Videoage International October 2017

October 2017 V I D E O A G E 54 shows, run them across Canada with their own ads sold in them, and it is the cable company (or sat/IPTV company) that makes the ads’ substitution by law. The Canadian networks advise the cable company that they own exclusive Canadian rights to the programs and the law then says if they run it at exactly the same time as the U.S. feeds with exactly the same episode, then cable operators must replace the U.S. feeds with the Canadian feeds. So viewers at home, whether they tune in to the U.S. feeds or the Canadian feeds, are actually watching the Canadian feeds, with those commercials. This is because only two percent of tuning in in Toronto is over the air via antenna (and that number is even lower in Vancouver and Calgary). But if viewers with good antennas are able to get Buffalo TV from their Toronto homes (some 180 km away), they can watch the U.S. feeds with American commercials. For Canadian broadcasters, timeslots on U.S. networks are even more important than the quality of the programs. If, for example, CTV already has the hot ABC network show on Thursday at 9 p.m. in simulcast doing well, and NBC has a good new show at the same time, CTV doesn’t want it or need it even if it is a great show. If, on the other hand, CTV owns the dramas playing on Wednesday night on both ABC and NBC at 9 p.m. in season, CTV can only play one of for one show and C$50,000 for another when the lower cost show might do double the ratings in the U.S. — but timeslots and simulcast drive everything. There is a real marketplace with Canadian bidders, hence the reason for them to be at the L.A. Screenings with all buyers to get what they need, or get more action (i.e. more bidding wars) on bids for popular shows. Because of this competitive content marketplace, old-style 1985 total output deals with one client don’t maximize revenues for most U.S. studios any more in Canada. SVoD/OTT rights are also a big issue, especially for Crave (run by Bell). Canadians want to be able to move product freely between their own platforms. For example, the new Star Trek series that Bell bought from CBS will probably premiere on the main CTV network in simulcast with CBS, then go to some combination of Space (their sci- fi cable channel) and Crave, their OTT platform, later the same week. Netflix is bidding for just Canadian rights all over the place and protecting their network ratings on first run in a big deal for Global and CTV. Netflix is ahuge factor inCanada. Approximately sixmillionof Canada’s 10millionEnglishTVhomes subscribe to Netflix Canada (a very different service and rights than Netflix in the U.S.). At times, some very urban U.S. sitcoms don’t get sold in Canada and don’t have much of an audience for the U.S. feed. (In Canada, distinctions are made between “urban” sitcoms and “suburban” sitcoms). Sometimes there is a price disagreement at the L.A. Screenings and the studio won’t sell a show. Modern Family , for example, was unsold in Canada for many months; the studio didn’t like the price, didn’t want to use their “cover” at a low price, and believed in the show. They lost some lowlicense fees in the short term, but six months later when it was doing great numbers in the U.S., Canadian buyers offered much more and Fox sold it in Canada. Rarely, there is a less desirable small sitcom or sometimes a CW show (CW is a factor in every home in Vancouver via border station, but not in the rest of Canada). If unsold, then Canadians watch the U.S. feed if they want to see it, from a border station carried on Cable (except for CW) with all the U.S. national and U.S. local commercials. To be precise, Canadian networks buy the these two in simulcast at 9 p.m. (simulcast is like syndicated exclusivity in the U.S.). As explained above, by proving to Canadian cable systems that CTV owns exclusive Canadian rights to the 9 p.m. ABC (or NBC) drama, the cable companies must by law pull the plug on the American feed and replace it with the CTV feed running exactly the same episode (with CTV commercials intact). CTV in this case can charge much higher advertising rates because they are simulcasting out the U.S. feed. (Cable subscribers may try and tune to the U.S.’s ABC or NBC channel, but they actually get the CTV feed with the same drama instead — including CTV commercials). But CTV can only simulcast one U.S. network at a time. So CTV picks the higher revenue program, and then “pre-releases” the other 9 p.m. drama and runs it the night before or even the same night but, let’s say, an hour earlier at 8 p.m. This mitigates CTV “damage,” gets them some revenue, and Canadian viewers, when given a choice to watch their favorite drama on a U.S. or Canadian network, tend to watch it on the network that has it first, either earlier in the evening or even the night before. The pre- release allows the Canadian network to better (though not fully) monetize their high licensee fee. The production studio often allows this pre- release (even if the U.S. client network hates it) because it supports higher license fees in Canada. ( Pictured on the front cover of this issue is Randy Lennox, president of Bell Media, taking the stage at the CTV Upfronts presentation ). Canada TV Upfronts (Continued from Page 52) Global’s fall 2017 grid Mike Cosentino, senior vice president, Content and Programming, Bell Media, presenting the new fall grid VideoAge would like to thank veteran Canadian broadcaster Jay Switzer (pictured above) for explaining the complexity of the Canadian television business model, and to Rogers Media, Bell Media, Corus and Fox Studios for providing photos and/or information.