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ARCHIVED - Decision CRTC 2000-140

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Decision CRTC 2000-140
Ottawa, 4 May 2000
YTV Canada, Inc.
Across Canada – 199812623
Application processed by
Public Notice CRTC 1999-177
dated 2 November 1999
Summary
The Commission renews the licence for YTV for a full term, but denies the rate increases proposed by the licensee. YTV’s conditions of licence with respect to exhibition of Canadian programming, exhibition of original Canadian programming from the independent production sector, and spending on Canadian programming will remain at the levels required during the previous licence term.
The Commission also approves an amendment to what is known as YTV’s "protagonist" condition of licence. This condition requires that all drama programming broadcast in certain time periods have a major character (protagonist) who is a child, youth under the age of 18, puppet, animated character, creature of the animal kingdom, comic book character, folk and/or super hero or classical or historical hero. This condition of licence will now apply to programming broadcast between 6:00 p.m. and 9 p.m., rather than from 6 p.m. to midnight, as was the case during the previous licence term.
The Commission, however, is imposing a condition of licence that all programming broadcast between 9 p.m. and midnight be of particular interest to youth (age 12-17) and their families. It also denies proposals by YTV related to the non-Canadian programming that it distributes during the evening.
Introduction

1.

The Commission renews the broadcasting licence to carry on the English-language specialty programming undertaking YTV from 1 June 2000 to 31 August 2006, subject to the conditions specified in the appendix to this decision, and in the licence to be issued.

2.

The Commission has no concerns with respect to YTV's compliance with its conditions of licence during the past licence term.

3.

As part of its application for licence renewal, YTV proposed several amendments to its conditions of licence. These proposed amendments, as well as the Commission’s determinations on them, are discussed in the following sections of this decision.
Proposed rate increases and improvements to Canadian programming

4.

The licensee proposed to increase the maximum wholesale rate per subscriber per month where YTV is carried as part of a distributor’s basic service. In anglophone markets, the licensee proposed to raise the monthly rate from $0.35 to $0.38 at the beginning of the new licence term, with an additional increase to $0.40 beginning in year four. In francophone markets, the applicant proposed a single increase from $0.09 to $0.10 at the beginning of the new licence term.

5.

The licensee indicated that, if the proposed rate increases were approved, it would make several improvements to its commitments related to Canadian programming. Specifically, YTV indicated that it would:
  • increase to 70% from 60% the minimum level of Canadian programming broadcast each year, between 6 p.m. and midnight,
  • increase the broadcast of original, first-run Canadian programs acquired from the independent production sector from a yearly minimum of 90 hours to 100 hours per year for the first three years of the licence term, with a further increase to 125 hours for each of the remaining four years, and
  • increase to 38% from 35% the percentage of annual gross revenues spent on acquiring and investing in Canadian programming.
Each of these commitments would be made a condition of YTV’s licence.

6.

Interveners supported the proposed increases to Canadian programming commitments. Indeed, some independent producers considered that YTV should implement the increased commitments to Canadian programming even if the proposed rate increases were denied. However, representatives of the cable industry opposed the proposed increases to YTV’s wholesale rates. The Canadian Cable Television Association (CCTA) considered that YTV was in a healthy financial position now and would enjoy further growth in the future, even if the rate increase proposals were not implemented. Vidéotron ltée supported the CCTA’s position, and considered that the Commission should maintain its policy of not granting an increase to a specialty service’s basic rate unless it is absolutely necessary.

7.

The Commission notes that YTV was profitable in each year of the current licence term. Its proposed rate increases were not based on economic need but rather as a way to finance improvements to the Canadian programming offered by the service. While acknowledging that the programming initiatives proposed by the licensee would be valuable, the Commission does not wish to take action that would increase the cost to consumers of an already successful service, particularly one such as YTV that is frequently carried on the basic service of distribution systems.

8.

The Commission therefore denies the proposed rate increases. The Commission notes YTV’s position that its revised commitments with respect to Canadian programming were based on the rate increases being approved. In this case, the Commission considers that it is appropriate to re-impose YTV’s current conditions of licence relating to exhibition of Canadian programming, exhibition of original Canadian programming from the independent production sector, and spending on Canadian programming. These conditions are set out in the appendix to this decision.
Other programming changes

9.

YTV proposed three other changes to its conditions of licence related to programming. More specifically, YTV proposed to:
  • amend its condition of licence requiring that all drama programming have a major character (protagonist) who is a child, youth under the age of 18 years, puppet, animated character, creature of the animal kingdom, comic book character, folk and/or super-hero or classical or historical hero. The licensee proposed that this requirement apply only to programming broadcast between 6:00 p.m. and 9 p.m., rather than to programming broadcast between 6 p.m. and midnight, as is currently the case. YTV further indicated that it would accept a condition of licence that would require it to provide programming of particular interest to youth (age 12-17) and their families during the period from 9 p.m. to midnight.
  • delete the condition of licence that limits to one hour, the amount of drama programming produced in the United States that may be broadcast between 6 p.m. and midnight.
delete the condition of licence requiring that a minimum of 35% of non-Canadian programming be devoted to programs from sources outside North America.

10.

The licensee considered that the proposed changes would enable YTV to provide programming that would appeal to those aged 12 to 17 in the time period between 9 p.m. and midnight. YTV was of the view that programming that conformed to the protagonist condition did not necessarily appeal to those in the 12-17 age group.

11.

The licensee explained: "It is well established through research that 14-17 year olds are 'aspirational' viewers – they like to watch entertainment about what comes next in their lives. We serve our audience of 2-13 year olds very well. We appeal to these children with strong Canadian, U.S. and international programming and our ratings indicate that this programming is well received. We would like to serve the older end of our mandated audience with as much commitment and variety of programming as we do our younger audience."

12.

Independent producers, Concerned Children’s Advertisers and The Alliance for Children and Television supported the creation of a time block oriented to persons between the ages of 12 and 17. They considered that such programming would make the YTV service more attractive, and could provide exciting opportunities for independent producers to develop new programming.

13.

With respect to the proposed changes relating to non-Canadian programming, YTV indicated that the increased Canadian content level it proposed for the evening broadcast period would, in and of itself, reduce the total percentage of non-Canadian programming that could be broadcast. It further considered that the condition of licence requiring YTV to broadcast foreign programming from sources outside North America was unduly restrictive. The licensee argued that the current condition of licence limits its flexibility to choose what it considers to be the best non-Canadian programming for its viewers.

14.

YTV’s proposals were opposed by CHUM Limited (CHUM). CHUM considered that YTV’s proposal that the protagonist condition no longer apply to programming broadcast between 9 p.m. and midnight, coupled with the proposed changes relating to non-Canadian programming, could change the orientation of the YTV service. Specifically, CHUM considered that the amendments, if approved, would allow YTV to broadcast almost any U.S. show including many popular drama programs that showcase young adults such as Friends or Angel, either in their first runs or as repeats. CHUM noted that such programs are a mainstay of many conventional stations, and was concerned that the broadcast of such programming could have a negative effect on conventional television broadcasters and change YTV into what would essentially amount to a youth-oriented conventional station.

15.

In reply to CHUM’s position, YTV noted that its intention was only to provide better service to the teen audience and that it had no intention of changing its programming niche. It pointed out that it fully intended to abide by the protagonist condition between 6 p.m. and 9 p.m. when younger children were watching.

16.

YTV’s proposal that the protagonist condition of licence apply only between 6 p.m. and 9 p.m. rather than from 6 p.m. to midnight is based on the view that youth are not necessarily attracted to programming with youth protagonists. The Commission notes the data provided by YTV to support its position, as well as the support for YTV’s proposal that was expressed by several interveners. Overall, the Commission considers that the modification to the protagonist condition suggested by YTV, coupled with the new condition requiring that programming between 9 p.m. and midnight be of particular interest to youth and their families, will create an opportunity for the development of innovative new programming for the youth market. It therefore approves the change to the protagonist condition as proposed by YTV and the addition of a new condition of licence requiring that programming broadcast between 9 p.m. and midnight be of particular interest to youth (age 12-17) and their families.

17.

The Commission has, however, decided to maintain the main thrust of the conditions of licence related to the non-Canadian programming broadcast by YTV. The wording has been slightly modified in order to provide the licensee with greater flexibility while achieving the objective that non-Canadian programming originate from a diversity of international sources. The text of the conditions is set out in the appendix to this decision.
Other matters
Cultural diversity

18.

In Public Notice CRTC 1999-97 entitled Building on success - A policy framework for Canadian television, the Commission expressed its confidence that the Canadian broadcasting system could "better reflect the presence of minority groups in Canadian society, and…portray them accurately and fairly." The Commission encourages the licensee to recognize, respect and actively promote diversity.
Employment equity

19.

The Commission notes that this licensee is subject to the Employment Equity Act that came into effect on 24 October 1996, and therefore files reports concerning employment equity with Human Resources Development Canada.
Service to the hearing impaired

20.

YTV has made a commitment to spend $200,000 in each year of the new licence term on closed captioning. It also predicted that 98% of all programming broadcast each year would be captioned. The Commission notes YTV’s substantial commitments and encourages the licensee to fulfil them. It requires YTV to caption 90% of all programming during the broadcast day by the end of the licence term.
Industry codes

21.

As proposed by the licensee, the Commission is applying conditions of licence requiring that YTV adhere to the Canadian Association of Broadcasters' (CAB) codes relating to gender portrayal, advertising to children and violence in television programming.
Interventions

22.

The Commission acknowledges the interventions submitted concerning this application and has considered all of them in reaching its decision.
Related CRTC documents

• Decision 2000-51: Administrative renewal

• Decision 99-130: Administrative renewal

• Decision 97-389: Licence amendment


• Decision 92-571: Last licence renewal
Secretary General

This decision is to be appended to the licence. It is available in alternative format upon request, and may also be viewed at the following Internet site: www.crtc.gc.ca 

 

Appendix to Decision CRTC 2000-140

Conditions of licence for YTV
1. In each broadcast year, a minimum of 30% of the programming distributed on YTV shall have as its target audience children up to 5 years of age, a minimum of 48% shall have as its target audience children and youth 6 to 17 years of age, and a maximum of 22% shall have as its target audience families.
2. The licensee shall devote 100% of the programs in the drama category distributed in the period between 6 p.m. and 9 p.m. in the evening broadcast period to programs with a major protagonist who is a child, youth under the age of 18 years, puppet, animated character, creature of the animal kingdom, comic book character, folk and/or super hero or classical or historical hero.
3. The licensee shall provide programming of particular interest to youth (age 12-17) and their families during the period from 9 p.m. to midnight.
4. Programming distributed by the licensee with families as the target audience shall not include programs from the following categories as set out in item 6 of Schedule I of the Speciality Service Regulations, 1990: news (category 1), analysis and interpretation (category 2a), sports (category 6); or music video clips (category 8b).
5. The licensee shall devote not more than 5% of the broadcast year to music video clips.
6. The licensee shall devote no more than an average of one hour per evening broadcast period over each broadcast week to drama programs produced in any one country other than Canada, excluding feature films and specials.
7. (1) The licensee shall devote no more than 10% of the broadcast year to feature films.

(2) In any seven-day period of Sunday to Saturday, in the evening broadcast period, the licensee shall distribute no more than two feature films.

8. The licensee shall devote not less than 60% of the broadcast year and 60% of the evening broadcast period to the distribution of Canadian programs.
9. During each year of the licence term, the programming distributed by the licensee shall include a minimum of 90 hours of original, first-run Canadian programs that have been acquired from the independent production sector by YTV, either through co-production or licensing arrangements.
For the purpose of this condition, an original, first-run program means a program that will be distributed for the first time by the licensee and has never before been distributed by the licensee of any other broadcasting undertaking.
10. In each broadcast year, the licensee shall devote a minimum of 35% of its non-Canadian programming to programs from non-North American sources.
11. (1) The licensee shall charge exhibitors of this service a maximum monthly wholesale rate per subscriber of $0.35 when the service is distributed as part of the basic service.
(2) Notwithstanding subsection (1), the licensee shall charge exhibitors of this service in Francophone markets a maximum monthly wholesale rate per subscriber of $0.09 when the service is distributed as part of the basic service.
(3) For the purpose of this condition, an exhibitor will be considered to be operating in a Francophone market where the population claiming the French language as its first language represents more than fifty percent of the total population of all cities, towns and municipalities encompassed in whole or in part by the licensed area of the exhibitor, according to the most recent population figures published by Statistics Canada.
12. (1) Subject to subsections (3) and (4), the licensee shall not distribute more than 12 minutes of advertising material during each clock hour.
(2) For the purpose of this condition, advertising material does not include a promotion for a Canadian program to be broadcast by the licensee notwithstanding that a sponsor is identified in the title of the program or is identified as a sponsor of that program, where the identification is limited to the name of the sponsor only and does not include a description or representation of the products or services or any attributes of the sponsor's products or services.
(3) In addition to the maximum of 12 minutes of advertising material referred to in subsection (1), the licensee may distribute, during each clock hour, a maximum of 30 seconds of additional advertising material that consists of unpaid public service announcements.
(4) The licensee shall not distribute commercial messages during any program that has as its target audience children up to 5 years of age.
(5) The licensee shall not distribute any advertising material other than national advertising.
13. In each broadcast year, the licensee shall incur expenses on a "cash" basis of not less than 35% of the annual gross revenues derived from the operation of this service in the preceding year for acquiring and investing in Canadian programming. Of this amount, not less than one-third must be allocated to the development, production and licensing of original, first-run Canadian programs as defined in condition of licence number 9.
14. The licensee shall adhere to the guidelines on gender portrayal set out in the Canadian Association of Broadcasters' (CAB) Sex-Role Portrayal Code for Television and Radio Programming, as amended from time to time and approved by the Commission.
15. The licensee shall adhere to the provisions of the CAB's Broadcast Code for Advertising to Children, as amended from time to time and approved by the Commission.
16. The licensee shall adhere to the guidelines on the depiction of violence in television programming set out in the CAB's Voluntary Code Regarding Violence in Television Programming, as amended from time to time and approved by the Commission.
Definitions
For the purposes of these conditions:

all time periods shall be reckoned according to the eastern time zone.

"analysis and interpretation (category 2a)" shall, up to and including 31 August 2000, have the same meaning as Analysis and Interpretation (category 2) under the Specialty Services Regulations, 1990.
"broadcast day" means the period of up to 18 consecutive hours, beginning each day not earlier than six o'clock in the morning and ending not later than one o'clock in the morning of the following day, as selected by the licensee.
"broadcast week" means the total number of hours devoted by the licensee to broadcasting during seven consecutive broadcast days beginning on Sunday.
"broadcast month" means the total number of hours devoted by the licensee to broadcasting during the aggregate of the broadcast days in a month.
"broadcast year" means the total number of hours devoted by the licensee to broadcasting during the aggregate of the broadcast months in a 12 month period, beginning on 1 September in any year.
"clock hour" means a period of 60 minutes beginning on each hour and ending immediately prior to the next hour.
"evening broadcast period" means the total time devoted to the broadcast of programs between six o’clock in the afternoon and midnight during the broadcast day.
"music video clips (category 8b)" shall, up to and including 31 August 2000, have the same meaning as Canadian music videos as set out in Section VIII of the appendix to Public Notice CRTC 1984-94 entitled Recognition for Canadian Programs.
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