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The Future of Simsub Post-Super Bowl: Why Canadian Viewership Data Vindicated the CRTC

The release of the television ratings for the Super Bowl unsurprisingly sparked a wave of reports yesterday blaming the CRTC for a decline of viewers at CTV.  The Hollywood Reporter claimed there was a ratings collapse, the National Post talked about a 39 percent drop, and Cartt.ca argued that the CRTC had failed Cancon with its decision. While CTV’s numbers may have dropped by 39 percent from the 2016 Super Bowl, that number on its own means as much as saying that Tom Brady’s quarterback rating dropped from his last Super Bowl appearance (it did).

When assessing the impact of the CRTC’s simultaneous substitution decision that opened the door to competing U.S. and Canadian feeds for the game (but not for the pre and post-game broadcasts), the far more important number is the Canadian audience for the U.S. feed. It tells the story of how many switched away from CTV to the newly available alternative. Although Bell indicated that this data is not available, that does not appear to be accurate. The Globe and Mail reports today that some Fox stations are measured in Canada, but that Numeris did not provide it with the numbers. [Update: A Numeris spokesperson confirmed that it measures some, though not all, Fox feeds in Canada].

However, Richard Deitsch, the lead media reporter for Sports Illustrated, tweeted on Monday that the CTV feed drew 4.5 million viewers, while the U.S. Fox viewed garnered 803,000 in Canada. Deitsch’s source for the report was Sportnet’s John Shannon, a longstanding sports television producer, who discussed the issue on the Prime Time Sports program on Monday afternoon. The Fox number may involve some guesswork given that Numeris does not track all Fox affiliates in Canada, but I am reliably advised that its data showed low numbers for some U.S. affiliates, including the Buffalo Fox affiliate feed [update 2/9: new reports indicate that the Buffalo number may be in error, suggesting a higher number of Fox viewers in Canada that reported by Shannon/Deitsch. CTV still retained a majority of the Canadian audience].

Even with some amount of guesswork, the real story is that the Canadian feed maintained a healthy majority of the audience. perhaps with as much as 85 per cent of all viewers. Far from representing a collapse (or – as the Hollywood Reporter inaccurately reported – that 40 percent of Canadian viewers turned to Fox), the Canadian feed did far better than the doomsayers predicted. Indeed, Bell’s claims of tens of millions in losses seems likely to have been overstated, particularly with additional revenue from a game that went into overtime.

The CRTC’s Super Bowl simsub decision was vindicated not only by the numbers, but also with the broadcast and the CTV response. The Super Bowl ads were available online, but watching the game and the commercials together demonstrated that the ads are (as the CRTC ruled) an integral part of the broadcast.  For example, commercials for Budweiser and Lumber 84, which speak directly to the immigration controversy in the United States, are powerful on their own, but took on an additional meaning when viewed during the game alongside the customary Americana of the Super Bowl and several shots of Vice President Mike Pence in the crowd.

The CTV response also provided a measure of vindication. Once it became apparent that the lobbying campaign to overturn the decision would fail, CTV competed with Fox for viewers. The Canadian feed included a contest with cash prizes and a trip to next year’s Super Bowl along with additional on-air promotion. While there were glitches with the contest, the creation of two different feeds with different benefits is precisely what the CRTC had in mind when it focused on creating more choice for Canadians.

The Bell appeal of the CRTC decision continues, but the bigger question is what comes next for simultaneous substitution policies. Canadian broadcasters have long feared that abandoning the policy would result in hundreds of millions in lost revenue. The Super Bowl experience suggests that that may not be the case. With a majority share of Canadian viewers, decades of watching the Canadian feed may have had a lasting impact on television viewing habits of those who still watch conventional television.

The importance of simsub is surely declining given the availability of streaming and recording alternatives, but it appears that many Canadian viewers will stick with the Canadian feed even with a U.S. alternative. Since removing simsub altogether would free Canadian broadcasters from U.S. programming schedules and potentially reduce the costs for foreign programming, the regulator should consider expanding the removal of simsub beyond one program per year.

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13 Comments

  1. Pingback: 20170208 reading, video, audio list (Super Bowl, CRTC, Merriam Webster, Census) | Kempton - ideas Revolutionary

  2. Eric Rosenquist says:

    I think they should get rid of simsub completely, but if the networks and the creative community need to be appeased over lost revenue, change the BDU rules so that having the American 4+1 OTA channels costs something like $1/month per subscriber.

    The BDUs don’t have to pay for those signals other than to get them to their head-end, so give the BDUs 5cents and put the other 95cents into the Canadian Media Fund.

    The US channels would have to be optional on all channel packages, even Skinny Basic.

    People who explicitly want the untouched US feeds would pay $1/month and would end up directly subsidizing CanCon.

    • Chigbo Ikejiani says:

      I’m not in a position to comment in depth on the merits of your suggestion, Eric, but don’t BDUs still have to pay a compulsory licence for the US signals? It might well be that this would only change the math (and maybe raise the end-user price, which I’m SURE everybody will love).

      • Eric Rosenquist says:

        They don’t have to compensate the stations; the retransmission is covered by a general Copyright Board tariff. I believe that applies to all of the retransmitted OTA stations though rather than a station-by-station fee.

        See CRTC Broadcasting Regulatory Policy CRTC 2015-96 paragraph 19 for info. Broadcasting Decision CRTC 2015-187 is also interesting since it contains details of a dispute where a US OTA station wanted to get itself removed from carriage by a Canadian BDU.

  3. Simsub rules may have made some sense in the days when there were only three US networks and perhaps only two stations in many Canadian markets. But in an era when everything is available to everyone via the Internet, often for free and without commercials, the rules no longer make any cultural, political or economic sense.

    I’m not a football fan so I didn’t watch the Super Bowl on either a Canadian or US network. But on-line the following day, I watched some of the ads that received high marks and mentions for one reason or another. Anyone can do that so what’s the point of the simsub rule?

    Even more revealing about the state of television is that although I haven’t had a cable subscription, I watch TV shows every night. No, I’m not stealing; rather, I watch one of about 30 British networks and channels that are live-streamed on line.

    The simsub brouhaha strikes me as the last of a rear-guard action by large media companies that are trying to hang onto a world that passed them by decades ago.

    • Mark Le Blanc says:

      Sorry. Put Reply comment below wrong comment.

      Agreed. Simsub will be a moot issue when (not if) sports content starts to come into Canada direclty via the US (or other foreign) broadcaster/OTT Service.

  4. This is an excellent and thoughtful piece, Professor Geist. Well done.

    The only point to add is reconsider your statement: ” It tells the story of how many switched away from CTV to the newly available alternative.”

    The issue here is not TV consumer behaviour. People that watch the FOX feed, even during simsub programming, are “not turning away” from CTV.

    Rather, CTV / BELL is using simsub to rent seek off the existing Canadian audience during these US retransmissions.

    At base, simultaneous substitution is just another form of regulated rent seeking in which dominant economic interests use government to profit maximize instead of quality service.

    The real issue under the whole Super Bowl simultaneous substitution is the over paying for US program rights by Canadian distributors.

    CTV / BELL has year over year struggled to effectively monetize their Super Bowl program rights. Going back for years, they have consistently not sold all the ads available, and the rates have consistently been below expectations.

    Up to this point, CRTC regulation has allowed this wasteful behaviour by Bell and other Canadian distributors to continue and to be absorbed in the high TV costs past on to Canadian consumers, ofter with inferior services for the consumers, e.g. program disruptions caused by simsub particularly during live sporting events.

    The CRTC should hold a hearing on this years Super Bowl broadcast and compel BELL and the NFL to table their program agreements. The Bell / NFL management should be called to the carpet for their poor management practices.

    • Mark Le Blanc says:

      Agreed. Simsub will be a moot issue when (not if) sports content starts to come into Canada direclty via the US (or other foreign) broadcaster/OTT Service.

  5. If they get rid of simsub, they will start making more money, because everybody that has a DirecTV dish will shut down their account and switch to a canadian distributor.

  6. Ryan Malone says:

    I haven’t had to put up with simsubs in over a decade. I just wish I knew of alternatives even before that!!!

  7. I applaud the decision of the CRTC. Gives the right to choose back to the consumers. The ads for the Super Bowl are as much of interest as the game itself. Time to allow Canadian consumers to exercise that right obtained by paying for Cable services from the telcos.
    http://wwwofficesetup.com/

  8. A lot of well worded commentary from smart people who happen to have no understanding of simsubs or Canadian broadcasting as a whole. None.

    Will your ego let you read this? probably not.

  9. Steve Killington says:

    You mean Canadian re-broadcasting Bruno!

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