ARCHIVED - Decision CRTC 2001-153

Decision CRTC 2001-153

Ottawa, 28 February 2001

Showcase Television Inc.
Across Canada 1999-1847-1, 2000-1375-6

Applications processed by Public Notices
CRTC 2000-69 dated 26 May 2000 and
2000-137 dated 28 September 2000

Showcase

The licence for the specialty television service "Showcase" is renewed for a full term. A proposal to delete the prohibition on the use of programming produced by Showcase affiliates is denied.

The Commission renews the broadcasting licence issued to Showcase Television Inc. (Showcase TV) for the national English-language specialty television service known as "Showcase" from 1 March 2001 to 31 August 2007, subject to the conditions specified in this decision and in the licence to be issued.

The Commission notes that, during the current licence term, Showcase TV has complied with all conditions of its licence.

Acquisition of programming from affiliates

Showcase TV is controlled by Alliance Atlantis Communications Inc. (Alliance Atlantis) which holds, through its wholly owned subsidiaries Atlantis Communications Inc. and Atlantis Broadcasting Inc., 100% of the voting shares of Showcase TV. Alliance Atlantis is a leading Canadian and international producer, distributor and broadcaster of filmed entertainment. In addition to Showcase, it holds ownership interests in a number of Canadian English-language specialty television services, including Life Network, HGTV Canada, Food Network Canada and History Television. In partnership with Astral Communications Inc., Alliance Atlantis also has an ownership position in two recently-approved French-language specialty services (Séries + and Historia, formerly Canal Fiction and Canal Histoire).

When Showcase was originally licensed, the Commission noted, ".the applicant made a commitment that Showcase will not air any first-run broadcasts of programs produced by a Showcase shareholder." (Decision CRTC 94-280).

In response to that commitment, the Commission imposed a condition of licence requiring that the licensee expend, over the licence term, not less than $3.75 million on licence fees to independent producers who are not Showcase shareholders for the production of 15 half-hour original Canadian drama programs. That condition was later amended, to remove the reference to half-hour programs (Decision CRTC 97-289).

As part of this application, the licensee proposed to delete the commitment noted above. In support of its proposal, Showcase TV argued that the original commitment is no longer necessary, and not appropriate, in view of the ongoing convergence of broadcasting, new media and production companies. As a second-window broadcaster, Showcase TV anticipates that it will become increasingly difficult for it to secure the broadcast rights for programming.

Showcase TV offered to increase from $3.75 million to $12 million the amount it would spend on programs from independent producers. It stated that, over the licence term, a minimum of 50 hours of independently produced programs would result. The licensee indicated that, should the Commission decide to deny the request to air first-run programs produced by a shareholder, Showcase would nonetheless be willing to commit to the higher level of expenditure for programs from independent producers.

A number of interventions were submitted expressing opposition to or concern with the proposal to air first-run programs produced by an affiliate.

The Alberta Motion Picture Industries Association expressed general concern with the ongoing vertical integration of broadcasters and producers, and suggested that the Commission should adopt stringent policies to ensure diversity in Canadian programming.

CHUM Limited noted that Showcase originally considered that one of its mandates was to provide a source of funding for non-affiliated producers. CHUM's intervention expressed the opinion that the prohibition on airing first-run drama programs produced by Showcase shareholders or affiliates remains appropriate.

In its intervention, Astral Media noted that the Commission licensed Showcase specifically as a second-window drama channel, and an unrestricted ability to acquire first-run programming would undercut the policy objective of ensuring diversity in sources of expression from the independent production sector. It further noted that, if Showcase were allowed to acquire first-run programming, the ability of Astral to acquire the same programming for its services could be undermined.

While not objecting in principle to Showcase's use of programming produced by a shareholder or an affiliate, Global Communications Inc. suggested that the service should be bound by a condition of licence similar to that imposed on other specialty services that have direct ownership relationships with producers.

In its intervention, the Canadian Film and Television Production Association (CFTPA) expressed its concern that Showcase's proposal to air productions from affiliates will further restrict access to Showcase by independent producers. It encouraged the Commission to ensure that Showcase fulfils its mandate as a second-window exhibitor.

In response to the intervention, the licensee stated that, without the requested change, it would be unable to ensure an adequate supply of high-quality Canadian drama over the new licence term. It maintained that its proven commitment to the independent production industry will extend into the future.

The Commission has traditionally considered that participation by program producers in the ownership structure of programming undertakings raises concerns related to program supply and the potential for "gate-keeping" vis-à-vis other producers. The Commission has adopted a range of measures in the case of producer-affiliated programming services, depending on individual circumstances.

In view of the nature of service that requires Showcase to be primarily a second-window exhibitor, the Commission denies the request to be relieved of the commitment not to air any first-run broadcasts of programs produced by a Showcase shareholder.

The licensee's increased commitment to expenditures for independent production is set out as a condition of licence in the appendix to this decision.

Other matters

Cultural diversity

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

The Commission encourages the licensee to consider employment equity issues in its hiring practices and in all other aspects of its management of human resources (Public Notice CRTC 1992-59). The Commission notes the licensee's statement that it will develop a comprehensive Employment Equity plan, based on the practices adopted and enforced by Alliance Atlantis.

Script and program development

The Commission notes the licensee's commitment to spend $100,000 in each year of the new licence term, on script and program development.

Service to the hearing-impaired

As part of its application, Showcase stated its expectation that it would have sufficient resources during the new licence term to caption 90% of its programming.

The Commission notes the licensee's commitment, and requires the licensee to caption 90% of all programming during the broadcast day, by the end of the licence term. The Commission expects that the increase to the 90% level will be achieved in an incremental manner over the entire licence term.

Revised program categories

Following additions and alterations to program category definitions set out in Public Notice CRTC 1999-205, the licensee filed an application to amend its condition of licence 1(a). The Commission has approved the changes as set out in Public Notice CRTC 2000-137. These changes do not reflect any significant alteration to Showcase's existing nature of service.

Interventions

In addition to the interventions discussed above, the Commission acknowledges and has considered all of the interventions submitted in support of this application.

Related CRTC documents

• Decision 2000-158 - Six-month administrative renewal for Showcase

• Decision 99-506 - Flexibility to broadcast infomercials for specialty services

• Decision 99-106 - Alliance Atlantis Communications Inc. granted authority for changes of ownership and control of Showcase Television Inc., among others

• Decision 97-289 - Licence amendments for Showcase

• Decision 96-281 - Licence amendment for Showcase

• Decision 94-280 - "Showcase" - Approved

• Public Notice 1999-205 - Definitions for new types of priority programs; revisions to the definitions of television content categories; definitions of Canadian dramatic programs that will qualify for time credits towards priority programming requirements.

• Public Notice 1992-59 - Implementation of an employment equity policy

Secretary General

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

Appendix to Decision CRTC 2001-153

Conditions of licence for Showcase

1.(a) A minimum of 95% of all programming broadcast by Showcase shall be drawn from the following categories, as set out in Schedule I to the Specialty Services Regulations, 1990:

Category 7 - Drama and comedy,

Category 12 - Interstitials,

Category 13 - Public service announcements,

Category 14 - Infomercials, promotional and corporate videos, and

Category 15 - Filler programming.

(b) 90% of the programming broadcast by Showcase shall have been produced outside the United States.

2.(a) The licensee shall devote not less than 60% of the broadcast year and not less than 60% of the evening broadcast period to the distribution of Canadian programs.

(b) Over the broadcast year, the licensee shall devote not less than 100% of the broadcast period between 7 p.m. and 10 p.m. to the distribution of Canadian programs.

3. In accordance with the Commission's position on Canadian programming expenditures as set out in Public Notices CRTC 1992-28, 1993-93 and 1993-174, except as amended below:

(a) In each broadcast year, the licensee shall expend on Canadian programs not less than 42% of the previous broadcast year's gross revenues;

(b) In each broadcast year excluding the final year, the licensee may expend an amount on Canadian programs that is up to five percent (5%) less than the minimum required expenditure for that year set out in or calculated in accordance with this condition; in such case, the licensee shall expend in the next year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's underexpenditure;

(c) In each broadcast year of the licence term, where the licensee expends an amount on Canadian programs that is greater than the minimum required expenditure for that year set out in or calculated in accordance with this condition, the licensee may deduct:

(i) from the minimum required expenditure for the next year of the licence term, an amount not exceeding the amount of the previous year's overexpenditure; and

(ii) from the minimum required expenditure for any subsequent year of the licence term, an amount not exceeding the difference between the overexpenditure and any amount deducted under paragraph (i) above.

(d) Notwithstanding paragraphs (b) and (c) above, during the licence term, the licensee shall expend on Canadian programs, at a minimum, the total of the minimum required expenditures set out in or calculated in accordance with the licensee's condition of licence.

4. The licensee shall expend, over the licence term, no less than $12 million on licence fees to independent producers for the production of a minimum of 50 hours of original Canadian drama programs.

5. (a) Subject to subsection (b) and (d), the licensee shall not distribute more than twelve minutes of advertising material during each clock hour.

(b) The licensee shall not distribute any paid advertising material other than paid national advertising.

(c) Where a program occupies time in two or more consecutive clock hours, the licensee may exceed the maximum number of minutes of advertising material allowed in those clock hours if the average number of minutes of advertising material in the clock hours occupied by the program does not exceed the maximum number of minutes that would otherwise be allowed per clock hour.

(d) In addition to the twelve minutes of advertising material referred to in subsection (a), the licensee may broadcast partisan political advertising during an election period.

6. The licensee shall charge each exhibitor of this service a maximum wholesale rate of $0.32 per subscriber per month where the service is carried as part of the basic service in Anglophone markets, and $0.11 per subscriber per month for exhibition on the basic service in Francophone markets, as defined in subsection 52(1) of the Broadcasting Distribution Regulations.

7. 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.

8. The licensee shall adhere to the provisions of the Broadcast code for advertising to children, published by the CAB, as amended from time to time and approved by the Commission.

9. 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.

For the purpose of these conditions, the terms "broadcast day", "broadcast month", "broadcast year," "clock hour" and "evening broadcast period" shall have the same meanings as those set out in the Television Broadcasting Regulations, 1987; and "paid national advertising" shall mean advertising that is purchased at a national rate and receives national distribution on the service.