GATINEAU – CRTC commisioner Christopher MacDonald’s persistent questioning on day one of the hearing into license renewals for several BDUs roughly translated to: “What’s taking so long with the set top box viewership data?”
Quebecor, Rogers, Shaw and Eastlink, all members of the Set Top box working group (check), each had very similar answers to MacDonald’s line of questions. Essentially the answers boiled down to: “What we’re doing is hard, pioneering, and with an uncertain business model, so yes, it’s a slow process.”
The group first met more than two years ago.
During the CRTC’s Let’s Talk TV process, the CRTC essentially ordered the industry to gather up viewership data from broadcast distribution undertaking (cable, IPTV and satellite TV carriers) consumer set top boxes so that everyone in the industry could better understand exactly what people are tuning into at any given moment, in far greater numbers than the traditional ratings surveys.
That data could be used to improve programming, to better target advertising for broadcaster clients – and is already helping inform the construction of packaging of some BDUs and in their contract negotiations with programming suppliers. The industry created a Set Top Box Working group of 16 members representing BDUs as well as large and small broadcasters, to address the Commission demand.
To some who have intervened in this hearing (and they will have their say in the coming days), the working group hammering out the details on how to extract, refine and use this data as a new industry currency is taking far too long and MacDonald’s questions on Monday reflected that.
To the BDU working group members who appeared Monday, however, they believe they’re creating something brand new, which is being done nowhere else in the world because the desire here is to sift the data through a new process with an independent third party (broadcast ratings agency Numeris) in order to get to a fully anonymized stream of data which can then be deployed to help boost revenues.
Of course, in the States, set top data is already used as currency – but it’s done on a carrier by carrier basis largely to support the sales of local ad avails (the two minutes per hour of ad time which the likes of CNN and A&E make available to carriers, though which aren’t allowed to be sold here). There, it is not a data stream vetted by an independent third party the way the Working Group is attempting to build and to the BDUs, it is the broadcasters who would benefit most in getting this data because they would be able to apply it against ad sales, potentially boosting revenues with better targeting of TV commercials.
For the BDUs, even those of which own broadcasting divisions, extracting the data is a cost with no clear return on investment.
“This system does not exist anywhere else in the world,” Quebecor Media’s vice-president of regulatory affairs told the commission panel, when asked why progress has been so slow. MacDonald noted that the Working Group does have to report to the Commission and deadlines so far have been repeatedly missed and was curious if there had been “any intentional foot-dragging” going on.
While admitting the BDUs are “not in the same place” as the broadcasters when working towards the goal, “I think we’re doing the best we can as a working group to get there,” added Tabet. “Return on investment is a major issue that we have to accomplish and get to before we do this system.”
All four BDUs agreed though that the delays are behind them and that a letter of intent for Numeris to produce a proof of concept will be signed by the end of this month.
“Whether or not… there is actually a set top box measuring system in this country is going to be a function of whether there is going to be a business case.” – Pam Dinsmore, Rogers
Some, such as the Independent Broadcasters Group, have asked that making STB data available to programmers should be a new condition of license for BDUs, but all four appearing Monday rejected that outright, for a few reasons, one of which is that if the system moves forward, they can’t be held to a CoL on a system they will not control. Besides, there is no guarantee yet this will actually get off the ground. Right now Rogers Cable, for example, uses the data “to help us package our services, to help us price our services and to help us promote certain services and certain packages,” said senior vice-president of content Jon Medline.
That sort of thing works for Rogers and Medline noted that the company does, on occasion, share viewing data when requested by some broadcasters. However, making this into a currency for broadcasters to use may still not happen, cautioned Pam Dinsmore, Rogers Cable’s vice president of regulatory. “Whether or not… there is actually a set top box measuring system in this country is going to be a function of whether there is going to be a business case,” she added.
Essentially, it costs money for the BDUs to pull, polish and process the data and they want any system to, at the very least, ensure they recover costs. When asked by MacDonald if those costs are “bigger than a bread box or smaller than a car?” Medline got to the crux of the matter, noting it can be both, depending on the data sets being requested and how much work has to be done to retrieve it.
Community channels
Since the CRTC’s 2016 decision on local TV and community channels, two of the large BDUs, Rogers and Shaw, have chosen to close channels in their biggest markets, taking advantage of the Commission’s new rules which allows them to take the money which would have been earmarked for access channels there and divert it to local broadcast news stations.
Rogers has done that by closing its Greater Toronto Area channels (Newmarket is the last one affected and will go dark December 31st) and Shaw has done it in Vancouver, Calgary and Edmonton. While Quebecor said Monday they have not chosen to do that as yet, such a decision is clearly on their radar when it comes to MAtv. “We are looking into this and making decisions on this over the next year,” said Steve Desgagné, general manager of MAtv.
The carriers all said they prefer to concentrate their community spend in mid to small sized communities which are not as well-served with TV as the likes of Toronto and Vancouver. That means London, Kitchener-Waterloo and its zoned channels in New Brunswick for Rogers, as an example.
The BDUs also said additional flexibility, where they need to decide sometimes on a show-by-show basis what works on their remaining community channels and what doesn’t, would help because channels have to serve geographic communities along with their communities of interests, which can stretch interpretations of what sort of programming is allowed on the local channels, whether made by access producers, or not.
For example, Shaw’s strategy is to show a combination of “hyper-local” programming like local town councils, along with out of region programming that would still appeal to local customers. The company’s senior vice-president of marketing, Katherine Emberley, singled out a show featuring the indigenous communities shot by its channel in Nanaimo, which makes sense to show in Victoria, too, as programming that is “locally relevant to viewers in multiple systems.”
The BDUs also say a big part of the reason they have had to cut back personnel and programming (Videotron also cut 35 positions in Quebec while not closing any stations) is thanks to the funding cuts wrought by the Commission’s 2016 decision which cut the level of funding BDUs have to send to community channels from 2% of revenues to 1.5%.
(Ed note: That said, these are BDU-owned channels. They could spend more, if they believed spending on this measured up to their spending in other areas.)
The hearing continues Tuesday with Cogeco, Telus and Bell facing the Commission.
