GATINEAU – The CRTC briefly changed the channel on Monday. The Let‘s Talk TV policy hearing turned its attention away from the impact that Netflix and over the top (OTT) services could have on the Canadian broadcasting system and instead tuned into the role that set top box (STB) viewership data should play in providing more granular audience measurement and therefore enhance the ability of broadcasters to monetize programs.
Rentrak, a U.S. corporation that provides a service combining both sample and census data, took the stand in the morning to explain how its offering can be of significant value to Canadian broadcasters and carriers. Bill Livek, vice chair and CEO of the company, noted that its system, using a combination of algorithms and different models, can place a value on products that a household buys or plans to purchase in the future. In essence, the way targeted advertising works on the Internet can be made to function in the broadcast environment.
“The landscape is becoming equalized,” he said.
Rentrak’s service can be of substantial value to niche broadcasters or programs with smaller audiences because they generally have viewers with particular product consumption patterns and this “makes them highly coveted by certain advertisers,” said Livek.
“You can’t practically meter that many homes to have a commercially viable outcome. Set top box information gives the economics of scale so these small programs can market themselves.” – Bill Livek, Rentrak
In this specific case, using sample data (as Numeris, formerly BBM, has traditionally done) is impractical. “You can’t practically meter that many homes to have a commercially viable outcome. Set top box information gives the economics of scale so these small programs can market themselves – as they are in the United States – against the product consumption levels,” explained Livek.
Despite the potential to offer increased viewership visibility, there may be a fear from some on what the numbers actually mean. Livek acknowledged this but noted that ad buying is shifting from one based on show popularity and audience demographics to a more three-dimensional approach.
“Now it’s become more of a Rubik’s cube where there is a price for a make and model of a car, a political ad, a consumer packaged goods ad,” he said. “And you can only do that when these large databases exist with program ratings and exact commercial ratings using these other consumer databases.”
With respect to STB data, the Commission (whose vice-chair, Tom Pentefountas conducted fact-finding meetings in late 2013 and early 2014) has wondered whether a working group might help encourage greater work in this area. Two other STB data companies appeared Monday, Numeris (formerly BBM) and Fourth Wall Media, and along with Rentrak, suggested letting the market pursue this type of initiative could be a good approach.
THE CRTC DID, HOWEVER, kick off the second week of its TV policy hearing by exploring the role U.S. channels play in the Canadian broadcasting system. The Walt Disney Company opened Monday with a presentation that argued against changes to simultaneous substitution and for ensuring broad distribution of discretionary services. On the latter point, Susan Fox, VP of government affairs at the company, highlighted the dismal experience Disney had when it was only available on an a la carte basis in the U.S. Even when it moved to premium packages or other cable company tiers, penetration wasn’t good.
Broad distribution, she said, allows services to maximize advertising revenue, provides more stability for long term program planning, and “it allows services to redirect consumer marketing and retention expenditures into higher quality and more diversified programming to better serve viewers.”
Pelmorex Communications as well as the Independent Broadcast Group (IBG) appeared in the afternoon to argue they will continue to need certain protections from the CRTC in a broadcast environment with greater consumer choice offered by pick and pay in an industry controlled by a handful of large companies. For IBG, it believes access rights are critical and suggests the Commission not change anything in the near term because many of them have just had their licences renewed.
“We urge the Commission to let the independent Cat A’s maintain their access rights and genre protection until their licence renewal in 2018.” – Don Gaudet, Stornoway Communications
“We urge the Commission to let the independent Cat A’s maintain their access rights and genre protection until their licence renewal in 2018,” said Don Gaudet of Stornoway Communications, owners of ichannel, bpm:TV and the Pet Network
Under questioning, IBG addressed the issue of skinny basic. Rather than a mandated skinny basic, the organization supports an extended basic. Besides, noted OUTtv’s Brad Danks, independent services on basic represents 1% of the cost on average and keeping them in basic would be about $2 per month.
Genre protection is also an important ask for The Weather Network’s Pelmorex.
There is a real threat, it said, that a vertically integrated broadcaster may decide to launch a weather type service if genre protection is eliminated. It happened a number of years ago, Pelmorex senior VP Paul Temple noted under questioning, adding that it’s reasonable to expect that it may happen again.
Pierre Morrissette, CEO of Pelmorex, said there is a real concern that an alternative service may “cherry pick” the largest markets rather than offer a national service. He added this would affect the company’s ability to service the thousands of small communities it currently provides with local weather information.
“We’d totally depend on the contribution of the largest markets to enable us to provide the same level of quality service at the same price to all the thousand plus other smaller communities across Canada,” he said.
The hearing continues tomorrow with the likes of SaskTel, TekSavvy, DHX Media and others appearing.
