By: Gregory Taylor
March 9, 2009
Gambling and pornography are not the only industries making money on the internet – it appears the world of sports, in particular hockey, is achieving what has thus far eluded most other broadcasters: a way to monetize the new media world.
The sixth of eight scheduled days of the CRTC hearings into new media broadcasting included revealing submissions by the Association of Canadian Advertisers and an afternoon panel of sports broadcaster The Score paired with the National Hockey League.
The ACA’s Bob Reaume identified advertising as “a primary resource” and “the essential economic underpinning to the (Canadian broadcasting) system”. The ACA supported the idea that professionally-produced content on the web is indeed broadcasting and added its support to extending the 1999 regulatory exemption order. A common refrain at these hearings has been that advertising money on-line is a trickle of the income generated in traditional broadcasting. The ACA recognized that video advertising is currently less than 1% of on-line advertising spending, much lower than other countries, but believes that is about to change.
The National Commercial Agreement, reached with actors unions and other creative groups at the end of 2008, establishes a working agreement for on-line commercials which the ACA believes will result in a blossoming of professional quality video commercials on Canadian websites. This may not be music to the ears to those annoyed by on-line advertising but will sound sweet to cash-starved content producers, and may have a profound affect for the future of Canadian new media. The difference may be apparent soon: in an exchange with Commissioner Stephen Simpson, Reaume stated “this is the year” for on-line video advertising production in Canada.
The Score and the National Hockey League were a rare tale of financial success in new media, in particular mobile media and internet. In its case to keep new media regulation-free, the Score (an independent yet profitable cable sports channel) noted 10% of its ad revenue is in new media, and the number is rising. The Score frequently emphasized the need to stop ISPs from being gatekeepers on the internet via preferential treatment for certain content providers. As their counsel Grant Buchanan observed “someone gets marginalized when someone gets prioritized”. The Score was told this was more appropriate for the CRTC Net Neutrality hearings planned for this coming summer.
NHL representative John Tortora echoed the hands-off position of the Score. He presented a healthy picture of the NHL’s on-line development, citing a 15% growth in web site traffic in the past year. The NHL uses the website to stream games not otherwise available and connect to various NHL team sites, including lucrative merchandising outlets. The NHL credited the lack of regulation as fostering “greater choice and efficiency” within the system.
Expect the call for laissez-faire to reach crescendo levels on Tuesday, March 10 when ISP providers Rogers, Shaw, Cogeco, and the Canadian Cable Alliance speak before the CRTC.