoted to drama, the prestigious but expensive program category

policy-makers have always tried to encourage. (Canadian dramas on commercial networks are already publicly subsidized through grants to producers, but the Forum’s demanding plan also throws in some extra funding mechanisms.)

Under the scheme, a CTV or Global prime-time schedule would have to feature several Canadian dramas on weeknights. Right now, those schedules often rely on their newscasts and entertainment magazines (busily hyping American stars) for their Cancon quota. No one is suggesting they would abandon U.S. shows, just that there might be one fewer CSI every night and one more Orphan Black, the Canadian sci-fi hit that currently airs Fridays on CTV.

Would the beleaguered broadcasters just go bankrupt? Maybe. But maybe they would be forced, in a global era in which Canadians can get any TV content they want anywhere, any time, to finally define themselves as significantly different from their U.S. counterparts. Maybe they would stop needing the sim sub protection if they created a niche for Canadian commercial television that would lure Canadians just as reliably as Canadian music and Canadian beer do.

In Australia, where the local TV culture benefits greatly from the huge geographic distance from the United States, commercial television offers lots of imported Hollywood drama but also a lot of Australian soaps, comedy, reality shows and even the occasional made-in-Oz drama.

That leaves the public broadcaster, the Australian Broadcasting Corp., with a clearly defined role providing most of the drama and documentaries as well as nurturing comedy shows (the most popular of which are often poached by the commercial networks). In Canada, the removal of sim sub might clarify everybody’s role, encouraging the birth of genuinely Canadian commercial television as well as the rebirth of the CBC as a genuinely public broadcaster.

That’s probably more starry-eyed idealism: It’s hard to think the CRTC, which tends to favour the business arguments of incumbents, is really countenancing a policy move that the major broadcasters so strongly oppose.

In launching Let’s Talk TV, the commission has thrown all sorts of options up in the air; most public discussion of the hearings will focus on the very popular notions of pick-and-pay cable pricing and a cheaper, slimmed-down basic cable. The CRTC expects to issue its findings early next year and then we’ll discover whether it took the broadcasters’ sacred cow out of the barn to shoot it – or just to pat it on the head and give it another handful of hay.

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