As this year’s Super Bowl broadcast drops the controversial “SimSub”, pressure increases on Bell and commercial-makers.
While football devotees will tune into Super Bowl LI this Sunday to see if the NFL’s top offence can pile up points against the league’s best defence, Canadian broadcasting and advertising executives will be watching a different sort of scoreboard on Monday morning.
That’s when overnight ratings are expected to show yet another record TV audience in the U.S. and Canada for the annual championship game — held this year between the high-flying Atlanta Falcons and the Tom Brady-led New England Patriots, to be broadcast from NRG Stadium in Houston.
The numbers are also likely to confirm an exodus of at least half of the peak audience of 9.2 million viewers who watched last year’s game on Canadian rights holder Bell Media’s CTV and French-language affiliate RDS.
The Canadian viewers are expected to bolt to the U.S. broadcast offered by rights holder Fox, at least in part to watch flashy U.S. Super Bowl commercials, which for the first time in more than 44 years will all air on Canadian screens.
The anticipated audience split follows a 2015 regulatory ruling in Canada that bans, as of this year’s game, a practice called simultaneous substitution. “SimSub” allows broadcasters who air American programming (such as CTV or Global) to request distributors (such as Bell or Rogers) to switch over to a Canadian signal — and Canadian ads — during commercial breaks.
SimSub lets Canadian networks capture advertising revenue worth more than $250 million a year to the industry as a whole, with some of those funds plowed back into the system to support homegrown programming.
During regulatory hearings that led to the SimSub decision, Bell Media said the practice generated some $40 million for the company in live-programming revenue, suggesting that without SimSub CTV would have little reason to bid for Super Bowl rights in the future.
The regulator, the Canadian Radio-television and Telecommunications Commission, says Super Bowl signal substitution has been a steady irritant to viewers, since it denies TV access to the popular U.S. ads and because errors in the hand-off have caused parts of the game to be pre-empted.
The CRTC has so far confined the ban to the Super Bowl and specialty channel sports programming, but says it could be ultimately extended across the industry to include events such as the Oscars.
For Bell Media parent BCE, the end of SimSub along with other regulatory changes to wholesale Internet prices and subscriber cancellations fees subtracts 1 per cent from projected 2017 growth in adjusted earnings per share.
The upshot for CTV viewers is that they are less likely to see ads tailored to the Canadian market compared to recent years because of the audience decline and resulting drop in the price for Super Bowl ads on Canadian stations.
“It’s a complete disincentive to distinct Canadian advertising,” said Ron Lund, president of the Association of Canadian Advertisers.
He said major advertisers have decided to use their U.S ads during the Canadian program, rather than creating a version aimed at Canada, as has increasingly been the case in recent years.
Based on the Super Bowl’s status as among the world’s top live sports events, CTV has been able to charge a significant premium for ads. But the ban on signal substitution means the price a Canadian network can charge for Super Bowl ads will drop, as will the price Canadian networks will be willing to pay to the NFL for broadcast rights.
Lund said that along with advertisers and broadcaster, the move will also hurt writers, producers and others in the creative community. The move has “pulled the rug out from a lot of people,” said Lund, who added that companies have been upping the ante in terms of investing in ads for Canadians, as well as those high-profile ads (selling this year for about $5 million U.S. for 30 seconds on the Fox network) that have been available to U.S. viewers. The game attracts high-profile advertisers such as major automakers (this year including Mercedes-Benz and Lexus), major movie studios and brewers.
Bell has responded to the SimSub ban by broadening its Super Bowl broadcast to a triple simulcast on CTV, CTV Two and TSN, and has also announced contests and prizes offered to Canadians watching the game on its network, including a trip to next year’s Super Bowl, a 2017 Nissan Titan and $300,000 in cash prizes.
Canadian viewers can also log on to biggameads.ca, a web page set up by CTV that’s hosting all of the latest American Super Bowl ads, which have become almost as much of an audience draw as the game itself.
Michele Pauchuk, president of the MEC Canada media agency, applauded the Bell initiative, since along with attempting to hold its audience in the interest of advertisers, it will also gather data on the impact of the ruling on audience dynamics that can be used as it presses a legal challenge against the CRTC decision.
Bell Media has won a right to appeal the SimSub decision, although a federal court had denied Bell’s request to suspend the new policy until an appeal is decided, leaving Bell under pressure to adjust ahead of the game.
Pauchuk said that while it remains to be seen how effective Bell’s incentives will be, it would be a struggle in any case for Canadian advertisers to elevate their game to compete with U.S. Super Bowl marketers, who are able to outspend their Canadian counterparts by at least a power of 10.