Mirko Bibic is the chief legal and regulatory officer at Bell and BCE Inc.
Super Bowl LI is heading our way on Feb. 5. The NFL's championship game is the biggest televised event in the world, watched by 160 million people around the globe and at least eight million here in Canada. But our national television regulator insists that Canadian commercials on the big game be overtaken by U.S. ads here in Canada.
In 2015, the Canadian Radio-television and Telecommunications Commission (CRTC) decided to look into simultaneous substitution, or simsub. It's a federal television policy that has been in place for decades, created to balance the fact that Canada, as it borders the United States, is the only country with unfettered access to all U.S. over-the-air signals, with cable companies also permitted by the CRTC to distribute them throughout the country.
With simsub, Canadian broadcasters can offer viewers here the U.S. shows for which they've acquired broadcast rights and substitute Canadian commercials in place of American advertising. Saturday Night Live on Global, the Grammy Awards on Rogers, the Super Bowl on Bell Media's CTV and hundreds of other examples, from sitcoms to soap operas.
Canadian viewers get all the U.S. shows they want. Canadian advertisers gain access to local audiences because broadcasters have paid for the exclusive rights to the shows. The revenue from Canadian advertising pays for the content rights fees while funding homegrown content production, all helping to support a viable national broadcast industry.
For now, the CRTC decided it would ban simsub for just one show on one network: the Super Bowl on CTV. This order happened to come down right in the middle of CTV's Super Bowl rights deal with the National Football League. The league is understandably dismayed that a regulator would randomly change the rules midstream and has, as with Bell Media, filed an appeal of the CRTC's decision with the Federal Court of Canada.
The CRTC said its ban is based on the idea that Canadians demand to see U.S. advertisements as part of the Super Bowl. Yet, out of an audience of eight million Canadian Super Bowl viewers, the regulator received fewer than 100 complaints about the lack of U.S. ads during the broadcast. This reflects the reality that all U.S. Super Bowl ads have for years been available online, most before the game is even played.
The decision really means that hundreds of Canadian advertisers big and small are denied access to the largest local TV audience of the year. Major Canadian companies and the federal government itself create ads for the Super Bowl broadcast in Canada, of course. But so do hundreds of small businesses and local governments reaching out to their communities on local game broadcasts across the country. For many, it's the only TV ad they do all year.
A growing community of voices, including ACTRA, Unifor and the Association of Canadian Advertisers, oppose the CRTC's decision. All of them point out that the impact reverberates throughout Canada's creative and broadcasting industry.
Private broadcasters, such as Bell Media, are required to contribute a percentage of revenues back into Canadian content production, and actively spend a significant amount more on domestic content creation. Canada's creators have already been impacted by a general decline in television advertising revenue, which would be significantly worse without simsub.
Annual advertising revenue across Canada's private conventional TV stations decreased by $309-million between 2011 and 2015. In 2015 alone, losses faced by Canadian broadcasters would have reached $390-million without simsub advertising revenue.
Advertising and Canadian content also converge on the Super Bowl broadcast with the promotion of new made-in-Canada productions to help spur their success. Last year, CTV highlighted six original Canadian series during the Super Bowl, homegrown content created with multimillion-dollar investments in creative and technical employment, introduced to the biggest Canadian audience of the year.
The only clear winners in the CRTC's decision are U.S. advertisers. Those that previously bought ads on both sides of the border, spending money in Canada to advertise to Canadians, now just need to make a U.S. ad deal and get cross-Canada access at no extra charge. Many U.S. ads will be promoting products unavailable here, including financial services and pharmaceuticals that aren't approved by the Canadian government.
Creators, employers and unions point out the impact of the CRTC's decision on employment and investment. Advertisers big and small are losing access to their communities. The NFL is fighting the decision in court, gaining the support of Liberal MPs and U.S. senators and pressing its case with Canada's ambassador to the United States.
All agree it's concerning that the most high-profile CRTC decision in recent years comes down to ensuring Canadians can watch U.S. TV commercials, live, in Canada.
We suggest a time out. With a full review of national broadcasting policy currently under way, and with all the immediate risks the CRTC's decision causes for Canadian creators and companies, we respectfully ask that the federal government press pause. Ottawa has all the tools required under the Broadcasting Act to review the play and make the right call.