Susan Gordon, Business Reporter

English

With millions of dollars potentially at stake daily, Flow Communications says it is undeterred by its regulator's initial clamp down, and is getting ready to lay out a case for its plan to sell advertising on the cable channels it packages for sale in Jamaica.

But new developments at the weekend may have given fillip to the communications company's lobby efforts, following the announcement that Cabinet has given approval for the promulgation of legislation to clear the way for cable companies to sell advertising.

The Ministry of Information announced pending changes to the Broadcasting and Radio Re-Diffusion Act to expand the categories of cable licences - a change that will, among other things, create a new commercial window for 'independent programme providers'.

Regulatory amendments

"The recognition of independent programme providers as licensees will facilitate the introduction of local advertising on certain cable channels originating in Jamaica, once the regulatory amendments are in place," said the Ministry of Information.

"Objections which had been previously raised by the media about this amendment have largely been overtaken by changes in the media landscape which have seen more broadcasters expanding their business operations to also become independent programme providers."

It was not immediately clear how this impacts Flow's plans but general manager Michelle English had advised Wednesday Business, even before the weekend announcement that the company would be arguing to the Broadcasting Commission that ad insertion was not a negative development.

"We think there's opportunity to leverage local programming," said English.

"We are trying to present a case to make sense not just as a revenue generating avenue for a private company."

She however, did not give details of the proposal.

Flow, under agreements with programmers of some of the cable channels it sells, has a two-minute window per hour, per day - or 48 minutes per day - to insert advertisements on more than 30 of the cable stations, according to marketing manager Jean McPherson.

According to Wednesday Business calculations, based on the most conservative TV advertising rates in the Jamaican market, that window could earn Flow ad revenues of $25 million per day, or about $9 billion per year.

The ads would only be viewed by cable subscribers in Flow's domestic market.

Flow on the weekend of May 31 began testing the system, with inserted advertisements of Singer, National Commercial Bank and its own network.

The ads were seen on the Lifetime Movie Network, MTV, ESPN, Nickelodeon, Cartoon Network, TNT, Food and Speed channels.

Future plans

McPherson said the tests, which were confined to the one weekend, were done to facilitate its future plans to advertise once the timing was right, and the Broadcasting Commission had given the go-ahead.

"We have the ability to plug in advertisements and we were doing some testing," she said.

"They (programmers) send cue tones which is a special signal that triggers our signal to insert the ad. Once you have that special agreement with the special network you can advertise."

The Broadcasting Commission issued a press release days later saying it had instructed Flow to cease the ad substitutions in order.

According to English, Flow acted on the assumption that a window to such tests had been opened under the former PNP administration by then information minister Burchell Whiteman, who on October 12, 2005 had announced a suspension of enforcement action against STV licencees who breached the rule relating to advertising on cable.

"We were coming from the ministerial statement issued some years ago," she said.

Regulation 17 (1)(c) of the broadcasting law which speaks to duties of licensee providing subscriber television service states that: "A licensee who operates subscriber television service shall not carry any local advertising other than advertisements transmitted on channels carrying national broadcasts."

Measure of protection

English said while she acknow-ledged that the intent of the legislation was to offer some measure of protection for national broadcasters such as CVM Television, Television Jamaica (TVJ) and Love Television, the ministers' statement was made with a view of developing other local cable programmers whose business model included selling advertisements.

"They don't want legislation inhibiting their independent programme providers and at that time it was about the local cable channels developing," she explained.

However, English said she was now satisfied that the order to cease advertising was not in relation to the local channels Flow carries on its network and that 'local' meant advertisements generated for the Jamaican market.

The Ministry of Information says Cabinet has approved the bill to amend the broadcasting law, which thereafter goes to Parliament for debate and passage into law.

susan.gordon@gleanerjm.com