The CRTC’s 2015 decision to ban simultaneous substitution from the Super Bowl broadcast starting in February 2017 has generated renewed criticism in recent days as the NFL, Bell, and the U.S. government launch a lobbying blitz against the decision that will take effect with this season’s game. The league, broadcaster and their supporters argue that the inability to block the U.S. feed will mean lost revenue for the Canadian broadcaster and presumably reduced licensing revenue in the future for the NFL as the Canadian rights may be viewed as less valuable.
Despite claims about damage to Canadian broadcasting, the ban on simultaneous substitution for the Super Bowl does not eliminate the ability of the Canadian broadcaster to air its own commercials. In fact, the use of simultaneous substitution for the Super Bowl is an outlier when compared to the broadcast of most other major sporting events in Canada. Whether the Stanley Cup finals, the World Series, the Olympics, or the World Cup, Canadians typically have access to both Canadian and U.S. feeds. Canadians often opt for the Canadian version, perhaps because they like the commentators or the Canadian-oriented coverage. No one suggests that Canadian access to the Stanley Cup finals on NBC or the World Series on Fox (Sportsnet uses the international feed and many commented this year that they preferred that version that included Buck Martinez on colour commentary) eradicates rights or eliminates the ability for a Canadian broadcaster to successfully air the same event.
With the elimination of simultaneous substitution, Canadians will have a choice between the U.S. and Canadian feeds. If the two are identical, some will likely opt for the U.S. feed to view the U.S. commercials. If Bell uses the opportunity to compete with local content, many may prefer the Canadian feed. Regardless, Canadian advertisers are not blocked from advertising during the Super Bowl and the predicted revenue losses are purely speculative since no one knows the impact on ratings. Critics contend that relatively few people have filed official complaints about simultaneous substitution of the Super Bowl. But if they are correct that few Canadians truly care, most will watch the Canadian feed with limited impact on domestic television ratings. However, if many Canadians opt for the U.S. feed, that will signal that many more were unhappy with simultaneous substitution, preferring greater choice.
Suggestions that the U.S. may lodge a trade complaint over the issue are rather remarkable given that the U.S. spent years lobbying against simultaneous substitution. There is little chance the U.S. will now argue that Canada must impose Canadian commercials over a U.S. broadcast. With respect to the value on NFL rights, that too is speculative given the enormous interest in the NFL and the active competition between sports networks for television rights. If Bell no longer wants the Super Bowl without simultaneous substitution, Rogers would presumably be happy to scoop up the rights.
The real concern for some in the Canadian broadcasting world is the fear that this marks the beginning of the end of simultaneous substitution. Yet the end of simultaneous substitution started years ago. The growth of specialty channels, which now represent a far bigger slice of the broadcasting revenue pie than conventional channels, heralded the decreasing importance of simultaneous substitution with fewer programs substituted and subscription revenue surpassing conventional television advertising revenue. Moreover, consumers gaining increasing control over what they watch and when they watch it contribute to its declining importance. Recording television shows or watching them on demand eliminates the simultaneous substitution issue. Sports leagues now package their seasons for full streaming (including NFL GamePass) and many watch streamed versions of shows directly from broadcasters or through services like Netflix and CraveTV.
Not only has the relevance of simultaneous substitution declined in recent years, but the policy has arguably harmed the long-term success of the Canadian system. It effectively trades some additional revenue for loss of control over the Canadian programming schedule and turns the Canadian system into a country-wide U.S. affiliate with hundreds of millions of dollars spent on the rights to non-Canadian programming. The CRTC recognized that eliminating simultaneous substitution altogether would still create a shock to the system. Limiting the elimination to the Super Bowl has the practical benefit of starting to move the industry off the addiction to U.S. programming and toward competition rather than regulatory protection.
The CRTC faces no shortage of criticism, but in this instance it is doing exactly what it said it would: “placing Canadians at the centre of the communication system.” The criticism over the decision boils down to broadcasters arguing that Canadians should not be able to see what they want during the broadcast because doing so might hurt their bottom lines. That is not placing Canadians at the centre of the broadcast system, which the CRTC has tried to do with its decision on Super Bowl broadcasts.