CRTC News Release on the Changing State of Television and Advertising
While we have removed some text from this article it is still fairly long but there is a lot of relevant information that people may find interesting.
May 21, 2015 (Toronto, ON)
Tom Pentefountas, Vice-Chairman, Broadcasting
Thank you for your warm welcome. I thought you might all be depressed these days, following the finale of the Mad Men series. As this Forum makes clear, we’re entering a new ad man – and woman – era; one every bit as exciting as the earlier advertising age.
I don’t pretend to be an expert on advertising, of course. But I know – from the CRTC’s recent consultations … public hearings … and eventual decisions surrounding our Let’s Talk TV policy review – that a world of opportunity is opening up for your sector. I’ve come today to highlight how the Commission’s roadmap for the future creates new avenues for advertising. Before I do, I’ll provide a broad overview of what we set out to do with Let’s Talk TV … the conclusions we came to … and some of their implications for the future of TV advertising in this country.
Let’s Talk TV
It’s no secret to anyone here that the TV world is undergoing a profound shift; a shift being led by viewers, who are now in the driver’s seat. And one which demands that content creators and distributors, as well as television advertisers follow their lead to remain relevant.
Canadians’ viewing habits have evolved rapidly in recent years. They are migrating away from the traditional TV set and watching the content they want, where, when and how they want, using the latest technologies. The volume of content and viewing options available has never been greater. Consider that 300 hours of video are uploaded to YouTube every minute, of every day, of every month. That’s on top of the 1,300 hours of traditional television Canadians can access every waking hour of the day.
This abundance of content, coupled with new tools to access it, has empowered the viewer. It has fundamentally changed the roles played by mainstream broadcast media – including advertisers. As the CRTC’s Chairman likes to say, while content remains king, the viewer is emperor. And no amount of regulation can stop that.
So, with Let’s Talk TV, we set out to hear what Canadians have to say about the future of TV – what they need, what they want and what role new technologies will play in providing it. The CRTC also wanted to ensure that the new framework fosters choice and innovation … encourages the creation of compelling programming made by Canadians … and empowers Canadians to make informed choices. We needed public input to develop a forward-looking framework that ensures Canada’s television system not only adapts to, but capitalizes on, the rapid rate of change.
We listened to more than 13,000 Canadians who participated in various phases of Let’s Talk TV and received presentations from industry experts from across the broadcasting spectrum. Based on what we heard, the Commission concluded that we need to update our toolbox and challenge conventional thinking to respond to changing times. Old solutions no longer suffice. Protectionism is an anachronism in an age of abundance and a world of choice.
So, the CRTC is tearing down barriers to innovation that have hampered broadcasters and producers, and throwing open the door to new ideas.
We want to cultivate the necessary conditions for the creation and promotion of compelling high-quality content that audiences at home and abroad will choose to watch. And as a result, you can pitch sponsors’ products to these audiences.
The sand is moving beneath our feet and it would be irresponsible to ignore it. American broadcasters, too, have no choice but to change. Who would have guessed the Cable television Advertising Bureau would become the Video Advertising Bureau and now include the networks?
I will highlight a few of our recent decisions, focusing primarily on content related issues since they are the most relevant to you.
We’ve decided that Canadian video-on-demand services will be able to offer exclusive content as long as they are available to all Canadians over the Internet without needing a cable or satellite television subscription.
Many stakeholders felt disadvantaged in the face of foreign online video services. Well, here you have it – a level playing field. Producers need to create innovative and appealing programming in order to stand-out in a sea of content. So we’re reducing our reliance on quotas for the amount of Canadian programs that local television stations and specialty channels must broadcast. Quotas simply won’t work in the future.
Instead, we are focusing on prime time. We’ve also struck down rules under which specialty channels could only broadcast certain types of programs. And Canadians will be able to choose the television channels they want – either on a stand-alone basis or through small, reasonably-priced packages. This paves the way for programming innovation, as broadcasters will need to be creative to distinguish their brands and appeal to viewers. We are not dictating business models; our objective is to foster a more open and competitive television market, and an environment that nurtures innovation in the programs Canadians watch.
Another significant change, we now expect all broadcasters to financially invest in programs made by Canadians. We will require a greater number of local stations and specialty channels to reinvest a portion of their revenues into the creation of made-in Canada content.
This shift away from outdated protectionist policies to expenditure requirements underlines that we want creators and distributors to choose quality over quantity.
Audiences around the world have access to the best content. If we’re going to be playing on the world stage, our content has to be of the same calibre. Otherwise, we risk being left behind in the digital world and becoming known as creators of second and third-tier content that no one wants to pay for or watch.
If you have a top-notch product that can take on the world and attract big audiences – the world is now your oyster. So, think big.
Let’s be world conquerors, not the conquered; the victors, not the vanquished.
Golden Age of Targeted Advertising
We may agree to disagree about a few of these things, but I’m sure there’s no disagreement that the potential for advertisers in this new age of television – whenever, wherever and however it is watched – is extraordinary. As you’ve undoubtedly heard this week, there may never be a better time to be in the ad business. There are all kinds of new approaches to advertising that are dramatically reshaping your sector – for the better.
The ability to deliver addressable TV advertising is revolutionizing the advertising industry.
Addressable ads have far greater precision than traditional approaches. Because of their focus on particular consumer profiles, they can be directly targeted. And they provide immediate feedback from these audiences. This means marketers can both target and interact more effectively – tailoring and coordinating messages across TV, online, smartphones and tablets. The Television Bureau of Canada says that major media generated net advertising revenue of $12.3 billion in 2013. So, there’s clearly a lot of money – and opportunity – at stake.
Just as the era of Mad Men is passé, so, too, are audience measurement tools from the golden age of television.
We no longer live in a four-channel world where you get up to change the channel. As you know only too well, today’s 500-channel universe has led to audience fragmentation. And that poses major problems for advertisers like you and the sponsors whose products you promote. Traditional measurement systems are unable to capture these fragmented viewers. Knowing who’s watching what is critically important because measurement equals monetization. And we’re leaving money on the table when we don’t know precise market shares.
Proper measurement not only increases content creators’ pool, but also contributes to the advertising community’s bottom line. The fragmentation of audiences and multiplication of platforms and windows need not be feared.
Something else coming along later this year is a Discoverability Summit, to be hosted by the CRTC. The Commission appreciates that making great programs and measuring their viewership is only half the battle. Great content means little if viewers cannot find it. For Canadian-made content to succeed, it must be widely available…visible on multiple platforms…and easily found.
The Discoverability Summit, to be held in the fall, will generate new thinking about tools and methods to connect viewers with content.
Algorithms – such as those used by online retailers to recommend goods to consumers – are among the tools used to connect viewers with the content they’re seeking. In the same way that big data is now being mined to target sales of laundry detergent, the likes of Netflix, Crave and Shomi are also finding innovative ways to capitalize on viewers’ shifting tastes.
All of the measures I’ve outlined today set the stage for an exciting new era in Canadian broadcasting that enables Canada’s creators – and, by extension, advertisers – to excel in a fast-evolving environment. Let’s Talk TV confirmed that Canada’s television system is healthy. We have the necessary financial resources in the system to create and promote great programs. We have the talent to bring these programs to life. We have viewers who are hungry for new and interesting content.
I think we need to have an outward vision. We need to leverage the infrastructure we have in Canada to seduce the world with our vision, our stories, our creative genius. Given the advertising industry’s proven track record of being bold and innovative, I have no doubt you will identify and seize new opportunities in this brave new world of television.
I am equally confident that you will continue be successful as TV advertising of the future unfolds.