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TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TELECOMMUNICATIONS COMMISSION
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
CANADIAN TELEVISION POLICY REVIEW /
EXAMEN DES POLITIQUES DU CONSEIL
RELATIVES À LA TÉLÉVISION CANADIENNE
HELD AT: TENUE À:
Conference Centre Centre des conférences
Outaouais Room Salle Outaouais
Place du Portage Place du Portage
Phase IV Phase IV
Hull, Quebec Hull (Québec)
October 13, 1998 13 octobre 1998
Volume 13
tel: 613-521-0703 StenoTran fax: 613-521-7668
Transcripts
Transcription
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
StenoTran
Canadian Radio-television and
Telecommunications Commission
Conseil de la radiodiffusion et des
télécommunications canadiennes
Transcript / Transcription
Public Hearing / Audience publique
Canadian Television Policy Review /
Examen des politiques du Conseil
relatives à la télévision canadienne
BEFORE / DEVANT:
Andrée Wylie Chairperson / Présidente
Vice-Chairperson, Radio-
television / Vice-
présidente, Radiodiffusion
Joan Pennefather Commissioner / Conseillère
Andrew Cardozo Commissioner / Conseiller
Martha Wilson Commissioner / Conseillère
David McKendry Commissioner / Conseiller
ALSO PRESENT / AUSSI PRÉSENTS:
Jean-Pierre Blais Commission Counsel /
Avocat du Conseil
Margot Patterson Articling Student /
Stagiaire
Carole Bénard / Secretaries/Secrétaires
Diane Santerre
Nick Ketchum Hearing Manager / Gérant de
l'audience
HELD AT: TENUE À:
Conference Centre Centre des conférences
Outaouais Room Salle Outaouais
Place du Portage Place du Portage
Phase IV Phase IV
Hull, Quebec Hull (Québec)
October 13, 1998 13 octobre 1998
Volume 13
StenoTran
TABLE OF CONTENTS / TABLE DES MATIÈRES
PAGE
Presentation by / Présentation par:
SPTV, The Specialty and Premium Television
Association / TVSP, Association de la télévision
spécialisée et payante 3767
CAB, Canadian Association of Broadcasters
(Specialty Board) / ACR, Association canadienne
des radiodiffuseurs (Conseil télévision spécialisée et
payante) 3849
NetStar Communications Inc. 3938
MUSE Entertainment Enterprises Inc. 4001
Radiomutuel inc. 4026
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3767
1 Hull, Quebec / Hull (Québec)
2 --- Upon resuming on Tuesday, October 13, 1998
3 at 0900 / L'audience reprend le mardi
4 13 octobre 1998, à 0900
5 17682 THE CHAIRPERSON: Good morning.
6 Welcome back to our hearing. Re-bienvenue à tout le
7 monde.
8 17683 Madame la Secrétaire, voulez-vous
9 s'il vous plaît inviter le participant suivant.
10 17684 Mme SANTERRE: Merci, Madame la
11 Présidente.
12 17685 The first presentation this morning
13 will be the Specialty and Premium Television
14 Association / Association de la télévision spécialisée
15 et payante.
16 PRESENTATION / PRÉSENTATION
17 17686 MS LOGAN: Commissioners, my name is
18 Jane Logan. I am the President and CEO of SPTV, the
19 Specialty and Premium Television Association.
20 17687 It is my pleasure to introduce our
21 panel who represent most of our board of directors. I
22 will start with the front row on my far left.
23 17688 Je vous présente Gilles Desjardins,
24 directeur, Développement des affaires de RDI, le Réseau
25 de l'information.
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1 17689 Next to him is Trina McQueen,
2 President of the Discovery Channel.
3 17690 To my right is Lisa de Wilde,
4 President of TMN Networks.
5 17691 À côté d'elle, Gérald Janneteau, le
6 président du conseil d'administration de TVSP et le
7 président de RDS, le Réseau des sports.
8 17692 Behind Gerry is Pierre Morrissette.
9 Il est le président et chef de la direction de
10 MétéoMédia / The Weather Network.
11 17693 Ensuite Pierre Roy, le président et
12 chef de la direction de Les Réseaux Premier Choix.
13 17694 Next is Phil Fraser, President and
14 CEO of Vision Television.
15 17695 We are hoping that Phyllis Yaffe will
16 join us beside Phil; and she is President and CEO of
17 Alliance Broadcasting, Showcase & History Television.
18 17696 We are pleased to have this
19 opportunity to appear before you today. This hearing
20 is a turning point in the evolution of the Canadian
21 broadcasting system.
22 17697 The Specialty and Premium Television
23 Association, SPTV, is the only association to represent
24 all core groups of our industry: specialty services,
25 third language networks and pay and pay-per-view
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3769
1 networks. Our members comprise 80 per cent of Canada's
2 specialty and premium television industry by revenue,
3 and 90 per cent of our sector spending on Canadian
4 programming.
5 17698 La présidente de cette audience,
6 Mme Wylie, a énuméré trois objectifs que le système
7 devrait poursuivre: en arriver à un plus grand nombre
8 d'émissions canadiennes, à des émissions canadiennes de
9 meilleure qualité et à une amélioration de la
10 rentabilité. Par ailleurs, le grand thème que les
11 télédiffuseurs conventionnels ont véhiculé est de
12 mettre davantage l'accent sur l'augmentation de
13 l'écoute. Eh bien, que nous la mesurions par l'un ou
14 l'autre de ces indicateurs, notre industrie est une
15 belle réussite.
16 17699 Comme vous le savez, les services de
17 télévision spécialisée et payante sont relativement
18 nouveaux. Mais depuis que les premiers services ont
19 obtenu leur licence dans les années quatre-vingt, nous
20 sommes devenus une composante importante du système.
21 En 1994, il existait 19 services canadiens de
22 télévision spécialisée et payante; l'an dernier, leur
23 nombre avait augmenté à 31 et, aujourd'hui, 48 services
24 canadiens sont exploités. Chaque nouveau service a
25 fait croître les dépenses que notre industrie a
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3770
1 consacrées à la programmation canadienne en plus
2 d'élargir l'auditoire canadien qui nous regarde.
3 17700 Les services de télévision
4 spécialisée et payante ont peu de poids pris
5 individuellement mais, ensemble, nous représentions 30
6 pour cent de l'écoute de la télévision câblée
7 francophone en 1997 et 22 pour cent de l'écoute de la
8 télévision câblée anglophone. Quant à nos dépenses de
9 programmation canadienne, elles se sont élevées à 262
10 millions de dollars.
11 17701 Our proudest achievement is the
12 appeal of Canadian programming in our schedules. Last
13 year, English language specialty television services
14 drew 65 per cent of their viewing with Canadian
15 material -- the reverse of private English conventional
16 television viewing trends. In the French language
17 specialty sector, audiences chose Canadian programs
18 67.5 per cent of the time. Premium services, which are
19 truly discretionary, have access to fewer Canadian
20 homes than specialty. They still play an indispensable
21 role in funding and exhibiting Canadian feature film,
22 spending $23 million on Canadian film last year alone.
23 17702 The main thrust of our submission is
24 directed at nine proposals we believe will be helpful
25 if we are to build on our Canadian programming success.
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1 Each of these is aimed at improving our ability to
2 finance, distribute and promote high quality Canadian
3 programming to our audiences, through the growth of
4 established services and the launch of new ones.
5 17703 Gerry.
6 17704 MR. JANNETEAU: As a starting point,
7 we believe the Commission should consider our
8 regulatory model -- spending linked to revenue -- as
9 the best tool for improving the quality and viewership
10 of Canadian programs.
11 17705 The evidence for this belief lies in
12 our own experience. On average, our industry now
13 invests some 37 per cent of its total revenue in
14 Canadian programming, compared to 28 per cent by the
15 much larger private conventional television sector. We
16 also spend more on Canadian independent production,
17 $106 million last year, or 40 per cent of all our
18 Canadian program spending. That is in contrast with
19 private conventional broadcasters who spent $77
20 million, or 17 per cent of their Canadian budgets, on
21 independent production. Our results? As we said a
22 minute ago, our Canadian programming generates over 60
23 per cent our audiences.
24 17706 Under the specialty and premium
25 model, when we make more revenue, the system does
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3772
1 better because we automatically reinvest in Canadian
2 programming. We have what economists call a virtuous
3 circle where more revenues drive better Canadian
4 programs, which drive higher viewership and
5 subscribers, which in turn result in higher revenues,
6 which allow us to invest in even better Canadian
7 programming.
8 17707 Clearly, revenue growth is an
9 essential element of improving our Canadian
10 programming. Many of our specific recommendations
11 address factors that bear directly on revenue which
12 require the Commission's assistance.
13 17708 Our first area of concern is access
14 to the distribution system. The number of viewers we
15 reach has a direct impact on our ability to finance
16 Canadian programming. Subscriber fees are nearly 70
17 per cent of revenue for specialty, and 100 per cent of
18 revenue for pay services. As niche services, we can
19 never expect to attract ad revenues at the same levels
20 as conventional broadcasters.
21 17709 Therefore, we have recommended that
22 the Commission enhance and strictly enforce the
23 existing access rules, including undue preference. Our
24 objective here is to assure fair access to viewers for
25 all licensed Canadian services.
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1 17710 Today, we live in a limited analog
2 cable environment and the additional capacity promised
3 by digital cable remains just that -- a promise.
4 17711 C'est pourquoi nous recommandons
5 aussi que le Conseil mette sur pied un groupe de
6 travail à l'échelle de l'industrie pour régler les
7 problèmes qui entravent la mise en oeuvre de la
8 câblodistribution numérique. Notre industrie a
9 absolument besoin de la distribution numérique pour
10 croître et innover. Dans le cas de la télévision
11 payante, par exemple, l'implantation de la technologie
12 numérique produira le double avantage d'accroître les
13 contributions de ces services à la programmation
14 canadienne et de fournir une arme supplémentaire pour
15 lutter contre le piratage du câble.
16 17712 L'une de nos autres recommandations a
17 trait aux défis particuliers qui se posent au marché
18 francophone. S'il est difficile de satisfaire la
19 demande pour la création de bonnes émissions
20 canadiennes dans un marché anglophone beaucoup plus
21 vaste, le problème est d'autant plus aigu pour les
22 producteurs et les services francophones.
23 17713 Comme leurs homologues anglophones,
24 les services francophones comptent sur la possibilité
25 de rejoindre le plus vaste auditoire possible à un
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1 tarif équitable. C'est pour cette raison que nous
2 suggérons au Conseil d'élaborer une politique et des
3 mesures incitatives réglementaires visant à favoriser
4 la distribution des services de télévision spécialisée
5 et payante de langue française à l'extérieur du Québec.
6 17714 Obtenir un tarif équitable est
7 primordial pour tous les services, qu'ils soient
8 francophones, anglophones ou allophones. Les
9 engagements que nous avons pris à l'égard de la
10 présentation de nos émissions sont liés à des
11 projections de revenus d'abonnement appropriées, qui
12 ont été approuvées lors des demandes et des
13 renouvellements de licences. Lorsque les tarifs de
14 gros sont réduits bien en-dessous des projections du
15 plan d'affaires, il n'y a plus assez d'argent pour
16 remplir les grilles-horaires avec des émissions
17 canadiennes de qualité. Nous proposons donc que le
18 Conseil surveille les tarifs d'abonnement de gros qui
19 sont versés aux services de télévision spécialisée et
20 agisse en conséquence.
21 17715 MS LOGAN: A further distribution
22 issue is the current interest in "pick and pay"
23 marketing. This would drastically cut the number of
24 Canadians receiving each service and force huge price
25 increases. The Canadian experience shows that
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3775
1 consumers prefer many television choices at a very low
2 price. For example, far more cable subscribers have
3 opted for Family Channel now that it is part of the
4 17-service Me-TV package for $5.99 than when it sold
5 for $9.95 as an à la carte or stand-alone service. We
6 ask the Commission to be wary of these pick and pay
7 proposals, as they will have a negative impact on
8 consumer prices and on the availability of Canadian
9 choices for viewers.
10 17716 With respect to advertising revenue,
11 we have requested that specialty services have the same
12 access as conventional broadcasters to simultaneous
13 substitution. Program rights must be fundamental,
14 regardless of which channel a program is broadcast on.
15 It would allow us full value when we buy program rights
16 for the Canadian market.
17 17717 Our last two recommendations deal
18 with promotion and foreign services. Foreign specialty
19 services no longer help to sell new Canadian specialty
20 packages the way they once did -- and that was their
21 biggest benefit to the Canadian broadcasting system.
22 They have, as you know, no requirements to produce or
23 showcase Canadian programming or to create jobs, and in
24 our world of limited analog channels they displace
25 Canadian services.
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1 17718 This hearing has heard that promotion
2 is a key ingredient in attracting viewers to Canadian
3 programs. We propose that advertising spots on U.S.
4 specialities and superstations be used to promote
5 Canadian television.
6 0910
7 17719 Foreign services today voluntarily
8 give two minutes an hour of free ad space for the
9 promotion of Canadian services, and we believe they
10 should do more. They say they do not sell ads for the
11 Canadian market in any case and since U.S. services
12 take about $80 million in subscriber fees out of the
13 Canadian system each year, making these slots available
14 to promote Canadian services would be a very modest
15 contribution in return. We also ask that the
16 Commission ensure distributors make these commercial
17 spots available free of charge in exchange for using
18 some of them for customer information and promotion.
19 17720 Finally, we have asked that you
20 continue the moratorium on further additions to the
21 list of eligible non-Canadian satellite services.
22 Obviously, the best of foreign services were added some
23 time ago. A moratorium would increase Canadian content
24 as new Canadian services are launched and it would
25 encourage foreign services to become minority partners
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3777
1 in Canadian offerings allowing foreign programs, but at
2 the same time ensuring Canadian programs, too, as well
3 as Canadian jobs and greater opportunities to export
4 Canadian programming.
5 17721 Violà qui met un terme à notre exposé
6 d'aujourd'hui. Nous sommes disposés à répondre à vos
7 questions que vous aimeriez nous poser. Merci.
8 17722 THE CHAIRPERSON: Thank you, Ms Logan
9 and your colleagues.
10 17723 Commissioner Wilson?
11 17724 COMMISSIONER WILSON: Good morning.
12 Thank you for being with us, all of you.
13 17725 Before we start, I would just like to
14 sort of establish the parameters for our discussion. I
15 noted in your very first paragraph on page 6 that you
16 said you wanted to congratulate the Commission for
17 getting back to basics at a time when new technology
18 and distribution issues have diverted some of the
19 attention of all those pondering the future at the
20 Canadian broadcasting system and I am going to take you
21 at your word.
22 17726 We are not going to talk about
23 distribution and access issues. As you know, we have
24 initiated a process that's going to be dealing
25 specifically with those things and a lot of your
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3778
1 recommendations do touch on those. There are some
2 other aspects of your presentation that I want to go
3 through with you and some sort of general structural
4 and system issues that I would like to get your views
5 on, but those specific issues will have to wait for the
6 other process, which will be held next year.
7 17727 There are a couple of questions of
8 clarification that I am probably going to ask you with
9 respect to some of those issues, but I think we have to
10 sort of limit the context. I don't want to go into
11 really deep discussion of those issues because there
12 will be an opportunity specifically to deal with those
13 issues. Suffice it to say, we have heard your message
14 loud and clear. It's a very consistent message and
15 those issues will be dealt with.
16 17728 MS LOGAN: We do appreciate the fact
17 that you will be holding a framework hearing next
18 spring and it will review access issues. We will make
19 full representation at that time. Our point in
20 highlighting access difficulties in our brief is really
21 to underline that our revenue and, therefore, our
22 ability to make the Canadian content contributions we
23 are discussing here today -- they are inextricably
24 linked to our ability to reach subscribers. So, when
25 you come to make decision about Canadian content for
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3779
1 the specialty and pay industry, you can't look at our
2 contributions in isolation from access. But your point
3 is taken and we will refrain from detail.
4 17729 COMMISSIONER WILSON: Okay, that's
5 great.
6 17730 What I would like to do is I would
7 just like to start by asking you some sort of general
8 questions and then follow that with some questions of
9 clarification regarding some of the statements that you
10 have made in your submission. The first thing that I
11 want to explore with you is really what struck me as
12 kind of a similarity between your position and the
13 position of the broadcasters, the CAB.
14 17731 On page 6 of your submission at the
15 bottom of the page, you state that:
16 "The contributions of our sector
17 ... need to be viewed in light
18 of its unique characteristics
19 and challenges and challenges,
20 which differ fundamentally from
21 those of Canadian conventional
22 networks."
23 17732 You detail three areas of fundamental
24 difference: The nature of your programming in terms of
25 appealing to a niche market, your relationship with the
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3780
1 independent production sector and the nature of your
2 revenue streams.
3 17733 Then at page 20 you suggest that:
4 "If, as a result of these
5 proceedings, the Commission
6 adopts new incentives to
7 stimulate the production,
8 promotion and exhibition of
9 Canadian programming ...
10 specialty and pay services
11 should have access to
12 corresponding incentives."
13 17734 And at page 35, in your discussion of
14 the contributions currently made by specialty and
15 premium networks, you state that the current framework
16 is demanding and receiving maximum contributions from
17 your members. Then on page 36 you talk about driving
18 viewership to Canadian programming.
19 17735 These are three of the central
20 elements of the broadcasters' proposal: First of all,
21 that they don't really want any change in their
22 Canadian content requirements, which I think is the
23 same thing that you are saying; secondly, they would
24 like some more incentives to sort of help them do what
25 needs to be done in terms of generating more Canadian
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3781
1 content; and they want us to focus on viewership.
2 17736 I know that that's kind of a very
3 simplistic way of looking at the elements of your
4 submission, but, as I was reading through it, it struck
5 me that the position is essentially the same. You feel
6 that you are making -- and this is not to take away
7 from the contribution that specialty and pay services
8 have made to the system in terms of Canadian content,
9 but you feel that you are making the maximum
10 contribution, you could use some more incentives and
11 viewership is an appropriate target. I know there is a
12 tie to spending requirements, which is the
13 recommendation you have made about the model.
14 17737 MS LOGAN: That's right. The
15 spending requirements include an automatic accelerator
16 so that, as we make more money, our contributions
17 automatically increase. Therefore, you have built the
18 growth in our contributions into the system.
19 17738 Trina, did you have something to add?
20 17739 MS McQUEEN: I think the fundamental
21 difference between the CAB and us is our belief that
22 the expenditure link to revenue model is the best
23 model. As you have seen in our submission, our
24 expenditure link to revenue is at a higher level than
25 most of the conventional services. It's not that we
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1 are not saying there is no more in the system, we are
2 saying that as more revenue comes into the system,
3 there will be more investment automatically. That's
4 the so-called virtuous --
5 17740 COMMISSIONER WILSON: The virtuous
6 circle.
7 17741 MS McQUEEN: -- circle, yes. Not the
8 vicious circle, the virtuous circle that really
9 produces a benefit. As any broadcaster becomes more
10 profitable, there is also more investment in revenue.
11 So, that's a fundamental difference. Sure, we agree
12 with the CAB that viewers are important. You have
13 raised some issues about whether bulk numbers of
14 viewers are the way we should go and we agree that
15 there are problems with that, but certainly every
16 program should strive for the maximum number of viewers
17 appropriate to its genre and its broadcaster and we
18 certainly believe in that.
19 17742 But if you ask are there fundamental
20 differences between the CAB's proposal and our
21 proposal, I would say they were. We are not quite sure
22 what the CAB means in its viewership goals and targets,
23 so we are not on feet with them in that, as I say,
24 because we don't really understand how it would be
25 implemented. Our model for expenditure is considerably
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1 different from them. Where we do agree is that one
2 thing that Canadian television needs to succeed is
3 higher audiences.
4 17743 COMMISSIONER WILSON: Actually, when
5 I was looking through your viewing results, the
6 viewership data that you provided, you talk about the
7 reserve trend in viewership to specialty services that
8 in fact Canadians are watching more Canadian
9 programming on specialty services than they are on
10 conventional television channels. What do you think is
11 driving that? Is it just the fact that there is more
12 Canadian content on specialty services or that there is
13 more in prime time, that it's scheduled differently,
14 that it's promoted differently? What is working to
15 bring about that success?
16 17744 MS McQUEEN: I think it's partly the
17 audience's fault, if I may use that word. I think
18 today's audiences are looking for programs that meet
19 their needs in a more kind of defined way. Just as
20 there has been a trend to specialty magazines and
21 specialty music tastes and so on, there is also a
22 tendency of people to choose channels the way they used
23 to choose programs. So, if you are the type of person
24 who likes news, you would tend to go directly to a news
25 channel first.
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1 17745 So, I think we are advantaged, first
2 of all, by the way the modern viewer behaves.
3 Secondly, I think also we have the luxury of choosing
4 our audiences. The conventional broadcasters don't.
5 We program for smaller audiences who are eager for a
6 certain type of programming and, thus, we don't have to
7 dilute the programming to reach a much larger number of
8 viewers. So, those are two things that I think help
9 the viewership.
10 17746 I think one of the things to remember
11 is that we do account for a large part of the viewing,
12 but each little niche of it is quite small. They add
13 up to a large group, but individually they are not
14 large audiences.
15 17747 COMMISSIONER WILSON: So, across the
16 48 services.
17 17748 MS McQUEEN: Yes.
18 0920
19 17749 COMMISSIONER WILSON: I want to talk
20 about the recommendation that you have made about
21 required spending levels on Canadian programming based
22 on the percentage of revenue. You noted in your
23 opening comments why you think this is the best model,
24 but in your submission, at page 20, you note that for
25 specialty and premium services it is neither possible
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1 nor desirable to create a one-size-fits-all framework.
2 This also is a phrase that CAB has used, the one-size-
3 fits-all.
4 17750 You go on to say that at the time of
5 licence renewals the Commission has the opportunity and
6 tools to ensure that Canadian spending requirements are
7 equitable between services with the same levels of
8 revenue or distribution, which would take into account
9 the challenges of specific programming categories.
10 17751 Would you suggest a similar approach
11 for the conventional broadcasters? If we are going to
12 move to that model of spending requirements based on
13 the percentage of revenue, should they be evaluated on
14 a case-by-case basis?
15 17752 MS McQUEEN: We are not experts on
16 conventional broadcasting. We will go ahead and give
17 you plenty of advice, but we warn you against taking
18 any of it, as I say, because we are not experts at all.
19 17753 It seems to us that the revenue
20 linked to expenditures formula works in the sense that
21 it does not make one size fit all. It really adapts
22 itself to the individual circumstance.
23 17754 COMMISSIONER WILSON: To clarify, the
24 recommendation you are making is that you are
25 suggesting that that apply right across the board to
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1 conventional broadcasters?
2 17755 MS McQUEEN: We are suggesting that
3 is a model that should be given serious consideration.
4 You would have to consider whether it should be adapted
5 to conventional broadcasters for their particular
6 circumstances, and this is where we are slightly
7 hesitant in saying you should just take it and plonk it
8 over the conventional broadcasting current structure.
9 But we do think it has a very strong potential as a
10 formula. Again, we are not sure whether it's perfectly
11 adaptable to conventional broadcasters, but one thing
12 it does - and I should have said this in response to
13 your previous questions, so I'm glad to have the chance
14 to backtrack -- I think one of the reasons that we have
15 had success with audiences is because we have invested
16 in programming in a dramatic way, and we noted that in
17 our submission. The level of our contribution, the
18 level of our investment, our licence fees, often will
19 equal the licence fees of conventional broadcasters.
20 17756 I would not want to say that good
21 television is always expensive television, but I would
22 say that there is a rough correlation between the
23 resources you put into a program and the results you
24 get. So I think we have shown that spending is part of
25 what makes good Canadian programming, and the advantage
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1 of the revenue linked to expenditure formula is that it
2 does give resources on a continually, we hope,
3 increasing basis to Canadian programming, so that's a
4 good thing.
5 17757 But to return to what you really
6 asked me, whether this is a model that absolutely suits
7 every single conventional broadcaster, we think it's
8 probably a good model, but we are not 100 per cent
9 sure. What we are sure is that broadcasters, like
10 people, should play to their strengths and I think the
11 strength of what we do is specializing and the strength
12 of what the conventional broadcasters do is general
13 audiences. So we are not saying really that
14 conventional television should become more specialized.
15 What we are saying is that the revenue linked to
16 expenditure formula will probably work for conventional
17 broadcasters.
18 17758 COMMISSIONER WILSON: That's actually
19 an interesting point that you just raised about
20 conventional broadcasters not becoming more
21 specialized, because it has been suggested by some of
22 the broadcasters that they have more flexibility in
23 terms of choosing the genres that they will put their
24 money into in focusing their channels a little bit
25 more.
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1 17759 What is your view of that proposal?
2 17760 MR. FRASER: We have shown across the
3 board with specialty channels, Madam Commissioner, that
4 when you go for a particular niche, a specialized
5 audience, you can do a better job of delivering
6 programs to meet those audiences. If you want to talk
7 to fly tiers, for example, fly fishers, there is a very
8 small number of people and your success is measured by
9 how many of those you get.
10 17761 In conventional broadcasting, the
11 numbers game is what drives you. You want the largest
12 number of people and that leads to a more generalized
13 and perhaps different approach to programming.
14 17762 So we think that a revenue driven
15 model, if the objective is to get more money into the
16 system and more programs into the system, that's a
17 useful tool.
18 17763 MS McQUEEN: If we can add to that,
19 the fact is that the big broadcasters have revenues of
20 $200 million, $250 million. Our revenue level is about
21 $25 million to $30 million. We will never be able to
22 do the great national events; the basic coverage of an
23 election, the major documentary series, the huge drama
24 series. To us, this kind of great general interest
25 programming is the job of conventional broadcasters, so
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1 I guess that's another point when we say that they have
2 to be the general interest broadcaster.
3 17764 COMMISSIONER WILSON: I would like to
4 talk briefly about your comments with respect to
5 cooperation between specialty services and conventional
6 broadcasters and I'm referring to the section on page
7 32. You suggest there that if each participant in
8 pre-buy financing could count its contribution as an
9 expenditure on original Canadian programming,
10 regardless of the window acquired, cooperation between
11 conventional and pay and specialty services would be
12 enhanced and the number and quality of Canadian
13 programs being produced would increase.
14 17765 I'm just wondering if you could
15 elaborate on this proposal. For example, I'm just
16 wondering if you are suggesting that the Commission
17 adopt a cash basis type accounting approach in favour
18 of the amortization or accrual approach presently in
19 place so that pre-buys could be counted in the year in
20 which they are made rather than in the year in which
21 the program goes to air.
22 0935
23 17766 M. ROY: Je pense qu'une des façons
24 d'aider le financement de programmation canadienne de
25 qualité, c'est justement cette coopération entre les
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1 différents diffuseurs conventionnels et spécialisés,
2 entre autres en respectant les fenêtres de diffusion.
3 Je pense qu'une des choses qui est bien établie, c'est
4 un système de fenêtres entre les services spécialisés,
5 les télévisions payantes, les télévisions
6 conventionnelles. Ce système existe déjà entre autres
7 au cinéma et il pourrait être reproduit pour d'autres
8 catégories de programmation, que ce soit pour enfants
9 ou que ce soit pour documentaires.
10 17767 Cette expérience a déjà été menée au
11 Québec et a donné de très bons résultats et, pour ce
12 faire, nous demandons entre autres une modification à
13 la définition de "production originale" pour aider ce
14 financement, que ce soit à travers la langue française
15 ou langue anglaise ou à travers différents intervenants
16 qui agissent dans différentes fenêtres.
17 17768 Alors cette coopération-là aiderait à
18 un meilleur financement de programmation canadienne de
19 qualité, à une augmentation du nombre de programmations
20 canadiennes et donc est très souhaitable.
21 17769 COMMISSIONER WILSON: That's great.
22 Thanks.
23 17770 The next area that I just want to
24 touch on is the notion of a distinct rates market for
25 Canada; I actually have discussed this with a couple of
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1 your other members. The issue that you raise with
2 respect to the distinct rights market for Canada is the
3 purchase of North American rights by U.S. satellite
4 services or other foreign services.
5 17771 How widespread is this practice? I
6 guess what I am trying to get at is whether or not this
7 is enough of an issue to warrant regulatory
8 intervention right now or if you are just raising a
9 flag about it.
10 17772 What kind of an effect is this having
11 on your services?
12 17773 MS de WILDE: It is a good question
13 that never seems to go away, and the reason that we
14 have raised it in our brief this morning is really to
15 lay it out as one of the preconditions to the
16 successful Canadian system. I think that many of us
17 can point to individual programs where it may have been
18 an issue, but the point of putting it in front of the
19 Commission is really to underscore the importance of
20 maintaining Canada as a distinct rights market.
21 17774 The licensing that the Commission
22 engages in, the lists of authorized services that don't
23 authorize competitive services from the United States
24 to come into Canada are two of the key tools that
25 ensure that it is difficult and it is not economically
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1 viable to buy North American rights. So we are
2 encouraging you to hold the line on those kind of
3 policies.
4 17775 COMMISSIONER WILSON: If it were to
5 become more of an issue, there have been a range of
6 suggestions about how to deal with it, from just doing
7 nothing and let the market decide to actually removing
8 services from the list. What are your thoughts on
9 that?
10 17776 MS de WILDE: We never like doing
11 nothing. Removing services from the list is obviously
12 at the far end of the continuum of easily implementable
13 regulator action, and I think where we would hope that
14 where we could solve the problem was before it actually
15 came to that point. So that's why we do insist on the
16 importance of licensing Canadians services first and
17 being really scrupulous about the services that are
18 added to the lists.
19 17777 COMMISSIONER WILSON: With respect to
20 simultaneous substitution -- this is an issue that you
21 raise in your submission -- we did include a provision
22 in the new Broadcasting Distribution Regulations that
23 would allow Canadian specialty services to request that
24 BDUs undertake simultaneous substitution, but it is not
25 something that was made mandatory for the following
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1 reasons: The Commission recognized that the providers
2 of sports services would benefit from simultaneous
3 substitution in respect of a certain number of live
4 sports events for which they have obtained Canadian
5 rights, but it was unclear whether the providers of
6 other specialty services would similarly benefit, and
7 any regulation introduced by the Commission would
8 require BDUs covered by the regulation to install
9 switching equipment capable of handling the requests
10 from all specialty services, even though such requests
11 could be quite rare in the case of some of the
12 services.
13 17778 I am just wondering what you feel has
14 changed that makes it more urgent that the Commission
15 revisit this issue.
16 17779 MR. JANNETEAU: If I may, first of
17 all, in the area of sports there have been specific
18 requests made of cable distributors to do substitution
19 and, because it is not mandatory, it wasn't done.
20 Perhaps we can talk more specifically about that a
21 little bit later when we come back here.
22 17780 I would also like to point out that,
23 as more and more specialty services come on line, there
24 are more and more opportunities for some simultaneous
25 substitution available to other specialty services, and
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1 they too would benefit from the substitution provision
2 if the cable operators would go ahead and proceed.
3 17781 COMMISSIONER WILSON: I am just
4 wondering if you have done some kind of an analysis of
5 your services and how many opportunities there actually
6 would be for simultaneous substitution in terms of
7 making a request that all distributors do it on a
8 mandatory basis.
9 17782 MR. JANNETEAU: I am afraid I don't
10 have the specifics on this, but that's something that
11 we could supply to you later, if you wish, or if Jane
12 can help here --
13 17783 MS LOGAN: I think we have seen a
14 number of services making requests for simultaneous
15 substitution, including Showcase, History and Life, in
16 addition to The Sports Network, which is the more
17 obvious example. What we are discovering is that small
18 cable operators, in fact, and DTH operators have gladly
19 agreed to some of these requests while larger
20 distributors have simply said, "No, it is not our
21 policy; we don't have to."
22 17784 So we find that the current policy of
23 leaving it to the discretion of the distributor is one
24 that's not working, and if small cable operators can
25 perform simultaneous substitution, we feel large ones
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1 should.
2 17785 Really, what is at stake here are
3 program rights, and our program rights, these are
4 rights that services have paid for.
5 17786 COMMISSIONER WILSON: I am just
6 trying to ascertain the extent to which those rights
7 are in jeopardy in terms of your request that that be
8 made mandatory, that full simultaneous substitution and
9 sometimes non-simultaneous substitution be effected for
10 specialty services. I think it is important for us to
11 understand the extent to which those rights are in
12 jeopardy.
13 17787 MS LOGAN: I think, from our
14 perspective, we are looking at the revenue side, and
15 the revenues for simultaneous substitution are of
16 interest; and, as we said at the outset, as we gain
17 more revenue we reinvest in Canadian programming, so
18 this would be good --
19 17788 COMMISSIONER WILSON: You are talking
20 about the revenues from advertising opportunities?
21 17789 MS LOGAN: Yes, the increased
22 advertising revenue.
23 17790 COMMISSIONER WILSON: What have you
24 calculated those to be?
25 17791 MS LOGAN: We have not put a number
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1 on it. We know as a percentage, though, it would be
2 substantively below what the opportunity as a
3 percentage is for conventional broadcasting. We are
4 talking about niche audiences and we have a limited
5 ability to perform simultaneous substitution across all
6 time zones, for example, because of the national nature
7 of most of the feeds.
8 17792 COMMISSIONER WILSON: I guess I would
9 be interested to see a bit more information on, first
10 of all, the whole rights issue and how much opportunity
11 there is for simultaneous substitution and what kinds
12 of revenues you might gain through the advertising.
13 17793 M. CHAREST: We would be pleased to
14 file additional information.
15 17794 COMMISSIONER WILSON: Okay.
16 17795 What I would like to do now is just
17 ask you some questions of clarification flowing from
18 your submission. I am going to go through it sort of
19 page by page, but, don't worry, not every page.
20 17796 The first area I want to talk about
21 is the pick-and-pay marketing. This is one of those
22 topics on which we probably won't go into a lot of
23 detail, but you make a statement in your submission,
24 and you made it again this morning, and the two
25 examples that you give in your submission are Family
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3797
1 Channel and TSN. The TSN example goes back quite a
2 long ways, and the Family Channel, there is sort of a
3 historical decision related -- I think with the Family
4 Channel it was -- well, I don't know if it was licensed
5 that way, but those are just two examples of pick-and-
6 pay that have been implemented in Canada.
7 17797 Are you aware of any other
8 jurisdictions where pick-and-pay is being utilized to
9 any extent?
10 17798 MS LOGAN: Indeed, we are aware that
11 there are digital distributors that have fully
12 addressable systems that in fact --
13 17799 COMMISSIONER WILSON: Are capable of
14 it.
15 17800 MS LOGAN: And that are offering
16 large packages and they are highly successful with
17 large packages at low prices and have not taken that
18 option because it is not attractive to them and it is
19 not attractive to consumers.
20 17801 COMMISSIONER WILSON: I guess I am
21 just wondering why you are raising this. Have you
22 actually had conversations -- you said that some cable
23 executives had suggested that this was one of the ways
24 that they might encourage the roll-out of digital
25 service, but if you look at the fully addressable
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3798
1 distributors, DTH and Look TV, they are continuing to
2 use packaging as their main marketing technique.
3 17802 I am just wondering where is your
4 fear really coming from and what you want us to do
5 about it.
6 17803 M. ROY: Je pense que c'est un des
7 grands mythes que l'on retrouve chez le consommateur,
8 c'est de croire que la technique à la carte est une
9 technique de mise en marché qui réussirait et qui
10 serait appréciée des consommateurs. Toutes les
11 expériences qui ont été menées aux États-Unis en ce
12 sens-là ont toutes été presque désastreuses. Le
13 consommateur, naturellement, préfère s'abonner à un
14 package de services beaucoup plus qu'un choix à la
15 carte, qui devient plus confus qu'autre chose.
16 L'impact que ça aurait sur les prix aux consommateurs
17 serait vraiment un impact très important.
18 17804 Si vous avez accès à 100 pour cent du
19 marché et vous chargez, disons, 1 $, et par la suite,
20 par une technique à la carte, vous n'avez accès qu'à 10
21 pour cent du marché, il y a de fortes chances, si vous
22 voulez maintenir la même qualité de services, que vous
23 deviez charger 10 fois plus, donc 10 $ au consommateur.
24 Donc le consommateur est perdant sur toute la ligne
25 dans cette stratégie.
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3799
1 17805 Alors c'est quelque chose que l'on
2 entend régulièrement du côté des gros opérateurs et
3 donc on est un peu inquiets parce qu'on sait que les
4 résultats seraient vraiment très négatifs pour la
5 programmation canadienne.
6 17806 Dans un marché comme le Québec, qui
7 est encore plus étroit, qui est encore plus petit, ce
8 serait la disparition pure et simple des services
9 canadiens de langue française. Souvent les seuls
10 services qui auraient les moyens de se payer une
11 stratégie pareille seraient les services américains,
12 qui ont déjà un amortissement sur leur marché et qui
13 viennent chercher des revenus additionnels ici, au
14 Canada, sans obligation aucune.
15 0945
16 17807 COMMISSIONER WILSON: I guess it just
17 struck me that -- you say that in any case where this
18 has actually been tried it has been a disaster from the
19 consumer point of view; but you would have to expect it
20 would be a disaster from a distributor's point of view
21 because people aren't going to take the services if
22 they are just taking them one by one.
23 17808 M. ROY: Je dirais que c'est un peu
24 l'ironie de la situation. C'est quelque chose qui ne
25 fonctionne pas et pour le consommateur et, par le fait
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1 même, pour le câblodistributeur.
2 17809 Le coût technique pour offrir une
3 telle technique de mise en marché est prohibitif et
4 donc devrait même, du point de vue des
5 câblodistributeurs, les décourager de faire une telle
6 mise en marché.
7 17810 COMMISSIONER WILSON: We raise the
8 issue at this time because, as people discuss how will
9 digital television work, there has been on the part of
10 the cable industry a growing interest in designing a
11 digital environment that will be pick and pay; and we
12 see that, yes, they might be able to get American
13 services in at that price, but eventually as the
14 digital world rolls out it will mean that Canadian
15 choices will not be competitive.
16 17811 I guess we will talk about this
17 further next spring.
18 17812 On page 14 of your submission, in the
19 second paragraph, you make some comments with respect
20 to public funding for Canadian programming. You
21 suggest that the Commission request that the government
22 explore further tax credits and other mechanisms which
23 could alleviate the difficulties of financing top
24 quality Canadian programming.
25 17813 I am wondering if you could just
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3801
1 expand a little bit for me on what you mean by "further
2 tax credits"? Are you looking for more of the same
3 kinds of tax credits as are currently available, or
4 some new kind; and what "other mechanisms" were you
5 thinking of, that is the phrase that I think you use?
6 17814 MS LOGAN: We were looking at some of
7 the incentives with respect to the CRTC, some
8 incentives with respect to certain categories of
9 programming.
10 17815 We see, as well, that documentaries,
11 for example, are one area that could be encouraged.
12 They are very difficult to finance and we had looked at
13 documentaries specifically.
14 17816 Trina, do you want to add on?
15 17817 MS McQUEEN: I don't think we
16 proposed any specific tax mechanisms. But we noted
17 that a number of other of the submissions to you
18 contained some information on that. Our request there
19 was that you do examine those other proposals that have
20 been raised rather than us suggesting specific ones.
21 17818 I don't know whether you wanted to
22 talk about documentaries or whether it was just really
23 the question about -- exploring...
24 17819 COMMISSIONER WILSON: It was just
25 what you sort of had in mind in terms of requesting
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1 that the government explore further tax credits. I was
2 just wondering if you had something specific in mind.
3 17820 MS McQUEEN: Again, not particular to
4 us, but we had noted there are a number of suggestions
5 in other briefs to you that could be explored.
6 17821 COMMISSIONER WILSON: Okay. This is
7 also on the issue of public funds. Further along in
8 the same paragraph on page 14, you state that the:
9 "...inequities in the
10 distribution of funds between
11 projects destined for public and
12 private broadcasters as well as
13 between projects for specialty
14 and conventional broadcasters
15 need to be addressed."
16 17822 But I noticed at pages 33 and 34 you
17 make a point of the fact that the demands made on the
18 public funds by specialty services are in fact quite
19 modest. This was a point that you raised in response
20 to what you said were concerns that had been expressed
21 that both public and private conventional broadcasters
22 are being penalized by your access to the fund.
23 17823 I am just wondering what exactly you
24 are saying that your demands on the funds are so modest
25 that there is actually room for more demand, especially
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1 in view of the contributions to Canadian programming
2 and viewership to Canadian programming that your
3 services make or -- because when you say the inequities
4 need to be addressed, on the one hand you are saying
5 that your demands are very modest and people shouldn't
6 be concerned, but then you are saying there are
7 inequities and they should be addressed. So what is
8 it?
9 17824 MS McQUEEN: At the time we wrote the
10 brief we were concerned about how the future
11 distribution might go because of what had happened last
12 April. However, we have been in touch -- have been,
13 well, why should I -- I am on the board of the fund is
14 what I mean -- and having that access, I think we
15 believe that the board is taking steps now that will
16 make sure that there is equitable and fair access to
17 the fund by all parties. We are satisfied at this
18 point that some of the concerns we had last April may
19 be alleviated.
20 17825 Now, the decisions aren't 100 per
21 cent made, and of course I think as specialty
22 television grows, we will always push for more access
23 to the fund, and justifiably so. But at the moment we
24 think things are going pretty well.
25 17826 COMMISSIONER WILSON: Okay. That is
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3804
1 great.
2 17827 Again, on page 14 of your submission
3 when you are discussing direct access by broadcasters
4 to the funds, you concluded that there are difficulties
5 which leave you to reject this proposal. But you do
6 say:
7 "The quality and editorial
8 control that would result in
9 projects controlled by
10 broadcasters is appealing."
11 17828 I am just wondering what you mean by
12 that.
13 17829 MR. FRASER: I am a bit lost. Can
14 you just put your question again?
15 17830 COMMISSIONER WILSON: Okay, on page
16 14, about halfway down the page, where you talk about
17 broadcaster access to production funds. That is a
18 notion that you reject. You say that you have rejected
19 it, but you do say in the second sentence:
20 "The quality and editorial
21 control that would result in
22 projects controlled by
23 broadcasters is appealing."
24 17831 I am just curious about what you mean
25 by that. Why would their editorial control be
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3805
1 appealing? Maybe I am being too picky but...
2 17832 MR. FRASER: I think, first of all,
3 we have to state that the root problem is that there is
4 not enough money in the various funds and there is a
5 danger of most of the money being soaked up by certain
6 kinds of programming.
7 17833 We who are niche broadcasters feel
8 that we don't have enough room for the kinds of
9 programs that we do to get access to enough funding.
10 17834 The question of editorial control, in
11 our situation where most of our production comes from
12 independent producers, is quite different from
13 broadcasters who are in a position to exercise more
14 control.
15 17835 MS LOGAN: But, of course, we mean
16 the editorial control exercised by specialty television
17 as broadcasters.
18 17836 COMMISSIONER WILSON: Okay.
19 17837 MS LOGAN: We consider ourselves to
20 be broadcasters in this modern world.
21 17838 MS McQUEEN: I could add an anecdote
22 if that would help clarify some of this.
23 17839 COMMISSIONER WILSON: I am not sure
24 that it is much clearer to me than it was.
25 17840 MS McQUEEN: I guess it is just that
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1 if you are the actual producer and owner of a work, you
2 really do have an ability to sort of wade in, roll up
3 your sleeves and say, "Put that shot there," or "Go
4 back and rewrite that," as opposed to dealing with an
5 independent producer who is the creative force behind
6 the program and you are really buying into his or her
7 vision of the program. Most of the time, that is
8 wonderful. But, some times, there is a desire on the
9 part of a broadcaster who wants very strongly to
10 deliver a certain kind of program and a certain kind of
11 message to be able to do that in a more -- in a
12 stronger way.
13 17841 That's the basis of that remark, that
14 editorial control by a broadcaster can be extremely
15 useful in certain situations where you actually have a
16 vision of what you want to say to your audience and you
17 want to be able to exercise that vision.
18 17842 COMMISSIONER WILSON: Okay. I wasn't
19 entirely clear that when you were talking about
20 broadcasters you were talking about yourselves, because
21 typically you are talking about yourselves as specialty
22 and premium services. So I thought you were talking
23 about the conventional broadcasters and, of course,
24 that is one of the issues that we are talking about, is
25 whether or not conventional broadcasters should have
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1 direct access to the equity investment program, for
2 example.
3 17843 Thank you for the clarification.
4 17844 On page 18, and again this morning in
5 your oral submission, you raise, as have other parties,
6 the notion of extracting some kind of contribution from
7 the U.S. services. You also recommend that the
8 Commission authorize the use of all advertising spots
9 for the promotion of Canadian programming and services.
10 17845 I am just wondering if, as an
11 association, have you actually talked to the U.S.
12 services about -- I want to talk a little bit more
13 about the contribution side, but just about the spots,
14 the ad spots, have you actually sat down and talked to
15 them about the idea of them giving up more spots? You
16 are saying that the Commission should instruct, should
17 authorize the use of all of those spots for the
18 promotion of Canadian programming and services. And in
19 your remarks this morning you said that they had
20 willingly given up those two minutes that are currently
21 being used, the local avails.
22 17846 Have you talked with the U.S.
23 services? Have you gotten together with them as a
24 group and sort of said, "What about giving us a couple
25 more minutes an hour?"
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1 17847 MS LOGAN: No, we haven't. There
2 have been some preliminary chats. We feel this is such
3 a reasonable request we are quite optimistic.
4 17848 Basically, the American services
5 can't have it both ways. They can't -- they say they
6 do not sell advertising in the Canadian markets so,
7 therefore, they cannot claim financial harm if these
8 spots are used for Canadian promotion.
9 17849 We think, given the benefits they get
10 from the Canadian market, $80 million last year in
11 subscriber revenue, it is a very, very reasonable
12 trade-off.
13 17850 COMMISSIONER WILSON: I just wondered
14 if any proposals had been discussed. I guess I am
15 curious about why you might want the Commission to
16 instruct that this happen if you haven't talked to them
17 yourselves already.
18 17851 Do you think that that is the most
19 appropriate way to handle it?
20 17852 MS LOGAN: Well, certainly, coming to
21 this hearing and looking at -- asking the question:
22 What could be done to increase the promotion of
23 Canadian television and how can we get greater
24 audiences? This is an idea that we thought we would
25 bring forward to this venue.
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1 17853 COMMISSIONER WILSON: Okay. You also
2 urge the Commission to examine other ways to insist on
3 significant contributions for foreign services. You
4 use that terminology specifically, this is again on
5 page 18, in terms of getting some kind of contribution
6 from the U.S. services for programming.
7 17854 You say that there are two problems
8 with doing this. One is the possibility that the
9 contribution will be passed on to Canadian subscribers,
10 and the other is potential trade issues. I am just
11 wondering when you urge the Commission to examine other
12 ways if you had any ideas about what other ways we
13 might do this.
14 17855 MS LOGAN: Well, we are hoping,
15 perhaps, your lawyers have sharper pencils or a new way
16 of looking at trade law and legislation. Ideally, a
17 contribution as a percentage of revenue, if we can
18 avoid the trade issues, and if we can ensure that
19 Canadians consumers don't ultimately foot the bill,
20 that would be equitable.
21 17856 COMMISSIONER WILSON: Okay.
22 17857 MR. JANNETEAU: If I might just add,
23 surely, the issue here is that the U.S. services are
24 taking out of the system $80 million a year, our
25 estimate from Statistics Canada numbers, and are really
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1 basically not contributing a lot. We recognize that
2 they have helped in the past, some of the services have
3 helped the distribution of the tiers, or the
4 penetration of the tiers. What we are suggesting is
5 that, perhaps, there could be other ways that the U.S.
6 services could be contributing to the system as we have
7 had to contribute to the system.
8 17858 COMMISSIONER WILSON: Okay. Thank
9 you.
10 17859 Once again I just want to ask a
11 question, and we don't need to go into a lot of detail
12 in the response. On page 29 of your submission, in
13 your discussion about revenue levels you suggest that
14 the Commission "gain a window" into wholesale
15 subscriber fees.
16 17860 I know I am sort of calling you to
17 task on your phraseology here, but I am just trying to
18 get a better understanding of what you mean by some of
19 these phrases. So what do you mean by "gain a window"?
20 17861 MS LOGAN: We mean monitoring. We
21 are not asking you to step in and set rates today.
22 17862 But the economic model under which
23 our sector works is changing and there is increasing
24 downward pressure on wholesale rates. That means that
25 the services that come up for contract renewal are
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1 often being asked to take less, or substantially less
2 in terms of a wholesale fee than they had before, and
3 it means that the services that this Commission
4 approves in licence hearings on the basis of very
5 specific business plans, when they go to negotiate
6 their conditions of launch are being asked to take less
7 than the levels of subscriber fees projected in the
8 business plans.
9 17863 It is a very difficult system because
10 of the inequities in bargaining power. The
11 distributors have tremendous power. They have the
12 power of life and death over the services. All
13 negotiations are in secret. What transpires is never
14 known. The outcomes are never known. Yet those
15 outcomes have the ability to undo all of your plans
16 when you pick service A over service B in a licence
17 hearing on the basis that you expect certain
18 contributions.
19 17864 We believe transparency is important.
20 We believe it would be a very useful tool for you in
21 your regulatory tool kit to know what actual rates are
22 being set for us and for the foreign services in a
23 comparative fashion.
24 17865 If you perceive problems and problems
25 developing, you will then have the ability to act
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1 accordingly. So we are asking you to monitor and act
2 accordingly.
3 17866 COMMISSIONER WILSON: Okay. I just
4 have two more questions for you.
5 17867 In your Appendix "B", you talk about
6 the restriction imposed on specialty services with
7 respect to showing infomercials, and you say that in
8 line with your call for equal treatment among
9 broadcasters you believe the authority to broadcast
10 infomercials should be extended to specialty services
11 under the same rules as conventional broadcasters.
12 17868 Do you think there is a demand on the
13 part of your viewers for infomercials, or is this
14 purely a commercial proposition?
15 17869 MS LOGAN: It's --
16 17870 COMMISSIONER WILSON: What is the big
17 thing about infomercials these days?
18 17871 MS LOGAN: Well, I think the big
19 thing about infomercials from the perspective of
20 specialty television is that as we look at how our
21 counterparts in the United States are successful, they
22 gain large revenue from infomercials.
23 17872 Infomercials can be well done if they
24 are targeted to niche audiences; and the more
25 advertising revenue we gain, the less pressure, of
StenoTran
3813
1 course, there is on subscriber rates.
2 17873 COMMISSIONER WILSON: Okay. What is
3 your view of the CAB suggestion that infomercials
4 should be counted as Canadian content? Would you be
5 proposing the same?
6 17874 MS LOGAN: I think, yes, it is an
7 interesting concept that certainly could work.
8 17875 COMMISSIONER WILSON: Okay. Finally,
9 in Appendix "B" you talk about the export of Canadian
10 programming and you state that this must remain a
11 secondary goal of our broadcasting system, but there
12 are other parties to this proceeding who have suggested
13 exactly the opposite as a way of trying to wean the
14 system off public funds, and that is the more
15 successful they are at producing programming for
16 foreign markets and selling those, then the more
17 freedom we will have to produce distinctively Canadian
18 programming.
19 17876 I am just wondering if you could
20 explain to me why you feel that export of Canadian
21 programming should be secondary.
22 1005
23 17877 I guess the other argument is that
24 the industrial programming meets industrial objectives
25 in terms of creating Canadian jobs.
StenoTran
3814
1 17878 MS LOGAN: Gerry, do you want to
2 start with that?
3 17879 MR. JANNETEAU: I guess the first
4 point is that if the export of Canadian programs, as
5 you defined it, meets industrial objectives, it perhaps
6 doesn't always meet cultural objectives. I think that
7 many Canadian programs or Canadian-produced programs
8 that have been made primarily for export have not
9 necessarily been stories about ourselves which we want
10 to see on Canadian television.
11 17880 The other thing that we want to say
12 here and introduce is that although we still believe it
13 is a secondary goal, there are ways with specialty
14 television where we can contribute in a different way
15 to this by encouraging partnerships. There are many
16 good stories about this and some of these are described
17 in here under question 75. What those partnerships
18 enable is the kinds of agreements that have been made
19 between, say, a Canal D and A&E or Discovery Canada and
20 Discovery U.S., where co-productions are made in Canada
21 for Canadians, but also are used elsewhere by the
22 partner of that specialty service.
23 17881 We operate, in the case of RDS, in a
24 business where exports are virtually non-existent
25 because of the rights market, the sports rights market,
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3815
1 and the way it is organized, basically, we really don't
2 have much access to exports. So, in our business, in
3 any case, and in many of our specialty businesses, if
4 we made exports our number one target, I don't think we
5 would be serving our Canadian audiences very well.
6 17882 COMMISSIONER WILSON: Those are my
7 questions. Thank you, Madam Chair.
8 17883 THE CHAIRPERSON: Commissioner
9 Pennefather?
10 17884 CONSEILLÈRE PENNEFATHER: Merci,
11 Madame la Présidente.
12 17885 I have two questions. One is on
13 closed captioning. I don't think I saw a reference to
14 closed captioning in your submission and I was
15 wondering what the status is of closed captioning
16 programming and pay and specialty. We have had
17 considerable representation to the effect that the
18 hearing impaired are frustrated by the lack of access
19 to programming on specialty services. Could you
20 clarify your position on closed captioning?
21 17886 MS LOGAN: I think I will ask Pierre
22 Roy to handle that question.
23 17887 M. ROY: Je pense que l'approche que
24 l'on aimerait favoriser du côté des services
25 spécialisés, c'est plus une approche au niveau des
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3816
1 heures qui seront réellement sous-titrées que seulement
2 de l'argent qui est dépensé. Alors nous avons mis en
3 place, par exemple au Réseau Premier Choix, un système
4 de sous-titrage à l'interne qui nous permet, pour un
5 même montant, de faire beaucoup plus d'heures que nous
6 ne faisions auparavant et, entre autres, de partager
7 les droits des films qui ont été sous-titrés avec
8 d'autres diffuseurs conventionnels.
9 17888 Donc notre approche est plus d'aller
10 dans le sens du nombre d'heures total qui est
11 accessible aux malentendants que strictement une
12 approche de dollars dépensés.
13 17889 CONSEILLÈRE PENNEFATHER: À ce
14 moment-ci, combien d'heures sont disponibles en
15 général?
16 17890 M. ROY: Oh, ça dépend beaucoup de...
17 17891 CONSEILLÈRE PENNEFATHER: La moitié?
18 Le quart?
19 17892 M. ROY: Ça dépend beaucoup des
20 licences, ça dépend beaucoup... je ne pourrais pas vous
21 dire de mémoire, mais ce sont des chiffres qu'on
22 pourrait vous fournir par la suite.
23 17893 CONSEILLÈRE PENNEFATHER: Mais est-ce
24 que c'est une politique de l'Association d'en avoir de
25 plus en plus, d'heures disponibles?
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3817
1 17894 M. ROY: Oui, tout à fait. Tout à
2 fait.
3 17895 CONSEILLÈRE PENNEFATHER: Vous avez
4 mentionné "descriptive video services", qu'en termes
5 technologiques c'est trop dispendieux, mais est-ce que
6 vous pouvez nous dire jusqu'à quel point c'est trop
7 dispendieux? Parce qu'il y a cette demande ici, devant
8 nous.
9 17896 M. ROY: Je dois dire que les
10 premières études au niveau technique, technologique,
11 qui ont été faites ou auxquelles on a eu accès
12 démontrent un coût vraiment tout à fait exorbitant en
13 fonction des moyens des services spécialisés. C'est
14 vrai aussi pour les conventionnels; c'est d'autant plus
15 vrai pour les services spécialisés étant donné nos
16 moyens réduits.
17 17897 Il y a des problèmes technologiques.
18 Aussi, aucun document n'est disponible actuellement sur
19 le marché, donc on ne peut pas en acheter déjà faits.
20 Il y a toutes les questions d'accès à des transpondeurs
21 qui permettraient un troisième canal pour transporter
22 ce descriptive video qui n'est pas disponible
23 actuellement pour nous.
24 17898 Donc il y a une multitude de facteurs
25 qui entrent en ligne de compte actuellement qui ne sont
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3818
1 pas seulement d'ordre technologique mais qui sont au
2 niveau des coûts, au niveau de la possibilité technique
3 de le faire, au niveau de l'accès à des produits qui
4 sont déjà accessibles avec un descriptive video.
5 17899 Donc on suit la situation, mais je
6 pense que... on parle souvent des deux rôles de la CBC,
7 et ce serait peut-être plus le rôle d'un diffuseur
8 public avec des fonds publics de faire un développement
9 dans ce sens-là.
10 17900 CONSEILLÈRE PENNEFATHER: Merci. Il
11 y a peut-être un suivi à faire à ce niveau parce qu'on
12 avait eu des représentations des groupes ici qui ont
13 décrit une situation beaucoup moins dispendieuse, comme
14 peut-être d'autres groupes nous avaient mentionné.
15 Alors je pense que leur présentation est disponible, et
16 on peut peut-être aller un peu plus loin dans ce
17 dossier.
18 17901 J'ai une dernière question.
19 17902 Vous mentionné ce matin... et c'est
20 sur la page 7 de la présentation. Vous nous suggérez
21 d'élaborer une politique et des mesures incitatives
22 réglementaires visant à favoriser la distribution des
23 services de la télévision spécialisée et payante de
24 langue française à l'extérieur du Québec.
25 17903 Auriez-vous quelques précisions ou
StenoTran
3819
1 pourriez-vous élaborer sur cette idée en termes du
2 comment et du pourquoi?
3 17904 M. DESJARDINS: La question des
4 services francophones hors Québec, je pense qu'on est
5 tous d'accord à dire que c'est une situation qui n'est
6 pas très reluisante. Je pense bien que le Conseil est
7 au courant de cette situation. C'est une question,
8 d'ailleurs, qui a été débattue le printemps dernier au
9 Comité mixte du Sénat et de la Chambre des communes sur
10 les langues officielles. D'ailleurs, la présidente du
11 Conseil a indiqué au congrès de l'ACTC en mai que le
12 Conseil se pencherait éventuellement sur cette
13 question, peut-être dans le cadre de l'audience sur
14 l'accès qui va venir et possiblement dans le cadre de
15 l'audience sur les services spécialisés francophones en
16 décembre.
17 17905 Donc nous, TVSP, on espère que le
18 Conseil va arriver à établir des politiques et des
19 règlements qui vont inciter une plus large distribution
20 des services francophones hors Québec.
21 17906 Je pense que, on l'a dit, c'est
22 important pour les communautés hors Québec d'avoir
23 davantage de services francophones et aussi je pense
24 que ça pourra créer des meilleurs liens entre les deux
25 groupes linguistiques de langue officielle au Canada.
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3820
1 17907 Alors évidemment je pense que comme
2 mesure, d'abord, présente, on vous demande de continuer
3 à garder le moratorium qui existe sur les services
4 étrangers parce que si ce moratorium est levé ça
5 augmente la pression à l'extérieur du Québec par
6 rapport aux services de langue française qui sont déjà
7 là ou ceux qui pourraient être distribués.
8 17908 Évidemment, on s'est aperçus qu'avec
9 les services de satellite ExpressVu et Star Choice en
10 numérique, ça, ça permet une plus large distribution et
11 un accès plus vaste aux services de langue française.
12 Ce n'est pas nécessairement vrai pour les services MDS
13 comme Look TV parce qu'ils sont en fonction maintenant
14 en Ontario et on s'aperçoit qu'ils ne distribuent aucun
15 service francophone excepté les services francophones
16 qui sont obligatoires pour eux en Ontario selon la
17 décision que le Conseil a faite.
18 17909 Évidemment, avec le câble numérique,
19 on suppose qu'il y aura des possibilités de distribuer
20 davantage de services francophones comme c'est le cas
21 pour le satellite.
22 17910 Maintenant, entre-temps, ce que le
23 Conseil peut faire... il y a différentes mesures que le
24 Conseil peut penser à faire, comme établir une
25 motivation pour les câblodistributeurs, par exemple, à
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1 distribuer un pourcentage de l'ensemble des services
2 qui sont distribués... qu'il y en ait un pourcentage
3 qui soit francophone.
4 17911 Ce qui arrive aussi, c'est qu'avec
5 l'augmentation des canaux au Canada anglais on
6 s'aperçoit que, relativement parlant, le pourcentage de
7 services francophones qui sont distribués diminue même
8 de façon absolue; sauf quelques exceptions où il y a eu
9 retrait de services francophones au Canada anglais, en
10 général, les services qui sont là ont été maintenus.
11 17912 CONSEILLÈRE PENNEFATHER: Merci,
12 Monsieur Desjardins.
13 17913 Merci, Madame la Présidente.
14 17914 THE CHAIRMAN: Commissioner Cardozo?
15 17915 COMMISSIONER CARDOZO: Thanks, Madam
16 Chair.
17 17916 I just had a question about one of
18 the long-term issues that faces us and that's the
19 matter of websites. I know to a large extent that will
20 be the matter of our new media hearing, but I am
21 wondering in the context of this hearing what we are
22 looking at, recognizing that on one hand websites is a
23 medium unto itself. To what extent do you see websites
24 as being part of your promotion strategy, for promotion
25 in general, for building brand loyalty, information
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3822
1 about programs, the Star system, and all that kind of
2 stuff that we have talked about.
3 17917 I have visited some of the websites.
4 Not all of your members, but some of them are quite
5 active. I am wondering how you see those in terms of
6 promotion with regard to the issues we are dealing with
7 here and what plans you have.
8 17918 MS LOGAN: I would like to ask Trina
9 McQueen to take that question.
10 17919 MS McQUEEN: And I hope others on the
11 panel will join me. You may be interested,
12 Commissioner, to know that it was a specialty channel,
13 actually, who had the first website -- was the first
14 network to have a website in Canada, a specialty
15 channel called Discovery, but I think that was -- it
16 seems like ancient history. There are very few
17 networks that do not have websites now and I think for
18 specialty channels it's especially important.
19 17920 Number one, the first question and
20 the most often question asked in television today is:
21 What's on? Because there are so many channels now, it
22 is very difficult for television guides, which are
23 becoming more like telephone books, to really give you
24 accurate and comprehensive program descriptions. So,
25 one of the things that our viewers use the websites for
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3823
1 is to find out what the program actually is. That's an
2 important part of making their choice. So, in
3 marketing and promotion and purely telling you what
4 time a program is on, websites are invaluable.
5 17921 Secondly, besides giving the schedule
6 information, they are extremely useful in giving people
7 an expanded experience of television. One of the
8 things that we need to do in television is to make sure
9 that our viewers converge. The mediums are converging,
10 we need to make sure that the viewers converge as well.
11 17922 One of the things we have noticed is
12 that people are willing to use television and the
13 Internet at the same time. On our website tsn.ca we
14 have a number of features which, in order to enjoy
15 them, you have to be watching TSN at the same time you
16 are using the website and, to my surprise, perhaps not
17 to everyone's, these are extremely popular. So, we are
18 seeing that the viewers are already converging and
19 using the two mediums at once. So, I think it's
20 important for every television network to make sure
21 that they can deliver that converged experience.
22 17923 I think the third thing also is that
23 we can, as specialty channels which have themes and
24 genres that are in a certain frame, make sure that our
25 website can deliver content that will reinforce those
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3824
1 genres and those themes so that things that can be
2 done, especially at great length on a television
3 program, can be picked up and recycled or even, as we
4 often do, we add original material that is specifically
5 made for that medium so that people have an experience
6 of the genre and the themes and connect them in their
7 minds.
8 17924 So, I think there are a number of
9 strong values for broadcasters and websites to work
10 together very strongly. One of the things that has
11 been very encouraging is the Bell Canada New Media
12 Fund, which has, I think, been a great success in
13 encouraging that kind of cooperation.
14 17925 MR. FRASER: I might add a couple of
15 things, if I may. I am a member of the Internet
16 Committee of the North American National Broadcasters
17 Association. We were in New York last week trying to
18 answer that very question and let me tell you that some
19 of the best brains in this business don't know the
20 answers to those profound questions about where this is
21 all going to go.
22 17926 Clearly, as Trina suggested, most of
23 us use the net now as a means of promoting our network.
24 It's increasingly becoming a means of interacting with
25 our viewers and there is some interactivity between
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1 what we put on television and what is on the net. The
2 two go to together sometimes almost like backs and
3 fronts.
4 17927 In fact with the evolution of web TV,
5 which really brings the two mediums together, a lot of
6 people think that that is a large part of the future,
7 where you can enhance the television experience, the
8 viewing experience, by going to a website even on the
9 same screen and getting additional information or take
10 so much of what you are watching or enjoying. But at
11 the same time, there are great serious concerns amongst
12 all of us about where this is going to lead.
13 17928 Some people in New York last week
14 were talking about this becoming a full-fledged
15 broadcast medium in the next four or five years. Some
16 people have shorter time frames, some people have
17 longer time frames. The Committee that I am on is very
18 concerned about the issues that that brings up, such as
19 copyright and a whole constellation of other issues
20 that I am sure you are going to discuss in the
21 forthcoming hearings.
22 17929 I think it would be very difficult
23 for any of us to fully meet the needs, desires,
24 aspirations of our viewers without using the Internet
25 in some way, shape or form. So, it has become, I
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3826
1 think, for most of us an integral part of what we do.
2 17930 MR. MORRISSETTE: If I can just add a
3 few comments, there is a today issue and a tomorrow
4 answered here in your question and I think the strategy
5 in terms of how to use the Internet varies between
6 entertainment services and information services. Two
7 of the largest categories of use on the Internet today
8 is news and weather and other similar types of
9 information services.
10 17931 When you operate a specialty service
11 in either the news or weather category, traditional
12 television limits your content to 60 minutes per hour
13 minus the commercial time. The benefit of a website is
14 that it's virtual so that the users can develop a
15 website that complements your traditional television
16 programming to better serve their needs, depending on
17 what they are. The main benefit of interactivity is
18 personalized information on demand.
19 17932 So, as websites in the information
20 category develop today, it's complementary, it's also
21 used to interact with the audience, there are
22 promotional aspects involved, but looking ahead towards
23 tomorrow when technology such as set-top box and web TV
24 type of systems will enable the convergence of the PC
25 and the television in the living room, there is no
StenoTran
3827
1 question that the two will evolve and mesh down the
2 road or converge down the road. This will have
3 profound impacts on programming strategies, not just
4 for the TV channel, but for the interact site as well.
5 As to entertainment services, I think the issues are
6 somewhat different, but there is a similar analogy.
7 17933 So, in summary, it's real-time
8 constraints for regular television versus virtual
9 capabilities for the interactive world of websites and
10 the major benefit ultimately from interactivity as
11 personalized information on demand. This will create a
12 new value-added benefit to the users and to
13 programmers.
14 17934 COMMISSIONER CARDOZO: It's
15 interesting you note that new media provides more than
16 60 minutes to the hour, which is kind of nice, I guess.
17 There are all sorts of things we could do with
18 advertising minutes, if you think about it, in
19 television.
20 17935 Is it fair to say that in terms of
21 the interactive part of your websites where you hear
22 back from people, you are hearing back more than before
23 you had an interactive website, for those of you who
24 existed before then?
25 17936 MS McQUEEN: Yes.
StenoTran
3828
1 17937 COMMISSIONER CARDOZO: By a lot, by a
2 little?
3 17938 MS McQUEEN: It's hard to tell
4 because Discovery always had a website, so there was no
5 before. But certainly, in my experience at another
6 broadcaster, there was much more feedback and instant
7 feedback, so there was an ability to do something about
8 the feedback we got in a very useful way.
9 17939 MR. JANNETEAU: In our case,
10 certainly five to ten times more than before we had the
11 website.
12 17940 MS LOGAN: We provided a survey of
13 the features of specialty and pay websites in our new
14 media submission and the ability to interact with the
15 viewer and the feedback mechanism was one that all
16 participants had and were using. It was especially
17 high in terms of the use of e-mail for contesting at
18 the same time.
19 1025
20 17941 MR. FRASER: There's an interesting
21 wrinkle I might add. We have been at it for ten years
22 now and we have always had a very steady flow of viewer
23 mail. What we are getting from the web site is not a
24 lowering of that mail from people who like to write
25 letters on paper, but communication from people we
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3829
1 never heard from before, and that's why a substantial
2 amount.
3 17942 THE CHAIRPERSON: When you talk about
4 the percentage of total revenue spent by specialties
5 and the pay television industry on programming as 30
6 per cent, would it be fair to say that you take all the
7 services that are attached in Appendix A, which is the
8 entire panoply of services, and you average it out?
9 17943 MS LOGAN: Yes, the 37 per cent.
10 17944 THE CHAIRPERSON: I do not want to
11 denigrate the level of the 30 per cent, but I am
12 wondering to what extent that is a fair comparison.
13 You obviously want to make a point when you compare
14 with the 28 per cent by the private conventional
15 broadcasters when, by virtue of being niche
16 programming, as you have insisted, some of them have
17 100 per cent of their programming Canadian.
18 17945 I am not, as I say, focusing on the
19 37 per cent but whether or not much can be taken from
20 the comparison in light of the types of services and
21 the fact that a number of them, such as the news
22 channels and so on, have 100 per cent Canadian content,
23 so obviously their entire expenses for programming will
24 be on Canadian content. I know there are some that are
25 lower, but to me that number is in every representation
StenoTran
3830
1 and I am wondering what value it has in your view.
2 17946 MS LOGAN: There is no doubt that
3 having news and weather at 100 per cent, or nearly 100
4 per cent, does pull up the average. On the other hand,
5 we take tremendous pride in the results because, as
6 small services, as we have said, the average revenue of
7 perhaps between 20 million and 30 million is very
8 challenging within our budgets to fill as much of the
9 schedule as we do with high Canadian content.
10 17947 THE CHAIRPERSON: I repeat; I
11 acknowledge the value of the 30 per cent. My question
12 is more whether the comparison is helpful in light of
13 the differences between the two.
14 17948 MR. JANNETEAU: Madame Wylie, si vous
15 me permettez, I think it might be worth pointing out
16 that, while there are services that are entirely
17 Canadian, there are also some services that do not have
18 very high Canadian content requirements, such as TV5,
19 which has been around a long time, and some of the
20 newer licensees.
21 17949 So I think that it is still a valid
22 point to include all of the services that are being
23 represented in this particular case.
24 17950 THE CHAIRPERSON: I think you would
25 need more complicated mathematics than simple averaging
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3831
1 to arrive at something meaningful. I did acknowledge
2 there are some that are very low, as low as 15 per
3 cent.
4 17951 Anyway, it's put there all the time.
5 17952 M. DESJARDINS: Je pense que c'est
6 important aussi de considérer que sur les télévisions
7 conventionnelles il y a des nouvelles, il y a du sport
8 et il y a de la météo qui font partie aussi de la
9 programmation canadienne des moyennes qui sont
10 utilisées pour les télédiffuseurs conventionnels.
11 17953 LA PRÉSIDENTE: Maintenant,
12 Monsieur Roy, télévision à la carte. Nous avons
13 entendu l'Association des câblodistributeurs pas samedi
14 dernier mais le samedi précédent, et je ne crois pas
15 faire erreur en disant qu'eux aussi reconnaissent que
16 la télévision à la carte, ce n'est pas une formule qui
17 serait un grand succès. Il faudrait revoir le procès-
18 verbal, je ne voudrais pas leur mettre des mots dans la
19 bouche, mais il me semble que votre inquiétude relève
20 de quoi? Parce qu'il semble qu'en public on ait
21 reconnu qu'il y aurait plus de choix par l'abonné mais
22 que le choix se ferait quand même en étage.
23 17954 D'où viennent vos grandes inquiétudes
24 qu'on s'achemine vers la télévision à la carte?
25 17955 M. ROY: Vous faites référence aux
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3832
1 services à la carte, pas au pay-per-view; vous faites
2 référence aux services à la carte.
3 17956 LA PRÉSIDENTE: Oui, aux services à
4 la carte.
5 17957 M. ROY: O.k.
6 17958 LA PRÉSIDENTE: Pardon, j'ai sans
7 doute fait erreur.
8 17959 À la convention aussi des
9 câblodistributeurs, je ne sais pas si vous y étiez,
10 mais il y avait une session en particulier qui... je
11 pense que c'était votre homologue des États-Unis, une
12 dame qui était déjà à Discovery ou qui l'est
13 maintenant, qui disait qu'aux États-Unis non plus ça ne
14 fonctionnerait pas.
15 17960 Je ne croyais pas, à moins que vous
16 sachiez quelque chose que je ne sais pas, que c'était
17 une menace qu'on essaierait de vendre à la carte, même
18 avec le numérique.
19 17961 M. ROY: Ça fait partie des
20 déclarations mêmes de certains câblo-opérateurs, qui
21 font cette déclaration qu'ils veulent utiliser cette
22 technique de mise en marché de services de
23 programmation. Alors on se fie à ce qu'on entend de la
24 part de principaux câblo-opérateurs au Canada...
25 17962 LA PRÉSIDENTE: Il faudra que je
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3833
1 revoie le procès-verbal de la présentation de
2 l'Association des câblodistributeurs.
3 17963 You have raised an issue about first
4 run or more windows at page 15 of your written
5 presentation. Are you asking the Commission to
6 redefine first run? Is that what you want?
7 17964 And could you tell me -- I may have
8 missed that but I do not see, I do not think anywhere,
9 a very precise definition that you would want. We have
10 had some suggested, such as first window should be
11 first window for that service as opposed to... Is that
12 what you want, so you could have sequential or
13 concurrent first windows?
14 17965 MR ROY: Actuellement, la définition
15 de "programmation originale" est très restrictive pour
16 être cataloguée comme diffusion originale en première
17 diffusion, il faut que cette diffusion-là soit faite la
18 première fois au Canada sur un service donné, toutes
19 langues confondues, toutes fenêtres confondues. Donc
20 c'est très restrictif et ça vient à l'encontre du
21 financement qu'on pourrait aller chercher dans
22 différents marchés ou sur différentes fenêtres.
23 17966 Donc nous demandons de réviser cette
24 définition-là pour permettre le partenariat avec des
25 diffuseurs qui font partie de fenêtres différentes de
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3834
1 diffusion et dans des territoires linguistiques
2 différents Pour éviter les abus que cette relaxation
3 pourrait amener il faudrait que les diffuseurs qui
4 veulent avoir accès à ce qualificatif soient parties du
5 financement de la production, donc aillent sous forme
6 de pré-achat et non pas d'acquisition subséquente.
7 17967 LA PRÉSIDENTE: Quand vous parlez
8 d'une définition restrictive, vous vous référez à
9 l'avis public je crois que c'est 197, où on reconnaît à
10 ce moment-là les marchés différents. Évidemment, les
11 marchés spécialisés sont nationaux; donc, s'il y a un
12 service conventionnel à une première fenêtre, est-ce
13 que vous verriez un service spécialisé avoir une
14 première fenêtre en même temps si vous avez pu
15 négocier...
16 17968 M. ROY: Peut-être pas en même temps,
17 mais une fenêtre...
18 17969 LA PRÉSIDENTE: En séquence.
19 17970 M. ROY: En séquence.
20 17971 LA PRÉSIDENTE: Et là, est-ce que
21 vous verriez une possibilité de, disons, trois ou
22 quatre fenêtres une après l'autre?
23 17972 M. ROY: Ça pourrait très bien être
24 la télévision payante ou la télévision à la carte,
25 télévision payante, service spécialisé ou conventionnel
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1 qui pourraient partager ou faire du co-financement et
2 aider au financement d'un plus grand nombre de
3 programmations canadiennes.
4 17973 LA PRÉSIDENTE: Et le but serait
5 évidemment de pouvoir plus facilement rencontrer...
6 17974 M. ROY: Nos exigences...
7 17975 LA PRÉSIDENTE: ... les exigences de
8 first run, de première fenêtre.
9 17976 M. ROY: C'est ça, tout à fait, sans
10 créer les abus qui avaient été à la base de cette
11 disposition-là. On voulait éviter au départ, si nos
12 recherches sont exactes, le fait...
13 17977 LA PRÉSIDENTE: La comptabilisation.
14 17978 M. ROY: ... qu'après le fait on
15 puisse acquérir une programmation canadienne en la
16 doublant et qu'elle soit considérée à ce moment-là
17 comme originale.
18 17979 LA PRÉSIDENTE: Quand vous parlez
19 d'abus, est-ce qu'il n'y aurait pas, inhérent à une
20 nouvelle définition ou une définition telle que vous
21 nous la donnez, un recyclage de programmation qui
22 pourrait être néfaste?
23 17980 M. ROY: Non. C'est pour ça qu'on
24 dit que, pour avoir accès à ce qualificatif, il
25 faudrait que le diffuseur fasse partie de la structure
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1 financière et agisse en pré-achat pour la
2 programmation.
3 17981 LA PRÉSIDENTE: Mais pour l'auditoire
4 il y aurait un recyclage de programmation?
5 17982 M. ROY: Non, je ne pense pas. C'est
6 un meilleur financement sur des marchés linguistiques
7 différents, sur des fenêtres différentes. On a déjà ce
8 mécanisme de financement partagé par exemple au cinéma,
9 avec différents intervenants qui peuvent acquérir des
10 droits et aider au financement de films de cinéma.
11 17983 THE CHAIRPERSON: Ms McQueen, you
12 have made clear that you are broadcasters so, while you
13 are here, I would like some comments from you on the
14 following: At page 26 of your written presentation,
15 and this morning again, you have talked about how you
16 seem to have been able to dislodge, albeit niche,
17 audiences during peak time from watching foreign
18 programming.
19 17984 I am curious why you insist that
20 spending is the best mechanism, considering the other
21 proposals we have before us, which would be requiring a
22 certain amount of programming in certain categories in
23 peak time and where you make your efforts towards
24 reaching your niche scheduling properly to reach your
25 small audiences but, nevertheless, who would have the
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1 opportunity to watch foreign programming at that hour
2 anyway.
3 17985 Why do you believe that the
4 broadcasters couldn't do the same simply if they had to
5 put Canadian programming in those hours and that that
6 would force them to spend their money and maybe we
7 would not have to have all these difficult formulas?
8 You seem to believe that it's the other way, it's
9 spending that will do it.
10 17986 MS McQUEEN: Yes, we do believe that
11 the system of requiring a certain number of hours is a
12 difficult system and is not as productive as linking
13 spending to revenue. I guess the reasons for that are
14 fairly obvious.
15 17987 The trouble with the hour-long
16 formula is that the temptation is to fill it with cheap
17 programming with low production values. That is the
18 temptation. I think we have to go back to the basis of
19 what private broadcasters are in the business of doing,
20 which is making shareholder value. If you can make
21 your shareholder value and meet your Canadian content
22 obligations by spending less money, it's almost an
23 irresistible temptation. I guess what we are asking
24 you is to lead us not into temptation.
25 17988 With revenue, we can invest in a way
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1 that will please the viewers that we have chosen and
2 that our niche commands us to support. It is a
3 measurable, easily identifiable kind of formula and it
4 works. We are not suggesting that you should do away
5 with having some minimum level of Canadian content --
6 that's obvious that we have to -- but given a choice
7 between increasing the number of hours of Canadian
8 content and requiring an expenditure formula, on the
9 basis of what we have done it seems that the
10 expenditure formula works.
11 17989 We were not told that we had to put
12 these programs in prime time. We did it naturally out
13 of the revenue-to-expenditure formula. In other words,
14 if you are going to spend a lot of money on Canadian
15 content, you naturally will put it in prime time rather
16 than putting it at six in the morning. If you have an
17 hour formula, the temptation is to put the lower cost
18 programming at six in the morning and fill your prime
19 time schedule with what you think will do well.
20 17990 That does not mean that the
21 producers' proposal, the 10/10/10 formula, we think has
22 some interest for conventional broadcasters. But the
23 programs that they are suggesting, most of them, the
24 big drama series for example, are not the programs that
25 specialty channels do and they are not suggesting that
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1 as a formula for specialty channels. They have said
2 that they generally feel good about what specialty
3 channels do.
4 17991 So I guess we kind of think that if
5 something is working, if the producers like it, if the
6 statistics about programming in prime time are decent,
7 if the revenue that's spent is large, it seems to us it
8 kind of works.
9 17992 THE CHAIRPERSON: For those who think
10 that there is not enough Canadian programming that
11 attracts audiences in prime time, there are a number of
12 parties who feel that we have not succeeded in doing
13 that and want to repatriate prime time.
14 17993 I am not sure that you responded to
15 my question. My question is: We have not, to date,
16 gone very far in demanding certain types of Canadian
17 programming in prime time. You seem to assume that the
18 broadcasters will be able to afford to lose their
19 audiences in prime time by taking their chances in
20 having what you call cheap tonnage, or cheap
21 programming, in prime time. It's the combination of
22 when you have to put it on that some will argue will
23 force expenditures because you cannot afford to lose
24 those peak hours. It's not something we have done.
25 17994 MS McQUEEN: When you insist that I
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1 am a broadcaster, I accept that definition, of course,
2 but I would like to be a specialty broadcaster rather
3 than a conventional broadcaster.
4 17995 THE CHAIRPERSON: That's your
5 prerogative.
6 17996 MS McQUEEN: The only reason that I
7 do not want to answer your question is because I think
8 it's a tremendously important one. In fact, it goes to
9 the heart of what you are doing here, and on the basis
10 of our limited experience with conventional
11 broadcasting it does not seem to us useful for you to
12 hear what might be an uninformed opinion.
13 17997 However, let me just continue to say
14 that the producers association proposal has some
15 interest and some advantages. It has the following
16 advantages for specialty broadcasters in that if it
17 works it would generate a supply of high quality
18 Canadian programming that we could help with by buying
19 second windows, third windows, and that would provide
20 acquisition possibilities for us outside that. So we
21 are not saying that the producers' proposal, as one
22 example of the thing that you are talking about, is
23 without merit. I think what we are saying as
24 broadcasters, specialty or conventional, is that we
25 find a great difficulty in the imposition of specific
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1 hours as a way of increasing Canadian content.
2 17998 THE CHAIRPERSON: Considering that my
3 first question put into question your comparison
4 between conventional and specialty services, I will let
5 you get away with not answering and keeping your
6 specialty service hat on.
7 17999 Counsel.
8 18000 MR. BLAIS: There are four brief
9 areas I would like to follow up on. The first area
10 deals with simultaneous substitution.
11 18001 To what class or classes of BDUs do
12 you think your proposal should apply?
13 18002 MS LOGAN: The same as the
14 conventional broadcasters have.
15 18003 MR. BLAIS: So the class 1s and 2s,
16 in your view, should be subject to that requirement?
17 18004 MS LOGAN: Yes.
18 18005 MR. BLAIS: And as a result, all
19 those class 1s and 2s systems would have to put in the
20 technical ability to do it for all services. It may be
21 suggested by some parties that that would involve a
22 considerable amount of expense and perhaps, on a cost
23 benefit analysis, would not be opportune at this time
24 to get involved into that.
25 18006 Would you like to comment on that?
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1 18007 MS LOGAN: We understand that the
2 costs have dropped dramatically and it is our actual
3 experience that small cable casters have been far more
4 likely to respond positively to actual requests, so
5 they don't seem to have the difficulty.
6 18008 MR. BLAIS: What is your evaluation
7 of the drop in costs to put the technical ability into
8 place if one compares to when the Commission looked at
9 this the last time?
10 18009 MS LOGAN: I would like to submit
11 that to you in writing. I am afraid today we had a
12 simultaneous substitution expert on our panel who
13 probably missed her plane and I do not have those
14 details with me.
15 18010 MR. BLAIS: Those technical problems
16 do occur. That's fine. If you could do it -- we are
17 late in the process -- perhaps by the 5th of November,
18 if that's all right.
19 1045
20 18011 MR. BLAIS: The second area I would
21 like to look at is your proposal with respect to access
22 to avails of foreign services. Mr. Buchan, when he
23 appeared with the Rogers panel, was lamenting the fact
24 that nobody raised subsection 9(2) of the Broadcasting
25 Act; this is at page 3126 of the transcript, at
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1 paragraph 14905.
2 18012 As you are aware, subsection 9(2) of
3 the Act is an implementation of Canada's international
4 obligations under the Free Trade Agreement and it
5 suggests that the Commission cannot require the
6 licensee to substitute replacement material for
7 commercial messages carried in a broadcasting signal
8 received by that licensee.
9 18013 In view of the fact that Mr. Buchan
10 thinks that we haven't spoken enough about it, I wonder
11 if you had some comments on the consistency of your
12 proposal with subsection 9(2) of the Broadcasting Act.
13 18014 MS LOGAN: I think we are more
14 optimistic than Mr. Buchan. We certainly have a
15 precedent that the initial two minutes were given
16 voluntarily and we feel that proposal is entirely
17 reasonable in that the services today gain $80 million
18 from the Canadian market without creating Canadian
19 jobs, without investing in Canadian content, without
20 showcasing it. We feel this is the least they could
21 do.
22 18015 MR. BLAIS: Do you see a difference
23 between the Commission requiring deletion and
24 permitting deletion?
25 18016 MS LOGAN: We are talking about
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1 permitting.
2 18017 MR. BLAIS: Thank you.
3 18018 Now, the third area I would like to
4 look at is contribution by non-Canadian services. It
5 has been suggested by some parties that the 5 per cent
6 contribution provided by BDUs already factor into
7 account the revenues related to the distribution of
8 non-Canadian services in that the gross revenues of
9 BDUs would include the activities related to non-
10 Canadian services, and therefore, indirectly, the non-
11 Canadian services are already contributing to Canadian
12 programming through the 5 per cent contribution of
13 BDUs.
14 18019 Do you agree with that?
15 18020 MS LOGAN: I thought that was
16 supposed to be the BDU contribution, and frankly they
17 earn most of their revenue from Canadian services. We
18 could also call it another indirect contribution from
19 our industry.
20 18021 MR. BLAIS: I quite agree because of
21 the revenues of your industry, but the point I am
22 getting at is that the gross revenues of those BDUs
23 would include activities related to both your services
24 as well as foreign services, and therefore, when one
25 does the calculation, one could argue that the activity
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1 of the U.S. services is already indirectly
2 contributing. In fact, some have suggested that if we
3 were to ask for a direct contribution from the U.S.
4 services there would be a form of, to use their word,
5 double taxation, which I don't necessarily agree with
6 but I think just to identify their concern.
7 18022 MS LOGAN: First of all, we do object
8 to the word "tax". Our understanding is that the Cable
9 Fund was set up as a contribution from the distributors
10 for which they received some benefits in return. So I
11 am not quite sure that this could be called a tax; it
12 was a negotiated agreement that they would do this, as
13 I understand it.
14 18023 Secondly, I am not sure that to say
15 that because someone's revenue -- or a generator of the
16 revenue that is provided by the cable services is thus
17 providing revenue is kind of way down the road; in
18 other words, we have no knowledge whether there is
19 actually any contribution directly by the American
20 services in reaching that revenue; in other words, do
21 they take a lower subscription fee? We don't know
22 that. It may simply be that the cable operators, the
23 distributors are providing that revenue without
24 reference to the American services. We don't know
25 that.
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1 18024 MR. BLAIS: Thank you.
2 18025 Now, the last area I would like to
3 follow up on is the area of infomercials.
4 18026 It has been suggested that the
5 rationale for the different treatment of infomercials
6 relates to the fact that your services generally have
7 access to two sources of revenues, both subscription
8 fees and advertising revenues, and since the
9 conventional broadcasters don't have access to
10 subscription fees, that that might be the rationale for
11 the distinction.
12 18027 What has changed?
13 18028 MS LOGAN: I think, when we look at
14 where the revenue comes from in the broadcasting
15 system, the overwhelming amount of advertising revenue
16 earned by the conventional broadcasters -- 1.5 billion,
17 and they have access to local advertising, which is a
18 huge difference -- completely dwarfs our 183 million in
19 advertising. We don't see this as a threat to
20 conventional broadcasters whatsoever.
21 18029 We have the kind of services that
22 cannot be supported as advertising services because of
23 the niche nature of their programming. That's the case
24 here and that's the case in the United States;
25 specialty services, even with 60 million cable
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1 households, could not survive on advertising revenue
2 alone.
3 18030 So we look at the infomercials as an
4 additional opportunity to grow the revenue base that
5 will give us the ability to reinvest in Canadian
6 content.
7 18031 Perhaps what has changed in terms of
8 arguing and making the case is that there is now an
9 association to put it forward on behalf of the group.
10 So we are better organized this time around.
11 18032 MR. BLAIS: Thank you.
12 18033 Those are my questions.
13 18034 THE CHAIRPERSON: Ms Logan, one very
14 pointed specialty service question this time.
15 18035 You want us to get a better window,
16 to gain a window into wholesale subscriber fees paid to
17 both Canadian and foreign services. What kind of
18 window does your association have?
19 18036 MS LOGAN: We have extreme difficulty
20 with this issue because the contracts are negotiated in
21 secret, they are covered by non-disclosure deals,
22 services have difficulty in holding discussions, and
23 the association itself does not deal with commercial
24 and contractual issues.
25 18037 We feel nonetheless that there is a
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1 growing dislocation, anecdotally we hear, between what
2 services, and especially services that have launched,
3 are taking as subscriber fees in order to get on the
4 air and in order to get those rare analog channels left
5 in the system compared to the business plans that the
6 Commission approved that contains certain expectations
7 for revenues and certain expectations for
8 contributions.
9 18038 So we are asking that you monitor and
10 we are saying this is a vital piece of information in
11 our financial structure today -- and certainly every
12 other bit of information is disclosed. We feel it is
13 time that you added this to your toolkit.
14 18039 THE CHAIRPERSON: As between your
15 members, you obviously can find out what they get per
16 subscriber, or don't get, but you don't really know
17 overall, let's say in the Me-16, how the cable
18 distributor values or how much money they get from
19 selling the American portion of it.
20 18040 MS LOGAN: No.
21 18041 THE CHAIRPERSON: So you wouldn't
22 know anything about how it is divvied up inside the
23 tier.
24 18042 MS LOGAN: No. No, we don't.
25 18043 THE CHAIRPERSON: So you need a
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1 window too. You want ours to be big enough so you can
2 peer through.
3 18044 Thank you very much, Ms Logan and
4 your colleagues, ladies and gentlemen.
5 18045 We will now take a break until ten
6 after eleven. Nous reprendrons à 11 h 10.
7 --- Courte suspension à / Short recess at 1055
8 --- Upon resuming at / Reprise à 1110
9 18046 THE CHAIRPERSON: Madam Secretary,
10 would you invite the next participants, please?
11 18047 MS SANTERRE: Thank you, Madam Chair.
12 The next presentation will be done by the Canadian
13 Association of Broadcasters Specialty Board,
14 L'Association canadienne des radiodiffuseurs, Conseil
15 de la télévision spécialisée et payante.
16 PRESENTATION / PRÉSENTATION
17 18048 MR. McCABE: Thank you. Good
18 morning, Madam Chair, Commissioners.
19 18049 It is with great pleasure that we
20 appear before you today representing the newly formed
21 Pay and Specialty Board of the Canadian Association of
22 Broadcasters.
23 18050 With me is the Chair of the Specialty
24 Board, Mark Rubinstein, Vice-Presidnet CHUM Television;
25 along with Charlotte Bell, Director of Legal and
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1 Regulatory Affairs at the Global Television Network;
2 and Raynald Brière, vice-président, Canaux spécialisés,
3 Le Groupe TVA Inc.; as well as our Executive
4 Vice-President and General Counsel, Peter Miller; and
5 our Manager of Research and Societal Issues, Tandy
6 Greer Yull.
7 18051 Our panel would have been somewhat
8 larger had not the fog-making gods and Air Canada
9 conspired against us, but we will try to do our best.
10 18052 The Specialty Board of the CAB
11 believes that this hearing provides the Commission with
12 an historic opportunity to support an environment in
13 which each element of the Canadian broadcasting system
14 contributes to its success the best way it can --
15 whether conventional or specialty; public or private;
16 broadcaster, producer, or distributor.
17 18053 Canadian specialty and pay services
18 already make a significant and unique contribution --
19 something that has been well-recognized in this
20 proceeding. We will focus our comments today on six
21 ways the Commission can capitalize on this tremendous
22 success story -- by: One, establishing a system-wide
23 viewing goal; two, maintaining a flexible regulatory
24 environment; three, seeking contributions to Canadian
25 programming from all elements of the system, including
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1 U.S. and exempt services; four, ensuring Canadian
2 services effectively reach Canadian viewers; five,
3 encouraging the development of a new partnership for
4 digital between distributors and programmers, and; six,
5 building on synergies within the system.
6 18054 The CAB Specialty Board supports the
7 establishment of system-wide goals for increased
8 viewing of Canadian programs. Focusing on viewership
9 provides all elements of the system with a winning
10 method to meet CRTC objectives of more quality Canadian
11 programs and a profitable industry.
12 18055 It is a win for viewers because it
13 gives them the quality programming they want. It is a
14 win for specialty services and producers because we
15 become partners in securing increased audiences and
16 revenues. And it is a win for you because it creates a
17 link between public policy and business objectives.
18 18056 It is true that this is a whole new
19 way of thinking about the broadcasting system, but that
20 is precisely why you brought us together this fall, to
21 find innovative ways to strengthen the Canadian
22 broadcasting system.
23 18057 With the right incentives and the
24 right regulatory framework, specialty and pay services,
25 and the distributors that make them available across
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1 the country, can contribute to the increased viewing of
2 Canadian programming.
3 18058 Mark.
4 18059 MR. RUBINSTEIN: Thank you, Michael.
5 18060 To capitalize on the success story of
6 Canadian specialty television, we must nurture an
7 environment which will ensure that Canadian specialty,
8 pay and pay-per-view services, and the broadcasting
9 system as a whole, thrives.
10 18061 The regulatory framework should
11 permit -- indeed, encourage -- each element of the
12 system to contribute the best way it can.
13 18062 Flexibility is the key -- a
14 one-size-fits-all approach will not work for specialty
15 and pay services. Their very nature makes it
16 impossible for them all to operate on the same basis.
17 18063 They must be encouraged to pursue
18 niche programming opportunities; to create new demand
19 for Canadian programs in a variety of genres; and to
20 broaden the audience base for Canadian programming.
21 18064 If the Commission is truly committed
22 to expanding the resources available for Canadian
23 production, it should look to those elements of the
24 system which make no contribution, but derive
25 considerable benefit, namely, non-Canadian and exempt
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1 services. As evident in the public notice launching
2 this proceeding, equitable contribution is central to
3 the Commission's review of television policy.
4 18065 Exempt services generate significant
5 revenue and take up valuable capacity without making
6 any contribution to the system. They should either be
7 licensed or required to make a direct contribution to
8 Canadian programming.
9 18066 Foreign satellite services earn
10 almost $80 million in subscriber fees from their
11 carriage in Canada. They also take up valuable channel
12 capacity, denying equitable carriage for Canadian
13 services. U.S. programming services are no longer
14 necessary to drive tiers. This is amply demonstrated
15 by the success of the all-Canadian Tier 2, which has
16 reached 70 per cent penetration, and by the viewing
17 stats for the newest tier: Canadian services like
18 Space or History Television have from launch
19 consistently outperformed U.S. services like
20 Speedvision or BET.
21 18067 It may be true that differentiated
22 U.S. services could be attractive packaging partners in
23 a digital environment. If so, they should be reserved
24 for the launch of new digital tiers. We may even wish
25 to consider moving some existing U.S. services to
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1 digital tiers, reserving analog for priority Canadian
2 services.
3 18068 It is time to require foreign
4 services to make a direct contribution to the Canadian
5 broadcasting system. There are a number of ways this
6 could be implemented, including: One, requiring a
7 direct monetary contribution to an accepted Canadian
8 production fund by withholding a percentage of
9 affiliate payments; and, two, revising the policy with
10 respect to the use of local avails to ensure they are
11 used 100 per cent for the promotion of Canadian
12 services and Canadian programming.
13 18069 MS BELL: Like a flexible regulatory
14 framework, effective access is central to the capacity
15 of Canadian specialty services to succeed as
16 businesses, and to contribute to broadcasting policy
17 objectives, be they: greater diversity in programming
18 options; more hours of Canadian programming; increased
19 viewing of Canadian programming; or greater resources
20 for Canadian program production.
21 18070 While we do understand that the
22 Commission will initiate a separate proceeding to
23 examine the appropriate licensing framework for new
24 services, we believe this hearing provides an important
25 opportunity to set the tone for the future.
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1 18071 The Commission should do whatever it
2 can to put real effect into section 3(1)(t) of the
3 Broadcasting Act which requires the priority carriage
4 of Canadian programming services.
5 18072 Canadian services must have the
6 opportunity to fill programming genres before
7 non-Canadian, non-contributing services are allowed to
8 occupy the turf. Among other things, this means
9 extending the moratorium on additions to the eligible
10 lists at least until the next round of Canadian
11 services are launched. New non-Canadian services
12 should only be added to digital tiers.
13 18073 This fall's launch of MuchMoreMusic
14 and CTV's SportsNet will result in more diversity; more
15 Canadian programs; more spending on Canadian
16 production; and more viewers of Canadian programming.
17 18074 But look at what Canadian Learning
18 Television, ROB-TV, StarTV and Talk TV could accomplish
19 once launched. Collectively, these services are
20 committed to spending $8 million on Canadian
21 programming by their second year. They will spend over
22 $125 million on Canadian production over their
23 seven-year terms; and, they will create almost 200 new
24 full-time jobs, plus contribute to new jobs in related
25 sectors.
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1 18075 But they can only meet these
2 commitments once launched and once made available to a
3 critical mass of cable subscribers.
4 18076 M. BRIÈRE: Dans le contexte actuel
5 de la distribution, tout débat portant sur l'accès
6 doit, par définition, nous mener à une autre
7 discussion, à savoir ce que le déploiement du numérique
8 signifie pour la télédiffusion canadienne. Bien que
9 nous ayons fortement l'impression que la mise en oeuvre
10 des services numériques d'ici un an ou deux soit un but
11 illusoire, nous ne doutons pas qu'elle se fera bientôt
12 et qu'elle aura d'importantes répercussions sur le
13 système de la télédiffusion.
14 18077 De nouvelles règles seront sans doute
15 nécessaires pour gérer la transition et compléter
16 l'implantation de la distribution numérique. Le
17 nouveau contexte exigera aussi un meilleur partenariat
18 entre les distributeurs et les services de télévision
19 spécialisée et payante. Nous croyons en effet que les
20 câblodistributeurs n'ont aucune chance de réussir dans
21 le domaine du numérique sans l'apport de services de
22 programmation canadiens prospères. De la même façon,
23 nous sommes d'avis que les canaux spécialisés canadiens
24 ne pourront se tailler une place dans le monde
25 numérique sans l'aide de distributeurs concurrentiels,
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1 en particulier des câblodistributeurs.
2 18078 Nous tenons donc aujourd'hui à
3 promettre publiquement que nous collaborerons avec les
4 exploitants des entreprises de câble et avec les autres
5 distributeurs canadiens à la mise en oeuvre des
6 services numériques et à leur réussite dans l'intérêt
7 des distributeurs, des services de programmation et,
8 plus important encore, dans l'intérêt des
9 consommateurs.
10 18079 MR. McCABE: We believe this hearing
11 also provides an opportunity for the Commission to
12 recognize, support, and build upon the important
13 synergies that have resulted from the diversification
14 of conventional broadcasters, independent producers,
15 and distributors into the specialty realm. These
16 synergies contribute to the expansion of Canadian
17 programming availability; create a testing ground for
18 new programming concepts; provide additional windows
19 for the promotion of Canadian stars and Canadian
20 programming; maximize the windows for
21 independently-produced product, and assure access to
22 investment capital.
23 18080 In sum, the CAB Specialty Board
24 recommends that the Commission adopt the following
25 policy proposals: First, establish national viewing
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1 goals and encourage all elements of the system to
2 contribute to meeting them, including specialty
3 services and distributors; second, maintain the
4 competitive licensing and case-by-case approach to
5 setting programming obligations, rather than attempting
6 to adopt a uniform approach to be applied across the
7 board; third, expand the resources available for
8 Canadian programming by seeking contribution from
9 non-contributing U.S. and exempt services; fourth,
10 ensure that Canadian specialty services have the
11 opportunity to fill programming genres before
12 non-Canadian, non-contributing services are allowed to
13 occupy the turf; fifth, encourage a new partnership
14 between distributors and programmers for the transition
15 to digital and create the conditions under which such a
16 relationship will thrive; sixth, encourage and build
17 upon synergies within the system by creating conditions
18 which will permit Canadian specialty services owned by
19 producers, broadcasters or distributors to make a fair
20 and reasonable contribution to the system.
21 18081 We thank you for the opportunity to
22 present these comments. We would be delighted to
23 respond to any of your questions.
24 18082 THE CHAIRPERSON: Thank you, Mr.
25 McCabe and your colleagues. Commissioner Cardozo.
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1 18083 COMMISSIONER CARDOZO: Thank you,
2 Madam Chair.
3 18084 Welcome back to those of you who have
4 returned, and congratulations to you, Mr. Rubinstein.
5 I hope this means you will come back often and see us,
6 and we will have many more of these meetings and,
7 hopefully, you will decide at the end of today whether
8 it is a pleasurable experience or not, but we will make
9 it as much fun as we can.
10 18085 Let me start by saying, as
11 Commissioner Wilson had mentioned at the start of her
12 questioning with the previous panel, that the issues of
13 distribution environment are, of course, largely the
14 subject of the next hearing on the licensing framework.
15 I note that you have noted that and that you are
16 putting these on the table to set the tone, so I will
17 largely leave it to that level for now. If there are
18 issues you want to get into, you can touch on them
19 briefly, but largely we will stay away from the issue
20 of the distribution framework.
21 18086 One of the underlying challenges
22 facing the specialty industry that you have noted, and
23 I wanted to just read a paragraph here, you notice on
24 page iii of the Executive Summary at the top of the
25 page you say:
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1 "Specialty channels also face
2 unique challenges in securing
3 audiences. As
4 highly-specialized niche
5 services, they focus on meeting
6 the viewing needs of a
7 particular audience, whose
8 attention can be fickle.
9 Specialty and pay services
10 already deal with a smaller
11 audience market than
12 conventional broadcasters..."
13 18087 So that is, I guess, the basis of the
14 challenges that you face, but I wonder if that is just
15 the challenges by definition. You have chosen to get
16 into the specialty field which, by definition, means
17 niche marketing.
18 18088 Is that a statement of the obvious as
19 to how this industry is situated, or is there more to
20 it there?
21 18089 MR. McCABE: If I may, before I begin
22 the answer to that, just respond to your point about
23 the distribution environment very briefly and to say
24 only that we have raised it here because, for specialty
25 services, distribution is the most important factor in
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1 their ability to contribute.
2 18090 So that in our mind it, the
3 distribution environment and the decisions you make
4 about it, and the ability we have to access it and what
5 terms we are able to access it, and the contribution it
6 makes and so on, are really essential, we think, to the
7 matters that concern this particular hearing as well.
8 So, we recognize, and respect, your desire to hold
9 detailed discussion of it to another time, but I did
10 want to record that.
11 18091 So your question is whether this is
12 merely a statement of the fact that we are dealing with
13 smaller audience. Peter, I think that is essentially
14 what we have meant here.
15 18092 MR. MILLER: I think that is correct.
16 I would only add that, as some of the questioning this
17 morning alluded to, there are often comparisons made
18 between sectors. We think it is important that when
19 you make these comparisons you recognize the
20 differences, the fact, for example, that specialty
21 receives 70 per cent of their revenues through
22 subscription, which has repercussions. But we also
23 note, and perhaps we will get into later, that in
24 particular specialty are probably the leading edge in
25 the television universe when looking at new media and
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1 the challenges and opportunities on the web. So that
2 is correctly characterized as a function of their
3 nature, but it still has very significant public policy
4 implications that we think need to be grappled with.
5 18093 COMMISSIONER CARDOZO: Okay. I just
6 want to clarify that this is a situation that has been
7 the case since the beginning of specialities and it
8 isn't something new that is unexpected.
9 18094 MR. McCABE: Well, as you know, the
10 specialty regime has evolved and the context initially
11 was one in which there was a regulatory recognition of
12 the fact that there would not in fact be -- there would
13 not in fact be foreign services that were competitive
14 with Canadian services that would enter the system;
15 second, even that services might be removed, but that
16 has now changed, obviously. So there are -- the
17 challenges have evolved.
18 18095 COMMISSIONER CARDOZO: Okay. Can we
19 talk for a few minutes about the hours of Canadian
20 programming? You note in your written material, and
21 you have made some reference to it today, that there
22 has been an increase in the hours of Canadian
23 programming. On page 5 in your written submission you
24 have got a graph which shows a considerable increase in
25 the specialities in terms of the hours of Canadian
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1 programming and somewhat of a reduction with private
2 sector and the CBC.
3 18096 I am wondering if you combine the
4 specialty numbers with the conventional broadcasters,
5 are we seeing somewhat of an increase in the amount of
6 product, Canadian product, because it has gone down a
7 little bit in the conventionals and gone up quite a bit
8 in the specialities?
9 18097 MR. McCABE: Yes, the mix has
10 changed, but in terms of hours we have seen, I think,
11 more than somewhat but a substantial increase in
12 overall exhibition of Canadian programs, that is,
13 availability of Canadian programming to the public.
14 18098 COMMISSIONER CARDOZO: Okay. Let me
15 just flip -- I am sorry to be having you flip through
16 various pages, but if you can go to page 8 and your
17 graph following the 1.3.3, "Viewing of Canadian
18 Specialty and Pay Service", there is quite a preference
19 here, according to your figures, and I think these have
20 been discussed before, for Canadian viewing. There is
21 quite a success story there.
22 18099 What is your sense about why there is
23 a success? I am not questioning it. I am not
24 demeaning it. But why is there a success there?
25 18100 MR. McCABE: Let me start and,
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1 perhaps, Mark or Peter may want to add, but, first, you
2 recall that at the beginning of the age of specialty
3 services, the assumption was that we needed Canadian
4 service -- American services to drive the penetration
5 of Canadian services. I think what happened was
6 specialty services, as they grew in Canada, began to
7 develop in a particular way that met the needs and
8 interests of Canadians. So you saw a MuchMusic and a
9 TSN, to just take a couple of examples, who do it
10 better than any U.S. counterpart.
11 18101 I think that, finally, it has been
12 the ability of specialty services, despite the fact of
13 a continued flow of U.S. services into the system that
14 had been authorized into the system, to in fact find
15 their way to a Canadian audience using the best of what
16 is available when they are not sort of cut off at the
17 pass by a foreign service entering, the best program
18 that is available in the world and marrying it to the
19 Canadian presence that Canadians want.
20 18102 I think, Mark, that is probably --
21 18103 MR. RUBINSTEIN: I think part of the
22 brilliance of the system is that the Commission has
23 encouraged, since 1984 on, the development and
24 expansion of Canadian specialty services in areas that
25 couldn't be as well served by the rest of the system,
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1 whether that was in music, or sports, or children's;
2 and so the wisdom of the Commission's licensing pattern
3 has been to focus on areas where we know there is going
4 to be an interest, even though, you know, individual
5 services may garner less than 1 per cent share to that
6 particular service as a group, we are now standing at
7 35-plus Canadian specialty services has obviously had a
8 tremendous impact.
9 18104 I think also in terms of the quality
10 of services, I think there was also wisdom in the
11 Commission licensing multiple titles to existing
12 specialty operators because it is a craft that is
13 difficult to learn and when you are -- when you have a
14 synergy of, for example, the Netstar group, which
15 operate more than one title, the CHUM group, now
16 Atlantis group, they are able to leverage off of their
17 experiences. I think that shows up on the screen
18 primarily in their ability to really promote, produce
19 and acquire the best possible Canadian programming in
20 their genre.
21 18105 I think it is a combination of at
22 least two of those elements.
23 1135
24 18106 COMMISSIONER CARDOZO: So, if we
25 take, Mr. McCabe, the point about viewership that you
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1 have made today and that you made on the first day of
2 the hearing, what can we do in the case of specialties
3 which have already a fairly good successful track
4 record to increase the viewing of Canadian programming
5 on the specialties?
6 18107 MR. McCABE: I think, as you point
7 out, with specialities the track record has been quite
8 exceptional, but I think what you can do, again trying
9 not to range too far into the area you don't want to
10 range into of the distribution system -- obviously,
11 sitting before you here today, the first thing you
12 could usefully do is make sure that as of September
13 1st, 1999 the remaining services that have been
14 licensed are in fact carried. It will, indeed, put
15 more programming of high quality, as Mark suggests,
16 before Canadians.
17 18108 Second, I think the distribution
18 regime that we will talk about in the next hearing
19 will --
20 18109 COMMISSIONER CARDOZO: But let's look
21 at the specialities that are already launched so you
22 are not dealing with the issue of whether or not they
23 get launched or licensed.
24 18110 MR. McCABE: In that respect, I think
25 you have wisely provided on a case-by-case basis a
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1 system of increasing the revenue flow to Canadian
2 programming that goes up, essentially, automatically as
3 revenues go up. If you can again continue to provide
4 the distribution environment where these services can
5 succeed and do some of the other things we have
6 suggested in here, such as contribution from other non-
7 contributing areas and so on, I think we can see again
8 a growth in the flow of dollars to Canadian programming
9 and I think that will translate into quality.
10 18111 COMMISSIONER CARDOZO: And is that
11 translated into viewers?
12 18112 MR. McCABE: Yes.
13 18113 MR. RUBINSTEIN: What I wanted to
14 add, Commissioner, was that if the question is, "How
15 can specialty services do better to meet a viewing
16 goal", the first thing is distribution, distribution,
17 distribution. It's one word. Since the revenues of
18 the services are tied to subscriber penetration and
19 since most services have a percentage of revenue
20 formula attached as a condition of licence, every
21 dollar more that they are able to generate, a
22 significant percentage goes back into the Canadian
23 programming fact. So, access is the fundamental way in
24 which existing services can do better.
25 18114 Going back to what the Act mandates,
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1 which is that we are supposed to give priority carriage
2 to licensed Canadian services, if you examine the
3 current landscape, I think the checkerboard
4 distribution that we have for services falls short of
5 that objective and that requirement. Secondly,
6 licensing new services will continue to make available
7 more and better Canadian programming on additional
8 specialty channels.
9 18115 COMMISSIONER CARDOZO: Let me try to
10 get back to this hearing. I see the points you are
11 making, I recognize them. Let me just ask you about
12 the viewing numbers then.
13 18116 You have talked about the viewing
14 numbers in specialities is going up, the viewing
15 numbers in the conventional system has been relatively
16 stable over a number of years, as you mentioned when
17 you appeared at the beginning of the hearing, Mr.
18 McCabe. Putting the two together, are we seeing
19 intuitively it means Canadians are watching more
20 Canadian programming when you combine the conventionals
21 and the specialities?
22 18117 MR. McCABE: When I addressed this
23 earlier, we talked about a change in the mix talking
24 about the availability of hours of programming to
25 Canadians, but on the viewing question, again the mix
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1 has changed. But, as we have seen earlier, the viewing
2 to Canadian has remained relatively stable over a long
3 period of time.
4 18118 COMMISSIONER CARDOZO: In specialties
5 as well?
6 18119 MR. McCABE: In the system. The mix
7 has changed and, indeed, as new specialty services have
8 been added and as they have succeeded in their
9 individual niches, yes, their contribution to the
10 viewing levels to Canadian have increased.
11 18120 MR. MILLER: Commissioner Cardozo, if
12 I could add to this, one of the unfortunate
13 consequences of the current regime and the current one-
14 to-one linkage rule is that as successful as we have
15 been with Canadian specialty services, it has come at a
16 cost and the cost has been more U.S. services in the
17 system. So, rather than repatriating viewing from U.S.
18 services, unfortunately, we have allowed that shift to
19 go from U.S. conventional to U.S. specialty.
20 18121 So, that's why we haven't got the
21 overall viewing numbers going up in a positive
22 direction and that's also why the CAB suggested that
23 the Commission set as a goal viewing to Canadian
24 services, because the only way you are going to drive
25 up Canadian programming is you get more Canadian
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1 services and more viewing to those services.
2 18122 COMMISSIONER CARDOZO: On financial
3 issues, I wonder if you have seen Appendix A from the
4 SPTV submission where they listed the dollar amounts
5 that various specialties had to Canadian programming.
6 I have a couple of extra copies, if you need them. Do
7 you have any comments on that?
8 18123 MR. McCABE: Which page are you
9 looking at?
10 18124 COMMISSIONER CARDOZO: Sorry, it's
11 Appendix A and it's the first page entitled "Canadian
12 Specialty and Pay Services, Canadian Programming
13 Licence Conditions".
14 18125 MR. MILLER: If I can start,
15 Commissioner Cardozo, I think what those numbers tell
16 us is two things: First of all, that the competitive
17 licensing and bidding process has allowed the
18 Commission to maximize the contribution from specialty
19 and pay services in whatever genres they serve because,
20 as has been alluded to earlier, the contribution may,
21 on average, be close to 40 per cent, but it varies
22 tremendously from, I believe, a low of 25 and lower up
23 to a high of virtually 100 per cent of program
24 expenditures or 50, 60 per cent of total revenues.
25 18126 The second thing it shows is that
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1 direct comparisons on averages is somewhat unhelpful
2 because again if you look at the average of pay
3 services, the average seems to be roughly around 20 per
4 cent. So, I suppose if you were to compare averages,
5 you could say that pay services aren't contributing
6 enough, but that would be again a false argument
7 because it is a different type of service that have
8 higher distribution costs and different programming
9 arrangements that force them to contribute in different
10 ways.
11 18127 So, to us this chart is very useful
12 just to demonstrate, as we pointed out, the genius of
13 the Commission's licensing process that, through a
14 competitive bid, allows the Commission to select those
15 services that contribute the most.
16 18128 MR. RUBINSTEIN: I was also going to
17 add that, number one, I think our first reaction is we
18 take tremendous pride in the numbers since we all
19 contribute to them. All of our members operate many of
20 these services that have secured such really remarkable
21 achievements.
22 18129 But dovetailing on what Peter was
23 saying, if the question is, "Does this mean that, for
24 example, the Commission should move to a percentage of
25 revenue model for the entire industry", vis-à-vis
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1 conventional broadcasting, that's not a new thing. You
2 already offer that option, so there is nothing new in
3 that proposal.
4 18130 It's true you give other options to
5 conventional licensees for good reasons, but we don't
6 take from this that a percentage of revenue formula is
7 a new proposal to move the system further ahead. It's
8 a proposal which has already been adopted by the
9 Commission for both specialty and conventional
10 licensees.
11 18131 COMMISSIONER CARDOZO: But you say it
12 works?
13 18132 MR. RUBINSTEIN: It absolutely works
14 in the case of specialties, yes.
15 18133 COMMISSIONER CARDOZO: Can I ask,
16 while on the financial question, about access to
17 production funds by specialty broadcasters? What are
18 your views on that?
19 18134 MR. McCABE: Our view, which we have
20 expressed in another appearance before you, extends to
21 specialty services as well. There is no doubt that at
22 this stage in the development of the Canadian
23 television cum production system we are at a bit of an
24 impasse in the sense that there are severe limits to
25 the funding that is available in the system. One of
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1 the ways that we in Canada can bring new money to the
2 system is to put broadcasters -- and when I say
3 "broadcasters", I do not just mean conventional
4 broadcasters, I mean conventional, specialty, pay -- in
5 a position to be producers and distributors, to be in a
6 position to invest more money in programming because
7 there is some potential for return.
8 18135 So, I think that it would be
9 shortsighted to take this proposal which is meant to,
10 in effect, draw more money into the system, expand the
11 capacity of the Canadian system, to produce high-
12 quality programming and to say, "It should only be
13 producers or it should only be broadcasters and exclude
14 specialty services." So, we most definitely do include
15 specialty services in that respect.
16 18136 COMMISSIONER CARDOZO: Would you see
17 any proportion of the fund being divided up or should
18 it all be open to equal access to producers and
19 broadcasters?
20 18137 MR. MILLER: I think one of the
21 useful discussions you have had through the course of
22 the hearing is what are adequate safeguards and I think
23 many of the concerns that have been raised by parties
24 can be dealt with through adequate safeguards. For
25 example, on the specialty side at present specialities
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1 on average in the previous year drew about 20 per cent
2 of the funds on both the licence fee and equity side of
3 the Canadian Television Fund.
4 18138 One possible safeguard to ensure that
5 specialities don't lose access would be to set some
6 minimum envelope or some envelope for them. These are
7 the kinds of things that we are certainly very open to
8 and I have taken note of the discussions that have been
9 held here to allow us to frame them.
10 18139 COMMISSIONER CARDOZO: One of the
11 prime arguments made by producers is that there is --
12 there is a couple of arguments. One is the gatekeeper
13 argument, that the broadcaster shouldn't be the
14 gatekeeper, that it should be the producer who tells
15 the story, and that producers, especially the ones that
16 aren't too, too big, have more flexibility, ability to
17 innovative dynamism, stuff like that that when you are
18 part of a bigger corporation you can't do all that sort
19 of stuff. Do you buy any of that?
20 18140 MR. McCABE: If I may just start --
21 and Peter and Mark may pick it up -- we are producers,
22 too. If you take a look at the expenditure on Canadian
23 programming, $145 or $146 million are spent, if you
24 will, in-house with the specialty services in fact
25 producing programming that Canadians find very
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1 attractive, $110 million or so in fact goes to
2 independent outside producers. So, it isn't, I think,
3 a question of some sort of level of creativity kind of
4 resting in a group of independent producers and none in
5 the broadcasters. I think that would be a
6 misrepresentation of the situation.
7 18141 I think also when you were talking to
8 the earlier panel, Commissioner Wilson picked a
9 paragraph in which they talked about the contribution
10 that, in effect, broadcasters could make to the
11 creativity of the programming. I think Trina McQueen
12 and others dealt with that. I think that producers who
13 are independent of broadcasters need the broadcaster in
14 the equation finally if the programming is going to
15 suit the audience of the broadcaster, if it's going to
16 be maximized for performance on the air.
17 18142 So, we don't see on that side any
18 great contradiction or any great need to, in effect,
19 protect a pool of creativity over on one side on the
20 basis that there is none on the other. There is
21 creativity on both sides and both ought to be utilized.
22 18143 The first point you raised,
23 obviously, was the gatekeeper question and, as Peter
24 had said -- he may want to add to it -- our view is
25 that there should be safeguards and that these should
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1 be negotiated going forward with producers.
2 18144 MR. MILLER: Just to take it in
3 context, we tend to use these terms and they all have
4 loaded connotations. Some people say gatekeeper rather
5 than decision-maker. We say synergies and others say
6 vertical integration and they have all these different
7 connotations. First of all, to start with, the
8 broadcaster is always ultimately the person that makes
9 the decision as to what show goes on the air. So, of
10 course, the broadcaster has to make that decision.
11 18145 The thing that's different now and
12 allows us, I think, to advance public policy is we are
13 no longer talking about four or five channels, we are
14 no longer talking about 10, 15 channels, we are talking
15 about on the order of 40 to 50 Canadian channels owned
16 by at least 10 major groups. So, you have so many more
17 options in terms of the number of broadcasters that air
18 programming that you can strike a new balance with
19 appropriate safeguards so that smaller producers and
20 regional producers still have the opportunity to get
21 their works aired.
22 18146 But the other thing that I think we
23 have to remember is the tremendous advantage of being
24 an independent producer. Your infrastructure costs are
25 lower, you are not tied to the same union agreements
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1 that broadcasters have, and as a specialty service
2 independent producers offer a tremendous advantage
3 because rather than having to build infrastructure, you
4 can purchase directly from someone that has either
5 infrastructure or can make it available the times they
6 need it.
7 18147 So, there is always going to be a
8 role and a strong role for independent producers even
9 if there weren't safeguards, but we are not even
10 proposing that. We are proposing safeguards and we
11 think that's the way to ensure that everybody wins out
12 of a more broad access to these kinds of initiatives,
13 be it distribution or production funding.
14 18148 COMMISSIONER CARDOZO: Are you
15 hinting in what you were saying, Mr. McCabe, and what
16 Ms McQueen was saying earlier that the broadcaster
17 knows the audience better than the producer does? The
18 producer is an artist and you are going to deliver the
19 goods. Is that what you were getting at?
20 18149 MR. McCABE: I hope I was doing more
21 than hinting. Again Peter reinforced it as well. I
22 think that is the point, that the skilled programmers
23 who are employed by broadcasters are people who are
24 making that judgment day in, day out about what the
25 audiences want. How do we present programming to
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1 audiences that will draw them to us so that we can have
2 subscribers, we have advertising revenue and so on?
3 So, that is an essential part of the judgment that is
4 missing if the system is conceived of as one in which a
5 group should make some programming and we have to take
6 it because that's all there is to take and it's our job
7 to put it on.
8 18150 I think we really have to -- yes,
9 that may have been a view and it remains a view in some
10 quarters, but I think that as we head into this much
11 more competitive world, we really do have to find the
12 kind of marriage between the people who make the
13 decision about what goes on the air and the people who
14 produce. That may perhaps most closely be found, that
15 marriage, in the ability to be partners in production
16 and distribution.
17 18151 COMMISSIONER CARDOZO: The next three
18 issues I want to cover deal with various aspects of
19 diversity. The first is on diversity in programming;
20 second, regional diversity; and third is cultural
21 diversity. Let me start with diversity in programming
22 and just read back one of your paragraphs. I won't
23 tell you what page it is on so you don't have to
24 shuffle around and look for it or you could still try
25 and see if you can find it.
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1 "The CRTC must continue to
2 ensure that Canadian specialty
3 services are able to offer
4 distinctive programming in well-
5 defined niches, that is
6 complementary to the programming
7 offered by other services..."
8 18152 It's on page 20 if you want to find
9 the content in which you have mentioned it.
10 18153 Without getting into issues of
11 licensing here, what are you saying we should do in
12 order to continue to ensure that there is distinctive
13 programming?
14 18154 MR. MILLER: Let me start and perhaps
15 we can get into other areas of your questions.
16 18155 First of all, underlying this part of
17 our submission is the notion that the Commission has to
18 ensure that Canadian services have a chance to launch.
19 That means ensuring that niches are not otherwise
20 occupied by foreign services. So, when you have a
21 circumstance, as we do today, where the golf channel or
22 BET are available in Canada directly from the U.S. with
23 no contribution being made, that makes it very
24 difficult for Canadian services to launch in those
25 areas and, therefore, very difficult to provide
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1 diversity on a Canadian basis.
2 1155
3 18156 Obviously it can be argued that PET
4 provides diversity in the system because it offers a
5 channel that may be attractive in particular to black
6 Canadians, but it would be so much better if there was
7 a Canadian black entertainment television channel, and
8 obviously it's impossible for that to be launched if
9 the niche is already occupied.
10 18157 COMMISSIONER CARDOZO: Okay, but once
11 you have got the current system we have, and leaving
12 aside the Canadian-American issue, if you just take the
13 Canadian services that are licensed, is it important
14 for them to maintain a distinctiveness from each other
15 and should we be concerned about that?
16 18158 MR. McCABE: Mark may want to answer
17 as someone who in fact operates a number of channels,
18 but I think it is in the best interests of all of the
19 players that these niches be respected in order that
20 they can continue to, in effect, programmed to an
21 audience that can provide the revenue that in fact
22 feeds the system.
23 18159 MR. RUBINSTEIN: I think the system
24 we have today, by default to a great extent, already
25 ensures that. Obviously, the real success, both
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1 programatically and financially, for so many of the
2 existing Canadian specialty services is focusing on a
3 genre that they have built up a loyal following to. It
4 would be a bit strange, even if they could do so under
5 their licence, to have a children's service all of a
6 sudden try and migrate into sports programming or adult
7 dramatic programming.
8 18160 So the licensing environment already
9 ensures that. Without talking about future licensing
10 decisions, it's certainly fair to say that, as the
11 Commission goes through this process and may come to
12 conclusions about areas of Canadian programming which
13 need greater support, one of the mechanisms you can do
14 is to put a priority on those specialty services which
15 target towards that demand or that under-served area.
16 And that's something the Commission has done
17 historically. Before 1997, we had no specialized
18 children's or youth television services. Now I think
19 most people would agree we have a pretty wide range of
20 quality and quantity of children's programming.
21 18161 If, for example, there was a view
22 that, for example, in the area of feature film we need
23 to have more diversity and more availability for
24 Canadian feature films in our system, is not one of the
25 ways that we can do that, without making existing
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1 services change their mandate, is try to put a priority
2 on new licences for services that want to fill that
3 desperate gap in the system?
4 18162 COMMISSIONER CARDOZO: Is there a
5 system in process at the moment whereby, when one
6 Canadian specialty appears to be encroaching on
7 somebody else's turf, is there a mechanism to talk to
8 each other or to do something about it?
9 18163 MR. MILLER: First of all, we talk to
10 each other regularly. Obviously, the Commission is the
11 ultimate arbiter as to whether a service is meeting its
12 conditions of licence and therefore going to areas that
13 are inappropriate, but certainly, at first instance --
14 and this did, I believe, happen in the case of the
15 Newsworld issue of last year -- that there is contact
16 at the service level first.
17 18164 COMMISSIONER CARDOZO: Let me move to
18 local programming, the issue of regional diversity. It
19 may seem like an unusual question to ask, but I think
20 it is an important one. Let me just lay out what I
21 think are shaping up as some of the issues around this
22 question.
23 18165 We certainly sensed a growing concern
24 that, on the one hand, broadcasters have reduced local
25 programming over the years. We talked about that when
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1 you appeared earlier and you suggested that a large
2 part of it was because broadcasters have been concerned
3 with meeting the requirements of Canadian programming
4 that the Commission has imposed.
5 18166 The other area where people have been
6 concerned about is in the community channel, and people
7 have suggested that since we made that not an
8 obligatory service that the community channel service
9 has dropped considerably over the past year. But I
10 think it's a continuing issue and it likely will be for
11 the next few years.
12 18167 The writer Michael Ignatief has
13 talked about the narcissism of minor difference where
14 the more we become globalized the more we become
15 concerned about our own communities or neighbourhoods.
16 And he has talked about that more in terms of country
17 to country, or it can be applied to the whole debate
18 about Canadian content -- Canadian versus American.
19 But it applies to communities, one community against
20 the other -- not against, but from another.
21 18168 We have heard about two types of
22 things; one is people wanting to see their local areas,
23 issues about their own communities on their own
24 televisions and, to a lesser extent, people wanting to
25 see local stories from other parts of the country,
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1 things that are not necessarily national news but
2 something local which may have implications for them
3 and their communities.
4 18169 In some senses, one might say that
5 national based, Canada-wide based specialties are the
6 antithesis of local programming. You do programming,
7 except for City Post 24, for example, which is a local
8 specialty, you are doing national programming for the
9 whole country and therefore you do not have room or
10 ability for local programming.
11 18170 What is your sense of how specialties
12 fit into the issue of local programming?
13 18171 May I first suggest that I think you
14 quite properly indicate that locally is one kind of
15 community, if you will, but there are other kinds of
16 communities and that specialty services, in effect,
17 probably have as their primary role speaking to and
18 helping form those kinds of communities which are
19 transnational, in effect, in which Canadians have an
20 interest across the country. And I think that's a
21 legitimate kind of community to service and to
22 recognize as an important part of the system that ought
23 to be addressed.
24 18172 The local question is one that, as
25 you can imagine, specialty broadcasters have not
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1 specifically addressed except perhaps in a couple of
2 ways. One of them is the business of telling stories
3 across this whole community so that one local community
4 hears the stories of another.
5 18173 But secondly, you have in some
6 instances, for instance with CTV Sports, you have in
7 effect looked at that on a regional basis. You have
8 had before you regional applications and have indeed
9 approved such applications.
10 18174 Perhaps Nark would want to add to
11 that.
12 18175 MR. RUBINSTEIN: Commissioner
13 Cardozo, I think one of the interesting things -- I'm
14 now speaking from the Chum experience -- is what's
15 interesting is the number of local programs produced by
16 one of our conventional services that airs not only on
17 our national specialty services but in fact is exported
18 around the world.
19 18176 Take an example like Movie Television
20 which is about the promotion of information and
21 entertainment about the entertainment industry; broad
22 coverage of the movie making industry, the television
23 industry and others. That show is a local program
24 produced by Citytv, has aired consistently on a
25 national basis on Bravo and is sold to over 100
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1 countries around the world providing invaluable
2 exposure for our industries.
3 18177 So in fact, although the mandate of
4 Bravo is not to provide local programming, we have the
5 ability to produce something that's both local to the
6 greater Toronto area, which is Citytv's coverage area,
7 but has found a tremendous audience both nationally and
8 internationally.
9 18178 So I think that's not unimportant
10 because it shows a synergy and an integration between
11 what some people would like to see as separate segments
12 of our industry, which really is not true any more. It
13 may have been true in the seventies and it may have
14 been an easier world then when you had conventional and
15 specialty and production. The integration of our
16 industry and most industries around the world now shows
17 that those are not negatives when they merge; they are
18 positives, and being able to service a local need
19 through a national specialty service is a real
20 accomplishment for our system.
21 18179 MR. McCABE: One of the local
22 problems that I find here in Ottawa is that, despite
23 the fact that Much More Music has been successfully
24 launched, we cannot get it here.
25 18180 COMMISSIONER CARDOZO: Next hearing.
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1 18181 Can I ask then, some of the
2 suggestions that have been put forward about local
3 programming is that we place a requirement on
4 broadcasters to show a certain amount of local
5 programming. I know you do not like requirements of
6 any kind but, be that as it may, you would see that as
7 a workable solution?
8 18182 MR. MILLER: Commissioner Cardozo, if
9 you can permit me, I think you know by now I have never
10 had a question I have been prepared to answer directly,
11 so I will go through a bit of a flow here.
12 18183 First of all, I think Canadians are
13 generally extraordinary well served by local media. I
14 cannot think of a time in history where people have
15 greater access to information, news, programming about
16 their communities, about their local environment. It
17 is phenomenal. Whether it be through local radio,
18 through local television, through the community
19 channel, through the newspapers, through the emerging
20 sites on the world wide web, I think that ability to
21 find out information and feel a part of your community
22 is stronger today than it has ever been, but it has
23 shifted, and in particular I think what people have
24 expressed some concerns about is how local broadcasters
25 have started to focus more on local news and less on
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1 local oriented programming; how the community channel
2 has looked more broadly at serving its regions. And I
3 guess with that change comes some concerns. But you do
4 have opportunities to fill in.
5 18184 We mentioned, obviously, already the
6 issue of regionalized specialty services. That is a
7 concept that's working in Toronto and you have
8 applications before you in other markets around the
9 country -- at least five other markets -- for similar
10 type applications.
11 18185 The weather channel and MétéoMédia is
12 a national service that is highly localized. Through
13 use of new technology that Pelmorex has pioneered, they
14 have created a national service that very much reflects
15 local needs.
16 18186 So the mix has changed but it is
17 being met in different ways. So the final issue then
18 becomes what is the best regulatory environment to
19 ensure local. We strongly vote in favour of the
20 current approach, which is you have competitive
21 licensing procedures, you allow entrepreneurs and
22 visionaries to come forward and fill gaps they see in
23 their communities and in centres across the country.
24 It is then your decision -- and it's often a hard
25 decision -- to make choices, and sometimes you have to
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1 make a choice between a more local oriented service or
2 a more national oriented service. But you are best
3 equipped, when you face the applications that come
4 before you in conventional hearings or in specialty
5 hearings, to make those determinations, and I think at
6 the end of the day, while many people would feel some
7 sense of assurance if there was a regulated
8 requirement, that would not result in better local
9 programming; it would result in people doing the same
10 kind of thing to meet a regulatory requirement.
11 18187 MR. McCABE: If I may just hitchhike
12 on that with one thought; despite impressions that have
13 been given here to the contrary, if you take a look at
14 the figures that we filed on another occasion, in fact
15 the expenditure by private broadcasters on local
16 programming has gone up substantially over the past
17 five years and, as Peter said, the mix has changed and
18 there are a whole range of other participants in the
19 business of local, but that has remained, I think, an
20 encouraging part of the sort of strength and support
21 for local programming.
22 18188 MS BELL: Commissioner Cardozo, there
23 is something I would like to add. When the Commission,
24 in 1991, reviewed its policy on local programming, I
25 think that it recognized that the system was evolving.
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1 I think it recognized that it had it give some
2 flexibility to broadcasters in order to meet those
3 needs and that it would in fact, at the time of
4 renewals, look at the contribution that local
5 broadcasters were making in terms of fulfilling the
6 needs of their audience.
7 18189 I think that that's worked and I
8 think we are advocating that we should continue with
9 that approach rather than go back to the old mechanism
10 pre-1991.
11 18190 COMMISSIONER CARDOZO: Okay, but the
12 problem still remains for us, that we have to consider,
13 is that you are saying the current system works. A
14 number of other people have come forward and said the
15 current system doesn't work, so the question is do we
16 give it time, as I think you are suggesting --
17 18191 MS BELL: What I'm saying is that you
18 have the tool to deal with the problems where they
19 exist when licensees come up for renewal or when you
20 are looking at new licensing.
21 18192 MR. RUBINSTEIN: I was going to add,
22 Commissioner Cardozo, that in response to some of those
23 concerns, number one is we don't want coming out of
24 this hearing a change to the system that exacerbates
25 the problem. If we want to have the existing system
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1 looking at the local conventional side, those who want
2 to continue to specialize and put their greater
3 emphasis on local programming must be permitted to do
4 so. To shoe horn them into some other area which moves
5 away from local obviously is not a positive thing.
6 18193 Secondly, quite apart from mandated
7 local programming obligations for specialty, it's well
8 within the resources of existing licence specialty
9 services to do more regional programming.
10 18194 Again, drawing upon our own
11 experience in the case of MuchMusic, we operate
12 regional field offices in both the Maritimes and
13 British Columbia, known as MuchEast and MuchWest. They
14 produce segments every week showcasing musical acts and
15 information from their respective territories. It's
16 fed on a national chain, so you can be in Winnipeg and
17 you may be quite interested about what's going on with
18 Sarah McLachlin in Vancouver or Sloan in Halifax.
19 18195 So it's not beyond the capability of
20 those who choose to do so to move into it, and your
21 system provides the flexibility for that without any
22 additional regulation.
23 18196 COMMISSIONER CARDOZO: So you are
24 saying we have got-- just to finish up on this topic --
25 that you have got the weather network and SportsNet
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1 which are mandated as regional, or at least have to
2 have a regional aspect to their programming; you've got
3 Bravo and MuchMusic through various ways, whether it's
4 MuchEast and MuchWest or Bravo picking up from other
5 networks. That's one way in which you get some local
6 on.
7 18197 So I guess you are saying if we were
8 to look at any kind of requirements, that we should
9 leave you out of the picture, out of that kind of
10 requirement and leave you to do your thing.
11 18198 MR. McCABE: In terms of
12 requirements, you are suggesting, but I think that what
13 we would urge is what Peter has suggested, that first
14 of all you look at the system in its entirety and not
15 just assume that local can be delivered in only one
16 way. And you have named off some of the pieces that
17 are useful, and Peter mentioned some of the others, in
18 looking at that system.
19 18199 And then I do think that, again, we
20 strongly feel that in the marketplace it is best to let
21 those services, as Mark said, that are expert in this,
22 that want to find their audiences in that area, in
23 effect to serve those marketplaces and not to drive
24 them out of the local area or indeed others into it.
25 18200 M. BRIÈRE: Si vous le permettez,
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1 j'aimerais faire un commentaire additionnel sur ce qui
2 vient d'être dit.
3 18201 Je pense qu'il est intéressant -- je
4 vais parler de l'expérience du Québec en particulier,
5 le marché francophone -- de noter que la venue des
6 canaux spécialisés a accru, à mon sens, la
7 programmation dite locale. Je regarde dans le domaine
8 de l'information, par exemple, je regarde dans le
9 domaine du sport, de la musique, je regarde dans le
10 domaine de la santé entre autres, il y a des débats, il
11 y a des discussions qui ne se faisaient pas avant sur
12 les chaînes généralistes qui se font maintenant en
13 télévision spécialisée. Ça s'ajoute à ce qu'on a dit
14 tout à l'heure, la radio, les journaux et tout ça.
15 18202 Je pense que, en tout cas dans le
16 marché que je représente, il y a eu là un accroissement
17 du volume de sujets locaux, et je pense que la
18 télévision spécialisée a permis ça également. Je pense
19 que c'est important de le mentionner.
20 18203 CONSEILLER CARDOZO: Merci beaucoup.
21 18204 Let me move to the issue of cultural
22 diversity and quickly go through some of the things we
23 have been hearing over these last two or three weeks.
24 18205 The Canadian Television Fund said
25 that the issue of whether there should be more or any
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1 cultural diversity portrayed in their program was not
2 something that was in their purview, that their role
3 was to provide the money, and I still didn't quite
4 understand their answer that we would have funds that
5 get shelled out without any kinds of requirements or
6 even prioritization.
7 1215
8 18206 Of course, we have had various
9 community groups as well as others talking about the
10 lack of diversity, as one person put it, the lack of
11 reflection of Canada on our screens.
12 18207 The Canadian Media Guild has gotten
13 into the area of saying, "Well, we want to deal with
14 quality, not quantity", which is sort of a tired old
15 argument of saying if you can hire minorities, somehow
16 you obviously have to hire less qualified people, which
17 reminds me of the criticisms that we made of Bertha
18 Wilson when she was appointed to the Supreme Court;
19 people said, "There go the standards", that she wasn't
20 qualified for the bench. It turned out at the end of
21 her time that she was one of the most hard working and
22 brilliant judges of her time.
23 18208 People say it is hard to identify
24 minorities who are going to make the cut; yet, I think
25 of where the funds come from. They come from
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1 taxpayers, they come from cable subscribers, and on
2 both counts, Revenue Canada and the cable companies
3 have no trouble identifying minorities and identifying
4 everybody to collect the money, but when it comes out
5 on the other end in terms of reflecting people on the
6 screen, some people get left out.
7 18209 The Canadian Diversity Network had an
8 interesting observation about some of the programming
9 from Britain, where they said:
10 "It is safe to say that
11 Canadians who watch British
12 dramas and comedies on TVO and
13 PBS are likely to see more Asian
14 and Black actors in major roles
15 than they ever will watching CBC
16 or Canada's private network."
17 18210 So, it seems like Britain is more
18 comfortable with this issue.
19 18211 The Race Relations Centre from
20 Montreal had referred to an interesting study where
21 they found that in advertising the executives were much
22 less willing to portray diversity, but polls show that
23 the average buyer out there had no problem with showing
24 diversity in advertising. So, there was this
25 gatekeeper thing where the advertisers felt there was a
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1 problem and the public doesn't.
2 18212 Epitome Productions said that they
3 wouldn't think of putting together a program today in
4 Canada, in Toronto, that did not reflect the diversity
5 and they suggested that the only area they found
6 reluctance is in their advertising at the international
7 level, that the advertising agencies who advertise for
8 them internationally tend to promote their shows
9 without the non-white characters in their promotion.
10 If you look at some of the local programming -- and I
11 have just been watching the last couple of weeks -- if
12 you look at the characters in the ads in the TV Guide,
13 for example, you don't get a clue that there are non-
14 white characters in those programs as well.
15 18213 So, I come to the issue of viewing.
16 If you don't say to all the viewers out there, "There
17 is something here that might interest you", you are
18 losing your viewers. You are somehow thinking that you
19 have to go for the lowest common denominator and
20 somehow if you have minorities you might detract or
21 something like that. I don't know what the issue is
22 there. So, it seems to me there is a good business
23 argument that may not be met.
24 18214 Let me ask you for your help to
25 understand this. Do you think (a) there is an issue
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1 here that we could be or should be reflecting diversity
2 more and, as some have suggested, such as the Canadian
3 Television Fund, the ball is really in your court? As
4 broadcasters, you commission or accept certain things
5 to be put on the screen. Do you have a role there that
6 others don't?
7 18215 MR. McCABE: If I may start, I will
8 hand then to Tandy Yull and to others. We have a
9 responsibility and I would suggest that responsibility
10 starts with the viewer and with the marketplace. We
11 have an interest, an intrinsic business interest, in
12 reflecting our audiences and my experience with
13 broadcasters across the country is that there is a high
14 level of recognition of that that our audiences are
15 changing, that in fact the people we are playing to in
16 Toronto and Vancouver, et cetera, are not the same
17 people we were playing to 10 and 15 years ago.
18 18216 If one ignores that whole audience,
19 one is ignoring a huge chunk of not only audience, but
20 of potential revenue. So, I think that you will see as
21 you look, in particular, in the major centres where the
22 impact of cultural change is most evident and most
23 clearly seen, you will find broadcasters who do,
24 indeed, recognize and reflect that reality of their
25 marketplace. In other areas of the country where there
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1 is perhaps less clear reflection, this consciousness
2 may not be as great, but I believe it is one that is
3 fairly widespread in the industry as such.
4 18217 Tandy?
5 18218 MS GREER YULL: I think I have to
6 start by seconding what Michael has said and your quote
7 from Epitome, that the business reality is that if we
8 don't program to our audiences which are increasingly
9 diverse, it's not going to make good business sense.
10 So, it's in our own best interest to program to that
11 diversity that Canada is.
12 18219 I don't have the number with me, but
13 I believe the environmental scan included with the CAB
14 Television Board submission quoted that by 2002 the
15 population will be 50 per cent made up of visible
16 minorities. Therefore, we have to follow that trend.
17 18220 I think many of the conventional
18 stations do do diversity on their own. I know that
19 Citytv has a tremendous record in that respect, the A
20 Channel and other stations in the western provinces.
21 BCTV, for example, have a tremendous record of creating
22 programs for an adverse range of audiences. Certainly
23 specialty channels have a contribution to make in that
24 respect and already do, particularly through the third
25 language services, of course, but we all must program
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1 to the diverse cultures that are Canada.
2 18221 COMMISSIONER CARDOZO: What makes it
3 something for -- that City and MuchMusic and BTV in
4 Vancouver, what makes it something easier for you to
5 reflect and other people just not be able to? I am not
6 saying all the others don't. I notice in the new
7 launch of SportsNet the lead announcer was a visible
8 minority, who has been with them for a long time and
9 obviously is very good at the job. You see it in news
10 on CBC, for example.
11 18222 MR. RUBINSTEIN: Since you raise one
12 of our stations, in our case --
13 18223 COMMISSIONER CARDOZO: Go ahead,
14 defend it.
15 18224 MR. RUBINSTEIN: It's something we
16 are obviously proud of, but I think there is two
17 things. Number one is, as a general comment, our
18 experience is you either believe in it or you don't.
19 It doesn't matter what the policy might be that the
20 Commission has enacted. If it's not at the core of
21 your programming philosophies, whatever you put up on
22 the screen isn't really going to be meaningful. So,
23 you really have to believe in it as a fundamental
24 philosophical approach for your station.
25 18225 In our case, secondly, with the
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1 launch of City in 1972, I believe it was the natural
2 intense localism associated with that service which
3 required bringing to the screen the multicultural,
4 multiracial, multilingual reality of a new Toronto,
5 where now close to 50 per cent or over 50 per cent come
6 from backgrounds where neither French nor English is
7 their mother language. So, our intense focus on
8 localism -- we are producing 40, 45 hours per week of
9 local programming. You can't help but have to deal
10 with that new multiracial reality.
11 18226 City became the springboard -- and
12 you have all been to our facility -- for the MuchMusics
13 and the Bravos and the Spaces and the Cable Pulse 24
14 and that intense localism and that philosophy about
15 really making diversity an essential element of what
16 you are as a television service got extrapolated and
17 interwoven into every one of our other specialty
18 services. We didn't do it because there was a policy
19 which required us to do it, we did it because it was
20 something we believed in, because our audiences wanted
21 it and also because it worked out that it was also good
22 business sense.
23 18227 COMMISSIONER CARDOZO: Just lastly on
24 this topic, to go back to the discussion we had with
25 the Canadian Television Fund who said it wasn't in
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1 their purview, it was in your purview, the broadcasters
2 who made that decision, as to whether or not it was
3 worth seeing more diversity, is there a role with
4 broadcasters? There is a role for producers, too, I
5 would assume.
6 18228 MR. McCABE: I don't think the
7 Canadian Television Fund as a funding body has a
8 particular responsibility in this area, but the
9 responsibility does rest with us and with the
10 producers.
11 18229 COMMISSIONER CARDOZO: There are two
12 more issues I want to cover and I will try and be
13 quick. New media. We talked to SPTV about it. Do you
14 have anything more to add in terms of whether all your
15 members, the specialty members, have active websites
16 with interactive facility?
17 18230 MR. MILLER: I think you received an
18 excellent answer on that this morning, so I am just
19 going to add something that wasn't said and that I
20 alluded to earlier. It's the extent to which specialty
21 services will be the leading edge and must be the
22 leading edge in new media. That is because by virtue
23 of them being niche specialized services, if they fail
24 to take advantage of that opportunity, as enhanced
25 video, real-time video starts to become more available
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1 on the web, they will be the first to suffer the
2 competitive consequences.
3 18231 The good news is that many Canadian
4 specialty services have already built strong brands.
5 YTV is youth, so YTV was one of the first to have a
6 very strong web presence and is building that brand in
7 whatever medium. The same is true for MuchMusic, the
8 same is true of other services. So, it's absolutely
9 appropriate for specialty to take a leading role in new
10 media because their future will depend on it.
11 18232 Again one of the unfortunate
12 consequences of allowing, for example, a golf channel
13 into Canada is you make it very hard for someone to
14 establish a golf cite because people watch the golf
15 channel and go down to the U.S. golf cite, but if you
16 can establish a Canadian service when you establish a
17 Space TV, you can build the brand and the awareness so
18 that Canadians not only go to the service, but also to
19 the site.
20 18233 COMMISSIONER CARDOZO: In terms of
21 promotion, do you see websites as being one of the
22 major opportunities or an opportunity to create the
23 Star system that we have talked about that exists so
24 well in Quebec or in French-speaking television, but
25 doesn't exist in English-speaking television?
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1 18234 MR. MILLER: The short answer is yes.
2 I would call it cross-promotion, though. It is the web
3 service promoting the channel through scheduling and
4 giving more information about on-air talent and
5 extending the program experience through some immersive
6 environment or gaming, but it's also the converse.
7 It's the ability of you on your conventional or
8 specialty side to promote the website and draw
9 Canadians to that.
10 18235 COMMISSIONER CARDOZO: Lastly, I just
11 want to ask you about -- let me rename this section to
12 "synergies". I had written "vertical integration".
13 You have talked about it in your written brief and
14 orally. Let me just give you an open-ended question
15 and say: What are your thoughts about vertical
16 integration or synergies?
17 18236 MR. MILLER: Let me start. First of
18 all, it's a global reality. We are not in the
19 convenient world where a television broadcaster did one
20 thing and a telephone companies did another thing and
21 producers did another thing. We lost that world 10
22 years ago. It's only now that in public policy terms
23 we are starting to catch up with that reality.
24 18237 So, we very much echo some of the
25 views that you have heard from companies like Shaw and
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1 Rogers that Canada needs to build strong multimedia
2 companies that have the capacity to compete against the
3 best in the world. That requires a building up of
4 these synergies or, to use the CBC term,
5 constellations.
6 18238 So, we see the building of
7 synergies/vertical integration as a very positive thing
8 to continue to allow the Commission to meet its public
9 policy objectives and to keep Canadian media companies
10 competitive against the world. With those advantages
11 come the need for certain safeguards, but in our minds
12 it's very important, particularly on the specialty
13 side, to recognize that without these synergies, many
14 specialty services simply couldn't get launched.
15 18239 As we enter the digital universe
16 where services are lucky they might have 500,000 to a
17 million subscribers, if they can't build on synergies,
18 they will not be able to use the revenues they get for
19 programming. They will be going instead to
20 administration and infrastructure. So, it's a major
21 plus, it's a major reality, and we note that the
22 Commission has encouraged it at most stages through the
23 last period.
24 18240 MR. RUBINSTEIN: I would come at it
25 from a slightly more practical point of view vis-à-vis
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1 this hearing, which is what we recommend the Commission
2 do as it goes through a very difficult deliberation
3 process is recognize that when you have some come
4 forward and say, "Isn't it terrific that the specialty
5 services group were doing such a wonderful job and
6 let's compare them and their performance to the
7 conventional group", in many cases you are talking
8 about the same owners.
9 18241 We are glad that they applaud our
10 performances for services like MuchMusic and Bravo and
11 Space. Those services could not contribute the way
12 they do and they could not reach the levels of
13 contribution that they do and they could not meet the
14 fundamental objectives of the Act but for the synergy
15 provided by a service like Citytv. So, it's not a
16 black and white thing. We try and parse out and assess
17 contributions by sector. As the sectors merge and
18 integrate, you are looking at a total package and we
19 hope that your analysis will obviously take that into
20 account.
21 18242 COMMISSIONER CARDOZO: I notice the
22 answers from you this morning have been very
23 complementary to the answers that we received from
24 SPTV, which sort of leaves me with the question of why
25 two organizations, but is one of the key differences
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1 that your members tend to be more linked to vertically
2 integrated companies than theirs?
3 18243 MR. RUBINSTEIN: Our membership
4 includes producers. History Television is a member of
5 our association. We obviously have very common
6 positions, but it's true that one of the things we
7 think we bring is a broader perspective. We don't sit
8 here as a board, although we represent exclusively the
9 specialty interests. We recognize that it's not that
10 simple any more and that a realistic anlaysis of what's
11 going on has to take into account the realities that we
12 all know, including common ownership and vertical
13 integration.
14 18244 COMMISSIONER CARDOZO: History is a
15 member of your association and SPTV. Is that right?
16 18245 MR. RUBINSTEIN: Correct.
17 18246 COMMISSIONER CARDOZO: Just to finish
18 on this point, then, in terms of vertical integration,
19 one of the suggestions out there has been that for
20 those of you who are vertically integrated and have
21 more access to synergies should be prepared to put more
22 into contributions towards Canadian programming. For
23 the record, your answer?
24 18247 MR. McCABE: When you licensed these
25 services, you were aware of the synergies that they had
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1 and you chose a particular level of contribution to
2 Canadian production, Canadian programming. We think
3 that that's appropriate and remains appropriate.
4 18248 I think your opportunity to review
5 that question comes at the time of their renewal when
6 you will take a look and say, "Do changed circumstances
7 make some other level of contribution appropriate?"
8 But to make some sort of general -- I think both SPTV
9 and ourselves have indicated and you yourselves have
10 reflected upon the vast variety of services and
11 circumstances in which the services operate. I think
12 some general rule that integrated services ought to be
13 contributing more would be counterproductive. I think
14 you have the tools and you have approached it in the
15 right way and will, indeed, approach it again at
16 renewal time.
17 18249 COMMISSIONER CARDOZO: Thank you.
18 That covers my questions. Do come back, Mr.
19 Rubinstein.
20 18250 MR. RUBINSTEIN: I think I will be
21 back on Thursday.
22 18251 THE CHAIRPERSON: Commissioner
23 Wilson?
24 18252 COMMISSIONER WILSON: Good morning.
25 Good afternoon, actually.
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1 18253 Mr. McCabe, I just can't resist the
2 opportunity to question you on a couple of things that
3 sort of seem to be common positions between you and the
4 Specialty Board and the Television Board. Yourself in
5 your submission raised the Television Board, so I feel
6 quite comfortable asking you these questions.
7 18254 On page 2 of your oral comments this
8 morning you state:
9 "It is true that this is a whole
10 new way of thinking about the
11 broadcasting system, but that's
12 precisely why you brought us
13 together this Fall -- to find
14 innovative ways to strengthen
15 the Canadian broadcasting
16 system."
17 18255 At the risk of, I guess, being a
18 little bit of the devil's advocate, I just want to ask
19 you: Why is this a whole new way of thinking about the
20 broadcasting system and what is so innovative about
21 focusing on viewership?
22 18256 MR. McCABE: We had concluded that it
23 must be new because we were having such difficulty
24 getting people to understand it.
25 18257 COMMISSIONER WILSON: Well, you have
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1 another opportunity right now.
2 18258 MR. McCABE: I think the --
3 18259 COMMISSIONER WILSON: It doesn't seem
4 at first blush -- I'm sorry to interrupt you. I had
5 this discussion with Mr. Macdonald of WIC, as you will
6 recall, but that is your business.
7 1235
8 18260 You have been spending all this money
9 on Canadian programming, so why aren't you -- why
10 haven't you up till now been driving viewers to that?
11 18261 MR. McCABE: I think, again, if I may
12 put a context to this, our proposal was that the entire
13 system be -- have goals established for it, not just
14 that our particular part of it have goals established
15 for it. By doing that, and by your taking some
16 leadership in this matter, you do signal to, for
17 instance, distributors that in the decisions about what
18 they put on a given tier or they, indeed, bring to
19 their service at all, you signal to them that they
20 should be concerned in doing that with viewership of
21 Canadian programming. I would suggest that that is not
22 one of their considerations at the moment in respect of
23 the production sector, who, you know, quite proudly say
24 that we have got a little clause in the act that says
25 we have to make a contribution. Well, we agree.
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1 18262 It seems to us, again, that back to
2 our discussion about what works on air and the judgment
3 that we have to make about it, and you have heard and
4 will hear broadcasters say that often what is made for
5 our -- that we -- often the programming that we put on
6 our screens is not made particularly for our screens;
7 that the economics drives a product that is made for
8 U.S. off prime or U.S. specialty and we have suggested,
9 and we must put it in prime time, it does not perform
10 as well with audiences.
11 18263 So, we are suggesting again that you
12 bring -- because they are representative of the act --
13 you bring into the ambit of a system goal the
14 production community so that you may work with them and
15 we may work with them to, in fact, arrive at ways of
16 having programming for our audiences that performs
17 better.
18 18264 We have put in our proposal, in the
19 broader television board proposal, a number of
20 incentives that we think will indeed aim in the
21 direction of having better programming that will get
22 bigger audiences. Most specifically, I suppose, we
23 have had -- we have proposed that we be participants in
24 the ownership and in the distribution so that we again
25 may focus upon programming that performs.
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1 18265 COMMISSIONER WILSON: So it is not
2 just -- it is not that you haven't focused on
3 viewership up until now because, as Scott Cuthbertson
4 said from TV Securities, that Canadian programming has
5 just been a cost of doing business. You make your
6 money on the U.S. programming so you buy that. You
7 exhibit that in prime time. You earn the margins on
8 that and you do your bit for Canadian programming and
9 you don't want to spend a whole lot of money on that,
10 sort of promoting it and -- because I mean you are in
11 the business to make money.
12 18266 MR. McCABE: That view that you
13 express there, and I assume you are exaggerating for
14 effect --
15 18267 COMMISSIONER WILSON: Exaggerating
16 what? The cost of doing business. No, he actually
17 said that.
18 18268 MR. McCABE: No, the description of
19 how we go at Canadian programming, that description was
20 one that several years ago undoubtedly was a true and
21 accurate description.
22 18269 COMMISSIONER WILSON: That is sort of
23 what I took from what he said.
24 18270 MR. McCABE: Yes, that is right.
25 18271 COMMISSIONER WILSON: During your
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1 presentation, that that was what he was talking about.
2 18272 MR. McCABE: And he is an independent
3 voice speaking to us from the marketplace. Often, as I
4 think some broadcasters have remarked, they know more
5 about our businesses than we do and, perhaps, are a
6 little bit more honest with us about how they really
7 operate than sometimes we are able to be.
8 18273 But, if I may, what has happened is
9 he gives you the reality today. We are having to think
10 about the reality of tomorrow. That reality is we have
11 to make money at that Canadian programming. We are
12 suggesting to you that your strongest contribution,
13 your most important contribution in this hearing could
14 be to create the situation, create the regulatory and
15 policy situation in which we have an opportunity to, in
16 fact, make money at that programming and therefore we
17 do more of it and we do better at it.
18 18274 It seems to us that that would be in
19 the public policy interest as well as in our interest.
20 There is no doubt that it is our business and, as we
21 move forward in a more competitive world, where we have
22 to find unique Canadian programming that can be
23 competitive, we have enormous obstacles to overcome in
24 terms of a budget that is typically half the cost of --
25 for an hour of distinctive drama, half the cost of the
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1 average American product, and yet we still lose $1.15
2 for every $1 we spend at that programming.
3 18275 We are trying to suggest that it
4 would be in all our interests, and it would in fact
5 provide an impetus for more and better Canadian
6 programming, if you were to help us reverse those
7 figures so that -- and what we are suggesting is focus
8 on viewership for the entire system.
9 18276 COMMISSIONER WILSON: Including
10 specialty and premium services.
11 18277 MR. McCABE: Including specialty and
12 premium.
13 18278 COMMISSIONER WILSON: Okay, so let me
14 ask you about that.
15 18279 This morning when we talked to SPTV
16 they talked about the reverse viewing trend enjoyed by
17 Canadian specialities. They said that Canada's
18 specialty television services enjoy the reverse trend
19 to average English viewing with 64 per cent of tuning
20 to Canadian programs and 36 per cent to foreign
21 programs, which is virtually the exact opposite of
22 conventional broadcasters.
23 18280 What do you think accounts for that?
24 I went through the charts in your submission, and you
25 have a number of charts with some data but everybody
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3914
1 sort of positions their data in a slightly different
2 way and there is nothing that corresponds directly to
3 this, but do you accept those figures?
4 18281 MR. MILLER: I think the numbers are
5 accurate for what they are, but they fail to address, I
6 think, two significant issues. Number one, that to get
7 a fair representation how specialty contributes to
8 viewing, you would have to look at U.S. and Canadian
9 together and see how that plays out.
10 18282 COMMISSIONER WILSON: But I am just
11 talking about viewing of Canadian and foreign programs
12 on specialty English and French-language specialty
13 services.
14 18283 MR. MILLER: But we would submit you
15 can't just look at that because you are a regulatory
16 regime with your one-to-one linkage rule, which means
17 for every Canadian specialty you bring in another U.S.
18 can be brought in. So, as I alluded to earlier in
19 questioning from Commissioner Cardozo, the unfortunate
20 consequence is while we are building audiences to
21 Canadian services, we are not repatriating audiences
22 from U.S. services.
23 18284 COMMISSIONER WILSON: But I am not
24 talking about audiences to the services. I am talking
25 about viewership of Canadian programming on those
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3915
1 services. There is no Canadian programming on the U.S.
2 services.
3 18285 MR. MILLER: There actually is, but
4 we will not get into that.
5 18286 COMMISSIONER WILSON: Yes, maybe a
6 small percentage. But we are talking about if you look
7 at YTV, YTV carries a certain amount of Canadian
8 programming and a certain amount of American
9 programming, or foreign programming, and 64 per cent
10 overall, let's say on average, of tuning to that
11 channel is to their Canadian programs.
12 18287 MR. MILLER: I am going to answer
13 your question --
14 18288 COMMISSIONER WILSON: Which is the
15 opposite of the conventionals, which is 65 per cent or
16 thereabouts, of tuning is to foreign programs.
17 18289 MR. MILLER: Sorry, again, I am
18 answering your question in two parts. The first part
19 of my answer is to say that those numbers are true but
20 they don't paint the full picture by virtue of the
21 linkage rule, so that the cost of those Canadian
22 specialities is tampered by the U.S. services, so that,
23 overall, the viewing doesn't go up. I think that is an
24 important context.
25 18290 Number two -- and I will come back to
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1 that if it is not clear.
2 18291 Number two, specialty services
3 receive 70 per cent of their revenues from
4 subscriptions. It is an entirely different business
5 model. Where they get paid for their distribution,
6 conventional broadcasters pay for their distribution.
7 It's an entirely different model. So, as I think the
8 Chair was alluding, when you look at these numbers you
9 can't compare them one to another because the model,
10 the business model is entirely different.
11 18292 COMMISSIONER WILSON: You are saying
12 that the business model affects the viewership?
13 18293 MR. MILLER: Absolutely. Because as
14 has also been pointed out to you, again, if you compare
15 the numbers, 40 per cent of the revenues of specialty
16 services go to Canadian programming whereas less on
17 conventional goes. Again, that is by virtue of the
18 entirely different business model.
19 18294 Secondly, as Mr. McCabe has alluded
20 to, in conventional television, because you don't have
21 subscription revenues, you just have advertising, you
22 rely disproportionately on U.S. programming so that you
23 can earn revenues from U.S. programming that you put
24 back into Canadian programming. So the business model
25 is entirely different and therefore the numbers are
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3917
1 entirely different.
2 18295 MR. McCABE: I think the final point
3 that Peter makes is important, that is, on the
4 conventional side, you are running, with the Canadian
5 programming, you are running up against that powerful,
6 high budget American programming that has traditionally
7 drawn huge audiences in this country and has helped us,
8 indeed, cross-subsidize the Canadian programming where
9 we have not necessarily had the budgets to do this, to
10 in effect create often fully competitive programming.
11 But, when we operate as specialities, we are, as Peter
12 says, in an entirely different model where the
13 economics of the programming is different and you are
14 not always running up against, for the particular
15 audience that you are talking to, you are not always
16 running up against that, again, that high budget or the
17 same volume of that high budget American programming.
18 18296 COMMISSIONER WILSON: I guess what I
19 am trying to get at, and this was a question I asked
20 this morning, is there something -- I mean you are
21 broadcasters but you are also specialty broadcasters.
22 I should say you are specialty broadcasters first and
23 broadcasters second, since that is the hat you have on
24 right now.
25 18297 I mean is there anything that you can
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3918
1 learn from that? They are suggesting that the same
2 kind of spending requirement model be applied to
3 conventional broadcasters right across the board, that
4 the more money you spend on Canadian programming it is
5 going to end up in prime time and the more -- and I am
6 tying this back to this whole system-wide viewership
7 goal.
8 18298 If you look at those superficial
9 numbers, and ignore the business model underlying it,
10 and you see 65 per cent of tuning is to Canadian
11 programming, that is pretty good. Is there something
12 that the conventional broadcasters can learn from that?
13 18299 MR. McCABE: We believe that the
14 model for specialty within its particular -- the
15 regulatory model is particularly suited to its
16 particular economic model. What we are suggesting in
17 respect of -- and again this is another appearance
18 before you being revisited -- but what we are
19 suggesting is that we must address the economics of
20 Canadian programming. We can't sort of, on
21 conventional, we can't just put it to the side, we must
22 -- and we put before you proposals to, in effect, draw
23 more money in.
24 18300 We have said we are the likely source
25 of new money for Canadian programming. But what we
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3919
1 have said is we must have an opportunity to make a
2 return on that money, that again a process in which you
3 merely require us to spend more money and, perhaps,
4 continue to lose money is one that is finally not a
5 healthy process for the system, and not one that is
6 likely to in effect advance public policy goals.
7 18301 But if you will create the
8 circumstances in which that investment of money can
9 potentially see a return, then, indeed, that approach
10 becomes central to the system. But if you are
11 suggesting that, as I think was being suggested
12 earlier, although Trina McQueen did say that she had no
13 expertise in the area -- I think that, perhaps, she is
14 being too modest there, but the -- if you are
15 suggesting that in effect the kind of flexibility that
16 conventional broadcasters have at this stage, and which
17 we are proposing be increased given the nature of the
18 broadcasting system as it is developing, if you are
19 suggesting that that in effect be rescinded and a
20 single rule be --
21 18302 COMMISSIONER WILSON: I am not
22 suggesting that.
23 18303 MR. McCABE: I am sorry. If the
24 suggestion is --
25 18304 COMMISSIONER WILSON: I am not at the
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1 point where I am ready to suggest anything.
2 18305 MR. McCABE: But if the suggestion is
3 then we would consider that to be a retrograde step of
4 considerable proportion.
5 18306 MR. MILLER: If I can add, I think we
6 learn two things from the experience of specialty.
7 First of all, we learn that even with a massive
8 infusion of dollars and hours of Canadian programming
9 we still haven't been able to move the overall viewing
10 numbers. The chart that we showed, the CAB television
11 panel showed --
12 18307 COMMISSIONER WILSON: That is a very
13 interesting point that you raise because you also have
14 not scheduled it in prime time and you also have not
15 promoted it the same way that the U.S. programming has
16 been promoted. So is that really fair to say? I mean
17 I raised this issue with Richard Stursberg because he
18 actually mentioned in his submission the notion that
19 viewership has been flat at 30 per cent for almost 40
20 years.
21 18308 MR. McCABE: You earlier suggested
22 that we -- it is our business to, in fact, find the
23 biggest audiences we can. If you speak to any
24 professional programmer working with any of the major
25 broadcasting systems, they will tell you that broadly
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1 speaking the Canadian programming they schedule is put
2 in the place that they best think it will get an
3 audience.
4 18309 Indeed, the suggestion that any kind
5 of programming whatsoever of whatever quality be shoved
6 right into prime time and somehow we are adrift if we
7 don't do that, I think it really betrays, in a sense, a
8 lack of knowledge, which I mean broadly speaking we all
9 have --
10 18310 COMMISSIONER WILSON: But who is
11 suggesting that any kind of programming of any quality
12 be shoved into prime time?
13 18311 MR. McCABE: That is the suggestion
14 that is often before us. You are suggesting that we
15 are not scheduling -- we are not scheduling this in
16 prime time.
17 18312 COMMISSIONER WILSON: Well --
18 18313 MR. McCABE: The answer is we are
19 scheduling it where it can find an audience and we are
20 looking to you to help us, one, improve the quality of
21 it so that it can find a better audience.
22 18314 COMMISSIONER WILSON: I guess what I
23 am just saying is that this 30 per cent number has been
24 relied upon by a lot of different parties as a measure
25 of how we have put all of this stuff into Canadian
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1 programming but, you know, we haven't increased the
2 viewership, but there are a lot of other factors that
3 go into increasing the viewership, including airing it
4 at a time when most people are watching television,
5 which is prime time.
6 18315 MR. McCABE: Again, the other
7 possible response to the scheduling is that the people
8 involved being professionals are putting it -- given
9 the other requirements that are upon them of
10 simulcasting revenue and so on are putting it in the
11 slot where it can best find an audience and, indeed, we
12 are looking to you to expand that so that we may find
13 appropriate audiences for programming.
14 18316 So that I don't think it is -- one
15 side of the argument is we are not putting it in the
16 schedule where it can best find an audience, and our
17 view would be that is precisely what we are doing with
18 the program we have in hand.
19 18317 COMMISSIONER WILSON: But it hasn't
20 had any effect.
21 18318 MR. McCABE: That is why we have
22 before you a range of proposals to try to improve that
23 situation, precisely.
24 18319 MR. MILLER: If I can finish, because
25 I had another part to my answer, the other lesson is
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1 that one size does not fit all; that the best way to
2 achieve objectives in viewing and of more money and
3 more hours is to allow players to fulfil their niches.
4 As has been pointed to by Mr. Rubinstein, that ability
5 to go into a particular niche is also true on the
6 conventional side now.
7 18320 Citytv, when it was licensed in
8 Toronto, was licensed to be different from other
9 conventional broadcasters, and that is very much a
10 fixture, I think, of the new environment we have today.
11 18321 COMMISSIONER WILSON: Okay, thank
12 you. Those are my questions.
13 18322 THE CHAIRPERSON: When you were asked
14 whether the Commission should respond to what appears
15 to be an interest or a preoccupation regarding local
16 programming on conventional TV, your answer, if I
17 understood well, was that citizens have never been so
18 well served locally. You talked about the delivery of
19 local programming on cable and 25 per cent of the
20 population does not get cable; others don't get certain
21 tiers; that they get local information through the
22 Internet when there is 12 to 13 per cent of homes in
23 Canada who have access to the Internet.
24 18323 The third answer was we have
25 broadcasters, and broadcasters such as CHUM, can choose
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1 to provide local programming and therefore people are
2 served and there is no need for the Commission to
3 intrude in that area and demand certain -- or require a
4 certain amount of local programming.
5 1255
6 18324 To this third answer some will say
7 pretty soon we may have three and even fewer corporate
8 groups serving any given market and what is eliminating
9 some of the local programming is this concentration and
10 restructuring, et cetera. So, how do you find these
11 three answers -- a level of comfort to those who think
12 that they are not getting enough local programming or
13 that they fear losing even what they have?
14 18325 MR. McCABE: I suppose at some level
15 we have to recognize that increasingly the regulatory
16 system is operating in a more competitive economic
17 environment. There is revenue that flows from local
18 programming and it seems to me that in that competitive
19 marketplace one or more of these broadcasters will seek
20 out that local revenue and attempt to provide a strong
21 local focus to their broadcasting.
22 18326 But it does not mean necessarily that
23 all of them will do it because I suspect if all of them
24 went into the marketplace and tried to tap that local
25 revenue, you might end up with three and four services
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1 that were, in effect, based on that revenue, relatively
2 weak, whereas if two or three were in the marketplace
3 because they chose to be there and they were there for
4 a reason, they are not going to abandon that
5 marketplace because there is a key part of their
6 revenue base there. They will have a strong revenue
7 base, they will be able to provide strong services to
8 Canadians.
9 18327 So, I don't think -- we don't think
10 that this is in fact a concern. It only becomes a
11 concern if the effect of what you do in your decisions
12 is to, by requirement, drive dollars out of that area
13 or draw dollars out of that area to other areas that
14 you give higher priority to, which is why we have
15 suggested that you in fact signal that this remains a
16 priority. I do believe, however, in that context that
17 broadcasters will not abandon that revenue source.
18 Those who can operate well in it will in fact remain in
19 that field.
20 18328 THE CHAIRPERSON: You wouldn't give
21 any credence, then, to some of the submissions we have
22 that local news even is no longer a money-maker,
23 because you seem to think that even if there is very
24 few conventional broadcasters -- let's assume the
25 Commission feels that to serve the population of Canada
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3926
1 with a sufficient amount of local programming you have
2 to ensure that conventional broadcasters provide it for
3 the reasons that I have outlined. So, let's start with
4 that premise.
5 18329 You say somebody will do it because
6 it's a revenue-maker. So, you don't believe the
7 submissions that are made that say it's not, because
8 when you say don't drive dollars by your upcoming
9 decision on this process, I gather, out of local by
10 demanding too much on under-represented categories,
11 which is, of course, one of the fears of those who want
12 more local programming, but we have seen, according to
13 those who feel there is not enough local programming,
14 less of it long before we even purport to change the
15 regulatory system.
16 18330 The argument is it's occurring via
17 concentration and restructuring and large multi-station
18 groups. It's not obvious to me that if we do nothing,
19 it will happen. Our fear is not how many will want to
20 do it, but whether anybody will do it where CHUM isn't
21 serving. Of course, we will get new services.
22 18331 MR. McCABE: Peter will perhaps want
23 to add to this, but it seems to us that it is
24 absolutely essential that you not just take these
25 demands for more local service in isolation. Certainly
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1 people who have particular interests in television or
2 in having a new car will tell you, "Yes, that's what I
3 want. I want more of that."
4 18332 I think the context that Peter set of
5 a much broader service of the local market is one that
6 it's important to establish rather than merely looking
7 at this one factor in that service for the local
8 market. So, our suggestion is that economics, one way
9 or another -- the economics of local programming are
10 essential, number one, but, number two, the context in
11 which you look at it is essential.
12 18333 Peter?
13 18334 MR. MILLER: To be clear, we are not
14 suggesting that no one should have local requirements.
15 Many broadcasters do in their conditions of licence.
16 The issue is whether everyone should have a set local
17 requirement that's put in regulation. That issue is
18 the same whether we are talking about local or
19 children's or feature film or drama. The decision the
20 Commission has to make is: Are those needs best met by
21 having everyone have those obligations or are those
22 needs best met by allowing those that want to be in
23 that area to accept obligations?
24 18335 Our proposal is: One size doesn't
25 fit all. Everyone shouldn't have children's
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1 obligations, everyone shouldn't have drama obligations,
2 everyone shouldn't have feature film obligations,
3 everyone shouldn't have local obligations, but those
4 that want to do drama in prime time should be able to
5 focus on that and have a regulatory regime that
6 supports that those that want to do local should be
7 able to make that a major part of their programming
8 stream and have it recognized, those that are in the
9 children's business have that as part of their
10 condition of licence, be it conventional or be it
11 specialized.
12 18336 The genius of the regulatory
13 environment is that you, in dealing with renewals, in
14 dealing with applications, are able to determine: What
15 do I need a little bit more of? I have a broadcaster
16 who wants to serve this market. Are they serving where
17 I think the needs are met? As you point out,
18 Commissioner Wylie, you have to be concerned about
19 those Canadians that don't have cable, so you want to
20 make sure in a given market that there is a range of
21 services and you will treat broadcasters in Toronto
22 differently than you will treat broadcasters in
23 Medicine Hat to make sure that those areas that you
24 want to ensure are being served are being served.
25 18337 Our only point is that that should be
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1 done through conditions of licence tailored to the
2 individual service, not a broad regulation that's
3 across the board.
4 18338 MR. RUBINSTEIN: I have hesitated to
5 wade in here because the Specialty Board did not debate
6 this issue. Michael and Peter are coming at it from a
7 conventional point of view, but I want to add two
8 things.
9 18339 One is that if you go back and look
10 at the 1995 renewals of all of the local conventional
11 stations, the Commission rejected wholeheartedly a
12 notion that you want to have everybody do a little bit
13 of the same thing. Peter was talking about that and
14 that as been a model that has been rejected for very
15 good reasons. We are a small country with limited
16 resources and, ultimately, the system benefits if you
17 allow individual licensees to concentrate on areas that
18 you identify as being important to meet the objectives
19 of the Act.
20 18340 Secondly, whether through
21 consolidation or otherwise, there become gaps in local
22 reflection. I imagine there would be no shortage of
23 applicants for new conventional stations who want to
24 purely meet that demand. You always have the ability,
25 if you have under-served areas, communities of medium
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3930
1 and large sizes, to issue that call. Speaking
2 personally, I don't think that's a bad thing.
3 18341 If one of the larger broadcast groups
4 wants to move away from local programming so they can
5 put their energies and their creativity and their
6 dollars into national drama, for example, if that
7 creates a need in a vacuum and a void for more local
8 programming in certain communities, by all means issue
9 the call. There won't be any shortage of people lining
10 up to fill that gap.
11 18342 THE CHAIRPERSON: If I recall, very
12 few of the submissions I have read suggest that there
13 should be an abandonment of the economic test as to
14 whether the market can support another station. So,
15 that may or may not be an answer.
16 18343 Mr. Miller, your view of flexibility,
17 if you were in the regulator's seat, is kind of
18 intriguing because renewals are at different times and
19 if there is only two or three stations left, even in
20 large markets, and everybody comes wanting to do the
21 same thing, we are supposed to please the first one in
22 and require the last one in to do what the other ones
23 didn't want to do. It sounds good on paper, but in
24 practice it's a view of flexibility that is --
25 regulation is not flexibility.
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3931
1 18344 It can have more or less flexibility,
2 but inherently if there is a requirement through an act
3 of Parliament to achieve certain goals, regulation
4 means there will be as much flexibility as possible if
5 the regulator understands its business, but it means
6 restrictions because if it were just flexibility, you
7 just go out three and do whatever you can. So,
8 flexibility is a very difficult issue in saying: Let
9 people do what they want. They want to concentrate and
10 restructure, you have two or three of them left, and
11 then they may all want to do the same thing.
12 18345 So, I will leave that, anyway,
13 because you have just pointed out that you are not here
14 as the CAB Board.
15 18346 MR. MILLER: If I can just briefly
16 respond, you are absolutely correct. I hope I didn't
17 leave the impression that there are easy answers here,
18 because there are not. These are serious issues and I
19 think we are simply suggesting that the suggestion that
20 the easy answer is some regulatory requirement across
21 the board is not necessarily the way to go. You do
22 require local reflection, you have conditions of
23 licence, and that has been a good instrument for you.
24 18347 MR. McCABE: If I might add, you are
25 not starting with a tabula rasa in which everybody is
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3932
1 going to wipe the sheet clean and come up in front of
2 you and say, "I have been this kind of broadcaster and
3 I want to change to be another kind." People have
4 investments over a long period of time and they are
5 serving a market in a particular way.
6 18348 So, I think you have an opportunity
7 to take a look at that market when you have somebody
8 before you. If they want to go off in some wildly
9 different direction, it seems to me that there is the
10 capacity of their competitors in the market to
11 intervene. If you were starting, as I say, with a
12 clean sheet and you were having to make these
13 decisions, I would think it would be more difficult,
14 but that isn't the case.
15 18349 THE CHAIRPERSON: A quick question,
16 Ms Greer Yull. You answered to Commissioner Cardozo
17 when he raised diversity. I know with CHUM at the
18 table it's a different issue than when we see other
19 broadcasters, but you are speaking for more than one
20 party. Your answer was 50 per cent of the population
21 will be of minority, so, of course, we will, without
22 any type of prodding, represent them, when in fact our
23 history has been that women have been 51 per cent of
24 the population for years and it took task forces and
25 codes and sex role stereotyping rules to have a proper
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1 reflection of what most of us consider a proper
2 reflection of women on the screen.
3 18350 So, I'm not sure it's that simple,
4 that things are done simply because the make-up of the
5 population changes and that there is some value in the
6 arguments made that unless you prod, the status quo
7 remains. I think the role of women in broadcasting has
8 shown that being the majority had little to do with
9 what ended up on the screen and how women were
10 reflected.
11 18351 MS GREER YULL: I think it's true
12 that it may take some time. I have to admit there are
13 also legislative requirements to increase diversity on
14 our programs. So, although it's a business reality and
15 I think we will see that cultural diversity will be
16 broadened as our audiences become more diverse, I think
17 it's also true that there are legislative requirements
18 that we do meet, including the employment equity
19 provisions, our on-air portrayal codes, and so on.
20 18352 So, I think there is still work to do
21 and, as Mr. Miller has suggested, there is also an
22 opportunity at licensing and renewal to re-examine on a
23 licensee-by-licensee basis, certainly.
24 18353 THE CHAIRPERSON: What code are you
25 referring to when you say on-air portrayal code viewed
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1 from a racial perspective?
2 18354 MS GREER YULL: Actually, could I re-
3 direct that to Peter?
4 18355 MR. MILLER: Sorry, no, we don't have
5 a specific on-air portrayal code. We have, as you
6 know, a gender portrayal code and there is an earlier
7 document that I think it's time for us to look at again
8 that was published back in the 1970s dealing with some
9 of these issues.
10 18356 MR. McCABE: We are not opposed to
11 prodding, by the way. We expect that as part of our
12 life and part of your job.
13 18357 THE CHAIRPERSON: My last question.
14 Mr. McCabe, when the question of constellations or
15 large owners with cross-ownership in the programming
16 area was raised and you were asked whether or not such
17 constellations should be asked to do more, your
18 response, if I understood properly, was that the
19 Commission already took that into consideration when
20 they licensed them and can take it into consideration
21 when they are renewed.
22 18358 Would it follow that the Commission
23 should take it into consideration when they change
24 ownership and they were licensed under a single owner
25 or not a constellation and they now become the
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1 ownership of a constellation? The reason I am asking
2 is because I checked back and you do advocate -- the
3 CAB advocates the elimination of the benefits test.
4 18359 MR. McCABE: Yes, that is the
5 appropriate time for you to make a judgment about the
6 level of contribution that they should be making given
7 their changed circumstances. This does not in any way
8 take away from the proposition that the benefits test,
9 as we have come to know it, which is some sort of kind
10 of flat tax, if you will, as it emerged in Commission
11 practice over a period of time, should be eliminated.
12 We believe that to be the case, but it is absolutely
13 proper and the appropriate time to make a judgment
14 about what contribution should be made and one of the
15 appropriate times is when they appear before you with
16 changed ownership circumstances.
17 18360 THE CHAIRPERSON: Thank you.
18 18361 Counsel?
19 18362 MS PATTERSON: Thank you, Madam
20 Chair.
21 18363 One of your proposals to cause
22 foreign services to make a direct contribution to the
23 Canadian broadcasting system was to, and I am quoting
24 here from your oral submission this afternoon at page
25 3:
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1 "...[revise] the policy with
2 respect to the use of local
3 avails to ensure they are used
4 100% for the promotion of
5 Canadian services and Canadian
6 programming."
7 18364 I would like to know if you have had
8 the chance to discuss this proposal with foreign
9 specialty services and, if so, with what result.
10 18365 MR. MILLER: First of all, we have
11 had discussions with the CCTA about the whole issue of
12 contribution from U.S. services and we can appreciate
13 some of their concerns.
14 18366 With respect to the local avail
15 thing, it would not require any consent from U.S. cable
16 services because they already give to the cable
17 operator the right to use them. Again to be clear, we
18 are only talking about the two minutes of local avails
19 that are currently used 75 per cent and 25 per cent for
20 cable. We take note of Mr. Buchan's comments about
21 commercial deletion and, therefore, have not suggested
22 that other advertising avails in U.S. services be used
23 in the same way.
24 18367 MS PATTERSON: Thank you for that.
25 18368 A second question is the following.
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1 SPTV raised the possibility of extending the
2 requirement that BDUs fulfil simultaneous substitution
3 requests to include those from specialty services. Do
4 you agree that the Commission should change its
5 approach on this issue?
6 18369 MR. RUBINSTEIN: This issue has been
7 debated amongst our Board. There is not consensus as
8 far as the CAB Specialty Board is concerned. We do
9 agree that leaving it in the hands of the distributor
10 is the worst possible thing. So, we think that the
11 Commission should make a decision and if you feel on
12 the basis of all of the evidence that it is a benefit
13 to extend it, then make it mandatory, but don't leave
14 it to the decision of the distributor.
15 1315
16 18370 MS PATTERSON: Thank you.
17 18371 A final question with respect to
18 infomercials. The rationale for restricting specialty
19 services from airing infomercials, as you know, is that
20 they generally have access to both subscriber fees and
21 advertising revenues. In your opinion, is this
22 rationale for why specialty services should have a
23 different set of rules in regard to infomercials from
24 the conventional broadcasters still valid?
25 18372 MR. RUBINSTEIN: We don't see any
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1 reason why there would be a difference in terms of
2 flexibility in permitting telecast of infomercials as
3 between the specialty and conventional sectors.
4 18373 MS PATTERSON: Thank you.
5 18374 Those are my questions, thank you,
6 Madam Chair.
7 18375 THE CHAIRPERSON: Thank you, Mr.
8 McCabe, ladies and gentlemen.
9 18376 We will adjourn for lunch and be back
10 at 2:30. Nous reprendrons à deux heures et demie.
11 --- Recess at / Suspension à 1315
12 --- Upon resuming at / Reprise à 1430
13 18377 THE CHAIRPERSON: Madame Secretary.
14 18378 MS SANTERRE: Thank you, Madame
15 Chair. I would like to invite NetStar Communications
16 Inc. to make their presentation.
17 PRESENTATION / PRÉSENTATION
18 18379 MS McQUEEN: Thank you very much.
19 Madam Chair, Commissioners, we apologize for having
20 dragged ourselves back to see you again. You have
21 probably had enough of us, but we have managed to
22 acquire some fresh faces. For the record, may I
23 introduce the panel.
24 18380 Gérald Janneteau, the president of
25 Réseau des sports; Mr. Rick Brace, president of TSN,
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1 Elizabeth Duffy-MacLean, director of business affairs;
2 and Paul Brown, vice-president of business affairs, all
3 of us from NetStar Communications Incorporated.
4 18381 We believe we are the 88th of 100
5 interveners and we commend you on your stamina. As
6 number 88, we think we are in a good strategic position
7 with the ability to work with what has gone before us.
8 As Isaac Newton once said, "If I have seen further than
9 other men, it is because I have stood on the shoulders
10 of giants." That's the Discovery version. The TSN and
11 RDS version is that we are batting cleanup in the
12 bottom of the ninth, whatever that means.
13 18382 In any event, it allows us the
14 opportunity, first, to assure you that the end is in
15 sight, and second, to address some of the themes that
16 have evolved.
17 18383 This hearing has been about more. We
18 have heard proposals about viewership from the CAB.
19 The producers, the directors and others have suggested
20 variations on more hours and more dollars spent on
21 Canadian programming in prime time. At the same time,
22 we have heard about the significant levels of
23 contributions being made by specialty services. So,
24 where do we go from here?
25 18384 Our view from all of this is that the
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1 formula that ties revenue to expenditures on Canadian
2 programming is the key to getting more. The evidence
3 we think, is clear. At NetStar, over half a billion
4 dollars has been spent on Canadian programming in the
5 last 14 years, and between 44 and 50 per cent of our
6 gross revenue goes to Canadian content. In terms of
7 hours, the majority of all programming on all three
8 networks is Canadian.
9 18385 We think we are doing an excellent
10 job and so do lots of others, but our success is
11 fragile because of the realities we face, because of
12 more. There is more competition for audiences; there
13 is more pressure from distributors on our wholesale
14 rates; there is more competition for advertising; there
15 is more competition for programming; and for all of us
16 there are more demands for more shareholder returns.
17 18386 The answer is viewers. When that has
18 been talked about before, you have asked penetrating
19 questions about sheer audience bulk as a good measure,
20 and there are problems with that, but every television
21 program should strive for the highest appropriate
22 audience. Good audiences mean more revenue and that
23 leads to more Canadian programming. So we do have to
24 have more viewers.
25 18387 We would like to address three ways
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1 to do that, to get more people to watch as well as to
2 make specialty services stronger with more money
3 flowing directly to Canadian programming. First, we
4 see simultaneous substitution as important. Second, we
5 would like to address under-represented programming,
6 and third, we would like to talk about promoting
7 Canadian programming.
8 18388 Rick, would you like to take it away?
9 18389 MR. BRACE: Thanks, Trina.
10 18390 I know we have beaten this drum
11 fairly hard and at the risk of repeating ourselves yet
12 again I would like to discuss the issue of extending
13 simultaneous substitution to specialty services. I
14 think my children could probably speak about this
15 issue, we have talked about it so much around the
16 house.
17 18391 Under the new broadcasting
18 distribution regulations, a new provision permits but
19 doesn't require distributors to carry out substitution
20 requests by Canadian specialty services. In contrast,
21 distributors are obligated to undertake substitution
22 for conventional broadcasters.
23 18392 As a result, mandatory substitution
24 for conventional broadcasters has proven to be
25 extremely successful. Increased audiences have led to
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1 maximizing of advertising revenues to the tune of over
2 $100 million annually. However, under the existing
3 regulations, mandatory substitution for specialty
4 services is not required.
5 18393 The underlying issue for both
6 specialty services and conventional broadcasters is the
7 same. Simultaneous substitution is purely and simply
8 about program rights protection. What we are
9 requesting is equal treatment. Canadian television
10 broadcasters, whether conventional or specialty, must
11 have equal ability to maximize their investment in
12 broadcast rights. With increasing competition, both
13 foreign and domestic, it's now essential that Canadian
14 specialty services be treated equally and have the
15 right to require distributors to carry out simultaneous
16 substitution. With no policy basis for the existing
17 discrimination against specialty services, NetStar
18 proposes that mandatory substitution be extended to
19 requests by specialty services.
20 18394 We would further propose, for both
21 specialty and conventional broadcasters, that to
22 further the protection of program rights, the existing
23 rules should be extended to substituting over U.S.
24 cable services. With the increase in authorized
25 foreign service over the past number of years, rights
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1 protection cannot be complete without extending
2 substitution to those services as well.
3 18395 NetStar would like to thank the
4 Commission for taking initial steps towards extending
5 rights protection to specialty services under the new
6 Distribution Regulations. Unfortunately, the reality
7 is that the changes had very limited success. As
8 outlined to the Commission in various documents filed
9 with you, since the regulations came into effect, TSN
10 has written to the 25 largest distributors several
11 times formally requesting substitution for a number of
12 events. While several mid-sized cable operator and the
13 DTH licensees have agreed, over 75 per cent of the
14 distributors contacted have refused our requests,
15 including the largest distributors.
16 18396 These same distributors are telling
17 us that it is not a cost issue, and with mid-sized
18 cable operators saying, yes, we know it is not a cost
19 issue. They will not undertake simultaneous
20 substitution for specialties because they are not
21 obliged to. As you will hear, other services have had
22 similar experiences.
23 18397 The benefits of this proposal will be
24 significant. First, it will allow maximum protection
25 of program rights. It will increase audiences tuned
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1 into the Canadian service. In addition, the increased
2 viewership to the Canadian service will mean more
3 exposure for promotions of upcoming Canadian shows and
4 there will be significant increases in expenditures on
5 Canadian programming from any additional advertising
6 revenue, under the gross revenue formula.
7 18398 We think this makes sense and we
8 truly believe that the benefits to the specialty
9 industry and to Canadian programming are substantial.
10 We hope you will agree.
11 18399 MS McQUEEN: Almost everybody who has
12 talked to you about under-represented programming has
13 talked about drama, which is seen as the single most
14 important format that needs support in Canadian
15 broadcasting. Drama is important. It's the basic
16 block of story telling. It can fire our imagination
17 and touch our emotions. But it is also the most
18 difficult and the most expensive genre to do
19 successfully. We have spent hundreds of millions of
20 dollars of public money on Canadian dramatic
21 programming. We have had some wonderful successes, you
22 have heard about many of them, but we are not yet seen
23 on the international front as world leaders in drama.
24 We are, however, seen as international leaders in other
25 areas, including documentaries and children's
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1 programming, and we are concerned that we not abandon
2 our success or our focus on these programs.
3 18400 Formats other than drama are
4 essential to the Canadian experience. Other genres can
5 reflect Canadian values, teach us about our past,
6 educate our children, entertain us and inspire us, and
7 viewers have shown a strong natural interest in
8 watching Canadian documentaries and children's
9 programming. Moreover, these programs can be produced
10 efficiently and they can make a profit.
11 18401 We propose, at NetStar, that you
12 extend the 150 per cent credit to all under-represented
13 formats equally, including documentaries. Equal
14 support will mean equal opportunity for success; for
15 more viewers, stronger services and for more Canadian
16 programming.
17 18402 M. JANNETEAU: D'une certaine façon,
18 c'est toute la programmation canadienne qui est sous-
19 représentée. C'est d'ailleurs pourquoi nous sommes ici
20 aujourd'hui. Toutes les émissions canadiennes doivent
21 être soutenues et encouragées et, pour cela, il faut en
22 faire la promotion.
23 18403 Nous nous devons de bien faire -- de
24 mieux faire -- le marketing de nos émissions
25 canadiennes. Souvent friands d'émissions canadiennes
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1 et toujours prêts à célébrer leurs succès, nos
2 téléspectateurs doivent être informés, et de leur
3 existence même, et de leur place dans nos grilles de
4 programmation.
5 18404 Face à une concurrence toujours
6 croissante et à la fragmentation toujours plus grande
7 de l'offre télévisuelle, face aussi à la marée
8 publicitaire américaine, il devient de plus en plus
9 important d'encourager et de mousser le visionnement de
10 nos émissions; le marché anglophone est littéralement
11 inondé quotidiennement par la publicité en ondes des
12 émissions américaines.
13 18405 NetStar est d'accord avec bon nombre
14 d'autres intervenants: la promotion des émissions
15 canadiennes est essentielle au renforcement du contenu
16 canadien.
17 18406 Plusieurs propositions ont ainsi été
18 formulées:
19 18407 - Considérer les dépenses visant la
20 promotion d'émissions canadiennes comme des dépenses
21 admissibles de programmation.
22 18408 - Imposer une utilisation maximale
23 des disponibilités publicitaires locales des services
24 de radiodiffusion par satellite non canadiens pour la
25 promotion d'émissions canadiennes.
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1 18409 - Adopter une politique d'abolition
2 des frais pour les services spécialisés utilisant ces
3 disponibilité publicitaires locales.
4 18410 NetStar appuie toutes ces
5 propositions et les considère comme des moyens
6 pratiques de soutenir la programmation canadienne.
7 18411 Trina.
8 18412 MS McQUEEN: As clean-up batters, we
9 have seen some consensus forming in a number of areas.
10 Others have agreed with us that the revenue expenditure
11 formula is key to getting more. And we think there is
12 also agreement that increasing the viewer demand for
13 Canadian programming is essential. At NetStar, we
14 believe that combining the revenue expenditure formula
15 with simultaneous substitution equals support for all
16 under-represented programming and good promotion of
17 Canadian shows will mean stronger broadcasting services
18 and larger audiences for Canadian programming.
19 18413 We thank you for the opportunity to
20 speak and we are ready to answer your questions.
21 18414 THE CHAIRPERSON: Thank you.
22 18415 Commissioner McKendry.
23 18416 COMMISSIONER McKENDRY: Thank you,
24 Madam Chair.
25 18417 Thank you for your presentation.
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3948
1 Perhaps we could start by talking about promotion
2 expenditures. On page 2 of your written submission you
3 propose to allow promotion expenditures to count as
4 Canadian and to allow Canadian promos to be considered
5 as Canadian programming. I think you also discussed
6 this on page 9 of your submission as well.
7 18418 First of all, what expenditures do
8 have you in mind? Are these advertising payments to
9 third parties, the cost of producing a promotional
10 spot?
11 18419 MR. JANNETEAU: I can give you some
12 examples of some of those expenditures: animation,
13 music, the voice-over that goes on to promos, temporary
14 help such as freelance producers, travel, outside
15 creative fees that might be required on the promos and
16 so on.
17 18420 We believe that these efforts are
18 essential to the increase and getting more viewers to
19 view Canadian programs and counting Canadian promo
20 expenditures in the same way that we do Canadian
21 programming would help achieve that goal.
22 18421 COMMISSIONER McKENDRY: I take it you
23 take a broad view of expenditures. You are not
24 restricting it to advertising expenditures with respect
25 to acquiring advertising from third parties.
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1 18422 MR. JANNETEAU: In fact, we would
2 also include third party advertising in that when it is
3 directed specifically for Canadian programs.
4 18423 COMMISSIONER McKENDRY: The reason I
5 ask is we did have one party appearing before us that
6 would have restricted these expenses to third party
7 advertising. You are saying it's broader than that in
8 your view?
9 18424 MR. JANNETEAU: That's right.
10 18425 COMMISSIONER McKENDRY: How would we
11 comfort ourselves or be assured, in the environment you
12 are talking about, that the expenditures reported to us
13 were properly incurred and accurately recorded? How
14 would we monitor that?
15 18426 MR. JANNETEAU: I presume that you
16 would do that in the same way that we do it for
17 Canadian programming expenditures at this time. There
18 is a pretty good definition of what is to be included
19 in Canadian programming expenditures. We submit
20 reports yearly and I presume that we would do the same
21 thing for promotion expenditures and outside
22 advertising.
23 18427 COMMISSIONER McKENDRY: And you feel
24 that the detail in there would be sufficient for us to
25 come to an opinion about whether or not the expenses
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1 were fairly recorded?
2 18428 MR. JANNETEAU: Absolutely.
3 18429 MS McQUEEN: I think that also you
4 would develop a body of expertise very soon that would
5 enable you to know when somebody was way out of line or
6 even a little bit out of line, unless we were lying to
7 you, which would be unthinkable.
8 18430 COMMISSIONER McKENDRY: So you are
9 suggesting by comparing amongst the services and
10 broadcasters we would get a feel.
11 18431 MS McQUEEN: I presume that would be
12 what you would do with other kinds of expenses that are
13 reported to you.
14 18432 COMMISSIONER McKENDRY: I would like
15 to talk now about the formats, other than drama, that
16 you point out are equally valuable in their ability to
17 reflect our cultural values and identity. You talk
18 about that on page 2 of your written submission and I
19 think you touched on it in your oral presentation as
20 well.
21 18433 You state that these formats require
22 support because not enough product is available or
23 because the format is uneconomical to produce. Can you
24 tell me what formats you have in mind? Perhaps those
25 are the same ones that you went through in your oral
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1 presentation but I would like to be clear about the
2 other formats that you are referring to here that are
3 uneconomical to produce or where there isn't enough
4 product available.
5 18434 MS McQUEEN: Particularly we want to
6 be the voice for documentaries here. We think that
7 that is a crucially important format, one in which
8 Canadians have a proud history, and I think a format
9 that can range over so many themes and do so many jobs
10 that it provides an astonishing variety of expression.
11 So that is our primary concern for documentaries.
12 18435 We also see children's programming as
13 something that Canadians are very, very good at.
14 Non-violent programming with educational values has
15 been a strength of Canadian producers and we just want
16 to make sure that in the kind of -- I don't want to
17 call it an obsession but it's pretty close to it with
18 Canadian drama -- that these formats do not sort of
19 slip away in the attention and the funding that's being
20 given to drama.
21 18436 COMMISSIONER McKENDRY: Let's talk
22 about documentaries for a minute. Now, you are saying
23 that documentaries are uneconomical to produce. Is
24 that your point?
25 18437 MS McQUEEN: They can be uneconomical
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1 to produce. Not all of them are. Some of them can be
2 profitable. But I think that there is not enough of
3 them and they seem to be ignored in many different
4 ways.
5 18438 For example, they do not even have a
6 category to themselves in the listing of different
7 formats that the CRTC has. They are included under
8 public affairs. Most descriptions of what people watch
9 include documentaries under public affairs. There are
10 two very different things; there are programs like "W5"
11 and "Fifth Estate" that are not documentaries but are
12 public affairs programs, and then there are the true
13 documentary formats, but they are all kind of lumped
14 together so that there is no really good picture of the
15 number of documentaries. But I think if you look at
16 any television guide of conventional broadcasters and
17 even specialty channels you will see that the long form
18 documentary is not a category that -- it's a category
19 that is certainly on the air but I would not say it is
20 represented. It is under-represented.
21 18439 COMMISSIONER McKENDRY: Would you
22 like to see us then establish a separate category
23 designation for documentaries?
24 18440 MS McQUEEN: I would like to see
25 documentaries in a category, yes, in the categories of
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1 programming that you have. I also think that it should
2 be firmly given a position in the list of under-
3 represented categories.
4 18441 COMMISSIONER McKENDRY: Just in terms
5 of the uneconomical to produce aspect of this, you said
6 that some documentaries are quite profitable and others
7 are not. The ones that are not, is that a reflection
8 of the fact that they don't attract viewers for
9 whatever reason, they are not documentaries that the
10 public responds to sufficiently?
11 18442 MS McQUEEN: No, exactly to the
12 contrary. I think the reason -- documentaries become
13 very expensive when they require expensive research,
14 when they require many days of shooting, when they
15 require, for example in my own field, which is wildlife
16 documentaries, it may take two years of hiding behind a
17 tree before you get the exact shot of the bird that you
18 want, and that becomes extremely expensive. It's not
19 to say that those documentaries don't eventually have
20 large audiences, they do, but the daunting prospect of
21 funding them may often put people off doing the kind of
22 documentaries that have the stature and the grandeur
23 and the production values of other programs.
24 18443 That's not to say that, by contrast,
25 if I may say something about drama again, a million
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1 dollars an hour for drama is a kind of weak budget.
2 It's okay but it's just barely adequate. For a
3 documentary, it's a stratospheric budget. And when we
4 talk about documentaries as being cost efficient, the
5 fact is that you can get a great many more high
6 production values for a documentary per hour than you
7 can with the same amount of money spent on drama. Not
8 to say drama is bad. I know that it's a federal crime
9 to speak against Canadian drama and I do not want to
10 get into any kind of trouble here. Do you have a
11 witness protection program?
12 18444 The fact is that documentaries are
13 more cost efficient than drama.
14 18445 COMMISSIONER McKENDRY: Given that
15 some dramas are profitable without public support and
16 that some require public support, how would we
17 distinguish or how would the funding agency distinguish
18 between those that should be assisted financially and
19 those that shouldn't.
20 18446 MS McQUEEN: I'm sorry, did you say
21 drama or documentaries?
22 18447 COMMISSIONER McKENDRY: Sorry,
23 documentaries. I apologize if I said drama.
24 18448 Let me repeat the question. Given
25 that some documentaries are profitable and others are
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1 not because of high costs and so on, how would a
2 funding body distinguish between the documentaries that
3 should receive assistance and those that shouldn't
4 because they are profitable on their own?
5 18449 MS McQUEEN: Well, I am not sure that
6 most of the funding agencies regard the profitability
7 of a program as a bad thing. I think, in the cases of
8 children's and drama, most people go into it with the
9 expectation that there might actually be a profit at
10 the end of it. It does not often materialize but I do
11 not think that's one of the things that is taken into
12 account. The non-profitability becomes a big check
13 mark for any genre.
14 18450 What we would like to see for
15 documentaries is the same status and the same
16 incentives as other under-represented programming; no
17 more, no less, same procedures, same judgments as other
18 under-represented categories.
19 18451 COMMISSIONER McKENDRY: I would like
20 to ask you about the comment on page 3 of your
21 submission that there are occasions when broadcasters
22 should be allowed to receive Telefilm equity funds. I
23 think in your introductory comments you pointed out
24 that you have the advantage of building on the record
25 that exists and this hearing, in your comments, I
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1 suppose we have the same time opportunity as well.
2 18452 I wanted to ask you about a comment
3 that Mr. MacMillan from Alliance made about this issue.
4 1450
5 18453 What I took him to be saying is that
6 the broadcasters and people that are supporting this
7 position are really making a mountain out of a mole
8 hill. He discussed this with us at page 339 of the
9 transcript in Volume 2, and what he said was, he said,
10 and I quote:
11 "I am just pointing out that
12 there are currently no barriers
13 to distributing or getting tax
14 credits or getting CTF money
15 now."
16 18454 And he was referring to the
17 broadcasters. He went on to say:
18 "The one barrier that there is,
19 however, is Telefilm equity
20 funding. That debate is, say, a
21 $30 or $35 million a year issue.
22 That's the English-language
23 private broadcaster TV portion
24 of Telefilm, roughly $30, $35
25 million..."
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1 18455 Then he went on to say that this is a
2 $1.7 billion advertising driven industry; and in fact
3 the numbers in your submission put it at $2.1 billion
4 because I think he was excluding the specialty
5 advertising revenues.
6 18456 What is your reaction to his point
7 that we are really just talking about an
8 infinitesimally small amount of money in relation to
9 the funding that is available to broadcasters for
10 production, that there really are no significant
11 restrictions?
12 18457 MS McQUEEN: Mr. MacMillan is one of
13 my heroes, and I would hate to oppose him. But if it
14 is such a mole hill, why are they opposing it so
15 fiercely and with such great force? Maybe it is a mole
16 hill, but I guess our position is that anybody who
17 wants to make Canadian programming should be
18 encouraged, not discouraged.
19 18458 We agree with the specialty
20 association that there are difficulties in allowing
21 broadcasters access to the Telefilm pot of money; but
22 we do believe that those difficulties can be overcome
23 and that if they are overcome it will not mean that
24 broadcaster affiliate companies will drain Telefilm.
25 What it will mean is that on occasion broadcasters who
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3958
1 have a specifically Canadian idea, and our proposal is
2 that these programs that do get Telefilm funding that
3 are broadcaster produced have to meet much more
4 stringent conditions than those proposed by independent
5 producers.
6 18459 But if we can meet the more stringent
7 conditions, if we are willing to invest a great deal of
8 our own money in it, I am confused about why we
9 shouldn't have the same ability to make these
10 economically viable that large production companies
11 have.
12 18460 It seems to me that if we want more
13 Canadian programming, we should accept the offers of
14 everyone who wants to come to the table with a large
15 licence fee and distinctively Canadian themes, 10 out
16 of 10 Cavco points, it is a good thing.
17 18461 COMMISSIONER McKENDRY: So you don't
18 accept his argument that there is lots of resources
19 available to broadcasters without having access to the
20 Telefilm equity funds?
21 18462 MS McQUEEN: I guess if there were
22 lots of resources available to broadcasters to do
23 underrepresented programming, they would be doing it
24 instead of going to independent producers. That is
25 common sense to me.
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3959
1 18463 COMMISSIONER McKENDRY: Let's talk
2 about simultaneous substitution for a few minutes. I
3 think this is an important matter to NetStar.
4 18464 Let me begin by asking you to what
5 extent your proposal would benefit other services than
6 sports services.
7 18465 MR. BRACE: Besides sports?
8 18466 COMMISSIONER McKENDRY: Yes.
9 18467 MR. BRACE: I think that in all
10 cases, including sports, the benefit would be in
11 several areas. I think probably the most significant
12 benefit would be the fact that any additional or
13 incremental revenues that are obtained by virtue of
14 simultaneous substitution, by view of the gross revenue
15 formula, would automatically go back into Canadian
16 programming.
17 18468 I think, secondly, that we can't
18 underestimate the opportunity to promote Canadian
19 programming through what is essentially high profile
20 programming that you are airing to a broad audience.
21 18469 So I think that those two elements
22 are certainly important.
23 18470 Probably the third is rights
24 protection, and maybe it is at the top of the list,
25 that when we go out, whether we are sports, whether we
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3960
1 are any other service for that matter, whether it is
2 conventional, we go out and we purchase rights for
3 Canada. Simultaneous substitution allows us to exploit
4 those rights, those national rights, and therefore that
5 is an opportunity for us at least, with the other two
6 points that I just raised. I think that benefits every
7 one across the board.
8 18471 COMMISSIONER McKENDRY: Perhaps I
9 should have been a little more specific in my question.
10 What I am looking for are there any other services
11 interested in this except sports services?
12 18472 MR. BRACE: I would like to pass on
13 to Elizabeth Duffy-MacLean on that one.
14 18473 MS DUFFY-MacLEAN: Commissioner
15 McKendry, I think you are going to be hearing from
16 several other services over the next day or so,
17 including the Alliance-Atlantis people who will have --
18 be able to better answer your questions about
19 non-NetStar benefits.
20 18474 As well, I think this morning SPTV as
21 well supported simultaneous substitution for its
22 members.
23 18475 COMMISSIONER McKENDRY: If I remember
24 correctly, I think SPTV said it should be extended to
25 Class I and Class II systems, and I think your proposal
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3961
1 is Class I systems only, do I have that correct?
2 18476 MR. BRACE: Class I systems, yes,
3 those with subscribers of 6,000 or more.
4 18477 COMMISSIONER McKENDRY: Why do you
5 not propose to extend it to Class II as SPTV did?
6 18478 MS DUFFY-MacLEAN: I think this was a
7 bit of a historical discussion we have had over time
8 with the Commission. I think at one point we said what
9 we really needed were the major markets, the Class Is.
10 We are certainly happy to accept Class I and Class II,
11 if that is on par with what the other -- what the
12 conventional broadcasters are receiving now.
13 18479 COMMISSIONER McKENDRY: If I
14 understand correctly what you are saying, you are
15 telling us this can be done because you have requested
16 some medium-sized systems to do it and they have done
17 it. So therefore the big systems should be able to do
18 it.
19 18480 I guess I want to understand that
20 argument a little better. Do you have any information
21 for us about the costs that were incurred by the
22 medium-sized systems? Sort of a follow-up question to
23 that is: Did you pay for any of these costs or did
24 they pay for them all themselves?
25 18481 MR. BRACE: Mr. McKendry, just to
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3962
1 clarify one point. We actually made the request of all
2 the systems, not just the small systems, for a number
3 of programs dating from a period that went from
4 February through December of last year.
5 18482 In point of fact, it was only the
6 smaller systems, some of the smaller systems, like
7 Northern and Bragg and Mountain Cable in a couple of
8 instances that agreed to do it; and, of course, the DTH
9 services came on board as well.
10 18483 In every case, it was done willingly
11 and without any notion of costs. They didn't refer any
12 costs to us and certainly we didn't pay any cost.
13 18484 COMMISSIONER McKENDRY: And the
14 larger systems, have they provided you with any reasons
15 why they haven't done it other than that they don't
16 have to do it?
17 18485 MR. BRACE: In discussions I have had
18 with the larger systems, and certainly Elizabeth
19 Duffy-MacLean can talk about this as well, they raise
20 an issue of cost, although they don't quantify it. But
21 probably the biggest issue that they raise is two
22 points on viewership discontent, and if I can just talk
23 about that from a little bit of a sports standpoint.
24 18486 The first is that viewers complain,
25 as you can appreciate, when the presentations or the
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3963
1 awards or the final of an event is not shown because it
2 is run long and it interferes with other network
3 programming. So, the tendency by people who are
4 simultaneously substituting may be to leave an event
5 before its absolute conclusion.
6 18487 On that point, certainly as a sports
7 network, with one kind of niche in our market, and that
8 is to do sports programming, we of course stay right to
9 the end and we do complete the event and that is our
10 policy. So I think that that issue is taken off the
11 table.
12 18488 The other one was a kind of a strange
13 one, but it was raised by a discussion I had actually
14 with Shaw Cable, who said that the big complaint they
15 have is funnily enough on Super Bowl, where people like
16 to see the launch of the American commercials in that
17 specific event. That, of course, is not an issue for,
18 I think, the specialty services, as I don't anticipate
19 any of us will be carrying Super Bowl down the road.
20 18489 COMMISSIONER McKENDRY: With respect
21 to the costs -- well, just let me make sure I
22 understand your answer. The costs, they haven't put
23 forward the costs as a reason, it is not a cost issue
24 as far as you know with the large systems, it is these
25 other reasons that you have pointed out to us?
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3964
1 18490 MR. BRACE: They identified cost as
2 an issue, but there were no specifics given. In other
3 words, when asked -- and I asked the question: Could
4 you quantify for me what it actually costs to do this?
5 The answer I got was it would have to be calculated.
6 18491 I visited with ExpressVu to see what
7 their opportunity for simultaneous substitution was.
8 They already have the technology in place, which is
9 kind of a touch and drag system, which does it
10 instantly. It is there.
11 18492 So I am really kind of in the dark
12 when it comes to answering the question of costs,
13 commissioner.
14 18493 COMMISSIONER McKENDRY: Have you
15 requested simultaneous substitution for the baseball
16 play-offs that are on now and are being carried by TSN?
17 18494 MR. BRACE: Yes, we have.
18 18495 COMMISSIONER McKENDRY: And you were
19 turned down?
20 18496 MR. BRACE: The same response, yeah,
21 we have had no luck.
22 18497 COMMISSIONER McKENDRY: Thank you. I
23 would like to talk for a moment now about your
24 recommendation with respect to making the licence
25 renewal process an administrative procedure, and you
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3965
1 talk about that on page 3.
2 18498 You recommend that we make the
3 licence renewal process an administrative procedure for
4 broadcasters that exceed a 60 per cent Canadian content
5 level overall and that expend more than 40 per cent of
6 their gross revenues on Canadian programming.
7 18499 I wanted to understand what the 60
8 per cent Canadian content level referred to in order
9 that I can relate that to the 40 per cent of the gross
10 revenues. I understand that.
11 18500 But what does the 60 per cent refer
12 to?
13 18501 MS DUFFY-MacLEAN: I think that was
14 our attempt at defining a level of substantialness in
15 terms of what services are doing for Canadian
16 programming.
17 18502 MS McQUEEN: But it is hours, too.
18 18503 MS DUFFY-MacLEAN: But it is hours.
19 18504 COMMISSIONER McKENDRY: So the 60 per
20 cent is exhibition as opposed to 40 per cent which is
21 money?
22 18505 MS DUFFY-MacLEAN: Right.
23 18506 COMMISSIONER McKENDRY: What criteria
24 did you use to come up with these two benchmarks?
25 18507 MS DUFFY-MacLEAN: Again, I think it
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3966
1 was our experience in looking at both what we do, as
2 well as what is done across the board, that there are
3 certainly other services who are doing a substantial
4 level; that 60 on the conventional side seems to be a
5 level that's required of them, and in our experience it
6 is a level that denotes some substantial contributions.
7 18508 COMMISSIONER McKENDRY: You note on
8 page 23 that specialty and pay services now spend 37
9 per cent of their revenues on Canadian programming.
10 What is the equivalent number, then, for exhibition?
11 18509 MS DUFFY-MacLEAN: I am sorry, the
12 equivalent level across the board?
13 18510 COMMISSIONER McKENDRY: Well, you are
14 proposing -- I just want to have some -- I understand
15 that your specialty industry is close to the 40 per
16 cent at 37 per cent. How close are you to the other
17 benchmark that you would need to achieve? If you have
18 the number for TSN, that is fine, but if you have the
19 number for the industry, that would be helpful as well.
20 18511 MS DUFFY-MacLEAN: I don't have the
21 number for the industry in terms of actuals because I
22 think that is a function of what they come forward to
23 you with at licence renewal and say that they are
24 doing.
25 18512 In terms of the levels that they are
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3967
1 required, as you know, it ranges quite substantially
2 from 100 down to 15 and 30. There would be certainly a
3 differing degree of what people would be required to
4 do.
5 18513 I think what we were looking at in
6 putting this forward was to say that if you offer
7 broadcasters some kind of incentive, and I am probably
8 using the word "broadcasters" incorrectly as we did
9 this morning, if you ask specialty services to do a
10 substantial level, then the motivation for something
11 like a licence renewal, which everyone takes extremely
12 seriously and can take the better part of a year to
13 prepare for, if someone can prove that they are already
14 meeting a substantial level and, perhaps, 60 and 40 is
15 not that appropriate level as you might define it, but
16 that that would allow them to get something back in the
17 sense that they have already met a substantial level of
18 both hours and dollars, and that in doing that,
19 perhaps, a licence renewal becomes a little less of a
20 need, that there may not be a problem in that area.
21 18514 COMMISSIONER McKENDRY: You are
22 proposing this benchmark would apply to the
23 specialities as well, this 60-40, not just
24 conventional, over-the-air broadcasters?
25 18515 MS DUFFY-MacLEAN: To specialties.
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3968
1 18516 COMMISSIONER McKENDRY: Where are
2 Discovery and TSN at with respect to the 60 per cent
3 exhibition?
4 18517 MS DUFFY-MacLEAN: They are all
5 performing at 60 per cent.
6 18518 COMMISSIONER McKENDRY: For your
7 industry it is not likely that it would require much
8 more effort to get to that benchmark. You are at --
9 for the specialities, you are at 37 per cent already;
10 you only have to get another 3 per cent. In your case
11 at least TSN and Discovery are already at the 60 per
12 cent, so just a little bit more would get you into that
13 administrative arena.
14 18519 MS DUFFY-MacLEAN: Yes.
15 18520 COMMISSIONER McKENDRY: The
16 conventional broadcasters, you say, are only at 27 per
17 cent with respect to -- 27 per cent of revenues are
18 spent on Canadian programming. So it would be a fair
19 leap for them to go from 27 to 40 per cent.
20 18521 MS McQUEEN: For some of them it
21 would. We have an Appendix "B" to the SPTV submission
22 which went through the entire, if you wanted to look at
23 that afterwards, it would tell you.
24 18522 Actually, for some of specialty
25 channels, it would be a considerable height to reach.
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3969
1 There are levels as low, I think, as 28 per cent of
2 revenue, and perhaps lower. I think some
3 conventionals, obviously, are above the average number
4 that you mentioned. So I don't think we can say that
5 it's huge for every conventional and not so huge for
6 every specialty. It might be a little bit huger for
7 conventionals than specialities but not by an
8 exponential factor.
9 18523 COMMISSIONER McKENDRY: The hugeness
10 could be compounded I suppose for some conventionals in
11 the sense that they do drama, and in your case you
12 don't do any drama at all.
13 18524 MS McQUEEN: Well, in theory, they
14 could get to it very easily by doing a little more
15 drama whereas -- because drama is so expensive --
16 whereas it takes a lot more documentary programming to
17 raise that percentage level.
18 18525 Are we going to do math in public
19 here?
20 18526 COMMISSIONER McKENDRY: No. I just
21 want to make sure that we understand the implications
22 of your 60 and 40 recommendation. Is it something that
23 is practical? Is it something that can be held out to
24 the conventional broadcasting industry as a reasonable
25 benchmark for them to achieve? I think I can
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1 understand where it might be for the specialities but I
2 am not -- I guess I am not certain that it is for the
3 conventionals.
4 18527 So you are asking us to put this in
5 place. We are going to have to decide whether or not
6 we accept your recommendation and I think we need to
7 understand what the implications of it are.
8 18528 Let me just follow up that by asking
9 you, then, what you mean by an administrative procedure
10 for a licence renewal?
11 18529 MS McQUEEN: Well, first of all, you
12 are absolutely right, we put it forward without having
13 the kind of detailed knowledge that we would expect you
14 to consider before you did it. I think our belief is
15 that it would be a stretch for many of us, but not an
16 insuperable stretch or else we wouldn't have put it
17 forward. But it is a nice benchmark.
18 18530 As to the administrative process...
19 18531 MS DUFFY-MacLEAN: I think what we
20 were thinking about was, perhaps, a kind of paper
21 process that provides you with the numbers you need to
22 have the comfort that we are doing the levels,
23 substantial level, however you define it, whether that
24 be 60 and 40 or some other level. Once you are
25 comfortable with that, then you need to decide whether
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1 there are other issues that require the broadcasters,
2 specialty services to come before you in this kind of a
3 process or not in a presentation-type set-up.
4 18532 COMMISSIONER McKENDRY: And the
5 administrative process, the administrative procedure
6 you set out would be a formality? I don"t understand
7 what you mean by "administrative procedure".
8 18533 MS DUFFY-MacLEAN: I guess what I am
9 saying is the Commission needs to decide what basic
10 numbers and what basic information it requires to have
11 the level of comfort that in the area of Canadian
12 content and whatever -- what other conditions of
13 licence are being met are -- that you are comfortable
14 the services is meeting that, in kind of a report form,
15 perhaps something that's a little less than your
16 standard form.
17 18534 Certainly, this is again as Trina
18 said, not something that we have defined in an A to Z
19 fashion. What we were looking for was some kind of
20 concept that might allow the broadcaster, the specialty
21 service to have the motivation to meet whatever
22 substantial levels you define, and come away with
23 something that allows them the other half of the
24 equation, which is a benefit to not have to appear
25 before you, if you don't have other issues with them.
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1 18535 We certainly do not have a form set
2 out that says this is what the Commission should ask.
3 18536 MS McQUEEN: May I give you a
4 parallel? When I went to university, if you had good
5 enough marks during the term you didn't have to write
6 the final. So this is kind of a parallel to that.
7 18537 But, of course, if there were issues
8 that the Commission wanted to examine, for example, if
9 there had been letters of complaint about us, or if
10 there were new issues in the system that you wanted to
11 explore with a personal hearing, then you could do so.
12 But if you felt comfortable that we had done well,
13 there would be a process that would not require a
14 hearing and that would not require the kind of
15 investment in time and resources for the station. As I
16 say, we wouldn't have to write the final.
17 1510
18 18538 COMMISSIONER McKENDRY: Thank you.
19 18539 On page 5 you state that adequate
20 notice must be given to specialty services regarding
21 any re-tiering re-alignments or service launches. I
22 just want to make sure I understood. Does this just
23 apply to cable or to all BDUs?
24 18540 MS DUFFY-MacLEAN: I think we are
25 looking at all BDUs.
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3973
1 18541 COMMISSIONER McKENDRY: And what, in
2 your view, would be adequate notice?
3 18542 MS DUFFY-MacLEAN: You are talking
4 about the existing 30 day?
5 18543 COMMISSIONER McKENDRY: You just say
6 that adequate notice must be given. What is your view,
7 30 days?
8 18544 MS DUFFY-MacLEAN: We believe that 30
9 hasn't, in our experience, been adequate notice and
10 that we would be looking for something like 60 days.
11 18545 COMMISSIONER McKENDRY: Why wouldn't
12 you negotiate this type of notice in your arrangements
13 with BDUs?
14 18546 MS DUFFY-MacLEAN: We have spoken to
15 specifically cable operators about channel re-alignment
16 issues and we have actually gone back on at least one
17 occasion and said, "You haven't even met the 30 days."
18 So, we have had those discussions. Our view is that
19 the 30 days hasn't, in reality, proven to be perhaps a
20 level that has worked to date.
21 18547 COMMISSIONER McKENDRY: My question
22 is, though, why wouldn't you negotiate whatever period
23 you want with the cable operators and execute this on a
24 contractual basis?
25 18548 MS DUFFY-MacLEAN: It hasn't been an
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1 issue that has been negotiable to date.
2 18549 COMMISSIONER McKENDRY: In the sense
3 that the other party refuses to negotiate with you on
4 this?
5 18550 MS DUFFY-MacLEAN: Well, there is no
6 need for them to negotiate, I don't think, because, as
7 it stands, it is already 30 days.
8 18551 COMMISSIONER McKENDRY: Again why
9 should you be given notice of service --
10 18552 MS DUFFY-MacLEAN: I apologize. Is
11 it already 60 days? It's already 60 days, I'm sorry.
12 18553 COMMISSIONER McKENDRY: So, we could
13 reduce it from 60 to 30?
14 18554 MS DUFFY-MacLEAN: No, I think we
15 will leave it at 60.
16 18555 COMMISSIONER McKENDRY: So, the
17 existing notice is adequate. You are not asking us to
18 do anything different here?
19 18556 MS DUFFY-MacLEAN: No.
20 18557 COMMISSIONER McKENDRY: Why should
21 you be given notice of service launches if there is no
22 re-tiering or channel re-alignments? You say that you
23 want to be given adequate notice of service launches if
24 there is no re-tiering. So, if your service isn't
25 being re-tiered or if there isn't any channel re-
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3975
1 alignment that affects your service, why should you be
2 given notice -- why should the cable operator have to
3 give you 60 days' notice of a new service launch?
4 18558 MS DUFFY-MacLEAN: I think that was
5 in the list of what we were looking at just from a
6 business perspective, the informational requirements.
7 There was not an equation there -- we were not trying
8 to equate service launches with the same level of
9 issues that channel re-alignments might give us. That
10 certainly wasn't our intention.
11 18559 MS McQUEEN: That would mean if we
12 had a service that was being launched, we would like to
13 know in advance what channel it would be on. It's not
14 that we would be asking for every service launch -- for
15 us to be informed of every service launch, it's just if
16 we actually had a new service to launch.
17 18560 COMMISSIONER McKENDRY: That answers
18 my question, thank you. I thought it applied to any
19 new service launch.
20 18561 On page 5, you state that the most
21 recently authorized non-Canadian services have been
22 added to the newest tier at the expense of the
23 unlaunched Canadian specialty services. Then you go on
24 to say the non-Canadian services are the least popular
25 with viewers.
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1 18562 We had a discussion with the Canadian
2 Cable Television Association about this area of
3 marketing and the point that Rogers' Mr. Allen made to
4 us is that, from a cable operator's marketing
5 perspective, you have to look at the entire package as
6 a whole. Apparently, from a marketing perspective, he
7 believes it is important to have general interest
8 services such as WTBS and The Family Channel and a tier
9 with specialized services than is the package as a
10 whole that counts. In other words, you shouldn't just
11 be looking at the Canadian special services and then
12 drawing conclusions about the Canadian specialty
13 services to explain the success of the tier.
14 18563 For example, on page 3100 of the
15 transcript, he said:
16 "We think the entire package as
17 a whole is what is important."
18 18564 What are you views on Mr. Allen's
19 thought that from a cable operator's marketing
20 perspective, it's the package as a whole that one must
21 take into account?
22 18565 MS DUFFY-MacLEAN: Our issue, I
23 think, was a little bit different. What we were
24 looking at -- we certainly weren't trying to say that
25 the packaging is not important because that's certainly
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3977
1 a major issue for us, as you heard from SPTV this
2 morning. I think our point about foreign services is
3 just that in the past they have had a much larger role
4 in driving the tiers and we are saying that perhaps the
5 newer services that are coming on from the newer
6 foreign services don't have that same role.
7 18566 MS McQUEEN: Anecdotally -- well,
8 first of all, I think he is absolutely right, it is the
9 package as a whole that is important. I think what
10 they tried to do was design a package which they
11 thought would be so big that it would appeal to a large
12 number of people, but anecdotally what we hear is that
13 if there are in packages services that aren't very
14 attractive and aren't very popular, then people will
15 often say, "Well, I don't want the XY channel, so I am
16 not going to buy the whole thing."
17 18567 So, a negative service can have as
18 much effect on a tier as a positive service, so to
19 speak. I guess when we look at the ratings performance
20 of the foreign services that were chosen, our suspicion
21 is that those are at best neutral and more likely
22 negative to the acceptance of the tier. But our
23 overall point is that they aren't driving the tier.
24 18568 Certainly we have been told by cable
25 operators over and over again, and we believe it, that
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1 services like A&E and The Learning Channel do help to
2 drive the tier. Our concern is that that day seems to
3 be over where there are A&Es left out there to
4 introduce and we are looking for a different form of
5 contribution from those foreign services, what can they
6 do.
7 18569 This has been the historic reason why
8 we have had foreign services in this country is because
9 they contributed to the Canadian broadcasting system.
10 The old ways don't seem to work any more, so what are
11 some of the new ways? But that's as a context to say:
12 What else could the foreign services do to earn their
13 living, so to speak, in Canada?
14 18570 COMMISSIONER McKENDRY: That leads me
15 to the question I had about them earning their living,
16 so to speak. On page 6 you state that foreign services
17 added to the eligible satellite services list should
18 pay an administration fee to the CTCPF. The first
19 question I have for you in respect of that is: To what
20 extent are administration costs incurred to add a
21 service to the list? Presumably, if you are going to
22 charge an administration fee, there has to be an
23 administration cost. What are the costs?
24 18571 MS McQUEEN: Speaking informally, you
25 have to listen to us gripe about it for hours, so there
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3979
1 should be some recompense to the system for that.
2 That's in some ways a joke, but in other ways it really
3 isn't a joke. The consideration of foreign services in
4 this country does take up a considerable amount of
5 administration time. You have to make decisions about
6 the eligible services list, issue notices, have
7 meetings, do other kinds of tasks and use resources.
8 18572 Just as we pay a licence fee, it
9 seems to us reasonable that other services should pay
10 not a licence fee because they don't have licences, but
11 an administrative fee. We believed it would help the
12 system if the CRTC then could pass on that fee to the
13 Cable Television Fund for the production of Canadian
14 programs.
15 18573 COMMISSIONER McKENDRY: So, the
16 notion is that it would recover the regulatory costs
17 that are associated with establishing the list and
18 putting people on the list and so on?
19 18574 MS McQUEEN: And doing any other
20 tasks, including having the issue debated in front of
21 you, whatever resources that the Commission spends,
22 both human and capital resources.
23 18575 COMMISSIONER McKENDRY: Mr. Blais
24 discussed this morning with, I guess it was, the SPTV
25 panel the thought that when the cable operator, the
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3980
1 BDU, pays the five per cent contribution to the Fund,
2 part of that five per cent is calculated including the
3 revenues of the U.S. services and that one could argue
4 that in fact the U.S. services are making a
5 contribution to the fund.
6 18576 MS McQUEEN: I think what we are
7 looking for is something that in some way -- it will
8 never be equal. In other words, Canadian services for
9 the privilege of doing business in Canada will always
10 have to undertake more obligations than foreign
11 services that are allowed in, but I would remind you in
12 this case Canadian services are doing exactly the same
13 in the five per cent. Five per cent of our revenues
14 also go to the Canadian Television Fund or the Cable
15 Television Fund. I can't remember the new name, but
16 the CTCPF, let's call it.
17 18577 So, once again the Canadian services
18 and the foreign services are judged as equal, but, in
19 addition, we have a whole bunch of other obligations.
20 The foreign services come in, take subscriber revenue,
21 and I guess we ask: What is their contribution over
22 and above contributions that all of us make to support
23 the system?
24 18578 The other answer to that question is
25 we have no idea whether that, in effect, actually is
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1 part of their obligation. In other words, for all we
2 know, the cable operators assume that and pay it on
3 their behalf. We have no idea whether it is actually
4 deducted from the revenue paid to the American
5 operators or not.
6 18579 COMMISSIONER McKENDRY: If it wasn't
7 deducted, would you be satisfied then that that was a
8 sufficient contribution?
9 18580 MS McQUEEN: No.
10 18581 COMMISSIONER McKENDRY: On page 6 you
11 state that foreign services that are directly
12 competitive with Canadian formats should not be
13 authorized without the consent of the Canadian service.
14 Why isn't this the same as saying consumers shouldn't
15 be able to buy Volvos unless General Motors says it's
16 okay?
17 18582 MS McQUEEN: That's an amusing way of
18 putting it and I don't want to get into metaphor hell
19 here, but I guess the difference is that if the
20 purchase of Volvos meant that General Motors wasn't
21 going to exist any longer, I think that there would be
22 a problem.
23 18583 What we are saying is that it isn't a
24 case of denying people access to certain kinds of
25 programming. It's saying that if we have a choice
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1 between a Canadian sort of programming and a foreign
2 sort of programming, knowing as we do the facts about
3 the obligations on Canadian services, the fragility of
4 the population base to support Canadian services, then
5 it seems to us a reasonable thing to say: If we can do
6 it as Canadians, let's do it as Canadians. If we can't
7 do it as Canadians and Americans are ready to do it, by
8 all means come on in.
9 18584 COMMISSIONER McKENDRY: So, the
10 viewer that said to you, "I would like to see ESPN.
11 You just compete head to head with ESPN and if you are
12 providing a good service, I am going to watch your
13 service", you reject that argument?
14 18585 MS McQUEEN: Well, you know, it
15 really is difficult to talk about this to the average
16 consumer. We had this conversation at my Thanksgiving
17 Day dinner, actually, about it. It's not like
18 producing a physical object where we can compete
19 equally. The Americans have already, as you know,
20 covered their costs on programming that they export to
21 Canada. It is not an equal competition and an equal
22 playing field. I think every society, every
23 capitalist, democratic society has provisions that
24 encourage real competition and that's all we are asking
25 for is real competition.
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1 18586 We are in a situation now where --
2 and we do this happily -- we have obligations to serve
3 Canadian public policy in return for our licence.
4 Foreign services don't. Therefore, our business plans
5 often don't look as attractive to our shareholders as
6 they would if we didn't have those obligations.
7 18587 In return for that, we are saying:
8 We will give you the best of ESPN on RDS and TSN, but
9 we will also give you the best of Canadian programming,
10 which ESPN will never ever give you. So, what you are
11 getting, in effect, is more choice. You will have the
12 best of ESPN, you will have the best of Comedy Central,
13 you will have the best of Discovery U.S., you will have
14 the best of everything that is produced in the United
15 States and you will have Canadian content. We think
16 that's a winning deal for the consumer, especially when
17 we get it in Canada for less dollars per month than
18 Americans pay for their cable services.
19 18588 That was before the pumpkin pie.
20 18589 COMMISSIONER McKENDRY: I hope you
21 didn't have indigestion after this meal.
22 18590 With respect to the purchase of North
23 American rights by U.S. satellite services, can you
24 give us any information about how significant a
25 practice this is and whether or not you think the
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1 practice will increase in the future?
2 18591 MR. BRACE: I think it's kind of a
3 two-phased answer, to be honest with you. In the case
4 of the world I live in, which is the world of sports,
5 we see it to a certain extent, but a lessening extent,
6 which seems to be a surprise for a lot of people. What
7 we are seeing is that rightsholders, generally
8 speaking, want to deal directly with each individual
9 market.
10 18592 In terms of Canada, they are seeing
11 Canada, once again from a sports standpoint, as a very
12 lucrative and new opportunity. So, rather than sell
13 off the rights to a North American entity, which then
14 acts as a go between or acts as agent or acts for
15 themselves in selling directly to us, it's, generally
16 speaking, going the other way.
17 18593 There are some areas where that is
18 not happening. NFL would be one, for example, where
19 ESPN purchased the rights to Canada and the U.S.
20 through their own contract, as with the English premier
21 soccer league, which Fox purchased, and is now going to
22 distribute in Canada on CTV SportsNet. But, generally
23 speaking, it tends to be going the other way, rather
24 than seeing the North American entity or the U.S.
25 entities taking over the North American rights.
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1 18594 MR. JANNETEAU: Simply, to add to
2 this, it may not be the experience in other areas in
3 that it continues to be a concern for most other areas
4 of programming, but it hasn't been in sports in general
5 and, of course, in the case of RDS, we acquire the
6 rights in the same way that TSN does.
7 18595 COMMISSIONER McKENDRY: I just wanted
8 to end by asking you about the CAB's viewership
9 proposal because this morning you made the point that
10 you are broadcasters and I would like to have your view
11 about how NetStar, assuming it agrees with the CAB
12 approach, would fit in.
13 18596 As you know, they have proposed that
14 we set a national audience or viewership goal for the
15 broadcasting system in consultation with the industry
16 and they say that each licensee should contribute in
17 its own way towards realization of the audience goal
18 and that you should be required to demonstrate how your
19 plans would fit in with all of this. Is that something
20 that NetStar agrees with and wants to participate in?
21 18597 MS McQUEEN: I think, Commissioner,
22 that Mr. McCabe said this morning that they thought it
23 must be new and revolutionary because nobody could
24 understand it. I am afraid we have to be in the
25 category of people who aren't sure how it works. We
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1 believe that the devil is in the detail, so it's very
2 hard for us to say, yes, it's a great idea or, no, it's
3 a crumby idea.
4 18598 What we do know is two things. One,
5 the answer to the issue of Canadian programming is
6 simple: Make profitable Canadian television. If we
7 could only do that across all genres, we wouldn't have
8 to talk about this. That's the key fundamental reason
9 why we don't have the kind of Canadian programming that
10 we would like to have because basically it is not
11 profitable. It's expensive to make and it just isn't
12 profitable. How do you make a Canadian program
13 profitable? By getting more viewers, which translates
14 into more subscribers and more advertising revenue.
15 18599 How you can impose a duty of
16 increasing viewership through a regulatory mechanism is
17 something that isn't clear to us. If there were a
18 concrete proposal for doing this, we would approach it
19 with enthusiasm and with an open mind, but we don't as
20 yet have what we consider to be a concrete proposal on
21 the table. We do believe that having a revenue formula
22 means that as companies become profitable, they will
23 invest more money in Canadian programming and we think
24 that there is a relationship between the resources you
25 can put into a program and the viewership it gets.
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1 18600 So, we think in a way that the
2 revenue formula leads to an increase in viewership by
3 promoting better Canadian programs, but unless any of
4 my colleagues are braver than I am and would like to
5 figure out how it's done, we can't help you very much,
6 I'm sorry.
7 1530
8 18601 COMMISSIONER McKENDRY: Thank you
9 very much, and thank you Madam Chair.
10 18602 THE CHAIRPERSON: Commissioner
11 Pennefather.
12 18603 COMMISSIONER PENNEFATHER: Thank you,
13 Madam Chair.
14 18604 Actually my question is exactly on
15 that point, so if we could just keep going with that a
16 little more so I understand your perspective on this.
17 18605 You say, and you have just said
18 again, that our view is that the formula that ties
19 revenue to expenditure in Canadian programming is the
20 key to getting more. But on page 10 of your
21 submission, paragraph 63, in making a point about drama
22 you say:
23 "More and more money has been
24 poured into the production of
25 Canadian drama and more and more
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1 hours have been broadcast. The
2 impact...however -- the hard
3 evidence -- is discouraging.
4 Viewing levels...have stayed
5 relatively the same."
6 18606 Now, I think, and correct me if I am
7 wrong, that you are making that point in terms of your
8 approach to all under-represented programs, and you
9 have just said it again, increase to all genres is the
10 key.
11 18607 I would just like to clarify those
12 two points of view, that it would appear, first, that
13 the more money at drama has not worked to increase
14 viewing levels. Why would it work now? Is expenditure
15 the only key, which I think we went through again
16 earlier?
17 18608 That being said, also, why would
18 adding the other representative categories that much
19 improve viewership if it hasn't -- we have had this
20 historical challenge of trying to get more viewership
21 even though we have had different formulae applied to
22 it.
23 18609 MS McQUEEN: Commissioner
24 Pennefather, I think there are two replies that I can
25 give to your question. First of all, I think that the
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1 producers made the point. They have become, over the
2 last five or so years, a more mature industry. They
3 now have very large publicly traded profitable
4 companies that are putting money, adequate resources,
5 into various kinds of programming, and I think that the
6 viewing levels to Canadian drama, although they have
7 stayed flat, that that in a way is an accomplishment,
8 considering the competition from other services, both
9 foreign and Canadian.
10 18610 Most specialty channels do not do
11 Canadian drama. That means Canadian drama has been
12 fighting for audience against a fragmenting position,
13 which is specialty services, both foreign and Canadian,
14 coming in and fighting them.
15 18611 I really think that it's perhaps
16 instructive to look at the experience in Quebec where
17 Canadian drama has amazing audiences, amazing shares,
18 probably shares that are not equaled in the western
19 world any longer, I think, where you can get a 44 or 45
20 or even a 50 share -- I think Omertá has a 50 share in
21 Quebec. I think you see there the effect that a long-
22 term investment in programming can have.
23 18612 My concern is that no matter how much
24 money -- I shouldn't say it. Drama is very, very
25 expensive and to increase, in a broad way, the number
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1 of hours of Canadian programming would take such a huge
2 amount of money that I am not sure whether it's doable.
3 That does not mean we cannot have audience successes in
4 Canadian drama if we fund it better; I just don't think
5 that in the wildest imaginings for us to be able to
6 fund a huge number of hours of good Canadian drama is
7 possible.
8 18613 Maybe I am a pessimist or not
9 properly schooled in the economics of how this can be
10 done, but I just do not think it can be done. I think
11 it can be done in certain cases and I think it can be
12 done over a long term of investment, and when we look
13 at the history of Quebec television, what we see is
14 that they put resources into Canadian drama; téléromans
15 that were terrible, people in rooms talking on and on
16 for ages. But they developed writers, lighting people,
17 actors, who then, as part of their generation, went on
18 to become terrific. And I do not think that's what we
19 have had in the English Canadian system at all, is the
20 kind of long-term commitment that Quebec drama has had.
21 18614 So I am not negative about that and I
22 do not think that Canadian drama has done badly
23 considering the kind of competition that it has had.
24 My concern about it is strictly that it requires so
25 much money to get it to the point where it's
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1 economically viable that I just do not think we can do
2 it in a way that will create the number of hours of
3 Canadian programming that you are talking about.
4 18615 COMMISSIONER PENNEFATHER: I take
5 that point and also the reference to the Quebec market
6 in this way; that certainly just expenditures is not
7 the reason for the success in Quebec. There were other
8 factors at play, which was part of my question, too,
9 about not just relying on expenditure requirements. If
10 you take documentaries, which is your concern, would it
11 not be the case that you would also want to propose, in
12 addition to expenditure requirements, exhibition
13 requirements so that we are talking about prime time
14 where you have our largest audiencees and which would
15 also incent larger expenditures for the production
16 values you will need to attract audiences in prime
17 time, or even peak time?
18 18616 This is the two sides of the story
19 which are on the table and yet you seem to say, as did
20 you this morning, that it is best to go with a formula
21 that just ties revenue to programs.
22 18617 MS. McQUEEN: Our position has been
23 that we believe in a floor level of hours, but after
24 that we think that revenue works automatically in every
25 way in terms of whether it's scheduled in prime time,
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3992
1 in terms of whether resources are put into under-
2 represented categories.
3 18618 The fact is that if you have to
4 invest that number of dollars in a format, you are much
5 more likely to have a good result with it than if it's
6 a mandated hour. There should be a floor level of
7 hours, there is no doubt about that, to fall back on in
8 bad times, but after that we really believe that
9 revenue is the key.
10 18619 It's true that it is not the only
11 thing that will make this enterprise successful. The
12 quality of the program matters, the promotion does
13 matter, the scheduling does matter, the competition
14 does matter. There are all kinds of other things, but
15 at base, and even in the Quebec situation, I think that
16 it was their continual investment that brought them to
17 the level that they are now in Canadian drama. There
18 really is a rough correlation between expenditure and
19 result.
20 18620 I see that with the American
21 programming. You know, it's attractive because they
22 have so much money spent before a program gets to the
23 screen, and you know the statistics. I think there are
24 1,000 scripts, 100 pilots, 10 programs that make it to
25 air and two programs that make it to a second season.
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1 So even though the budgets are dramatically bigger by a
2 factor of ten, the fact is even before they get to air
3 they have spent huge amounts of money that just are not
4 in our system at all, and I think that's why those
5 programs attract viewers, is because so much money has
6 been spent developing them and we have not been able to
7 have that kind of economic power.
8 18621 I cannot figure out a way that -- and
9 we have thought about it both at SPTV and at NetStar --
10 I cannot figure out a more general notion than if you
11 invest in Canadian programming you will have better
12 Canadian programming. It does not work every time, but
13 it's the closest we can get to a rule. It's like Mr.
14 Trudeau once said, the race is not always to the swift,
15 but that's where I would put my money.
16 18622 COMMISSIONER PENNEFATHER: We will
17 leave it there for now. Thank you.
18 18623 THE CHAIRPERSON: Commissioner
19 Cardozo.
20 18624 COMMISSIONER CARDOZO: I wonder if I
21 could just ask you a about question that hasn't
22 received much attention in the hearing but that gets
23 some responses in some of the written submissions, and
24 that's violence on television. I am looking more from
25 your perspective, not so much from AGVOT, which I know
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1 you also are part of. But one of the things people
2 often say, that I hear, is despite everything we have
3 been talking about and doing, there is still a lot, or
4 too much, or more, violence on television.
5 18625 How do you respond to that kind of
6 suggestion?
7 18626 MS McQUEEN: Commissioner Cardozo, I
8 think we have set up, probably in the world that we
9 know about, the most viewer friendly system for
10 complaints about violence. It may not be a perfect
11 system, and I do not think we will ever get to be a
12 perfect system. It may not be a completely objective
13 system because people have very different views about
14 levels of violence, but we have set up an independent,
15 well funded, standards body that will accept complaints
16 about violence, that is composed of distinguished
17 adjudicators, that has the authority to make changes
18 and to make judgments and, from what I understand,
19 there are very, very few complaints made to that body.
20 So I think we have all the machinery in motion. I am
21 not sure why it does not seem to be used by the average
22 viewer.
23 18627 I do believe, and we said this all
24 through the AGVOT hearings, and many people said it
25 before us, that the problem tends to be with programs
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1 that are not made in this country generally. And I
2 think there is a feeling of frustration among people
3 about dealing with programs that are not made by
4 producers here.
5 18628 When I was with AGVOT, one of the
6 things that we said was that more Canadian programming
7 would undoubtedly mean a less violent Canadian
8 broadcasting system.
9 18629 Elizabeth, has NetStar had any
10 complaints about violence in it's programming?
11 18630 MS DUFFY-MacLEAN: Discovery has not
12 had anything that I can think of.
13 18631 MS McQUEEN: I know that you were
14 told that I did not write back to a viewer who
15 complained about a program before it went on the air.
16 In fact, I went through my files and I did in fact
17 write -- and I will table my answer -- to those people,
18 in which I asked them to keep me informed. Nothing
19 happened.
20 18632 You know, I think it may be -- I do
21 not exactly know, but it's tough to fight the system,
22 and I have great sympathy for people who run these
23 organizations, usually on a volunteer basis, and have
24 to use their own resources and their own time to try to
25 do something that they feel very passionately about.
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1 And I can understand their frustration and I sympathize
2 with it. I am not sure that I have any answers beyond
3 what the system has already set up.
4 18633 COMMISSIONER CARDOZO: So if you are
5 not getting too many complaints, are you concluding
6 that we have the problem under control or that, for
7 whatever reason, people are not complaining?
8 18634 MS McQUEEN: Well, I think there are
9 only those two possible answers. I cannot think of any
10 other.
11 18635 COMMISSIONER CARDOZO: You do not
12 know which of the two it is?
13 18636 MS McQUEEN: No, I do not.
14 18637 COMMISSIONER CARDOZO: Thanks.
15 That's the second person that says "I do not know"
16 during the whole hearing, so you get an award for that.
17 18638 THE CHAIRPERSON: Counsel.
18 18639 MR. BLAIS: Along with other parties
19 that have made recommendations about documentaries,
20 this necessarily brings us to questions of definition
21 and I was wondering if you accept the CTF's definition
22 of documentaries.
23 18640 MS McQUEEN: Telefilm's definition of
24 documentaries?
25 18641 MR. BLAIS: Yes, that's right.
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1 18642 MS McQUEEN: We think that it is too
2 exclusive and we would like, with your permission, to
3 table a definition that we think would be acceptable.
4 18643 MR. BLAIS: Do you have it there?
5 18644 MS McQUEEN: No, we don't, but we
6 could give it to you tomorrow or the next day.
7 18645 MR. BLAIS: That's fine, thank you.
8 So by the end of the hearing, which is the 15th. We
9 would appreciate that.
10 18646 Because you are suggesting that we
11 give 150 per cent credit, similar to the drama
12 situation, and there we need ten out of ten points, how
13 would we evaluate the Canadianness of a documentary in
14 those circumstances?
15 18647 MS McQUEEN: There is a Cavco
16 evaluation of documentaries, and you could use that.
17 18648 MR. BLAIS: So the same point system
18 as exists currently?
19 18649 MS McQUEEN: It's slightly different
20 for documentaries --
21 18650 MR. BLAIS: I realize that.
22 18651 MS McQUEEN: -- but it does exist,
23 yes.
24 18652 MR. BLAIS: Okay. You are not
25 suggesting a more subjective evaluation of Canadianness
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1 subjective test; it's an objective point system --
2 18653 MS McQUEEN: Yes.
3 18654 MR. BLAIS: -- that you are
4 proposing. Thank you.
5 18655 With respect to your administrative
6 fees for being added to the eligible satellite list, is
7 this a one-time fee for the first time one gets listed,
8 or does it become an annual --
9 18656 MS McQUEEN: Annual.
10 18657 MR. BLAIS: It's an annual fee?
11 18658 MS McQUEEN: It would resemble, in
12 shape and process, the licence fee that Canadian
13 broadcasters pay.
14 18659 MR. BLAIS: Which raises another
15 issue. Is there not a risk that when someone pays an
16 annual fee they start thinking they have certain rights
17 of access to the system?
18 18660 MS McQUEEN: If it's an
19 administration fee, we believe that shouldn't be a
20 problem.
21 18661 MR. BLAIS: Now, at page 56 of your
22 memorandum, you suggest -- this is with respect to
23 promotions -- you state:
24 "NetStar supports the inclusion
25 of expenditures related to on-
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1 air promotions produced by
2 Canadian television licensees to
3 promote Canadian programs as
4 eligible Canadian program
5 expenditures."
6 18662 I was surprised to see that you have
7 limited it to those produced by Canadian television
8 licensees. Now, I will admit that it might not make
9 sense to farm it out to an independent producer but why
10 would one limit it to in-house promotions?
11 18663 MS DUFFY-MacLEAN: We do not have any
12 objection to going beyond that. I think our point
13 there was merely that most of our promos are produced
14 in-house.
15 18664 MR. BLAIS: Thank you. Now, with
16 respect to simultaneous substitution, there was some
17 discussion about costs and you stated that no one has
18 objected so far in the voluntary system. Now, if we
19 move to a mandatory system, it would mean, in your
20 proposal, that all Class Is would have to have
21 facilities and be ready and willing to go for all the
22 specialty services.
23 18665 Is there not a possibility that that,
24 when it becomes mandatory, becomes a somewhat different
25 ball game?
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1 18666 MS DUFFY-MacLEAN: As we said, we
2 certainly we do not have a number on the cost issue.
3 Perhaps the "I do not know" version comes in here a
4 little bit. But I think the fundamental issue is the
5 protection of program rights, and if cost was not an
6 issue in terms of the regulation for conventional
7 broadcasters, that in our view parity for specialty
8 services requires that cost be a lesser issue here as
9 well.
10 18667 MR. BLAIS: Which raises my last
11 question -- the last point I would like to discuss with
12 you. I notice in some places in your brief you use the
13 words "equitable rules" but in other places you talk
14 about "equal rules" with conventional broadcasters. I
15 have asked others this morning this question.
16 18668 Your revenue stream is both
17 subscription based and advertising based and I was
18 wondering whether that equal treatment argument really
19 holds water across the way.
20 18669 MS DUFFY-MacLEAN: In our view, the
21 dual stream revenue is really not a reality when 9 per
22 cent of the total television advertising revenues are
23 taken by specialty services. So 9 per cent to us is
24 not equitable or equal in any way to make a dual stream
25 revenue situation apply here.
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1 18670 I think the other issue is when you
2 talk about the other side of that stream, which is
3 distribution, we are also not looking at the same level
4 of distribution as the conventional services are, so we
5 like to look at them perhaps as not streams so much as
6 trickles.
7 18671 MR. BLAIS: Thank you. I think I
8 understand your point. Thank you very much. Those are
9 my questions.
10 18672 THE CHAIRPERSON: Thank you very
11 much.
12 18673 Ms McQueen, I do not think we do have
13 a witness protection program, but we are quite prepared
14 to send you, with a high recommendation, to King
15 Solomon's court.
16 18674 MS McQUEEN: Oh dear, dividing the
17 baby. Thank you.
18 18675 THE CHAIRMAN: We will take our
19 afternoon break now. We will be back at ten after
20 four. Nous reprendrons à quatre heures et dix.
21 --- Short recess at / Courte suspension à 1550
22 --- Upon resuming at / Reprise à 1615
23 18676 THE CHAIRPERSON: Madam Secretary?
24 18677 MS SANTERRE: Thank you, Madam Chair.
25 The next presentation will be by MUSE Entertainment
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1 Enterprises Inc., Mr. Prupas.
2 PRESENTATION / PRÉSENTATION
3 18678 MR. PRUPAS: Thank you very much,
4 Madam Chair, for the opportunity to speak here today.
5 MUSE is a very young company and we consider ourselves
6 to be privileged to have the opportunity to make this
7 presentation here today. I thank you all very much for
8 that privilege.
9 18679 I, Michael Prupas, have had a lot of
10 experience in the entertainment business, having been a
11 lawyer at Heenan Blaikie, the senior entertainment
12 partner for 20 years, and having been the professor of
13 entertainment law at McGill University's law faculty
14 for the last two years.
15 18680 I hope that the remarks I am about to
16 address to you will be taken with whatever experience,
17 with whatever knowledge that experience may have
18 granted me and looked at from that perspective.
19 18681 I spent a lot of years looking at and
20 working in the area of Canadian programs, and I want to
21 share with you some of my observations and thoughts
22 about where we have come to in the programming industry
23 and what it means for the CRTC in its policy-making
24 decisions at this very important juncture in our
25 Canadian history.
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1 18682 I think it is worth reviewing very
2 briefly the concepts, at least as we see it, behind the
3 concept of what is a Canadian program, and why we have
4 a Canadian content programming system.
5 18683 First of all, we want to encourage
6 the sense that the broadcasting system reflects who we
7 are, what we are, where we came from, and where we are
8 going to, as Canadians.
9 18684 Secondly, we want a recognition of
10 the importance of having our own professional
11 production industry so that we can have the technical
12 means -- and by that I include the creative means -- to
13 communicate our identity to ourselves and to others
14 around the world.
15 18685 Thirdly, I think we have to look at
16 our Canadian content programming regulations in the
17 context of the establishment of Canadian identity from
18 a historical perspective; that this is a country which
19 is distinct from other countries and we have
20 established that distinction in the past through other
21 means, through our transportation systems, for example,
22 through our military achievements and through our
23 social support systems. We think that the broadcasting
24 content rules fall into that same context and should be
25 looked at in that historical perspective.
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1 18686 We also think, though, that the
2 context in which we are operating today has changed
3 dramatically. By that I mean that the broadcasting
4 environment of 1998, and moving into the next
5 millennium, is very different from the one that existed
6 on an international scale 10 years ago.
7 18687 First of all, we know that European
8 and Asian cultures in particular, and Latin American
9 cultures to a significant extent, have also been
10 exposed to the erosion of their cultural identities
11 through the infusion of North American-driven programs
12 primarily, and that they have -- they are now
13 experiencing some of the same kinds of problems in
14 terms of their cultural identity that Canada has
15 experienced for many, many years.
16 18688 Secondly, we note that with the
17 advent of more broadcasting channels, with the
18 availability of satellite delivery systems, with the
19 potential advent of delivery via the Internet, the
20 television-video marketplaces that we have known in the
21 past have changed dramatically; that the markets are
22 now being subdivided into narrow path segments; and
23 that the economic substructure underlying the creation
24 of Canadian programming, and programming
25 internationally, is very different from what it was 10
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1 years ago.
2 18689 I think it is worth examining that in
3 some detail, and I will take a few minutes of your time
4 today to do that, to show how that is impacting on the
5 financing of Canadian programming and what policy
6 consequences I would suggest need to be taken from
7 that.
8 18690 So, these are realities which I
9 believe obligate all participants in the Canadian
10 production industry, including the producers, the
11 financiers, and the regulators, to rethink their
12 traditional approaches and adapt to the requirements of
13 the twenty-first century.
14 18691 I believe that this adaptation can be
15 done in such a way as to nurture diversity represented
16 by many different countries and many different cultural
17 protagonists, that it can be done in a way that is
18 appealing to viewers and in significant enough numbers
19 around the world to justify their cost of production,
20 but that it must be done by fostering alliances and
21 partnerships -- en français on dit complicité -- with
22 international producers, distributors and broadcasters.
23 I will elaborate.
24 18692 Over the years, a number of
25 regulatory tools have been put in place in an attempt
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1 to insure by regulation that the cultural policies of
2 the Canadian Broadcasting Act, particularly as they
3 relate to Canadian content, are implemented. Access
4 requirements and distribution linkage requirements have
5 been two such tools.
6 18693 Without such requirements, licensees
7 would have no obligation to carry Canadian programming
8 and the producers of Canadian content productions would
9 lack any certain outlet for their products. However,
10 one must ask whether the CRTC will be able to continue
11 to rely upon these requirements in the face of our
12 current and future technological advances. There
13 already exists a significant grey market of Canadians
14 who, by using American addresses, have subscribed to
15 American satellite services which have no regard to
16 Canadian cultural policies and, by extension, no
17 commitment to Canadian programming.
18 18694 Hundreds of new channels are becoming
19 available all over the world and Canadian television
20 viewers will soon be lured not only by these channels
21 but also the possibility of watching television through
22 their home computers.
23 18695 In these conditions, a continued
24 reliance on existing requirements may prove fruitless
25 in the quest to protect the availability of Canadian
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1 programming. For this very reason, it may be argued
2 that the better approach would be to promote Canadian
3 programming by fostering those conditions which will
4 make such programming more attractive to a Canadian
5 audience in the first place.
6 18696 By encouraging a strong Canadian
7 production industry, which is motivated to produce
8 successful entertainment programs, the Canadian
9 government will perhaps be in a better position to
10 ensure that Canadians watch Canadian television
11 programming.
12 18697 How ought the regulatory framework be
13 modified in order to enhance the quality of Canadian
14 programming in such a manner as to, one, allow it to
15 compete successfully in the international marketplace;
16 two, be gradually weaned away from various Canadian
17 federal and provincial funding schemes; and, three,
18 maintain Canadian control and identity?
19 18698 At this point in my presentation, I
20 would like you to turn to the schedules which were
21 included at the back of my presentation, the document
22 that is entitled, "MUSE Entertainment Enterprises Inc.,
23 Example 1, Example 2 and Example 3".
24 18699 What I want to do with these examples
25 is to illustrate to you -- and these are, I can tell
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1 you, real cases of real Canadian television series that
2 have been produced in the last 12 months and the
3 financing schemes that underlie them. I think it is
4 important to bring to your attention the way that the
5 financing for these television series have come
6 together.
7 18700 Obviously, for confidentiality
8 reasons, I can't identify the names of the programs,
9 but you can take my word that these are real programs.
10 18701 Generally speaking, I think it is
11 fair to look at -- looking at it from a producer's
12 point of view, and we are talking here about
13 entertainment programming, either drama or sitcom in
14 both of these cases. This is a high profile
15 programming we are talking about. The world, the
16 financial world from the producers's point of view is
17 made up of three general blocks of potential sources of
18 financing, assuming that we are talking about a
19 Canadian production.
20 18702 First of all, there is the block
21 which comes from the combination of your Canadian
22 broadcasters and the Canadian tax credits. Any program
23 that is going to be broadcast in Canada is going to be
24 able to -- as Canadian content -- is going to be able
25 to qualify for tax credits from Canadian and provincial
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1 -- from federal and provincial sources.
2 18703 The second block of financing, if you
3 will, is the financing that comes from now the Canadian
4 Television Fund, formerly the Canadian Cable Production
5 Fund. The first block roughly represents a third of
6 the financial package of any given production. The
7 second block, if it is available, and as you know there
8 is only -- and as was discussed here earlier this
9 afternoon -- only a small number of productions
10 actually qualify for the Canadian Cable Production
11 Fund. The fund as a whole generates $200 million in an
12 industry that is producing $2 billion or more of
13 production in a given year. So it is a small part and
14 it represents a relatively small part of the overall
15 pie of Canadian content programming on Canadian
16 broadcast networks. But, nevertheless, if it is
17 available, it can represent up to one-third of the
18 budget of any given production.
19 18704 The third third, if you will, can
20 come from a presale to an American broadcaster; a
21 presale to a foreign broadcaster; or equity financing,
22 that is to say, risk financing which is not covered by
23 any presale coming in most circumstances from a large
24 production company, which may or may not be a Canadian
25 production company.
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1 18705 Now, as I pointed out, very few of
2 productions actually qualify for the Cable Production
3 Fund; and that is something that -- that third needs to
4 be replaced by one of the other three thirds that I
5 mentioned previously -- I should say two of the other
6 three thirds that I mentioned previously. That is to
7 say, the American funding; the European or foreign fund
8 -- international sales; or equity risk money coming
9 from a producer.
10 18706 So, in my first example that I wanted
11 to take you through quickly, just to illustrate this,
12 you see a case where funding was provided by the Cable
13 Production Fund, including both the licence fee program
14 and the equity investment program, where there were
15 Canadian, federal and provincial, tax credits. There
16 was in this case some additional funding from one of
17 the funds that have been authorized by the CRTC; and
18 there has been some money from the Canadian
19 broadcaster.
20 18707 The foreign licence fee in this case,
21 which did not cover sales in the U.S., again covered
22 roughly a third of the budget of the production, and
23 was a -- from a Canadian point of view, a very, very
24 generous foreign licence fee. There has been very few
25 Canadian programs that had licence fees of this size.
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1 18708 The second example that I want to
2 draw your attention to, my Example 2, is a case of a
3 production which had a small amount of -- there was a
4 significant foreign licence fee, roughly half the
5 budget of the production in this case. The same sort
6 of size of Canadian broadcast fees and tax credits.
7 There was no U.S. distribution and you had a Canadian
8 distribution company that was prepared to put up equity
9 money at risk to encourage this film to -- this series
10 to get produced.
11 18709 Now, in this case, the Canadian
12 producer took a substantial risk because the history of
13 these kinds of productions is that when you have a sale
14 to the United States, it is usually quite easy to count
15 on revenues coming from the rest of the world. When
16 you have sales to the rest of the world, it is not easy
17 to count on sales being made in the United States. The
18 U.S. is a market that is often inaccessible, as
19 Canadian producers would testify to you, to most
20 Canadian productions.
21 18710 What you have here is a Canadian
22 producer taking a fairly significant amount of risk,
23 hoping that the show would be made, and the only reason
24 he was prepared to take -- that the risk would be
25 covered -- the only reason he was prepared to take that
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1 size of a risk is that he had a huge licence fee coming
2 from a foreign distributor.
3 18711 The third example is an example where
4 you also had a Canadian producer making -- taking a
5 risk investment. He had his Canadian broadcaster fees.
6 He had his tax credits. But he had also a U.S. licence
7 agreement in place guaranteeing broadcast on a
8 specialty network in the United States. Actually, it
9 was a syndicated network in the United States. As a
10 result, the producer put up a relatively small amount
11 of money against a fairly high amount of coverage.
12 18712 Am I speaking too long?
13 18713 THE CHAIRPERSON: Yes.
14 18714 MR. PRUPAS: All right. I am ready
15 to cut it off here. That is the point I wanted to
16 make. I hope I have communicated to you where I am
17 coming from in terms of the financing sources, and I
18 welcome your questions.
19 18715 THE CHAIRPERSON: Thank you, Mr.
20 Prupas.
21 18716 Commissioner Wilson.
22 18717 COMMISSIONER WILSON: Good afternoon,
23 Mr. Prupas. It is a pleasure to have you with us this
24 afternoon.
25 18718 You have presented quite an
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1 interesting scenario for the future of Canadian
2 production and broadcasting. It is based on your
3 submission of June 28th. I took a quick look through
4 your oral presentation, but I am going to focus mostly
5 on your written submission if you don't mind.
6 18719 MR. PRUPAS: Sure.
7 18720 COMMISSIONER WILSON: It struck me
8 that you might go so far as to say it is a uniquely
9 Canadian solution, in that it -- maybe what you are
10 proposing is that in order to generate quality Canadian
11 programming and strengthen the system we should make
12 programming that is valued and successful abroad, sort
13 of if it is successful in other people's eyes, then we
14 will like it better. I don't know if it is fair to say
15 that.
16 18721 MR. PRUPAS: I don't know if that is
17 a fair summary, but it is certainly true that I believe
18 that Canadians, historically, and it is unfortunately
19 the history of our country, tend to regard more highly
20 people who succeeded elsewhere than people who have
21 made it at home.
22 18722 COMMISSIONER WILSON: Yes.
23 18723 MR. PRUPAS: I think that is true to
24 some extent with our television programming, but I
25 think that the real issue is not whether it succeeded
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1 abroad but whether it has met the kind of standards
2 that Canadians have for watching television. Those
3 standards, because of their exposure to American
4 television, to the depth that they have had that
5 exposure, require Canadian producers to meet those
6 American standards, if they want to get Canadian
7 audiences.
8 18724 COMMISSIONER WILSON: Is it fair to
9 say that it is your belief that the path to a strong
10 and viable Canadian broadcasting system is really
11 through focusing on industrial programming, since
12 industrial programming, sort of in the context of what
13 we have been talking about during this proceeding, is
14 the kind of programming that is more exportable than
15 distinctively Canadian programming?
16 18725 MR. PRUPAS: I personally believe
17 that Canadian programming is exportable, when it is
18 done at a certain -- of a certain quality. I don't
19 know what you mean by industrial programming.
20 18726 COMMISSIONER WILSON: Something like
21 "Traders" or "Cold Squad" or "Due South" which is more
22 exportable, even though "Due South" has the mountie and
23 that is quite clearly Canadian.
24 18727 MR. PRUPAS: I would certainly say
25 that programs like "Traders" and "Due South" are the
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1 kind of things that I would be thinking about, yes, if
2 that is what you call "industrial". I have a hard time
3 defining it as industrial. To my mind, industrial is
4 programming that does not have identifiably Canadian
5 elements attached to it in a significant degree.
6 18728 I think that -- you know, I think
7 that if the contrast to industrial is programming that
8 is -- and I have worked on programs, say, like "Black
9 Harbour", which is very distinctively Canadian, and
10 "Black Harbour", unfortunately, has not had a great
11 success in its sales abroad, and I am not convinced
12 that that is because it was set in Canada, because I
13 think that shows that are set in Canada can succeed
14 elsewhere. I think it is because there is a problem in
15 the pacing and the style of that show that has just
16 made it very difficult for it to be sold elsewhere.
17 18729 COMMISSIONER WILSON: But if I am
18 understanding what you are saying in your submission,
19 you are suggesting that a focus on more generic or
20 industrial programming is probably the better way to go
21 in terms of weaning the system off taxpayer-supported
22 funds and trying to attract foreign investment and
23 building a stronger system.
24 18730 MR. PRUPAS: Let me come at that a
25 different way.
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1 18731 My experience in setting up this
2 company, and in attracting, as I have, a foreign
3 investor as a minority shareholder in my company, not
4 an American company, the European company, has been
5 that they have taken the perspective that the kind of
6 programming which you may call industrial that is
7 produced in Canada --
8 18732 COMMISSIONER WILSON: We don't need
9 to argue over the term. You know what I mean by that
10 term.
11 18733 MR. PRUPAS: I think that anything
12 that -- I am certainly advocating that Canadian
13 programming, to survive in the future, and to succeed,
14 needs to be sold internationally. I am certainly
15 saying that.
16 18734 COMMISSIONER WILSON: Which we are
17 doing. I mean we are doing that now and you note in
18 your comments today and in your submission we are the
19 second largest exporter of programming,
20 English-language programming. We could always export
21 more I guess but...
22 18735 In your experience is there an
23 international market for distinctively Canadian
24 programming?
25 18736 MR. PRUPAS: I think that there is --
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1 the answer is there is. Certain kinds of Canadian
2 programming sells very well internationally.
3 Children's programming --
4 18737 COMMISSIONER WILSON: Distinctively?
5 18738 MR. PRUPAS: Distinctively meaning --
6 what is a distinctively Canadian program in your view?
7 18739 COMMISSIONER WILSON: I guess one of
8 the definitions that we have been looking at is the
9 definition that is applied by the Canadian Television
10 Fund for distinctively Canadian.
11 18740 MR. PRUPAS: One of the examples that
12 you have here is a program that qualifies for the
13 Canadian Cable Production Fund and is being sold
14 internationally with this very substantial guarantee
15 that we were very heavily involved in arranging.
16 18741 So I think that there is a market for
17 that stuff and, certainly, the people that I am working
18 with internationally are saying we can take Canadian
19 stories, it doesn't have to be Chicago or New York, it
20 can be Toronto or Vancouver, and we can sell those
21 stories, or it could be the north for that matter. The
22 north, there is tremendous interest internationally in
23 Canadian wilderness and Canadian wildlife as well.
24 Those things can be sold internationally.
25 18742 But what can't be sold is programming
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1 that doesn't meet that -- the kind of pacing and the
2 kind of -- that doesn't have the kind of writing that
3 international audiences, including Canadian audiences,
4 expect.
5 18743 COMMISSIONER WILSON: You make the
6 statement in paragraph 5 of your submission that the
7 quality of Canadian programming can be enhanced in such
8 a manner as to allow it to compete successfully in the
9 international marketplace while gradually being weaned
10 away from Canadian taxpayers' money and, at the same
11 time, maintaining Canadian control and identity.
12 1535
13 18744 I am just wondering. Really, you are
14 the first party who has even suggested that the
15 Canadian broadcasting system can be weaned from public
16 funds.
17 18745 MR. PRUPAS: I'm glad I was original.
18 18746 COMMISSIONER WILSON: It's always
19 good to be original, but I guess what I am wondering
20 is, having looked at your oral submission today and the
21 examples that you have given, in order to be weaned
22 away from Canadian taxpayers' money, do we have to give
23 up ownership because ownership of rights, of course, is
24 really of paramount importance to the producers.
25 18747 MR. PRUPAS: I think there has to be
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1 some money put into the system by Canadians in order
2 for Canadians to retain ownership into the programming.
3 I think that that money can come and should come from
4 Canadian broadcasters. I think that there is -- I
5 would love to see at least the Canadian tax credit
6 system continue long into the future because clearly
7 the more money the Canadians are able to put into a
8 production, the more control they are going to be able
9 to maintain and to have that kind of leverage.
10 18748 But I am anticipating the day when we
11 are going to find Canadian taxpayers less willing to
12 support programming to the degree they have had in the
13 past and, furthermore, we are already at the stage
14 where a significant portion of Canadian content
15 programming is getting a relatively small portion of
16 its budget from Canadian sources.
17 18749 COMMISSIONER WILSON: From private
18 Canadian sources or --
19 18750 MR. PRUPAS: From all Canadian
20 sources, from public and private sources. The value of
21 Canadian tax credits, for example, which is public
22 money, is roughly somewhere between 12 and 30 per cent
23 of the budget of any given production, which is not the
24 majority of the financing and not sufficient to drive
25 the production completely, yet we are able to leverage
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1 those kinds of numbers into getting Canadian control
2 and Canadian content.
3 18751 COMMISSIONER WILSON: Another element
4 of your proposal is -- let me cite this. I believe
5 it's at paragraph 14. You say that:
6 "The CRTC could effectively
7 encourage greater viability for
8 Canadian programming if it were
9 willing to establish incentive
10 programs that would reward
11 productions with additional
12 content recognition percentages
13 if a certain level of
14 international presales has been
15 achieved."
16 18752 I guess these incentives wouldn't
17 hurt your business, would they?
18 18753 MR. PRUPAS: They certainly wouldn't
19 hurt my business, but I would --
20 18754 COMMISSIONER WILSON: Since your
21 position is towards the international market.
22 18755 MR. PRUPAS: I think it would help --
23 18756 COMMISSIONER WILSON: But that's not
24 really my question. I was just making an offhand
25 comment.
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1 18757 MR. PRUPAS: It wouldn't hurt my
2 business, I won't deny that.
3 18758 COMMISSIONER WILSON: But what kinds
4 of incentives did you have in mind?
5 18759 MR. PRUPAS: I am thinking about the
6 international co-production recognition that you have
7 in regulation 1984-10 or the April 10th, 1984
8 regulation, the Canadian content regulation that goes
9 back to 1984 where you give content recognition to
10 programs that are produced under Canada's international
11 co-production treaties.
12 18760 There is already a greater
13 flexibility that you have built into the system for
14 programs that qualify under those treaties and I am
15 suggesting that those programs should be given enhanced
16 program recognition for your content system in Canada
17 in the same way you give 150 per cent for 10 out of 10
18 productions. I would suggest that international co-
19 productions that are produced under those international
20 treaties, which, as you know, exclude the United
21 States, should be given enhanced recognition.
22 18761 COMMISSIONER WILSON: At paragraph 13
23 you state:
24 "Should the CRTC decide to
25 require Canadian broadcasters to
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1 increase their commitment to the
2 broadcast of Canadian
3 programming during prime viewing
4 hours, then it will be necessary
5 to create creative and economic
6 models which will allow that
7 programming to become attractive
8 to the broadcasters."
9 18762 So, what kinds of models do you think
10 would allow the programming to become attractive to
11 broadcasters?
12 18763 MR. PRUPAS: I think what I am
13 driving at there is encouraging Canadian broadcasters
14 to in fact play a role as equity participants in the
15 production of the industry, that they should be
16 encouraged to put their money in and given some at
17 least moral recognition, if not some financial
18 recognition, under your system for the contribution
19 that they make at that level. If they are going to put
20 in that extra money, certainly they could benefit from
21 the returns that their equity would bring, but perhaps
22 they could get from the CRTC additional points of some
23 sort. You know that system better than I do.
24 18764 COMMISSIONER WILSON: What is your
25 view on the broadcasters accessing the Telefilm equity
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1 investment program?
2 18765 MR. PRUPAS: I guess as long as they
3 are putting their money in to producing shows and they
4 are playing a role in that, I don't see why they should
5 be treated on a different playing field than the rest
6 of the producers. I think there has to be some very
7 strong rules, though, against self-dealing and that
8 would be my big concern.
9 18766 COMMISSIONER WILSON: I guess some
10 people would argue that their direct access to the
11 equity investment program would mean that they are
12 using public money to take an ownership risk and then
13 if it pays off, in fact they haven't really put their
14 own money into it at all.
15 18767 MR. PRUPAS: Well, it's the same
16 thing with the producers. Why should they be treated
17 differently than the producers? The producers aren't
18 putting in their own money, either, arguably. This is
19 coming from somebody who has spent most of his life
20 representing Canadian producers. So, I think it's --
21 18768 COMMISSIONER WILSON: I'm sure you
22 did an excellent job.
23 18769 MR. PRUPAS: I beg your pardon?
24 18770 COMMISSIONER WILSON: I'm sure you
25 did an excellent job.
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1 18771 Are you talking about the same thing
2 then? You are talking in paragraph 13 about equity
3 participation. In paragraph 15 you say:
4 "...[the] participation of
5 Canadian broadcasters in foreign
6 sales is to be welcomed and not
7 discouraged provided that
8 safeguards are established to
9 ensure that the licence fees
10 paid by Canadian broadcasters
11 for Canadian broadcast rights
12 are not subsidized directly or
13 indirectly."
14 18772 MR. PRUPAS: Yes, it is the same
15 point in fact.
16 18773 COMMISSIONER WILSON: I just wasn't
17 sure because you had --
18 18774 MR. PRUPAS: I had repeated it twice.
19 18775 COMMISSIONER WILSON: Well, there are
20 two different ways of describing the foreign sales. I
21 was wondering if you were suggesting something to do
22 with Canadian broadcasters getting involved in
23 distribution of the product as separate from being
24 equity participants.
25 18776 MR. PRUPAS: No, I am referring to
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1 their equity participation.
2 18777 COMMISSIONER WILSON: You say that
3 broadcasters should not be encouraged to become
4 producers themselves and that:
5 "The CRTC should keep
6 broadcasters focused on their
7 audience's requirements and keep
8 the producers delivering what
9 the broadcasters need."
10 18778 I have a friend who often uses the
11 expression "stick to your knitting". Is that the
12 message that you are asking the CRTC to deliver to the
13 broadcasters?
14 18779 MR. PRUPAS: Yes, I think so. They
15 certainly should be able to be encouraged to put their
16 money into the shows and they obviously have a
17 tremendous input as to what should be in those shows
18 and how they should be handled, but I think that there
19 is a distinctive role that producers play as opposed to
20 broadcasters and that distinction should be maintained.
21 18780 COMMISSIONER WILSON: Those are my
22 questions, Mr. Prupas. Thank you very much.
23 18781 THE CHAIRPERSON: Thank you, Mr.
24 Prupas. Thank you for your presentation.
25 18782 Madam Secretary?
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1 18783 MS SANTERRE: Thank you, Madam Chair.
2 18784 La prochaine présentation sera faite
3 par Radiomutuel Inc.
4 18785 Messieurs.
5 1645
6 18786 LA PRÉSIDENTE: Bonjour, messieurs.
7 Allez-y quand vous êtes prêts.
8 PRÉSENTATION / PRESENTATION
9 18787 M. BEAUCHAMP: Madame la Vice-
10 Présidente, Mesdames et Messieurs les Conseillers, mon
11 nom est Normand Beauchamp. Je suis président de
12 Radiomutuel. À ma droite se trouve mon collègue Paul-
13 Émile Beaulne, vice-président exécutif de la Société et
14 président de notre Division de canaux spécialisés et, à
15 ma gauche, Michel Arpin, vice-président, Planification
16 de Radiomutuel.
17 18788 Comme vous le savez, Madame la Vice-
18 Présidente, Radiomutuel est propriétaire de 11 stations
19 de radio; elle exploite le réseau radiophonique FM
20 Radio Énergie et, en co-entreprise avec Télémédia, le
21 réseau radiophonique AM Radiomédia ainsi que deux
22 autres stations de radio à Montréal et à Québec. Nous
23 sommes aussi titulaires de la licence du service
24 spécialisé de langue française Canal Vie et co-
25 titulaire, avec CHUM Limited, des licences de
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1 MusiquePlus et de Musimax. Radiomutuel emploie,
2 directement ou indirectement, environ 600 personnes au
3 Québec.
4 18789 Collectivement, les services
5 spécialisés de langue française apportent une
6 contribution très importante au financement, à la
7 diffusion et à la promotion des émissions canadiennes.
8 Rappelons, par exemple, qu'ils consacrent en moyenne 43
9 pour cent de leurs recettes annuelles brutes à la
10 programmation canadienne, dont une large portion par
11 l'intermédiaire de la production indépendante,
12 comparativement à 28 pour cent pour l'ensemble des
13 télédiffuseurs conventionnels privés canadiens.
14 18790 Entre 1993 et 1997, pour chaque
15 dollar additionnel affecté à la programmation, la
16 télévision spécialisée et payante a consacré 80 sous à
17 la programmation canadienne comparativement à 32 sous
18 seulement pour la télévision conventionnelle privée.
19 Soulignons également qu'en moyenne les services
20 spécialisés de langue française sont assujettis à des
21 obligations de contenu canadien en soirée de 62 pour
22 cent comparativement à 50 pour cent pour l'ensemble des
23 télédiffuseurs conventionnels privés canadiens.
24 18791 Nos propres services spécialisés ne
25 font pas exception à la règle. Tant Canal Vie,
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1 MusiquePlus que Musimax sont assujettis à l'obligation
2 de diffuser 60 pour cent de contenu canadien en soirée.
3 Canal Vie s'est engagé à consacrer au moins 45 pour
4 cent de ses recettes annuelles brutes aux émissions
5 canadiennes.
6 18792 De plus, nos services de musique
7 vidéo ont des obligations particulières en matière de
8 pourcentage de vidéoclips canadiens et de vidéoclips de
9 langue française à respecter. Enfin, tant Musimax que
10 MusiquePlus se sont engagés à verser un pourcentage de
11 leurs recettes annuelles brutes à un fonds spécialisé
12 dans le financement de vidéoclips canadiens de langue
13 française. À cet égard, mentionnons que nous avons
14 contribué, depuis nos débuts, au financement de 321
15 vidéoclips de langue française, auxquels nous avons
16 consacré des investissements de plus de 2,8 millions de
17 dollars.
18 18793 Tenant compte de la contribution à la
19 programmation canadienne de la télévision spécialisée,
20 nous croyons donc qu'il n'existe pas de raisons qui
21 militent en faveur d'un changement de cadre
22 réglementaire de la télévision spécialisée ou d'une
23 augmentation de ses obligations.
24 18794 Malgré cette situation positive, les
25 exploitants francophones de canaux spécialisés doivent
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1 améliorer leur situation afin de pouvoir maintenir leur
2 place et même l'accroître; c'est pourquoi nous désirons
3 vous faire part de notre vision quant aux questions
4 suivantes: l'accès aux marchés et aux revenus
5 publicitaires, l'équilibre concurrentiel entre les
6 partenaires, et les émissions sous-représentées et
7 l'accès aux fonds.
8 18795 Premièrement, accès aux marchés et
9 aux revenus d'abonnement.
10 18796 Dans l'univers à 100 canaux qui se
11 profile à l'horizon, le premier défi des
12 radiodiffuseurs de langue française, dans un marché d'à
13 peine 6 millions de téléspectateurs francophones,
14 consiste à offrir des produits imaginatifs de qualité
15 comparables à ceux en provenance du Canada anglais et
16 de l'étranger qui, eux, bénéficient d'un marché local
17 nettement plus important. Ne pas créer un cadre
18 réglementaire favorable aux canaux spécialisés de
19 langue française aura pour effet de ralentir leur
20 développement et effriter leur base opérationnelle, ce
21 qui résultera en un transfert de l'écoute vers la
22 télévision de langue anglaise, comme c'était le cas
23 dans les années qui ont précédé l'arrivée de TQS,
24 Télévision Quatre-Saisons, et de la première génération
25 de canaux spécialisés francophones.
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1 18797 C'est en tenant compte de cet
2 environnement que le Conseil peut aider les services
3 spécialisés de langue française à maintenir, voire même
4 à augmenter, leur contribution à la programmation
5 canadienne. En effet, les services spécialisés de
6 langue française sont présentement désavantagés à bien
7 des égards, et ce, pour de multiples raisons.
8 Premièrement, le taux de pénétration de la
9 câblodistribution au Québec est plus faible qu'ailleurs
10 au Canada. Deuxièmement, le taux de pénétration de
11 l'étage est également plus faible au Québec qu'ailleurs
12 au Canada. Enfin, les services spécialisés de langue
13 française sont très peu distribués dans les marchés
14 anglophones au Canada alors qu'à l'inverse les services
15 canadiens de langue anglaise sont largement distribués
16 dans les marchés francophones.
17 18798 Cette circulation à sens unique fait
18 en sorte que les services de langue française sont
19 confrontés, dans les marchés francophones, à la
20 concurrence de services de langue anglaise offrant des
21 formules de programmation similaires, services
22 auxquels, pour des raisons qui nous échappent, les
23 câblodistributeurs accordent parfois une position plus
24 avantageuse que celle octroyée aux services de langue
25 française de même nature. Ainsi, dans l'ouest de l'île
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1 de Montréal, les nouveaux services spécialisés de
2 langue française sont tous positionnés au-delà de la
3 position 42 alors que des services américains comme The
4 Learning Channel, Arts & Entertainment et CNN, et des
5 services canadiens de langue anglaise comme TSN,
6 Bravo!, Showcase, Discovery et même les nouveaux
7 services CTV Sportsnet et Space, the Imagination
8 Station, occupent des positions en-deçà de 40 et, pour
9 certains, en bas de 30.
10 18799 Tous ces facteurs limitent la
11 capacité des services spécialisés francophones de
12 générer des revenus d'abonnement et des recettes
13 publicitaires, recettes et revenus dont, en vertu de
14 nos conditions de licence, un pourcentage important
15 serait consacré au financement de la programmation
16 canadienne, ce qui permettrait d'atteindre les
17 objectifs que le Conseil poursuit à travers la présente
18 audience, soit plus d'émissions canadiennes, de
19 meilleure qualité et vues par un plus grand nombre de
20 Canadiens. Cela permettrait aussi à ces services de
21 continuer, comme ils l'ont fait dans le passé, à
22 favoriser le rapatriement de l'écoute des francophones
23 vers la télévision de langue française.
24 18800 Les exploitants de canaux spécialisés
25 francophones doivent prendre leur place et être
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1 protégés face à l'envahissement des services de
2 programmation de langue anglaise, canadiens et
3 étrangers, tout comme les exploitants anglophones sont
4 protégés de l'envahissement des services américains.
5 C'est à cette seule condition, Madame la Vice-
6 Présidente, que les services de langue française
7 pourront prendre toute la place qui leur revient et
8 offrir aux citoyens de langue française de ce pays un
9 éventail de programmation aussi riche et diversifié que
10 celui dont bénéficient déjà leurs compatriotes
11 canadiens de langue anglaise.
12 18801 C'est pourquoi nous demandons au
13 Conseil d'adopter une démarche réglementaire en trois
14 volets:
15 18802 Premièrement, assurer que les
16 câblodistributeurs qui desservent les marchés
17 francophones respectent intégralement, pour un niveau
18 de pénétration donné, le tarif mensuel à l'abonné qui
19 figure dans le plan d'affaires des services spécialisés
20 que le Conseil a choisi d'accepter ou de renouveler.
21 18803 Deuxièmement, assurer une priorité
22 absolue et un positionnement privilégié aux services
23 spécialisés canadiens de langue française dans les
24 marchés francophones par rapport aux services de langue
25 anglaise.
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1 18804 Troisièmement, créer des incitatifs à
2 la distribution des services de télévision spécialisée
3 de langue anglaise dans les marchés anglophones à
4 l'étendue du Canada et plus particulièrement dans les
5 marchés hors Québec à forte concentration de
6 francophones. À ce dernier égard, nous comprenons que
7 de tels incitatifs ne pourront sans doute être
8 pleinement appliqués que dans un univers numérique.
9 18805 Nous notons cependant que, dans
10 l'univers analogique actuel, les membres de l'ACTC se
11 sont engagés à distribuer les services spécialisés
12 canadiens à caractère ethnique lorsque les
13 ethnoculturels auxquels ces services s'adressent
14 représentent au moins 10 pour cent de la population de
15 la zone de desserte. Il nous apparaît pour le moins
16 ironique que cette disposition ne s'applique pas aux
17 minorités de langue officielle, et particulièrement aux
18 nombreux marchés anglophones où le pourcentage de la
19 population de langue française dépasse très largement
20 les 10 pour cent, comme ceux d'Ottawa, de Timmins ou de
21 Moncton. Nous croyons que cette disparité de
22 traitement devrait être corrigée le plus rapidement
23 possible.
24 18806 Je demanderais maintenant à mon
25 collègue Paul-Émile Beaulne de poursuivre notre
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1 présentation.
2 18807 M. BEAULNE: Merci, Normand.
3 18808 Madame la Vice-Présidente, distingués
4 membres du Conseil, pour faire face au défi que
5 décrivait Normand il faut que, dans le marché
6 francophone, les trois partenaires que sont la
7 production indépendante, la télévision conventionnelle
8 et la télévision spécialisée travaillent de toutes
9 leurs énergies pour occuper l'espace audiovisuel avant
10 que la globalisation des marchés fasse en sorte que les
11 diffuseurs étrangers viennent s'implanter.
12 18809 Nous croyons qu'en cette matière le
13 Conseil a effectivement un rôle important à jouer pour
14 créer et assurer le maintien de forces concurrentielles
15 équilibrées. Un tel équilibre concurrentiel est à
16 notre avis nécessaire pour maintenir le dynamisme et la
17 compétitivité du système de la radiodiffusion
18 canadienne. Pour ce faire, le Conseil doit renforcer
19 les entreprises exploitantes de canaux spécialisés
20 avant de consolider les entreprises généralistes.
21 18810 À cet égard, nous croyons que le
22 Conseil devrait avoir pour préoccupation d'assurer que
23 les entreprises de télévision spécialisée et payante
24 existantes puissent diversifier leurs opérations de
25 manière à bénéficier de toutes les synergies possibles
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1 afin d'offrir aux téléspectateurs une gamme variée de
2 services de programmation de qualité aux plus bas prix
3 possibles pour les consommateurs. De plus, ces
4 entreprises doivent pouvoir s'accaparer, au total
5 cumulatif, un pourcentage des parts d'auditoire et des
6 recettes publicitaires dans le marché francophone qui
7 soit significatif.
8 18811 Ces règles du jeu sont primordiales
9 pour développer une saine concurrence entre les
10 différents joueurs et pour assurer que la télévision
11 maintienne sa position comme média publicitaire.
12 18812 Nous endossons la recommandation de
13 nombreux intervenants qui demandent que le mandat de
14 Radio-Canada soit redéfini et qu'elle soit bien
15 financée comme chaîne nationale, de manière à ce
16 qu'elle sorte de la commercialisation à outrance. À
17 notre avis, octroyer à Radio-Canada de nouveaux
18 services de télévision spécialisée ne crée pas de
19 saines conditions de concurrence. En procédant ainsi,
20 le Conseil favoriserait un rapport de force
21 concurrentiel mieux équilibré entre entreprises de
22 télévision spécialisée et entreprises de télévision
23 conventionnelle privée et publique et il favoriserait
24 du même coup l'existence d'un milieu de la production
25 indépendante dynamique puisque les services spécialisés
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1 ont recours à leur expertise et à leurs services dans
2 une plus large proportion que les télédiffuseurs
3 généralistes, qui sont habitués de produire à l'interne
4 une portion très importante de leur programmation
5 canadienne.
6 18813 Nous sommes loin des propos
7 alarmistes de certains intervenants, dont Télé-Québec,
8 qui au cours de cette audience ont demandé au Conseil
9 de ne pas autoriser de nouveaux services spécialisés.
10 À notre avis, les conséquences de ne pas autoriser de
11 nouveaux services sont plus lourdes pour la culture
12 française au Canada que celles perçues pour ces
13 intervenants. En effet, le pouvoir de négociation des
14 droits de diffusion et le pouvoir de contrôle de
15 l'inventaire publicitaire que craignent ces
16 intervenants est loin d'être une réalité puisqu'il
17 n'existe pas de parité entre les divers groupes
18 exploitant des canaux spécialisés. Pour ces motifs,
19 nous demandons au Conseil de ne pas retenir les
20 opinions de ces intervenants et de continuer à
21 supporter l'éclosion de nouveaux services de télévision
22 spécialisée de langue française.
23 18814 La plupart des intervenants dans le
24 présent processus public ont indiqué qu'ils souhaitent
25 que le Conseil continue de mettre l'accent sur les
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1 catégories d'émissions sous-représentées, soit les
2 dramatiques, les émissions pour enfants, les
3 documentaires, les variétés et les émissions de musique
4 et de danse. Nous constatons toutefois que la plupart
5 insistent principalement sur les trois premières.
6 18815 Dans notre mémoire nous avons, pour
7 notre part, démontré le peu de place sur les écrans et
8 le peu de support financier qui sont accordés aux
9 variétés musicales. Cette situation a contribué à une
10 crise des variétés à la télévision québécoise de langue
11 française qui affecte le dynamisme même de l'industrie
12 de la musique au Québec, la popularité des spectacles
13 sur scène et, indirectement, l'industrie de la radio.
14 18816 Nous invitons donc le Conseil à
15 affirmer qu'il considère les émissions de catégorie 8
16 comme des émissions sous-représentées à la télévision
17 de langue française et à utiliser son pouvoir de
18 recommandation pour assurer que les services de
19 programmation qui contribuent le plus fortement à
20 corriger la situation de sous-représentation de
21 certaines catégories d'émissions à la télévision de
22 langue française aient un accès adéquat aux fonds de
23 financement de la programmation canadienne et nous
24 souhaiterions également que le vidéoclip ait accès aux
25 fonds de la TV canadienne.
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1 18817 À cet égard, nous suggérons également
2 au Conseil de recommander que le pourcentage d'environ
3 50 pour cent des ressources du Fonds canadien de
4 télévision actuellement réservé à Radio-Canada soit
5 réexaminé immédiatement, et ce, de façon à être établi
6 en fonction de ce que représentent leurs dépenses de
7 programmation canadienne en pourcentage de l'ensemble
8 des dépenses de programmation canadienne des
9 télédiffuseurs canadiens de toutes catégories. Ainsi,
10 une portion plus juste de ces ressources serait allouée
11 aux diffuseurs privés et notamment aux services de
12 télévision spécialisée, portion qui refléterait
13 davantage les contributions de chaque catégorie de
14 diffuseurs au financement de la programmation
15 canadienne.
16 18818 Madame la Vice-Présidente, Mesdames
17 et Messieurs les Conseillers, nous vous remercions de
18 votre attention. Nous sommes maintenant prêts à
19 répondre à vos questions.
20 18819 LA PRÉSIDENTE: Merci, messieurs.
21 18820 J'ai quatre groupes de questions à
22 vous poser: un sur la réglementation en général, vos
23 propos sur les catégories sous-représentées, vos propos
24 et vos recommandations en ce qui concerne Radio-Canada
25 et ensuite vos recommandations en ce qui concerne les
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4039
1 canaux spécialisés. Je vais me référer à votre
2 soumission écrite aussi bien qu'à votre présentation
3 d'aujourd'hui, qui me semble, à date, être semblable
4 dans vos positions à celle écrite.
5 18821 Ce n'est pas toujours clair pour moi
6 quand vous parlez de la télévision canadienne en
7 général et celle au Québec. Par exemple, vous ne
8 préconisez aucun changement du cadre réglementaire en
9 ce qui concerne les services spécialisés et la
10 télévision payante, mais à la page 4 je pense de votre
11 résumé vous recommandez au Conseil de ne faire aucun
12 changement avant d'avoir haussé l'apport des
13 télédiffuseurs conventionnels privés jusqu'à ce qu'ils
14 atteignent ceux de la télévision spécialisée.
15 18822 Si nous examinons cette question vis-
16 à-vis les services conventionnels au Québec et ceux
17 partout au Canada, nous avons évidemment des réponses
18 différentes. Vos propos ici s'adressent à la
19 télévision canadienne en général ou à la télévision
20 québécoise? Je vais vous dire pourquoi.
21 18823 Si je regarde votre annexe 3, qui
22 indique l'obligation des diffuseurs conventionnels
23 comme étant 60 pour cent et 50 pour cent, si on examine
24 le Québec on s'aperçoit qu'elles atteignent un niveau
25 beaucoup plus élevé, les télévisions conventionnelles,
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1 que le minimum 60-50, ce qui voudrait donc dire que si
2 le barème était "Ne nous demandez rien de plus jusqu'à
3 ce que les télédiffuseurs aient atteint les mêmes
4 niveaux que nous", je vous poserais la question est-ce
5 15 de TV5, 32 pour cent de Canal D, 100 pour cent de
6 Canal Nouvelles? Je ne suis pas certaine de ce que
7 vous voulez dire ici.
8 18824 M. ARPIN: Madame la Présidente, en
9 fait, on ne parle que du système francophone dans toute
10 notre intervention.
11 18825 LA PRÉSIDENTE: Ah, bon. Alors vous
12 êtes d'accord avec moi que le 60-50 qu'on voit à
13 l'annexe 3 et à la réglementation mais qu'on atteint
14 beaucoup plus...
15 18826 M. ARPIN: Mais on note malgré tout
16 que finalement, quand on regarde la performance des
17 canaux spécialisés francophones par rapport à la
18 télévision même généraliste, au niveau de la journée de
19 radiodiffusion, quand on regarde notre annexe, il n'y a
20 de toute évidence pas de difficulté, on est 61 à 60.
21 Mais, pour la période de radiodiffusion en soirée, on a
22 quand même une performance de 62 par rapport à une
23 performance de 50 pour cent.
24 18827 Donc, effectivement, de ce côté-là,
25 de manière consolidée, l'ensemble des exploitants de
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1 canaux spécialisés dépassent la performance des
2 télévisions généralistes.
3 18828 LA PRÉSIDENTE: Mais dans l'annexe 3,
4 quand on parle de la période de radiodiffusion en
5 soirée. quel est par exemple le niveau de programmation
6 de contenu canadien atteint par TVA... pas celui qui
7 est exigé mais celui qui atteint? C'est ça qu'était ma
8 question. Est-ce que vous voulez dire ce que la
9 réglementation exige ou ce qu'on atteint depuis déjà
10 quelque temps?
11 18829 M. ARPIN: Dans les faits, je n'ai
12 pas d'analyse récente de...
13 18830 LA PRÉSIDENTE: Mais qu'est-ce que
14 vous pensez?
15 18831 M. ARPIN: Je n'oserais pas
16 m'avancer, madame.
17 18832 LA PRÉSIDENTE: Je crois que les
18 chiffres qu'on voit sont plus élevés que 50 pour cent.
19 Alors je ne suis pas certaine, qu'est-ce que vous
20 voulez dire par: "N'exigez pas plus de nous jusqu'à ce
21 que les télédiffuseurs aient atteint"... quoi? Plus
22 que la moyenne?
23 18833 M. BEAUCHAMP: Ce n'était pas
24 uniquement sur la diffusion, Madame la Présidente. Ce
25 à quoi on voulait faire allusion ici, ce sont les
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4042
1 investissements mesurables en argent à la production de
2 contenu canadien en ce sens que nos canaux... si on
3 parle aussi de Canal Vie, la formule qui semble
4 marcher, qui donne les résultats escomptés, c'est un
5 pourcentage de nos recettes et, à partir de ces
6 pourcentages de recettes là, nous réussissons à livrer
7 un produit canadien de haute qualité et un nombre
8 d'heures assez important.
9 18834 Donc on faisait allusion au système
10 comme tel qui marche beaucoup plus parce que, vous avez
11 entièrement raison, le problème de contenu canadien en
12 tant que décompte d'heures n'est pas aussi grave dans
13 le marché francophone que dans les marchés anglophones;
14 par contre, le pourcentage qu'on dépense de nos revenus
15 en programmation versus l'ouvrage accompli, quand on
16 fait allusion à ne pas trop, trop changer ça, ce
17 modèle-là marche au Québec.
18 18835 M. BEAULNE: J'ajouterais que, quand
19 on regarde l'ensemble de la télévision spécialisée, il
20 se consacre 43 pour cent des recettes annuelles brutes
21 à la programmation comparativement à 28 pour cent pour
22 l'ensemble des télédiffuseurs. Donc il y a quand même
23 un plus grand investissement fait à travers la
24 production indépendante provenant des canaux
25 spécialisés.
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4043
1 18836 LA PRÉSIDENTE: Vingt-huit pour cent
2 au Québec?
3 18837 M. BEAULNE: Pour l'ensemble des
4 télédiffuseurs conventionnels privés canadiens.
5 18838 LA PRÉSIDENTE: Ah, parce que je
6 croyais qu'on venait de me dire qu'on parlait ici de
7 comparaison entre les services spécialisés au Québec et
8 les services conventionnels au Québec, parce que ça
9 devient tout à fait différent; le 28 pour cent, ça,
10 c'est parce que les services québécois... attendons.
11 Recommençons.
12 18839 À la page 4 vous parlez et
13 d'émissions canadiennes distribuées et de pourcentage
14 des recettes brutes consacré à la programmation
15 canadienne et vous voulez faire une comparaison ou un
16 pont entre ce que font les services spécialisés et ce
17 que font les services conventionnels.
18 18840 Est-ce qu'on parle ici de tous les
19 services canadiens? C'est ça qu'on dit, mais vous
20 venez de me dire il y a un instant...
21 18841 M. BEAUCHAMP: Ce qu'on a voulu
22 faire, c'est de faire un genre de tour d'horizon pour
23 dire...
24 18842 LA PRÉSIDENTE: Complet.
25 18843 M. BEAUCHAMP: ... que les canaux
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1 spécialisés d'une façon générale au Canada remplissent
2 bien leurs obligations en contenu canadien. Encore là,
3 ce qu'on disait, c'est que le modèle... encore là,
4 maintenant, après qu'on ait fait ce point-là, ce
5 general statement, si vous voulez, après ça on se
6 replie sur le Québec et on dit que le modèle qu'on a
7 utilisé pour faire cette programmation canadienne, qui
8 est un pourcentage de nos revenus, ça aussi, ça semble
9 bien marcher. Donc, de cette façon-là, on dit qu'il
10 n'y a pas trop, trop à changer dans le système
11 réglementaire des canaux spécialisés du Québec.
12 18844 LA PRÉSIDENTE: Du Québec, et non
13 plus, je suppose... si le niveau de dépenses et de
14 distribution de programmation canadienne au Québec
15 restait au niveau où il est de fait plutôt que le 60-50
16 exigé par la réglementation, vous trouveriez ça
17 raisonnable aussi pour leur apport dans le système en
18 général comparé aux services spécialisés.
19 18845 M. BEAUCHAMP: Oui.
20 18846 LA PRÉSIDENTE: Comme vous faites
21 partie de l'industrie de la radiodiffusion québécoise
22 ou francophone, est-ce que vous avez une préoccupation
23 à ce que le Conseil prenne des mesures pour s'assurer
24 que le niveau de performance des conventionnelles reste
25 ce qu'il est et qu'il ne descende pas à 60-50?
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1 18847 M. BEAUCHAMP: Notre intervention n'a
2 pas comme objectif ou comme but, autre certaines lignes
3 de compétition et de structuration, si vous voulez, de
4 l'industrie au Québec, d'embarquer dans le débat de ce
5 que devraient faire les conventionnelles. Notre point
6 est de dire que les canaux spécialisés au Canada
7 semblent donner beaucoup au système. Au Québec, ça
8 semble vouloir fonctionner; la méthode de calcul comme
9 condition de licence pour nos engagements au système
10 semble bien aller.
11 18848 Maintenant, il y a des choses qu'on
12 pourrait encore modifier pour que ça aille plus loin,
13 beaucoup plus que de tenter d'estimer ce que devraient
14 faire ou ne devraient pas faire les généralistes.
15 18849 LA PRÉSIDENTE: Là, nous pouvons
16 facilement passer à vos commentaires sur comment on
17 traite les canaux spécialisés de langue française et
18 les problèmes que vous y voyez.
19 18850 Si je regarde, par exemple, au
20 paragraphe 13, qui est à la page 4, vous indiquez -- et
21 vous l'avez fait encore dans votre présentation
22 orale -- que les services spécialisés de langue
23 française seraient éminemment soutenus ou aidés s'ils
24 étaient distribués dans les marchés francophones au
25 Canada, en plus évidemment d'ajouter de la
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4046
1 programmation francophone au Canada.
2 18851 Vous semblez cet après-midi -- ce que
3 vous n'aviez pas fait dans votre représentation écrite
4 si je me souviens bien -- indiquer que vous seriez
5 prêts à accepter un certain pourcentage comme barème
6 pour décider si le Conseil devrait obliger la
7 distribution des services spécialisés francophones au
8 Canada anglais à un certain barème ou pourcentage de
9 population.
10 18852 M. BEAUCHAMP: Encore là, je pense
11 qu'éventuellement il va y avoir une autre audience sur
12 l'accès.
13 18853 LA PRÉSIDENTE: Oui. Vous allez...
14 18854 M. BEAUCHAMP: On a voulu prendre un
15 commentaire qui a été fait, quand on nous dit que...
16 les services francophones, on tente de négocier l'accès
17 à travers tout le Canada, et on nous dit toujours qu'il
18 n'y a pas de place, il n'y a pas de place, et l'ACTC
19 sont arrivés eux-mêmes et ont dit: "Pour les stations
20 ethniques, dans les communautés où il y a 10 pour cent,
21 on va trouver de la place."
22 18855 Encore là, nous, le seul point qu'on
23 amène ici, c'est de dire: Si c'est vrai pour les
24 groupes ethniques, ce avec quoi nous sommes d'accord en
25 principe, ce n'est même pas vrai pour des stations
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4047
1 francophones dans des marchés à haut pourcentage
2 francophone; on ne réussit pas à pouvoir vendre nos
3 services, pas plus Radiomutuel que tous les autres
4 titulaires de canaux spécialisés.
5 18856 Donc ce qu'on a voulu amener ici,
6 Madame la Présidente, c'est qu'à toutes fins pratiques
7 le défi de demain des canaux spécialisés au Québec est
8 particulier; nous devons compétitionner en même temps,
9 avec un plus petit marché, avec nos confrères de langue
10 anglaise et les marchés américains. Nous devons, pour
11 compétitionner d'une façon équitable, s'assurer que
12 nous tirons avantage du maximum de toutes les
13 possibilités que premièrement le marché canadien peut
14 nous offrir.
15 18857 Donc une des choses qu'on dit, c'est
16 qu'il y a des revenus qui nous seraient accessibles en
17 nous obtenant de l'aide pour faire mieux voyager nos
18 services hors Québec. Comme vous savez, tous les
19 services ou une bonne partie des services canadiens de
20 langue anglaise trouvent leur place très facilement au
21 Québec; encore en fin de semaine on a lancé deux ou
22 trois autres services de langue anglaise au Québec,
23 mais on ne réussit pas à vendre nos services hors
24 Québec.
25 18858 Le deuxième point qu'on dit, c'est
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1 qu'on ne réussit pas non plus à aller chercher des
2 situations privilégiées parce qu'on n'est pas reconnus.
3 Je pense que si je pouvais, dans tout ce qu'on a,
4 sortir l'affaire qui est très, très importante, ce
5 qu'on vous demande, c'est de donner un statut
6 particulier aux services francophones au Québec. On ne
7 réussit même pas au Québec à aller chercher des
8 positions privilégiées.
9 18859 Quand on vous fait le commentaire que
10 la quasi totalité des canaux spécialisés, les nouveaux
11 canaux spécialisés, sont 40 et plus et tous les
12 nouveaux canaux spécialisés même qui viennent d'être
13 mis en ondes ont des situations de distribution plus
14 favorables que nous, ce sont toutes des petites choses
15 comme ça qui font que dans un petit marché on va
16 pouvoir tirer toutes les ficelles pour pouvoir produire
17 de la qualité, être compétitifs sans pour autant passer
18 la facture aux consommateurs ultimement.
19 18860 LA PRÉSIDENTE: Finissons la pensée
20 de la distribution des canaux spécialisés francophones
21 hors Québec et ensuite on reparlera de la distribution,
22 des termes et conditions de la distribution des
23 services spécialisés francophones au Québec.
24 18861 Vous savez que, dans le cas des
25 services allophones, ce sont des services qui doivent
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1 être discrétionnaires, à moins qu'ils aient été, dans
2 certains cas, comme Telelatino à Toronto, dernièrement
3 seulement, au premier étage; mais, par exemple, le
4 système chinois de Fairchild, qui coûte je ne sais pas
5 combien, c'est près de 20 $ si ce n'est pas plus...
6 alors c'est un positionnement qui n'est pas,
7 évidemment, celui que vous cherchez.
8 18862 Je voudrais comprendre davantage ce
9 que vous voudriez hors Québec. Vous ne voudriez pas la
10 position de Fairchild.
11 18863 M. ARPIN: Non, ce n'est pas... en
12 fait ce qu'on dit...
13 18864 LA PRÉSIDENTE: Non, non, mais
14 j'essaie de comprendre, parce que...
15 18865 M. ARPIN: Non, non. Ce qu'on dit,
16 c'est que l'ACTC a garanti de l'accès -- même s'il est
17 distribué comme un signal sous forme de télévision
18 payante il occupe un espace, un canal donc -- pour
19 desservir les communautés de 10 pour cent et plus. Ce
20 que nous disons, c'est que ce n'est pas nécessairement
21 le modèle qui est préconisé pour les allophones; on dit
22 qu'au niveau de l'industrie de la câblodistribution on
23 trouve de la place pour 10 pour cent mais on ne trouve
24 pas de place dans les marchés d'Ottawa, de Timmins, de
25 Sudbury, de Moncton pour 35 pour cent, 38 pour cent, 39
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1 pour cent.
2 18866 Donc, ce qu'on dit, c'est qu'il y a
3 nécessité d'une réflexion et probablement d'une
4 implication de la part du Conseil pour nous aider à
5 trouver une solution pratique à cette question-là.
6 18867 Il est notable que de tous les
7 services francophones, à l'exception de RDI, licenciés
8 après 1994 -- donc je fais une exclusion pour RDI --
9 aucun d'entre eux n'ait réussi à percer à l'ouest de la
10 frontière du Québec et quelques-uns ont réussi à percer
11 dans le nord-est du Nouveau-Brunswick, dans la
12 communauté de Bathurst/Caraquet, mais pas tous.
13 18868 LA PRÉSIDENTE: Mais, si je comprends
14 bien, vous n'êtes pas prêts aujourd'hui à aller plus
15 loin. J'essayais simplement de vous demander des
16 explications: Comment voudriez-vous qu'on fasse ça?
17 Comment est-ce qu'on établirait lesquels et dans quelle
18 mesure, et là où il y a une certaine population? Parce
19 que c'est évident que ce n'est pas facile. Il faudrait
20 dans certains cas abandonner des services américains
21 sans doute, déplacer des services. Est-ce que ce
22 serait tous les services francophones? Ceux qui ont le
23 plus de programmation canadienne?
24 18869 Vous ne voulez pas parler de ces
25 détails-là aujourd'hui.
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1 18870 M. ARPIN: En fait, non, parce qu'on
2 voudrait quand même avoir une discussion avec nos
3 collègues. Ce sont des questions qu'on a soulevées à
4 l'occasion au niveau de nos associations de canaux
5 spécialisés mais sur lesquelles on n'a pas encore
6 déterminé une position collective. Mais c'est une
7 question qui préoccupe l'ensemble des exploitants de
8 canaux spécialisés de langue française.
9 18871 LA PRÉSIDENTE: Vous voulez
10 aujourd'hui soulever le principe seulement qu'il y a
11 quelque chose qui ne roule pas rond si les services
12 spécialisés québécois...
13 18872 M. ARPIN: Ne réussissent pas à
14 percer...
15 18873 LA PRÉSIDENTE: Davantage.
16 18874 M. ARPIN: ... dans des communautés
17 francophones significatives.
18 18875 M. BEAUCHAMP: Il y a aussi la
19 notion, Madame la Présidente, à un moment donné de
20 marchés bilingues aussi et des lois de linkage, des
21 lois d'assemblage qui peuvent être pensées, parce qu'on
22 sait fort bien qu'il est impensable et que la
23 technologie ne permettra pas aux marchés qu'on a
24 mentionnés de prendre la panoplie totale de tous les
25 canaux français. Par contre, ce qu'on tente d'amener
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1 ici, c'est que le système de télévision spécialisée au
2 Québec, c'est tout un défi qui nous attend pour
3 s'assurer, avec un marché de 6 millions, qu'on va y
4 rencontrer... il faut regarder toutes les avenues
5 possibles de maximiser les revenus possibles.
6 18876 LA PRÉSIDENTE: Vous avez sans doute
7 pris connaissance des représentations de l'Impératif
8 français, justement, surtout sur la situation à Ottawa,
9 où c'est évident qu'il y a beaucoup de signaux
10 accessibles mais censément pas suffisamment de signaux
11 de langue française à leur avis et à l'avis d'autres
12 citoyens d'Ottawa. Alors vous allez avoir l'occasion
13 d'en reparler.
14 18877 M. ARPIN: Dans les faits, on est en
15 contact avec ces communautés hors Québec qui nous
16 demandent aussi comment on doit s'y prendre. C'est une
17 situation un peu de cul-de-sac, je le réitère. Depuis,
18 donc, les services licenciés en 1988, sauf un en
19 1994... ceux qui ont été licenciés en 1988, à cause des
20 règles d'assemblage, ont réussi à avoir de la
21 distribution dans certains marchés. Mais ceux
22 licenciés après 1988 -- et il faut aller en 1994 pour
23 des services francophones -- à l'exception de RDI, et
24 pour des raisons qui sont bien connues, tous les autres
25 n'ont jamais réussi à sortir du Québec.
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1 18878 LA PRÉSIDENTE: Maintenant, parlons
2 du positionnement, qui à votre avis devrait privilégier
3 des services francophones dans les marchés
4 francophones, surtout au Québec. Vous en reparlez
5 aujourd'hui à la page 4 de votre présentation orale et
6 vous en avez parlé aussi dans votre soumission écrite,
7 particulièrement au même paragraphe 23, à la page 6.
8 18879 Premièrement, vous demandez qu'il y
9 ait un positionnement privilégié et, entre parenthèses,
10 par rapport aux services de langue anglaise proposant
11 des formules de programmation apparentées. Est-ce que
12 vos commentaires se limitent seulement lorsque les
13 formats anglophones sont semblables ou si c'est une
14 position générale?
15 18880 M. ARPIN: Non, c'est sur l'ensemble.
16 Quand on regarde les règlements ou la loi canadienne, à
17 toutes fins pratiques, il y a une loi canadienne pour
18 les canaux spécialisés qui stipule bien les règles du
19 jeu, vers où on veut s'en aller versus les Américains
20 et ce genre de choses là. Mais quand on regarde
21 l'industrie francophone, il n'y a pas de positionnement
22 clair, il n'y a pas cette même écriture qui dit qu'au
23 Québec... comme ce qu'on dit avec les services de
24 langue anglaise. Au Canada anglais, on dit: Priorité
25 aux stations anglaises, il y a la liste de ceux qui
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1 n'ont pas le droit d'entrer, tandis qu'au Québec il n'y
2 a rien de tout ça, il n'y a pas de liste, n'importe qui
3 entre, de langue anglaise, de langue... je comprends
4 que les Américains, il faut qu'ils soient sur la liste.
5 18881 Nous, on dit qu'il est temps de
6 positionner d'une façon très claire qu'à partir du
7 moment où un titulaire reçoit une licence du CRTC pour
8 desservir des marchés francophones, à partir de ce
9 moment-là il devrait y avoir un genre de service
10 privilégié, ce qui n'existe pas. Le positionnement sur
11 le cadran, il n'y a pas une loi qui est là, on doit
12 toujours négocier, et ce n'est pas aussi clair qu'il le
13 faut. Quant à nous, c'est une lacune.
14 18882 À partir du moment où on vient
15 chercher des licences spécialisées, à partir du moment
16 où on prend des engagements, à partir du moment où on
17 doit se débattre du mieux qu'on peut pour rentabiliser
18 nos entreprises dans un marché de 6 millions de
19 personnes, il me semble qu'il y a assez de défis là et
20 au moins on devrait avoir une partie de notre plan
21 d'affaires qui est pour autant bien sécurisé.
22 18883 LA PRÉSIDENTE: Mais, encore là, vous
23 n'avez pas aujourd'hui de règles très précises à
24 suggérer pour corriger l'effet que vous soulevez à la
25 page 4, que même dans l'île de Montréal...
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1 18884 M. BEAUCHAMP: Non, dans
2 l'application comme telle, Madame la Présidente. Par
3 contre, une priorité absolue et un positionnement
4 privilégié, que ce ne soit qu'un commentaire de
5 principe ou un positionnement ou un voeu du Conseil
6 pour venir supporter l'industrie du Québec, au moins à
7 l'intérieur de ça on sait vers où on s'en va.
8 18885 Actuellement, quand on négocie,
9 beaucoup de fois, c'est soit nous ou un canal anglais.
10 18886 LA PRÉSIDENTE: Je vais vous parler
11 dans un instant de la situation des tarifs; vous parlez
12 ici de positionnement et, généralement, que vous soyez
13 positionnés plus bas sur le cadran plus tôt que plus
14 haut, c'est le problème principal.
15 18887 M. BEAUCHAMP: Oui, et aussi, juste
16 avant d'aller là-dessus, il y a des marchés du Québec,
17 et je demanderais à mes confrères... sans pour autant
18 mentionner les marchés, il y a encore des marchés du
19 Québec où Canal Vie n'est pas distribué et où les
20 canaux spécialisés reçoivent leur place et où
21 finalement on nous dit carrément: "Il n'y a pas de
22 place pour vous autres." Mais ces mêmes services là...
23 18888 LA PRÉSIDENTE: Ce ne sont pas des
24 cas où il y a des services anglophones.
25 18889 M. BEAUCHAMP: Je vous parle de cas
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4056
1 de canaux...
2 18890 M. ARPIN: Des services américains.
3 18891 M. BEAUCHAMP: Je vous parle de
4 services de canaux, de services de câblodistribution de
5 catégories 1 et 2, qui ont plus de 3 000 abonnés de
6 câble, donc qui par définition ont en quelque part un
7 minimum de 50 canaux jusqu'à 75 canaux, et ce monde-là
8 ont opté pour prendre d'autres services parce qu'il n'y
9 a rien dans la réglementation qui nous donne un
10 avantage sur qui de droit. C'est soit service A en
11 anglais ou soit service B en français, et c'est tout.
12 18892 LA PRÉSIDENTE: Mais est-ce que dans
13 les marchés francophones les règles d'accès n'exigent
14 pas qu'ils transportent, s'ils ont des canaux, tous les
15 services de langue française?
16 18893 M. BEAUCHAMP: Dans les marchés de
17 6 000 foyers et plus.
18 18894 M. ARPIN: Dans les marchés de
19 classe 1.
20 18895 LA PRÉSIDENTE: Ah, bon, je vois.
21 18896 M. ARPIN: Mais, quand même, il y a
22 encore au Québec un marché de classe 1 qui ne distribue
23 pas Canal Vie, notamment. Il trouve que c'est trop
24 cher.
25 18897 M. BEAUCHAMP: Donc tout ce
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4057
1 processus-là, depuis un an et demi, deux ans qu'on
2 négocie, qu'on tente... parce qu'il n'y a pas une
3 position claire qui dit qu'à partir du moment où il y a
4 une spécificité québécoise ou canadienne de canaux
5 spécialisés, cette industrie-là doit être protégée,
6 doit avoir accès aux canaux spécialisés avant... peut-
7 être pas avant, mais au moins, comme on dit ici, que ce
8 soit un service privilégié et qu'on ait accès au moins
9 à nos propres services de distribution.
10 18898 LA PRÉSIDENTE: À la page 5 de votre
11 soumission écrite, au paragraphe 19, et aussi au
12 paragraphe 23, vous parlez du tarif mensuel. Je
13 n'étais pas absolument certaine que je comprenais ce
14 que vous disiez à ce moment-là, mais je comprends
15 aujourd'hui, dans votre présentation orale, qu'il est
16 évident que ce que vous voudriez, c'est que le câblo
17 soit obligé de vous donner les tarifs indiqués dans
18 votre plan d'affaires, qui était, lui, échelonné selon
19 la pénétration. Alors, si vous êtes discrétionnaire
20 mais pas au service de base, qui a de fait un tarif
21 réglementé, vous voudriez que le tarif que vous aurez
22 indiqué dans cet échelonnement-là devienne obligatoire
23 pour le câblo, parce que vous dites que le Conseil a
24 accepté ce plan d'affaires là. Mais moi, ce que j'ai
25 compris, c'est que le Conseil n'allait pas entériner
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4058
1 nécessairement ces tarifs-là, qu'il entérinait
2 seulement le tarif exigé si le service était distribué
3 à la base.
4 18899 M. BEAUCHAMP: Je ne suis pas
5 convaincu qu'on demande aussi clairement que le Conseil
6 devrait réglementer d'une façon catégorique, mais ce
7 qu'on dit ou ce qu'on veut dire ici, c'est qu'en
8 quelque sorte on comprend qu'il y a une négociation de
9 gré à gré qui doit avoir lieu; encore faut-il que cette
10 négociation de gré à gré se situe dans un certain
11 environnement qui respecte en gros un plan d'affaires
12 et les engagements déposés par nous.
13 18900 De quelle façon est-ce que ça doit se
14 faire ou ça peut se faire? Sans aucun doute...
15 j'écoutais ce matin la SPTV, et on parlait de
16 transparence comme étant possiblement une des façons de
17 le faire. Je vous dirais juste qu'à quelque part les
18 télédiffuseurs ou les canaux spécialisés francophones
19 ont tellement d'autres défis que d'annuellement ou de
20 continuellement négocier leurs tarifs, ou même les
21 nouveaux services qui, espérons-le, vont voir le jour
22 une journée, de trouver un genre d'encadrement au moins
23 où il peut y avoir cette négociation-là... je comprends
24 qu'il y a de l'arbitrage, mais que cette négociation-là
25 puisse en quelque sorte... je ne pense pas que le
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1 Conseil puisse... je suis un petit peu partagé entre le
2 réglementer... mais de là à totalement se dissocier du
3 processus, surtout pour un marché étroit et petit comme
4 le Québec, c'est là où on vous demande de...
5 18901 LA PRÉSIDENTE: Maintenant, dans ce
6 paragraphe 19 vous parlez d'une attitude adoptée par
7 certains câblodistributeurs canadiens vis-à-vis les
8 tarifs dans les négociations, et plus bas vous dites:
9 "Cette attitude risque, si elle est reprise par les
10 câblodistributeurs du Québec". Voulez-vous dire
11 qu'elle ne l'avait pas été le 30 juin mais qu'elle
12 l'est maintenant, ou si c'est encore un "si"?
13 18902 M. BEAUCHAMP: Les négociations à
14 date, ce ne sont jamais des négociations qui s'en
15 vont... et ça va tellement, tellement bien, l'année
16 prochaine... voici, c'est toujours une négociation qui
17 s'en va beaucoup plus vers le bas que vers le haut.
18 18903 On a été mis au courant d'une
19 certaine pratique à la baisse et certaines négociations
20 qui sont plus difficiles. J'oserais dire qu'à ce
21 moment-ci les négociations sont très tendues, sont très
22 difficiles, mais elles se font d'une façon tout de même
23 assez respectable au Québec, et on voudrait juste
24 s'assurer que ça continue de cette même façon-là.
25 18904 M. ARPIN: Évidemment, notre
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4060
1 référence ici, c'est que... ça ne s'est jamais passé
2 dans le cas des services dans lesquels Radiomutuel a un
3 intérêt, mais nous savons qu'il y a eu des contrats qui
4 ont été dénoncés au Canada anglais par des entreprises
5 de distribution. Ce n'est jamais arrivé au Québec
6 qu'on contrat soit dénoncé, donc ça demeure un "si",
7 mais on a quand même la préoccupation qu'un événement
8 semblable pourrait se produire. Donc on insiste sur la
9 vigilance du Conseil.
10 18905 LA PRÉSIDENTE: Maintenant, les
11 catégories sous-représentées, si je comprends bien, aux
12 pages 8 et 9 de votre soumission écrite vous nous dites
13 que les catégories d'émissions qui sont considérées
14 sous-représentées à la télévision conventionnelle de
15 langue française sont très bien représentées
16 généralement à la télévision payante et spécialisée de
17 langue française et, contrairement à d'autres
18 intervenants que nous avons entendus, vous reconnaissez
19 d'emblée que la télévision généraliste atteint tout le
20 monde tandis que la télévision spécialisée n'atteint
21 pas tout le monde mais que, malgré ça, vous voudriez
22 avoir plus d'aide financière pour continuer à produire
23 cette programmation spécialisée -- j'ai bien compris --
24 pour les services spécialisés?
25 18906 M. BEAULNE: (Hoche la tête en signe
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4061
1 d'acquiescement).
2 18907 LA PRÉSIDENTE: Et surtout vous
3 voudriez une allocation minime ou minimum par le fonds
4 pour les arts de la scène parce que je crois que vous
5 avez déposé une annexe où vous indiquez qu'il y a
6 seulement 1,25 -- l'annexe 1 -- pour cent des déboursés
7 totaux consacrés en trois ans à la catégorie arts de la
8 scène, qui recoupe la catégorie 8, ce qui
9 représenterait donc seulement 875 000 $ sur 7 millions.
10 18908 Avez-vous pensé à un pourcentage
11 quelconque qui, à votre avis, serait raisonnable?
12 C'est évidemment parce que vous avez le service Musimax
13 et MusiquePlus.
14 18909 M. BEAULNE: Mais le commentaire,
15 Madame la Présidente, qu'on faisait s'adressait à
16 l'ensemble de la télévision quand on mentionnait les
17 sous-catégories représentées, en particulier de la
18 musique et les émissions de variétés. Force est de
19 constater qu'elles sont absentes à la fois de la
20 télévision et à la fois de l'importance qu'on y accorde
21 en termes de financement.
22 18910 Jusqu'à présent, les intervenants qui
23 ont comparu devant vous ont surtout insisté sur
24 l'importance qu'on devrait accorder aux émissions pour
25 enfants, aux dramatiques ou aux documentaires. Nous,
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1 on dit que les émissions de variétés et les catégories
2 de musique et danse devraient également être mieux
3 représentées au niveau du financement parce que ce sont
4 des éléments importants, en particulier dans la
5 promotion et la mise en marché des artistes et de
6 l'industrie du spectacle du Québec et, par ricochet, ça
7 a un effet sur l'ensemble de la radio, parce que les
8 émissions de variétés, on ne peut pas uniquement les
9 promouvoir par la télévision spécialisée, on a besoin
10 de l'accès à la télévision de masse. Cette présence-là
11 permettrait non seulement de soutenir les carrières
12 existantes mais surtout permettrait également un
13 excellent débouché pour les nouveaux artistes.
14 18911 Donc ce que l'on dit, c'est que, bien
15 sûr, il faut reconnaître que les émissions pour
16 enfants, les documentaires et les dramatiques sont
17 importants, mais également on devrait inclure au même
18 titre les catégories d'émissions de musique ou de
19 variétés.
20 18912 LA PRÉSIDENTE: Vous ne parlez pas
21 ici nécessairement d'une allocation minimum pour les
22 services spécialisés dans ces catégories-là mais pour
23 les conventionnelles autant.
24 18913 M. BEAULNE: La seule parenthèse que
25 je ferais par rapport aux télévisions spécialisées,
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1 c'est bien sûr que dans l'inclusion du fonds on devrait
2 prévoir à l'avenir le financement du vidéoclip, qui
3 viendrait compléter à ce moment-là l'impact qu'on
4 pourrait créer en donnant plus de ressources à la
5 catégorie musique et variétés.
6 18914 LA PRÉSIDENTE: Quand vous parlez
7 d'un déséquilibre dans l'allocation, c'est ça que vous
8 voulez dire...
9 18915 M. BEAULNE: Exactement.
10 18916 LA PRÉSIDENTE: ... qu'il y a
11 certaines catégories de programmation considérées sous-
12 représentées qui sont bien représentées aux services
13 spécialisés mais qui n'ont pas assez d'aide financière
14 parce qu'on n'en attribue pas suffisamment ou on
15 n'alloue pas suffisamment...
16 18917 M. BEAULNE: À la télévision
17 conventionnelle...
18 18918 LA PRÉSIDENTE: ... dans les fonds.
19 18919 Maintenant, Radio-Canada. Nous avons
20 eu évidemment plusieurs représentations à l'effet que
21 le 50 pour cent des fonds qui sont alloués à Radio-
22 Canada devrait être revu et mis à la baisse, je
23 suppose. Ça, c'est à la page 10, au paragraphe 40. Et
24 je crois qu'aujourd'hui vous avez fait des commentaires
25 semblables.
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1 18920 Expliquez-moi comment vous avez fait
2 vos calculs au paragraphe 40. Vous partez avec 50 pour
3 cent des fonds attribués à Radio-Canada, les filiales
4 de production des télédiffuseurs conventionnels privés
5 peuvent accaparer jusqu'à 33 pour cent des déboursés
6 totaux, donc les société de production affiliées au
7 télédiffuseur privé peuvent accaparer jusqu'à 66 pour
8 cent.
9 18921 M. ARPIN: C'est parce qu'il y a les
10 affiliés de Radio-Canada qui vont chercher une part des
11 fonds...
12 18922 LA PRÉSIDENTE: Ah, je comprends.
13 18923 M. ARPIN: ... qui va à la télévision
14 conventionnelle privée, donc c'est ça qu'on a fait....
15 18924 LA PRÉSIDENTE: Je comprends.
16 18925 M. ARPIN: ... et qui produisent pour
17 diffusion sur le réseau national.
18 18926 LA PRÉSIDENTE: Merci. Je comprends.
19 18927 M. ARPIN: Alors ce sont les maisons
20 de production; ce ne sont pas les télédiffuseurs eux-
21 mêmes mais ce sont leurs maisons de production.
22 18928 LA PRÉSIDENTE: Maisons de production
23 des affiliés de Radio-Canada...
24 18929 M. ARPIN: Des affiliés de Radio-
25 Canada qui produisent pour le réseau national.
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4065
1 18930 LA PRÉSIDENTE: Par exemple, une
2 maison de production qui est la propriété de Cogeco.
3 18931 M. ARPIN: Ce serait un exemple.
4 18932 LA PRÉSIDENTE: Cette réallocation-
5 là, est-ce que vous avez pensé exactement comment vous
6 voudriez qu'elle soit faite ou si c'est encore au
7 niveau des principes?
8 18933 M. BEAULNE: Je vous dirais qu'on est
9 plus près de la réalité, Madame la Présidente.
10 Évidemment, les sous-catégories qu'on a mentionnées, en
11 particulier variétés et musique, pourraient grandement
12 bénéficier d'une remise des fonds répartie plus
13 largement entre les différentes catégories.
14 18934 LA PRÉSIDENTE: Je parlais ici plus
15 particulièrement de Radio-Canada. À la page 11 vous
16 dites que le pourcentage qui lui est alloué devrait
17 être réexaminé et vous voudriez que ce pourcentage-là
18 ne représente que le pourcentage des dépenses de Radio-
19 Canada sur la programmation canadienne vis-à-vis les
20 dépenses de programmation canadienne des télédiffuseurs
21 canadiens ou francophones?
22 18935 M. BEAULNE: Canadiens.
23 18936 LA PRÉSIDENTE: Partout.
24 18937 M. BEAULNE: Exactement. Le
25 pourcentage des dépenses en production canadienne de
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1 Radio-Canada devrait être calculé sur l'ensemble des
2 dépenses de production canadienne de l'ensemble de la
3 télévision au Canada.
4 18938 LA PRÉSIDENTE: Et ça, ce serait une
5 recommandation au fond qui viserait les dépenses de
6 l'année précédente pour décider ce qui peut leur être
7 alloué l'année suivante?
8 18939 M. BEAULNE: Exactement.
9 18940 LA PRÉSIDENTE: À la page 15 vous
10 recommandez, comme l'ont fait d'autres participants
11 dans l'industrie au Québec, que le Conseil invite
12 Radio-Canada à modérer ses visées commerciales -- ça,
13 c'est au paragraphe 56 -- et sa volonté effrénée de
14 concurrencer le secteur privé sur tous les fronts,
15 notamment en envahissant le champ de la télévision
16 spécialisée.
17 18941 Est-ce que votre problème principal,
18 c'est que Radio-Canada se lance dans la concurrence
19 avec les services spécialisés ou si vous entrevoyez des
20 problèmes aussi dans sa concurrence avec les services
21 conventionnels, bien que vous n'y oeuvrez pas vous-
22 mêmes?
23 18942 M. BEAUCHAMP: C'est une vue globale.
24 18943 Je reviens encore au défi: un marché
25 de 6 millions, actuellement avec je crois 11 télés
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1 spécialisées, un défi d'un univers de, dépendant qui on
2 écoute, 75 à 100 et d'autres services. Pour qu'un
3 marché comme ça rencontre les expectatives, il faut
4 absolument que tous les éléments marchent. Ce sont les
5 éléments comme tel qu'on tente de faire ressortir dans
6 notre présentation. Ils sont peut-être petits quand on
7 les regarde, mais quand on regarde notre défi, notre
8 défi, il est grand.
9 18944 Un des points que nous tentons de
10 faire ressortir aujourd'hui, c'est que ça va prendre un
11 équilibre entre les forces concurrentielles. Si cet
12 équilibre-là au Québec n'a pas lieu et si on fait
13 uniquement renforcer -- dans ce cas-ci votre
14 question -- Radio-Canada, qui est déjà un déséquilibre
15 au niveau de la concurrence, la seule chose qu'on fait,
16 c'est qu'on affaiblit la totalité des maillons
17 nécessaires pour rencontrer la totalité des objectifs
18 du marché.
19 18945 On n'est pas contre, on est pour la
20 chaîne d'État, elle fait de l'ouvrage louable, mais
21 qu'elle remplisse son mandat et qu'elle vienne
22 complémenter ou compléter ce qu'on fait. C'est là
23 qu'on dit que, encore, ça va prendre la totalité des
24 forces concurrentielles qui vont jouer d'une façon très
25 positive et non du monde qui vont avoir des méga-
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1 structures, qui vont avoir des avantages marqués qui
2 feraient qu'il n'y en aurait plus, de compétition.
3 18946 On va avoir le choix au Québec de
4 créer deux compagnies de télédiffusion francophones ou
5 de créer une industrie où toutes les composantes vont
6 travailler ensemble pour le mieux du marché. Donc,
7 dans cette optique-là, on dit que de renforcer Radio-
8 Canada dans du commercial, de lui donner d'autres
9 chaînes spécialisées à ce moment-ci, d'autant plus que
10 les entreprises privées sont prêtes à les livrer, ne
11 donne rien du tout au système et au défi qu'on doit
12 rencontrer ensemble comme industrie au Québec.
13 18947 LA PRÉSIDENTE: Ce sont évidemment
14 des propos que vous allez avoir l'occasion de reprendre
15 en décembre, mais si nous parlons de la concurrence
16 avec les services spécialisés, au paragraphe 52 vous
17 parlez en particulier... un peu plus loin vous parlez
18 d'avantages concurrentiels et financiers indus que la
19 Société Radio-Canada aurait, au paragraphe 55. Et à 52
20 vous donnez un exemple, par exemple, de la promotion
21 pré-lancement et la publicité à l'antenne de la chaîne
22 généraliste Radio-Canada et que vous ne croyez pas
23 qu'elle ait été facturée à RDI.
24 18948 Est-ce que c'est là un de vos
25 problèmes principaux, si on trouvait une méthode de
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1 comptabiliser d'une façon assez serrée pour éviter ces
2 avantages indus, que là, vous auriez moins de
3 problèmes, ou si vous parlez plutôt d'un principe
4 général, comme vous venez de le faire, qu'il devrait y
5 avoir un équilibre dans le marché?
6 18949 M. BEAUCHAMP: C'est un principe
7 général, mais par contre ce qui existe, et ce que la
8 quasi-totalité des intervenants du Québec ont semblé
9 vouloir dire, c'est que la situation actuelle, il ne
10 faut pas prétendre que... la situation actuelle de
11 Radio-Canada, tout le monde est d'accord que c'est à
12 l'avantage du système québécois de diffusion. C'est
13 une concurrence qui est très difficile quotidiennement,
14 et ça part à tous les niveaux; ça part de l'emploi
15 d'employés.
16 18950 Cette année Radiomutuel, qui est une
17 des compagnies les plus stables au Québec, les employés
18 qu'on perd, on les perd à la société d'État parce qu'on
19 ne peut pas rencontrer les expectatives financières.
20 18951 Donc c'est un problème qui est
21 général mais qui, dans son application... c'est-à-dire
22 qu'ici on a un diffuseur public qui prend de la place,
23 et énormément de place, dans un monde concurrentiel,
24 commercial, et veut nous concurrencer à tous les
25 niveaux, sur l'embauche d'employés, pratiques
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1 commerciales, achats d'émissions, sur toute la ligne,
2 de A à Z.
3 18952 Ceci fait que c'est une industrie
4 qu'on a beaucoup, beaucoup de difficultés... il faut
5 quasiment dire: Tenez, prenez votre place, et, après
6 ça, nous, on va essayer de remplir les places que vous
7 n'occupez pas, parce qu'on ne peut pas les
8 compétitionner.
9 18953 LA PRÉSIDENTE: Avec des fonds
10 publics, évidemment.
11 18954 M. BEAUCHAMP: C'est ce qu'on dit.
12 C'est que si on veut qu'un système soit performant pour
13 rencontrer les expectatives, qu'on crée des forces
14 concurrentielles qui ont un certain niveau d'égalité,
15 ce qui fait que demain matin on va pouvoir, au niveau
16 du privé... le public, c'est défini, ce qu'ils ont à
17 faire, et ils le font bien. Ils ont un mandat à
18 remplir. Qu'on laisse la société d'État jouer et
19 prôner et développer la culture; ils font un ouvrage
20 phénoménal. Mais de les inciter à venir davantage dans
21 le marché concurrentiel n'aide rien, ne donne rien de
22 plus au marché, parce que ces services-là seraient
23 faits par quelqu'un d'autre, et bien au contraire
24 minimise la compétition entre les services et au
25 détriment de tout le système.
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1 18955 LA PRÉSIDENTE: Ce n'est peut-être
2 pas une question à laquelle vous voulez répondre parce
3 que vous n'oeuvrez pas dans la télévision
4 conventionnelle, mais est-ce qu'à votre avis... et
5 c'est une question que j'ai posée, disons, à TVA et à
6 d'autres intervenants du Canada français. À la
7 télévision conventionnelle, si Radio-Canada n'offrait
8 pas une concurrence, est-ce qu'il y en aurait, de la
9 concurrence?
10 18956 M. BEAUCHAMP: Je pense qu'encore il
11 faut voir où elle fait la concurrence. Tout le
12 monde... et je pense même que la télévision
13 généraliste, dans ce qu'ils le font, ils le font bien.
14 Mais demain matin, s'ils ne diffusent pas le Grand
15 Prix, le Grand Prix sera disponible au Québec. S'ils
16 ne diffusent pas certaines variétés... il y a certaines
17 émissions de cette façon-là qui seraient faites et
18 faites par les généralistes ou par les spécialisés ou
19 par le système, dans lesquelles les droits de
20 diffusion, on pourrait les négocier d'une façon plus
21 intelligente.
22 18957 Deuxièmement, on pourrait fort
23 probablement négocier la vente et les achats de ces
24 propriétés-là à la hausse et de tout amener le marché
25 par en avant au lieu de l'amener par en arrière.
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1 18958 M. BEAULNE: On pourrait sans doute
2 aussi se poser la question: En quoi Radio-Canada va
3 remplir mieux son mandat qui lui est dévolu en jouant
4 un plus grande rôle dans le domaine de la télévision
5 spécialisée et en étant de plus en plus présente?
6 18959 Normand a mentionné des points, mais
7 j'aimerais juste faire valoir quelques autres points
8 sur les impacts négatifs que pourrait avoir une plus
9 grande présence de Radio-Canada en télévision
10 spécialisée.
11 18960 Il y a tout l'aspect du pouvoir
12 d'achat, notamment au niveau des acquisitions, des
13 coûts de programmes, qui seraient sans doute beaucoup
14 plus dispendieux à acquérir compte tenu du pouvoir
15 d'achat que pourrait avoir Radio-Canada. On pense à la
16 vente ou à la commercialisation; quand vous avez déjà
17 une TV généraliste avec cette puissance-là, si vous
18 additionnez d'autres éléments spécialisés, ça vous
19 donne un net avantage.
20 18961 Également, je vous dirais qu'il faut
21 tenir compte aussi de l'aspect de la production
22 indépendante. On sait que les télévisions spécialisées
23 utilisent beaucoup la production indépendante, et ce
24 n'est pas toujours le cas pour la télévision publique
25 ou la télévision privée.
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1 18962 Donc ce sont des aspects qui nous
2 amènent à poser des questions, sans compter que
3 l'intégration de ces différentes produits amène
4 nécessairement un recyclage de produits qui fait en
5 sorte que ce que la télévision francophone spécialisée
6 a réussi à créer jusqu'à présent, c'est une qualité de
7 produits, une diversité et surtout une complémentarité.
8 18963 Alors, encore là, on pourrait se
9 poser la questions: Est-ce que vraiment on atteint
10 l'objectif de complémentarité en permettant à Radio-
11 Canada de venir jouer dans toutes sortes de créneaux
12 spécialisés? Je pense qu'on rejoint beaucoup plus la
13 pensée que les gens vous ont exprimée jusqu'à présent,
14 qu'on devrait revoir sans aucun doute le mandat de
15 Radio-Canada et également son financement plutôt que de
16 lui permettre d'aller chercher une double taxation en
17 jouant dans la télévision spécialisée.
18 18964 LA PRÉSIDENTE: Vous aurez une double
19 occasion de vous y pencher de nouveau, soit en décembre
20 et aussi au renouvellement de Radio-Canada, qui
21 s'annonce pour le printemps.
22 18965 M. BEAUCHAMP: Madame la Présidente,
23 par contre, je pense qu'ici vous avez raison et on ne
24 veut pas... mais l'audience ici va regarder tout de
25 même en quelque sorte la formation et la structuration
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1 de la réglementation pour l'avenir du Québec et du
2 Canada. Donc c'est beaucoup plus... d'une façon
3 générale, il y a des choses, il y a des points qu'on
4 fait valoir parce que si... et je pense que c'est ici
5 un peu qu'il faut les faire valoir parce que s'il y a
6 une structure qui rend la réglementation non efficace
7 dans le futur, peu importe qui va être détenteur de
8 certaines licences, ça va être beaucoup plus complexe
9 pour tout le monde.
10 18966 Quant à moi, le système canadien
11 anglais marche, il va bien, il y a de la compétition,
12 il y a de l'équilibre, il y a des joueurs de taille, et
13 le système canadien, on est ici pour le faire évoluer.
14 Mais d'une façon générale il y a de la concurrence, il
15 y a un bon mix, si vous voulez, entre le privé et le
16 public. Au Québec, il faut s'assurer de créer un genre
17 de mix, si vous voulez, entre des entreprises qui
18 peuvent concurrencer, qui ont la taille, qui ont la
19 force de vouloir concurrencer. Et on sait qu'au
20 Québec, à toutes fins pratiques, la SRC, ce n'est pas
21 CBC au Canada anglais.
22 18967 Donc, notre inquiétude, ce n'est pas
23 ce qu'ils font; notre inquiétude, c'est la charpente
24 totale dans laquelle on va avoir à compétitionner.
25 Donc c'est la structure totale, et je pense que ça vaut
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1 la peine d'y réfléchir, surtout dans certains projets
2 de réglementation ou dans certains positionnements
3 d'entreprise.
4 18968 LA PRÉSIDENTE: Vous rejetteriez donc
5 le modèle constellation pour Radio-Canada mais vous y
6 croiriez pour le secteur privé.
7 18969 M. BEAUCHAMP: Non commercial ou bien
8 financé, mais...
9 18970 LA PRÉSIDENTE: Je veux dire le
10 modèle constellation que Radio-Canada met de l'avant,
11 que c'est nécessaire maintenant d'avoir des tentacules
12 dans plusieurs...
13 18971 M. BEAUCHAMP: À partir de ce moment-
14 là, Madame la Présidente, on va tout vendre nos
15 services et on aura une super-structure d'État.
16 18972 LA PRÉSIDENTE: Non, non, mais est-ce
17 que vous croyez à ce modèle pour le secteur privé?
18 18973 M. BEAUCHAMP: Pas du tout. Pas
19 plus.
20 18974 LA PRÉSIDENTE: Pas non plus.
21 18975 M. BEAUCHAMP: Pour le secteur privé?
22 18976 LA PRÉSIDENTE: Oui, le modèle
23 constellation où le même propriétaire pourrait avoir
24 plusieurs services spécialisés et une télévision
25 conventionnelle.
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1 18977 M. BEAUCHAMP: Notre point de vue,
2 c'est qu'au Québec, dans un premier temps, il faut
3 renforcer la structure pour s'assurer qu'il y a une
4 base de compétition assez forte pour tirer au maximum
5 avantage de cette compétition-là. Donc vous avez les
6 entreprises... il y a à peu près cinq compagnies de
7 télé spécialisée au Québec. Il s'agit de s'assurer que
8 ces entreprises-là, demain, peuvent avoir les moyens,
9 la synergie, la complémentarité de tirer au maximum des
10 avantages de leurs opérations pour concurrencer et la
11 télévision généraliste qui est bien équipée et la
12 télévision d'État qui est, en plus d'être très
13 agressive, est très bien financée.
14 18978 On dit, nous, que ce qui est super
15 important... dans un premier temps, notre point de vue,
16 c'est de s'assurer que cette complémentarité et cette
17 compétition entre le système, à l'avantage du système,
18 soit mise en place et bien protégée avant de créer des
19 super-structures.
20 18979 LA PRÉSIDENTE: Et ce que vous voulez
21 de nous maintenant, c'est que nous prenions vos
22 principes et que nous les transmettions en
23 réglementation définie.
24 18980 M. BEAUCHAMP: Ce serait très
25 agréable.
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1 18981 LA PRÉSIDENTE: Mais vous n'avez pas
2 l'intention de nous aider à faire ça...
3 18982 M. BEAUCHAMP: Ce serait très, très,
4 très agréable, je pense.
5 18983 LA PRÉSIDENTE: ... mais seulement
6 les grands principes.
7 18984 M. BEAUCHAMP: Mon intention n'est
8 pas de tout gagner ça. Non. Le but... on se présente
9 d'une façon très simple. On amène une vision du
10 Québec. Je pense que Radiomutuel, tout de même, on est
11 une entreprise d'une certaine envergure, mais avec tous
12 nos acquis de communication au Québec on a voulu amener
13 un son de cloche ici pour le bien-être du processus qui
14 est engagé pour dire: Écoutez, le défi, il est grand.
15 Le seul défi qu'on ne peut pas avoir au Québec, c'est
16 de replier ou de ne pas avancer; pour qu'on avance,
17 voici certaines conditions que le marché doit avoir
18 pour s'assurer que, pour 6 millions, on va pouvoir
19 continuer à exporter et à produire des produits de la
20 même qualité que nos confrères de langue anglaise et
21 que les Américains.
22 18985 Donc c'est à peu près dans ce
23 cadrage-là qu'on se présente devant vous.
24 18986 LA PRÉSIDENTE: Nous vous remercions
25 de vos grands principes. On en a eu beaucoup, pas
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1 autant de recommandations... oui, on a certaines
2 recommandations qui sont très particulières, surtout
3 les crédits majorés; là, ce sont des chiffres très
4 précis.
5 18987 M. BEAUCHAMP: On est disponibles
6 pour faire de la consultation au niveau du Comité
7 exécutif.
8 18988 LA PRÉSIDENTE: Nous vous remercions.
9 18989 Avant de partir, expliquez-moi, à la
10 page 7 de votre présentation orale, la dernière phrase
11 du deuxième paragraphe:
12 "... le Conseil doit renforcer
13 les entreprises exploitantes de
14 canaux spécialisés avant de
15 consolider les entreprises
16 généralistes."
17 18990 M. BEAUCHAMP: C'est un peu ce à quoi
18 je faisais allusion, en ce sens que... assurons-nous
19 qu'au Québec il y a assez d'entreprises de
20 communication fortes pour pouvoir se livrer une
21 concurrence à l'avantage de tout le monde avant de
22 créer des super-structures. Donc c'est dans cette
23 optique-là que... comment vous appeliez ça tantôt, la
24 constellation. Je l'ai mal compris...
25 18991 LA PRÉSIDENTE: Oui, constellation.
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1 Alors là, vous parlez...
2 18992 M. BEAUCHAMP: Je ne l'ai pas saisi
3 de cette façon-là, mais je dis que nous, notre point de
4 vue dans le dossier, c'est: définissons le rôle et
5 finançons comme il faut Radio-Canada puis que, bravo...
6 18993 LA PRÉSIDENTE: Et aussi les
7 conventionnelles.
8 18994 M. BEAUCHAMP: Les généralistes...
9 18995 LA PRÉSIDENTE: Les généralistes.
10 18996 M. BEAUCHAMP: ... à ce moment-ci,
11 dans un premier temps, ils auront des licences
12 spécialisées...
13 18997 LA PRÉSIDENTE: Privées.
14 18998 M. BEAUCHAMP: ... et là, il est
15 temps que l'autre vague sous ça puisse avoir les
16 éléments nécessaires pour bien concurrencer. C'est ça
17 qu'est l'acheminement de notre pensée, parce que nous
18 disons que, pour rencontrer les défis, c'est un système
19 équilibré de compétition qui va être à l'avantage de
20 tous, du consommateur jusqu'au producteur indépendant.
21 18999 LA PRÉSIDENTE: Nous vous remercions
22 de votre présentation, et j'espère que vous aurez un
23 bon voyage de retour à Montréal. Et peut-être que, si
24 vous ne l'avez pas fait, vous pouvez regarder la
25 présentation de Radio-Canada. Il y a des petites
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1 constellations colorées pour démontrer comment on doit
2 faire la radiodiffusion en l'an 2000. Alors vous
3 saurez de quoi on parle quand on parle de
4 constellations.
5 19000 M. BEAUCHAMP: On vous remercie
6 beaucoup.
7 19001 LA PRÉSIDENTE: Nous vous remercions.
8 Bonsoir.
9 19002 M. BEAUCHAMP: Merci beaucoup.
10 19003 M. BEAULNE: Merci.
11 19004 LA PRÉSIDENTE: Ça termine notre
12 journée. Nous reprendrons demain matin à 9 h 00. We
13 will adjourn now for the day and we will be back at
14 9:00 in the morning.
15 --- Whereupon the hearing concluded at 1755,
16 to resume on Wednesday, October 14, 1998,
17 at 0900 / L'audience est ajournée à 1755,
18 pour reprendre le mercredi 14 octobre 1998,
19 à 0900
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