Speech by Jean-Pierre Blais, Chairman, Canadian Radio-television and Telecommunications Commission

To the annual convention of the Association des producteurs de films et de télévision du Québec

Quebec City, Quebec
May 31, 2013

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Ladies and gentlemen,

I am very pleased to be attending the Association des producteurs de films et de télévision du Québec’s (APFTQ) conference. This is the first time I am meeting with you in my current role, but I have met a number of you in my “past lives.” I see this as an opportunity to reconnect—and especially to discuss issues that matter to all of us.

I would like to use this opportunity to share my opinions on the current state of the creative audiovisual industry and on our regulatory approach. I also want to discuss the relationship we want to develop with you and to share a few ideas about the business opportunities available to film and television producers in the expanding digital universe.

The CRTC’s approach to creation

I would like to begin with a few quotes from The Little Prince. As you probably know, The Little Prince, published in 1943, is a philosophical and allegorical novella by Antoine de Saint-Exupéry. It tells the story of a meeting between a pilot, whose plane has crashed in the middle of the Sahara desert, and a young boy, who is travelling from planet to planet in search of friends.

When the narrator first meets the Little Prince, the boy says, "If you please—draw me a sheep!" After several disappointing attempts, the narrator finally drew the Little Prince a box and explained his drawing as follows: "This is only his box. The sheep you asked for is inside."

This story perfectly illustrates our relationship. The CRTC is not involved in creation. That is your area of expertise. We are in the business of providing frameworks and containers. In other words, we foster an environment that encourages creators to take risks and work together on developing creative products and innovative services on all platforms.

Historically, the CRTC’s role has been to manage scarcity—including antenna systems and frequencies. That used to be relatively simple in an analog and linear world. The challenge was then to ensure that Canadian content could be broadcast to an audience that was, to a certain extent, captive.

That world has changed. Where once there was scarcity, there is now such abundance that the challenge is quite the opposite: How can we ensure that Canadian content—your content—can be seen and heard in the digital cacophony?

My take on that issue is simple. I am not a protectionist; I am a promotionist.

Our approach is similar to the spirit of the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expression. That convention gives every country a space for promoting its culture, but in an international environment. In passing, I want to stress that the procedure for Canada’s acceptance of that convention, and the consultations on the issue, were part of an effective and successful partnership between the Government of Quebec and the Government of Canada.

Our work at the CRTC today consists in ensuring that you have the ideal conditions for creating captivating programs and adopting new business models. Our challenge is to use all the investments made by the production industry stakeholders to fuel creativity and produce content of global interest, in all forms and formats.

To accomplish that, we are investing in regulatory approaches that are: (1) modern; (2) adaptable to technological realities; (3) prioritize rewarding excellence and innovation, and (4) are always in the interest of Canadians. Our course of action sometimes requires adopting regulations, but we are increasingly exploring alternatives to regulations, such as adopting codes and creating partnerships with industry. Sometimes we must rely on the absence of regulation to achieve the objectives set out in the Broadcasting Act.

I note that the CRTC is currently sponsoring a working group in which the APFTQ participates, whose goal is to promote our films, programs and digital media.

Essentially, whenever possible, we rely on market forces and competition, but we do not shrink back when those forces cannot, by themselves, achieve the Broadcasting Act’s objectives.

Market opportunities

It is fair to say that your sector has a solid foundation upon which to build its future.

According to APFTQ’s and CMPA’s publication, Profile 2012: An Economic Report on the Screen-based Production Industry in Canada, Canadian production in 2011-12 hit a 10-year high. It expanded by 5.6% to almost $5.9 billion. In Quebec’s case, that represents $1.35 billion in economic activity.

Moreover, those productions are drawing increasingly large audiences. In 2011-12, the Canada Media Fund backed 25 programs that drew average audiences of over 1 million. Fifteen of those programs were in French.

A successful system

In this context, producers who have taken risks and seized opportunities to create noteworthy television programming have increased their viewership, both in Canada and abroad.

Quebec’s situation when it comes to this is exceptional. Quebec has built itself a rich and diverse star system, which is supported through the print media and popular magazines, but, first and foremost, through the amazing quality of content produced here. Quebecers crave the content you produce and want to see their favourite stars on both the small and big screens…and on emerging screens.

Gala Artis recently highlighted once again how much Quebecers care about their small-screen artists. The viewers chose to honour artists from all networks, by recognizing the amazing success of programs such as O’, Unité 9, and 19-2. In addition, Les Bobos was named the “best comedy on television” at the 15th annual Gala des Olivier.

The Little Prince said the following about his planet: “Where I live, everything is so small! […] Straight ahead of him, nobody can go very far…” That is why your success also depends on the creation of Canadian “concepts” that will sell abroad.

Of course, I am thinking of Un gars – une fille, which has been adapted in some 20 countries around the world, and which has been seen practically everywhere. I am also thinking of Les Invincibles and Les Bougon, both of which were developed by the CBC and then adapted for the French public. It was recently announced that Un air de famille will follow the same path.

I also want to point out that LOL :-), Comment c’est fait and Le sexe autour du monde have had solid international runs and are showcasing Quebec and Canadian talent and know-how abroad. That is a significant source of revenue for the original producers, an opportunity to develop know-how, and a showcase for our product abroad.

I also want to talk about the opposite situation, where producers have successfully adapted the best foreign concepts here by infusing them with a decidedly Quebec flavour. I am talking about programs such as L’amour est dans le pré, Un souper presque parfait, La voix and, of course, Tout le monde en parle.

Of course, the field of so-called media creation is much broader. I would like our actions in television to spill over onto all types of production, including films. I applaud the massive success the industry has achieved with titles such as Incendies, Monsieur Lazhar, Starbuck and, of course, the works by the industry’s major creators like Denys Arcand.

And the next generation has answered the call. I am thinking of Xavier Dolan and Yan England. In addition, last week, two Quebec films were screened at the Cannes Film Festival: Chloé Robichaud’s Sarah préfère la course and Sébastien Pilote’s Le démantèlement.

It is said that a cornerstone of competition is being first on the market. Quebec producers have been among the first to position themselves in the Internet television world. That era was ushered by Têtes à claques, but since 2006, numerous titles have appeared, including En audition avec Simon and the content of Lib tv. The Quebec brand is now well-established in that market.

Even The Little Prince, 70 years after its creation, has an animated series and a website, www.lepetitprince.com.

The renewal of the CBC’s licenses

It was with that in mind that the CRTC renewed the licences for the Canadian Broadcasting Corporation’s (CBC) television services. That is to say, with an eye on both the present and the future.

We adopted the following approach: We have established minimum requirements for programming that is at the heart of the CBC’s public-service mission. We set a floor for programs of national interest—dramas, comedies, documentaries, variety and musical programs, and galas. We have also established a floor for children’s programs, and for regional shows, especially those aimed at francophones across Canada. It’s important to keep in mind that these floors are not ceilings!

However, we expect the CBC to exceed those floors.

That approach takes two realities into account. The CBC’s budget, in constant dollars, is now roughly equivalent to what it was in 2002. All things being equal, the combined effects of government appropriations and inflation will make the CBC’s budget for 2018—still in constant dollars—about 20% lower than its 2002 budget.

Our decision also recognizes that factors other than regulations drive CBC to broadcast unifying and high-quality Canadian programming: the Canada Media Fund’s approach based on audience success, federal and provincial tax credits, and the need to attract audiences in order to maintain advertising revenue.

The Little Prince teaches us that “One must require from each one the duty which each one can perform.”

Toward digital cacophony

Although recent successes are certainly a solid base going forward, considerable challenges will arise in the near future.

Today, very few households do not have a high-speed Internet connection. Almost all Canadians have access to advanced wireless networks that support smartphones and other devices that connect to the Internet. Consumers now have unprecedented access to content and services they can access anytime and anywhere, using the device of their choosing.

This dramatic progress is continuing, still with technology at its core. It keeps transforming our personal relationships, work, daily habits, and even the way we speak. And it is showing no signs of stopping.

The outcome is the gradual disappearance of differences among platforms, in a world dominated by the Internet.

That new business environment has not even hit francophones markets in Quebec fully yet. At this time, only 28% of francophones watch their programs on both traditional television and the Internet. Only 2% of that same audience watch television exclusively on the Internet. These trends have progressed much more quickly in Canada’s anglophone markets.

However, it should be noted that, even here, people are quickly adapting to watching television on the Internet. That shift has been a growing reality in Quebec and is only gaining ground. You do not have much time left to prepare.

Adapting to a digital world

Saint-Exupéry, in The Little Prince, notes with extraordinary foresight that, “All grown-ups were children first (but few remember it),” and that, “Grown-ups never understand anything by themselves, and it is tiresome for children to be always and forever explaining things to them…”

Those observations nicely summarize the situation “early adopters” find themselves in. Early adopters are those technology enthusiasts—probably your teens—who are the first to take advantage of the opportunities provided by technological advancements and who integrate them into the general population.

As you probably know, Netflix just released 15 new episodes of “Arrested Development” online—simultaneously. The BBC recently announced that about 40 hours of programming would be streamed on iPlayer before being broadcast on television. Internet television platforms such as TOU.TV, Illico.web and others are also well-adapted to early adopters’ expectations.

As those examples show, experimentation—with all the associated risks—is essential to the creation of tomorrow’s business opportunities. Naturally, our early adopters are currently the ones using those new formats. But that is an important group. They are the ones who are pointing the way for other consumers.

What will be the impact of those developments on the creative approach and production? How can we adapt our product to that environment in order to reach new audiences? How can we help Canadian production businesses grow and compete with the world’s best companies?

The challenge will consist in using Canadians’ past and current investments in the production industry to fuel innovation, create more jobs and produce world-class stories—in a variety of forms and formats. Production costs are on the rise, but, at the same time, digital platforms provide opportunities we are just beginning to explore. Moreover, there are numerous partnership opportunities with stakeholders who are currently on the fringes of the broadcasting system as we know it. Montreal is one of the top video game hubs in the world.

Here is my question for you: “Where do you want to be in three years? In five years? What about in 10 years?”

Faced with a future that reveals so few of its secrets, we must all prepare. Still with a view to supporting the creation and production of quality content, the CRTC recently published its Three-Year Plan, which outlines our roadmap—and which may eventually affect yours.

I also want to draw attention to your association’s contribution to our public processes, including the renewal of the Canadian Broadcasting Corporation’s licences and the public hearings on the BCE/Astral transaction.

The activities covered in the plan include a licence renewal hearing for Québecor Média Inc. and Remstar Diffusion. We will also review the tangible benefits policy in order to streamline it and provide additional guidance.

Additionally, the CRTC will study the issue of basic telecommunications services offered to Canadians. The goal is to identify the services Canadians need to be able to fully participate in the digital economy. Should broadband be considered an essential service across the country? That will be one of the central questions at the heart of this proceeding.

As these changes have been taking place, consumers’ needs have also been evolving. That reality has a significant impact on programming services, and thereby, an impact on you, the producers, the creators. I recognize the fact that programming services will need time to adapt to an increasingly consumer-focused environment. However, they will still have to adapt quickly.

Trade agreements

It appears clear to me that the business environment must support production. The CRTC considers that close collaboration between independent producers and broadcasters helps all the parties benefit from the development of programming on all platforms. We have repeatedly stressed the importance of trade agreements for ensuring stability and clarity for all stakeholders, and for giving everyone an opportunity to do well—both on our domestic markets and internationally.

The regulatory framework for television is based on a balance between the following two factors: creating conditions for a healthy and profitable private sector on the one hand, and ensuring appropriate contributions to the social and cultural objectives of the Broadcasting Act on the other hand. Trade agreements directly contribute to those two factors and, above all, serve the interests of all Canadians.

We mustn’t forget that Parliament, in that piece of legislation, requires us to provide a public service essential to Canadians, first and foremost.

Conclusion

To succeed in the digital environment, the production and creative industries must move beyond individual projects. We have to produce content for the global audience and create international brands to rival the best in the world.

This is not something that can be achieved by way of a regulatory decree. It requires creativity and entrepreneurship.

You are the specialists in creative matters. I encourage you to use the current market of traditional media—which are still going strong, in spite of certain challenges—and the amazing opportunities provided by broadband and new platforms.

You have successfully built a solid industry in a small market—and in a competitive environment. I see no reason why your success should not grow in a market with infinitely more opportunities.

The CRTC will be there to promote your productions every step of the way. We are committed to providing you with the best and most solidly built container. However, to be successful, you absolutely must draw and put in it your best and most beautiful sheep!

 

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