Two interesting developments hit Canada’s TV scene recently, one of which will no doubt please most Canadians. The other will extremely annoy all those affected should it go beyond discussion stage.
In the first case, we see the mightiest of marketing machines, the National Football League, pitted against the Canadian government. The latter has wisely decided, at least as this is being written, to ignore the entreaties of the NFL and its highly paid lobbyists.
The NFL is turning up the heat on the government in an attempt to reverse a decision by Canada’s broadcasting regulator to end simultaneous substitution (also known as sim-sub) and allow the Super Bowl to be shown with American ads on Canadian television screens.
For many years, Canadians have been denied seeing the complete Super Bowl experience on their screens. The game coverage was left alone, but not the commercials, which for some viewers are a bigger draw than the football action.
After all, these commercials aren’t your ordinary car and breakfast cereal advertisements. They’re big-budget, mini-TV productions, and large sums have been paid for them to run during America’s (and, as it turns out, Canada’s) biggest TV draw of the year.
The decision from the Canadian Radio-television and Telecommunications Commission bans Canadian cable providers from simultaneously substituting Canadian commercials for American commercials on U.S. channels carrying a program for which rights have been purchased in Canada.
Needless to say, the CRTC action is being appealed through a court challenge by the NFL, on behalf of Bell Media, the rights-holder for Super Bowl coverage in Canada. Bell says it acquired the Super Bowl rights under one set of rules – namely that it would control the commercial experience in Canada – and that it must now exercise those rights under a different set of rules that will cost it significant advertising revenue.
Presumably, the removal of sim-sub will also lower the future value of the Canadian television rights for the Super Bowl, which is no doubt why the NFL is eager to have its day in court.
However, any legal challenge will not be heard before the Feb. 5 date of the Super Bowl. As a result, it seems Canadians won’t have to watch domestic bank and grocery store commercials, but instead will be free to watch the glitzy million-dollar fare that Americans see as part of the entire Super Bowl experience.
Bell Canada will be free to carry its own commercials during the Super Bowl, and viewers with access to American channels will, of course, be free to switch channels for the American experience. One narrow group that will miss out is those who have subscribed to Telus basic TV; these customers have no American channels in their package.
Note that the original decision by the CRTC to have sim-sub dropped was made while the Harper regime was still in office. The current PMO has supposedly replied to the NFL by saying that the CRTC is independent of government and that the action will not be overruled.
As for the second development, we can probably drop this one into the “trial balloon” category.
With Canadians cutting their cable TV subscriptions in ever-increasing numbers, it is no secret that the federal government is losing tax revenue generated from cable bills.
Those responsible for keeping federal government coffers full surely can’t help but notice that many of these cord-cutters are replacing some of that lost content with streaming subscriptions. And the biggest of the streamers in Canada is American-owned Netflix.
Companies such as Netflix have basically flown under the radar of the CRTC and, until now, the taxman. A Netflix tax would likely be an unpopular move. Of course it would have a more generic name, but there’s no escaping the intent: extracting tax dollars from Canadian Netflix subscribers.
Vancouver teacher and Netflix user Angela Filipovic isn’t fazed by the possibility of a tax, saying, “While I am averse to paying taxes that seem absurd, there is some merit to adding GST to Netflix subscriptions, as it is a service.”
Stay tuned for developments on both these stories. In the meantime, enjoy those American Super Bowl commercials.
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