ARCHIVED - Broadcasting Decision CRTC 2014-484

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Route reference: Part 1 application posted on 29 April 2014

Ottawa, 18 September 2014

8504652 Canada Inc.
Across Canada

Application 2014-0320-4

Séries+ – Licence amendment

The Commission approves the application by Corus Entertainment Inc. on behalf of 8504652 Inc. to amend the condition of licence for Séries+ relating to expenditures on original French-language production by increasing the required expenditures by $750,000 over three years. In the Commission’s view, this additional investment could stimulate innovation, improve the quality of the Séries+ service and make it more attractive.

Background

1. In Historia and Séries+ – Acquisition of assets and change in effective control, Broadcasting Decision CRTC 2013-738, 20 December 2013 (Broadcasting Decision 2013-738), the Commission approved the application by Corus Entertainment Inc. (Corus) to acquire the assets of the French-language specialty Category A services Historia and Séries+. In that decision, the Commission directed Corus, as a condition of approval, to file an application to amend condition of licence 6(a) for Séries+ to increase expenditures for original French-language programming. The condition of approval and the decision state that these expenditures must be over and above the service’s Canadian programming expenditures (CPE) and result in an increase in original programming.
2. Currently, the licensee must devote 17% of the undertaking’s gross revenues for the previous broadcast year to the acquisition of or investment in Canadian programming (condition of licence 4), of which at least $1.5 million per year must be devoted to the funding of original French-language drama (condition of licence 6(a)).

Application

3. In this application, Corus on behalf of 8504652 Canada Inc. proposed to invest $750,000 over the next three broadcast years (2014-2015, 2015-2016 and 2016-2017). The applicant stated that the original programming funded would be broadcast during the third broadcast year (2016-2017). Corus indicated that it needed this flexibility in light of the time required to produce original programming and its current commitments. It also anticipated the use of partnerships and a co-production to increase the total amount devoted to original programming. Corus therefore proposed to amend condition of licence 6(a) set out in Broadcasting Decision 2013-738 so that it reads as follows:

6. a)      The licensee shall devote to the funding of original French-language drama:

1. at least $1,500,000 per year from Canadian programming expenditures made under condition of licence 4;
2. at least $750,000 in addition to the expenditures made under condition of licence 4 and subsection i) of this condition of licence during the 2014-2015, 2015-2016 and 2016-2017 broadcast years.

For the purposes of subsection ii) above, the expenditures may be made by the licensee or by the licensee in partnership with another party in the context of a co-production, but notwithstanding the licensee’s additional expenditures must total $750,000.
b) Of the Canadian programming expenditures made under condition of licence 4, the licensee shall devote $3.5 million during the licence term to pay for the dubbing in French in Canada of Canadian and foreign series that are broadcast.

4. Corus proposed to detail its additional expenditures in its annual report to enable the Commission to evaluate compliance with the condition of licence and the appropriate CPE levels for the service for purposes of the next licence renewal in 2017.
5. The Commission did not receive any interventions regarding this application.

Commission’s analysis and decisions

6. After examining the record for this application in light of applicable policies and regulations, the Commission considers that it must examine the following issues:  

• is the proposed investment appropriate?
• is the requested flexibility warranted?
• should the condition of licence mention the possibility of a co-production?

Is the proposed investment appropriate?

7. Corus indicated that the $1.5 million it currently spent annually had enabled Séries+ to garner $4.5 million to produce five or six 1-hour episodes of an original French-language series (for example., the dramatic series Le berceau des anges, which will be broadcast on Séries+ in 2015). Corus stated that the additional $750,000 would result in a total budget of 6 to $6.5 million, which would represent the production of eight or nine 1-hour episodes of a high-quality dramatic series or of 20 half-hour episodes of a dramatic comedy. It indicated that the proposed investment would generate an equivalent amount from the Canada Media Fund and tax credits, in addition to the service’s current CPEs. Consequently, Corus claimed that the investment was not only appropriate, but also represented a significant contribution to Quebec’s broadcasting and television system.
8. In the Commission’s view, Corus has demonstrated that the additional $750,000 would result in an increase in the production of original French-language programming on Séries+ and would be incremental to its CPE requirements, as required by the condition of approval set out in Broadcasting Decision 2013-738. The Commission therefore finds that Corus’s proposed investment is appropriate.

Is the requested flexibility warranted?

9. In its application, Corus explained that the dramatic series for the 2013–2014 broadcast year had already been aired, that the series for 2014–2015 was currently being filmed, that the series for 2015–2016 was in production and the programming decisions for 2016-2017 would be made in the next 15 months. It therefore requested flexibility to be able to spend the additional $750,000 over three years based on a series to be broadcast in the 2016-2017 broadcast year.
10. The Commission note that the condition of approval set out in Broadcasting Decision 2013-738 does not specify that Corus should spend a fixed annual amount for the duration of the licence period. Spending the $750,000 for a broadcast in 2016-2017 is therefore not contrary to the condition of approval.
11. In light of the foregoing and in the absence of interventions opposing the application, the Commission finds that the flexibility requested by Corus is warranted.

Should the condition of licence mention the possibility of a co-production?

12. In general, conditions of licence relating to CPE are sufficiently flexible to allow the use of co-productions. The Commission notes Corus’s commitment to expend $750,000 under any circumstances. It also notes that contributions from any partner would be in addition to Corus’s own contribution. The Commission finds that it is not necessary to mention the possibility of a co-production in the new condition of licence and that the licensee may make use of partnerships and co-production in the absence of such a provision.

Conclusion

13. In light of all of the above, the Commission approves the application by Corus Entertainment Inc. on behalf of 8504652 Canada Inc. to amend the condition of licence forSéries+ relating to expenditures on original French-language programming by increasing the required expenditures by $750,000 over three years. In the Commission’s view, this additional investment could stimulate innovation, improve the quality of the Séries+ service and make it more attractive.
14. Corus must therefore adhere to the following condition of licence:

6. a) The licensee shall devote to the funding of original French-language drama:

1. at least $1,500,000 per year from Canadian programming expenditures made under condition of licence 4;
2. at least $750,000 in addition to the expenditures made under condition of licence 4 and subsection i) of this condition of licence during the 2014-2015, 2015-2016 and 2016-2017 broadcast years.

b)    Of the Canadian programming expenditures made under condition of licence 4, the licensee shall devote $3.5 million during the licence term to pay for the dubbing in French in Canada of Canadian and foreign series that are broadcast.

Secretary General

*This decision to be appended to the licence.

Date modified:

2014-09-18