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Will commercials airing on U.S. border stations be seen by a Canadian audience?
The short answer: Nope.
The fact that Canadian audiences do enjoy the majority of popular U.S. shows is one thing, but the way audiences receive the signal is another. In Canada, U.S. programs that air on American stations have their signal temporarily substituted by a distributor with a Canadian one when a domestic station is airing that program at the same time, so that Canadian audiences see the Canadian commercials.
Canadian audiences watch the vast majority of their programming on our own stations and networks. Yes, we do watch the big American networks, but these stations only attract a small fraction of the total audience. For example, CBS affiliated stations garnered just 2.1% of the total hours viewed by Canadians in the fall of 2010, according to BBM Canada. ABC, NBC, Fox earned even less. In fact, Canadians in general are watching more and more Canadian TV than ever - a growing trend.
Reasons for signal substitution
The Canadian Radio-television and Telecommunications Commission (CRTC) ensures signal substitution for a couple of reasons. One is to protect the rights of broadcasters. When broadcasters purchase programs from American and Canadian producers or networks, they are paying for exclusive broadcast rights in certain markets. Signal substitution protects these rights.
Another reason is to enable TV stations to attract advertising dollars. TV services earn most of their revenue from advertising. The advertising rates they can charge depend on the size of their audiences. Without substitution audiences would be split across several stations and reduce the size of the audience for each station. With smaller audiences, TV stations couldn't charge as much for advertising. Signal substitution ensures local stations keep their local audiences and the corresponding advertising dollars.
Sources: CRTC, BBM Canada
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