ARCHIVED - Public Notice CRTC 84-1

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Public Notice

Ottawa, 5 January 1984
Public Notice CRTC 1984-1
In July and August of 1983, the Commission received applications from general interest pay television network licensees, on behalf of their cable television affiliates, for authority to exhibit unscrambled previews of their services during a three-day fall promotional campaign. The Commission approved these applications on a one-time experimental basis.
Subsequently, on 30 September 1983, the Commission issued Public Notice CRTC 1983-228 inviting comments from the public related to the issues involved in, and the implications of, the occasional distribution of unscrambled previews.
The Commission received 26 submissions in response to this notice from all sectors of the broadcasting industry, including licensees of television, cable and pay television undertakings. As well, the Consumers' Association of Canada, Media Watch of Prince Edward Island and members of the general public submitted their views on the subject.
Some suggested that unscrambled previews would have no demonstrable negative effect on the audiences or revenues of conventional broadcasters. No evidence was provided to refute this view. Others claimed that the distribution of unscrambled pay television programming was contrary to the premise that pay television services should he discretionary, and that previews could infringe on the broadcast rights of conventional broadcasters to certain programs. Concerns were also raised with respect to the unscrambled preview of adult movies.
Certain comments proposed that the Commission set limits as to the timing, frequency, duration and methods for the distribution of pay television previews. Others expressed the view that the marketplace would effectively limit the number of previews due to the high costs borne by the pay networks for the unscrambled exhibition of their programming, and the disincentive such previews constitute for potential subscribers if scheduled too frequently. There was universal agreement, however, that pay television previews should not he scheduled during the major national rating periods of off-air broadcasters.
Although the question of unscrambled previews elicited a wide range of views, the predominant opinion among those in favour of previews was that the most effective means to market pay television was to allow viewers to sample the product. They suggested that previews should be made available to the widest possible audience.
On the basis of the submissions received and the arguments presented, and taking into account the successful experiences of Superchannel and First Choice with their previews during 1983, the Commission considers that periodic unscrambled distribution of authorized pay television services is a valuable tool in the marketing of pay television and offers the public an effective means of sampling pay television without incurring expense. Further, the Commission is satisfied that there is no evidence at this time that television broadcasters would be harmed by previews.
Accordingly, the Commission authorizes the cable distribution of pay television previews for a period of one year. This will give the Commission the opportunity to examine the results of the previews conducted during that interim period to determine whether or not their authorization should be continued and, if so, under what terms and conditions.
Such authorization is subject to the condition that the previews not be exhibited by cable television licensees during major national broadcasting rating periods such as those conducted by BBM and Nielsen. In addition, the Commission requires that programming distributed during these preview periods consist only of films and programs that are part of the pay television services actually offered to subscribers. The scheduling and content of such programming must also meet the same standards that currently apply to conventional broadcasters.
Unscrambled previews may be distributed by cable operators on the channel normally used to distribute the pay television service or on any other special programming or currently unused channel, provided that such previews do not cause the removal of any Canadian services that are presently being offered.
The Commission is satisfied that this approach will permit both cable and pay television network licensees flexibility in structuring and scheduling preview periods in order to maximize their potential marketing value.
J.G. Patenaude
Secretary General

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