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The Canadian Television Industry

The Canadian Television Industry. Welcome to Canada!. A confederation of 10 provinces Two founding European ancestries - England and France - hence two official languages and two parallel media structures

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The Canadian Television Industry

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  1. The Canadian Television Industry

  2. Welcome to Canada! A confederation of 10 provinces Two founding European ancestries - England and France - hence two official languages and two parallel media structures Multi-cultural community, with some of the highest concentrations of ethnic diversity in the world

  3. The Canadian Market Source: CDN - BBM Nielsen Media Research – Jan ‘07 32 million people 40 TV markets 13 million TV households

  4. Total Advertising Revenue Source: TVB Canada – Net Advertising Volume 2006 $13.7 billion total advertising market $3.2 billion is TV $99 - per capita TV ad spend

  5. Top TV Markets in North America Millions of people aged 2+ - Toronto is 5th largest market in North American Source: Canadian- BBM Nielsen Media Research Fall 2007,US-Nielsen Media Research, January 2007, Population estimates

  6. Top 10 Canadian TV Markets Source: BBM Nielsen Media Research Fall 2007

  7. Dramatic Population Concentration • The top 10 markets represent 70% of the total population • This concentrated population distribution has lead to exclusively market-specific television planning and execution • National ratings are not utilized as they would not accurately reflect Top 10 vs minor market deliveries • Given the importance of each major market, it is imperative to ensure delivery of planned support levels in each • E.g. Toronto represents almost 22% of Canada’s total population

  8. Canadian Advertising Revenue Growth2002 vs. 2006 TV +25% Newspaper +7% Radio +29% Out-of-home +36% Internet +74% Total Dollars $ (000) Source: TVB Canada, Net Ad Volume – CRTC/CNA/NMR/IAB

  9. Share of Canadian TV viewingConventional/Broadcast vs. Specialty/Cable Viewers 2+, Mo-Su 6a-6a, 2006-2007 What WeWatch Source: BBM Nielsen Media Research 2006-2007

  10. Canadians’ exposure to ads on US stations Source: BBM Nielsen Media Research 2006-2007 P2+ • In spite of almost 18% share of total Canadian viewing to US stations, exposure to US-placed ads is small • While much of the programming airing on Canadian stations is of U.S. origin, cable and satellite companies are required by law to substitute American broadcasts with Canadian signals (programs and commercial) when both stations are airing the same program/episode simultaneously (i.e. Simulcast) • Implemented to protect Canadian advertisers’ interests by ensuring that Canadians watch Canadian commercials • Not surprisingly, Canadian broadcasters strive to maximize simulcast opportunities

  11. Canadian Television Viewing PatternsAverage Per Capita Viewing - Adults 25-54 CDNs are watching more television today than they did 10 years ago Hours Per Week Nielsen Media ResearchSeptember to May 96/97-03/04 BBM Nielsen September to August 04/05-06/07 * Different measurement systems cannot be directly compared.

  12. Average Per Capita Weekly Viewing Hours(by demographic group) Source: BBM Nielsen Media Research 06-07

  13. Television Technology Adoption Source: CDN – BBM Nielsen Media Research – Jan ‘07, Media Stats – Feb ’07; US - Nielsen Media Research – Jan ’07; 2007 Media Technology Monitor (MTM) 99% penetration of Canadian households 89% of homes have either cable or satellite 54% are digital 27% are HD-equipped

  14. Major Suppliers in Canadian Media

  15. Geographic Coverage by Broadcast Group

  16. Broadcast Groups – Networks & Specialty

  17. Characteristics of The Canadian Television Industry Regulatory Body Broadcast ownership groups Audience measurement Planning and Buying

  18. Regulator • Canadian Radio-Television and Telecommunications Commission (CRTC) is an independent agency responsible for regulating Canada's broadcasting and telecommunications systems • The CRTC reports to Parliament through the Minister of Canadian Heritage • The Canadian industry comprises public and private ownership – however majority the are private • Current regulations limit commercial time to 14 minutes per hour in prime-time • Canadian broadcasters are required by the CRTC to produce and air Canadian content • The intent is to develop popular programming relevant to Canadians as well as to support the production and talent communities

  19. Major Broadcasters in Canada English French

  20. English Broadcasters • Canadian program production: • All private broadcasters provide some original Canadian content • However, developing original programming is costly relative to size of the Canadian market • As a result, Canadian broadcasters purchase US programming and maximize simulcast for largest viewing audience potential • Where relevant, broadcasters will produce a Canadian version of a US hit - e.g.“American Idol” • Major broadcaster groups own both conventional and specialty/cable stations

  21. English Broadcasters • CBC is the national public broadcaster in Canada • CBC’s mandate is to develop and deliver programs that reflect the Canadian experience • CBC provides extensive national coverage in all major & minor markets • CBC receives funding from the federal government as well as revenue from commercial sales

  22. French Broadcasters * Source: BBM Nielsen Media Research Fall 2007 French data is measured byPortable People Meter methodology, which captures out-of-home viewing. English capture in-home household viewing with People Meter technology • French-speaking population base is 7.7 million – 24% of total Canada • Quebec networks feature mostly locally made productions: • Why? - to reflect Quebecers’ overwhelming preference for “home-grown” product (versus English Canada where US product is preferred) MarketProgram2+ Rtg* Montreal F Banquier 40.6 Montreal E House 17.4 Toronto House 16.0

  23. French Broadcasters • Overall tuning levels are equivalent in both English & French Canada. • However, there is less fragmentation in French Canada - hence higher ratings • SRC (French-language equivalent of CBC) is also a national public broadcaster.

  24. Public Broadcasters • CBC/SRC - Canadian Broadcasting Corporation/ Société Radio-Canada – national • Télé-Québèc - Quebec (regional) • Saskatchewan Communications – regional • TVO - Ontario’s public broadcaster • Knowledge Network - British Columbia-regional

  25. Multicultural Broadcasters Source: Statistics Canada 2006 Census • 2006 Census: Stats Canada employed 62 languages in completing the form census • Broadcasters are expanding their multilingual programming services

  26. Multicultural Broadcasters Source: Statistics Canada 2006 Census • Rogers: • Ontario – OMNI.1 and OMNI.2 • Calgary – OMNI • Edmonton – OMNI • Vancouver – Channel M • Vision • Canada's multi-faith and multicultural broadcaster is available as a basic service on cable and satellite • Fairchild TV • A popular Asian channel thatis carried by the listed cable, satellite systems and broadcast • Canwest • Montreal - CJNT

  27. Aboriginal Broadcasters APTN - (Aboriginal People’s Television Network) is a mandatory service available in over 10 million Canadian households and commercial establishments Inuit and Métis people have the opportunity to share their stories with the rest of the world on a national television network dedicated to Aboriginal programming, documentaries, news, dramas, entertainment specials.

  28. Audience Measurement - Currency • Base: Demographic Groups* within DMA’s • Cost Per Rating Point - CPRP • Cost Per Thousand - CPM • CPRP and CPM is the currency for planning and buying commercial airtime in Canada • CPRP is always DMA-specific • A National Rating is not functional in Canada: • Population skews to major centres • Under-represents rural Canada * Definition options: measurement data may be extracted usinga variety of qualitative criteria

  29. Audience Measurement - Methodology • BBM Nielsen provides meter measurement nationally and in three markets, 52 weeks a year: • Toronto, Vancouver and Calgary • National audiences measured through a national meter sample • Quebec and Montreal Francophones are measured by BBM Personal Portable Meters

  30. Audience Measurement - Methodology • Diary measurement for these 7 major markets occurs in the fall, spring, and summer: • Halifax • Quebec • Montreal Anglo • Ottawa/Gatineau • Kitchener/London • Winnipeg • Edmonton

  31. Audience Measurement - Methodology • Diary measurement for these minor markets occurs in the fall and spring: • Saint John -Moncton • Okanagan-Kamloops • Sherbrooke • Sudbury-Timmins/North BayS.S.M • Kitchener/London • Barrie • Windsor • St.John’s –Corner • Windsor • Saskatoon • Regina-Mooose Jaw • Saguenuay • Red Deer • Rim.Mat.Sep.Illes • Thunder Bay • Carleton • Sydney-Glace Bay • Rouyn-Noranda • Charlottetown • Riviere du Loup • Prince Albert • Brandon • Pembroke • Lloydminister • Yorkton • Medicine Hat • Terrace-Kitimat • Dawson Creek • Kenora

  32. Planning and Buying • The Canadian advertising industry, comprising broadcasters, agencies, and advertisers, operates similarly to the US • Key Objectives: Broadcasters • Manage inventory for maximum return • Build client base • Maximize unit rates • Forecast the market place accurately • Increase sales year over year • Increase share of tuning/advertising $ • Implement successful program strategy • Realize margins via product placement, integration, sponsorship • Offer multi-platform extensions and multi-media opportunities

  33. Planning and Buying • Key Objectives: Agencies • Lowest costs in market place • Flexibility with suppliers • Insightful and innovative client solutions • Preferred client status • Added value at no cost • Growth in existing business • Increased margins • Growth of client base • Delivery of established objectives

  34. Planning and Buying • Key Objectives: The Advertiser • Lowest rates • Deep consumer insights & effective communication strategies • High profile/ visibility • Creativity & Innovation • Positive business results • Flexibility • Media planning begins with an in-depth briefing on the client’s overall business, marketing objectives, and advertising objectives – both historically and the coming year

  35. Planning and Buying • Key components of the television plan are: • Target group – who is the media plan intended to reach • Why – increase sales, brand launch, brand awareness, etc. • When – time of year • Where – geographical coverage • Media mix – various television platforms, etc. • Reach/Frequency = Gross Rating Points (GRPs) on market-by-market basis • Day-part mix – % prime, % weekend, etc. • Estimated costs (reflect agency’s experience, clout, and prevailing market conditions) • Client approval to the media plan/ budget release, permits Media buyers to proceed with negotiations/ commitment

  36. The Canadian Upfront • Canadian Broadcasters and agencies attend the US ‘Up Front’ to prepare for selection of US programs for the upcoming Canadian Fall TV season • The ‘up fronts’ allow the Canadian contingent the opportunity to view the new programs and gage audience reaction • Canadian broadcasters participate in aggressive bidding for selected programs and complete negotiations Los Angeles • Each Canadian broadcaster hosts a Fall presentation event in early June

  37. The Canadian Upfront • At the same time, agencies are preparing for negotiations by assessing spending volumes and program preferences • Broadcaster/agency agreements are a combination of agency and client-specific commitments • Agreement base options – CPM (network) or CPRP (specific market)

  38. Additional TV Buying Details • Client buying can occur at any point in the year. Campaigns can be purchased : • Short term, long term • Seasonally – Fall, Winter, Spring, Summer • National, regional, local • Historically the highest demand for commercial time occurs in the fall of each year, followed by spring, with the lowest demand in summer and Jan/Feb • Market pricing typically reflective of supply and demand • Early marketplace entry is critical to securing the best inventory at lowest rates

  39. The National Buy Quebec City Edmonton Montreal Vancouver Halifax Calgary Ottawa Winnipeg Sudbury Thunder Bay Toronto Kitchener/London

  40. The National Buy • Assumed objective – to deliver a consistent weight in all planned markets • Upon client approval, all national networks operating in Canada are contacted for briefing and invitation to submit proposal • Objectives will define mix of conventional and specialty • Again, share of tuning will guide share of budget

  41. The National Buy • Of note, each program is evaluated for rating delivery in each DMA separately • Likely that the same program will deliver a different rating in each market • Completed network buy will deliver variable weight levels by DMA • Buyer will purchase inventory from regional and then local inventory in order to deliver overall weight consistent with established objective

  42. The Regional Buy Ottawa Thunder Bay Sudbury Toronto

  43. The Regional Buy – Ontario example • The regional buy (usually defined by province) comprises a number of markets – buy objectives by DMA can be consistent or variable. • Upon client approval, all regional networks operating in Ontario are contacted for briefing and invitation to submit proposal • Again, share of tuning will guide share of budget

  44. The Regional Buy – Ontario example • Of note, each program is evaluated for rating delivery in each DMA separately • Likely that the same program will deliver a different rating in each market • Last buy layer in regional buy – local inventory to deliver overall weight consistent with established objectives

  45. The Local Buy Toronto

  46. The Local Buy – Toronto example • Upon client approval, all stations operating in Toronto are contacted for briefing and invitation to submit proposal • Generally share of tuning will guide share of budget • Completed buy will comprise multiple stations that together deliver GRP, daypart, and budget objectives established for the market

  47. Accountability to advertisers • Pre-buy reports provide an overview of completed buys: • Estimated • GRP and audience deliveries • Review of station selection and share • Program & added-value highlights • Spending details • Post-buy reportsprovide an analysis of actual audience deliveries • GRP and audience deliveries by station on a local market and national level • Compensation details for station/network under-deliveries • Lessons learned/ indicated action

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