ARCHIVED - Broadcasting Decision CRTC 2005-444

This page has been archived on the Web

Information identified as archived on the Web is for reference, research or recordkeeping purposes. Archived Decisions, Notices and Orders (DNOs) remain in effect except to the extent they are amended or reversed by the Commission, a court, or the government. The text of archived information has not been altered or updated after the date of archiving. Changes to DNOs are published as “dashes” to the original DNO number. Web pages that are archived on the Web are not subject to the Government of Canada Web Standards. As per the Communications Policy of the Government of Canada, you can request alternate formats by contacting us.

 

Broadcasting Decision CRTC 2005-444

  Ottawa, 31 August 2005
  Alliance Atlantis Broadcasting Inc. and Astral Broadcasting Group Inc., partners in a general partnership carrying on business as Historia & Séries+, s.e.n.c.
Across Canada
  Application 2004-1431-8
Public Hearing in the National Capital Region
16 May 2005
 

Séries+ - Licence renewal

  In this decision, the Commission renews the broadcasting licence for the specialty programming undertaking known as Séries+, from 1 September 2005 to 31 August 2012. The details regarding the licensee's specific proposals for the new licence term, and the conditions of licence and other obligations determined by the Commission are set out below.
 

The application

1.

The Commission received an application by Alliance Atlantis Broadcasting Inc. and Astral Broadcasting Group Inc., partners in a general partnership carrying on business as Historia & Séries+, s.e.n.c. (Alliance/Astral) to renew the broadcasting licence for the French-language specialty programming undertaking known as Séries+, which expires 31 August 2005.

2.

In its licence renewal application, the licensee proposed to operate this undertaking under the same terms, conditions and definitions as those in effect under the current licence, except for a proposed increase in its level of programs from U.S. sources from 20% to 30%.

3.

On the basis of its review of this licence renewal application and having considered the interveners' comments, the Commission renews the broadcasting licence for Séries+, from 1 September 2005 to 31 August 2012. The licence will be subject to the conditions specified therein and to the conditions set out in the appendix to this decision.
 

Interventions

4.

The Commission received interventions in support of Séries+'s licence renewal and comments from the Association des producteurs de films et de télévision du Québec (APFTQ), the Union des artistes (UDA) and the Société des auteurs de radio, television et cinéma (SARTEC).

5.

APFTQ indicated that it did not oppose the proposed amendment to the licensee's expectation that would allow Séries+ to acquire a maximum of 30% of its programming from U.S. sources, particularly given that the licensee is prepared to spend $3.5 million to pay for the dubbing in French in Canada of international series from sources other than U.S. sources. These international series would otherwise not be available in French.

6.

APFTQ suggested that Séries+ should increase its expenditures to acquire original French-language Canadian programming.

7.

The UDA and SARTEC proposed that the Commission increase the Canadian content requirements for Séries+ from 25% to 30% and then, incrementally, to 35%. These interveners noted that the 30% level is the same as the percentage of U.S. content requested, and submitted that the licensee could easily achieve this level, particularly by broadcasting English-language Canadian programming. The interveners also noted that the 25% level currently imposed on Séries+ is well below the 60% level imposed on Showcase, the English-language equivalent of Séries+.

8.

SARTEC proposed that the Commission clarify the condition of licence, which requires the licensee to spend a minimum of $900,000 each year to fund original French-language Canadian programming (categories 7(c) and 7(d)), excluding programming originally produced in English.

9.

SARTEC also submitted that, given the strong growth in Séries+'s profit before interest and tax (PBIT), the licensee's requirements with respect to Canadian programming expenditures should be increased by 6% over the licence term to a minimum of 28%.
 

Licensee's reply

10.

Alliance/Astral stated that Séries+ is faced with two problems in procuring drama programming from sources other than U.S. sources. On the one hand, there has been a significant drop in the production of drama series in key European countries, owing mainly to funding crises and the growing popularity of reality TV and in-studio variety shows. On the other hand, demand is down for international drama series from sources other than U.S. sources in the French market itself, reducing the number of British, German, Italian, Australian and other programs that are dubbed each year in French in Europe for broadcast on French channels.

11.

With respect to interventions by SARTEC and UDA proposing an increase in the percentage of Canadian content on Séries+, Alliance/Astral maintained that Séries+ is in no way a French-language equivalent of Showcase. Alliance/Astral submitted that, in fact, the programming aired by Showcase and Séries+ in the English- and French-language markets, respectively, are radically different.

12.

Furthermore, Alliance/Astral contended that Séries+'s mission defines its nature of the service, contributes to its complementarity and makes it unique in the French-language broadcasting environment, and that its mission is still relevant. In Alliance/Astral's view, Séries+'s mission would be compromised if, at each licence renewal, the percentage of Canadian content were increased by 5% or 10% simply because of its sound financial position.

13.

Alliance/Astral stated that its Canadian programming expenditure requirements (22%) apply to all Canadian programs, original and acquired, French and English, and that its commitment is indeed to devote a minimum of $900,000 of its overall spending each year to acquiring original French-language Canadian programming. According to Alliance/Astral, during the fiscal years 2001 to 2005, Séries+ will have spent over $935,000, on average, each year to acquire original French-language Canadian programming in Categories 7(c) and 7(d). These expenditures are over and above the minimum $900,000 required by the licensee's conditions of licence and represent 86% of its total expenditures on original Canadian programming. Further, Alliance/Astral indicated its willingness to make a commitment to devote a minimum of $7 million over the new licence term to acquire original French-language Canadian programming.

14.

Alliance/Astral submitted that Séries+'s historical average PBIT is below the limit set out in Introduction to Broadcasting Decisions CRTC 2004-6 to 2004-27 renewing the licences of 22 specialty services, Broadcasting Public Notice CRTC 2004-2, 21 January 2004 (Public Notice 2004-2). According to the licensee, this would justify maintaining its Canadian programming expenditure requirement at its current level.
 

Commission's analysis and determination

 

Programs from U.S. sources

15.

The Commission notes that Séries+ was originally licensed following a highly competitive process (Alliance Atlantis Communications inc. and Premier Choix Networks Inc., on behalf of a company to be incorporated - Canal Fiction, Decision CRTC 99-109, 21 May 1999. As part of that process, the applicant made a commitment to provide a service offering international programming consisting mainly of drama programs and series that had never been broadcast on French-language Canadian television and stated that such a service would provide diversified programming for Francophone viewers. The Commission further notes that the 20% level of programming from U.S. sources was set at the applicant's initiative.

16.

The Commission notes that it did not receive interventions opposing this request. Based on the record of the present proceeding, the Commission approves the licensee's request to increase its level of programs from U.S. sources from 20% to 30%. The Commission notes, however, that the majority of the programs broadcast by Séries+ originate from sources other than U.S. sources. Nevertheless, in order to ensure that the licensee continues to fulfil its original mission to broadcast distinct and varied programming, the Commission finds it appropriate to impose the 30% limit by condition of licence, as set out in the appendix to this decision.
 

Canadian content

17.

The Canadian programming requirements imposed on specialty services at the time of licensing or at licence renewal are determined by the Commission on a case-by-case basis. The Commission's requirements are based on such considerations as the genre of the service proposed by the applicant, the availability of Canadian programming falling within that genre, and the applicant's other plans and commitments. The Commission also takes into account the applicant's proposed wholesale fee and the type of carriage on broadcasting distribution undertakings that the service would receive.

18.

With respect to the interveners' proposals that the Canadian content requirement for Séries+ be increased, the Commission notes that the licensee exceeded its commitments several times during its first licence term.

19.

The Commission further notes that, despite Séries+'s relatively recent launch, it has become extremely profitable. The Commission also notes that the licensee's contribution in terms of Canadian content is lower than that of other specialty services. Although, as part of its nature of service, Séries+ acquires a significant volume of foreign series, the Commission is of the view that a 5% Canadian content increase will not compromise its nature of service, but rather assist in furthering the objectives of the Broadcasting Act (the Act) and strengthening Canada's broadcasting system. Accordingly, the Commission increases Séries+'s Canadian content requirement from 25% to 30% for the new licence term. A condition of licence to this effect is set out in the appendix to this decision.
 

Canadian programming expenditures

20.

Traditionally, the Commission has considered it appropriate that a broadcaster's profitability be taken into account when assessing the contribution it should be called upon to make to the Canadian broadcasting system. At the same time, the Commission is of the view that it would be unfair and, over the long term, potentially counter-productive, for the Commission to increase the requirements imposed on profitable specialty licensees to a degree that would penalize their financial success and undercut their motivation to continue pursuing increased profit margins.

21.

In Public Notice 2004-2, the Commission set out a graduated approach to Canadian programming expenditure requirements that the specialty services referred to therein would be required to meet during renewed licence terms. For services' first licence renewal, the approach was based upon the historical average PBIT margin for each service over the initial licence term, excluding the launch year, which was not considered to be representative. Those specialty services referred to in Public Notice 2004-2 that had recorded an average PBIT margin of under 20% during their first licence term would not be required to increase their spending on Canadian programming at licence renewal time. The approach was addressed by the applicant and interveners, and the Commission considers it appropriate to adopt it in the present case. The Commission is satisfied that the approach is balanced and fair in that it takes into account a service's past financial performance and future projections, and relates its Canadian programming expenditure requirements directly to its profitability.

22.

The Commission notes that Séries+'s average PBIT margin for its first licence term is below the 20% threshold. In the circumstances, the Commission considers that an increase in Canadian programming expenditures is not appropriate at this time. For the new licence term, the Commission directs the licensee to maintain Séries+'sCanadian programming expenditures at 22% of its gross revenues from the previous year. A condition of licence to this effect is set out in the appendix to this decision. This percentage includes the following three commitments made by the licensee:
 
  • The licensee will contribute actively to the development of Canadian creative talent and young artists by making an annual grant of $125,000 to the Institut national de l'image et du son (INIS);
 
  • The licensee will also make an annual grant of $100,000 to the Cinémathèque québécoise, specifically for the preservation, restoration and computer archiving of Canada's television heritage; and
 
  • The licensee will devote no less than $7 million to the acquisition of original French-language Canadian drama programming over the upcoming seven-year licence term.

23.

In view of Séries+'s financial success and on the basis of its projections for the new licence term, the Commission finds that the licensee's commitment to increase funding for original Canadian drama programming produced in French in Canada or under official co-production agreements with France or other French-speaking countries is reasonable and warranted. The Commission is imposing this commitment as a condition of licence, as set out in the appendix to this decision.

 

Dubbing

24.

As proposed by the licensee, the Commission requires, as a condition of licence, that Séries+ devote $3.5 million to dubbing in French foreign programming from sources other than U.S. sources. A condition of licence to this effect is set out in the appendix to this decision. Further, the Commission expects Séries+ toensure that the dubbing of all foreign programming paid for directly by the licensee is dubbed in French in Canada.

 

Regional reflection and independent production

25.

Section 3(1)(i)(v) of the Broadcasting Act (the Act) states that the programming provided by the Canadian broadcasting system should "include a significant contribution from the Canadian independent production sector." The Commission's concern is to ensure that independent production companies unaffiliated with the licensee have reasonable access to the licensee's program schedule.

26.

The Commission notes the numerous initiatives undertaken by Séries+ aimed at reflecting the various regions of Quebec and Canada in its programming.

27.

In accordance with its objective, the Commission expects the licensee to ensure that the programming aired by Séries+ reflects all of Canada's regions. The Commission also expects the licensee to continue to provide opportunities for producers working outside the major production centres to supply programming for the service.
 

Employment equity and on-air presence

28.

Pursuant to section 5(4) of the Act, the Commission does not regulate or supervise matters concerning employment equity in relation to broadcasting undertakings with more than 100 employees, as they are subject to the Employment Equity Act. However, the Commission continues to regulate matters such as on-air presence.

29.

The Commission expects the licensees of specialty television services to ensure that the on-air presence of members of the four designated groups (women, Aboriginal persons, persons with disabilities and members of visible minorities) is reflective of Canadian society, and that members of these groups are presented fairly and accurately.

30.

In this regard, the licensee stated that it does not have any on-air employees. However, the Commission expects Séries+ to give high priority to representing members of the four designated groups in its original productions.
 

Cultural diversity

31.

All broadcasting licensees, including those that operate specialty services, have a responsibility to contribute to the reflection and portrayal of Canada's cultural diversity in furtherance of the policy objectives contained in section 3(1)(d) of the Act. Specifically, broadcasters share responsibility for assisting in the development of a broadcasting system that accurately reflects Canada's ethno-cultural minorities, Aboriginal peoples and persons with disabilities. Accordingly, broadcasters must ensure that the portrayal of such groups, through their presence and participation on-screen, is accurate, fair and non-stereotypical.

32.

The Commission notes the initiatives that the licensee has undertaken in this regard. During the current licence term, the licensee filed a corporate cultural diversity plan with the Commission setting out specific commitments relating to corporate accountability, reflection of diversity in programming, and community involvement as they relate to presence and portrayal of cultural diversity.

33.

The Commission expects the licensee to continue to contribute to cultural diversity and to implement the commitments set out in its corporate cultural diversity plan. The Commission further expects the licensee to incorporate persons with disabilities into its cultural diversity corporate planning and to ensure that this is reflected in its annual reports on cultural diversity.
 

Service to persons who are deaf or hard of hearing

34.

The Commission is committed to improving service to viewers who are deaf or hard of hearing, and has consistently encouraged broadcasters to increase the amount of closed-captioned programming they broadcast. The Commission generally requires all broadcasters to offer a minimum percentage of closed captioned programs.

35.

In the context of its licence renewal application, the licensee stated that it was prepared to make a commitment by condition of licence, to gradually increase the percentage of all its programming that will be closed captioned, starting at 40% in the first year and achieving 80% in the last year of its new licence term. The licensee added that it has also set itself the general objective of achieving a captioning level of 90% in the sixth year of its new licence term.

36.

The Commission generally requires English-language services to close caption a minimum of 90% of all their programming. In the past, French-language services were required to caption a lower percentage of their programming, in recognition of the greater challenges involved in captioning French-language programming. However, the Commission notes that it is now appropriate to require that French-language broadcasters close caption the same percentage of programming as their English-language counterparts.

37.

The Commission notes that the licensee has indicated that it was prepared to make a commitment to close caption 40% of all of its programming, starting in the first year of its new licence term and to gradually increase that percentage to 80% of all of its programming starting in the last year of its new licence term. Consistent with the Commission's general approach for French-language services, the Commission expects the licensee to respect its captioning commitments and is imposing a condition of licence requiring the licensee to close caption at least 90% of all programming aired during the broadcast day, beginning no later than 1 September 2010. The condition of licence is set out in the appendix to this decision.

38.

The Commission further expects that, during the new licence term, the licensee will focus on improving the quality, reliability and accuracy of its closed captioning, and work with representatives of the deaf and hard of hearing community to ensure that captioning continues to meet their needs.
 

Service to persons who are blind or whose vision is impaired

39.

Section 3(1)(p) of the Act states that, as part of the broadcasting policy for Canada, "programming accessible by disabled persons should be provided within the Canadian broadcasting system as resources become available for the purpose." Accordingly, the Commission expects all broadcasters to work toward improving the accessibility of their programming for persons who are blind or whose vision is impaired.

40.

The Commission is committed to improving the accessibility of television programming for persons with visual impairments through the provision of audio description and video description (also known as described video).

41.

In recent decisions renewing the licences of specialty services, the Commission expected licensees to provide audio description wherever appropriate, to undertake upgrades to permit the delivery of described video on a secondary audio program (SAP) channel, and to acquire and broadcast described video programming wherever possible. Where appropriate, the Commission also encouraged specialty service licensees to provide at least one hour per week of described video programming, increasing by an additional hour per week in each successive year of their licence terms.

42.

Furthermore, as indicated in Public Notice 2004-2, the Commission has not imposed any specific requirements on services whose programming is music-based, or is oriented towards sports, or news and information. Rather, the Commission's focus has been on services featuring those types of programming, such as drama, documentary and children's programs, that best lend themselves to described video.

43.

The Commission notes the steps the licensee has taken during the current licence term to provide improved access to viewers who have visual impairments. The licensee intends to make the independent producers, which provide programs for Series+, more aware of the benefits for people who are visually impaired of having the program host provide, wherever possible and appropriate, audio description of certain information elements that appear on screen in textual or graphic form. The licensee also indicated that it is closely following technical developments that will improve access to Canadian programming services for people who have visual impairments, and that it intends to participate in the industry forums where these issues will be examined.

44.

The Commission will continue to adopt a case-by-case approach, as stated in Public Notice 2004-2. The Commission has considered Series+'s arguments that significant technical upgrades would first be required to provide described video using a SAP channel. The Commission further notes that Series+ has become profitable only recently. Accordingly, the Commission determines that it is appropriate to allow the licensee three years to plan its activities.

45.

Consistent with the Commission's approach for services offering drama-based programming as set out in Public Notice 2004-2, and given the nature of the service and the programming offered, the Commission determines that it is appropriate to require the licensee to provide a minimum of two hours of described video programming each week, beginning no later than 1 September 2008 and a minimum of three hours each week, beginning no later than 1 September 2011. A condition of licence to this effect is set out in the appendix to this decision. In fulfulling this condition, a minimum of 50% of the required hours must be original to the service.
 

Programming delivered across time zones

46.

In Policy on violence in television programming, Public Notice CRTC 1996-36, 14 March 1996, the Commission noted concerns expressed by parties that programs originating in certain time zones were being delivered by satellite to viewers in other time zones at hours that would be considered as inappropriate for their broadcast, based on the programs' content. The Commission encourages licensees whose services are distributed over various time zones to consider viewers in all the time zones served and offer the requisite protection when certain programs are scheduled.

47.

The Commission wishes to underscore the importance it places on each broadcaster according proper sensitivity to the concerns of its viewers with respect to the scheduling of programming intended for adult audiences, taking into account the time zone differences between where a program originates and where it is received. The Commission expects licensees to demonstrate responsibility, particularly in responding to any complaint.
 

Compliance with industry codes

48.

In accordance with its usual practice for specialty television services, the Commission is imposing conditions of licence requiring the licensee to adhere to industry codes related to sex-role portrayal, advertising to children and the depiction of violence in television programming.
  Secretary General
  This decision is to be appended to the licence. It is available in alternative format upon request, and may also be examined in PDF format or in HTML at the following Internet site: www.crtc.gc.ca 
 

Appendix to Broadcasting Decision CRTC 2005-444

 

Conditions of licence

 

1. (a) The licensee shall offer a national French-language specialty service devoted exclusively to drama. At least 95% of its programming shall be drawn exclusively from category 7, as set out in Schedule I to the Specialty Services Regulations, 1990, as amended from time to time.

 

(b) Except for programs in categories 7(a) Ongoing dramatic series, in an original language other than French, 7(c) Specials, mini-series, made-for-TV feature films, and 7(d) Theatrical feature films aired on television, the Canadian programs broadcast on Séries+ shall have been copyrighted at least 10 years before the date of broadcast.

 

(c) The Canadian programs in category 7(d) broadcast on Séries + shall have been copyrighted at least 7 years before the date of broadcast, unless Séries + has participated in their funding at the production stage and that funding does not exceed 50% of the total cumulative amounts allocated in fulfilment of its current condition of licence of $1 million per year.1

 

(d) The licensee shall limit the level of programs from U.S. sources to 30% annually.

 

2. In each broadcast year, the licensee shall devote to the exhibition of Canadian programs not less than 30% of the broadcast day and of the evening broadcast period.

 

3. In accordance with the Commission's position on Canadian programming expenditures as set out in New Flexibility With Regard to Canadian Program Expenditures by Canadian Television Stations, Public Notice CRTC 1992-28, 8 April 1992, in The Reporting of Canadian Programming Expenditures, Public Notice CRTC 1993-93, 22 June 1993, and in Additional Clarification Regarding the Reporting of Canadian Programming Expenditures, Public Notice CRTC 1993-174, 10 December 1993:

 

(a) The licensee shall expend on Canadian programs, including script and concept development expenditures for Canadian programs that are not broadcast, expenditures on contributions to the development of young artists and the preservation and promotion of the television heritage, not less than 22% of the previous broadcast year's gross revenues derived from the operation of the service. This percentage includes the following three commitments made by the licensee:

 
  • The licensee shall devote no less than $1 million per year to fund original French-language Canadian drama;
 
  • The licensee shall devote to the development of Canadian creative talent and young artists an annual grant of $125,000 to the Institut national de l'image et du son (INIS); and
 
  • The licensee shall devote an annual grant of $100,000 to the Cinémathèque québécoise, specifically for the preservation, restoration and computer archiving of Canada's television heritage.
 

(b) In each broadcast year of the licence term, 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 calculated in accordance with this condition; in such case, the licensee shall expend in the next broadcast year of the licence term, in addition to the minimum required expenditure for that year, the full amount of the previous year's under-expenditure.

 

(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 calculated in accordance with this condition, the licensee may deduct:

 

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

 

(ii) from the minimum required expenditure for any subsequent broadcast year of the licence term, an amount not exceeding the difference between the over-expenditure and any amount deducted under (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 calculated in accordance with this condition of licence.

 

4. The licensee shall limit to 25% annually its expenditures to acquire the rights to Canadian original programs devoted to programs produced by the licensee's shareholders or affiliates.

 

5. The licensee shall devote $3.5 million to pay for dubbing in French in Canada, international series acquired from sources other than U.S. sources.

 

6. The licensee shall provide closed captioning for not less than 90% of all programs aired during the broadcast day, beginning no later than 1 September 2010.

 

7. In each broadcast year of the licence term, the licensee shall provide a minimum of two hours of described video programming during each broadcast week, beginning no later than 1 September 2008 and, increasing to a minimum of three hours, beginning no later than 1 September 2011. In fulfilling this condition, a minimum of 50% of the required hours must be original to the service.

 

8. (a) Subject to subsection (b), the licensee shall not distribute more than twelve (12) minutes of advertising material during each clock hour;

 

(b) 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;

 

(c) The licensee shall not distribute any paid advertising material other than paid national advertising;

 

(d) In addition to the twelve (12) minutes of advertising material, the licensee may broadcast partisan political advertising during an election period.

 

9. The licensee shall charge each exhibitor of this service a maximum wholesale rate of $0.45 per subscriber per month, where the service is distributed as part of the basic service.

 

10. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the Canadian Broadcast Standards Council (CBSC).

 

11. 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.

 

12. 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. The application of the foregoing condition of licence will be suspended as long as the licensee remains a member in good standing of the CBSC.

  For the purposes of these conditions of licence, all time periods shall be calculated according to Eastern standard time; the term "broadcast day" shall mean a 24-hour day commencing at 4 a.m. each day, or any other period approved by the Commission; the terms "broadcast year", "evening broadcast period" and "clock hour" shall have the same meaning as those set out in the Television Broadcasting Regulations, 1987; the term "broadcast week" shall have the same meaning as that set out in the Radio Regulations, 1986; and the term "paid national advertising" shall mean advertising material as defined in the Specialty Services Regulations, 1990 and that is purchased at a national rate and receives national distribution on the service.
  Footnote:

[1] In the amendment approved in Licence amendments for Séries+, Decision CRTC 2001-707, 20 November 2001, the Commission reiterated the following commitment by the licensee: All category 7(d) French-language Canadian feature films for which Séries + has participated in the funding at the production stage will also benefit from a commitment that they will be broadcast by a French-language conventional Canadian broadcaster-private or public, general-interest or educational-with which Séries + will negotiate sharing of exhibition windows at the pre-purchase stage.

 

Date Modified: 2005-08-31

Date modified: