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Ottawa, 27 May 2010
To: Video-on-demand licensees
Re: Partial suspension of prohibitions on advertising
In Regulatory Policy 2010-190, the Commission determined that it will allow video-on-demand (VOD) licensees, by condition of licence, to advertise in programming only if it is acquired directly from licensed Canadian broadcasters.
The Commission also stated that it will generally prohibit a VOD licensee from advertising in programming obtained from a related Canadian programming undertaking, subject to the following exception. A VOD licensee will be authorised to advertise in programming obtained from a related programming undertaking that has also acquired the linear rights to the programming.
Finally, the Commission stated that it will not require VOD licensees to strip out commercial messages where those messages are already included in a program previously aired in Canada on a non-Canadian service authorized for distribution in Canada.
It is noted that some VOD licensees have filed applications, while others need to apply for a condition of licence, to take advantage of the advertising opportunities noted above since they are prohibited from advertising by their existing conditions of licence. Such conditions of licence require them to comply with the advertising prohibition set out in Section 3(2)(d) of the Pay Regulations, 1990. However, it has been decided that the application of the existing VOD conditions of licence will be suspended, pending receipt and Commission consideration of applications for amendment to such conditions of licence from VOD licensees. Applications should be sent to the Commission within one month from today’s date. Therefore, VOD licensees will be permitted to advertise in programming immediately provided they adhere to the following conditions, as set out in Regulatory Policy 2010-190:
The licensee shall not include as part of its video-on-demand offering any program containing a commercial message except where:
(a) the commercial message
(i) is included in a program that is obtained from a Canadian programming
undertaking that is not a related Canadian programming undertaking;
(ii) is included in a program that is obtained from a related licensed Canadian programming undertaking that has acquired the right to broadcast the program on its linear Canadian programming service(s); or
(iii) was already included in a program previously broadcast in Canada by a non-Canadian programming service authorized for distribution in Canada;
(b) the program's inclusion as part of the video-on-demand offering is in accordance with the terms of a written agreement entered into with the operator of the programming service that broadcast the program; and
(c) the licensee adheres to the Canadian Association of Broadcasters' Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
The term “related Canadian programming undertaking” means a Canadian programming undertaking of which the licensee or an affiliate, or both, controls more than 10% of the total shares issued and outstanding
Moreover, VOD licensees will be expected to comply with other restrictions that generally apply to advertising authorizations, notably the following:
A. The commercial message may be offered, if it included in community programming in accordance with subsections 27(1)(g), (h), and (i) of the Broadcasting Distribution Regulations (when applicable);
B. The licensee may broadcast a commercial message directly or indirectly advertising an alcoholic beverage only if
(a) the sponsor is not prohibited from advertising the alcoholic beverage by the laws of the province in which the commercial message is broadcast;
(b) the commercial message is not designed to promote the general consumption of alcoholic beverages; and
(c) the commercial message complies with the Code for Broadcast Advertising of Alcoholic Beverages, published by the Commission on August 1, 1996.
Paragraph (b) does not apply so as to prohibit industry, public service or brand preference advertising.
It is expected that applications will seek advertising permission, in accordance with both the conditions noted above, and the list of other restrictions that generally apply to advertising authorizations. For those VOD licensees who have already filed applications, it is expected that they will amend such applications in order to request the conditions and restrictions noted above. Should any party wish different conditions or restrictions than those noted above, such party will be expected to justify a departure from those set out above, with specific reasons.
Sincerely,
ORIGINAL SIGNED BY
Scott Hutton
Executive Director, Broadcasting
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