ARCHIVED -  Transcript of Proceeding

TRANSCRIPT OF PROCEEDINGS BEFORE

THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

SUBJECT:

Canadian broadcasting in new media

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

February 24, 2009

Transcripts

In order to meet the requirements of the Official Languages

Act, transcripts of proceedings before the Commission will be

bilingual as to their covers, the listing of the CRTC members

and staff attending the public hearings, and the Table of

Contents.

However, the aforementioned publication is the recorded

verbatim transcript and, as such, is taped and transcribed in

either of the official languages, depending on the language

spoken by the participant at the public hearing.

Canadian Radio-television and

Telecommunications Commission

Transcript

Canadian broadcasting in new media

BEFORE:

Konrad von Finckenstein   Chairperson

Michel Arpin   Commissioner

Len Katz   Commissioner

Rita Cugini   Commissioner

Michel Morin   Commissioner

Timothy Denton   Commissioner

Louise Poirier   Commissioner

Stephen Simpson   Commissioner

ALSO PRESENT:

Cindy Ventura   Secretary

Chris Seidl   Hearing Managers

Steven Harroun   

Regan Morris   Legal Counsel

HELD AT:

Conference Centre

Outaouais Room

140 Promenade du Portage

Gatineau, Quebec

February 24, 2009

- iv -

TABLE OF CONTENTS

   PAGE / PARA

PRESENTATION BY:

CFTPA   675 / 3587

Documentary Organization of Canada   754 / 4048

Writers Guild of Canada   786 / 4249

Songwriters Association of Canada   826 / 4500

Campaign for Democratic Media   864 / 4729

Regroupement des producteurs multimédia   900 / 4910

Gatineau, Quebec / Gatineau (Québec)

--- Upon resuming on Tuesday, February 24, 2009 at 0900

3581   THE SECRETARY: Thank you, Mr. Chairman and good morning.

3582   For the record, we wish to inform you that Friends of Canadian Broadcasting have submitted their Friends Supported New Media Study which will be added to the public record of this proceeding. Copies are available in the examination room.

3583   Now we will proceed with Item 18 on the Agenda, which is the presentation by the CFTPA.

3584   Appearing for the CFTPA is Mr. Guy Mayson.

3585   Please introduce your colleagues, after which you will have 15 minutes for your presentation.

3586   Mr. Mayson...?

PRESENTATION / PRÉSENTATION

3587   MR. MAYSON: Good morning, Mr. Chair, Vice Chairs, Commissioners, CRTC staff.

3588   I would like to start off first of all with a major thank you to all of you for attending our conference last week. I trust that you found it useful and invigorating and challenging and stimulating.

3589   I also wanted to pass on a major thank you for suspending the hearing during that time. It was much, much appreciated.

3590   My name is Guy Mayson, I am the President and CEO of the Canadian Film and Television Production Association. The CFTPA represents almost 400 companies that create, finance, produce, distribute and market feature films, television programs and interactive content for new digital platforms. Through the content we produce, independent producers help foster Canadian cultural choices and reflect the rich diversity of this country. As such, the independent production sector plays a vital role in the Canadian broadcasting system as recognized in the Broadcasting Act.

3591   I am pleased to have with me today two of our leading television and new media producer members.

3592   To my far right is Barbara Jones, President and Executive Producer of SailorJones Media of Owen Sound, Ontario, a broadcast and new media consultant and leading producer of interactive content and services.

3593   Barbara has 25 years of media experience in radio, television and new media in such diverse areas as reporting, TV network program planning, production and scheduling, audience and market research, international cross-platform projects and, yes, even preparing CRTC applications. She wrote and produced the award-winning 11 language documentary "Fundamental Freedoms"and produced an extensive multilingual companion website charterofrights.ca.

3594   Next to Barbara, and to my immediate right, is Mark Bishop, partner and producer of marblemedia, an award-winning independent multiplatform content creation company based in Toronto.

3595   In 2008 marblemedia received the Company of the Year Award and Mark was named Producer of the Year as part of the Canadian New Media Awards. Marblemedia is the producer of such well-known and innovative multiplatform projects as "This is Daniel Cook", "This is Emily Yeung" and "deafplanet.com", the world's first television and online series in American sign language.

3596   CFTPA staff with me today are, to my far left John Barrack, National Executive Vice President and counsel; and to my immediate left Mario Mota, Vice President Broadcasting Policy and Regulatory Affairs.

3597   In addition, in the row behind us we have Reynolds Mastin, the CFTPA's Associate Counsel; as well as Stuart Jack and Kurt Eby from Nordicity Group. We have asked Stuart and Kurt to join us in case the Commission has any detailed questions regarding the study Nordicity conducted for us that was appended to our written submission.

3598   Before we get into the substance of our presentation we would like to play a short video clip to give you a snapshot of some of the new media activities CFTPA members are engaged in. The clip is of the three nominations that were up for best converged new media project at the 2009 CFTPA Indie Awards held last week as part of our "Prime Time in Ottawa" conference. I know some of you were there.

3599   Please roll the clip.

--- Video presentation

3600   MR. MAYSON: For those who don't know, the winner was Reel Girls Media's Anash Interactive project.

3601   At the outset the CFTPA would like to commend the CRTC for its foresight in undertaking a review of Canadian broadcasting and new media. We see this review as one essential piece in a much larger discussion about Canada's overall content strategy.

3602   More specifically, this proceeding can ensure Canada becomes globally competitive in the digital space so that Canadians can benefit from a rich range of content choices in that space. This will enable us to take a wide range of content to Canadians and to bring Canada to the world.

3603   The Commission's decision 10 years ago to exempt new media from regulation was the right one at that time. Today, however, the landscape has been radically transformed and we believe it's entirely appropriate to ask whether the current approach is still the right one.

3604   We are truly a crossroads. Rapidly developing technology and changing viewer habits are altering the broadcasting landscape and indeed redefining what constitutes a broadcaster.

3605   While new media poses challenges for all players, the CFTPA sees new media as a tremendous opportunity, not a threat.

3606   Canadian broadcasting in new media offers a promise of unprecedented economic and cultural dividends and therefore the CFTPA urges the Commission to embrace a forward-looking vision for broadcasting and new media that puts Canadian content at the centre and embraces the economic and cultural opportunities that new media offers.

3607   While the pace of change is relentless, the key policy questions underpinning this review remained constant. They include the following:

3608   Does broadcasting and new media today have the potential to contribute materially to implementing the policy objectives of the Broadcasting Act? We believe the answer is yes.

3609   Is broadcasting in new media currently contributing sufficiently to meeting those objectives? In particular, can Canadians adequately see themselves in high quality content on the second and third screens and do they have appropriate access to the system? In a medium increasingly dominated by foreign and primarily U.S. content answer is clearly no. Much more needs to be done.

3610   In a globally connected world if Canadian content does not occupy the field, foreign content will. In short, the window of opportunity for Canadian new media broadcasting is rapidly closing.

3611   In our view, if we are to fully achieve the objectives of the Broadcasting Act we need strong, well-capitalized Canadian companies able to develop, produce and promote a critical mass of Canadian new media content.

3612   Canadian independent producers are creating world-class new media content, winning awards and attracting audiences here and abroad. We are able to take up this challenge, but we face significant hurdles in the development, financing and promotion of our work. Canada's independent producers have the talent, business acumen and global reputation to lead content creation over all platforms. However, in order to succeed, Canada needs a coordinated digital media strategy on a 21st-century policy toolkit.

3613   Mark...?

3614   MR. BISHOP: The CFTPA believes now is the time for light handed yet decisive action to ensure that in the new media environment Canadians continue to have opportunities to participate in and enjoy a distinctly Canadian broadcasting system.

3615   We believe that the Commission should continue to examine new media and mobile broadcasting undertakings from regulation, but the criteria for exemption should be broadened with a goal toward promoting Canadian content choices online and on mobile devices.

3616   Within that context, we have put forward a series of strategic recommendations focused on the following broad objectives:

3617   Stimulating investment in the production and promotion of a robust supply of high-quality Canadian new media broadcasting content;

3618   encouraging exploitation of Canadian multiplatform digital media content by all players through greater contractual certainty and parity underpinned by terms of trade;

3619   building on the value that independent producers bring to the system in developing, innovating and creating diverse Canadian new media broadcasting content.

3620   We believe that one of the best ways to ensure Canadians can see themselves in the global, unregulated new media environment is to ensure that there is a robust supply of professional, high quality, Canadian choices that are readily available and accessible.

3621   Some say that anything other than a hands-off regulatory approach to broadcasting in new media will stifle innovation and creativity. In our view, the opposite is true. Tangible economic stimulus is critical to create the conditions from which Canadian innovation, creativity and culture can thrive. Without it, we risk Canadian content being further marginalized in the rapidly expanding landscape.

3622   In order to create a critical mass of high-quality Canadian new media broadcasting content, additional funds are needed. As in traditional television broadcasting, Canada's relatively small marketplace will not support the kind of massive venture capital and corporate investment that underpins U.S. multiplatform content.

3623   Current Canadian funding streams are very important, but too small to develop a critical mass of Canadian new media content. New funding for multiplatform production will enable producers to provide a significant quantity of compelling Canadian content. This content will be made available for distribution across a variety of screens, will unlock greater value in television content and achieve important economies of scale.

3624   In addition, funding for direct to new media broadcasting content would allow Canadian independent producers to innovate and compete in this growing but difficult to finance category.

3625   The CRTC has a role to play together with the federal and provincial governments in finding new sources of funding. This hearing provides a tremendous first step in developing a much larger overall Canadian content strategy.

3626   Mario...?

3627   MR. MOTA: Consumers, broadcasters, distributors and content creators alike are increasingly utilizing the internet today as an extended broadcasting platform. The result is an integrated system.

3628   For the most part, large broadcasting distribution undertakings and telcos are also internet service providers and wireless service providers. They have acknowledged publicly that their internet services in particular have become viable alternatives for the distribution and consumption of video content.

3629   These large communications conglomerates are benefiting greatly and providing conduits for Canadians to access new media broadcasting content. While it is true that they have spent heavily to build out their networks, they are profiting greatly from these activities.

3630   We believe, therefore, that large ISPs and incumbent WSPs should be required to contribute a small percentage of their gross revenues derived from broadcasting activities to an independently administered fund that is mandated to support the development, creation and promotion of high-quality Canadian new media broadcasting content produced by independent producers.

3631   Let us be clear about our proposal. It would apply to only the largest facilities-based ISPs and the incumbent WSPs. This mirrors the CRTC's flexible contribution approach applicable to BDUs, that is, only the largest BDUs are required to contribute.

3632   Canadians support the concept of ISPs and WSPs contributing to Canadian new media content creation according to the results of a survey we commissioned along with our union and guild partners last year.

3633   Professor Eli Noam, in his report "TV or Not TV: Three Screens, One Regulation?" and many parties to this proceeding also support this proposal.

3634   The ISPs have questioned the CRTC's jurisdiction to impose such a contribution regime on them under the Broadcasting Act. We respectfully disagree with their position. As part of our written submission we submitted a legal opinion from McCarthy Tétrault that argues that the Commission indeed has the jurisdiction.

3635   We also commissioned economic consulting firm Nordicity Group to undertake an analysis of potential impacts of such a contribution regime. As Nordicity concludes, the impact on ISPs and WSPs and/or their customers of a modest contribution to Canadian new media content production would be negligible, if any, yet the results for the system and Canadians could be exponential.

3636   John...?

3637   MR. BARRACK: Thanks, Mario.

3638   The relationship between broadcasters and independent producers is one of partnership. That partnership has, however, become severely and increasingly unbalanced. Nowhere is this imbalance more evident than the area of digital rates, a point we can illustrate further in the question/answer session, if you wish. A key way to restore balance in this partnership is through fair and equitable terms of trade.

3639   Mr. Chairman, as you have stated on numerous occasions, terms of trade agreements between broadcasters and the CFTPA will provide the stability and clarity necessary to help unlock full exploitation of television content across all platforms.

3640   The Commission has stated that the terms of trade should provide a mechanism for establishing a fair valuation of new media rights, and ensuring their equitable exploitation by broadcasters and independent producers.

3641   In our view, fair and equitable terms of trade that recognize the value of and provide appropriate compensation for multi-platform production are integral to stimulating greater new media content creation across all platforms.

3642   More specifically, these terms should squarely address the issue of exploitation of new media rights, and must, at their core, fundamentally respect producer ownership of those rights.

3643   Independent producers are the copyright owners of traditional broadcast content, and the rights holders to all further exploitation.

3644   However, they are increasingly losing these rights to broadcasters, without compensation, during initial licence negotiations for traditional broadcast windows.

3645   The "Changing Channels Report" commissioned by the CRTC for this proceeding noted that broadcasters all too often obtain new media platform rights and then fail to exploit them.

3646   When broadcasters demand domestic new media rights and fail to exploit them, the entire production and creative industries suffer.

3647   Furthermore, by tying up digital rights we deny Canadians and others around the world access to Canadian choices on new media platforms. It is a missed opportunity to fill the new digital shelf space with distinctly Canadian product.

3648   Accordingly, the CFTPA is of the view that terms of trade agreements with Canadian broadcasters must include a "use it or lose it" provision that would apply to broadcaster acquisitions of new media rights. Such a provision would provide that, where a broadcaster has not exploited a given new media right within a reasonable period of time, such as 12 months, the right would automatically revert to the independent producer.

3649   Furthermore, burdening producers with the costs of financing new media content for exploitation by others without appropriate compensation is not sustainable. It will ultimately put the production of high-quality Canadian content on all screens in jeopardy.

3650   Therefore, we urge the Commission to continue to reiterate its expectation that broadcasters conclude terms of trade agreements with the CFTPA as a matter of priority.

3651   Barbara...

3652   MS JONES: Canadian producers are the architects of award-winning and innovative content. We are key economic engines in the multi-platform environment. We create value in the digital marketplace by merging creativity with technology to develop, finance and market Canadian content. Often this is on a global scale.

3653   Canada has many examples of new media talent and entrepreneurship. One such example is the Emmy-award winning "RegenesisTv.com" from Xenophile Media and Shaftsbury Films. Their work, and the work of many other interactive producers, has earned Canada the reputation as a leader in the global new media industry.

3654   Independent producers come from all regions of Canada. We represent an array of editorial perspectives, cultural and linguistic heritage. We are catalysts of diversity in new media broadcasting, and we are important vehicles for furthering key objectives of the Broadcasting Act.

3655   New production models require new resources in order to embrace the transition to multi-platform content production. The production models require advanced capital equipment and technology, appropriate human resources, training and technical upgrading. We need to transfer and store content in multiple formats, and forge new distribution and development partnerships globally.

3656   Independent producers must have the means to negotiate this complex transition successfully.

3657   Adequate funding for the creation and promotion of independently produced Canadian new media broadcasting content, providing appropriate shelf space for that content, and fair and equitable terms of trade are all essential to the overall health of our independent production companies and the thousands of jobs we support.

3658   Guy...

3659   MR. MAYSON: The CRTC's actions in supporting Canadian broadcasting in new media are critical. In our view, it is clear that broadcasting in new media has arrived, and it has exciting potential to contribute to the Canadian broadcasting system.

3660   The light-handed approach that we have outlined, while recognizing the global and unregulated nature of the internet, will help build a strong framework for the healthy growth of Canadian innovation, jobs, and long-term industrial prosperity.

3661   Most importantly, it will ensure that at a time when the traditional broadcasting landscape is changing, Canadians will continue to have access to Canadian content choices via new media.

3662   We have tried to address in a broad way most of the issues that the Commission asked parties to address in their oral remarks at this public hearing. We look forward to answering any questions that you may have on these and other issues.

3663   Thank you for your attention.

3664   THE CHAIRPERSON: Thank you for your presentation.

3665   I have a whole host of questions for you. Let me organize them first of all.

3666   You are suggesting that we should adopt a flexible, forward-looking definition of broadcasting. I don't think you offer one. At least, I didn't see one in your presentation.

3667   Do you have one?

3668   MR. MAYSON: I think it's a question where the landscape is changing so quickly that the flexible approach is required in terms of the content that is made available, who is providing it, and finding the appropriate structural mechanisms to help support that content.

3669   MR. MOTA: Mr. Chairman, the definition that the Commission put in the Public Notice is certainly one that we support. It is certainly a starting point.

3670   I guess the only concern we had, and I think we raised it in our written submission, was the issue of interactivity, where the user can customize the content. The Commission wasn't so concerned about that.

3671   From our perspective, the point we were trying to make in the written submission was, let's try not to box ourselves in with a definition when this environment is changing so rapidly.

3672   For example, there is a lot of user customization and interactivity, and we wouldn't want to see those kinds of innovation and creativity be constrained with a tight definition.

3673   We will certainly give a bit more thought to a definition, and we could certainly give that in our reply comments, if you wish.

3674   THE CHAIRPERSON: Yes, I would appreciate that. When we make rules, we have to see who they apply to, so one of the things we have to define is who is the broadcaster and what is broadcasting, and telling me a concept is of limited help. I actually have to spell it out, and actually spelling it out is not that easy.

3675   So any help you could give us would be appreciated.

3676   You mentioned the crucial role of independent broadcasters in new media. Explain that to me, because it is not, necessarily, that you can't have healthy and expanding new media and you need independent producers.

3677   You make a big point about Canada being a small market and that economies of scale are, therefore, obviously important.

3678   Some people have argued that you can have viable new media, but you don't necessarily need to have independent producers. If you had five huge broadcasting undertakings, let's say, which produce a lot of new media, that could have the same effect.

3679   Obviously you disagree, and I would like you to explain to me why you feel that independent production is a key element of new media.

3680   MR. MAYSON: I will start that one off, it's a good question, and then I will ask my producer colleagues to jump in as well.

3681   I think, in our view, independent producers are able to bring the diversity to the system that is required. They are able to bring the creativity, the financing and the talent that is required for quality programming to be created. That has been proven, I think, in a more traditional broadcast format.

3682   It really comes down to choices for Canadians, and we truly believe that independent producers are the best vehicle for doing that.

3683   You should probably comment a bit on your own creative process, Mark.

3684   MR. BISHOP: In terms of the independent production community in new media production, we really have an opportunity, as small, nimble organizations, to be innovative in our modes and methods of storytelling.

3685   Our creative process on interactive is a very different creative process than that which we have on our television productions. We have done projects in the past, the one that was mentioned before, "Deafplanet.com", which, again, was a grassroots interactive concept, which developed over time to actually spin back to a television production.

3686   I think that is an interesting example of the creative development process that exists within the independent production community to be able to grow and develop ideas.

3687   MS JONES: As an adjunct to that, I think, as Mark said, that new media is able to address unique audiences. I think that reaching Canadian audiences is becoming, to our broadcast partners, a difficult challenge, and one of the opportunities that new media brings is, in some cases, cost effectiveness, to be able to reach local and niche markets in a relevant manner that the other scale --

3688   To your point about being nimble, there are opportunities for new media independent producers to get into those communities in ways that some of our broadcast partners are not able to. It just wouldn't be efficient for them to do so.

3689   THE CHAIRPERSON: Does it go so far as -- could one say that there is a trade-off between economies of scale and creativity and innovation, and the more you have economies of scale and large -- et cetera -- in effect, the more you reduce the likelihood of innovation and you stifle creativity?

3690   Is there a direct relationship between the two?

3691   MS JONES: I would say yes; however, it also depends on individual business objectives. To say that you can't have one without the other would be a little far-reaching.

3692   But, certainly, we see a lot of creativity, and the ability to be able to react to audience opportunities -- and, certainly, as I suspect my colleagues in the "dot" group will attest to, with new media you are able to get a story and get it quickly, if it's something that is breaking. Whereas, in the development cycles for a television project, and the time required to complete a deal, you may have missed that opportunity that, in the land of factual programming, might not be there when the broadcast deal is completed.

3693   MR. BARRACK: If I could comment, Mr. Chairman, at the other end of the spectrum there is also the international aspect. Independent producers are uniquely positioned to partner internationally in a way that can take a lot of this content and bring it to the world.

3694   That is a real opportunity that our domestic broadcasters don't have. We are used to working in international partnerships, and that allows for a much more creative, much more robust type of content, potentially, which brings Canadian aspects to others.

3695   MR. MAYSON: If I could add one thing, Mr. Chairman, I think, in the broader sense, and what is really exciting about the new world that we are all sitting here talking about for independent producers is the huge potential for opportunity to produce in a different way, and to distribute in different ways, outside the model they have normally been working with.

3696   THE CHAIRPERSON: In your submission this morning you made the point that Canadian broadcasters are not putting enough shows online, and that takes you directly to your terms of trade, which you are very keen to see being put in place, as are we. You suggest that you put in there a "use it or lose it" clause, so that, in effect, by default, if Canadian broadcasters are not putting more shows online, the independent producer has the option.

3697   That begs two questions. First of all, why are Canadian broadcasters not exploiting it? It should be in their best interests to do it.

3698   Secondly, how would this actually work? What constitutes usage, so that the default would kick in and an independent producer would have the right to market it himself or herself?

3699   MR. MAYSON: I will let John expand on this, but I think, in a very general way, to your first question, the larger problem is the desire on the broadcaster's part to tie up the rights without necessarily investing any money in exploiting them.

3700   The desire is somewhat a control, so that no one else can have it, in some ways, and not do anything with it themselves.

3701   THE CHAIRPERSON: But, Mr. Mayson, you are suggesting irrational behaviour.

--- Laughter

3702   THE CHAIRPERSON: If they think there is value, they tie up these rights, but then they don't exploit them. I find it hard to believe that our broadcasters would do that.

3703   MR. MAYSON: I am not suggesting any malice here. I think it is a matter of -- they have X amount of money to put into the acquisition of the product. They want to distribute it in a certain way. They want to use it in two or three windows. Where there is perhaps additional investment required, they are less eager to use that investment. They are eager to hang onto the rights, though, and perhaps use the product down the road.

3704   MR. BARRACK: Just to expand -- I will take both components of your question in turn, but I think that -- is it irrational behaviour? Let's consider that for a second.

3705   It is our goal, in all circumstances where we have a broadcast partner, that we want them to use it. It is in our interests to have them use it. Our shows are most successful when they are seen by the greatest number, on the greatest number of platforms.

3706   There, frankly, has not been a strategy -- and it's unique broadcaster-to-broadcaster -- to exploit all of these rights, necessarily. But there is an absolute desire to gillnet them.

3707   When you go into a contract negotiation now, it is about: We want all of these rights.

3708   It is not a discussion about plan, in terms of execution, how this is going to go.

3709   Really, this "use it or lose it" clause -- the motivation is, we want them to use it. We want to see a plan.

3710   To the second part of your question, what constitutes usage is some kind of real, tangible use of those rights. It doesn't just park them on the shelf or, more importantly, doesn't just try to add book value by putting these -- what's been happening and it's not irrational behaviour, is having these rights on the books is an asset to those broadcasters.

3711   So I think -- I think Mark in particular has a very good example here in terms of what's involved and how he has been able to make use and not.

3712   So Mark may --

3713   MR. BISHOP: Yeah, to John's point from earlier, I mean, I think so much of it really is about the partnership that the independent producer has with the broadcaster. And there are certain examples that are happening now of Canadian broadcasters who are actively working to ensure that the content is exploited on all the platforms.

3714   But there are other cases where we have actually seen a shift within a broadcaster, and one particular example with a kid series we produced many years ago called "This is Daniel Cook" which we have made available on every platform under the sun. In fact, if you visit our website you can see how it's available for download and, you know, so much of it has been partnerships with our broadcasters to enable that exploitation, to ensure that the content is seen on as many platforms as possible both in terms of reaching audiences and in terms of generating revenue for all parties.

3715   But then, unfortunately, what happens as tides have turned and, you know, as John was mentioning, when we went to do a spin-off series to that project, what eventually ends up happening is there becomes a shift during your negotiation process with the broadcaster to be able to hold onto as many of those rights as possible. And unfortunately what that does is it really locks up those rights to online distribution of your content as one example, to not be able to fully exploit those rights.

3716   So I guess for us it really is about striking that balance and having a partnership to ensure that as those rights are taken or included as part of the broadcast deal, as John said, is that we really want to find a way to ensure that the rights are exploited by the best party possible. Oftentimes it will be the broadcaster who is the best but not necessarily.

3717   THE CHAIRPERSON: Yeah, I guess it's the lawyer in me. "Use it" is a fairly loose term, you know. If you are now in contract negotiation with somebody does that constitute use or do you actually have to have a signed contract or what exactly do you have in mind here now? I think that you need to spell this out in far greater detail so it's clear what a broadcaster has to do not to lose that right.

3718   MR. BISHOP: We can provide examples of that because again we have actually done, you know, a very similar deal to this with other Canadian broadcasters to actually include a performance guarantee to ensure that the rights are fully exploited on multiple platforms within a specified time period.

3719   MR. BARRACK: And again, we will respond to this more formally at the written stage but this is something that in our negotiations with conventional broadcasters has been squarely on the table. We are not -- there is a degree of specificity. I will admit that for this presentation we are not trying to get into the minutia of our negotiations but I would be very happy to spell that out in greater detail.

3720   THE CHAIRPERSON: Am I overoptimistic in expecting that when we go in for licence renewals in April you will be able to table a draft terms of trade agreement with the various broadcasters?

3721   MR. MAYSON: Certainly -- I will let John comment to you because we are right in the middle of this right now. We are certainly still optimistic. We have reached a bit of an impasse but you reach impasses in discussions and negotiations and we may need some encouragement from the Commission before that time.

3722   THE CHAIRPERSON: Well, I think I have -- I have said it on many occasions but I will gladly repeat it here. I expect to see something like that when we talk. It takes two to tango so I expect both you and the broadcasters will do your best efforts to reach such agreement.

3723   MR. MAYSON: Right. And just may I say we very much appreciate your efforts on that point.

3724   THE CHAIRPERSON: Thank you.

3725   Now, in terms of contribution you make -- you use the words modest contribution by ISPs and WSPs as required. I presume this is code for the Peter Grant proposal?

3726   MR. MAYSON: I will let Mario comment but I think we did have a hard look at this and I think we were -- in our own submission we were a little careful about projecting or suggesting an actual number, but I think the analysis provided by Mr. Grant to us was compelling.

3727   Do you want to add on that?

3728   MR. MOTA: Certainly.

3729   The starting point was this 2.5 percent from Mr. Grant but, as you know, the Commission increased the BDU contribution to 6 percent. So if you are taking the methodology we used in the Nordicity analysis then the high end is sort of 3 now.

3730   In the Nordicity analysis we asked them to model out a 2 to 3 percent rate and what that would generate, and looking at what kind of impact that might have on the ISPs. So we haven't come up with a firm number but if we think we are going to try to achieve something we would probably lean towards the high end, so the 3 percent.

3731   And the reason why we say that is because when you look at some of the oversubscription that we see in the funding envelopes that currently exist or the funds that currently exist to support new media -- that Telefilm administer the Canada New Media Fund. We have the Bell Fund and we have the small digital pilot media project from Telefilm. It's about $26.5 million today but we do know the Bell Fund is oversubscribed by a 3:1 ratio. So for every three quality applications they receive they can only fund one of them.

3732   So when you start extrapolating that and you start doing the numbers, then these are the kinds of dollars we would need in the system, injection of new dollars in the system to meet the demand that's out there for good quality projects.

3733   THE CHAIRPERSON: Now, we have heard from various people saying if you decide for a fund it should be a segregated fund, only eligible for new media projects, and the other people saying this is a distinction, which doesn't make sense because most of the content is high quality content which is really -- and the primary use is television or film and then you repurpose it for new media, et cetera -- so making a separation doesn't make sense. And if you make this money available so do the CTF or something so that it basically can be dual purpose.

3734   I gather you are more of the former. You more want a specially dedicated fund, and maybe you can explain to me why -- what the other people have said before us -- see it doesn't make sense -- or why would you would advocate a specially dedicated fund rather than, let's say, putting it into the CTF or Telefilm Canada and saying it's available for both?

3735   MR. BISHOP: I will let my producer colleagues answer that one as well.

3736   There are some existing funds funding new media projects and you know they are just generally, I think, well administered. We would see the fund, I think, being as broad based as possible, funding both projects that have a broadcast base in a traditional way but also uniquely produced for non-broadcasts and for different forms of new media communication.

3737   And so I --

3738   THE CHAIRPERSON: You can't have both. You can't be --

3739   MR. BISHOP: Well, I would --

3740   THE CHAIRPERSON: I mean either you are a virgin or you are not.

--- Laughter

3741   THE CHAIRPERSON: I mean, I don't understand how you are saying here --

3742   MR. BISHOP: Should we answer that?

--- Laughter

3743   MR. BISHOP: Perhaps I will take that.

3744   One example, if you were to look at one of the funds Mario mentioned, the Telefilm Canada New Media Fund as an example, that is a fund that actually addresses both sides of what you are discussing. It actually addresses cross-platform content, i.e. web content in conjunction with the television broadcast, but it also addresses standalone interactive projects which I think are really key for the independent production sector and key for innovation. And that can be web standalone, mobile, video games, any emerging interactive platforms as they become available.

3745   And I think, again, that's really important both for production but what a fund like that also offers is the development, which is really key because so much of this is early days of innovation. So it addresses development, production and, actually, one of the other key elements which we touched on in the presentation which is the promotion of the interactive content and, really, those three streams crossing over both of those different areas.

3746   THE CHAIRPERSON: So you are in favour then for a mixed fund?

3747   MR. BISHOP: For a mixed fund.

3748   THE CHAIRPERSON: Yeah. I'm sorry. In reading yours I thought that you meant it to be dedicated purely for new media.

3749   MS JONES: And I would just like to add to Mark's comment regarding the Canada New Media Fund, if one is primarily a new media producer with a project that is attached to a television program and perhaps the broadcaster hasn't financially contributed to that project it actually works against you when you are applying for funds with the Canada New Media Fund.

3750   Where we recognize the importance of the association of television and new media products together as in the Bell Fund and the opportunity there, the Canada New Media Fund you are penalized in the sense that if Mark is my broadcaster and he is only able for reasons of his own company's strategy to write a letter of support, I can then not go to the Canada New Media Fund to get support because my broadcaster has not provided that financial support.

3751   So we recognize the opportunity if, as an independent producer, if you have a fund that's dedicated to independent new media production attached to a television program but also not attached to television programming we will have a lot more innovation and entrepreneurship and company building for Canada to be playing on that global scale.

3752   THE CHAIRPERSON: Okay. If there is a fund of any kind or any contribution then obviously the question is, how do we determine the size of the fund and what is -- and as you know, the basic argument which you repeat in your submission and which is a mix, is that the ISPs and WSPs have in effect become partially BDUs. They are distributing broadcasting content. Broadcasting content nowadays is not only watched over television but also over computers and mobile devices. Now, how do we turn -- that takes us to the question of measurements. I took the liberty at your convention to visit your stand on ISAN in Tokyo which you administer.

3753   Madam Secretary, would you come here, please, and put one of these on the record? And give one of them to Mr. Mayson because I want to ask him about this -- and I warned him beforehand that I was going to do this.

--- Pause

3754   THE CHAIRPERSON: Because clearly it's going to be key for us to know what is happening in the new media, whether delivery is wireless or by internet, how much of it is actually what we would consider broadcasting whatever definition we have.

3755   And until this hearing I did not know that there is such a thing as ISAN, or I-S-A-N, International Senate of Audiovisual Number, which you administer for Canada. I gather it's an international standardization organization and you are the Canadian administrator for Canada.

3756   First of all, is that the only one or is there more than one of these methods? Are there competing systems or is ISAN the one and only universal one for the whole world?

3757   MR. MAYSON: I can sit here and pretend that I know all about this but I will let Mario and John speak to it. But it is an international system and I would say usually promising for tracking and identifying and measuring ultimately all audiovisual work.

3758   But I will let Mario and John comment and answer your questions, Mr. Chair.

3759   MR. BARRACK: And in turn I will also ultimately turn to Mark and Barbara to comment.

3760   There are currently different private watermarking and other tracking systems that allow for private measurement but they are not across the board. And what ISAN offers is a neutral number that effectively, if it were made mandatory, would be able to track all content.

3761   The difficulty with ISAN right now is uptake. There is a very limited uptake both in Canada and internationally because there hasn't been a requirement that all content effectively carry this number.

3762   THE CHAIRPERSON: Okay. So it is voluntary then?

3763   MR. BARRACK: It is voluntary at this point, yeah.

3764   THE CHAIRPERSON: We are interested clearly in quality professionals that wanted -- for lack of a better word -- Canadian content. We are not interested in user-generated content.

3765   MR. BARRACK: Yes.

3766   THE CHAIRPERSON: Are there Canadian producers, members of your --

3767   MR. BARRACK: Yes.

3768   THE CHAIRPERSON: -- organization who had produced product which is distributed either by internet or by wireless that doesn't carry an ISAN number?

3769   MR. BARRACK: Yes, there is, and the difficulty -- here is the regime if I can set it out very quickly.

3770   Under the union and guild agreements there is a requirement that content carry an ISAN number. Bluntly, that has not been something that has been administered terribly efficiently.

3771   THE CHAIRPERSON: Why is that? Presumably, you charge for putting an ISAN number on it. Is that the idea?

3772   MR. BARRACK: We do.

3773   THE CHAIRPERSON: And your charges are outrageous; is that the --

3774   MR. BARRACK: No, it's $35.00.

3775   MR. MOTA: It's quite new.

3776   MR. BARRACK: It is $35.00, and it's very new.

3777   The difficulty -- the difficulty is that beyond that there has not been a requirement really at the broadcast side of the equation. And so there is a number of organizations that request the number but that the level of requirement is not there.

3778   MR. MOTA: Mr. Chairman, we pulled some stats because we were anticipating this question. The Vice-Chair, I know, was asking the APFTQ this last week.

3779   I think it is early days. It's basically a year -- not even a year in since we started issuing numbers. We have 125 clients registered so far. 69 percent of them are CFTPA members, so largely the producers are taking out the numbers. So we also have post-production facilities, a provincial guild. Only one broadcaster has taken out numbers and that's certainly a bottle neck, distributors and SOCAN as well and the training institution.

3780   And there are a number of people -- John mentioned the collective agreements. The CRTC is also now requiring or requesting an ISAN number, TeleFilm, the CTF, CAVCO, a number of the independent production funds, SOCAN I mentioned.

3781   So, it's voluntary and that's where the numbers are varied.

3782   THE CHAIRPERSON: Surely this issue is very easily solvable.

3783   Should there be a fund and you could say that eligibility to the fund depends on your being a signed up member of ISAN and registering your product with ISAN.

3784   I mean, it would be a self-fulfilling prophecy presumably, especially when you are telling me it is $35 registration.

3785   MR. MAYSON: M'hmm. Yes, I would say that would be actually a major step forward for ISAN, Mr. Chairman, yeah.

3786   THE CHAIRPERSON: Okay. Now, the ISAN indicates what -- if we review on the outline -- or handout that I gave you, if you look to page -- unfortunately the pages are not numbered -- the one that has ISAN Work Preview on top, and so it seems to be a print-out of the information that is...

3787   I'm sorry, let me --

3788   MR. MAYSON: ISAN Work Preview, yes, here we go.

3789   THE CHAIRPERSON: Actually it is page 8.

3790   MR. MAYSON: Here we go. Page 7, page 8. Okay, yes.

3791   THE CHAIRPERSON: You see the print-out there.

3792   MR. MAYSON: Yeah.

3793   THE CHAIRPERSON: And at the top it says, ISAN Work Preview. If I understand it, this is the information that appears on the watermark of it, if you take the watermark and print it out this is what it will tell you. Is that correct?

3794   MR. MAYSON: That's correct. That's right.

3795   THE CHAIRPERSON: It shows as indication, country, United States on the example there.

3796   When it shows in Canada, who would that be, would that be a Canadian producer or, for instance, a lot of films and television is filmed in Vancouver or Toronto but for Americans. Would they show up on here as Canada or U.S.?

3797   MR. BARRACK: The company taking out the number and if it in this case were the independent producer, the Canadian producer, regardless of whether it was sold to, for example, a Canadian outlet or even licensed, would still be the Canadian number. So, the Canadian root number.

3798   And then you have, if I might go to the next step, a series of version -- version codes and those version codes are particularly helpful in the new media context because they allow for subsets or evolutions of the root program.

3799   THE CHAIRPERSON: Sorry, you lost me. You have got to slow.

3800   What is the version code here?

3801   MR. BARRACK: Pardon me, sorry?

3802   THE CHAIRPERSON: You said there are version codes.

3803   MR. BARRACK: There are -- beyond what appears in this -- and I'm sorry, I'm not immediately familiar with this -- there are sub -- so, there's a root number that attaches to the project which would identify the name of the producer and the name of the project.

3804   There may be various versions of that program or evolutions of that program that would then have a version number, so that we could not only track the initial program but subsequent evolutions of that program, all tracking back to the Canadian company.

3805   THE CHAIRPERSON: But if I understood your earlier answer, it will show that this was produced in Canada.

3806   MR. BARRACK: Yes.

3807   THE CHAIRPERSON: It may very well have been produced for American television or American film and just filmed in Canada?

3808   MR. BARRACK: No. In that case it would be -- that would not be -- we wouldn't own the copyright, effectively. So, it would not be the Canadian company taking out the ISAN number. In a service production environment it would be a U.S. company taking out that number.

3809   THE CHAIRPERSON: So, building on that grosso modo, this ISAN number when it says, country of -- what it says, country of reference, when it says Canada, it is a Canadian production?

3810   MR. BARRACK: Yes.

3811   THE CHAIRPERSON: It may not measure up to CAVCO standards, but at least we will know it was made in Canada by a Canadian production company.

3812   MR. BARRACK: Yes, that's right.

3813   THE CHAIRPERSON: And is there anything on this system -- back onto that, that gives me any more information as to, in effect, whether it has received funding from anybody, from CFT or somebody, whether it measures up to CAVCO standing or nothing?

3814   MR. BARRACK: No, it does not.

3815   THE CHAIRPERSON: But at least I have now one measurement which before I didn't have. If I go to Rogers and I say, look at the top as an example, all the traffic that goes over your Internet, measure how many have ISAN -- tell me how many have ISAN numbers and how many of those ISAN numbers have Canada as the country of reference.

3816   MR. BARRACK: Yes.

3817   THE CHAIRPERSON: Then from that I could extrapolate with a certain amount of precision that of your traffic 20 percent, let's say for argument sake, bears the ISAN reference number, so 20 percent of your profit of your traffic is actually the equivalent of distributing Canadian broadcasting?

3818   MR. BARRACK: Yes.

3819   THE CHAIRPERSON: I mean, it's rough.

3820   MR. BARRACK: It's very rough. I mean, that's fair.

3821   THE CHAIRPERSON: But at least, I mean, you know we put out as one of our key issues measurement and nobody knows what is out there, nobody knows the total and nobody knows the Canadian component.

3822   MR. BARRACK: Yeah.

3823   THE CHAIRPERSON: It seems to me is this at least an approximation of the Canadian component of broadcasting that goes over the Internet?

3824   MR. BARRACK: And the only point I would emphasize is that in order to have -- to get a higher level of granularity, Mr. Chairman, it would need to be made mandatory across the board so that we really do track it.

3825   THE CHAIRPERSON: M'hmm. But you as a Canadian member of ISAN --

3826   MR. BARRACK: Yes.

3827   THE CHAIRPERSON: -- do you have the ability to further particularize it, or are there fields here that are empty that you could ask the Canadian registrants to fill that would help us in the future?

3828   MR. BARRACK: There is an opportunity for expanded information. I would have to clarify whether we would need international ISAN approval for that or whether that can be done locally.

3829   THE CHAIRPERSON: I asked Mr. Mayson before you guys appeared to bring the ISAN specialist from you with me and I want a clear answer to this.

3830   You can see where I'm going.

3831   MR. BARRACK: Yes.

3832   THE CHAIRPERSON: I'm sorry he is not here, but I would really like to get that information.

3833   MR. BARRACK: Yeah.

3834   THE CHAIRPERSON: I would like to know what is the ability -- this is the first thing I have seen that brings us somewhere to measurement. I don't know whether we are going there or not, I just want to be able to explore the abilities.

3835   So, what could be done -- assume, as I said earlier, you know, you make it a self-fulfilling prophecy by saying you can't access the fund unless you are an ISAN member, et cetera.

3836   What information -- this is the information that is there right now. What additional information are you as a Canadian member of ISAN able to insist upon and put here which would help us towards our goal of establishing the Canadian component of broadcasting on the Internet?

3837   MR. BARRACK: I would suggest, Mr. Chairman, if it's of use to the Commission, that we arrange separately to review with the Commission all of the possibilities and ins and outs of ISAN.

3838   I think that it might be something that we could arrange to have experts available to the Commission to speak to those questions very directly.

3839   THE CHAIRPERSON: We are in a public hearing, this is something of due process.

3840   MR. BARRACK: Yes.

3841   THE CHAIRPERSON: Anything that we are going to impose on anybody, everybody should know and have a comment.

3842   That is why I am giving you such a hard time.

3843   MR. BARRACK: Yes.

3844   THE CHAIRPERSON: Because I want that information, I want it out there and I want to hear from the ISPs whether what we are doing makes sense or not and increases...

3845   MR. BARRACK: Yes.

3846   THE CHAIRPERSON: So, while I appreciate an information session on this side, I need something on the public record from you of what is available.

3847   And, you know, I am quite excited about this because this is the first thing that I have seen that is close to a measurement.

3848   I just don't know whether I am being overly optimistic or if it's a mirage or whether this is actually something we can build on.

3849   So, anything that you can find and you can publicly file with us would be very much appreciated.

3850   MR. BARRACK: We will file a detailed written reply.

3851   MR. MAYSON: The one comment I would make, Mr. Chair, is that the -- John's quite right, I think that the ISAN number ultimately is -- the information that we're allowed to ask our applicants to provide is basically an agreed upon international standard and what will likely happen, if there was a requirement for additional information, it would likely require some agreement from the international agencies.

3852   THE CHAIRPERSON: Okay. I mean, just whatever the process is and what is possible, et cetera, I think we should explore it. It may turn out to be a dead end, it may turn out to be very useful.

3853   Now, this ISAN is sort of like a watermark, if I understand, a digital watermark. So, the ISPs -- does the same apply in the wireless context?

3854   MR. MAYSON: I would have to confirm that, but I believe the answer is yes.

3855   MS JONES: Mr. Chairman --

3856   THE CHAIRPERSON: Yes.

3857   MS JONES: -- if Mark and I may, there are substantial measurement systems in place in new media in addition to the developing ones that ISAN represents.

3858   We have, as a result of our Bell Fund agreements, requirements for all of the Canadian product that we produce that is funded through the Bell Fund to include tags that allow each of our products to be measured and analyzed by the Bell Fund as part of our, I guess our audit process for those projects.

3859   Those tags can come in a few different forms and represent such measurement services as AW stats which does analysis on literally a line-by-line basis of what our projects entail, and I'm speaking to new media projects specifically which do, in many cases, include video and audio materials as well as Google analytics which allows us to better understand the audiences that are coming to our site, specifically speaking to interactive websites.

3860   As well, the new media industry has a currency not dissimilar to currencies that exist in television broadcasting and our currency is comScore, which is sort of the BBM Nielsen of the new media world.

3861   The difficulty with comScore for an independent producer is not dissimilar to the difficulty for an independent producer subscribing to BBM Nielsen.

3862   We just don't have the wherewithal to be subscribing to those services and our projects, in many cases, when they are specifically focused on Canadian audience, do not meet the minimum thresholds that are required to appear in sort of the bigger picture of what -- we would be the dash marks in the book if there was a BBM printing version of what comScore offers.

3863   So, collaboratively with broadcasters, if our projects are to be measured there is existing currency.

3864   There are many other analytical tools available and I'd be very happy to provide you with a list of those and they range from sort of an audience measurement that gets into the demographics and the psychographics, age, income, occupation, education, the usual handful.

3865   And we can look at those -- those visitors, those audiences to our products in a way that in many ways traditional media doesn't permit.

3866   And Mark can certainly speak to some of his own experiences.

3867   THE CHAIRPERSON: Yes, but -- sorry.

3868   MR. BISHOP: Oh no, all I wanted to add is that really both for independent producers and for broadcasters the tools of measurement that we've had in place, namely and especially for any of our new media web-based content, there's an incredible tracking ability that we're able to have and have that information and share that with our broadcasters and with our funding agencies.

3869   THE CHAIRPERSON: Yes, but we are talking about different measurements here. I understand what you are talking about.

3870   What I was -- I was going back to the basic principle that Peter Grant's proposal says, you know, ISPs and WSPs have become distributors and they, of course say no, absolutely not, I run a damn pipe and I just transport bits.

3871   And I say, well yes, that's right, but of those bytes that you -- "x" percentage is really broadcasting and what is that "x" and how do I measure it?

3872   And that is why I focused on ISAN because that might allow me to identify at least a portion of it.

3873   So, Mr. Mayson, whatever you can come back to us and file it so that the other parties have an ability to comment on it in ISAN.

3874   As I say, I am particularly interested in what liberty you as a Canadian member of ISAN has to put an additional field in there which might help us identify broadcasting content.

3875   MR. MAYSON: Mr. Chair, we had had discussions with the Vice-Chair and with some of your Staff about ISAN in past weeks and we've actually -- were looking at arranging a meeting to, you know, discuss this in greater detail.

3876   I understand the public record aspect, and so we will provide a written response on this issue which could be commented on.

3877   THE CHAIRPERSON: Now, the other point that you are making is in terms of -- let's see, is promotion and you say, well, Canadian broadcasters do not put your content on the web, et cetera, there is also insufficient promotion and your wish is that there would be a fund and that part of that fund would be dedicated to promotion.

3878   What exactly do you mean by -- (a) what is "part" and, secondly, what do you mean by the point dedicated to promotion? Who would receive the money, the broadcasters, you, or how will it be distributed, et cetera, and what kind of promotion do you have in mind?

3879   Presumably you are talking here now about new media promotion rather than traditional media promotion.

3880   MR. MAYSON: Again I'll let my producer colleagues comment, but our basic point there is that we see the real exciting challenge but also the huge opportunity of new media as being the ability for production companies to go directly to their target audience.

3881   And part of that -- to us that's a hugely positive thing, but part of that requires the resources to find some space on -- out there, be able to actually promote your company, promote your product, find your audience. It's something that the company needs to undertake to do. It's not inexpensive and, in some cases, you could be working with a broadcaster, some cases you wouldn't be.

3882   I would say in terms of who's eligible it would be ultimately the applicant to the fund and ultimately who that turns out to be.

3883   We obviously see the opportunity for independent producers here and as creating a whole new potential market going directly to their clients.

3884   And, Mark, you should go on that one.

3885   MR. BISHOP: I mean, again, you know, as we've mentioned before, we really see promotion as one of the key activities in the actual production process.

3886   So, you know, equally as important as creating compelling content, it's really finding a way of letting our audiences out there know that that content exists.

3887   And to be truthful, there are many more opportunities online, but there are also many more challenges because automatically, as has been said earlier, I mean, we are talking about competing on a global scale and trying to get our content into audiences.

3888   But to do that, I mean, we also have a lot of tools that are available on the marketing side and I think, again, it's very different and it's a very different approach that we take when we talk about marketing digital content because in fact it's a very grass roots initiatives which we initiate which are anything from marketing on blogs to using a number of tools and tools which Barbara mentioned earlier which are available online to help market and promote our content.

3889   But those items are key, and they have been recognized by the other funding bodies which unfortunately are hugely over subscribed.

3890   So, as I had mentioned before, the Telephone Canada New Media Fund does have a marketing component, there's a small marketing component to the Bell Fund and even the Ontario Interactive Tax Credit does allow marketing expenses to qualify as justifiable interactive costs because, again, they see those costs as part of the production process.

3891   But, again, the challenge we as the content holders face is that there's a lot more that we have to be doing that others are doing internationally and that we're competing against.

3892   THE CHAIRPERSON: Okay. Sorry.

3893   I think I have gone over my time so I will pass it on to my colleagues.

3894   Michel.

3895   COMMISSIONER ARPIN: Well, thank you, Mr. Chair.

3896   And thank you for the clarification regarding ISAN, that it will be very helpful.

3897   I understand that the sound recording industry has also gone through the watermark road and that they seem to have -- because there is, at least throughout North America, a firm that is collecting data under the name of Songscan, and which is collecting the watermark of those recordings.

3898   So, it's the same system across the whole of North America I guess that something very similar could be done regarding audio/visual material and ISAN could probably be the answer.

3899   So, I will appreciate that you look into it and come up with a more defined answer, because surely it is an area of concern for measurement.

3900   In your oral presentation today -- and I am quoting from your page 4 -- where you said that:

3901   COMMISSIONER ARPIN: My guess is that it was also true when TeleFilm was created, it was also true when the CTF was created and now again we are now looking at another fund to achieve the same goal.

3902   Will we ever be able to achieve that goal?

3903   MR. MAYSON: I certainly think so. I think there's been an increasing recognition actually, and particularly during this recent past years and period of consolidation that healthy companies are very important to ensuring the creation of all forms of Canadian content and it's not something that will ever be done entirely in-house obviously, or it will not always be done entirely by the independent sector, there will always be a balance between the two, but a healthy, strong independent sector we see as increasingly becoming an objective, not just of the Commission, but of funding policy at the Department of Heritage and Tax Credit policy.

3904   So, we see it as really a key in going forward and a key objective of our association.

3905   And I think it's even more important in some ways in the new media area because, as I said earlier, there is this huge potential for production companies to go -- to find their own market now, to work -- they can choose to work with broadcasting partners. Obviously it's about partnership in many, many ways, but there's also this new ability to find your own market.

3906   You two should probably comment a bit on that. You've already said something, I know, but it's important.

3907   MS JONES: Certainly. Just a further on Guy's comment. The interesting thing about new media is that we are able to drill down and reach people in new ways that are relevant to them.

3908   And being appropriate to the audience means creating the type of projects that Mark creates for children's television and experience -- and carrying that experience on to the interactive platforms.

3909   What's relevant to one community may not be as relevant to another. We're able to, as we've said earlier, be nimble and drive down to a niche and work with our audiences and get immediate feedback from our audiences. They're very happy to give us feedback about our projects and finding ways to reach them in ways that maybe we even haven't thought of.

3910   MR. BARRACK: We've also, and you may have seen this last week when you were at the conference, but there has been an evolution in our own membership.

3911   There is a change that's occurring in terms of there being larger, more capitalized companies. That doesn't mean that there aren't always going to be small nimble companies that will feed into that.

3912   But that landscape is changing, and I think when you saw companies such as Alliance Atlantis exit production you saw an evolution of these new companies. You see the E1s, you see the Shaftsburys and others.

3913   COMMISSIONER ARPIN: We also saw Astral Communication doing exactly the same thing.

3914   And lately we saw Remstar to become -- take U.S.

3915   MR. BARRACK: Yeah.

3916   COMMISSIONER ARPIN: So, every time so far the experience has been that those who have become significant independent producers would quickly get out of that sector when they got the financial strength to move toward another field.

3917   MR. BARRACK: It's a tough business and there's no question that people see opportunities in distribution, see the margins in distribution, quite frankly, and are attracted to it.

3918   But I also think that what you're seeing is, as there's been consolidation on the broadcast side there's also been consolidation or some level of consolidation on the production side because, quite frankly, those broadcasters are choosing to work with a smaller and smaller range of folks.

3919   Whether you agree or disagree with that trend, that has been the trend. So, to really the heart of your question, is it possible? Yes.

3920   Is it important that companies that are professionally in the game of creating content keep creating content and be well capitalized? Yes. Because if we want Canadian audiences to have the best possible content, you need folks who have those tools.

3921   MR. MAYSON: I think the larger -- and we've spoken about it before, Vice and Mr. Chair, and I think the larger challenge is really, especially as companies develop, is trying to defray the risks of production.

3922   I think it's a bit of a myth that somehow production is -- there's no risk involved as a producer. There's colossal risk as a producer.

3923   And, so -- and you see as companies develop they do try to develop other avenues, distribution, ideally broadcasting, you know, that broadcasting is seen as such a smart business that there is that movement to it, if you can possibly get into it somehow let's get into it.

3924   But it is really more about diversifying your revenue streams as much as anything and I think this -- the new media, my original point about I think the potential for new media for productions companies is actually considerable in that area, so...

3925   COMMISSIONER ARPIN: If the Commission was to agree to the proposal made so far by numerous intervenors and create a fund, obviously that fund will not only serve -- well, I found today on the net in terms of professional media, I found music and finding feature films and finding television programming all within the new media.

3926   Have you thought of how you will segment the fund in order to achieve the needs of each of the various parties that are currently using a new media strategy?

3927   MR. BARRACK: Only to the extent that we would want it to be as broad based as possible. Certainly the current -- again, I'll go to my producer colleagues here, but the current funds that exist are fairly broad based in terms of what they can consider and there is unique programming being created, you know, for the net, you know, for Webisodes.

3928   So, we would see it as being as broad based as possible and as inclusive as possible.

3929   MR. BISHOP: And again, I mean, I think it comes back to what we were talking about earlier and it's the idea of really trying to create opportunities, you know, in the sand box that we have with these tools to be able to create and tell stories.

3930   And, again, not necessarily the re-purposing of content, but as Guy just mentioned, the idea of creating original online only or mobile only stories.

3931   COMMISSIONER ARPIN: Okay.

3932   MS JONES: Vice-Chair, sorry just to further on that -- I'm sorry, Mark -- the story telling can come in many different forms to speak to sort of the non-fiction approach -- and it also applies to fiction -- in that how you tell a story and present a story is going to be unique for each story.

3933   So, there's no one formula. And what's very important with what new media producers bring to the equation as independent producers is that we know how to work with creative new media talent to present, dare I call them, the holes so that the user experience is appropriate to that piece of content.

3934   So, it's not just a news presentation but it's the type of product that Mark was nominated for an award for. So, he still has to build that shell and there's a lot of costs that are directly related to the technical component where a lot of innovation occurs prior to what appears to be the traditional content that kind of fills the holes after the fact, be it audio, be it sort of the podcast format or pieces of taped video which are representative of what our membership produces.

3935   COMMISSIONER ARPIN: A portion of the current fund is dedicated for local programming improvement and mainly the news aspect.

3936   Would you include newspaper who do more and more video in --

3937   MR. MAYSON: I think Barbara's got a good answer on that one.

3938   I think there's a huge potential for local programming. News, I mean, it strikes me that currently news and current affairs I don't think are eligible for most of the new media funds, but you had some interesting ideas, Barbara, in terms of local programming created...

3939   MS JONES: Certainly. There are a lot of under served communities in this country relative to seeing their own faces and hearing their own voices in Canadian media, whatever that form might be.

3940   And what new media offers is the ability to go in and work with communities at a scale that makes sense, that's efficient at finding ways to tell their stories. It's not about the genre of new media, because those relationships with the audiences that can occur at a local very meaningful level can all be types of programming, but it's about finding ways to tell Canadian stories in a way that is engaging and not currently available widely.

3941   COMMISSIONER ARPIN: Thank you. Those were my questions.

3942   THE CHAIRPERSON: Len, you had a question.

3943   COMMISSIONER KATZ: Just a quick point and a question I guess.

3944   I've heard a number of parties come before us and say the funds that are out there today are over subscribed as a reason for additional funding support.

3945   I don't find the term over subscribed to be unduly negative without having a context to it as well. I think the fact that there is less supply for funding than there is demand is probably a good thing because it allows hopefully some people to sort out what are the actual winners and what are the actual losers.

3946   MR. MAYSON: M-hmm.

3947   COMMISSIONER KATZ: So, to simply say over subscribed does not do anything for me personally. I just wanted to make that point because I've heard it now a number of times from various different people. It has got to be put in some sort of context.

3948   I'm sorry.

3949   MR. MAYSON: Sorry, Commissioner Katz.

3950   I think we don't disagree. To us it's sort of a barometer of something and a sign of something, but to us it's just so painfully obvious though when you look at the funding available for new media projects it is extremely low, and just in terms of what we're trying to do and we're trying to create a critical mass of programming you might want to watch, or content you might want to watch, excuse me, so...

3951   But I take your point that that in itself is not compelling.

3952   MR. MOTA: And Vice-Chairman Katz, if I can just add, I mean, the Bell Fund example that I used at 3:1, these are projects that they think are solid projects that deserve funding and when we've had discussions with them they essentially see -- you know, they wouldn't be able to meet that demand, they would need double the funding that they have now if not a little bit more.

3953   So, these are projects that meet all the criteria, they've dug into the numbers, in the Bell Fund board's opinion, solid projects with real potential out there.

3954   So, these are not just ad hoc projects that, you know, are put together on the wind.

3955   COMMISSIONER KATZ: Right. The other question I have is with regard to the use it or lose it that you spoke to the Chairman about as well.

3956   I assume there's a middle of the road there somewhere, before you lose it there's a trigger of guarantees or payments or something as well, so there's an incentive for the broadcasters beyond just sort of saying, there's no money here, we're just going to give it back to the creator, the originator of this thing.

3957   Why isn't there some thought into sort of after a certain period of time, if you don't use it there's another payment made in terms of royalties or creative or something?

3958   MR. MAYSON: Right on. I think that is exactly what we are talking about. If the broadcaster for example has acquired this and they have a planned strategy, there should be ability to step up again and retained or re-up on those rights. I would agree with that completely.

3959   THE CHAIRPERSON: Steve...?

3960   COMMISSIONER SIMPSON: I have a question in the area of rights and responsibilities, ownership rights and responsibilities of promotion of programming.

3961   Where I'm going with this is to try to better understand what you think is going to be the role of the broadcaster down the road.

3962   Old model, filmmaker makes product, cuts a distribution deal; distributor builds the rich content that goes around the product and then all that stuff, the film print and all the promotional material goes to the exhibitor. That's the old model.

3963   Now, today we have new media content producer, production community; we have a distributor which is a BDU, and we have a broadcaster who is essentially an exhibitor.

3964   Now, is that old model, in your mind, going to carry on?

3965   There has been a reluctance of the broadcast community to invest around the products that they purchase. Is that the reason why you are not seeing more use of the content that you sell to them going onto the web, because no one can figure out who is going to spend the money to wrap around that product?

3966   MR. MAYSON: I think again I will let my colleagues comment because they have more practical experience with this, but I think that's essentially true. I mean ideally the partnerships are good, ideally you want a good partnership working with your broadcaster and many of those exist.

3967   I think it's about costs. In many cases on the new media side and different windows essentially the costs are being picked up in many cases by the production company itself, so in some ways if that is the model then okay, we are going to try to do that in some shape or form and make it work.

3968   But you have a bunch of different models working right now. The old model is still around in certain areas and, you know, the feature film world hasn't actually changed dramatically in a long time. That model still exits, but the potential in the new media side is very much about a good partnership or when the partnership is not working the ability to do it yourself in some ways.

3969   MR. BISHOP: Again, I think that's part of the role of the new media producer as we are in this transition phase.

3970   The new media producer works hand-in-hand with either the broadcaster or the distributor to help them out with the content, because part of the challenge comes down to exactly what you are describing, who is the most appropriate party to distribute the content, who is going to help market the content and at the end of the day how are we actually going to make any money from this content. It's one thing to grow numbers and grow traffic, but how is that actually generating revenue?

3971   So again I think that is when it gets right back to that partnership, it's back to the partnership of working with -- whether it is your broadcaster, whether it is your BDU, whether it is a portal.

3972   Again, we have had relationships, each one which is significantly different in terms of distributing our content, but it's back to the role of the producer to actually work very closely to help create and craft the promotion around the distribution of the content.

3973   Again, part of it is the opportunity that the internet provides now in terms of being able to reach directly to audiences and part of it are the grassroots initiatives that I mentioned before and the new tools and technology that we can do on a low-cost but on an ongoing basis to help reach our audience.

3974   Just to give you a sense, the project deafplanet that I mentioned before which launched seven years ago, we are continuing to expend money to promote it online for audiences, that is things like Google ad words, other online tools. So it is constant endeavour for us as the producer to continue to develop and promote content online, even though in that case the broadcast term has even long since expired.

3975   MS JONES: Just I would like to add to what Mark said, in many cases the producer has possibly the wherewithal and most certainly the passion to see where some of the opportunities might lie for their piece of content beyond a traditional piece of tape. There is nothing wrong with the opportunity being afforded to the broadcaster to partner, that is an ideal opportunity. That might not be the best opportunity for that piece of content.

3976   Speaking to what we were able to produce around the Charter of Rights and Freedoms, the best opportunity with that project clearly is an educational market. So in addition to the broadcast rights the educational sales are handled by a separate distributor, I have retained interactive rights and we have been able to do a lot of really fascinating things with that.

3977   It wasn't a position that OMNI, who was the first broadcaster in on the project when it was first produced in seven languages, was able to take. We spent a lot of time discussing how they might support the project and they weren't able to support it financially at that time, but they wrote letters of support which allowed me to trigger financing to be able to produce the new media content that we believed from the onset needed to be part of the experience because in the example of a documentary about the Charter of Rights, you can't possibly do it in 42 minutes of television. We managed to, but what we created as an online experience with extensive teacher guides and additional content that involved some very skilled legal writers to be able to present that information in the manner that was most effective for that piece of content.

3978   So that is what an independent producer can bring to their own individual projects.

3979   COMMISSIONER SIMPSON: This is my last question.

3980   So how does the application of funding track with respect to ownership, because as you make new media richer media, if you are bringing that money to a deal, a distribution deal, should the money -- as it makes the product more valuable, how does that money, if it is going to monetize your content, how does it get shared? Because if you find yourself in a situation where you are vending that kind of money into a deal and cutting a better distribution deal, do you get to keep all of that money or do you share with the broadcaster and distributor?

3981   MR. BISHOP: Again,in our past experiences we have shared it with all of our equity players, including the broadcaster who has shared in that back-end revenue, including our distributor, including any other equity participants that are involved. Because again, it all gets back to partnership, you know, work together to create the content and her to exploit it, whoever is the best suited should exploit it, and then once we turn into making revenue, everyone should share in it.

3982   COMMISSIONER SIMPSON: Thank you.

3983   THE CHAIRPERSON: Okay.

3984   Michel, dernière question?

3985   COMMISSIONER MORIN: Yes.

3986   The issue of digital rights has been raised many times and if such an agreement will be put in place, what will be the impact on digital platforms? Will it be important? Small?

3987   What do you think?

3988   MR. MAYSON: Commissioner Morin, you are speaking about the terms of trade and the exploitation?

3989   COMMISSIONER MORIN: Yes.

3990   MR. MAYSON: We think it's essential simply to provide a clear, transparent framework for the negotiation of rights.

3991   I will let John comment further because he is completely immersed in this at this point, but in our view I think the impact will be critical and strong, but ultimately beneficial for all involved.

3992   COMMISSIONER MORIN: You have just said critical, so you are talking this morning about a critical mass of Canadian new media.

3993   Isn't it the key at the end, this negotiation?

3994   MR. MAYSON: It's critical, yes. It is critical to that critical mass, yes.

3995   COMMISSIONER MORIN: Yes.

3996   MR. MASON: You are absolutely right.

3997   COMMISSIONER MORIN: Yes. But is there any benchmark we can have about this critical mass?

3998   MR. MAYSON: In our submission we had talked about in certain sort of licensed portals, et cetera, licensed distributors talking about a preponderance of Canadian content. I think it is a desirable goal. Outside of that a very hard thing I think to measure, to achieve. I think the ISAN initiative is something we will look at closely in terms of maybe helping you measure that, but what is needed is more at this stage.

3999   MR. BARRACK: If I might, back to the core of your question in terms of where terms of trade comes into this debate is that right now digital rights are being taken as a bundle for very little additional money, or no money over and above the license fee.

4000   You are seeing conventional television broadcast license fees of "X" and "X" plus $100, "X" plus $1000, very minimal amounts, okay, and being taken for seven years and beyond. You cannot adequately finance these -- you can't create a critical mass if it's not adequately financed. It is just that simple.

4001   And there are a variety of inputs obviously we are looking at here and it is that partnership that needs to be rebalanced both financially and equitably.

4002   I don't know if Barbara or Mark want to comment further.

4003   THE CHAIRPERSON: I'm sorry, we are really running out of time. You answered the question, let's go on, okay.

4004   I have one more -- are you finished, Michel -- one more intervention.

4005   Go ahead.

4006   COMMISSIONER MORIN: Yes. It won't be long.

4007   Have you read the comment by Mr. Robert Ester from Osgoode Hall Law School titled "Network Management DPI" -- Deep Packet Inspection -- "in Canadian Content"?

4008   UNIDENTIFIED SPEAKER: (Off microphone).

4009   COMMISSIONER MORIN: You don't.

4010   So if you can, I would appreciate your comment about this whole issue in this hearing.

4011   THE CHAIRPERSON: What don't you do that in your written submissions, okay.

4012   UNIDENTIFIED SPEAKER: Sure. We will.

4013   Thank you.

4014   COMMISSIONER MORIN: Thanks.

4015   THE CHAIRPERSON: Tim, you are the last man between us and the coffee break.

4016   COMMISSIONER DENTON: Okay. Well, I don't want to get between us and coffee.

--- Laughter

4017   COMMISSIONER DENTON: Look, this is a very thorough and very well-done submission, okay, so it makes the case as best as it possibly could for your position and you are to be congratulated on that.

4018   My question is, this is kind of like a Charter of Rights for producers and one of the things that concerns me is the relationship of means and ends, particularly in relation to the question of how you propose in your recommendations that:

4019   I can see, as it were, we can subsidize the production of tractors, but what is going to make the farmers buy them? It's that feedback loop between production and consumption and payment that is the weakest portion.

4020   Do you have any guidance for us on this question of how to get to -- mixing metaphors again -- how to get the horses to drink the water?

4021   First of all, can we cause them to be placed on aggregated websites?

4022   Second, if so, will they continue to be popular if those things are placed?

4023   Address the question in any manner you like.

4024   MR. MAYSON: It's a really good question, Commissioner Denton.

4025   I will let Mario comment as well, but I think that is the challenge in many ways and I think it may ultimately become -- producing something is one thing, finding shelf space for it properly, promoting it properly, giving it sort of front page on many of the portals, that is the big challenge.

4026   Maybe it is ultimately more of an incentive approach, how do we find ways to encourage and make that happen.

4027   I think it can be hard to regulate that in any way or demand that that happen, but it may become much more of finding some smart ways to provide incentives for Canadian alternatives to be featured and getting to them is much easier than it is now. Finding them is always the challenge.

4028   COMMISSIONER DENTON: Finding the what, I'm sorry?

4029   MR. MAYSON: I'm sorry. If you are trying to find that Canadian show or that educational project you heard about, just finding it, you know, that's always a challenge. So ideally you would want to work with the big portals and make sure that it was easier to do that.

4030   MR. MOTA: Commissioner Denton, I will add in then I will ask Mark to add a comment as well.

4031   Yes, we need to give this more thought. We will in our reply phase. It was kind of loosey-goosey in our submission.

4032   Certainly where licensed broadcasters streaming and they have their broadband players they are streaming, there is an opportunity, we think, within the exemption order to put a very, very light-handed message in there that where you are engaged in streaming that you should make available on the shelf a preponderance -- a simple preponderance that more titles should be available for Canadian than there are foreign.

4033   The question then becomes a fairness issue. How widely does the Commission cast the net? Do we include the aggregator sites? How does it monitor? How does it track? We recognize that's a big challenge and we will probably give that a bit more thought.

4034   But some parties in this proceeding made the suggestion of a possible opt in or a registration system like the Commission uses on the telecom side, like the reseller approach or the CLEC approach, that could be a way the Commission could explore as if you want the benefits of accessing funds, or to that extent, then you opt in, but there is a basic condition to that. So it is a basic preponderance, where you are an aggregator you have to make some shelf space available.

4035   So those are the kinds of things we are thinking about. I realize they are incredibly challenging to work through and I think we will go back and do some work and see if we can't --

4036   COMMISSIONER DENTON: I hope so.

4037   I don't want to get between too much us and coffee, but in a world in which people have really infinite -- where fragmentation is infinite and is getting more infinite every day, these questions to have cause to happen what you want to happen are not easy and we would appreciate some thoughts on this.

4038   THE CHAIRPERSON: Yes. Why don't you do that, Mr. Mota, as you said. These are difficult questions and the devil is very much the detail so why don't you address it in your written submissions.

4039   Okay. Thank you very much for a very good presentation.

4040   MR. MOTA: Thank you.

4041   MR. MAYSON: Thank you.

4042   THE CHAIRPERSON: We will take a 10-minute break.

--- Upon recessing at 1030

--- Upon resuming at 1045

4043   LE PRÉSIDENT: O.K., Madame la Secrétaire, commençons.

4044   THE SECRETARY: Thank you, Mr. Chairman.

4045   I would now invite the Documentary Organization of Canada to make its presentation.

4046   Appearing for the Documentary Organization of Canada is Mr. John Christou.

4047   Please introduce your colleagues, after which you will have 15 minutes for your presentation.

PRESENTATION / PRÉSENTATION

4048   MR. CHRISTOU: Thank you very much.

4049   Thank you, Commissioners, for inviting us to speak today.

4050   My name is John Christou and I am the Co-Chair of DOC, the Documentary organization of Canada.

4051   I am with Danijel Margetic. He is the Chair of DOC's Policy and Advocacy Committee.

4052   The Documentary Organization of Canada, l'association des Documentaristes du Canada, is the collective voice of independent documentary filmmakers across Canada.

4053   DOC is a national non-profit arts service association representing over 850 directors, producers and craftspeople in the documentary community, from all provinces and regions of our nation. DOC advocates on behalf of its members to foster an environment conducive to documentary production and strives to strengthen the sector within the broader film production industry.

4054   We have carefully weighed the submissions brought before the Commission by various parties to date and have we have followed the discussion that has occurred over the last week. We are heartened by the frank exchange of ideas that is occurring here. As a result, we have been able to strengthen, streamline and elaborate on our own proposals, which we are happy to present here today.

4055   Since some presenters have taken a similar position as our own, we will attempt to focus our presentation on a number of practical and concrete solutions which we believe will help to increase the amount of Canadian content available to Canadian and international consumers.

4056   But before we get into DOC's recommendations and responses to the Commission's questions, we would like to give the Commission an overview of our position in this matter and provide a bit of background of our members and our point of view.

4057   First, let me define what we mean when we say "new media".

4058   While new media encompasses a wide array of delivery formats and content, DOC, as a representative of documentary filmmakers, is mostly concerned with video content distributed over the internet and mobile devices. Therefore, when we use the words "new media" in this submission, we are referring to those aspects of the term.

4059   Furthermore, unless otherwise noted, we also define "new media" as content that is primarily produced for the internet and not content that is repurposed from TV, or new media created as a marketing tool in support of TV projects.

4060   DOC represents individuals, small businesses owners, independent producers, and craftspeople, who make documentaries. The internet represents a golden opportunity for our members, the opportunity to practice their craft and be the both the producer and broadcaster of their own work, without being restricted by an increasingly out of touch broadcasting system.

4061   We view this as a period of exceptional opportunity and evolution for our industry, one where our members will be active participants.

4062   As such, our members remain very concerned about potential internet regulation. DOC strongly believes in the idea of net neutrality and, consequently, we would like to urge the Commission wherever possible to strive to ensure unfettered access to the internet by both the Canadian public and Canadian content producers.

4063   In order to protect these potential opportunities, we believe that all content producers, whether professional or non-professional, should have fair and equal access to broadcasting over the internet. Filmmakers should have the ability to self-distribute their content as they see fit without any dependence on television broadcasters.

4064   We acknowledge that other parties have addressed this issue, but DOC is also concerned about the role ISP's have assumed in recent years by acting as gatekeepers or as self-appointed regulators by engaging in the practice of traffic shaping.

4065   The argument presented by the ISP's has been this is simply good pipeline management, but by specifically targeting one segment of internet traffic the ISP's have stepped out of the passive distribution role they have so far claimed for themselves.

4066   In order for new media to grow and develop, no party should be able to restrict or modify the ability of the public to access new media on the internet, notwithstanding the restrictions imposed by copyright rules.

4067   The power of the internet lies precisely in its ability to create a direct link between a consumer and content creator. In this forum the content creator can simultaneously become a broadcaster and distributor of their own content, without facing the same barriers of entry. However, if the internet is not neutral, new and insurmountable barriers will emerge.

4068   With that in mind, DOC strongly opposes the proposition of licensing new media undertakings.

4069   DOC recommends that the new media exemption order should continue. Furthermore, we believe it is highly unlikely that these exemption orders can ever be lifted, due to the lack any workable means of implementing a licensing system, but most importantly because we are not persuaded that such regulation would benefit the Canadian broadcasting system or Canadian consumers.

4070   However, DOC does recommend the implementation of very specific and targeted measures that we believe would help increase the amount of Canadian new media content available on the internet.

4071   I will pass it over to Danijel to elaborate.

4072   MR. MARGETIC: In order to know how much Canadian content is available online, we first have to define what constitutes Canadian content in new media.

4073   We agree that user generated content should be exempted from regulation and we would not support any regulation that inhibits the ability of non-professionals to make their content available to the world through new media.

4074   Only content that meets minimum criteria should be certified as Canadian Content and DOC fully supports the notion that financial support should only be available to professionals and productions meeting these criteria.

4075   DOC recommends that new media meet the following Canadian content criteria:

4076   One, the content must be produced by a Canadian owned and controlled company;

4077   Two, 75 percent of budgets must be spent in Canada, with food, travel and accommodation expenses for Canadian crew abroad counting as Canadian expenditures;

4078   Three, majority of key crew must be Canadian as determined by a point system.

4079   Although we believe the CAVCO point system has merit, it does not reflect the nature of documentary production, particularly as applied by CTF, because there are significant differences in key crew positions for documentary production. Also, the CAVCO point system may not be not fully relevant to the internet.

4080   We propose the following point system be used for documentaries for key creative positions filled by Canadians:

4081   Director would qualify for two points; writer for one point; Director of Photography for one point; editor for one point; and composer for another point.

4082   In order to qualify as Canadian, the new media production would have to score four out of six points.

4083   We recognize that a similar but different point system would have to be developed for drama productions.

4084   DOC would also recommend that CAVCO be given the responsibility of certifying Canadian new media productions.

4085   The second recommendation is the creation of a method to track Canadian content online.

4086   Doc recommends the CRTC and CAVCO work with private software developers on creating a method of tracking certified Canadian content online. For example, a company in the U.S. called Digimarc has been working with a number of clients to create video tracking methods. They imbed invisible digital watermarks that can be tracked over the internet.

4087   There is no reason why a Canadian watermark couldn't be developed to track the usage of Canadian video on the web. The invisible watermark could be inserted into the code of video files once it has been certified as Cancon. This information could also be beneficially shared with the content creators, so that they can better track how their content is used online and, therefore, hopefully develop better and more targeted content in the future.

4088   In terms of the Cancon goals, DOC believes the CRTC should establish Canadian content goals, but it is difficult to suggest a specific target at the moment since reliable information about the availability of Canadian new media content doesn't yet exist.

4089   The question of how to measure Canadian content online is also relevant and needs to be answered. DOC believes that Canadian content should be measured by the total number of viewing hours of certified new media content. Once a tracking measure is put in place, goals could be established.

4090   The New Media Fund that we propose, we feel that the biggest current barrier to creating new media content is the lack of production financing. This is compounded by the fact that new media content is most valuable as a long-term investment.

4091   Once a show is online, it can remain there indefinitely and thus continue to earn money over many years. This is commonly referred to as the long tail.

4092   We would also like to refute the assertion that the production of new media content is cheaper then producing content for television. This is based on a series of erroneous assumptions which we would happily address in the follow-up.

4093   Original new media productions can be just as expensive as TV production. Thus, a New Media Fund needs to be created to finance the production, promotion and accessibility of new media.

4094   First, let us recommend some of the parameters of the fund.

4095   DOC recommends that the mandate of a New Media Fund should be to support original content created primarily for the internet. Funds already exist that support interactive new media and new media that serves as a marketing tool for TV programs.

4096   Furthermore, the costs of repurposing TV content for the internet are small and can easily be assumed by the producer or distributor of content.

4097   We believe the definition of new media content should be left somewhat flexible and that the fund should seek to fund a range of projects, including web series, web shorts, web docs, and other content that is defined as priority content, therefore excluding news, sports, game shows et cetera.

4098   DOC recommends that this fund be administered by either the CTF or Telefilm. There is no need to create a new administrative structure, but this fund must be completely separate from the current New Media Funds run by those organizations, since those funds do not currently support the type of programming and incentives we are talking about.

4099   DOC is reluctant to recommend a dollar figure for this fund since the financing sources are uncertain at the moment, but we believe that substantial, multi-year commitment is necessary.

4100   We recommend that the new fund employ a temporary panel of consultants who are active new media producers and creators whose role would be to select projects that should receive funding.

4101   We feel that the best approach to new media production financing by the fund would be in the form of equity investments, and that it should be reasonably expected that the fund see a return on its investments.

4102   The fund should support the following three objectives, production, promotion and accessibility through different funding streams. While we have not reached a conclusion about how the funds would be divided among the different streams, we do have suggestions about how each stream could be structured.

4103   Starting with new media production, 1/20 of the funds of the production stream should be earmarked for First Nations productions; 1/3 of the remaining funds should be earmarked for French production; and 1/5 of both the English and French funds should be earmarked for regional production. Furthermore, 1/3 of all the funding should be earmarked for documentaries.

4104   For new media promotion, 1/2 of the stream should be earmarked to supporting the marketing of Canadian Content through on-line ventures; 1/4 of the funds should be earmarked for supporting marketing of Canadian content through traditional outlets, broadcasting and print as an example; and 1/4 of the funds should be earmarked to supporting marketing of Canadian content through alternative marketing endeavours.

4105   Last, but not least, new media accessibility. 1/2 of the accessibility stream should be devoted to improving broadband access in remote and rural areas and the other 1/2 of the funds should be devoted to improving accessibility to new media for Canadians with disabilities.

4106   We believe that it would be difficult for a fund to have real impact unless it concentrates on all three areas, production, promotion and accessibility.

4107   We are particularly concerned by the fact that none of the ISPs or the broadcasters have acknowledged the problem of accessible media. A brief examination of the broadcaster websites shows that no efforts have been made to make their new media content accessible, despite the availability of affordable technological solutions to adapt their already captioned broadcast material to the internet.

4108   Of all the major players who have submitted to these proceedings, NFB alone has acknowledged the accessibility issue and is actively working on it.

4109   MR. CHRISTOU: Sources of Funding. DOC believes there are three main methods of finding money for any such new fund.

4110   First, we can appeal to the government to contribute financially to this new fund.

4111   Second, a levy on ISP revenues can be implemented to contribute to the fund.

4112   A third option would be a spectrum heritage trust that could be created whereby a percentage of the money raised from the sale of wireless spectrum could be put into a legacy trust and that money could fund new media production for many years.

4113   The Commission has already heard numerous recommendations about the ISP levy, therefore we won't spend too much time on it right now, but we do want to reiterate one main point.

4114   DOC believes that ISPs are the direct beneficiaries of increased bandwidth usage and it is clear from the data that video is the driver of bandwidth usage around the world. Therefore, as bandwidth usage continues to increase in Canada so will the profits of ISPs. As such, they are the main beneficiaries of bandwidth usage and thus must contribute to the creation of Canadian content in new media in the same way that cable companies are mandated to contribute to the creation of Canadian content for television.

4115   In this regard, DOC would be happy to see the money for a New Media Fund come from any of these three sources or perhaps a combination of all three.

4116   In conclusion, DOC proposes that the new media exemption order continues to be appropriate, but that a number of conditions and mechanisms need to be implemented in order to achieve the goals of the Broadcasting Act.

4117   In our follow-up we would like to address some important issues that have emerged during the hearings or in other parties' submissions.

4118   Specifically we would hope to address the myth and non-existence of geo-blocking;

4119   the proposed CAB metric for measuring impact on new media on broadcasting;

4120   the proposal by Allarco to change existing rules to consider broadcaster involvement in developing new media programming as recognized contributions to Canadian content;

4121   Fourth, the contention by Quebecor, CBC and Corus that broadcasters are the best stewards of Canadian Content and as such are entitled to control all rights; and, finally,

4122   the notion advanced by ISPs that the best metric of internet use is time spent and not bandwidth consumed.

4123   Thank you very much. We look forward to your questions.

4124   THE CHAIRPERSON: Thank you for your submission.

4125   We talked about tracking with the CFTPA and let me continue in that vein.

4126   I see in paragraph 23 you are talking about Digimarc:

4127   MR. CHRISTOU: Yes.

4128   THE CHAIRPERSON: Assuming there is absolutely nothing preventing you or CFTPA or anybody else to develop a Canadian watermark and put it on, et cetera, then where do we come in?

4129   You would presumably want us to ask ISPs and WSPs to track and make available the information of how the information is being used or being sent over their networks so that it gives you an indication of how successful you are.

4130   Is that the idea?

4131   MR. CHRISTOU: Yes, exactly. We like to track how many times a program is seen, where it is seen, and have the information sent back, so that we can actually know who is watching Canadian content online, because right now, as we all know, it is very difficult to tell.

4132   THE CHAIRPERSON: So you would like -- let's take the ISPs. You would like Bell to tell you how often a certain website is being visited.

4133   I understand, but I thought that the watermark only identifies this as, let's say, a Canadian video.

4134   MR. CHRISTOU: I think that the goal would be for the system to be completely automated, so that the information could be collected and sent to one place. Whether that is more appropriately with CAVCO or some other organization, I think it could be engineered so that it is done automatically, and that information would be sent --

4135   THE CHAIRPERSON: Yes, but what information? That's what I am trying to figure out.

4136   MR. CHRISTOU: The information would be who is watching it, how many times, and through which websites, through which delivery systems.

4137   Those would be the three key points.

4138   MR. MARGETIC: If I may elaborate, the Digimark technology does not necessarily rely on the ISPs to provide that data, the Digimark technology is embedded in the actual video files and would allow for the tracking through those files, without necessarily having to have the ISPs fully track that.

4139   THE CHAIRPERSON: I understand that. My premise was -- you can implement this yourself. Presumably we come in and somehow put an obligation on the ISPs and WSPs to deliver information on how that data is being used, and by whom, and I am trying to figure out what exactly you have in mind.

4140   MR. MARGETIC: For starters, if we were able to have an impartial aggregator of that data, it would allow for a better understanding of how the Canadian online new media content is being used against the overall usage of the internet.

4141   THE CHAIRPERSON: What do you mean by impartial aggregator?

4142   MR. MARGETIC: Essentially, in the same way that the Commission and CAVCO track Canadian content production via hours viewed, et cetera, through logs provided, it would be beneficial if that information was contained within a central aggregator.

4143   THE CHAIRPERSON: Let me repeat again that we are talking at cross purposes. I go on the assumption that Digimark -- that there is the development of a Canadian watermark, as you suggest. The industry uses that. Fine. Clearly, one can, if one wants to, identify Canadian videos as a result of this.

4144   MR. MARGETIC: Yes.

4145   THE CHAIRPERSON: Now, the next step is, somehow you have to have access to that information. How do you get it, et cetera?

4146   Presumably you would want us to intervene and somehow make that information available to you, the producer, so that you can judge what is effective and what is not.

4147   What are the means that you see of getting that information?

4148   It has to involve the ISPs and the WSPs, I would assume.

4149   Maybe my assumption is wrong, tell me.

4150   MR. MARGETIC: My understanding is that the Digimark allows you to track your content without necessarily having to involve each and every ISP. It essentially can be used to track that content without having to request that information from the ISPs or WSPs.

4151   THE CHAIRPERSON: Okay. How do you track it?

4152   MR. CHRISTOU: One of the ways -- Digimark is just one example --

4153   THE CHAIRPERSON: Yes, that's true.

4154   MR. CHRISTOU: You know, it could be as simple as each production being given a tracking number and logging into a specific website that has all of the information readily available, which is, I believe, the way the ISN number works.

4155   Whether it is ISN or Digimark, or whatever it is, it would be a very simple interface.

4156   THE CHAIRPERSON: Okay, but somebody has to feed that database. Who would be feeding it?

4157   MR. CHRISTOU: You mean who would actually manage the database of information and --

4158   THE CHAIRPERSON: You say that you can log into the database to see how many times it has been shown.

4159   MR. CHRISTOU: Right.

4160   THE CHAIRPERSON: But somebody has to feed that database, first of all, which, I presume -- that gets back to my question, it has to be the ISP or the WSP.

4161   MR. CHRISTOU: The way that the watermarks can be built is that the information is automatically sent into the database. There is no actual need to communicate between the ISP -- it's a direct connection.

4162   THE CHAIRPERSON: Okay. Now I understand.

4163   So I watch a video that has that watermark, and because I do that it triggers a signal that goes to some database that you --

4164   MR. CHRISTOU: Exactly. There is a code in the video, so as soon as you watch it, it is sent directly to the database --

4165   THE CHAIRPERSON: Thank you.

4166   MR. CHRISTOU: -- bypassing the ISP.

4167   I'm sorry, I didn't realize how simple the question was.

4168   THE CHAIRPERSON: I'm sorry, I'm not a techie. Now I understand what you want.

--- Laughter

4169   THE CHAIRPERSON: Thank you.

4170   Mr. Denton, I believe you have some questions.

4171   COMMISSIONER DENTON: Good morning, gentlemen.

4172   Yes, I have a few questions. I was just going through your proposals, and let's see if I get them straight.

4173   Basically, paragraph 6, no protection for the old regime.

4174   Paragraph 7, attacks on ISPs and no bandwidth throttling.

4175   And paragraph 12, no concern for user-generated content.

4176   That is basically the thrust of it?

4177   MR. MARGETIC: Generally, yes.

4178   COMMISSIONER DENTON: Okay. Now, one of the things that interests me is your attitude toward traffic management/bandwidth throttling, because you have a very valid concern that people be able to reach all end points when they upload stuff to the internet.

4179   If bandwidth throttling worked in favour of Canadian content, would you change your mind about it?

4180   MR. MARGETIC: No, we fully believe that the internet should be a neutral setting for all content.

4181   COMMISSIONER DENTON: Supposing, however, if I was a very large user of bandwidth, that I paid a higher price than people who were lower consumers of bandwidth.

4182   MR. MARGETIC: Essentially, yes.

4183   COMMISSIONER DENTON: Is that objectionable to you?

4184   MR. MARGETIC: No. However, the problem as it stands right now is that, what throttling is doing is, essentially, diminishing the independent producer's ability to quickly and cheaply access large segments of the population.

4185   I am just going to use The Corporation as an example, which was produced by one of DOC's members, Mark Akbar. In the time since, he has put his own version of The Corporation on the P2P file-sharing WebTorrent, and just his own version has had one million downloads, not counting all of the versions that are illegally there. Through that, he has been able to access a very large segment of the population, and he has been able to control his own content and embed information that would lead users to his own website for purchasing DVDs.

4186   The problem there is that if Mark were to put that content on his website, it would be financially untenable for him to have one million downloads, because he would be constantly charged by the ISP for the usage of bandwidth.

4187   What P2P essentially does is, it allows for the democratization of content. The more popular content is, the more readily it is available, and the quicker it is to download.

4188   The problem that is evident at first blush -- and I am not saying that this is supported by data -- is that the threat of P2P to ISPs is that it takes the distribution of content out of their hands.

4189   Right now part of that parcel involves charging the end user, and part of the parcel involves charging the distributor for hosting that content and for the bandwidth. By putting it on P2P, essentially, the sharing is distributed, and it allows for infinitely lower -- much, much lower costs for the content producer, in terms of distribution.

4190   COMMISSIONER DENTON: I acknowledge that it engenders very much lower costs for the content producer, it also has very significant cost implications for those who provide bandwidth.

4191   Anyway, we will deal with that in another --

4192   MR. MARGETIC: For sure, but as it stands right now, they are charging on both sides of the pie.

4193   COMMISSIONER DENTON: I would not be surprised.

4194   In paragraph 14 of your original submission, not the one you read today, you proposed that --

4195   What do you think of the converse of such a proposal; for instance, if you go to get money out of a production fund, then you satisfy certain requirements, and essentially that is your licence to do it?

4196   In other words, you are not generally licensing new media, you are basically -- if you are going for federal money, or some kind of money, then you satisfy certain requirements.

4197   MR. CHRISTOU: Sir, could you clarify that? Do you mean --

4198   COMMISSIONER DENTON: I think what you are saying is, basically, if you are going for federal money, or any kind of money on this, you just have to satisfy certain requirements.

4199   MR. CHRISTOU: Yes, you would have to satisfy, of course, Canadian content requirements, and projects would be selected, ideally, by a committee of professionals who would evaluate the merit of projects.

4200   COMMISSIONER DENTON: Okay. I come to the question that I asked of the film and television producers, which is: Okay, we have the system of production in hand, who is going to consume it, and why?

4201   MR. CHRISTOU: That is the million dollar question, of course, and I think it is a difficult one to answer, for a few reasons, in that the definitions of new media are vague.

4202   A lot of what the CFTPA talks about are these interactive websites, whereas what we are mostly dealing with are films, TV shows, video content. I think, as time goes on, and as people migrate away from broadcasting toward the internet, their demand for long-form video content is not going to diminish, it is just the platform that is changing.

4203   So I think that the people who are watching TV now, in five, six, seven years will be watching TV on the internet. That is why we are trying to look somewhat forward, beyond this sort of three, four or five year dark period, where people, including us, don't exactly know what is going to happen.

4204   I think our belief is that, as people migrate from TV to the internet, those same viewers are going to be watching long-form content on the internet, so the people will be there.

4205   Whether the content is going to be there is the question, and if the Canadian content is there before the viewers come over, then we will be in a much better position than trying to catch up later.

4206   COMMISSIONER DENTON: Okay. What you are saying is agreed to by many participants before us, that we have to have content available. Does this not emphasize the importance of some kind of tagging or marking regime, whereby Canadian content can be recognized mechanically and electronically?

4207   MR. CHRISTOU: Absolutely. That's why we have that recommendation above our funding recommendations. It's key. If we don't know what Canadian content is and who is watching it, then, of course, we can't track what impact any money would be having, or what impact our efforts in production would have.

4208   COMMISSIONER DENTON: This brings me back to the question, is not a system of tagging and marking a system that is not network-neutral, at least as regards to this kind of content?

4209   MR. CHRISTOU: I think it is neutral in that we are monitoring the content, as opposed to using those numbers to impose limits or caps or minimums in either direction.

4210   We know the impact that the money is having, and that would be the point of the watermarking.

4211   And if the money had no impact, then we would have to rethink whether money should be there. And if the money had a lot of impact -- you know, a small amount of money had a large impact, then we could also think about increasing the amount of money.

4212   But we wouldn't be able to make those decisions without that knowledge.

4213   COMMISSIONER DENTON: Thank you.

4214   MR. MARGETIC: If I may add, the tracking would only impact neutrality if it was subsequently used to impact how that content was being accessed by the end user.

4215   COMMISSIONER DENTON: You could have equality of access among all end points, but you might have a scheme whereby -- if you are tagging and marking, you might have preferential tracks for Canadian content, for example.

4216   And I hear -- your principal position is that you don't seem to want this.

4217   MR. CHRISTOU: There is another alternative. We submitted a written submission yesterday to the CRTC in regards to the throttling issue, and in it we are proposing a somewhat -- not quite a formed idea yet, but a potential idea that may work down the road, where ISPs could, potentially, track the sharing of video files over peer-to-peer systems, and perhaps develop some sort of tariff system whereby content producers could be remunerated for files being shared over peer-to-peer, and in such a system, it would be more feasible that Canadian content could be given preferred speeds.

4218   COMMISSIONER DENTON: Thank you, I look forward to hearing that in the next traffic management proceeding.

4219   THE CHAIRPERSON: Commissioner Arpin?

4220   COMMISSIONER ARPIN: Do you think there is an opposition between the file sharing and Canadian content?

4221   Because if we use some means to identify Canadian content versus file sharing --

4222   It makes sense for Canadian content to be prioritized in the future, because the networks will be, eventually, congested. So how do you see --

4223   I am seeing an opposition between Canadian content and peer-to-peer.

4224   MR. CHRISTOU: I don't think that they are mutually exclusive at all. I think that peer-to-peer file sharing could be an enormously important tool for Canadian content, in its efficiency of distributing video content, and also its advantage of viewers being able to watch the content, first of all, whenever they want, without having to wait for things to download.

4225   On the producer side, we can deliver the quality of files that we would like to deliver.

4226   COMMISSIONER ARPIN: But isn't it an ideal world?

4227   MR. CHRISTOU: It is at this point an ideal world, but I think that if we design and work toward designing systems in which that ideal world could be reached, then now is the time to do it.

4228   The borders are infinite at this point. The sky is the limit, and we can work toward developing a system where it could work.

4229   If you take the example of the music business ten years ago, if a system such as Napster, which was the first and the fastest growing of all the systems -- if the music industry itself were to have accepted a $10 or $15 per user fee per month for unlimited music, the music business today would be financially in a lot better shape than if they had revolted against it.

4230   Therefore, there is no reason why a peer-to-peer file sharing system for Canadian films, where people would pay a monthly fee, couldn't be designed. There is absolutely no reason that we couldn't try to achieve that.

4231   COMMISSIONER ARPIN: Thank you.

4232   THE CHAIRPERSON: Louise?

4233   COMMISSIONER POIRIER: Yes, thank you, Mr. Chair.

4234   In paragraph 9 of today's presentation you refer to ISPs engaging in the practice of traffic shaping. Then, in paragraph 33 you also refer to new media accessibility, mentioning the remote and rural -- to increase accessibility in remote and rural areas, and for Canadians with disabilities.

4235   I am surprised that you don't refer, also, to the speed of internet services offered throughout Canada, because average residential broadband is 3 to 7 megabytes, and when we think of audio-visual distribution of documentaries, there is a need for increased broadband speed in Canada, isn't there?

4236   MR. CHRISTOU: I will make one comment, and then I will pass it on to Dan.

4237   I think that, yes, it is an extremely important issue. If a peer-to-peer system were to be implemented, it would become less important, because there would be a lower strain on bandwidth speeds.

4238   MR. MARGETIC: The problem that we see in terms of accessibility is that while broadband is widely accessible to the majority of Canadians situated in urban areas, it is not accessible in rural and remote areas.

4239   At the moment, if it were not for traffic shaping, that bandwidth is, to an extent, fairly -- it is moderately sufficient.

4240   Compared to other countries, Canadians have a much lower bandwidth, very much so when compared to Japan, and even when compared to our southern neighbour. Even more so, the discrepancy becomes obvious when one uses the metric of megabytes per dollar paid for bandwidth. Canadians were in the 27th spot among 30 countries tracked by the OESC in 2007.

4241   So, yes, we agree that bandwidth increase overall by major ISPs would be a great benefit, not just to the consumers, but it would be a great benefit to themselves. If they were to develop a higher speed service, then they could potentially justify -- and this is purely me speaking as a consumer of the internet -- the somewhat exorbitant rates they sometimes charge.

4242   THE CHAIRPERSON: Okay. Thank you very much. Those are our questions for you.

4243   I understand that we need a five-minute break for the next presenters to set themselves up.

--- Upon recessing at 1120

--- Upon resuming at 1137

4244   THE CHAIRPERSON: Madam Secretary...?

4245   THE SECRETARY: Thank you, Mr. Chairman.

4246   I would now invite the Writers Guild of Canada to make its presentation.

4247   Appearing for the Writers Guild is Maureen Parker.

4248   Please introduce your colleagues, and then you will have 15 minutes for your presentation.

PRESENTATION / PRÉSENTATION

4249   MS PARKER: Thank you, and sorry about the technical glitch. I guess that new media is quite complicated.

4250   Good morning, Mr. Chairman, members of the panel, Commission Staff, ladies and gentlemen. My name is Maureen Parker and I am the Executive Director of the Writers Guild of Canada, a national association representing 2,000 professional screenwriters, many of whom are on the forefront of creating content for new media.

4251   To my right is Rebecca Schechter, screenwriter and our President, and Jill Golick, screenwriter, new media writer, and our Vice-President.

4252   Also with us today is my colleague Kelly Lynne Ashton, Director of Policy.

4253   We are here today to urge the Commission to rescind the New Media Exemption Order and institute a regulatory framework that supports and encourages Canadian content on new media platforms.

4254   In the Commission's own study, Professor Noam explains the need for regulation, saying:

4255   We will now address some of the issues raised in the Notice of Public Hearing.

4256   For the record, Mr. Chair, we don't have this in our presentation, but we, too, are quite familiar with the ISN numbering system. We are members of SESAC, the international body that originated the numbering system, and if we could help in any way, we would be pleased to do that.

4257   Before we address the problem of measurement, we need to take a moment to talk about definitions, specifically the difference between linear and non-linear video.

4258   Linear video can be streamed television programs or made-for-new-media video, such as webisodes. Viewing linear video is a passive experience. One of the early online successes for linear Canadian content has been the Degrassi webisodes. These are small, stand-alone stories that enhance the TV viewing experience. Let's take a look.

--- Video presentation

4259   MS PARKER: A fan starts on the Degrassi mini-site, hosted by CTV, and clicks on "Video" to access the webisodes. This takes her to the CTV player. Here you see a pre-roll ad for an American show, and then the webisode plays.

--- Technical difficulties

4260   MS PARKER: We will walk through the clips verbally.

4261   As I say, a fan starts on the Degrassi mini-site, hosted by CTV, and clicks on the video to access the webisodes. This takes her to the CTV player, and here you see a pre-roll ad for an American show, and the webisode plays.

--- Video presentation

4262   MS GOLICK: With non-linear video, on the other hand, the viewer chooses from a limited number of options to navigate through a story. This is not synonymous with customization.

4263   If possible, we will take a look at ZOSTV.com and see a clip from there.

4264   The producers of ZOS call this "Last Tango in Jadac", an interactive fiction experience.

--- Video presentation

4265   MS GOLICK: This isn't a webisode, but scripted audio-visual entertainment. It is a very controlled experience, hardly unique or customized.

4266   Both linear and non-linear video fall within the Commission's definition of "program", arrived at during the New Media Exemption Order deliberations.

4267   The Commission made the appropriate choice when it excluded only unique or customized audio-visual content.

4268   We are sure that you are all familiar with the television show Little Mosque on the Prairie. This season it launched Little Mosque Online. We want to show you this example, because, rather than a traditional menu navigation, it uses the characters, with scripted and filmed dialogue, to offer the viewers their content choices.

4269   Let's take a look at this one.

--- Video presentation

4270   MS GOLICK: Each of these little clips offers a choice. To access podcasts, webisodes, a curling game, or an archive of recipes, you click on one of the actors.

4271   From the perspective of the audience, the funders and the WGC, the program is not the webisode or the podcast, but the entire Little Mosque Online experience.

4272   Again, the Commission definition works because it is expansive enough to include this type of content.

4273   Before we address measurement, there is one more consideration: we need to define "original new media Canadian content" to ensure that what we are measuring, promoting and funding is truly Canadian programming.

4274   You can't import television regulations wholesale when dealing with new media, so the WGC proposes a new certification system for original new media.

4275   Recommendation No. 1: We recommend that Canadian-certified new media projects be Canadian owned and produced, with at least 75 percent of costs spent in Canada, and the top five highest creative positions held by Canadians.

4276   Now let's address measurement. Linear video on new media platforms is easier to measure than non-linear video. Broadcasters are increasingly making television programs available online because the audience wants to get caught up with their favourite shows.

4277   From that perspective, it makes little sense to exempt new media broadcast from traditional content regulation. For audiences there is no difference.

4278   However, as new media platforms are currently exempted, Canadian broadcasters have been free to feature their U.S. programming, not their Canadian content. We would like to illustrate this point by showing you a screen shot of CTV's home page.

4279   The video -- it's up there now -- the video promotes the U.S. series "Lost". Canadian shows are available but you have to work hard to find them, just like on television. The problem is not just on the broadcasters own websites. On other platforms such as iTunes and YouTube we have the same problem with the broadcasters' branded channels.

4280   Let's take a look at the Treehouse iTunes channel. They are selling only their U.S. programming. By failing to put Canadian programming on iTunes, Treehouse has cut the Canadian producers and creative talent out of a potentially lucrative revenue stream.

4281   MS SCHECHTER: It's time for the Commission to rescind the New Media Exemption Order that allows broadcasters to do an end run around their Canadian content obligations. When it comes to television shows on the web the content is identical and the same producers are dealing with the same broadcasters. Only the pipeline is different.

4282   Our recommendation number two: We urge the Commission to set minimum Canadian content levels for streaming and downloading of Canadian television programs by Canadian broadcasters wherever their channels are hosted. We recommend minimum Canadian content levels for all sites of 60 percent measured by time.

4283   However, the length of a program is not an effective standard when measuring the volume of original new media content. The simplest method here is to measure titles, excluding news, sports and content outside of the definition of "program". This kind of regulation will not artificially limit the formats or lengths of content produced but will ensure that no less than predominant use of Canadian resources is used in new media broadcasting.

4284   Recommendation three: We recommend the minimum Canadian content levels for original new media content of 60 percent of available content measured by title.

4285   In the online world, just like the traditional broadcast world, success is determined by both audience size and revenue. Because new media is exempted from regulation the broadcasters have no obligation to report on traffic or the advertising revenues earned from their sites. The Commission cannot effectively measure success or improvement if they don't have a baseline.

4286   So our recommendation four: We urge the Commission to require detailed reporting from broadcasters regarding their new media activities.

4287   Looking at impact, new media has lowered the barriers to new entrants into the broadcasting system. Just about anybody can set themselves up as a new media broadcaster. All you need is content, a hard drive and a good internet connection. At a time when the traditional broadcast system has become increasingly homogeneous due to consolidation, this has brought much needed diversity to the system.

4288   The WGC is not advocating that the Commission extend its jurisdiction beyond the Canadian broadcasting system or to user-generated content. However, we do see an advantage to allowing independent new media broadcasters to opt-in.

4289   Our recommendation five: We recommend an opt-in tier of new media broadcasters who choose to be licensed and therefore take on licensees obligations. In exchange, they are in a position to trigger funding from the ISP levy or receive any promotion incentives that might exist.

4290   Kelly Lynne?

4291   MS ASHTON: We submit that the CRTC has the jurisdiction to impose a levy on the ISPs and the only issue is whether or not to do it. We have filed with the CRTC a legal opinion from McCarthy Tétrault which supports our position.

4292   Section 3(1)(e) of the Broadcasting Act says clearly that:

4293   MS ASHTON: The ISPs are a part of the Canadian broadcasting system, not just legally but also because consumers have made them so. Audiences demand content on all media platforms.

4294   The ISPs have happily complied by upgrading their infrastructure and providing consumers with higher speeds and greater download allowances to accommodate video viewing. They have switched to graduated licensing so that consumers who want more video have to pay more. ISPs are earning greater revenues from being a part of the Canadian broadcasting system. They must contribute to it.

4295   So how should the ISPs contribute? We believe that a levy on ISP revenues is the best approach. We commissioned a Nordicity study to examine how much such a levy would cost if it was based on a reasonable request. This study also looked at what the levy would cost subscribers if the ISPs chose to pass it on.

4296   We have with us here today Stuart Jack from Nordicity and he will answer any questions on the methodology of the study.

4297   A reasonable ask of 3 percent of certain ISP revenues would amount to $97 million. There is a clear need for that money. The Bell Fund turns down two out of three applications for lack of funds. The CTF's $2 million new media pilot project ran dry in just six weeks.

4298   A levy would have an immediate impact on levels of Canadian content online. It would energize an entire industry, creating permanent jobs in a highly-skilled sector. It would provide Canadians with more choice.

4299   For the ISPs who earned $5.7 billion last year 3 percent is peanuts. The ISPs should pay the levy directly and not pass it onto subscribers. The levy will generate more content, consumers will need more bandwidth. Thanks to graduated licensing, rather than being an expense for the ISPs, the levy could actually generate revenue. Despite all the ISP hyperbole, a levy will not kill the internet.

4300   Recommendation number six: We recommend therefore that the Commission create a class of broadcasting undertaking called an ISP new media broadcasting undertaking for whom a condition of licence will be a contribution to Canadian new media programming of 3 percent of certain revenues.

4301   MS PARKER: Although a new ISP levy is a start it is not enough. Too few Canadians know about the existing Canadian content online. Access is meaningless if it is not effective access.

4302   Recommendation number seven: We propose that 10 percent of the money from the new ISP levy be allocated as an incentive payable to broadcasters who promote and provide effective access to Canadian content on new media platforms. The funds would only be given to broadcasters who have improved traffic to Canadian content online. The funds would be used for in-house production of new media programs.

4303   Once again, we urge the Commission to rescind the exemption order and develop a regulatory framework containing the elements that we have recommended. Even in a digital universe we look to the CRTC to ensure that Canadians can choose to watch Canadian programs. The method of delivery is irrelevant.

4304   The ISPs are looking for a legal loophole to avoid their responsibilities under the Broadcasting Act. Their future is secure. What hangs in the balance is Canadians' ability to choose Canadian content. The time to act is now.

4305   Thank you.

4306   THE CHAIRPERSON: Thank you very much for your presentation.

4307   Sorry, must have heard too many presentations or I just don't get the point that you are making between unique and customized audiovisual content and non-unique. You pointed to ZOStv.com. Are you sure that's -- I presume it's a Canadian -- that's a Canadian production?

4308   MS PARKER: Yes, it is. It's a Canadian production.

4309   THE CHAIRPERSON: You say it's "hardly unique or customized". On what basis do you say that?

4310   MS PARKER: We are talking about the definition of program as defined. And what we are saying is that by providing a limited number of options for the viewer that doesn't make it a unique or customized experience. It's still entertainment programming with limited options. It's not unique and customized, therefore falling outside of the definition of program under the Broadcasting Act, of course.

4311   THE CHAIRPERSON: Yeah, I guess what you have to do to be unique or customized. I mean this is sort of a continuum, isn't it? I mean you say it's not unique. Somebody else looking in says, "I have never seen something before. This is new, et cetera. It entertains me". I just don't see where you draw the curtain.

4312   MS PARKER: Well, of course we all have -- everything is subjective in life but I guess what we are trying to show you with this clip is that with this particular program and others like "The Border", for example, has something similar, there are very limited options for the viewer.

4313   So if you are looking -- so if you are going down a path and you can choose "yes" or "no" or different avenues, there are not an unlimited number of avenues like there are on other sites and with other types of programming like "Second Life".

4314   Jill, would you like to jump --

4315   MS GOLICK: Well, like scripted drama the writer has created a certain number of scenes but it's up to the user to determine which order he sees those scenes in. But it's still a limited number of scenes. So in this sense the user can navigate through the material having choice and, yet, it's still a small and limited amount of program.

4316   THE CHAIRPERSON: Then the only other question I have this is when you talk about the new media fund, and you suggest 3 percent would raise $97 million and you say of certain revenues. You said that line several times. So it's not of all ISP revenues, obviously only of certain revenues.

4317   What are the certain revenues?

4318   MS PARKER: We have excluded certain revenues such as dialup and other small ISPs.

4319   Kelly Lynne, would you like to speak more specifically about that?

4320   MS ASHTON: It is set out in the Nordicity reports. We have excluded commercial.

4321   The bulk of -- we are looking at video services. So most of the video is going to residential users so that is why we would exclude commercial.

4322   The small users it would -- small ISPs it would be too much of a burden.

4323   THE CHAIRPERSON: Yeah.

4324   MS ASHTON: Services -- revenue is not related to the provision of internet services, would be excluded.

4325   So we take the whole pie, cut it back to what's appropriate.

4326   THE CHAIRPERSON: Is that a shorthand way of saying in effect personal use of broadband, people who get broadband? Because I mean surely if you get dialup you can't watch videos.

4327   MS ASHTON: That's right, right.

4328   THE CHAIRPERSON: If you have got high speed --

4329   MS ASHTON: That's right.

4330   THE CHAIRPERSON: -- you have maybe some but really not.

4331   MS ASHTON: Yeah.

4332   THE CHAIRPERSON: So really you are talking about broadband users and you exclude commercial broadband users, right?

4333   MS ASHTON: Yeah, with a few other minor exclusions, but yeah.

4334   THE CHAIRPERSON: Okay, thank you.

4335   Len, you have some questions?

4336   COMMISSIONER KATZ: Yes. Thank you, Mr. Chairman, and good morning.

4337   I want to go back to a statement that was made yesterday by -- I think it was GlassBOX TV, and I think other parties have commented as well.

4338   We heard them say yesterday that any additional support made available in light of the new environment should not result in the establishment of a new fund limited uniquely to new media. Do you agree with that?

4339   MS PARKER: No, we don't agree with that. We think that the new fund should encompass new media programming as it can accompany a television program and original new media content that stands alone and is not part of a television package.

4340   So for example a show like "Being Erica", it has on its site, on the CBC site, it has a blog, daily blog. So we think that funding for that blog should be coming out of this new fund; anything that accompanies a television program, or there will be original new media content that doesn't accompany a television program and that should also be funded.

4341   What we don't want to see is the fund being used to finance TV production. We want to keep that money separate and distinct.

4342   COMMISSIONER KATZ: But if, in fact, all production goes to generating the eyeballs on traditional broadcasting, wouldn't it make sense for it all to be all encompassing rather than two separate envelopes, two separate pots all to support one production, one ambition to create advertising, to create eyeballs for traditional broadcasting, if that in fact is what all this is about?

4343   MS PARKER: Well, that's -- it's a very good point and there is certainly something to agree with in that point. I think our fear is that because we are losing ground in this particular area we need to get some of this type of production made and financed. There are monies available for television production in the CTV and others. What we want to ensure is that there is some financing specifically allocated for reaching audiences over the net as well.

4344   COMMISSIONER KATZ: Okay. I'm going to take you to your original submission, page 29, paragraph 90, because I want to spend some time focusing on it if you can get it. And I will just read it into the record. And it states -- it's paragraph 90 on page 29:

4345   COMMISSIONER KATZ: Can you elaborate on the specific instances you are referring to when you suggest that ISPs are involved in influencing the nature of programming or content that's accessed over the internet?

4346   MS ASHTON: Well, that I think gets us into that whole neutrality issue that I think we were trying not to get into in this hearing. That's where we get into the grey area of traffic shaping, are they really choosing what content is going through?

4347   COMMISSIONER KATZ: But is it your position that that's what they are doing? I mean we are trying to deal with this legal issue that you filed, I guess, and I'm trying to understand where the line is between your position and others positions as well.

4348   So to the extent that you are basically trying to draw a distinction between what is a common carrier and what is not a common carrier, I think if I read this correctly you are basically saying if all they are doing is carrying the traffic they are a common carrier, but if they are influencing the nature of programming or content then they are more than that and they are presumably a BDU and they come under the Broadcasting Act.

4349   And I'm trying to understand if it's your position that the ISPs should in fact be contributing to the system then ergo it draws the conclusion you are also suggesting that they are influencing the nature of the programming or the content.

4350   MS ASHTON: But if you look at the legal opinion that we also filed from McCarthy's we went beyond the question, "Are they a BDU or not?" because I don't think it's actually very clear as to whether they are or not. And that legal opinion said regardless of whether they are a BDU they are a programming undertaking, a broadcasting undertaking, rather, and a new class of undertaking or should be considered perhaps as a new class of undertaking.

4351   And that legal opinion we examined the issues. Are they a BDU or are they a new class of undertaking? These are different ways of looking at it and we support the position that they are a new form of undertaking and then we don't have to deal with the question of are they a BDU or not.

4352   COMMISSIONER KATZ: Okay. So your position is the legal position because what this leads me to believe is you are drawing a different distinction here and you may not be consistent with your own legal position, is what it's telling me.

4353   MS PARKER: Yeah, progressed, yeah.

4354   MS ASHTON: The legal opinion is a stronger position for us, yes.

4355   COMMISSIONER KATZ: Okay. So we should not take this as being your position anymore?

4356   MS ASHTON: No, no. I believe there is some subtlety in that that we then took further in the legal opinion.

4357   COMMISSIONER KATZ: Okay.

4358   I'm going to come around to this notion of the Nordicity study and the quantum that was used to come to this support mechanism. But I want to do it in a more -- in a different route and I want you to know where I'm coming from on this as well.

4359   Today the support mechanisms that are going into Canadian production are coming from the BDU percent that's coming in from the BDU revenues. Is that correct?

4360   MS PARKER: Yes.

4361   COMMISSIONER KATZ: And what is that percent today?

4362   MS PARKER: It's 5 percent.

4363   COMMISSIONER KATZ: Okay. That's 5 percent --

4364   MS PARKER: Plus 1 for local.

4365   COMMISSIONER KATZ: Right.

4366   MS PARKER: M'hmm.

4367   COMMISSIONER KATZ: And within the 5 percent, 2 percent is being used for community programming by the --

4368   MS PARKER: I believe so.

4369   COMMISSIONER KATZ: -- by the BDUs and 3 percent is going into the CTF?

4370   MS PARKER: That's correct.

4371   COMMISSIONER KATZ: Okay. So it's the 3 percent that's going into Canadian production today?

4372   MS PARKER: Yes.

4373   COMMISSIONER KATZ: Okay.

4374   And it's your proposition that it should be an additional 3 percent, which is 50 percent of the current BDU allocation that should be going into the new media fund if I can call it that, which basically is 100 percent of what is being delivered right now from the BDUs for Canadian production?

4375   MS PARKER: M'hmm.

4376   COMMISSIONER KATZ: It's not 50 percent. It's 100 percent because they are producing -- they are delivering 3 percent right now and you're suggesting as part of the study that 3 percent should be going there as well, half of 6 percent?

4377   MS PARKER: That's correct, we are.

4378   COMMISSIONER KATZ: Okay, so you are --

4379   MS PARKER: From the ISPs.

4380   COMMISSIONER KATZ: From the ISPs?

4381   MS PARKER: From the ISPs.

4382   COMMISSIONER KATZ: Okay. So you are looking at virtually doubling, not virtually but in reality you are looking at doubling the support that's going in there today through this formula that you have developed through Nordicity?

4383   MS ASHTON: It's apples and oranges because the money going from the BDU share of revenues and if you are looking at what the 3 percent is, it works out to be about 140 million going to the CTF. And what we are talking about is 97 million so we are not doubling the amount of money going into new media.

4384   COMMISSIONER KATZ: Okay. But it is a very large percent. It's 70 percent or 80 percent?

4385   MS ASHTON: It's looking at a large amount of money that this industry needs because if you are looking at where audiences are they are over here. They are on the new media platforms looking at the television content and looking at original media here.

4386   The fact that we only have 23 million or something along those lines available for production and we have got -- with the Heritage money there is 240 -- around 256 available with CTF that's a great disparity. So the 97 million we will try to bring that disparity up.

4387   COMMISSIONER KATZ: Yeah, but right now from the industry that there is today the BDU contribution you are saying is 140 million, and I will take that as being what it is. And under your formula here you are looking at an additional 100 million going in.

4388   MS PARKER: Yes, but from a different type of production and from the ISPs, not the BDUs.

4389   COMMISSIONER KATZ: Understand that.

4390   MS PARKER: And as Kelly Lynne had just pointed out, which I think is an important distinction, you know, the BDU money is matched by public money. So there is, you know, a far greater pool of that. You know, this is 97 million.

4391   And again, we provided you with a range, you know. That's the high end of the range. So yeah, that's 97 going towards completely different types of programming. We have heard today about oversubscribed and I did listen to -- Commissioner Katz, I believe that was your question -- and I understand your point. You want something more specific than oversubscription.

4392   You know I think if you look across a number of funds that are trying to provide this type of financing for new media programming; for example, the CTF with its fund running out within six weeks, that I think speaks to something. There is demand. Canadians want this type of additional content not just for their television programs but also as standalone, but will have to find a way to pay for it.

4393   COMMISSIONER KATZ: But as I thought I heard Kelly Lynne -- sorry -- indicate a minute ago, the eyeballs are moving to the new media environment but the reality of what I'm seeing is the BDU consumer hasn't left the cable industry. They are still there. They are still consuming cable.

4394   So notwithstanding the fact that the advertising revenue may slowly be migrated over to the new media environment, although I'm still not convinced that it's actually moving over there, I think there is more economical issues here than meets the eye as well because from what I gather there isn't the migration going one to one.

4395   But notwithstanding that issue, if in fact there is a migration going on, people aren't turning back their cable sets and so -- and in fact, cable is still growing. Last time I looked at the number of customers they are still growing as well.

4396   So there is still huge growth in the contribution from the traditional BDUs to new production and yet, notwithstanding that, you are looking at virtually doubling it. I used the term "doubling it" loosely, 70 percent today, but based on the forecast that I think Nordicity had it's going to get 120 or whatever million it is as well by 2010-2012. So it will be double effectively by the time this thing gets going if in fact this is something that is going to be pursued.

4397   And I'm just trying to understand the return on that investment. Again, if in fact everything is going right now towards repurposing and promoting the linear -- the traditional broadcasting system through new media but trying to drive the eyeballs back there as well through as broad number of platforms as out there, we are not going to be contributing to any more eyeballs. There are many more eyeballs watching Canadian programming but the average consumer won't be watching anymore than that. He only has a limited number of hours that he can watch anyway.

4398   MS PARKER: Well, that's one way of looking at it. The other is too, that you know under the Broadcasting Act, you know, the purpose of the Broadcasting Act is to supply Canadians with some balance and some choice to watch Canadian programming, and that's what you are not getting from our system. We attempted to show you that today through our clips which, you know, have limited impact as we can see.

4399   But what we are showing you is that it's hard to find and there isn't very much of it and, therefore, we have to figure out a way to make more.

4400   So we have looked through the system. We have looked to who is contributing to the system in that that they are, you know, broadcasting programs as well, and who is not contributing to the system.

4401   So we embrace the idea of a levy because we think it's a fair way of asking everyone to contribute to the Canadian broadcasting system.

4402   I guess your question is, "Will there be too much money and not enough revenue coming back through additional eyeballs?" I think that's rather impossible to say because, first of all, we are talking about a new form of programming, not just the type that accompanies television programming.

4403   I know -- you know, I consume my television quite differently these days. You know I watch what I can but I also watch things online. I also watch original content online.

4404   You know, absolutely there is still a dimension of what we don't know but is this too much money? We don't think so. And again, we are providing you with a range. It would be nice if we get the top part of the range but, you know, we are realistic people.

4405   MS ASHTON: Could I just add that to say that viewers only have a limited amount of time, we are finding with new media that we are accessing our viewers at times when they haven't previously been consuming media.

4406   For example, we often see people at work looking at new media programming. Now, they wouldn't have watched television at work but they will watch short, original new media while they are sitting on hold, while they are waiting for a meeting to start or for someone to work at their technical difficulties.

4407   So there are new times being added and we are finding also that people, especially young people, are watching television with a laptop on their lap and consuming two media at the same time. So there is an expansion of the viewing hours.

4408   COMMISSIONER KATZ: Okay. In paragraph 59 of, again, your December 5th submission on page 20, you cite -- and I think the reference you cited is actually CRTC public notice. You indicate that 5 percent of all internet websites are Canadian websites.

4409   From perhaps a non-financial perspective, notwithstanding what you have already said about seeking the financial support, is there anything you believe that can be done by the CRTC, by Canadian government to promote that 5 percent of the internet websites distinct from the other 95 percent that's non-Canadian?

4410   MS ASHTON: We have proposed to you the opt-in licensing idea. What we need from more Canadian websites is support. It's the same as Canadian television.

4411   With out opt-in idea we know that there are new entrants into the system, producers who are aggregating content who would like to have some support to be able to grow, to have more than just their own video content webisodes, and under our opt-in idea they would be able to access the ISP levy. They would be able to trigger funding by licensing content and get exclusive content exclusive to them. They would have the financial support for new original content and their obligation would be Canadian content minimums. And as Canadian players going after frequently niche audiences, we don't think that would be an issue for them because they don't have the money to be licensing the U.S. programming such as CTV.

4412   So this is one idea that we have had of actually increasing the amount of new Canadian content and new players into the same.

4413   COMMISSIONER KATZ: So what in fact would be the conditions on those people that opt-in or you call it your second tier? What would the conditions be for those people to be able to subscribe to this fund?

4414   MS ASHTON: Well, that's the sort of thing we would have to work out in a subsequent hearing. The kind of thing we are thinking of is just minimum content quotas. So if it's the same as we are suggesting for streaming and downloading that it be at least 60 percent. We say at least 60 percent of their catalogue would be Canadian.

4415   If they are a promotion you know it's up to the Commission what it decides the other main players, what their obligations are, but I think we can look at the opt-in as a second tier with a separate set of conditions, recognizing that they are smaller and that they require some nurturing, so not the same sort of detailed reporting obligations that a bigger company might have.

4416   COMMISSIONER KATZ: Okay. Let's move to the quantum, the Nordicity study I guess to some extent as well. And I recognize, I think -- the Directors Guild was here last week and when I started asking questions they were saying it was only one such model, so you were not married to this model and this amount of money as well.

4417   But I just want to try and understand. The model drives an increase of $1.05 per month I guess in contribution and the suggestion is that it can easily be absorbed. Can you expand upon how easy it is in this environment, in this economic climate to absorb costs, first of all as an ISP, and how a consumer can continue to pay all the fees they are paying for these so-called commodity services as they keep increasing.

4418   MS PARKER: Well, you know, just looking at their overall revenue, it was 5.7-billion for the sector, we believe 3.8 for all digital media, we think three percent levy of $97-million is not an overwhelming sum, especially as now the ISPs are earning additional revenue from carrying video through the graduated licensing.

4419   You know, I'm certainly paying as an Internet subscriber, so my bill is changing. When I download more video, I'm paying more and, therefore, they're earning more and we believe they can afford to pay a levy of -- a reasonable asked levy.

4420   We're not asking that this be passed on to the consumer, we're asking the ISPs absorb this as a cost of doing business.

4421   COMMISSIONER KATZ: Okay.

4422   MS PARKER: Would you like Mr. Jack to add anything? We have brought our --

4423   COMMISSIONER KATZ: If he would like to, he is free to.

4424   MR. JACK: Sure. It goes to past experience and we can name some of the larger ISUs such as Rogers that have historically added rate increases on periodic bases with corresponding increases in subscriber base. We get to also talk about bundling. When you buy a bundle of services and the dollar increase comes upon the bundle, it's very difficult for the consumer to differentiate what this is basically on, also in terms of service in that bundle.

4425   So, it's not as if they're going to drop their cell phone and their land line and their ISP service for a $1 increase. So, there is some comfort level in terms of past data is showing that.

4426   With bundled services, and especially with the larger ISPs they've been successful in increasing their rates much higher with corresponding increases in their subscriber base.

4427   COMMISSIONER KATZ: I look forward to the ISPs responding, but I mean I can only assume that they have used capital investments to make as well and I also think, notwithstanding the fact that your evidence indicates that this is inelastic, the reason there are bundles out there from my recollection is because you are trying to incent consumers to buy more but you are discounting when you buy more as well, and if it was purely inelastic there wouldn't be a need to have discounts on bundles.

4428   Well, I will look forward to hearing their responses to some of these issues.

4429   The last question I have is the model that you set up, assuming we go forward with it, the two to three percent range and the WSPs at 0.06 percent.

4430   You see that presumably evolving as the industry evolves as well, or are those numbers static? In other words, we know that the ISP revenues are growing, they are growing and you cited that they are growing and they are growing faster than probably most other revenues as well.

4431   MS PARKER: At this time we've left that modelling static at two to three percent because there is growth, as you say, inherent in the system because their revenues will continue to grow.

4432   COMMISSIONER KATZ: Okay. Those are my questions.

4433   THE CHAIRPERSON: Stephen.

4434   COMMISSIONER SIMPSON: May I ask a question concerning -- on page 6 of your presentation you had indicated that failure of broadcasters to post content on aggregation sites such as iTunes and YouTube were an example of the failure of the broadcaster.

4435   And I am wondering how that isn't more of a commercial issue of negotiation between the producer and the broadcaster rather than -- is this something that needs to be regulated or something that needs a finer point put on it in contract negotiations?

4436   MS PARKER: Well, I'll start this off and then pass this on to my colleague, Jill Golick.

4437   It isn't really a matter of negotiation, we've already negotiated that and you've heard a bit about that this morning from the CFTPA.

4438   So writers, independent writers in this country sign collective agreements with independent producers and we assign certain rights to those independent producers. They already have the right under our collective agreement to exploit digital production or traditional programming, streaming and downloading.

4439   And we have formulas, for example, there is a distributors gross formula that kicks in if a program has been streamed and downloaded.

4440   So, there is a revenue stream coming back. The problem is that the broadcasters are buying these rights and not using them, and certainly this particular broadcaster has access to a full slate of Canadian programs but for some reason is not using them on their branded channel.

4441   Jill, would you like to add something?

4442   MS GOLICK: Well, I just wanted to add that Itunes is currently not available as a distribution system in this country to anyone except a broadcaster.

4443   So, in order to have your product on iTunes you must go there with a broadcaster. If your broadcaster fails to put your product on there, that can be a significant revenue stream that you're cut out of.

4444   We saw recently in the United States, Joss Whedon, a very famous screen writer there create a web series called Dr. Horrible's Sing-Along Blog which he gave away for free for a limited amount of time on the web and then made available for download on iTunes and within a month had made back his initial payment for the show and was in a profit situation.

4445   So, you can see that people -- even though a product may be given away on television or on the web, it is also very valuable for sales in that format.

4446   COMMISSIONER SIMPSON: I understand that completely because it's a different model of monetization but it is very real.

4447   I just am trying to understand whether the broadcaster is failing through benign neglect or an inability to get that kind of content produced, or is it that they are not seeing the revenue potential themselves or that they don't want to share it?

4448   Do you know that answer, or are you asking us to find that out?

4449   MS GOLICK: No, we don't know that answer. That would be a great question for them when they appear in front of you.

4450   But, you know, obviously we would like to see those programs distributed because it would be revenue stream for our members and for the rest of the creative talent pool.

4451   I mean, the programming is there we just need to exploit it now.

4452   COMMISSIONER SIMPSON: Thank you.

4453   THE CHAIRPERSON: Okay. Louise, do you have a question?

4454   COMMISSIONER POIRIER: Yes, I have one question.

4455   THE CHAIRPERSON: No, I will come to you.

4456   Okay. Vice-Chairman Arpin wants to follow up on what Steve just asked and I will come back to you, Louise.

4457   COMMISSIONER POIRIER: Okay.

4458   COMMISSIONER ARPIN: Now, this broadcaster here that we talked about is also a producer. Is he able to put his own production into iTunes or does he make them available through his website?

4459   MS GOLICK: Absolutely.

4460   COMMISSIONER ARPIN: So, it's not -- because in your oral presentation you said -- you were talking mainly about American production.

4461   MS GOLICK: Well, we showed you the Treehouse iTunes website.

4462   COMMISSIONER ARPIN: Yes, except that we had some difficulty seeing it.

4463   MS GOLICK: Well, you can check it. You just scroll down and it is entirely U.S. product. There are about seven or eight preschool programs for sale on the site, they are all American. There were no other pages, that is the entire catalogue they're offering for sale on iTunes.

4464   I can't explain their motivation, I can only tell you what I see when I go there.

4465   COMMISSIONER ARPIN: No, and they will be appearing before us later on this week I think, or next week or the week after next and we will have surely an opportunity to hear from them because they also have their own production house.

4466   MS GOLICK: Yes.

4467   COMMISSIONER ARPIN: And their catalogue is not either over there. So, there might be some commercial issues as Mr. Simpson was referring to.

4468   Thank you.

4469   THE CHAIRPERSON: Louise.

4470   COMMISSIONER POIRIER: Yes, hello.

4471   Two of your recommendations refer to minimum Canadian content levels, No. 2 and No. 3.

4472   Considering that you were in the room this morning when the Chair questioned CFTPA on ISAN, I would love to hear about what is your reaction on this means to evaluate Canadian content on new media?

4473   MS PARKER: I think that they are two different measurements.

4474   I think with respect to ISAN what we may be looking at is to see how much broadcast programming is available, the overall number. And ISAN is just being introduced in Canada as the CFTPA explained, it's an international system. Other countries have rolled it out earlier.

4475   But we are all participants in the system, such as the Writers Guild of Canada are requiring ISAN numbers on each project in our database and each version in our database.

4476   So, we will at some point have some statistical data to share with you, but it's just in its introduction phase right now.

4477   With respect to our specifics, we're talking about what we believe should be the form of measurement for minimum levels of Canadian content online, streamed and downloaded and then original.

4478   Because streamed and downloading is different than original, we are proposing that you measure by actual time. And for original, because time won't work, the lengths are different, they vary, we're asking for a title measurement.

4479   We're just trying to specifically answer the questions that were put before us by the Commission.

4480   COMMISSIONER POIRIER: Yes.

4481   MS SCHECHTER: If I may, I just think also for streaming and download, since those are identical to what's on television, we are just taking sort of the 60 percent over the day OTA and trying to apply that to the Internet, and I think that that -- it's just a question of looking at a catalogue that they have online of what's available. It's not an extremely complex thing to measure.

4482   Original is more complex and the bigger picture is.

4483   COMMISSIONER POIRIER: I wonder if it is too early for you to comment on ISAN to the Commission before the ending of this hearing. I would love to know what is your position on it and if you would be willing to use it or if you disagree with it.

4484   MS PARKER: Well, we are already using it.

4485   COMMISSIONER POIRIER: Yes, you are.

4486   MS PARKER: And in great numbers because we also run a collection society for Canadian writers as well.

4487   So, we have already worked with ISAN International, Patrick Attallah, getting it set up and, of course, with the CFTPA, they have the Canadian agency.

4488   So, you know, we can in our written response provide you with our thoughts on that.

4489   COMMISSIONER POIRIER: Thank you very much.

4490   THE CHAIRPERSON: Okay. Thank you very much. Those are our questions and we look forward to your written submissions.

4491   Madam Secretary, what time do we resume.

4492   THE SECRETARY: One thirty.

4493   THE CHAIRPERSON: One thirty. Okay.

4494   THE SECRETARY: Thank you.

--- Upon recessing at 1217

--- Upon resuming at 1350

4495   LE PRÉSIDENT : O.K., Madame la Secrétaire, nous sommes prêts.

4496   LA SECRÉTAIRE : Merci, Monsieur le Président.

4497   I would now invite the Songwriters Association of Canada to make its presentation.

4498   Appearing for the Songwriters Association of Canada is Mr. Don Quarles.

4499   Please introduce your colleague and proceed with your 15-minute presentation.

PRESENTATION / PRÉSENTATION

4500   MR. QUARLES: Thank you very much.

4501   Bonjour, Monsieur le Président et les Membres du comité. Merci pour cette opportunité de faire notre présentation à cette audience.

4502   Good afternoon, Mr. Chair, Committee members and Staff. Thank you for giving us the opportunity to share some thoughts on this very important area of particular concern to those of us who create music for a living.

4503   My name is Don Quarles, I'm the Executive Director of the Songwriters Association of Canada, the only national non-profit organization that represents and is run by songwriters.

4504   For the past 25 years the SAC has concerned itself primarily with the education and development of aspiring songwriters.

4505   To my left I'd like to introduce to you Eddie Schwartz, songwriter, producer and performer who's written songs for Joe Cocker, the Doobie Brothers, Carly Simon, Rascal Flatts, Amy Sky and dozens of other Canadian and international artists, including Pat Benatar who was propelled to world-wide fame when she recorded Eddie's song "Hit Me With Your Best Shot".

4506   He is the President of the Songwriters Association of Canada and is also the current Director and past President of the Canadian Songwriters Hall of Fame.

4507   To my right I'd like to introduce to you Bill Henderson, legendary songwriter, singer, musician and producer and founding member of Chilliwack, one of Canada's most loved bands and creator of such classic songs as "My Girl", or as most of us know it "Gone, Gone, Gone".

4508   Bill has served on a number of music industry boards and is the Vice-President of the Songwriters Association of Canada.

4509   I'd now like to pass the microphone on to Eddie Schwartz.

4510   MR. SCHWARTZ: Thank you, Don.

4511   For decades Canadian music creators have and continue to be ready, willing and able to write and produce intellectual property that takes a back seat to no one.

4512   After 10 years of looking to the powers that be in the music and telecommunications industries for a solution to the exponential growth of unauthorized and unremunerated music file sharing, we as creators now realize we have no choice but to take a proactive role in developing a solution that is fair and beneficial to all parties in regard to this massive and growing broadcast activity.

4513   Why do we feel justified in defining file sharing as a broadcast activity? First and foremost we look to a definition of broadcasting put forward by the Commission in paragraph 22 of the CRTC Notice 2008-11 from which we restate this excerpt.

4514   MR. SCHWARTZ: End of quote.

4515   In a soon to be published paper called "The Tangled Web of UGC, Making Copyright Sense of User-Generated Content", written by Professor Daniel Gervais, a noted Canadian intellectual property expert, Professor Gervais states that:

4516   MR. SCHWARTZ: In his words:

4517   File sharing is the predominant example of what Professor Gervais is talking about. In fact, 24 hours a day, every single day 10-million songs are being file shared at any given moment, as many as 40-billion songs a year.

4518   Music file sharing constitutes at least 90 percent of the music activity on the Internet and dwarfs all other digital methods of distribution, including the much vaunted iTunes.

4519   Surely the way to restabilize the system is through regulation and monetization of this many to many world we are faced with.

4520   The failure to monetize and regulate the billions of music files shared annually has dramatically weakened creators' ability to earn a living.

4521   Now, we are in danger of missing a rare economic opportunity that could well be key in propelling Canada's economy forward in this new century.

4522   For while we think it reasonable to assert that in other areas of economic activity, such as manufacturing for example, Canada may have difficulty competing with Asian and other nations, in the realm of intellectual property and music, in particular, Canadians are and will continue to be more than competitive.

4523   For that reason we call on the CRTC and other government bodies to put in place the regulatory and legislative framework to transform this wonderful new technology for the distribution of our work into the economic powerhouse for Canada it can and we believe it will be.

4524   Why are we such strong supporters of file sharing if we are not being remunerated for our works?

4525   The answer is this: Peer-to-peer networks and their like have become the greatest living repository of the entire lexicon of western music ever created.

4526   You can find virtually any piece of music from the obscure to the hugely successful without burning a litre of gas. In conjunction with net neutrality, it affords equal access for all, to the struggling independent Canadian bands as well as the huge multi-national mega stars alike.

4527   It's great. Consumers and creators love it. All we ask as creators is to be reasonably and fairly paid for our work.

4528   Mr. Bill Henderson will now give you some additional information on our proposed model.

4529   Bill.

4530   MR. HENDERSON: Thank you, Eddie.

4531   The Songwriters Association of Canada has developed a simple plan to monetize music file sharing. In the process of developing this plan, we sought input from music futurists, copyright experts, economists, Internet technical experts as well as many national and international music industry and consumer groups.

4532   We suggest that file sharing should require a licence fee as do other forms of broadcasting. Though others at this hearing have referred to it as a tax, a licence fee is no more a tax than the monthly fee most of us now pay ISPs, or the monthly fees we pay to cable companies for bundled television content. It is payment for use of our work and to characterize it as a tax is misleading.

4533   This licence fee would be purchased through a small payment bundled into monthly broad band access charges. The licence fee would be paid by individuals to their ISPs and would allow individuals to file share unlimited amounts of music, just as SOCAN's licence fees allow traditional broadcasters the same privilege.

4534   File sharing would then become an authorized activity. Consumers would be free of all legal threats and repressive measures, provided they continue their activity within the limits of an accompanying regulation -- any accompanying regulation set by this body.

4535   The proceeds of this licence fee would be pooled, much as SOCAN currently pools licence fees from traditional broadcasters, and distributed to creators and rights holders in proportion to the activity their works receive.

4536   Information on music file sharing activity is available from third party organizations such as BigChampagne in California who have a widely accepted method of monitoring this activity in a non-intrusive way that ensures individual privacy.

4537   The amount of the licence fee would be determined by the Copyright Board through the quasi-judicial process that SOCAN and traditional broadcasters have engaged in for many years.

4538   This process would take consumer, creator and other stakeholder interests into account to determine the appropriate licence fee.

4539   Good faith negotiation among creators and rights holders would determine how the pool of money is split.

4540   Some percentage of the total pool would be paid to the Internet service providers, the ISPs, for their assistance in the process, and the ISPs' role would simply be to collect the licence fee and pass it on to the appropriate collective. Creators and rights holders would then become in essence ISP business partners.

4541   There is good and growing evidence that consumers would welcome such a system. A study by Hertfordshire University in England in June of 2008 concluded, and I quote:

4542   MR. HENDERSON: End of quote.

4543   Canadian consumer advocates have also addressed our proposal. I quote Michael Geist who stated on December 3rd, 2007 on his website:

4544   MR. HENDERSON: End of quote.

4545   Other consumer advocates who have expressed support for this general approach are the Canadian Internet Policy and Public Interest Clinic, known as CIPPIC, and the Public Interest Advocacy Centre.

4546   Eddie.

4547   MR. SCHWARTZ: Thanks, Bill.

4548   In order to ensure access to Canadian music, we urge the Commission to enact regulations that create net neutrality. Net neutrality is the foundation for access and is an essential underlying assumption to our proposal.

4549   By making bandwidth available equally to everyone, net neutrality will ensure access to all songs created by Canadians not just the limited repertoire available at digital stores.

4550   We come before you today to ask for your support for a new business model, not for the creation of another fund to help produce new media. Our priority must be to re-establish the value of the works themselves rather than to see the creation of more works that ultimately may have little or no value due to file sharing that pays creators and rights holders nothing for their efforts.

4551   However, if a fund is to be established, far better for the money to be directed toward the marketing and promotion of Canadian music nationally and internationally.

4552   The songs that will be the most file shared, therefore, be the most successful in the pool -- calculation of the pool in a net neutral universe are the ones that people are made aware of and that is where a fund to promote Canadian music could play a significant role and create greater access to our artists and culture.

4553   CanCon continues to be a valuable tool where traditional linear forms of broadcasting are carried on the Internet. Since the great preponderance of Internet music activity is file sharing, however, and cannot be controlled in the same way, net neutrality and funds for marketing and promotion of Canadian music are perhaps our best tools to support access to Canadian content in this new non-linear file sharing environment.

4554   Don.

4555   MR. QUARLES: Mr. Chair, Committee members and Staff, the Songwriters Association of Canada's equitable proposition will provide a foundation of financial and legal certainty that will allow music fans to access the content they want when they want it, while allowing those who create music to get paid for the use of their work.

4556   By some estimates, 30 percent of the current recorded music sales are independent artists. Our proposal will help to encourage creativity in these new emerging music creators by offering the revenue stream of the future.

4557   On behalf of Eddie, Bill and the tens of thousands of other music creators in Canada, thank you for your time and attention.

4558   Merci beaucoup.

4559   THE CHAIRPERSON: Thank you very much for your very interesting proposal.

4560   A few questions.

4561   What you really -- you are calling it a licensee, but you really have taken the idea of the blank copy charge, right, and converted it to the Internet, the same concept, that people do now know it, you can't stop them, et cetera, so they should be paying for it, so a generalized fee. That is really behind all of this.

4562   Congratulations. It is a very creative approach, but it is the same approach, it seems to me, in concept.

4563   MR. SCHWARTZ: I would respectfully disagree actually, it's the concept that SOCAN, it's performing rights -- it's much more the performing rights model than it is the private copying levy.

4564   The performing rights model is basically broadcasters have a blanket licence to play any Canadian music -- well, any music from anywhere in the world on radio and a pool of money is created, and that model predates the private copying level by many decades.

4565   THE CHAIRPERSON: Okay.

4566   MR. SCHWARTZ: So, it's really more the performing rights model.

4567   THE CHAIRPERSON: On what basis would the Copyright Board determine the rate?

4568   MR. HENDERSON: Well, there would have to be submissions from all parties and a rate would have to be determined.

4569   You'd have to -- economists would figure that out basically as they do.

4570   There are -- it's interesting, you know, you could ask the question, how do you set a rate for file sharing, where's the precedent? And I don't know if that's where you're going with this.

4571   THE CHAIRPERSON: No, I am trying to find out what your guide posts are. Are you thinking, well, if there was no file sharing we would be selling our products through CDs and we would presumably get an income of "x", we are now not getting it because the files are being shared, so that is what you want to replace.

4572   Is that the sort of concept you have in mind or what? That is what I am trying to get.

4573   MR. HENDERSON: No, I wouldn't -- I wouldn't go with that because that -- I think what you're referring to do has more to do with reproduction and what we're talking about here is not reproduction, we're talking about sharing, we're talking about communicating, it's the communication of works to others.

4574   As you know, in Canada there is -- as you know very well, there is a private copying levy and that is to cover the copying, the reproduction.

4575   THE CHAIRPERSON: You know, I am unfamiliar with this issue, that is why I am fascinated with what you have come up with.

4576   The good faith negotiations, if they don't result in a sharing formula, do you see some sort of fallback of having somebody be it the copyright, us or somebody else determining the sharing ratio?

4577   MR. HENDERSON: Well, the Copyright Board did do that in the case of private copying, they set the split and I think that there's a precedent there for one thing.

4578   But it simply has to be worked out. The people have to sit down, they have to work it out.

4579   THE CHAIRPERSON: Would this require changing either the copyright or the international treaties on copyright that Canada is party to?

4580   MR. HENDERSON: Well, according to a study that Daniel Gervais did for us, with respect to your second question, international treaties, basically he said that in order to be able to do this and respect those treaties -- be able to put in place what we're suggesting and respect those treaties, it has to be agreed generally that file sharing is impossible to stop, it can't be stop.

4581   And, in that case, then it's possible to enact the kind of legislation we would need. We're looking for a file sharing right, a new right.

4582   THE CHAIRPERSON: So, indeed, it would require a change to all legislation on copyrights then?

4583   MR. HENDERSON: Indeed.

4584   THE CHAIRPERSON: And if I understand, there is no international precedent for this, you would actually be blazing a new trail in light of the reality which you so very convincingly presented that, you know, you can't stop it and basically it's a wonderful way of creating a depository and spreading the music around the world, so let's face reality and find a new way of dealing with it?

4585   MR. HENDERSON: Yeah, that puts it in a nut shell how we feel about it, absolutely.

4586   THE CHAIRPERSON: Yes.

4587   MR. HENDERSON: There is one precedent in Denmark, I don't know if you heard about what happened in Denmark. But in Denmark -- what is the company, Eddie, the -- oh, it's TDC, TDC is the big ISP, there are a number of ISPs but TDC is the big one.

4588   And apparently they -- in Denmark there is a law that service agreements between consumers and companies cannot exceed six months and so that puts the ISPs in a lot of competition for subscribership, so there's a great subscriber churn.

4589   So, apparently all of the ISPs in that country have a fund for member -- subscriber retention fund and TDC, the largest one, decided to make a move where they went to CODA which is the SOCAN of Denmark. They went to CODA and they said, how much money do you earn in a year. And they said, 50-million kroner and TDC cut them a cheque for 50-million kroner and said, we would like the rights to all of your repertoire for our network, which they received.

4590   And they went to the record companies as well with the same kind of money and made a deal with them as well.

4591   So, here you -- there is an actual precedent where for a 100-million kroner in Denmark people who are signed to TDC as subscribers are able to access the world's repertoire of music legally.

4592   THE CHAIRPERSON: I see. Okay.

4593   Michel?

4594   COMMISSIONER MORIN: Yes. This licence fee, what will be the importance? Do you have any range of the value we can look at for this licence fee?

4595   MR. SCHWARTZ: Well, we plugged some numbers in to see, because we were asked by music publishers, we, you know, discussed this obviously with our colleagues, the music industry, and they wanted to get some idea so they could go basically to their multi-national bosses in most cases and say, you know, and tell them what the bottom line is for their catalogues.

4596   So, we looked at -- we actually plugged a figure of $5 a month in.

4597   COMMISSIONER MORIN: Five dollars a month?

4598   MR. SCHWARTZ: Well, no, I'm not suggesting that, I'm just saying we used that as a plugged figure to come up with some idea of how big a pool would be created.

4599   In other words, you'd have to create a pool that's big enough that it fairly monetizes the work because it's going to be distributed amongst all the different creators and rights holders.

4600   So, you know, that kind of -- that pool could create as much as $500-million a year in Canada based on broad band access.

4601   But again our -- just so you understand our position, that's not our position that it should be $5 a month, our position is that the Copyright Board is the proper body to decide what that monthly number is.

4602   COMMISSIONER MORIN: But with such a number I suspect the reaction of the young consumers

4603   MR. SCHWARTZ: Well, right now if you had $5, okay, and you went to iTunes you could buy five songs.

4604   COMMISSIONER MORIN: Yes.

4605   MR. SCHWARTZ: With our proposal, if you had $5, you can download 10,000 songs tomorrow. I mean, in terms of a value proposition, I think it's absolutely untouchable. I don't think anything else out there even comes close.

4606   The strength of it is it's actually a very small monthly amount, very small daily or monthly amount. Most for profit business models charge more like $20 a month for some kind of music access, some kind of subscription service, so it's certainly far less than that.

4607   We're presupposing that you would have a broader base, you'd have a broader base in Canada of people who would subscribe to it, so it would create numbers that would be sufficient.

4608   But I think at the end of the day, the way we're looking at this is, look, we have to find a way to monetize intellectual property going forward or else we're going to be -- we're going to be losing a tremendous industry in this country.

4609   I think that's the downside. If you don't find some way to monetize intellectual property, we're faced with a tremendous economic problem, we're going to start losing industries.

4610   The music industry is the first one out of the chute for obvious reasons, the size of the files are very manageable. And, as we all know, the music industry is in dire straits and getting worse, most of the major labels are in serious trouble in this country.

4611   So, you know, we feel it behooves us as the first ones out of the gate to try to find some solution that remonetizes this industry which could be very important to Canada.

4612   I mean, we have -- and I think it's very important for us to say that we usually are educators, I mean we usually are there trying to help the next generation of songwriters to come, to help develop them so they can play their role on the Canadian and the world stage.

4613   After 10 years of waiting for other people to come up with a solution we finally said, I don't think anyone's going to come up with a solution, and this is not going away, file sharing is not going away. So, we better come up with some idea.

4614   And also, I'll just add one thing, it's a little disingenuous to be developing the next generation of Canadian creators if at the end of the day you know they're not going to be able to make a living, there's no money, their work is going to be valueless.

4615   So, again, you know, that started to bother us and we felt we had to try to address it.

4616   COMMISSIONER MORIN: You made the reference about a study in England. Have you done some study in Canada about the consumers and the artists about all these issues, a study with all the options on the table?

4617   MR. HENDERSON: No, we haven't. We haven't done a study on consumers. We had a study done on, as I mentioned earlier, on the legal issues, we had a study done -- a technical study on Internet technical matters as to whether -- basically whether file sharing could be stopped or not, we also had an economic study done.

4618   We have not done a study of consumers. That could be a very expensive process, I imagine, and so we haven't got to that yet.

4619   We do feel it needs to be done, it does need to be done. This is the only one we know of that has really looked at whether people would be interested in this kind of an approach and it was quite encouraging, the results, and it will be repeated annually and expanded.

4620   COMMISSIONER MORIN: In your presentation you said, paragraph 3, that you believe that Internet and similar service providers, ISPs, are not purely a telecommunication pipeline, that they involve content and should be regulated, not unlike broadcasters.

4621   So broadcasters and BDUs have editorial control over what programming they do or do not provide, but with the ISPs, from your point of view, is there a similar control over content?

4622   So what's the difference?

4623   MR. HENDERSON: We have evolved our thinking on that and it seems to us now that there certainly are activities on the internet that could still easily be handled using Cancon rules.

4624   If a radio broadcaster puts their signal out on the internet you are really looking at the same kind of activity, so we felt that that could still be covered under Cancon regulations without too much trouble.

4625   But obviously in the nonlinear world of the internet where it's a pull situation and people are deciding what they want to listen to, there is no way we can tell them what to listen to. We can't make them listen to 50 percent Canadian content, they are going to listen to what they want to listen to.

4626   So we felt that what the Commission could do with regards to this that would be helpful would be to put in place net neutrality regulations, provisions for net neutrality, because net neutrality ensures that every voice is heard so the Canadian voice is going to have as much chance to be heard from a purely technical point of view as any other. On top of that, if there is a fund the fund should be for promotion because we can put a spotlight on Canadians and we can bring again Canadian content to the fore.

4627   MR. SCHWARTZ: If I could just add to that, I think you are right and I think we refined our thinking a little bit since that was written.

4628   We are not saying so much that we think the ISPs have to be treated like broadcasters. What we are saying is that the end-user should pay a license fee. In the many-to-many universe that Professor Gervais is talking about, you know we licensed broadcasters, that was the one-to-many universe, so we look to broadcasters as the one to license. Now we have no choice, because it's many-to-many, to license the many.

4629   The ISPs are not so much the ones that attract the license fee, but they are the gatekeepers and the only practical place where you can go and say we need your cooperation to license the activity. So we are not licensing them so much as licensing the end-users through the ISPs.

4630   COMMISSIONER MORIN: Thank you very much.

4631   THE CHAIRPERSON: Len...?

4632   COMMISSIONER KATZ: I have one question.

4633   You suggested or alluded to the quote of $5.00 which may or may not be appropriate, but is that money intended to go to just Canadian rights holders or international rights holders as well?

4634   MR. SCHWARTZ: Well, I think that the long answer -- when I say "long" I mean long-term answer -- is that we go to everybody. In other words performing rights -- and again, just to come back to that as the model that we use to some extent -- after 200 years -- performing rights was invented in France in the 1750s I believe and some 200-plus years later we have an international system of performing rights societies around the world which collect my intellectual property bills. Any Canadian creators can be performed in Germany, Japan, South America, license fees find their way back to us here in Canada and that is part of how we make a living.

4635   So the long answer is that eventually that we would hope other nations will join with us. There is a start in Denmark, there actually also is a very similar proposal -- I think it was the Isle of Man -- so there are places where this is beginning to take a toehold.

4636   So eventually, yes, the money would go to everybody.

4637   Again, I think we are quite happy with the notion of phasing that in over time. Maybe if Canada is the only -- if we are the first one out of the chute on this -- we certainly hope we are -- that maybe we look at a much smaller amount that goes to Canadians to start with as that international system is being built up.

4638   COMMISSIONER KATZ: Do you have any idea what percent of world music rights are originated from Canada?

4639   MR. SCHWARTZ: Surprisingly large, but I don't have it. I mean right now in particular we have an incredible array of Canadian musical artists out there from Nickelback to Feist To Broken Social Scene, I could go on and on. We have an awful lot of very, very successful Canadian music creators out there in the world right now whose songs are getting file-shared even as we speak.

4640   So what the exact percentage is we don't know. We could try to research that, but we don't have that number.

4641   THE CHAIRPERSON: When you say started in Canada, do you have any idea of reciprocity here? If other countries adopt a similar scheme you would pay for their copyright holders, too?

4642   MR. SCHWARTZ: Yes. I think eventually it would be a performing rights universe where there is a worldwide system.

4643   THE CHAIRPERSON: Right.

4644   Michel...?

4645   COMMISSIONER ARPIN: Thank you, Mr. Chair.

4646   I hear your proposal and I can understand what your aims are, however, you are saying that Copyright Board shall set the rate, the ISP should not be granted licences, and so what are you asking the CRTC to do?

4647   MR. HENDERSON: Right.

4648   Yes, there is a whole legislative aspect to this that the CRTC would not have a part in. However, what we felt would be applicable would be two things:

4649   One, net neutrality, because we think net neutrality would be a very, very important aspect of making this work.

4650   The other is, if there are funds we think they should go -- rather than to the creation of content for new media, we think they should go to the promotion of content, because that is a way -- if the Commission is concerned with access, that Canadians have access to their own music, their own stories, their own culture, then we think one way of encouraging, if not guaranteeing, that access is the promotion and is the net neutrality.

4651   COMMISSIONER ARPIN: However, you will have to go through the ISPs to make the levy, because you can't expect each household to send you $5.00 every month.

4652   MR. HENDERSON: Exactly.

4653   COMMISSIONER ARPIN: So at the end of the day are you of the view that we are somehow the cornerstone to raise the money or will you create a collective that will do that?

4654   MR. HENDERSON: Yes, it would be -- I mean, we envision a collective that would collect the money and distribute the money fairly and would have representatives of the four groups, creators and rights holders on it, on its Board to make sure that everyone agrees.

4655   The issue of the ISPs is we have to reach the point where the ISP becomes a partner in this in that they collect. The tariff is not on the ISP, it's on the end user, but the ISP collect as part of the bill, the monthly bill. It's there as a line item or it's part of a bundle that is purchased and the ISP would be paid something for doing that work, but the work is essential. At some point it would have to be a regulation or rule that they do that, yes.

4656   COMMISSIONER ARPIN: The only flaw that I see in your proposal obviously is if you are saying don't license the ISP, it means that the CRTC will have no hold on their existence. They will remain exempted like they are today and they will be totally out of the consideration by the Commission under the Broadcasting Act or the Telecom Act.

4657   MR. SCHWARTZ: May I address that for a second?

4658   I think the way that we look at it -- and this is an evolving story and the evolution of the CRTC may be part of it. It's very presumptuous of me to say that, but it's true.

4659   I mean, if you are going to a many-to-many universe then you are defining everyone who file shares or shares intellectual property on the internet is a broadcaster, so in point of fact, you know, in a changing world maybe the CRTC -- it's not just about the big companies anymore, it's not just about regulating the ISPs, it's about putting in place regulations that would affect all of those people who are engaging in an activity that would now be defined as broadcasting.

4660   COMMISSIONER ARPIN: It means that we are going to need 10,000 other employees only to issue licences.

4661   Anyhow, those were my questions, Mr. Chair.

4662   THE CHAIRPERSON: Okay.

4663   Tim, you had a question?

4664   COMMISSIONER DENTON: Gentlemen, your proposals are to tax consumers of broadband rather than those who use file-sharing technologies.

4665   Did you consider how you could get a more precise form of levy on those who engage in file-sharing activity?

4666   MR. HENDERSON: I think one of the concerns we have is privacy. The method that we are proposing does not invade in the privacy, it doesn't ask whether this person is doing it or not. That we thought was a good thing.

4667   COMMISSIONER DENTON: You mean privacy trumps actual consumption?

4668   MR. HENDERSON: Well, you know, it's interesting, file-sharing is something that is done by a lot of people on peer-to-peer and then there are all the people who receive files in e-mail attachments or instant messaging.

4669   There are all kinds of ways to file share, so we feel that it's a very, very common activity.

4670   COMMISSIONER DENTON: What about measuring the amount --

4671   MR. SCHWARTZ: May I address that? Can I just address that question, please, sir?

4672   If this was bundled, if you had the right -- when you signed on for broadband if this was an option, to bundle unlimited file-sharing for a certain amount of money, I mean that addresses your question. Obviously it's up to us to chase them. This would be an option, a bundled option with their internet, you know, their broadband internet fee every month.

4673   In other words, it's a bit of a self-identifying future, people have a chance to opt in through a bundled service.

4674   COMMISSIONER DENTON: So in other words, bundled options or consumption, different prices according to your bandwidth consumption, don't offend your rule against network -- or for network neutrality?

4675   In other words, is it okay in your scheme if there was like three or four pricing bands, depending on your consumption, and those who obviously are engaging in very large file transfers might get hit a higher price?

4676   MR. SCHWARTZ: Well, I think that I would hate to see ISPs use this as an excuse to use their clout in an unfair way in regards to the consumer. I would hate to see that happen.

4677   But we have -- net neutrality means equal access. We can't control the prices. Those are private companies, we can't control the prices that they charge for access.

4678   I would imagine whoever offers the best bundle at the best price would have an advantage in the marketplace and people would tend to go that way if they possibly could.

4679   COMMISSIONER DENTON: Yes. I was just interested in some discussion of my right not to be hit up for a tax or a levy versus your right to earn an income. Obviously something has to give here.

4680   MR. SCHWARTZ: Yes.

4681   COMMISSIONER DENTON: But I was just wondering whether you were ready to contemplate either pricing bans or a more precise form of fee raising taxation, whatever.

4682   MR. SCHWARTZ: Yes, I guess, we do have a problem with the word "tax", we think it's really -- in other words, just like everybody else we have a right to make a living and I really don't understand why our right to make a living is called a "tax" and everyone else's is called their monthly paycheque or a license fee. I mean, I just find that that word "tax" brings a certain kind of baggage with it, may I say, that I find less than appealing.

4683   COMMISSIONER DENTON: I know. How shall we call it, a forced levy on people might have the same result eventually, I mean ultimately.

4684   THE CHAIRPERSON: I think you are done.

4685   Louise...?

4686   COMMISSIONER POIRIER: Yes, just a few short questions.

4687   This is a very proactive solution, interesting, naturally we need to investigate a little bit more on it, but this is the solution for audio on new media.

4688   Have you ever thought that we could apply this model to video on new media? It's only for music.

4689   MR. HENDERSON: Yes. Oh, that's right. No, we have been asked that question many times, what happens when movies and television come long and they want the same thing?

4690   I mean, it is a very different business. They are very different businesses. In movies it's possible to embed advertising. If you have embedded advertising then when your product goes out on the internet and you get a whole lot more eyeballs than you had before, you are able to go back to your advertiser and say "Look what we have delivered for you" and get more money. I mean, there is value there without even talking about a license fee like this.

4691   However, it could be that as time goes by that that also would be something that would -- video would show up as something that would require a license fee as well, yes, perhaps. It's hard to say.

4692   COMMISSIONER POIRIER: But actually you see it mostly as a solution to music and...

4693   MR. HENDERSON: Music, we see as being in the forefront of this.

4694   COMMISSIONER POIRIER: Yes.

4695   MR. HENDERSON: Music was the first to be hit by this, yes.

4696   COMMISSIONER POIRIER: It needs a specific answer or solution.

4697   MR. HENDERSON: Yes.

4698   COMMISSIONER POIRIER: Could it be a real solution to piracy, too, your solution, the one you are presenting, and how would it be a solution to piracy?

4699   MR. HENDERSON: Well, see, we love the fact that people are sharing our music because that means people like our music.

4700   COMMISSIONER POIRIER: Yes.

4701   MR. HENDERSON: That's what it's all about. So we don't like calling them pirates at all. We want to provide them a way to pay that works for them and then everyone is happy. That's what we want.

4702   So we feel that this is working in that direction. We intend this to benefit everyone.

4703   COMMISSIONER POIRIER: How?

4704   MR. HENDERSON: Well, the people who want to not pirate but share our work will be able to share our work. They will have paid a license fee.

4705   We, on the other hand, will be paid for the sharing of our work. We will have a collective that will be run fairly by the people who own the rights and have created the work.

4706   COMMISSIONER POIRIER: And it can work even though Canada would be the only one who would go into that direction or do we need to have United States join us in that solution?

4707   MR. HENDERSON: File-sharing is over 90 percent of music activity on the internet. It is a tsunami, it is huge. We are trying to position ourselves on the front of the wave so that it lands in the right place. But it's happening all over the world and there will be a solution, there will be worldwide solutions.

4708   We are talking to people, we talked to people in the United States, the Songwriters Guild of America, Nashville Songwriters Association International, we discussed all this with them; we talked to the British Composers Association, we discussed it with them; Australia, we were in touch with people in Australia.

4709   I mean different countries are trying to deal with this in different ways, but it will happen. It will happen. I just think if we can have a way that is clean and is fair to everyone, that would be great.

4710   MR. SCHWARTZ: I think it's just worth knowing that there is a movement to do this in the United States, it is coming, strangely enough, from the labels. Warner, Sony and EMI have a company, they formed a company called -- is it Coruss(ph)?

4711   MR. HENDERSON: Coruss.

4712   MR. SCHWARTZ: Yes, with two "S" I think and no "C". And I think they are starting at colleges and universities. There is a gentleman by the name of Jim Griffin who is spearheading it in the United States.

4713   So there are movements afoot. They are not all the same, Canada is a different country than the United States, it may come more from the private sector in the United States. But the songwriters groups do also support it.

4714   COMMISSIONER POIRIER: Thank you very much.

4715   MR. SCHWARTZ: It's a journey of 1000 miles.

4716   COMMISSIONER POIRIER: Okay. Thank you.

4717   THE CHAIRPERSON: Thank you for your presentation, it's an interesting idea.

4718   Of course I don't tell you anything you don't already know, but we are not the primary target for your idea, you have to start with the Department of Heritage and changes to the Copyright Act.

4719   I opened up by saying this is borrowed from the blank charge and it was exactly for the same reason that my colleague Tim said, the blank levy is based on the assumption that everybody uses it to copy copyrighted work, which is not so, as anybody buys tapes for other purposes pays the charge.

4720   The same thing here, everybody will be paying the fee notwithstanding if they don't download or use P2P.

4721   So refining your concept so that those people who actually use downloading of music pay for it rather than everybody I think would make it probably much more saleable, because there is a certain element of injustice in it and that's why people call it a tax, because everybody pays even if they don't get the benefit.

4722   But I must say, this is the most original approach I have seen yet and I wish you good luck. If you get changes to the Copyright Act and international agreement, then clearly you will be back here for us to implement it. So see you then.

4723   Bye-bye.

4724   So we will take a 10 minute break, Madam.

--- Upon recessing at 1435

--- Upon resuming at 1445

4725   THE SECRETARY: Thank you, Mr. Chairman.

4726   I would now invite the Campaign for Democratic Media to make its presentation.

4727   Appearing for the Campaign for Democratic Media is Mr. Michael Lithgow.

4728   Mr. Lithgow, you have 15 minutes for your presentation.

PRESENTATION / PRÉSENTATION

4729   MR. LITHGOW: Good afternoon to the Commission.

4730   We welcome the opportunity to comment on the question of new media broadcasting in Canada.

4731   This hearing comes at an important juncture in the evolution of the Canadian broadcasting system. Changes in the way Canadians access content online are reshaping how traditional broadcasters do business and how Canadians produce and consume Canadian dramatic programs, local and regional information and news and cultural reflections.

4732   The business of broadcasting in Canada is changing, as are the ways in which broadcasting safeguards, Canadian democratic ideals through the strengthening and enrichening of Canada's cultural, political and social fabric.

4733   New media technologies present new challenges and new opportunities for the maintenance and enhancement of national identity and cultural sovereignty and they introduce unprecedented distribution, production and access possibilities and new priorities.

4734   How Canada responds to these exciting challenges now will likely influence Canadian culture for generations.

4735   The Campaign for Democratic Media is a national nonprofit and nonpartisan media advocacy organization. We are made up of an informal network of individual Canadians, civil society organizations, consumer organizations, labour groups, media advocacy groups, academics, grassroots media activists and others interested in helping to create a diverse, accountable and quality Canadian media system.

4736   In our written submission we touched on four key points in response to the Commission's questions:

4737   the continuing importance of support for Canadian content in a new media broadcasting context;

4738   the creation of an internet broadcast fund;

4739   the importance of not abandoning the public and community elements of the broadcasting system as programming migrates to new media contexts;

4740   and the critical importance of non-commercial new media broadcasting services to local reflection and diversity of voices in the Canadian broadcast system.

4741   One of the central issues facing the Commission is the seeming irreconcilable differences between terrestrial and online distribution strategies. Many of the intervenors to this hearing have suggested that online distribution continue to be exempted from regulation in the interests of innovation and competition, but what is becoming increasingly clear is the broadcasters themselves are employing strategies that in fact replicate existing terrestrial broadcast outcomes.

4742   The now common use of geo-blocking or geo-fencing to restrict online distribution to national territories demonstrates that new media broadcasting is being employed in some significant ways as an extension of terrestrial broadcast services and, as such, it is prone to some of the same problems that have plagued Canada's traditional broadcast system, in particular, the lack of local and regional programming content that reflects distinctly Canadian experiences.

4743   As new media broadcasting carves a distinct place for itself in the Canadian mediascape, Canadians must give thought to the kinds of priorities that have been at the foundation of broadcasting policy in Canada from its inception.

4744   As with traditional broadcasting, it is logical and necessary to think about mechanisms to pay for Canadian programs in a new media context to ensure that Canadians have access to their own histories, opinions, values and artistic creativity.

4745   A persistent difficulty in the traditional system has been the lack of production and availability of local news and information and local cultural reflection. Broadcasters have consistently asked to be relieved of local programming obligations because of economic constraints. The market has difficulty satisfying this explicit goal for the Canadian broadcasting system and it is an appropriate point of regulatory intervention.

4746   Other interveners have referred to the U.K. regulator Ofcom's oft quoted light touch approach to regulation. It is interesting to note that at the Ofcom annual lecture in 2008 Chairman David Currie actually expressed dislike for the term "light touch regulation". Here I'm quoting:

4747   His point being that given a preference for the least intrusive forms of intervention where intervention proves necessary, it should be swift and decisive.

4748   Commercial broadcasters themselves have expressed dismay at the inability of market forces to overcome certain kinds of expenditure inertia in the case of domestically produced dramatic programming at local and regional news.

4749   We believe strongly that as services migrate to the internet the importance of regulatory support for local public affairs and local reflection in the form of news and independent Canadian dramatic and documentary productions must be recognized.

4750   In the Commission's call for comments, you raised questions about the kinds of broadcasting content that the Commission should pay attention to, referencing specifically questions around commercial and non-commercial programs and professional and nonprofessional programming.

4751   Our concern is primarily with public affairs. We as Canadians and the Commission must think carefully about what we are doing with the question of new media broadcasting and news programs. I don't need to repeat the appeals made to the CRTC by commercial broadcasters for relief from expenditure requirements for local news programming. The market consistently demonstrates an inability to incentivize investment in these forms of programs.

4752   What is exciting and unprecedented is that new media broadcasting presents the Commission with an entirely new breed of content producer, the non-commercial broadcast service. These are content producers who produce high-quality news programs for online distribution to Canadian audiences.

4753   Non-commercial broadcast services are distinct from user generated content such as YouTube in that they have standards of selection of production, editorial requirements and operate within usually expressed journalistic standards. Content providers like The Real News Network, Isuma TV, Rabble TV, Working TV, The Tyee are producing locally and regionally reflective news programming for Canadians that is high-quality professional and often through not-for-profit organizational structures.

4754   New media broadcast services are attempting to provide a content stream that has been chronically under-served in the traditional broadcast system, namely local reflection and local news.

4755   We recommend strongly that the Commission consider mechanisms which make funds available to support the presence of Canadian content and that these funds be made available to, among others, non-commercial new media broadcast services.

4756   Similarly, we want to stress the critical importance of all elements of the Canadian broadcast system and the continuing importance in a new media context.

4757   Under section 3 of the Broadcast Act, the broadcasting system in Canada is understood as comprised of three distinct elements, private, public and community. In the interests of national identity, cultural sovereignty, diversity of voices, local reflection, the development of Canadian talent and the expression of Canadian culture, the public and community elements must not be abandoned in the migration of services to online platforms and these will take special consideration. For example, community programming has traditionally been produced by volunteers.

4758   Funds to encourage the presence of community programming in a new media context must be made available to support operational expenses if the community element is to be supported alongside its private and public counterparts.

4759   Canadian regulators have sought to achieve the goals and objectives of the Broadcast Act through various means.

4760   I'm going to skip down a little bit here.

4761   What we are recommending in this case is that we want to encourage the Commission to consider the creation of an internet broadcast fund, a pooling of resources gathered by a small levy from the internet service providers and mobile communications companies, both of whom have become de facto content providers.

4762   As with the Canadian Television Fund, a small levy is hardly noticed at the consumer level, where ultimately, we are told by industry representatives, the additional cost will be passed down to, but a small levy aggravated can provide the kinds of resources and investment needed to produce high-quality Canadian programs that cannot be delivered by market forces alone.

4763   Another critical component of the new media broadcasting question is access. The Commission is no doubt aware of the access disparities at work in Canada, often referred to as the digital divide. According to a recent report, 37 percent of Canadian communities, most of which are in the rural, remote and northern parts of the country do not have broadband access. An internet broadcast fund could allocate a portion of resources to help address the broadband access deficiencies.

4764   These measures are suggested to address where market forces have demonstrated an inability to provide adequate incentive to ensure that communities have access to new media capability. Infrastructure which provides access to all Canadians should be the foundation for any new media broadcasting policy.

4765   It is always difficult to determine the when and why of subsidizing Canadian cultural work. One of the key questions being asked in these hearings is: What is the value of ensuring that Canadians in fact have access to their own culture.

4766   The Canadian broadcasting system must strive to meet the goals and objectives set out in the Broadcasting Act. The Broadcasting Act sets out a framework of objectives, the broadest of which suggests that the Canadian broadcasting system should provide, through its programming a public service essential to the maintenance and enhancement of national identity and cultural sovereignty and safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada.

4767   If we ask in these hearings what is the cultural, social and political fabric of Canada, we must confront the democratic ideals upon which Canadian society is founded. The Broadcast Act creates the opportunity to consider the role of Canada's broadcasting system and how we structure and govern ourselves as a nation.

4768   The importance of our broadcasting system to Canadian, political and social reality, in addition to its economic role cannot be overstated. Some of what makes Canadian culture valuable, perhaps in a way that eludes easy marketization, are the ways in which Canadians distinguish themselves and are distinguished from other cultural identities.

4769   Some say we are peacemakers, that are our sense of well-being is more collective than individual; that freedom in Canada is not linked with the right to own a gun; that first peoples and Francophones are among the founding cultures of the country.

4770   Canadian culture, is in a way, the art of sewing together cultural differences. We are not the melting pot, but a chorus of regional and local diversities. If these diversities are removed from cultural circulation, if the stories of aboriginal Canadians are left out, if the histories of the Métis or prairie farmers or east coast fishers are forgotten, if the stories who made Canada their country through immigration are left untold, if Canadian poetry and music and film and literature and drama are abandoned because it is too expensive or too regional, then we must ask ourselves what we will have left as a nation to share.

4771   Our point is that new media broadcasting is a logical extension of terrestrial broadcasting and the broadcasters themselves are recognizing this in practice through strategies like geo-blocking.

4772   It is logical and necessary for the Commission to consider regulatory strategies to encourage the presence of high-quality Canadian programs in a new media broadcasting context.

4773   It is also logical that internet service providers and mobile phone companies who are increasingly acting as content providers be asked to contribute to Canadian culture through a small levy that can assist in the production of quality commercial and non-commercial Canadian dramatic programming and in particular local and regional news.

4774   An internet broadcast fund like the Canadian Television Fund, and in particular like the new Local Program Improvement Fund, could help to address what in the terrestrial system has remained chronically under-resourced and under-represented despite a continuing and demonstrated desire for it on the part of the Canadian public. And an internet Broadcast Fund could help provide resources to expand access to broadband into the Canadian communities that currently lack adequate access.

4775   The Canadian broadcasting system has, from its beginnings been managed to achieve goals that serve economic needs, but also and equally important, to achieve goals that serve Canadians in a wider social and political context.

4776   We encourage the Commission to act with decisiveness to ensure that within new media broadcasting Canadian culture continues to enrich and maintain Canadian identities, histories, stories, experiences and points of view.

4777   In closing, we would, Campaign for Democratic Media, welcome the opportunity to work with the CRTC to study non-commercial new-media broadcast services and their capabilities and potentials to fulfil local and regional news and information gaps which currently exist in the Canadian broadcasting system.

4778   Thank you for the opportunity to speak today.

4779   THE CHAIRPERSON: Thank you for your presentation.

4780   You speak of a small contribution, hardly noticeable by the Canadian consumer, to establish this internet broadcast fund.

4781   What do you have in mind?

4782   MR. LITHGOW: Well, referencing a report that was done by Peter Grant at McCarthy Tétrault called "Reinventing the Cultural Toolkit", there were studies done analysing volumes of data -- I know that has been a debate here at the hearings in terms of volumes of data versus the time spent listening to what is being downloaded, but they analyze volumes of data of internet use in North America and they found that about 50 percent of all the data flowing was people accessing broadcasting content.

4783   So he proposed, based on that, that right now BDUs are required to pay 5 percent into the Canadian television fund, 2 percent of which goes to community programming and 3 percent to the CTF, that, based on that 5 percent figure, if half of what internet service providers is dealing with broadcasting content, a 2.5 percent levy.

4784   THE CHAIRPERSON: So basically the Peter Grant Model is what you endorse?

4785   MR. LITHGOW: Say that again?

4786   THE CHAIRPERSON: It's the Peter Grant model that you endorse?

4787   MR. LITHGOW: Yes.

4788   THE CHAIRPERSON: You are aware that Peter Grant is only talking about the creation of broadcasting, he is not at all talking about using part of that money to have broadband access, and that is quite a different dimension of costs.

4789   I mean, if there is 37 percent, which you quote -- whatever the figure is, it doesn't have broadband access. To give them broadband access would be a gigantic undertaking, given their regional location, and how far they are from the next possible connection, whether you do it by wireless or wireline.

4790   MR. LITHGOW: And yet, without broadband access, a lot of what is being discussed at the hearings becomes irrelevant.

4791   THE CHAIRPERSON: Yes. All I am trying to point out is that the money that Peter Grant is talking about is meant purely for programming, he is not at all thinking about broadband access.

4792   If you are talking about broadband access, you are talking about far larger sums than the $97 million a year that Peter Grant is talking about.

4793   MR. LITHGOW: Okay. Then, to correct, I guess, we are not endorsing his model, we are borrowing parts of the model he is presenting and working it into different ideas.

4794   THE CHAIRPERSON: Steve, do you have questions?

4795   COMMISSIONER SIMPSON: I sure do, thank you.

4796   Mr. Lithgow, it is my habit when I am going through a presentation to highlight sections of the presentation, so that I can focus on the point being made, and I stopped after about the first page, because I was highlighting every single sentence that you were bringing forward.

4797   My reason for saying that is that I am trying to understand what specific point you wish me to focus on first, because you have managed to elevate everything in this document to a level of hierarchical importance.

4798   Are you approaching this hearing from an academic viewpoint, an intellectual viewpoint, a social or an ideological viewpoint?

4799   I really want to understand what it is that you are after here.

4800   MR. LITHGOW: Our sense is that often the issues that are on the table in hearings like this are largely organized around markets and the economization and commodification of the production of culture, which is obviously significant, important and relevant.

4801   But the Broadcasting Act is broader than that. The Broadcasting Act sets out a lot of other ideas that are sort of outside the very narrow confines of economic principles. So part of what we try to bring forward are reminders that in the decision-making process the Canadian broadcasting system serves democratic purposes. It's not just an economic decision, it actually involves our way of life, how secure we feel on the streets, our sense of who we are and who gets access to what resources, when and where.

4802   And the tools are there. We don't have to invent them. It's not a legislative question because the Broadcasting Act includes those kinds of provisions.

4803   We sort of move into these spaces, just trying to bring those ideas forward, because I think they often get left behind.

4804   We have sort of a specific policy piece that we are after here. We think that the ISPs and the mobile telephone companies should subscribe to the same levy fees as BDUs, and that that pool of funds could be used to help provide resources for Canadian content online, and in particular for what I am identifying as a non-commercial broadcast service, which are these people who are trying to fill in these regional and local information gaps that exist in the terrestrial system.

4805   COMMISSIONER SIMPSON: Okay, I will take that and I will run with it for a bit.

4806   I had thought that you might be elevating everything to a higher level within the hierarchy, but I will go the other way and say that -- a comment I made yesterday was that the internet has the capacity to be able to level everything out. Everyone has an opportunity to be heard, and there are those who believe that everyone should have absolute equal and unfettered access.

4807   In that sort of flat earth of the internet, my first question is to go to a statement on your website which indicates that, as part of your campaign for democratic media, your organization believes that there should be an abolition of what you characterize as big media.

4808   I ask that in the context of hearing you say today that you believe that the CRTC should be encouraging the existing platforms of broadcasting, which is what this hearing is all about -- we should ensure an orderly migration of that existing model over to the internet, yet your organization also, at the same time, seems to be saying that those big hierarchical institutions shouldn't follow with that migration.

4809   Could you expand on that a bit?

4810   MR. LITHGOW: I am slightly embarrassed, because I am not familiar with what you are referencing on the website.

4811   I'm sure it's there, I am just not familiar with it, so I don't actually have a clear response to it, in terms of the abolition of big media.

4812   COMMISSIONER SIMPSON: It is right under another question I have, which is called "Save Our Net", and it is in a prompt saying, "Act now. Stop the big media takeover. Media ownership is more highly concentrated in Canada than almost anywhere else in the industrialized world."

4813   It goes on, basically, to indicate that there should be a breakdown of those monolithic structures, because it is preventing access to the everyday voice of people, because of the way the existing system is structured.

4814   I am trying to understand why you are defending it and trying to tear it down at the same time.

4815   MR. LITHGOW: In the conversations that I have with the people I work with at the Campaign for Democratic Media, I haven't participated in conversations that have been about breaking down large media.

4816   However, I am in a lot of conversations about the kinds of constrictions that having concentrated media ownership places on people's access to culture, both accessing a diversity of voices and accessing opportunities to participate in the production of culture.

4817   So I can speak to the idea that we are actively, as an organization -- and this is probably one of our central principles -- looking for ways to expand ways for Canadians to participate and to have access to a greater diversity of voices.

4818   And we do believe that large commercial media organizations do not provide Canadians with the diversity of voices that actually exists in our communities across the country.

4819   COMMISSIONER SIMPSON: The free speech model, essentially, that everyone should have, an equal opportunity to have a voice on any subject, and I accept that.

4820   MR. LITHGOW: Yes, roughly.

4821   COMMISSIONER SIMPSON: Okay. There was a paper that was sent to me the other day by a friend, and you haven't seen it, so I will just give you an idea of what it's about -- and I am not going to hold you to an opinion on it.

4822   It was from the Pew Research Centre, on their project for Excellence in Journalism, and they were lamenting the fact that -- if indeed what your organization is wanting, which is the abolition of big media, it looks like you are going to get your way from their point of view, in that they are saying that we are looking at the beginning of the end of the big newspaper industry, because the internet is flattening it, and as has been proved over time, broadcast has a tendency to follow the conditions we see from print, and if that does occur, you are going to have a very different world out there on the internet.

4823   My question to you is this -- because, again, this hearing is about broadcasting on the internet. If we wind up in a world where there is equal opportunity for everyone to publish, to broadcast, to stand on their own particular electronic soapbox, the Pew Institute indicated that the biggest concern they have is that, with the abolition of these big media structures, there is the beginning of the potential of an era of what they call "corrupted journalism", where everyone's view, because it is held equal, makes it almost impossible to separate the truth from fact, fiction, or outright lies.

4824   I am curious as to where you stand on the idea of broadcast journalism, because you brought that up in your paper, and how -- as you say, you are concerned about Canadian public affairs -- how we ensure, in this new world, that the public is being given accurate and fair information.

4825   MR. LITHGOW: In the era of big media there are many, many people who feel that we still have trouble separating fact from fiction.

4826   There is robust discourse and conversation about the New York Times, and what is included and what isn't included, and the ways in which omissions play into political decision-making.

4827   Because if people don't know that something exists, then it is very hard to make a decision about it, if they can't identify a problem.

4828   I am not nearly as worried about that as, maybe, the source of that paper is, because as a journalist I have participated in community radio and community television in Canada for upwards of 20 years, and I have worked with some wonderful, talented, bright, dedicated and caring people.

4829   Sure, there are criticisms about what campus radio does and what community radio does in their newscasts, but there are also criticisms against big media, and I think we can figure that stuff out.

4830   I don't actually think that, because the internet flattens accessibility to distribution, suddenly the Canadian public goes: Gosh, I don't know who to believe any more.

4831   I think that we come from families, we come from communities, and we live in contexts, and we have professional associations -- we are always engaged in a constant reassessment and assessing of what is going on around us, and the more voices we have access to, I think, the more robust our decisions will be.

4832   COMMISSIONER SIMPSON: That's a great answer.

4833   If we were to contemplate some form of regulatory regime for the internet within the sphere of broadcasting, I believe you are saying that you would endorse the existing regulatory regime coming over to the internet.

4834   Is that correct?

4835   MR. LITHGOW: In the sense that I have understood the call for questions, which is carving out this space for the migration of broadcasting services onto the internet. Not the entire internet, but broadcasters who are engaged in what we recognize as broadcasting in the terrestrial system as it moves online, yes.

4836   What that does then is, that opens up ISPs and mobile telecommunications companies to some of the same kinds of what I see as provisions that try to move resources around a little bit, to ensure that Canada, which has a small population and a big geography -- that we can sort of nurture domestic talent and industries and ensure that our voices are heard within the mélange of voices that take place.

4837   COMMISSIONER SIMPSON: One of the tenets that we follow is that we are interested only in the professional side of the equation. In this model that you have in your mind, how do we determine who is a professional and who is not, and how do we go about imposing a licensing regime on those people?

4838   MR. LITHGOW: That is an extremely good question. I asked myself how the Commission does it now, actually, because it just seems to be who is engaged in the commercial activity of the production of culture, and I don't think that is an interesting or nuanced enough understanding of why culture gets produced.

4839   I think it would be an area, one, that we would be very happy to work with the Commission on, and I think there is a really good conversation to be had, because, you are right, some kind of criteria would have to be sorted out to divide out what we mean by "professional".

4840   Within journalism colleges across Canada, that is an ongoing debate, and it is also an ongoing pedagogical orientation, in terms of how they train journalists.

4841   COMMISSIONER SIMPSON: We have anecdotally heard a lot of voices indicate that we should keep our mitts off the internet. It has not been an unfamiliar conversation that I have had with a lot of people over the last while, that the internet really should be a free space, a democratic space.

4842   But I am curious if you have any ideas as to how -- if we were to keep our hands off it, how we, at the same time, could be fulfilling another one of your mandates, which is to ensure the promotion and elevation of Canadian culture and content, and who foots the bill.

4843   MR. LITHGOW: We support the models that are in place for the terrestrial system, in terms of --

4844   Some of the models don't work when they migrate onto online distribution, but in terms of the production of Canadian content, we have mechanisms now that try to move resources into spaces where Canadian content producers can access them.

4845   We have complaints about how some of those resources are managed, like the levy for community television, in terms of who actually gets access to that money. It's about $70 million a year, which is largely organized by cable companies, and the communities have very little access to it, but they could.

4846   I guess the short answer to that is, one way or another -- and that is really what our provision in this paper is asking for, is ensuring that Canadian cultural content producers do have access to resources, understanding that not all cultural production is done for the purposes of engaging in market activities. There are other reasons why people engage in cultural production in Canada, and that doesn't mean that it's not intelligent, that doesn't mean that it's not artistic or not sophisticated, it just means that people are engaged for different reasons, and it is equally of value.

4847   COMMISSIONER SIMPSON: Okay. This is my last question, and it is the $64,000 question.

4848   I need you to walk me around the block one more time on this conflicting issue.

4849   Today I am hearing you say that the CRTC should be actively engaged in helping to ensure that there is an orderly migration of, let's say, the regimes or the protocols that do work in the existing broadcasting structure, and ensure that they move over in a way that will be equally productive and beneficial to Canadians, Canadian talent; and yet your organization seems to be, at the same time, saying, through your campaign "Save Our Net", that the internet should be totally hands off. Get your hands off the throttling and get your hands off traffic management. It should remain the wild west and let it sort itself out.

4850   I don't understand which side of the fence you are coming from.

4851   MR. LITHGOW: It's the word "totally" in what you just said -- I'm not sure that we are saying totally hands off. I think we are saying, absolutely and unequivocally, that traffic prioritization, traffic shaping and traffic throttling is not the way to encourage innovation and the flourishing of Canadian culture at all.

4852   We are very, very strongly against those approaches to the management of what happens on the internet.

4853   Outside of that, we think there are other ways -- like, specifically, the way we read the Call for Comments was that the CRTC had identified this particular activity, which was new media broadcasting, which was then defined as these broadcasting services, which were, in fact, migrating from the terrestrial system.

4854   For us it was like, okay, that seems to be a manageable way to think about creating yet another mechanism, an access for Canadian artists and content producers to other kinds of resources, to make sure that we still have a presence in however this new media turns out.

4855   Because we are at a fairly early juncture still, even though we are five years from where we were when the exemption was made.

4856   COMMISSIONER SIMPSON: I'm sorry, I am going to ask one more question, Mr. Chair.

4857   Who is the broadcaster on the internet? Is it a private entity? Is it a public broadcaster? Should those organizations, if they are private, be making money on the internet, or should it be an egalitarian space?

4858   And the public, in your mind, should they be seeing a subsidy of some form showing up on their tax bill to foster a more public type of broadcasting on the internet?

4859   MR. LITHGOW: If we want to make the decision that, as the commercial broadcasters in Canada -- who are they now? They are the ones who have licences to broadcast.

4860   They are migrating into a space that isn't licensed yet.

4861   If we want to say that those broadcasters should continue to pay attention to our concerns about Canadian content in some way, what we are saying is that we need to, maybe, start expanding our notion of what it means to legitimately produce culture, and we have to do that because the internet has presented us with something new.

4862   We have these entities, and they are public -- the CBC, obviously, right -- and they are private, in terms of for-profit organizations, and there are non-profit organizations.

4863   In the terrestrial model, as close as we have to that, I guess, would be -- well, we have Vision, which is a not-for-profit model. I don't know if APTN is or not, but it is just expanding the idea of what it means to legitimately participate in the production of culture.

4864   And if we make the decision to regulate, and if we make the decision to allocate resources, then we need to bear in mind that we are dealing in a new environment, and there are other players, and these other players happen to be fulfilling a gap that has been long identified in the terrestrial system, which is local news and local culture. This is a space that consistently doesn't work in the terrestrial broadcasting system. It is malnourished, anyway.

4865   So we have this really interesting conflagration of a need and a gap, and people who are working really hard to make it happen, but they are under-resourced, and we have this conversation about "Do we want to create mechanisms to move resources toward Canadian culture," as we think about what is happening online.

4866   COMMISSIONER SIMPSON: Okay. I am finished, Mr. Chair. Thank you very much.

4867   THE CHAIRPERSON: Thanks.

4868   Tim, do you have a question?

4869   COMMISSIONER DENTON: Yes.

4870   Good afternoon, Mr. Lithgow. I could say that perhaps your thing is not a campaign for a democratic media, but a campaign for a regulated media.

4871   Usually the complaint from organizations and people concerned with democratic community-based or community communication is that the internet is basically destroying newspapers, broadcasting, and a whole bunch of other business models, and that somehow perhaps this might even be seen as a good thing.

4872   But when I read your proposals, it seems to be that they foresee the need to carry on the existing models, only more so.

4873   When we look at blogging, for example, we have the enormously increased power of people to communicate across the internet and get their views out, without going through institutions, and yet when I look at your thing it is all about saving institutions.

4874   I would like you to rebut, address, any of these points that I am raising, because I don't quite understand where you are coming from on this.

4875   MR. LITHGOW: Which institutions?

4876   COMMISSIONER DENTON: When we go to your document, at paragraph 9 --

4877   MR. LITHGOW: The oral or the written?

4878   COMMISSIONER DENTON: Written.

4879   You state:

4880   And you answer, of course:

4881   So regulatory measures that have traditionally been applied will continue to be applicable, because the problems continue to be the same.

4882   MR. LITHGOW: But we don't see democracy and regulation as opposed. In fact, just on a personal level, I think that democracy has come out of an enormous amount of regulation.

4883   I don't know where the impression has come from that we are against regulation, because we are not. Clearly, it is an extremely important part of how the Canadian broadcast system has become what it is.

4884   The only institutions that I can think of that we are worried about --

4885   We are not really talking about the big commercial content providers. They have their teams of people who will be here before you advocating on their behalf. That is really not our responsibility or interest. What we are talking about are the spaces that don't have so many resources.

4886   Thinking about a terrestrial and then an online system, the only institutional things that I can think of that we are advocating for are the mechanisms that have been created to somehow alleviate what are thought to be disparities in access to resources for the production of Canadian culture.

4887   All we want to ensure happens is that, as regulation moves onto the net, if and when it does, those same concerns for Canadian content get brought forward, that we don't sort of just unleash -- that we don't just leave Canadian content out of the questions we are asking about what is the relationship between the internet and our terrestrial broadcast system.

4888   COMMISSIONER DENTON: Many people have come before us to plead for exactly that thing, but no one has made the case that the problem with the internet is that it is leaving business models alone.

4889   One of the things whereby the internet is really causing severe difficulties for traditional broadcast and newspaper media is because it is revolutionizing the costs of production.

4890   I was thinking that if perhaps you were concerned with democratic media, you ought to be rejoicing in the internet, because it has lowered the cost of production and dissemination of views and opinions.

4891   MR. LITHGOW: And we are rejoicing in the internet for those reasons, in particular, because it seems to allow, because of the low cost of distribution, a greater diversity of voices to have the potential to exist in some kind of public forum.

4892   COMMISSIONER DENTON: Yes, but since it does allow this diversity of voices to exist, manifestly they have come into being, that doesn't seem like a problem that needs to be solved.

4893   MR. LITHGOW: I knew I would be asked that question. It's like, well, why would we want to create pools of resources for services that are already being provided, and I guess the analogy that occurred to me was, if one commercial radio station in rural Saskatchewan plays a Joni Mitchell song, does that mean we don't need Cancon regulations for Canadian music on commercial radio stations?

4894   The fact that some people are doing this, I don't think that necessarily demonstrates that it is as robust as it could be.

4895   I also do research in the area of alternative or independent -- these organizations who provide news programming for reasons other than for profit, and they tend to have short lifespans. Why? Because it is really hard to organize those kinds of activities without constantly being engaged in the advertising game, which they are not. They put their economies together in really different ways, and it often depends on either unpaid or underpaid labour, which is obviously problematic, certainly, in the long term.

4896   So because people are doing it, because we are seeing some evidence that it is an exciting medium and the opportunity is there, I don't think we should simply assume that it is going to flourish on its own. I think we need to be aware that resources could be really well spent pushed in that direction, to solve, like I say, other problems that we have identified for years now in the terrestrial system.

4897   COMMISSIONER DENTON: Do you envisage the continuation of professional media to accomplish the goals you seek?

4898   MR. LITHGOW: Do I envisage the continuation of professional media?

4899   COMMISSIONER DENTON: Paid professional media to accomplish the goals of community organization and community expression about which you speak.

4900   MR. LITHGOW: Yes. I think it is happening in part now, and absolutely and for sure, yes.

4901   COMMISSIONER DENTON: Interesting. Thank you.

4902   THE CHAIRPERSON: Thank you very much, those are our questions for you.

4903   MR. LITHGOW: Thank you.

4904   LE PRÉSIDENT : Madame la Secrétaire, qui est le prochain?

4905   LA SECRÉTAIRE : Regroupement des producteurs multimédia.

--- Pause

4906   LA SECRÉTAIRE : J'inviterais maintenant le Regroupement des producteurs multimédia à faire sa présentation.

4907   Monsieur Marc Beaudet comparaît pour le Groupe des producteurs multimédia. Il nous présentera son collègue.

4908   Après quoi, vous aurez 15 minutes pour votre présentation.

4909   Merci.

PRÉSENTATION / PRESENTATION

4910   MR. BEAUDET : Bonjour.

4911   Je me nomme Marc Beaudet. Je suis président du Regroupement des producteurs multimédia depuis un an, après avoir été sur le conseil d'administration pendant une autre année.

4912   Je suis accompagné de Gilbert Ouellette, qui est le directeur général de notre association.

4913   M. OUELLET : Bonjour à tous. Merci de nous accueillir aujourd'hui.

4914   Notre présentation a deux parties. Nous allons vous décrire un peu plus la réalité de la production multimédia telle qu'on l'entend, telle qu'on la vit.

4915   Et on a répondu aussi aux questions qui étaient préalables à l'audience d'aujourd'hui.

4916   Donc, tout d'abord, nous voudrions vous présenter le Regroupement des producteurs multimédia, le RPM.

4917   Il s'agit d'une association de type professionnel qui a été créée à Montréal en 2000 -- donc, il y a neuf ans déjà -- et qui représente actuellement plus de 70 producteurs.

4918   Ceux-ci sont actifs en production de contenu de commande, ce qu'on appelait auparavant le corporatif ou l'industriel, contenu de convergence et culturel, ou encore de contenu original sur les nouvelles plateformes.

4919   Le RPM vise notamment à créer un climat propice au développement et à la croissance de la production multimédia au Québec.

4920   En ce sens, on fait des représentations actives auprès des gouvernements. Aujourd'hui, auprès du CRTC.

4921   Le RPM gère également des ententes collectives avec les syndicats d'artistes, l'Union des artistes au Québec, et participe à la réalisation d'études sur les réalités économiques et d'affaires du secteur.

4922   Dans notre mémoire, envoyé le 5 décembre dernier, nous avons exprimé un certain nombre de commentaires et de visions quant aux enjeux entourant la radiodiffusion canadienne par les nouveaux médias.

4923   Permettez-nous à ce moment-ci de mettre en évidence quelques éléments propres au secteur de la production multimédia ou ce qu'on appelle ici les nouveaux médias.

4924   Premièrement, nous voulons insister sur l'existence de nombreux producteurs de contenus médiatiques au Canada qui ne sont pas, à la base, spécialisés en création de contenu de radiodiffusion tel qu'on l'entend de façon traditionnelle.

4925   Ceux-ci sont principalement actifs en production de contenu (audiovisuel et interactif) de commande, de convergence (lié à des émissions de télé) ou original sur les nouvelles plateformes.

4926   Ils ont, avec les années, développé un savoir-faire indéniable pour la mise en valeur de contenu dans des environnements associés aux nouveaux médias, principalement le Web, la TVIP ou IPTV, le mobile.

4927   Ces producteurs, associés à la production multimédia sous toutes ses formes, sont pour la plupart des PME, de création relativement récente, et employant généralement moins de dix personnes.

4928   Des entreprises qui sont en général sous capitalisées, il faut le dire, et qui doivent se financer, un peu comme dans les autres secteurs, projet par projet.

4929   Ces producteurs contribuent déjà, indirectement et de diverses façons, à la création et à la distribution de contenu canadien de radiodiffusion.

4930   Mais ils le font souvent à titre de sous-traitants et sont ainsi tributaires des besoins soit : des producteurs télé pour la réalisation des volets interactifs associés à des émissions de télévision; des groupes médias ou de télécommunication (on pense notamment sur le Web à sympatico.ca, canoe.ca ou radio-canada.ca) pour la production de contenus originaux offerts sur le Web; ou des annonceurs et agences de marketing pour des contenus commandités (généralement appelés « branded content ») proposés sur ces nouvelles plateformes.

4931   Marc ?

4932   M. BEAUDET : Il ne faut pas oublier que pour chaque projet culturel dans les nouveaux médias, comme dans les autres sphères culturelles, il y a un producteur qui prend un risque.

4933   Il est un élément essentiel du processus de création, de production et de distribution.

4934   Nous devons mettre davantage à contribution ces nouveaux et talentueux producteurs de contenu multimédia.

4935   Surtout, afin d'offrir à la population canadienne des contenus qui l'interpelle, dans des environnements de radiodiffusion de plus en plus interactifs.

4936   Le RPM croit qu'il faut établir, dans un avenir rapproché, des politiques de soutien récurrentes pour garantir un minimum de financement à ce type de production.

4937   Comme ce fut, et c'est toujours le cas, pour la production télévisuelle et cinématographique canadienne.

4938   Cela pourrait se faire par l'instauration de mesures incitatives favorisant la création, la promotion et la visibilité du contenu canadien original, audiovisuel et interactif, spécifique aux nouvelles plateformes.

4939   Ces mesures pourraient, par exemple, mener à la création d'un fonds dédié à la production de contenu original, financé à même des redevances des entreprises fournissant des services de radiodiffusion sur Internet et sur des appareils mobiles grâce à la technologie point à point.

4940   Le RPM ne s'est pas penché de façon exhaustive sur les modalités d'opération d'un tel fonds.

4941   Nous ne pouvons pas actuellement déterminer les sommes exigées au titre de redevances ou encore sur quelles bases se ferait la distribution de ces argents.

4942   Nous croyons cependant qu'une telle contribution aurait, sans nul doute, un effet positif et multiplicateur pour offrir aux Canadiens des contenus novateurs et en phase avec les nouveaux modes de consommation, surtout chez les plus jeunes.

4943   Ce qui, de surcroit, favoriserait le maintien et la croissance d'une véritable industrie indépendante de production de contenu (audiovisuel et interactif) de qualité et spécifique aux nouvelles plateformes.

4944   Un fonds qui devrait également assurer une présence forte et active des contenus de langue française.

4945   Le RPM voit par ailleurs d'un bon oeil que ces mesures incitatives soient assorties de conditions de diffusion et de distribution à l'avantage des entreprises qui seraient appelées à contribuer financièrement à un éventuel fonds.

4946   Si ces entreprises participent à augmenter la production de contenu original, nous trouvons normal qu'elles aient une forme de préséance pour exploiter ces contenus sur les plateformes ou propriétés qu'elles possèdent ou contrôlent.

4947   D'autant que nous croyons qu'il peut se développer une véritable synergie, en termes de promotion et de notoriété entre les entités de production que nous représentons et les sites de diffusion populaires (portails et autres) exploités par les entreprises de services de radiodiffusion sur Internet et sur des appareils mobiles.

4948   Gilbert ?

4949   M. OUELLETTE : Oui. Merci, Marc.

4950   Donc, nous aimerions maintenant nous attarder sur les questions soulevées de votre part en vue de la tenue de cette audience.

4951   On va relire les questions rapidement.

4952   Donc, à la question « Est-il possible de mesurer efficacement la quantité et la consommation de contenu diffusé dans cet environnement, et est-il possible de cerner le contenu canadien dans ces mesures ? », nous disons oui, et nous expliquons pourquoi au paragraphe 10.

4953   Donc, nous croyons possible le fait de mesurer et de suivre d'assez près le contenu diffusé et distribué, de façon licite et légale évidemment, sur les nouveaux médias.

4954   En ce qui concerne la diffusion de produits originaux canadiens destinés aux nouveaux médias, il est plausible à court et moyen termes, selon nous, de pouvoir recenser le trafic parmi les sites parmi les plus fréquentés par la population canadienne.

4955   Un tel service est d'ailleurs déjà offert. Il y a des entreprises spécialisées, comme ComScore avec son service Video Metrix.

4956   On vous signale aussi que le RPM prévoit d'ailleurs s'associer, dans les mois qui viennent, à la publication d'une lettre économique faisant état de la production et la distribution de contenu vidéo sur les nouvelles plateformes au Québec.

4957   Une initiative qui, selon nous, permettra de suivre l'évolution du phénomène en termes notamment de nombre de visionnages (les streams) et de types de contenu les plus populaires, toujours évidemment pour le Québec.

4958   À la question « Comment le contenu de radiodiffusion devrait-il être défini dans l'environnement des nouveaux médias en vue d'atteindre les objectifs de la politique de la Loi sur la radiodiffusion ? », nous répondons : Même si l'on comprend que le Conseil, en évoquant le contenu canadien de radiodiffusion néomédiatique, peut référer souvent à des contenus audiovisuels linéaires, comme on les retrouve sur les ondes des chaînes de télévision, nous estimons qu'il doit y avoir de plus en plus de place pour une valeur ajoutée interactive associée à de tels contenus.

4959   Avec une interconnexion et une interopérabilité de plus en plus grandes entre les appareils de diffusion (on parle donc des téléviseurs, ordinateurs, téléphones intelligents, consoles de jeux, et cetera), il est à prévoir que la consommation pourra se faire à plusieurs niveaux à la fois.

4960   Autant, comme consommateurs, nous pourrons obtenir en direct des informations complémentaires associées à une émission de télévision, diffusée sur un dispositif branché à un serveur local ou externe, autant il sera de plus en plus normal, toujours comme consommateurs, de pouvoir visionner des contenus télévisuels sur Internet, en complément à des pages que l'on consulte.

4961   Ceci, évidemment, sans tenir compte de toute la dimension de la socialisation (le Web social, qu'on appelle) associée aux nouveaux médias, où l'utilisateur peut partager un contenu -- souvent professionnel, il faut le dire. Ce n'est pas que des « user-generated contents » dont il s'agit.

4962   Donc, il le partage avec son réseau et, le cas échéant, il peut y ajouter des commentaires ou, dans certains cas, ses propres éléments d'information et de contenu.

4963   M. BEAUDET : À la question, « En ce qui concerne les coûts de production multiplateforme, les coûts liés à la production de contenu destiné aux nouveaux médias sont-ils semblables à ceux du contenu destiné aux plateformes traditionnelles ? », non.

« En quoi diffèrent-ils ? »

4964   Pour l'instant, si l'on considère que les contenus destinés en primeur ou exclusivement aux nouveaux médias, il est clair que les coûts à la minute ou les coûts par projet sont beaucoup moins élevés que les contenus destinés aux plateformes traditionnelles.

4965   Cela s'explique principalement par le fait que les modèles économiques associés à la diffusion de tels contenus ne peuvent pas encore soutenir des coûts de production élevés.

4966   Il faut constater cependant que certains contenus commandités (« branded content »), que ce soit sous formes de webépisodes ou de jeux interactifs en ligne, peuvent jouir de budgets tout à fait acceptables.

4967   Enfin, les coûts sont généralement plus bas dans la mesure où, dans l'univers interactif et multiplateforme, nous ne connaissons pas, du moins pas encore, la pression à la hausse sur les prix d'un « star system », comme à la télévision ou au cinéma.

4968   Le budget moyen au Canada pour les projets financés par les Fonds Bell, Fonds Quebecor, est de 345,000 dollars.

4969   À la question « Étant donné l'évolution et l'importance croissante que connaît la radiodiffusion dans l'environnement des nouveaux médias aujourd'hui, la position du Conseil est-elle toujours d'à-propos ? », nous répondons effectivement non.

4970   Nous l'avons indiqué plus tôt. Nous croyons que les intervenants actifs en distribution de contenus par les services de radiodiffusion sur Internet et sur des appareils mobiles devraient apporter une contribution à même leurs revenus, sous forme de redevances ou autres.

4971   Mais nous ne pensons pas qu'il faille mettre en place un régime de réglemention stricte visant à restreindre l'accessibilité aux contenus étrangers.

4972   Nous serions davantage en faveur de règles et d'incitatifs visant à encourager la production et l'offre globale de contenu canadien.

« Certains genres de contenu ont-ils besoin d'un soutien à la radiodiffusion dans l'environnement des nouveaux médias ? Pourquoi et comment ? »

4973   Nous répondons : Comme dans les autres secteurs des industries dites culturelles, il y a définitivement des genres de contenu qui ont besoin d'un soutien plus prononcé.

4974   Nous n'avons qu'à penser à tout ce qui touche les oeuvres de fiction, l'information de type documentaire ou la création de contenus destinés aux jeunes publics.

4975   Par-dessus tout, il ne faudrait pas oublier le contenu destiné au public francophone du Canada et en particulier à celui du Québec, connu pour son caractère spécifique par rapport à ce qui se consomme dans l'univers médiatique nord américain.

4976   M. OUELLETTE : L'autre question, elle est assez longue. Donc, on parlait de la promotion de ces contenus dans cet univers nouveaux médias.

4977   Nous répondons, au paragraphe 16 : Si l'on prend pour acquis que l'univers de la radiodiffusion par les nouveaux médias passe en bonne partie par le réseau Internet public, on est obligé de constater que les frontières géographiques se sont estompées au cours des dernières années.

4978   Évidemment, comme Canadiens, nous pouvons avoir accès à une foule de contenus de divers pays.

4979   Mais à l'inverse, c'est aussi vrai. N'importe qui dans le monde peut consommer une bonne partie des contenus canadiens disponibles sur la toile.

4980   Cependant, il faut également prendre en compte que l'on retrouve bien souvent derrière les sites les plus fréquentés les mêmes propriétés, les mêmes propriétaires, lesquels exploitent des marques connues à l'échelle de la planète ou des adaptations régionales de celles-ci (on pense aux Google, Microsoft, Yahoo, Facebook) ou des marques populaires sur le marché national comme, par exemple, au Canada, dans les « top 25 », on retrouve Canoe, CTV, CBC - Radio-Canada, Canwest, Sympatico. On fait le même exercice avec ComScore, les « top 25 » en France.

4981   On va retrouver des propriétés françaises : Orange, Lagardere, TF1 et Dailymotion, qui est français.

4982   À ce compte, il devient très difficile de se faire une place à l'échelle de la planète ou même dans certains marchés régionaux ciblés.

4983   Par contre, le Canada est déjà reconnu comme un berceau de la création de haut niveau sur le plan des médias interactifs.

4984   Il ne fait pas de doute que certaines nos entreprises, soutenues de façon récurrente sur le plan de la production et de la promotion, pourraient émerger du lot et rayonner au-delà de nos frontières.

4985   Finalement, nous voulons terminer de bloc de présentation en rappelant certains éléments de notre mémoire non traités jusqu'ici.

4986   On a un court paragraphe en ce qui concerne la diversité des voix.

4987   Donc, nous constatons, dans un univers ouvert et non balisé comme celui des nouveaux médias, que la diversité des voix éditoriales peut être compromise dans la mesure où ce ne sont pas des impératifs commerciaux qui guident la production et la sélection des contenus. Je répète. C'est : où ce que sont plutôt que des impératifs commerciaux, oui, qui guident la production et la sélection.

4988   Cela, vous le savez très bien, de la part notamment de groupes médiatiques qui favorisent ouvertement une politique de convergence s'appuyant sur des propriétés traditionnelles qui sont encore très fortes et très en vue. On pense notamment à la télé, la radio, et l'imprimé.

4989   M. BEAUDET : Nous pensons par ailleurs que les diffuseurs ou les groupes médias publics, notamment Radio-Canada, doivent être à l'avant-garde des nouvelles façons de produire et de diffuser des contenus sur les nouveaux médias.

4990   Dans cette optique, nous aimerions que ceux-ci aient recours davantage, et de façon systématique, aux producteurs indépendants pour combler une partie conséquente de leurs besoins, en ce qui a trait à la production de contenus canadiens originaux destinés aux nouveaux médias.

4991   En conclusion, nous préconisons un système de radiodiffusion qui reconnaisse la nature et le caractère particulier des contenus audiovisuels et interactifs, de plus en plus présents dans l'univers des nouveaux médias.

4992   Un système qui applique toujours les principes de prépondérance du contenu canadien et du caractère bilingue de notre pays.

4993   Un système qui met à contribution tous les acteurs de la chaîne de valeurs, dont ceux qui opèrent des infrastructures de distribution, de plus en plus populaires et payantes en raison des contenus qu'on y trouve.

4994   Voilà donc, Mesdames, Messieurs, l'essentiel de la vision et des commentaires du Regroupement des producteurs multimédia.

4995   Nous demeurons à votre disposition pour répondre à vos questions.

4996   Merci beaucoup de nous avoir entendus.

4997   LE PRÉSIDENT : Merci.

4998   Dans votre présentation, vous parlez des mesures et vous dites que c'est possible de mesurer les sites Web qui sont visités et cetera.

4999   Évidemment, c'est vrai. Mais notre question était vraiment ciblée d'une autre façon.

5000   Le traffic général sur Internet, personne ne sait combien de programmes de radiodiffusion sont diffusés sur Internet, ni quel pourcentage est canadien ou vient du régime canadien ou quelque chose comme ça.

5001   Comment est-ce qu'on peut identifier la quantité, parce que si on regarde les ISP (je ne sais pas comment dire en français) --

5002   M. OUELLETTE : Les fournisseurs de services Internet.

5003   LE PRÉSIDENT : les fournisseurs de services Internet, comme distribution de radiodiffusion et on veut, comme quelqu'un a suggéré, imposer un frais, on doit savoir quel est le total et quelle est la portion canadienne.

5004   Est-ce que vous pouvez nous aider avec ça ?

5005   M. BEAUDET : Oui.

5006   Par rapport au contenu ou par rapport au traffic Internet.

5007   LE PRÉSIDENT : Disons au traffic.

5008   M. BEAUDET : C'est sûr que, anciennement, les mesures statistiques étaient beaucoup imprécises, mais il est sorti récemment beaucoup de méthodes, en fait, de géolocalisation, qui permet de contrôler la distribution de son contenu par pays ou territoire.

5009   Nous avons réalisé un magasin pour important distributeur de musique où la chaîne de droits était complexe. Par exemple, il avait les droits sur certains artistes au Canada et en Amérique du Nord, mais il ne les avait pas en France.

5010   Donc, en détectant la provenance du visiteur sur le site, on était capable ou non de lui offrir une partie du catalogue de chansons.

5011   Donc, ces outil-là par rapport au traffic existent et sont de plus en plus précis.

5012   LE PRÉSIDENT : Et le contenu ?

5013   M. OUELLETTE : Oui, mais je pense aussi que, votre question, c'était -- de plus en plus, il y a des organismes comme Interactive Advertising Bureau qui, compte tenu de la valeur des contenus, veulent savoir, de plus en plus avoir ces données-là de façon amalgamée.

5014   Il est clair que les Radio-Canada -- les sites de Radio-Canada, Canoe, Sympatico -- connaissent très bien la fréquentation de leur site et peuvent assez bien faire des catégorisations entre le contenu canadien, le contenu acheté original et le contenu rediffusé.

5015   On est, je pense, à l'ère de ramasser ces statistiques-là et d'être capable -- comme en télévision, ça s'est imposé -- d'arriver avec des statistiques plus globales, plus nationales.

5016   On parlait, par contre, des grands sites ou des sites les plus fréquentés. On ne pense pas qu'on puisse, chacun qui a son site personnel ou des petites compagnies, qu'on pourrait avoir toutes les...

5017   LE PRÉSIDENT : Oui, mais je ne parle pas des sites. Je parle des diffuseurs.

5018   Le fameux modèle de monsieur Grant a fait l'assumption que la moitié du trafic est vidéo. C'est la base de toute cette construction pour une levy ou un frais qui doit être payé par les distributeurs. Mais je ne sais pas d'où vient cette assumption.

5019   M. OUELLETTE : Oui. Bien, nous, on n'a pas non plus exactement la référence, mais il se fait et aux États-Unis et ici au Canada de plus en plus d'études régulières sur la consommation vidéo sur les sites, et après ça, on est capable, évidemment, de tracker d'où proviennent ces vidéos. Est-ce que c'est des user-generated content, de la radiodiffusion ou de l'original, made for Internet là?

5020   LE PRÉSIDENT : O.K.

5021   M. OUELLETTE : Et ça se fait, ce n'est pas un problème.

5022   LE PRÉSIDENT : O.K. Merci.

5023   Michel, tu as des questions?

5024   CONSEILLER ARPIN : Oui, merci.

5025   Si ce n'est pas un problème... parce que je ne sais pas si vous avez assisté à l'audience depuis tôt ce matin ou si...

5026   M. OUELLETTE : En partie, oui.

5027   CONSEILLER ARPIN : En partie ou quand l'APFTQ a comparu. Parce que, un, on a, notamment, parlé d'un programme qui est géré par le CFTPA, qui est le marquage ISAN, et d'autres nous ont parlé de Digimark.

5028   On sait que dans l'enregistrement sonore, le marquage existe déjà depuis fort longtemps, et comme vous êtes des producteurs de multimédias, vous avez certainement un intérêt de savoir qu'est-ce qui arrive à vos productions, je présume à tout le moins.

5029   Est-ce que c'est quelque chose que, effectivement, vos membres... sur lequel vos membres réfléchissent, cherchent des solutions ou...

5030   M. OUELLETTE : Oui. Je veux juste apporter... j'ai dit que ce n'est pas un problème au niveau technique à tout le moins. Après ça, il est clair dans notre esprit, je pense, qu'il y a une volonté à y avoir... il y a des sous à investir. Comme on le fait depuis des années, en radio, en télévision ou dans les médias imprimés, à chaque fois qu'on a des statistiques sur l'auditoire, il y a un coût associé à ça, et là, il faut ramasser tout ça.

5031   Pour répondre -- je laisserai Marc après -- il est évident que ça dépend encore... nous, on a des producteurs qui font un ensemble de contenus. Quand il s'agit de sites très précis -- Marc pourra vous en parler, il en a fait -- on peut facilement savoir qui vient sur le site et même la provenance, à la limite, de qui fréquente le site du moment où ce n'est pas...

5032   CONSEILLER ARPIN : Ça, c'est peut-être d'intérêt pour le producteur, puis je comprends très bien qu'ils veulent le savoir, mais nous, comme corps réglementaire, pour ce qui est de la radio et de la télévision, on souscrit, comme tout le monde, à BBM, et évidemment, nos questions, finalement, essentiellement, c'est : Est-ce qu'il est pensable d'avoir un BBM de l'Internet?

5033   M. BEAUDET : Il y en a un actuellement, qui est...

5034   CONSEILLER ARPIN : Qui est comScore.

5035   M. BEAUDET : ...qui est comScore, qui est le plus utilisé.

5036   CONSEILLER ARPIN : Mais qui fait plutôt une évaluation d'usage. On est abonné aussi à comScore.

5037   M. BEAUDET : Oui.

5038   CONSEILLER ARPIN : Alors, qu'est-ce qu'on cherche, c'est de savoir... effectivement, c'est la consommation réelle de contenus spécifiques, parce que comScore va me dire que je suis allé sur le site de... tant de personnes sont allées sur le site de Radio-Canada, mais il ne nous dit pas qu'est-ce qu'ils ont fait sur le site.

5039   M. OUELLETTE : Non, on va pouvoir le dire. Il y a toute sorte d'entreprises, même au Québec, qui se spécialisent dans la métrie très micro. Donc, on peut savoir quelle vidéo vous avez regardée, d'où vous venez, à quel moment vous avez quitté la vidéo pour aller où, mais je pense que le défi, c'est d'avoir tout ça réuni. C'est comme si on voulait regarder ce qui se faisait en audiovisuel traditionnel et qu'on voulait comptabiliser tout ce que les gens tournaient, diffusaient dans des salles ou autres.

5040   M. BEAUDET : Mais si je peux répondre à votre question, en fait, c'est que le grand problème pourquoi il n'y a pas ces statistiques-là disponibles, un, c'est que c'est souvent des informations commerciales qui sont gardées confidentielles par les grands diffuseurs, et deuxièmement, il n'y a pas d'incitatif à les publier.

5041   Maintenant, quand on fait des sites pour des agences de publicité et il faut calculer des taux de conversion ou d'usage des sites, on va implanter des systèmes statistiques qui sont extrêmement précis pour suivre à la trace les provenances et ce que les gens font sur les sites.

5042   D'autre part, dans un système que vous connaissez plus, qui est le Fonds Bell, associé avec Téléfilm, ont mis en place avec l'aide d'une compagnie de Toronto un système de mesures. Ils font implanter des outils statistiques dans tous les sites qu'ils financent et ils vérifient la qualité de leur investissement à partir non seulement du trafic sur le site, mais des patterns de trafic à l'intérieur des sites eux-mêmes, et ils publient ça à l'intérieur de leur rapport interne. Malheureusement, ce rapport-là n'est pas donné aux producteurs, mais ils peuvent comparer l'ensemble de leur investissement de cette façon-là.

5043   La technologie est là pour permettre ça. Dans la mesure où vous seriez intéressé de réglementer et d'imposer des normes, ça ne serait pas difficile s'il y a des incitatifs pour les producteurs ou les diffuseurs de s'y conformer.

5044   Mais actuellement, le seul qui est populaire, c'est comScore parce que c'est lui qui détermine la valeur commerciale des propriétés de diffusion au Canada.

5045   CONSEILLER ARPIN : On aura des gens de Bell qui vont venir nous visiter. On aura probablement pour eux des questions plus pointues sur, effectivement, les mesures qu'ils imposent pour vérifier l'utilisation quand c'est au niveau commercial.

5046   Dans votre présentation d'aujourd'hui et puis aussi dans votre exposé écrit, vous nous dites que votre membership est formé de gens de contenu de commande, de convergence et de contenu original pour des nouvelles plateformes.

5047   C'est quoi le partage entre chacun de ces trois catégories-là?

5048   M. OUELLETTE : Ça pourrait être le tiers-tiers-tiers, si on voulait simplifier.

5049   La commande, ce sont les gens qui faisaient à l'époque, comme je disais, des documents corporatifs, mais de plus en plus dans des univers interactifs complets, mais peuvent être appelés aussi à travailler en sous-main pour des agences de marketing-publicité ou des producteurs télé dans certains cas.

5050   La convergence, elle occupe aussi un bon pourcentage, et de plus en plus, ils apparaissent, ceux qu'on appelle les producteurs de contenus originaux pour les nouvelles plateformes. Chez nous, il y a Salambo Productions que vous connaissez certainement via son produit fort que sont « Les têtes à claques. »

5051   Mais c'est un amalgame. On ne pourrait pas, évidemment, se permettre au Québec d'avoir trois sous-associations pour chacune de ces catégories-là.

5052   CONSEILLER ARPIN : Non. Je peux comprendre là, effectivement.

5053   M. BEAUDET : Des fois, certains producteurs, comme ma compagnie, Turbulent, on est dans deux. Par exemple, on a fait énormément de contenus convergents avec la télévision, mais cette année, on a livré deux projets originaux qui ont été diffusés, un sur MSN Sympatico, qui n'étaient pas liés à la télévision. Donc, on est devenu, à ce moment-là, un producteur de contenu original aussi.

5054   CONSEILLER ARPIN : Donc, évidemment, quand vous faites des produits de convergence, vous êtes un sous-traitant pour...

5055   M. BEAUDET : Il peut arriver, oui, qu'on est un sous-traitant ou, dans certains cas, les fonds d'investissement vont nous demander d'être en co-production.

5056   CONSEILLER ARPIN : Ou co-producteur.

5057   M. BEAUDET : Oui.

5058   CONSEILLER ARPIN : Donc, vous êtes soit co-producteur, soit un sous-traitant?

5059   M. BEAUDET : Oui.

5060   CONSEILLER ARPIN : En général, vous êtes sous-traitant ou co-producteur? Ça dépend avec qui vous travaillez.

5061   M. BEAUDET : Objectivement, on est pas mal toujours sous-traitant, même quand on a le titre de co-producteur.

--- Laughter

5062   CONSEILLER ARPIN : Maintenant, vous dites aussi que... vous faites le constat quand même, puis vous le souligner et dans votre présentation écrite et dans votre présentation orale, que la production francophone, il n'y en a pas suffisamment. Je présume que vous travaillez autant en anglais qu'en français, et que la commande que vos membres reçoivent est généralement plus souvent pour des sites en anglais ou de la production anglaise?

5063   M. BEAUDET : Non. La production convergente au Québec est en grande majorité francophone. Par contre, il va arriver qu'on fait des sites bilingues.

5064   CONSEILLER ARPIN : Oui.

5065   M. BEAUDET : Ça peut arriver. Le problème principal qu'on va avoir, puis je vais vous donner l'exemple d'un projet concret. On a co-produit avec Glacialis le projet « Mission Antarctique », qui était la mission de Jean Lemire en Antarctique, où il partait pendant 16 mois avec son bateau. C'est un site qui a été énormément populaire au Québec, avec 1.5 millions de visiteurs. Maintenant, même avec une version anglaise, étant donné qu'on n'avait pas la campagne média qu'on avait au Québec, on n'a jamais réussi à percer dans les marchés anglophones.

5066   Alors, c'est toujours un peu le problème de produire au Québec. Même quand on produit en anglais, on n'a pas les centres décisionnels. Il faut être chanceux, en fait, pour traverser la frontière.

5067   Alors, je vous dirais que le problème du Québec, en fait, c'est que c'est des propriétés américaines qui vont dominer le paysage de l'Internet, comme je pense que le site le plus visité au Québec, c'est YouTube. Alors, à ce moment-là, le problème auquel on fait face avec les audiences plus jeunes, c'est qu'il n'y a pas d'offre en français pour ces audiences-là.

5068   Je me rappelle une histoire, et là, peut-être que je déborde de mon propos, mais je vais vous la conter quand même. C'est que pendant longtemps dans le nord-est des États-Unis, il y a eu des communautés francophones actives. Ils avaient leurs propres écoles, ils étaient catholiques, et ils avaient leur propre culture. Ils avaient préservé le fait français, et ça, c'est jusqu'à l'arrivée de la télévision. Quand la télévision est arrivée, en l'espace d'une génération, le français a disparu du nord-est des États-Unis, qui s'était maintenu depuis le 19e siècle.

5069   En fait, nous, notre crainte aujourd'hui, c'est que si on ne développe pas de contenus en français ou assez de contenus en français pour les nouvelles plateformes, c'est que notre culture, en fait, disparaisse, envahie par les médias numériques, et c'est très difficile pour nous à l'intérieur du système actuel de compétitionner avec les offres de contenus en anglais.

5070   CONSEILLER ARPIN : Cependant, quand même, les diffuseurs francophones traditionnels qui font quand même des commandes, est-ce que... parce que ça m'amène à une interrogation. Vous avez parlé de la télévision publique un peu plus tôt, puis on pourrait probablement faire la même réflexion avec les télédiffuseurs privés.

5071   En général, est-ce que c'est eux-mêmes qui font de la production in-house, comme on dit, ou s'ils font affaire avec des producteurs?

5072   M. BEAUDET : Bien, pour avoir accès au Fonds Bell ou au Fonds Quebecor...

5073   CONSEILLER ARPIN : Oui, oui. Là...

5074   M. BEAUDET : Oui, ça, il doit avoir une sous-traitance. Les commandes privées sont quand même assez rares parce qu'ils ont des équipes. Puis là, je pense qu'il y a 125 personnes qui travaillent chez Radio-Canada. Alors, ils font une bonne partie de leur production à l'interne, mais ils vont donner des contrats. Radio-Canada est un bon client sur le marché de Montréal.

5075   CONSEILLER ARPIN : Maintenant, je fais un petit peu de coq-à-l'âne, je reviens.

5076   M. BEAUDET : Oui.

5077   CONSEILLER ARPIN : Quand vous avez parlé tantôt de Jean Lemire et de « Sedna IV »...

5078   M. BEAUDET : Oui.

5079   CONSEILLER ARPIN : ...Radio-Canada l'a bien promotionné, mais...

5080   M. BEAUDET : Oui.

5081   CONSEILLER ARPIN : ...CBC ne l'a pas fait.

5082   M. BEAUDET : Exactement.

5083   CONSEILLER ARPIN : Bon! C'est un peu le message que j'avais entendu sans que vous le disiez, mais c'est peut-être bon de l'inscrire...

5084   M. BEAUDET : Bien, ils ne l'ont peut-être pas fait autant que... Mais aussi, au Québec, il n'y avait pas seulement Radio-Canada. Vous aviez les groupes de presse, les journaux. Il y avait énormément de monde là.

5085   CONSEILLER ARPIN : Effectivement. Il était suivi...

5086   M. BEAUDET : Oui.

5087   CONSEILLER ARPIN : ...autant par les magazines que par la presse quotidienne que la télévision et la radio.

5088   M. OUELLETTE : J'aimerais ajouter, si vous permettez. C'est sûr que les groupes de diffusion médias, tels qu'on les connaît au niveau de la télévision, ont souvent peu d'intérêt à passer des commandes à l'externe pour du contenu original, compte tenu, évidemment, d'une structure de financement qui est beaucoup plus pauvre qu'en télé ou en tout cas, sur les sommes globales, il y en a beaucoup moins.

5089   Donc, on est, jusqu'à maintenant -- et ça, Marc l'a souligné -- on est resté cantonner dans du complément à des émissions de télévision, dont le Fonds Bell et le Fonds Quebecor, pour les nommer.

5090   Nous, on aimerait, comme on dit, avec Radio-Canada et les autres diffuseurs qui ont toujours un pouvoir d'attraction aussi et de promotion, de pouvoir faire des contenus originaux avec eux, mais sur la base d'une véritable relation d'affaires.

5091   CONSEILLER ARPIN : Maintenant, quand monsieur Beaudet parlait autour du paragraphe 13, il a ajouté quelque chose qui était...

5092   M. OUELLETTE : De son crû.

5093   CONSEILLER ARPIN : ...de son crû et il a laissé tomber un montant de $ 345 000 d'aide financière...

5094   M. OUELLETTE : En moyenne.

5095   CONSEILLER ARPIN : ...en moyenne qui pouvait venir de Quebecor et de Bell.

5096   Mais ce n'est pas le financement complet de...

5097   M. BEAUDET : Oui, c'est la structure financière en moyenne. C'est un chiffre qui vient de... il y a deux ans, le Fonds Bell avait tenu une assemblée des principaux producteurs canadiens et avait dit : En moyenne, on a additionné tous les projets que le Fonds Bell a subventionnés dans les 10 dernières années, et on a établi en moyenne que le budget moyen était de $ 345 000.

5098   C'est un chiffre actuellement qui fait du sens. C'est sûr qu'il y en a des plus élevés, il y en a des moins élevés, mais c'est la moyenne canadienne selon le Fonds Bell, selon les projets financés par le Fonds Bell.

5099   CONSEILLER ARPIN : Et ça, ça comprend un ensemble de produits ou bien ça comprend un seul produit?

5100   M. BEAUDET : Un seul produit.

5101   CONSEILLER ARPIN : Un seul produit.

5102   M. OUELLETTE : Un seul projet, devrait-on dire, qu'il peut avoir au sein même d'un site, d'un environnement interactif, autant des jeux, de la vidéo, du texte et compagnie, et ce qu'il faut savoir aussi, un site, il devient vivant le jour où on le met ligne. Il faut toujours continuer à le...

5103   CONSEILLER ARPIN : À le nourrir, effectivement. Contrairement à une production télévisuelle, elle est faite. La cassette, elle demeurera la même pour sa vie entière, tandis qu'un site, il faut qu'il soit continuellement mis à jour.

5104   M. OUELLETTE : Oui.

5105   CONSEILLER ARPIN : Un des éléments de discussion qu'on a eus pendant la journée était le fait que, par exemple, la reconnaissance d'un produit canadien. On sait que dans le secteur de la télévision, une émission canadienne, ça répond à des critères et un système de pointage qui attribuent au réalisateur, au scénariste, à l'interprète principal, et ce qui fait un total de 10. Et le CRTC a décrété que 6 sur 10, un jour, c'était une émission canadienne, et puis le Fonds canadien de télévision avait dit, bien, pour avoir du financement chez nous, c'est 10 sur 10.

5106   Les gens qui produisent du documentaire, quand ils ont comparu, nous ont proposé un autre système qui est basé sur un système de 6 points, compte tenu que, finalement, la structure de production dans le multimédia n'était pas semblable à la structure de production du monde de la télévision.

5107   M. BEAUDET : Vous voulez savoir notre point de vue?

5108   CONSEILLER ARPIN : Mais oui, évidemment, c'est ça. Oui.

5109   M. BEAUDET : Oui. Bien moi, je vous dirais, en fait, que la plupart des projets convergents, quand on demande une demande de financement à Téléfilm, au Fonds Bell ou au Fonds Quebecor, on a le pointage. Il faut, effectivement, démontrer que les gens, les artisans sont Canadiens.

5110   Puis, je vous dirais aussi qu'on a tout avantage à conserver ça parce que c'est une industrie qui peut se délocaliser très rapidement. Donc, advenant, par exemple, que le contenu canadien ou la présence des gens canadiens dans les structures de projet ne serait plus nécessaire, vous savez déjà que les pays émergents tels que l'Inde ou même en Europe de l'Est ramassent déjà beaucoup de contrats de sous-traitance technique des agences de publicité canadiennes. Donc, en fait, c'est ce qui nous permet de garder ce genre de projet-là, en imposant, en fait, de la main-d'oeuvre canadienne, une expertise technique Web dans notre pays.

5111   M. OUELLETTE : Un bémol quand même, et ça été exprimé la semaine dernière à Prime Time, une des intervenantes qui nous disaient, je pense, de mémoire : Il ne faudrait pas être obligé de mettre un castor dans le programme pour certifier que c'est canadien.

5112   Et c'est là aussi... je pense, c'est l'embarras de tout ça. Si on veut avoir une industrie qui exporte un moment donné ou qui a une possibilité de rayonner, il va falloir peut-être être moins contraignant que certaines autres formes de programmes dans la télévision traditionnelle, où on exige d'exprimer, jusqu'à un certain point, la réalité canadienne. Donc, si on a...

5113   CONSEILLER ARPIN : Effectivement, c'est une des règles du Fonds canadien de télévision, que le sujet traité doit être canadien.

5114   M. OUELLETTE : Oui.

5115   CONSEILLER ARPIN : Effectivement, l'ironie, c'est que la guerre en Afghanistan n'est pas un sujet canadien.

5116   M. OUELLETTE : Non, mais à moins que c'est un point de vue canadien.

5117   CONSEILLER ARPIN : Ça peut-être changé, mais quand j'ai présidé le comité sur le Fonds canadien, c'était un des arguments qui nous... une des préoccupations qui nous avait été soulignée. Cependant, je dois reconnaître que la situation a bien évolué depuis, et peut-être qu'effectivement le sujet n'est pas le même.

5118   Vous avez parlé plus tôt que... bon, dans votre nomenclature, vous avez parlé des sites les plus importants. Vous avez mentionné des sites français. Je me suis posé comme question : Est-ce qu'il est arrivé que de vos membres aient produit pour des producteurs étrangers?

5119   M. OUELLETTE : Absolument.

5120   M. BEAUDET : Oui. Vous avez la compagnie Tribal Nova à Montréal qui compte 65 employés et qui est très présente aux États-Unis et en France. Donc, elle a construit une bonne base d'opération au Canada et, par la suite, a été en mesure de commercialiser des contenus canadiens, même de produire des contenus originaux pour des entreprises françaises comme Baillard ou de travailler en partenariat avec des compagnies comme PBS aux États-Unis.

5121   CONSEILLER ARPIN : Écoutez, Monsieur le Président, je pense que j'ai passé les questions que je voulais poser à nos invités.

5122   LE PRÉSIDENT : Merci.

5123   Michel, tu as des questions?

5124   CONSEILLER MORIN : Oui. Bonjour.

5125   M. OUELLETTE : Bonjour.

5126   CONSEILLER MORIN : Vous dites en page 5 que :

« ...nous ne pensons pas qu'il faille mettre en place un régime de réglementions stricte visant à restreindre l'accessibilité aux contenus étrangers. Nous serions davantage en faveur de règles et d'incitatifs visant à encourager la production et l'offre globale de contenu canadien. »

5127   Cela étant dit, je ne sais pas si vous avez pris connaissance, il y a un intervenant qui n'apparaît pas dans le cadre de ces audiences-là mais qui a proposé un monsieur Robert Ester(ph) de Osgoode Hall Law School. Je ne sais pas si vous avez lu son mémoire, mais il parle de l'ordonnancement par paquet, deep packeting inspection, DPI.

5128   Est-ce que vous êtes au courant de cette technique-là...

5129   M. OUELLETTE : Non.

5130   CONSEILLER MORIN : ...qui identifie les contenus, en fait? Et ça peut nous permettre, évidemment, d'avoir plus de contenus canadiens ou francophones.

5131   Moi, j'aimerais ça que vous fassiez vos commentaires relativement à ça, et éventuellement aussi, en ce qui concerne la limite d'usage. Est-ce qu'on pourrait avoir une limite d'usage, un bit cap comme on dit là, qui soit différent pour le contenu canadien et le contenu étranger, disons? Je ne sais pas, peut-être vous avez des commentaires tout de suite.

5132   M. OUELLETTE : Non, mais je dirais qu'on ne s'est pas penché particulièrement sur cette question-là, parce qu'on a travaillé en comité avant de préparer et le mémoire et la présentation d'aujourd'hui.

5133   Mais dans un premier temps, nous, ce qu'on voulait signifier, sans aller encore là dans le détail, c'est qu'on pense qu'il y a moyen d'augmenter l'offre de façon substantielle, une offre qui est séduisante pour une population locale, régionale, nationale, sans pour autant, comme on l'a fait dans d'autres systèmes avec de bonnes raisons à l'époque, de limiter l'accès des autres contenus.

5134   CONSEILLER MORIN : Mais vous savez aussi que les réseaux risquent d'être encombrés à court terme et que, de toute manière, les fournisseurs de services Internet devront faire des choix et privilégier certains contenus. À ce que vous me dites, les productions américaines, entres autres, risquent d'éliminer pas mal de productions peut-être, et c'est dans ce sens-là que ces deux données-là pourraient peut-être aider à indiquer certains choix, tout en ne bloquant pas l'offre étrangère.

5135   LE PRÉSIDENT : Puis-je suggérer que vous lisiez les articles que mon collègue a cités et faites vos réponses par écrit...

5136   M. OUELLETTE : Oui.

5137   LE PRÉSIDENT : ...parce que vous avez la chance de répondre, parce qu'une discussion sur un article que vous n'avez pas lu, ça, vraiment, ne vaut pas...

5138   M. OUELLETTE : Mais je peux enchaîner. On s'était prononcé sur la neutralité d'Internet en disant qu'il ne fallait pas permettre à des entreprises de baliser le trafic. Du moment où on permet à ces fournisseurs, notamment, d'accès de le faire, comment on contrôle après ça? Entre le petit, le moyen et le gros, on sait qu'il y a des groupes médias très bien intégrés qui pourraient éventuellement privilégier leur propre propriété au détriment des producteurs indépendants, notamment.

5139   M. BEAUDET : Et vous avez en dernier lieu la géolocalisation qui fait en sorte que certaines émissions de la BBC sont bloquées par la BBC elle-même et ne sont pas distribuées au Canada. Donc, des fois aussi, la Loi sur les droits d'auteur fait une sélection, en fait, de ce qui est disponible dans un territoire ou non.

5140   CONSEILLER MORIN : Merci.

5141   LE PRÉSIDENT : Merci. Ce sont nos questions, et comme j'ai dit, si vous avez des commentaires sur l'article que monsieur Morin a cité, si vous voulez les faire par écrit.

5142   M. OUELLETTE : Oui. Merci.

5143   LE PRÉSIDENT : Madame la Secrétaire, on résume demain à 9 h 00?

5144   LA SECRÉTAIRE : Oui, Monsieur le Président.

5145   LE PRÉSIDENT : O.K. À demain.

--- Whereupon the hearing adjourned at 1608, to resume

on Wednesday, February 25, 2009 at 0900

   REPORTERS

____________________      ____________________

Johanne Morin         Monique Mahoney

____________________      ____________________

Jean Desaulniers         Madeleine Matte

Date modified:

2009-02-25