THE CTV-MTV DEAL announced today, while very important for CTV and awfully painful for CHUM, which loses its MTV content, is just a little piece of the enormous change the broadcast television industry is facing – on a number of fronts.
To me, it’s part of “the new TV,” for lack of a better term, where traditional boundaries are quickly breaking down. The lines between broadcast, specialty and pay are blurring to the point that they matter less and less from a viewer’s perspective every day.
People watch shows. They want content. The fact that it’s on CTV or Global or Showcase or Movie Central or Family or OMNI or MuchMusic or ichannel matters less and less every day. The habits spawned by video on demand and personal video recording has people thinking less of specific channels and more about specific shows.
I saw an interactive program guide Wednesday at the CCSA AGM trade show in Gravenhurst that lets consumers with PVRs set recordings by subject matter, director or actor. Those customers might never realize what channel they’re watching when they sit down and view that recorded content – until they see the endless promos, maybe.
I was struck by just how much is different these days when reading through the Astral/Corus submission this week opposing the new pay TV applicants. The two regional pay monopolies commissioned a study analyzing the pay TV market in Canada which, of course, said the pay market is just fine how it is, thanks.
The niftiest part of that study, however, were some graphics (one is pictured below) illustrating the upheaval the content distribution industry has undergone in just a few years. It’s change which impacts television in myriad ways. There are so many content windows now, TV is just one link (albeit a big, heavy one) in the value chain. Before pay TV and DVDs and VOD and so on, movie producers had the theatre and the television set as their only windows. Now those windows are of endless size and growing rapidly in number.
So, a company like CTV can’t just sit still and keep on airing primarily simulcasts of American broadcasters (although that’s still their bread-and-butter). It recognizes the need for its own popular content (Canadian Idol, Corner Gas) and for content unavailable elsewhere (all the MTV stuff they now have access to) on the Canadian dial. CTV has moved itself up a window and the higher ratings have followed.
Exclusive MTV content (and soon, an MTV channel) seems to be an exceptional move for CTV and will be great for the broadcaster in the short-to-mid-term. But long term, original programming or not, the ad market is shifting, too, and improvement is absolutely required.
Media buyers want more. They’re paying ever more money year-to-year for ads on broadcast stations and getting far less gross audience than years past because of all these windows and the fragmentation they enable.
Now, those advertisers will tolerate fragmentation going forward as long as one other thing can be delivered – targeting, or personalized ads. This is where the Saturn ad goes to Scarborough while the Mercedes ad is played in Rosedale – during the same 30 seconds. This, to advertisers, is real value. It’s return on investment they can calculate. The industry has been talking about targeted ads for a long time. Long enough, probably. Advertisers and their buyers are getting close to forcing this development and it can already be done. We just need the will to do it.
The thing with targeting ads though, is that the means to take such direct aim rests with the addressable digital decoders of the cable companies. So, what are broadcasters doing to negotiate with cable on this front in order to be able to target the ads they deliver to specific neighborhoods or demographics?
Not much, it seems. A question to this effect was asked at the recent BMO Nesbitt Burns investors day conference in Toronto of a panel including CHUM Ltd. CEO Jay Switzer, Alliance Atlantis executive chairman Michael MacMillan and Corus Entertainment CEO John Cassaday. Maybe they fear how much of a piece of the action the cablecos might ask for, but the five seconds or so of chilly silence before any of the three dared say anything was telling and their answers led to one conclusion: this is not happening yet.
But it should be. The new TV environment is telling us so.
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Image source: "An assessment of the market for pay television in Canada", by Communications Management.
