ARCHIVED - Transcript, Hearing 13 April 2011
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Volume 8, 13 April 2011
TRANSCRIPT OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications for the group-based licence renewals for English-language television groups listed in Broadcasting Notice of Consultation CRTC 2010-952, 2010-952-1, 2010-952-2 and 2010-952-3
140 Promenade du Portage
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
To consider the broadcasting applications for the group-based licence renewals for English-language television groups listed in Broadcasting Notice of Consultation CRTC 2010-952, 2010-952-1, 2010-952-2 and 2010-952-3
Konrad von Finckenstein Chairperson
Leonard Katz Commissioner
Rita Cugini Commissioner
Suzanne Lamarre Commissioner
Peter Menzies Commissioner
Tom Pentefountas Commissioner
Stephen Simpson Commissioner
Jade Roy Secretary
Joshua Dougherty Legal Counsel
Sheehan Carter Hearing Manager
140 Promenade du Portage
April 13, 2011
- iv -
TABLE OF CONTENTS
PAGE / PARA
Documentary Organization of Canada 1143 / 6863
Alberta Media Production Industries Association 1188 / 7100
On Screen Manitoba 1209 / 7223
Youth Media Alliance 1228 / 7333
Canadian Association of Film Distributors and Exporters 1256 / 7489
Toronto International Deaf Film & Arts Festival 1290 / 7718
Strategic Alliance of Broadcasters for Aboriginal Reflection 1295 / 7751
Big White and Silver Star Ski Resorts Ltd. 1300 / 7771
BC Children’s Hospital Foundation 1303 / 7787
Insight Production Company Ltd. 1307 / 7809
Canadian Independent Music Association 1336 / 7998
- vi -
PAGE / PARA
Undertaking 1225 / 7315
Undertaking 1286 / 7690
Undertaking 1288 / 7705
--- Upon resuming on Wednesday, April 13, 2011 at 0900
6857 THE CHAIRPERSON: Good morning. Bonjour.
6858 Commençons, Madame la Secrétaire.
6859 THE SECRETARY: Thank you. Good morning.
6860 For the record we would like to announce that charts prepared by the Commission outlining information on group revenues and CPE are being added on the public record and are available in the examination room.
6861 We will now proceed with Documentary Organization of Canada.
6862 Please introduce yourselves for the record, after which you will have 10 minutes for your presentation. Thank you.
6863 MME FITZGIBBONS : Bonjour, Messieurs, Dames de la Commission. Mon nom est Lisa Fitzgibbons. Je suis la directrice générale de l'Association des documentaristes du Canada/Documentary Organization of Canada.
6864 Avec moi aujourd'hui sont Cameron McMaster, notre chercheur en politique, et monsieur Jacques Ménard, président des Productions des Collines.
6865 J'aimerais demander la permission, avant de commencer, de soumettre de nouvelles données pour la présentation d'aujourd'hui, qui accompagnent notre présentation.
6866 LE PRÉSIDENT : Quelle sorte de documentation est-ce que c'est?
6867 MME FITZGIBBONS : Nous avons des appendices supplémentaires, des annexes, Canadian Content Total Projects, CBC's Documentary Night in Canada, donc, des auditoires, Canadian Share of Documentary and Drama Viewership. Ce sont des données qui découlent...
6868 LE PRÉSIDENT : Des données. O.K. Donnez ça à notre secrétaire.
6869 MME FITZGIBBONS : Merci.
6870 Alors, merci pour la présentation ce matin.
6871 DOC est l'association qui représente les réalisateurs et les producteurs indépendants qui travaillent dans le documentaire à travers le pays. Il s'agit d'une association sans but lucratif qui représente plus de 800 membres de partout à travers le pays.
6872 In our presentation today, we would like to discuss the following:
6873 - the supply and demand of documentaries;
6874 - a documentary baseline requirement;
6875 - policy monitoring.
6876 Over the course of the last century, documentaries have told our stories to Canadians and the rest of the world and brought the world's stories our doorstep.
6877 Documentaries provide a window on national, regional and local stories and tell stories that are meaningful, critical, entertaining and engaging.
6878 Our documentaries have received national and international critical acclaim, and indeed, have become synonymous with Canadian creative expression.
6879 Today, however, the documentary industry is in crisis. The combined impact of the financial recession, genre creep, lack of documentary commissioning and the consolidation of the Canadian broadcasting service have created the perfect storm which has decimated the Canadian documentary industry.
6880 The sector is experiencing job losses, massive drops in production volume, declining regional production, less access to funds and fewer windows.
6881 Our members are distressed and it is their opinion that the outcome of this proceeding will decide the fate of the Canadian documentary sector.
6882 The implementation of Policy 2010-167 ("the policy"), while offering programming flexibility to broadcasters, should not compromise the Commission's responsibility towards the creation of programs that serve the national interest nor ignore the cultural objectives set out in the Broadcasting Act.
6883 MR. MÉNARD: Good morning.
6884 Unlike English drama production, English documentary production has fallen below levels reached during its peak around 2006. In fact, English documentary production has fallen every year by an average of 15 percent.
6885 Clearly, if the policy is to meet its stated objective of supporting programs that serve the national interest, regulatory action must be taken.
6886 Broadcasters are the gatekeepers of the documentary genre: they control how much is produced and what is broadcast. They contribute financially to documentaries through licensing fees, which in turn, as you know, trigger other critical forms of financing such as the CMF, provincial funding, tax credits and film funds.
6887 In 2006-2007, total private broadcaster licence fees for English television production dropped by 20 percent.
6888 Fortunately, although broadcasters' interest has waned, there are faithful documentary audiences. If Saturday is "Hockey Night in Canada" on CBC, then Thursday night has become "Documentary Night in Canada."
6889 In 2008 the CBC inaugurated a consistent and accessible programming slot for documentary, which was supported by good promotion. This programming offer competed with the highest-rated shows on Canadian television: "The Big Bang Theory" and "Grey's Anatomy."
6890 Viewer numbers for "The Nature of Things" and "Doc Zone" indicate that if documentaries are predictably scheduled, audiences will show up and consistently return, and if aggressively promoted, the shows can garner respectable audiences of up to just under one million.
6891 When asked why they don't program documentaries, private broadcasters respond that there is no convincing economic argument for them to do so.
6892 However, this ignores the fact that documentaries garner consistent audience levels. One of every two documentaries watched in English Canada is Canadian, whereas only one in seven of all dramas watched in Canada are Canadian.
6893 Furthermore, broadcasters ignore the evergreen quality, if you like, of documentaries, whose value extends far beyond the original broadcast.
6894 Broadcasters have spoken about bringing Canadian eyeballs back to the regulated television environment. But perhaps Canadian viewers are forced to seek programming elsewhere because they are not finding what they want on Canadian television screens.
6895 Documentary festivals, semi-theatrical and online portals offer Canadians the types of documentary programming that broadcasters are not commissioning.
6896 Last year, a combined audience of almost 200,000 Canadians attended les Rencontres internationales du documentaire in Montréal, Hot Docs in Toronto and DOXA in Vancouver. Since 2009, the NFB online portal has had over 10 million views.
6897 Documentaries provide Canadians comprehensive and varied content. Television viewers are not a homogeneous group and past history has shown that a diverse offering of programs has served audiences well. Is that not one of the main principles of the Broadcast Act?
6898 The typical documentary viewer is aged 50 years and older. Canadians aged 50 years and older represent over 33 percent of the Canadian population. Let's make sure they have something to watch.
6899 MR. McMASTER: Our Policy Implementation Strategies.
6900 DOC supports the new television regulatory policy. It provides broadcasters the flexibility to program their services while promoting underrepresented genres, including documentary, through predictable expenditure requirements. The success of this policy will depend on its uniform application and strict enforcement of its criteria.
6901 The PNI rate should be based on historical expenditures. We don't have access to all of the broadcaster financials or the corrected PNI spends of the broadcasters. We cannot declare how much the historical expenditures should be raised in order to make sure there is healthy production. Regardless of the PNI percentage, we want to see a baseline requirement for documentary production.
6902 The priority programming regime did not include any explicit requirements to commission documentaries, and consequently, there has been a decline in regional production, strands have been cancelled, and every year, fewer documentary projects have been commissioned. Unless a documentary baseline requirement is introduced, the PNI system will suffer the same problems.
6903 DOC argues that 30 percent of broadcasters' PNI allocation be spent on documentaries. We believe that 30 percent is a suitable amount. Appendix D illustrates that this percentage is actually below the 10-year average of the PNI volume for English-Canadian productions.
6904 We recognize that the current policy aims for flexibility, but increased flexibility may result in all documentaries being slotted on specialty services rather than on conventional television. DOC is worried that flexibility will come at the expense of access.
6905 We would hope to see broadcasters allocate PNI to conventional services given that they are the most accessible broadcasting services in Canada.
6906 In order to maintain the diversity of programming on conventionals, we further propose that 20 percent of all PNI expenditures directed to conventional television be spent on documentaries.
6907 Otherwise, we risk seeing the trend evidenced in our Appendix E harden. In 2008-2009, there were 21 documentaries broadcast by CTV and Global, four less than what was broadcast in 2000-2001, and in 2010 that number will be lower still.
6908 Some of these programs were not actually documentaries as the misapplication of the documentary definition has been rampant. "Popstars," "So You Think You Can Dance" and "Canadian Idol" are among those titles labelled as documentaries in the independent production reports.
6909 Single-episode documentaries are broadcast on anthology strands so that audiences have predictable and consistent locations to find Canadian documentaries.
6910 "W-Five Presents" and "Global Currents" were the main strands for documentaries in the private conventional space, and both broadcasters stopped commissioning independent documentary productions in 2009-2010.
6911 Prior to going on hiatus, these programs were broadcast in the summer months or during the weekends, making it more difficult for audiences to find them. This kind of peekaboo programming results in "watch by chance" audiences. Even producers don't know when their programs are going to air.
6912 Although some broadcasters argue that a baseline requirement is superfluous or impedes the flexibility of the system, it is our view that without regulatory action, broadcasters will commit the minimal amount necessary to documentaries, as has been witnessed over the past several years.
6913 Regional production.
6914 As Appendix F demonstrates, production has become increasingly centralized in Ontario over the last 10 years. Without strict requirements to commission programs from the regions, this centralization will continue.
6915 Programming from the regions should be a condition of licence. At minimum, a broadcaster should have dedicated resources to regional commissioning. The PNI system must encourage the creation of programs that reflect the views and attitudes of Canadians in every region.
6916 Genre Protection.
6917 Specialty services were intended to offer distinct options to cater to audiences' varied interests. However, the loose interpretation of the nature of services has blurred their original purpose. The impact of a generalist specialty market with no differentiation between the channels renders the concept of specialty services obsolete.
6918 Broadcasters are asking for more flexibility in order to create a more homogeneous specialty market, but will this serve Canadian interests and audiences?
6919 The Impact of the New Documentary Definition.
6920 DOC has been pointing out the misapplication of the documentary definition for many years and is pleased to see the Commission's initiatives in this regard. Despite what certain stakeholders argue, the refined definition does not add complexity to the system but simplifies it.
6921 The new policy was created to streamline regulation but the scope of the hearings has become so vast that monitoring compliance is that much harder. As more services are reviewed in one hearing, increased scrutiny is required. One area that requires additional enforcement is the application of program categories.
6922 Broadcasters have consistently and wilfully misapplied the documentary category in the past. Indeed, the PNI expenditures of the broadcasters reveal that they have actively spent money on reality programming and called it documentary.
6923 Although we believe that the new documentary and reality TV program categories may reduce category creep, the Commission should take more frequent actions against this practice.
6924 We recognize that the line between intervention and cultural preservation is a difficult one to draw and a fine line to walk. However, DOC would be supportive of any measures that the Commission creates that would increase its ability to enforce the objectives of the new television policy.
6925 DOC supports the Commission's request to have the power to fine licensees using administrative monetary penalties. However, administrative monetary penalties can only be successful inasmuch as they work in tandem with transparent reporting mechanisms that allow for the Commission and the public to evaluate the performance of licensees.
6926 We echo the WGC's proposal for in camera meetings between the Commission and creative groups. This forum would provide members of the creative community a place to disclose financial information, discuss industry trends and practices in a safe and confidential environment.
6927 MS FITZGIBBONS: The principles of the Broadcasting Act are as valid today as when the Act was first established in 1968. Broadcasting in Canada is not solely about the bottom line but also sets out to attain cultural objectives.
6928 In this regard, documentaries, as defined at the outset, are perfectly situated as a genre to pay a critical role in realizing these objectives. In the end, the decline of documentary production and its gradual disappearance from the Canadian broadcasting system disrupts the programming ecology and undermines the principle of diversity guaranteed by the Broadcasting Act.
6929 The broadcasters have been given sufficient flexibility by this policy. Canadian audiences and the documentary community turn to the Commission to ensure the policy be implemented to everyone's benefit.
6930 We welcome any questions you might have. Merci beaucoup.
6931 THE CHAIRPERSON: Thank you for your presentation.
6932 Frankly, I don't understand you at all. Isn't it cheaper to produce a documentary than a drama?
6933 MS FITZGIBBONS: Yes.
6934 THE CHAIRPERSON: We created the PNI group. We said drama, documentary and award shows. How many award shows can you do? Not too many if we itemize them. So for the first time we actually put the emphasis on documentary.
6935 We said: You must spend at least 5 percent -- we will see what the final number is -- on drama and documentary.
6936 Wouldn't that be automatically, if you are a producer -- and what you just told me there for documentaries, they are cheaper to produce, they are evergreen, audiences like them. Since you have to spend money on it, wouldn't you do it, wouldn't normal business sense require it?
6937 Why do you want to have a 30 percent minimum of PNI? Why do you want regional production? Why do you want this and that, overregulating going exactly the other way, when we have taken you and said: You are important, you are so important we put you on the same rank as drama. Here, broadcasters, you decide which one you produce.
6938 By your own admission you have a built-in advantage. You are cheaper and you are evergreen. So why do you need all of this?
6939 MS FITZGIBBONS: Well, what we have seen is that when given the opportunity to avail themselves of opportunities, we felt -- for example, I'll talk about the CMF POV program.
6940 We felt that it was an opportunity for broadcasters to step up to documentary production, and they have stayed away from that documentary production and have left projects on the table. So to us --
6941 THE CHAIRPERSON: But let's face the reality of today. We cleaned up the definition. Reality shows don't count. We have said 5 percent at least, probably more depending on which category, has to be spent on it.
6942 And what is the alternative for broadcasters? Spend it on drama or documentary. And how many award shows can you do? So basically the choice is between drama and award shows, by and large. So that should give you a tremendous leg up.
6943 MS FITZGIBBONS: Well, we are delighted at the PNI approach. For us it's a question of whether the broadcasters are going to respect the documentary genre and not use it to masquerade other programming.
6944 So it's critical -- we realize that the refinement of the definition is a step in the right direction, but we don't want to leave it entirely up to the broadcasters' discretion. We feel that there has to be some sort of guidelines that guide the principles on which they spend.
6945 THE CHAIRPERSON: Yes, but I mean you suggest -- for instance, you are worried that you will be banned to the specialty channels, won't be shown on OTA.
6946 I just can't understand any good business reason why I would do that. If I am a broadcaster and I am spending money on documentaries, surely I want to get my return. I am not going to hide them on a specialty channel in obscure hours. What would be the point of doing that?
6947 MR. McMASTER: Well, if we look at the way CTV used its documentary benefits, I guess the BCE benefits of 2000, they had dedicated hours for documentaries in that package and the way in which they exhibited those documentaries was on Saturday night.
6948 So you think they have to spend the money on these documentaries and you would think that they want to garner the most audience numbers with them, and then they slot them in on Saturday nights rather than peak viewing periods. And we see this also in the summer.
6949 So with those practices continuing, we are just worried that they put us in the worst places of television on conventional television, and then why wouldn't they replace that OTA, conventional Saturday night, which they have already done, with American drama?
6950 We have already seen it. Now that there's no documentaries on CTV and on Global, we don't anticipate them putting them on there. So if there isn't --
6951 THE CHAIRPERSON: But that is the key point. I mean I agree with you, they have been playing around with the definition and they have been monkeying around. That's why we changed the rules.
6952 We said spend your money, because if you figure out where you are going to spend the money, you are going to put it where you get the most return.
6953 Yet, you are now thinking -- you said there is no documentary on CTV and Global. Well, as of this year they will have to spend a certain amount on it, on drama or documentary. Doesn't that automatically drive them to docs? That is, I guess, where we have our disconnect.
6954 We have looked at their past performance. We don't like what we see and exactly said, well, what drives you? Obviously returns on your investment. So we will dictate that a certain amount of investment goes into these categories, which are totally in accordance with the objectives of the Broadcasting Act. Spend it there and then show it where you think it's best for you.
6955 MS FITZGIBBONS: I guess our point is that you have to -- by virtue of the different subjects that are tackled in documentary, you have to give audiences a consistent rendez-vous to show up.
6956 That is why we used the example of the Thursday night on CBC. I think that is a programming strategy that has been successful and we are showing that as a best practice, if you will.
6957 So even though they might be able to spend now for documentaries, unless they develop these strands and then aggressively promote them, we might still end up with lots of docs over the summertime.
6958 THE CHAIRPERSON: Now, you are asking for an in camera discussion. I don't know whether you listened to my exchange with the WGC.
6959 In camera is there to deal with business confidential data, disclosure of which would harm the applicant, and that is not our intent. But it is not in order to exchange information that you are otherwise not willing to share because you are worried about reprisals or something like that.
6960 So I mean if you have data that is business confidential, then, of course, we would give you an in camera.
6961 But I asked the WGC and basically they wanted to talk about the practices of various broadcasters. I can't do that without giving them a chance to rebut, and, of course, to rebut you have to hear it.
6962 And I think the same applies in your case or are you talking about data here?
6963 MS FITZGIBBONS: No. I think in our case what we are talking about are business practices. Essentially there is such a power differential that people are uncomfortable to speak up.
6964 THE CHAIRPERSON: No, I can understand that and that is why we have the vertical integration hearing. That is where we will address what are the effects of this tremendous concentration that we have seen and the power differential.
6965 Steve, I believe you have some questions.
6966 COMMISSIONER SIMPSON: Thank you very much, Mr. Chair.
6967 Good morning. Thank you very much for your presentation.
6968 Starting off with your previous written submission which goes back to February 9, which was very detailed and I spent quite a bit of time poring through it, I just want to make sure that any discrepancies between your presentation today and February 9 are the result of issues that have evolved -- for example, on terms of trade, I am going to talk about later -- and to just probe your position today versus what you had written in February.
6969 I would like to start off with the statement on page 8 at the very bottom where you had said that:
"The group spend on qualifying broadcasters on documentaries has declined." (As read)
6970 Which to me implies that you have some universal scope of historical spending.
6971 Yet, in your presentation today you are saying you can't declare how much the historical expenditures should be raised in order to make sure there is healthy production of documentary.
6972 I am just wondering how -- those two seem to conflict with me, and I ask this not in a way to try and trip you up but to understand where you are extracting a lot of your data from, because you have come forward with a significant amount of data in both your written submission and today's submission. So help me by qualifying that first question.
6973 MR. McMASTER: Okay. So in the submission, we are working with the data that was provided by the broadcasters on the public record for their group-based PNI expenditures for documentary.
6974 In our submission what we were trying to express was that over the course of the hearing so far we have heard -- well, in the first part, there were requests for more data by the Commission to the broadcasters for CPE expenditures and for PNI expenditures.
6975 And then I believe it was last Thursday where there was a recognition that the PNI group spend for documentaries was actually inaccurate.
6976 And then the data that we are working -- so to conclude that thought, if we see that this is the case with the group spend, we didn't think it was appropriate for us to say, oh, you need to raise PNI this high, because we are not actually sure what the historical expenditures are given these inconsistencies in reporting.
6977 When it comes to what we are reporting in the presentation, we are taking -- I use the word "PNI" but it's just drama and docs -- spent over the last 10 years as reported in "Getting Real 4," our documentary economic profile, and CMPA's "Profile 2010." The latest data on documentaries is taken -- like the 2009-2010 is taken from "Profile 2010."
6978 So when we were drawing that data, we were just trying to show what is the average spend on documentaries in total within the English market, and if you look at the Appendix you see it varies. Like right now it's at 25 percent but it has gone all the way up to 41.
6979 We are just trying to show this is the basis for why we are saying 30 percent. I'm sorry we weren't that clear.
6980 COMMISSIONER SIMPSON: No, not at all. It's just that that's the purpose of face-to-face, is to help understand that.
6981 That was my next question, you know, on what basis were you extrapolating all this data to get at your 30-percent spend, and that helps tremendously.
6982 The other issue that I would like to come up-to-date on, because it wasn't touched on too much in your verbal presentation this morning, is terms of trade. Back in February we weren't there yet, and, of course, there has been a significant amount of productivity on terms of trade.
6983 Would you touch on your perspective as of today on terms of trade? Because you were still quite critical as that MOU or memorandum of understanding was evolving at the time. Where do you stand today?
6984 MS FITZGIBBONS: As you know, terms of trade were negotiated by CMPA. So we haven't had a chance to review the terms of trade with our members and we will be making a comment on that as part of our final comments. But we weren't part of the negotiations.
6985 COMMISSIONER SIMPSON: Okay. Great. Thank you.
6986 To delve into the decline, as I think a couple of the commissioners responded this week, it's not often we get complimented for our work, but there has been some praise coming in this direction on the change in the policy from exhibition to expenditure.
6987 But I can't help but note the strong undertone through all of your commentary that a need for windows, a need for a certain certainty on exhibition is still very much a part of your life, the reality of your life.
6988 So the question is the chicken and egg. In your particular genre, if I may use the word, of producing documentaries, which in your world has to come first, the money or the exhibition window?
6989 MS FITZGIBBONS: Oh, boy! Well essentially, I think if you have the exhibition window, the money will come, no? I think we need the exhibition window.
6990 MR. MÉNARD: I would agree with that. I mean as Lisa said, if you have the window, the money will come. As you know, the whole system is predicated on getting that first window to get any kind of money.
6991 So the money. There have been great programs -- POV has been mentioned -- from CMF that have come, you know, about in recent years, but it all gets kicked off, it's all triggered by that window. Primetime window, good window, and if not, there's no money.
6992 COMMISSIONER SIMPSON: Okay.
6993 On the subject of prime time versus specialty -- again, you have been very thorough in your data -- I have seen figures thrown around in the specialty area of exhibition, 200,000 to 300,000 in viewership, which seems to be a comfortable audience average from what I am seeing.
6994 And you have demonstrated that docs when given the opportunity for mainstream play are pulling in 700,000, 800,000 in audience, which is still arguably half of what a mainstream broadcaster is hoping to pull in when it comes to a primetime program.
6995 So with that in place, why are you taking the position that broadcasters shouldn't -- I use the word "bicycle" -- shouldn't be spending once and playing a product many times to be able to get their expenditure costs back when it comes to multiple exhibitions of a particular product on various channels?
6996 MR. McMASTER: I don't think we are opposed.
6997 If we could say, like the evergreen quality of a documentary is obviously its social value, its cultural value.
6998 But then we also have to look at the longtail value of something, and studies have shown that if you have a documentary, it can come from one station and go to another, and we are okay with that as long as there is a licence fee for both services.
6999 I think in our submission, the written submission, we had highlighted two examples of "Aftermath" on the History Channel which garnered great audiences in specialty and then it was brought to the conventional market and did well.
7000 If we look at a recent example, I can imagine how well "The Kennedys" miniseries is doing if we consider that a docudrama -- if they have labelled it documentary, I'm not sure. They would probably move that to the conventional market and it could garner more audiences. I don't know its Canadian participation. I think it's a co-pro, so I don't know what flexibility they have.
7001 But I do see with the specialty stations that are portals for a specific niche interest like History, like certain factual programs, that you could, you know, bicycle them around and they can garner actual revenues.
7002 Like in "Getting Real 4" we had a study of broadcasting revenue-generation based on documentaries, and repeat value was based on much of the same data as you have heard from the WGC, DGC, ACTRA, CMPA, a Canadian programming revenue study that they mentioned earlier in the hearing, and what we are seeing is that with a one-off there's a modest return if you have a number of repeats on conventional and then on specialty, but with the CREs you can get fairly lucrative returns.
7003 So we have no problem with the bicycling as long as there is some sort of compensation.
7004 COMMISSIONER SIMPSON: And that goes back to terms of trade. Yes. Okay.
7005 On the subject of tightening genre restrictions with respect to broadcasters, as business people -- I mean we all do what we do for the love of the work, but there still has to be a dollar at the bottom of the barrel to pay the bills -- when it comes to genre tightening, does that in the end hurt the marketability of your product or help it?
7006 MS FITZGIBBONS: We don't think it does. We think it serves Canadian audiences.
7007 I would like to share with you an exchange that was on our electronic forum.
7008 So we have a member who is asking other members, "Hey, does anyone know who I should talk to at History because I have a story about a World War I pilot?" The reply came jokingly, "Hey, if you can get that on History you are in charge of Peace in the Middle East."
7009 So there is a real disconnect right now between what the specialty channels are offering and what their intentions were. We don't think that is serving Canadian audiences well.
7010 COMMISSIONER SIMPSON: In the world moving, creeping slowly towards a non-linear system we are seeing and hearing about the impact of over-the-top methods of distribution of product, like Netflix, Apple TV Hulu, what I find interesting is that these offerings break content into channels and put product squarely in front of the audience, with the audience having, like a vending machine, the opportunity to hit B1 or D3, and the audience selection becomes a metric of the product and the interest in the product.
7011 Have you any information that you can share with respect to how docs are doing in demand-based delivery systems?
7012 MS FITZGIBBONS: Two-part answer.
7013 So before you can get to the metrics you actually have to get the product offered. DOC has a website called DOCspace where we promote and market Canadian documentaries. We have been trying to connect with Netflex and iTunes to propose Canadian titles. It is very difficult for an individual producer to go to Apple and Netflix and say, "Hey, do you want to take this?" They are not going to deal with the individual producer, they are only going to deal with aggregators.
7014 So there is an obstacle to entry in that field to the producers which we are trying to overcome. So that's the first part of the answer.
7015 The second part of the answer is, we are currently doing a digital distribution report on documentary and so far, as we can tell, when Canadian titles are offered they fare fairly well, as they do on iTunes, and we hope to come out with that report this year.
7016 MR. McMASTER: In response to VOD, are you are referring to cable VOD or like Netflix subscription VOD?
7017 COMMISSIONER SIMPSON: Any demand system.
7018 MR. McMASTER: Well, on the demand systems if we look at various online portals, I mean from what I have heard from the NFB and from our stats that we have on the NFB's portal is they have been getting fairly good long tail returns. So they have like 2,000 documentaries on there and they are viewed from 10,000 to -- I think the top one is maybe 900,000 views or something, but that is over the period of three years.
7019 When I have talked to VOD providers that are cable, they say that overall when you have a documentary that is well-known, and if it's topical, it will get a good amount of views. But because of the shelf space and, you know, there is a cycle of products, it can't really take advantage of the long tail distribution system.
7020 Then to go to iTunes, which is also an on-demand system, what I have found, like part of our study is I have looked at six months worth of their top 200 list of documentaries for their feature length and for their television, and on the television side what I have found is as soon as a Canadian title comes up in a series, it's promoted, it's in the top 200 competing against thousands of different American stuff and then it falls off.
7021 The one program that is there consistently for the last six months in the top 200s, usually ranging between 150 and 200 is "The Nature of Things". It's a six part series -- well, six episodes for the season and it's usually there for six months.
7022 Turning to feature films, the distribution of programs, it's usually between 20. There is about 20 Canadian films there every single -- every week that I looked at it and usually these programs have curation and promotion on the iTunes software.
7023 So they might be in the banner ad, they might be mentioned in the under $10, it might be somewhere else, but there is this consistent -- it's not just making it available, because we all know about the warehouse effect, it's about promoting it, it's about putting it out there and it's about having people see that it's there. So I guess that's a range of on-demand documentary content.
7024 I mean iTunes doesn't share its data so it's difficult for us to really say whether or not this is profitable in the end. And it's a wild goose chase trying to talk to VOD people about getting actual numbers.
7025 COMMISSIONER SIMPSON: I'm disappointed in hearing that because it, for me, represents the prospect of some blue sky in understanding exactly what the consumer demand is for the product.
7026 I have two more questions and then I'm done. One is a rather large one and one is rather perfunctory, but I will ask the simple one first.
7027 The question was asked the other day of the independent production community whether the funding model and the broadcaster partnership is emphatic enough about the need for promotion of a product, not just the creation of it.
7028 Will you comment on whether that's a similar issue with the documentary producer in getting enough money allocated to promotion?
7029 MS FITZGIBBONS: Well, I think people would start by saying presently we are suffering from a lack of money in the system. If there was enough money in the system clearly we would want to see more money allocated to promotion and marketing. It's a definite must. You can't just create the product and assume that audiences are going to find it, you have to promote it aggressively and of course if you do that you are doing it with what money.
7030 COMMISSIONER SIMPSON: Okay. A bigger question and it's always a favourite of mine, it goes to programming.
7031 In the entertainment side of the business, long-form drama in particular, the commercial producer understands that there is a need to recognize that cop shows sell. You don't find many reality shows based on social work or environmental activism. It might make a great movie but, you know, it's just that you fish where the fish are.
7032 I wonder and ask you to comment on the documentary genre. I started out on my film-making side of the business working on documentaries and commercial projects, commercials, storytelling, corporate storytelling, and I knew then the documentary crowd was quite a unique animal. There is just something about what makes somebody go that direction, it's sometimes a very low only path, but it can be rewarding when you get it right.
7033 The exhibition policy that we put in place that obviously wasn't working satisfactorily was attributed in your presentation to a collapse of the spend on documentaries, but I'm wondering how much the move to reality-based television has also played a factor in that and, if so, why aren't more documentary producers, who have an affinity for capturing reality, moved to that space to be able to have their cake and eat it too?
7034 MS FITZGIBBONS: I will start, he can end.
7035 Just to go back briefly about where you started in your career, I think it's true many of our members would say, you know, I'm not sure that everybody wants to sign up for a vow of poverty to do documentaries, but that's where a lot of people are faced right now.
7036 In regards to the question about where do they fit on the realm of documentary versus factual programming or reality, I think producers are very pragmatic and they recognize that there is a need for a wide offer of products.
7037 Our members happen to be interested in a specific type of documentary although because they have financial concerns end up working on many types of productions.
7038 So in their daily lives they are fully aware and cognizant of the coexistence of these genres. I think the difference is that you don't want to mistake one or confuse one for the other.
7039 Tu veux rajouter quelque chose?
7040 MR. MÉNARD: I think I think the answer was in all -- you mentioned it all in your question and you are absolutely right. I mean, we will never get away from the fact that we are a specialty product and I think it's part of who we are and it's part of what we want to do.
7041 I mean if Loblaw's can now have aisles for organic product, I don't see why generalist television can't have an aisle for organic product. We are not going to be a generic product, we are not, you know.
7042 I don't think that's the answer, in other words having all documentary film-makers making reality TV I think in the sense that you are exposed to the cop show, that kind of stuff, I don't think that's really a feasible answer for the documentary film-makers. We are trying to get that aisle in the store, that's all, I think.
7043 I mean, it's like saying if in the heyday of porn of the '80s and '90s, why didn't all the drama people start doing porn, that was where the money was, but I mean they didn't do that, thank God.
7044 COMMISSIONER SIMPSON: Thank you very much. Those are my questions.
7045 THE CHAIRPERSON: Len...?
7046 COMMISSIONER KATZ: Thank you, Mr. Chairman.
7047 Good morning. I just have one question.
7048 Paragraph 14 of your remarks this morning suggests that typical documentary viewers aged 50 years or older -- my understanding is advertisers like to attract audiences between 18 and 45 or 54 in some cases and it begs the question in my mind: Is the issue here an issue with broadcasters or an issue with advertisers and trying to get advertisers to understand that the audience that watches documentaries do spend money, do have disposable income and should be the ones they should be catering to?
7049 Is that not the crux of the problem and us trying to fix the problem by getting broadcasters to broadcast documentaries doesn't solve the problem, especially in our new model, because the money that is being put into CPE is based on previous years' revenue and if we force them to put on your programming the money allocated is going to go down, not up, if what they are telling us is correct.
7050 MR. McMASTER: Well, I think you are pointing to a very good -- I wouldn't call it a disconnect, but this sort of paradox of we have a Canadian broadcasting system that we want to reflect the interests and needs of the Canadian population and we have major advertisers who want to market to the 15 to the 34s.
7051 I mean, we don't want the entire Canadian broadcasting system to just have programming just for the advertising. If we think about that I don't think -- like would it just be everything on MuchMusic on every single channel.
7052 You are completely aware that we have the Broadcasting Act definitively saying that we have to cater to the needs of men, women and children of all ages and it is essential that we have programming for these various markets, but at the same time I know that the boomer market is a growing place for advertisers and from what our audience demographic profile shows is that the main people who are watching documentaries are 50 and over, but we also have this pocket of people from 39 to 45, that age group, and most of these people are professionals or retirees and they have fairly high household incomes, they are middle income from $60,000 to $110,000, maybe $90,000, so there is a possibility to market to this group.
7053 Moses Znaimer thinks he can do it with Zoomer. With what he did with Citytv, he was able to seize on a television opportunity. As much as I would like to believe that you could seize on this opportunity as broadcaster, it's just I don't think it is necessarily the best thing to only focus on one advertising group as advertisers tend to want broadcasters to do.
7054 Then going to your second point of is this constantly going to drive things down, given the flexibility that broadcasters will have to show -- well, much as we don't want them to this, they might change their OTA stations to complete American rebroadcasters and put as much prime time programming, American programming there that would drive their revenues up.
7055 We also always have to remember that this isn't just about advertising when it comes to the specialty channels it's subscription revenues. This has been an absent point I think in the hearings, is we are talking about advertising first and foremost, but a large portion of the revenues of these corporate groups are coming from these subscription revenues. So I would like to add that back to the conversation.
7056 COMMISSIONER KATZ: Just to follow up, you said that CBC has set aside time on Thursdays for documentaries. CBC is a good example of a public broadcaster who is not focused on bottom-line revenues but on filling a void and addressing opportunities for Canadians where the economics may not be the best for whatever reason.
7057 Can you expand upon whether you see an opportunity to do more with the CBC as a vehicle to get more exposure or documentaries in Canada?
7058 MS FITZGIBBONS: I'm sure we will have an opportunity to talk about that later this year, but obviously yes, we believe so.
7059 We were very sad to see when they cancelled "The Lens". That was a real blow to our community. Our members still talk about some of the strands that used to be on the CBC like "Witness" that are long gone now. So there are lots of questions about what the CBC can be doing in this field, but I don't think it's accurate either to say that only CBC should be active in this field.
7060 In "Getting Real" what's interesting, you will find that the biggest audiences were on conventionals, in this fact French conventionals.
7061 So it's about creating the right product for that audience and we maintain that documentary can be part of that and can be successful commercially.
7062 THE CHAIRPERSON: Tom... ?
7063 COMMISSIONER PENTEFOUNTAS: Good morning.
7064 Am I to understand that you would like us to regulate how much of PNI would go to documentaries?
7065 MR. McMASTER: Yes, a baseline spending requirement.
7066 COMMISSIONER PENTEFOUNTAS: Okay. And would you also like us to impose upon broadcasters that they show documentaries on prime time in the fall and winter seasons?
7067 MR. McMASTER: We did not ask for that.
7068 We recognize that the policy is moving away from exhibition requirements and that's why we asked for a percentage of conventional PNI spend be dedicated to documentaries.
7069 We are trying to work as much within the policy as possible and not have any policy amendments.
7070 COMMISSIONER PENTEFOUNTAS: Okay. So what do you do about 21 in your argument that says they are showing it in the summer under the "peekaboo programming" and the "watch-by-chance". People aren't going to be watching your documentaries unless we impose that an hour or two hours a week in prime time go to docs.
7071 MR. McMASTER: Well, as I said, we see that exhibition requirements would be a way of doing that, but you are not instituting them.
7072 COMMISSIONER PENTEFOUNTAS: Yes.
7073 MR. McMASTER: So we think that -- I mean in each of these different corporate groups they have conventional assets. I mean Corus doesn't do any PNI for its conventional so their percentage wouldn't work. We think if there is going to be spending on conventionals, and if they are going to be investing money in conventional, in the absence of a window them actually directing money to it would mean that they would put it on the air. I mean it might be in the summer on the weekends on the conventionals, but it would be on the conventionals and we still see value of having documentaries on the conventionals and we are worried that with this 100 percent PNI flexibility that it will be shoved into the recesses of specialty television, given that now specialty channels can also move this around. We just don't want to see it ghettoized to a certain extent.
7074 COMMISSIONER PENTEFOUNTAS: Yes, but you understand broadcasters are in the moneymaking business. You understand that?
7075 MR. McMASTER: Oh absolutely, but they also have an agreement with the Canadian public through their licences to live up to the Broadcasting Act and show programming that interests Canadian. And if it was just about the bottom line, I mean they wouldn't make local news either because they have the LPIF, right, and that provides the money in order to do that properly. Now we have the PNI programming system in order for them to make programs that aren't properly funded or --
7076 COMMISSIONER PENTEFOUNTAS: But are you alleging that they are going to spend money on documentaries, a lot of money according to what we are proposing, and that they are not going to try to have a return on investment on that money by showing these shows when no one wants to watch them?
7077 MS FITZGIBBONS: That's not what we are suggesting, but we certainly wouldn't want to avoid seeing it slotted at times where audiences aren't going to show up or aren't predictable. We recognize that we are not -- we are not suggesting that you regulate it, we would like to make sure that it doesn't get shoved off to the side.
7078 COMMISSIONER PENTEFOUNTAS: Well, how do you do that without regulating it? I don't understand.
7079 MS FITZGIBBONS: We are trying to recognize the flexibility that the Commission wants to build into the policy and we are saying we will hope that the broadcasters will then live up to their end of the bargain and then, you know, broadcast this at predictable times and promote it accordingly so that the audiences will show up.
7080 COMMISSIONER PENTEFOUNTAS: But we are imposing upon them expenditures towards the creation of products that you are defending. I don't understand what more you want --
7081 MR. McMASTER: One of the major points that I was --
7082 COMMISSIONER PENTEFOUNTAS: -- besides us regulating that they should show an hour of documentaries every night at 8:00 p.m.
7083 MR. McMASTER: One of the points we were trying to drive home in our presentation is the failure of the priority programming system is if you give them the space to do it and the space to choose they will not choose to do it. If we look at Global and CTV we have seen that if there weren't those benefits which directly told them to make hours of documentaries we think there would have been very, very few, including documentaries in the genres of priority programming. It didn't necessarily mean they had to show documentaries, it meant they had the choice.
7084 Similarly with the PNI system, they have the choice to show drama and they have the choice to put their money towards documentaries and they have the choice to put it towards drama and given how the broadcasters have constructed their benefits packages they were very reluctant to support documentaries. I recall in Shaw's benefits package it wanted to create the next big Canadian genre and luckily some of that money is now going towards documentaries as it has been expanded to the PNI genre.
7085 COMMISSIONER PENTEFOUNTAS: But short of controlling every aspect of their business, what else do you want the regulator to do?
7086 MR. McMASTER: We are not requesting that you control every aspect of their business, we are just saying that from our experience over the last 10 years if they are not given the explicit --
7087 COMMISSIONER PENTEFOUNTAS: So you are asking us to explicitly and specifically tell them that we want one doc a week or one doc a night at 8:00 p.m.?
7088 MR. McMASTER: No, we are asking for a 30 percent baseline requirement in the --
7089 COMMISSIONER PENTEFOUNTAS: Twenty percent of PNI.
7090 MR. McMASTER: Thirty percent of PNI, 20 percent on the conventional.
7091 It was our impression from the policy that the Commission was asking for suggestions on a baseline requirement when the data came in from the broadcasters on the group spend of these various broadcasters for documentaries and so we are providing what we think is a way in which documentaries can be supported within the policy framework.
7092 COMMISSIONER PENTEFOUNTAS: Thank you, sir.
7093 MS FITZGIBBONS: I just want to finish by saying, we understand you want to give the flexibility, our point is that it's true, unless regulated we are not confident that the broadcasters will live up to this.
7094 THE CHAIRPERSON: Your position is eminently clear so it's obviously based on past experience. So thank you very much for your intervention.
7095 Madame la Secrétaire, who is next?
7096 THE SECRETARY: Thank you.
7097 We will now proceed with the presentation by the Alberta Media Production Industries Association, previously known as Alberta Motion Picture Industries Association.
7098 Please come to the presentation table.
7099 THE SECRETARY: Please introduce yourself and you have 10 minutes for your presentation.
7100 MR. EVANS: Thank you.
7101 Good morning. My name is Bill Evans, I am the Executive Director of the Alberta Motion Picture -- sorry, our new name continues to surprise me sometimes -- the Alberta Media Production Industries Association. I am joined by Kristian Roberts of the firm Nordicity whom AMPIA has commissioned to prepare the accompanying report that has been circulated to the Commission. So I would ask that the Commission accept this report as part of our presentation.
7102 THE CHAIRPERSON: You gave a copy to Madam Secretary?
7103 MR. EVANS: This report was a result of a question which was asked to us at our last appearance at the CRTC hearings for the BCE takeover of CTV and we were asked to provide data on the amount of private broadcaster expenditures in Alberta specifically and also within the context of spending in the Prairie Provinces, so that is what this is.
7104 AMPIA is pleased today to provide comments on the group-based license renewals of the above named broadcasters and is pleased that the Commission is reviewing these broadcasters licences in their entirety.
7105 We continue to believe that it is a privilege in this country to license the broadcast airwaves that reach into each corner of this country. With those licences comes a responsibility to serve the communities that support these broadcasters.
7106 First, AMPIA would like to congratulate the CMPA and the broadcasters and the CRTC for concluding the Terms of Trade agreement. We realize that an enormous amount of work went into it and our members greatly appreciate it.
7107 Since 1973, AMPIA has represented independent producers and members involved in all aspects of the creation of screen-based content in Alberta. The mandate of the Association is to ensure the development of the indigenous industry at the producer, technical, talent and craft levels. Central to this mandate is maintaining an environment in which Alberta producers can initiate, develop and produce screen content over which they have creative and financial control.
7108 To that end, AMPIA supports the position of our colleagues at the CMPA in their submission in support of a ruling that will require broadcasters to contribute significant benefits to independent producers, which is crucial to our membership. AMPIA also supports the CMPA's assertion that the Commission should reject the broadcasters' attempts to amend the Group Licensing Policy by relieving them of any obligations currently in their individual licences relating to independent production.
7109 We also support the CMPA position that under the GLP broadcaster groups are expected to commission programs of national interest from all regions of Canada and to engage in levels of production activity commensurate with their presence in their respective markets.
7110 To that specific point, let me draw your attention to the report which was distributed with this presentation entitled "Analysis of Canadian Private Broadcaster's Expenditures in Alberta and the Prairie Provinces."
7111 This report was commissioned jointly by AMPIA and the Alberta Association of Motion Picture and Television Unions, or AAMPTU, in response to a request by Commissioner Poirier at our last appearance before the Commission to provide hard data on funding in Alberta by broadcasters, which we have done. The purpose of the report is to analyze expenditures on independent television production made by broadcasters in Alberta or the Prairie Provinces between the years 2002 and 2009.
7112 The report is in two parts.
7113 Part One considers the degree to which conventional broadcasters have met their commitments and expectations documented in their broadcast licences, including promises made as part of tangible benefits packages.
7114 Part Two investigates the degree to which Alberta and the Prairie Provinces have benefitted from private broadcasters' regional distribution of independent production commissioning and expenditures compared to the national average on a per-household basis and also compared to our peer provinces.
7115 The report found that under Part One commitments made by private broadcasters fell short of expected funding commitments in all but two of the years examined. There is a summary of the specific commitment shortfalls on page 1 of the Introduction. In total, there was a regional commitment to Alberta or the Prairie Provinces of over $45 million, of which roughly $15 million remains unexpended or unaccounted for. See page 4 for a chart which breaks these numbers down further.
7116 Please note that as we were able to find data only up to broadcast year 2008-2009 it is possible that some further funding commitments have been made in the past broadcast year. We will update the Commission when we have received the information for the 2009-10 broadcast year.
7117 Please see page 2 of the introduction for a summary of the main findings of Part 2.
7118 The major finding of this report is that Alberta and the Prairie Provinces not only trail Canada's two major production centres, those being Ontario and Quebec, but in many cases they trail many of our peer provinces and the national average.
7119 Alberta, in particular, was one of the most underrepresented provinces in terms of its share of private broadcaster spending on a per household basis.
7120 The analysis also found that Alberta was the most underrepresented province in Canada in terms of original production spending, except for Newfoundland, P.E.I. and New Brunswick, across all levels and genres of production.
7121 On a per household basis, Alberta's level of production was between one-tenth and one-quarter of national averages in these genres.
7122 How do we explain this underrepresentation?
7123 Contrary to the general perception, Alberta provides a very supportive environment in which to produce television programming. Since 1998 we have had a provincial film fund that, while not a tax incentive, provides grant-based investments that are competitive with other provinces. In fact, since 1998 no project that has qualified for this fund has been turned down.
7124 We have great locations, great facilities, and more being planned and built as I speak.
7125 Alberta has a strong production community, in part due to past benefits that flowed to Alberta, which helped develop the producers, directors, writers, actors and crew to the world-class quality that we have today.
7126 Unfortunately, these benefits packages have expired or remain unexpended, and what few regional broadcast funds existed have been eliminated as a result of consolidation of ownership and centralization of development and licensing in central Canada.
7127 In order to correct this imbalance, it is AMPIA's position that regional development offices and significant regional development funds and licences be required as Conditions of Licence for these group-based renewals.
7128 These development offices should be more than drop-off points, with real decision-making power, and should become an integral part of private broadcasters' business plans to secure the best programming possible.
7129 It is now, more than ever, important that national broadcasters have regional executives and regional offices who work hard to bring quality programming from the regions to the national arena. This approach would strengthen the fabric of Canadian television and fulfil the mandate of the national Broadcasting Act.
7130 With regard to the unfulfilled commitments to Conditions of Licence by private broadcasters, we recommend that a staff member or a consultant employed by the CRTC verify the data that we have provided and identify if, indeed, there have been shortfalls in meeting these commitments. If there have been, we ask that the regulator enforce the Conditions of Licence that have not been met.
7131 AMPIA appreciates the opportunity to comment on the GLP applications, and I would be happy to answer any questions you might have, and Kristian Roberts can speak to any questions regarding the findings of the report.
7132 Thank you.
7133 THE CHAIRPERSON: Thank you for your submission, and thank you for giving us some substantive data, rather than just feelings and perceptions. That is very helpful.
7134 This whole issue of regional production -- I don't know whether you were here when we had the broadcasters before us. I have heard now twice the very laudable intentions and undertakings and visiting the province and drawing provincial productions, et cetera, but then the performance doesn't meet the rhetoric.
7135 Are there any concrete suggestions that you have that we should employ?
7136 I mean, every broadcaster will tell me: If it's a good story, we will do it. Whether it comes from Manitoba or from Ontario, there is no difference. We will gladly film it in Manitoba -- or Alberta, or Saskatchewan, or whatever province you take.
7137 But it doesn't usually happen.
7138 Do you have some concrete suggestions on what we should do to address this issue?
7139 MR. EVANS: I think that the best possible solution, from our perspective, would be to support the few remaining regional offices that certain broadcasters have in the region, and specifically I am talking about the CTV office in Vancouver and the ACCESS office in Edmonton.
7140 But, in addition to those, we need the roles clarified, in that it is by no means certain that the CTV office in Vancouver will remain open after the departure of their development officer there, and the role of ACCESS as a commissioning entity has significantly declined over the past several years, to the point where very little activity is being commissioned at all.
7141 So we would suggest that, as a Condition of Licence of these renewals, all broadcasters that are applying be encouraged or required to maintain or open offices of development, if they don't have them already.
7142 THE CHAIRPERSON: Okay. Thank you.
7143 Peter, do you have some questions?
7144 COMMISSIONER MENZIES: Thank you very much for this. This is really very intriguing.
7145 How long have you been working on this, putting this study together?
7146 MR. EVANS: The report had to be put together in a very short period of time, because we were tasked with this activity at our last appearance, which was at the beginning of February.
7147 Kristian, do you want to speak to that?
7148 MR. ROBERTS: Nordicity was contracted by AMPIA only three or four weeks ago, so this is a process of one month or less, from our engagement to this hearing today.
7149 COMMISSIONER MENZIES: What was your first reaction when you saw the report?
7150 Did you go, "I told you so," or what?
7151 MR. EVANS: My reaction was -- it was not out of line with my expectations, but I guess it was a little bit more severe than even I was expecting.
7152 COMMISSIONER MENZIES: The extent to which it shows underspending or non-spending -- I am trying to condense this really quickly, but about a third of the money that was supposed to be spent by the broadcasters in Alberta was not spent, or there is no evidence that it was spent?
7153 MR. EVANS: Perhaps Kristian could speak to that.
7154 MR. ROBERTS: Yes, I will speak to that question.
7155 I think your latter statement is perhaps more accurate, that is, there is no evidence that it was spent.
7156 I should point out that there are a variety of reasons for why that money may not have been spent, including, but not limited to, the end of a fund by virtue of consolidation of stations.
7157 So, yes, effectively there are a number of reasons why those funds might not have been expended, and in some cases we simply haven't been able to verify whether or not the fund has been spent because no information has been made available to us from our request to the CRTC for such information.
7158 COMMISSIONER MENZIES: So you have been making these requests to us, to our staff, to find this information for you?
7159 MR. ROBERTS: Correct. Under the timeframe, that was the only viable option.
7160 COMMISSIONER MENZIES: How would you characterize that exercise?
7161 MR. ROBERTS: Like a sleuthing exercise. That is perhaps the best characterization of the exercise.
7162 COMMISSIONER MENZIES: Spoofing?
7163 MR. ROBERTS: Sleuthing, in that it was a mystery to be solved. The information was not easily readily available and it required that it be tracked through a number of documents and, effectively, of course, back to the original decision.
7164 COMMISSIONER MENZIES: Now, is this something that applies generally to our ability to track these spends?
7165 MR. ROBERTS: I cannot speak to that generally, I can speak only to those benefits packages and Conditions of Licence that are contained in this document, and whilst it is not very difficult to find where those commitments are and where they come from, it is reasonably difficult to find where those particular resources were expended.
7166 COMMISSIONER MENZIES: What was the explanation that you received?
7167 MR. ROBERTS: We did not receive any explanation for that difficulty.
7168 COMMISSIONER MENZIES: How long have you been trying to bring this to our attention?
7169 MR. EVANS: We mentioned it as part of our presentation with regard to the BCE application in our presentation in February, and then we were asked by Commissioner Poirier to substantiate our subjective, I guess, analysis with some hard data. So, really, only in that very short period of time.
7170 However, I would have to say that other producers that are part of our organization have been lobbying for more activity and more regional spending for years -- years and years.
7171 COMMISSIONER MENZIES: There seem to be two issues here. One is people doing what they say they are going to do, and the other is the sort of separate issue of regional spending. But on the regional spending issue, the one question I had is: How would --
7172 You might not have these statistics, and I am not demanding them of you, but can you give me your impression of how this might look if the public broadcaster's spending was included as well?
7173 MR. EVANS: That is a good question. I think the numbers would be a little bit higher. CBC, in particular, has invested heavily in production in Alberta over the last several years, or during the scope of this study, and it is our intention to broaden the scope of this study to include not only the CBC, but also production related to the National Film Board, as part of this overall study of production in Alberta for the same time period, and we are hoping that we will be able to work with Nordicity to expand the scope of the study and provide that information to you at some point in the future.
7174 COMMISSIONER MENZIES: How would you describe the overall health of your membership, in terms of it as an industry, in recent years?
7175 MR. EVANS: I would say that over the past couple of years we have been in a rather precipitous state, especially in terms of the number of craft positions that have been emigrating, I guess, from Alberta to B.C., and in some cases other Prairie Provinces, as well, because, simply, the amount of production has declined to a level where people find they can't make a living doing it any more without travelling to other jurisdictions.
7176 COMMISSIONER MENZIES: How much are these statistics to blame for that?
7177 MR. EVANS: I would say that, partly, the overall economic conditions since 2008-2009 are largely to blame for that.
7178 However, I think it's significant when we look at the amount of regional spending and the decline that has happened over the last, I would say, four years of this study. That has played a significant role, as well.
7179 COMMISSIONER MENZIES: To be fair, wouldn't it be -- what I am trying to get a sense of is the trending, because to a certain extent it tends to make sense that if Vancouver is a larger film centre, more people will go there. If that's where the business is, that's where people will go, if that's where the resources are, and it has a better climate for year-round work, and has a lot of the geographical assets that might work in Alberta, too.
7180 There is sort of an assumption made there that you are probably always going to lose some talent, but what I am trying to get a bigger picture of is what is different today from ten years ago. Is it better or worse, and why or why not?
7181 MR. EVANS: Let me just clarify, first of all, that when I was talking about jobs moving outside of our province, I was specifically talking mostly about craft positions. For obvious reasons, I think that a number of producers who are Alberta-based would choose to stay and work in Alberta and produce stories based in Alberta, and a number of them continue to do so, but they are faced with the challenges of finding crews who are available to work when they do get production financing.
7182 So in terms of the overall expenditure and availability of funding for development and production, there has been a decline in the last ten years.
7183 Ten years ago the situation was much better. There were still some regional production funds that existed, and a number of benefits packages, which have since wound down, and there is really nothing coming on-stream to replace these sources of funding.
7184 Our argument is that when you look at that situation, the decline of regional funds and benefits packages, and then look at the position of Alberta within the overall context of peer-to-peer comparison, in comparison with the national average, there has been an historic underspend in Alberta and in the Prairie Provinces, and we are hoping that that can be addressed as part of the Conditions of Licence of these group-based renewals.
7185 COMMISSIONER MENZIES: Sure, but wouldn't it make some sense, from a business point of view, for some of the stations to -- if you are struggling to create Canadian drama, that we put in --
7186 From everything we have heard, it doesn't make money, at least for the broadcaster, in the short-term, so their tendency would be to make programming that is more likely to capture the larger audiences that are available to them in southwestern Ontario, the Flashpoints and the Rookie Blues and that sort of stuff. It is, pound-for-pound, probably less expensive than shifting out to Alberta.
7187 How would you address that argument?
7188 MR. EVANS: I am not sure that I would agree with that. I think, if you look at a show like Heartland, or a show like Blackstone, both of which are filmed in Alberta -- Heartland is the more expensive of the two, and certainly it makes sense, in terms of its content, for it to be based in Alberta. You couldn't shoot a horse drama in southern Ontario.
7189 Well, I suppose you could, but you wouldn't have the mountains.
7190 So I think that show -- I am not sure what the levels of per episode spend are compared to a show like Flashpoint, but I would say that they are probably no more expensive. In fact, I think that in certain regards, Alberta is a much more competitive place to produce than Ontario.
7191 There is some data being prepared by the Alberta Film Commission that will be forthcoming that supports that position, within particular levels of production.
7192 I mean, we are not competitive with, say, B.C. on $120 million, special effects, superhero shows, but on that mid-level Canadian series we are very competitive.
7193 I would point to a show like Blackstone as a show that has much lower costs, partly as a result of the fact that it was commissioned through the Aboriginal Peoples Television Network, which typically has smaller budgets, but they are able to produce a quality show that is set in a very specific region of Alberta, and it is much cheaper, I am sure, to produce than Flashpoint.
7194 COMMISSIONER MENZIES: I just have two more questions. One, could you just clarify for me, because I am still not sure, how long you had been trying to obtain the data on the broadcaster spend?
7195 If you were intervening at the Bell hearing, I am assuming that this had been of concern to you for some time and that you were --
7196 MR. EVANS: Yes.
7197 COMMISSIONER MENZIES: -- trying to obtain data at some point.
7198 MR. EVANS: Just to give you some historical context, many years ago, I believe it was in 1998, there was a study that was commissioned by AMPIA called "The Watchful Eye", and it was essentially the same thing. It was a breakdown of all of the benefits programs and a tracking of how that money had been spent, or not, and there has been a general desire and recognition that AMPIA needed to engage in such a study again, especially with regards to the recent changes of ownership of, you know, what was A-Channel and Craig Media to CHUM to City, and the question that our members are asking us is: What happened to the A-Channel fund? Where is that money? Did it ever get spent?
7199 When we were at the Commission hearing in February, Commissioner Poirier's point was very well taken, and we decided that, even though we had a very short timeframe, we should endeavour to find as much information as we can, which is why we contacted Nordicity, because they have a lot of this information at their fingertips.
7200 And even though this was put together in a relatively short period of time, we feel that the information in it is beneficial and it's tangible and it's real, and it shows some very worrying trends.
7201 COMMISSIONER MENZIES: It certainly is great food for thought. Thank you for this, because it is so much easier to deal with data than it is just perceptions and opinions.
7202 One last question: Could you just reconfirm that the business case for producing in Alberta is competitive with the business case for producing elsewhere?
7203 And if you have any -- I don't want to push my luck, but if you have any data on that, or if there is data in here that I haven't seen yet, that would be helpful, too.
7204 MR. EVANS: I do have some data that was provided to me by the Alberta Film Commission. However, I have been asked not to disclose it because it has yet to be vetted by their department.
7205 However, I could sort of give you a snapshot of it, which is that, compared to B.C. and Ontario, Alberta is competitive in all genres and levels, including factual series, factual one-offs, dramatic series, and dramatic one-offs, up to a budget of a $20 million feature film.
7206 COMMISSIONER MENZIES: Thank you. My colleagues may or may not have some questions.
7207 THE CHAIRPERSON: Suzanne...
7208 COMMISSIONER LAMARRE: Thank you, Mr. Chair.
7209 I can't read that fast, so I didn't read the report, I am just looking at the pictures, and looking quickly at the pictures, I have two questions.
7210 First, the data you are providing, does it include both French and English productions for all provinces?
7211 MR. ROBERTS: It does, yes.
7212 COMMISSIONER LAMARRE: On page 16, something jumped right out at me. On Figure 10 it says: "Canadian private broadcasters' expenditures on children's and youth."
7213 Now, your definition of private broadcasters, for these figures, does it include TVO, TFO and Télé-Québec?
7214 MR. ROBERTS: These are private broadcasters only.
7215 COMMISSIONER LAMARRE: Only private, so it excludes TVO, TFO and Télé-Québec.
7216 MR. ROBERTS: It does.
7217 COMMISSIONER LAMARRE: Thank you. That's it.
7218 THE CHAIRPERSON: Thank you very much. Those are our questions for you. We appreciate you coming, and we appreciate you giving us this report.
7219 Let's take a 10-minute break.
--- Upon recessing at 1022
--- Upon resuming at 1038
7220 LE PRÉSIDENT : Madame la Secrétaire, commençons.
7221 THE SECRETARY: We will now proceed with On Screen Manitoba.
7222 Please introduce yourself, after which you have 10 minutes for your presentation.
7223 MME MATIATION : Bonjour, Monsieur le Président, Membres du Conseil et employés. Je m'appelle Nicole Matiation. Je suis la directrice générale de On Screen Manitoba. Je vous remercie de m'écouter aujourd'hui.
7224 On Screen Manitoba is an innovative membership-driven association that leads, builds and represents the Manitoba screen-based media industry.
7225 On Screen Manitoba's membership represents a cross-section of individuals and industry organizations, production companies, creators, labour groups and so on, totalling more than 1,500 individuals.
7226 Our members, the creators, crews and suppliers of Canadian independent screen-based media in Manitoba, play a vital role in the fulfillment of one of the Broadcasting Act's core mandates, to ensure the Canadian broadcasting spectrum is used to provide a diversity of voices to the Canadian people.
7227 Regionally based writers, directors and producers play a key role in ensuring Aboriginal, Francophone, Anglophone and multicultural voices from all regions of Canada have a place within the national broadcast system, including both public and private broadcasters.
7228 Les producteurs indépendants en région sont des partenaires clés dans cette vision nationale, car sans l'implication des écrivains, réalisateurs et producteurs comme ceux au Manitoba, on ne verra pas une vraie diversité de perspectives sur les ondes.
7229 Actuellement, la structure est biaisée pour les producteurs vivant en proximité des télédiffuseurs publics et privés à Montréal en ce qui concerne la plupart télédiffuseurs francophones, et à Toronto en ce qui concerne les Anglophones.
7230 Nous croyons que sans des bureaux de programmation régionaux avec un vrai engagement financier de la part des télédiffuseurs à développer et soutenir des productions en région, le système de télédiffusion canadien sera appauvri.
7231 Before proceeding in addressing our concerns regarding the group licence renewals, and speaking on behalf of independent producers in Manitoba, I thank the CRTC for its work in bringing about the Terms of Trade Agreement and I thank also the broadcasters and the Canadian Media Producers Association, the CMPA, for their commitment to reaching a resolution.
7232 The Terms of Trade Agreement provides a strong framework within which independent producers, broadcasters and other stakeholders can continue to build a strong Canadian broadcasting system.
7233 On Screen Manitoba supports the CRTC group licence policy and we recognize the importance of the four pillars of the policy:
7234 - the minimum 30 percent Canadian Programming Expenditure;
7235 - the minimum of above 5 percent on programs of national interest;
7236 - the upholding of Canadian content exhibition requirements; and
7237 - obligations to support independently produced programming.
7238 However, On Screen Manitoba aligns with the CMPA in pointing out that the PNI at 5 percent is based on historical spending of drama alone and is simply a starting point.
7239 Historically, PNI spending on documentaries and award shows is set significantly higher and must be factored into the overall PNI or Canadian audiences will lose the opportunity to benefit from at least the current level of independently produced Canadian PNI.
7240 The CRTC is, of course, best positioned to analyze the data and seek the necessary information to determine a reasonable PNI within the context of a flexible policy. However, On Screen Manitoba notes, as did the CMPA in an earlier presentation, that one broadcaster suggested a PNI spend of more than 9 percent.
7241 In regard to Canadian content exhibition obligations, On Screen Manitoba agrees with the CMPA that this is an essential component of the group licence policy as it ensures that independent Canadian productions are shown when most Canadians are watching.
7242 On Screen Manitoba underlines the CMPA findings that the request by specialty services to reduce CPE obligations could result in as many as 9,000 fewer hours of Canadian programming annually, and this would represent a significant erosion of independent Canadian programming and is not reflective of the intent of the group licence policy, nor of the Canadian Broadcasting Act generally.
7243 On Screen Manitoba believes that the fourth pillar of the group licence policy is key to ensuring a diversity of voices on the air.
7244 Further, we believe that the obligation to work with Canadian independent producers should apply to both PNI and non-PNI programming.
7245 On Screen Manitoba echoes the CMPA's note that the Commission has raised a non-PNI spending obligation as a possible means to ensure non-PNI programming is offered to independent producers across Canada --
7246 THE SECRETARY: I'm sorry, can you please slow down for the translators?
7247 MS MATIATION: Yes. I'm sorry.
7248 THE SECRETARY: Thank you.
7249 MS MATIATION: While On Screen Manitoba fully supports the group licence policy and its commitment to flexibility, we do have some serious concerns regarding its application:
7250 - We share the CMPA's position that adhesion to the Terms of Trade Agreement must be made a condition of licence to ensure all parties abide by the agreement.
7251 - On Screen Manitoba is also very concerned that unless pay TV is excluded from the group renewal policy we will see an unintended and further erosion of broadcaster investment in Canadian feature films. We support the CMPA's call for a separate hearing to discuss the impact of broadcaster investment in the realization and exhibition of Canadian feature films.
7252 Our primary concern, however, lies in the Commission's stated expectation under the group licence policy that the broadcaster groups commission programs of national interest from all regions of Canada and to engage in levels of production activity that are commensurate with their presence in their respective markets.
7253 Over the past several years the broadcasters have centralized operations in Toronto with regard to Anglophone production and in Montreal with regard to Francophone production. Regionally based programming executives have all but disappeared and outreach is now rare and, in our experience, generally requires the producer community to initiate such visits. This puts regional producers at great disadvantage.
7254 Drawing on research into independent production activity reports available from Shaw Media and CTV, CMF reports and Manitoba-specific data from Manitoba Film and Music, we have made the following observations:
7255 - Spending overall on independent production dropped radically in 2009 to less than half of previous years.
7256 - Over the four years from 2006-2007 to 2009-2010, Canwest's level of independent production in the Prairies dropped from 14 to just two projects. Licence fees have plummeted for the region from over $6 million down to under $400,000. Note that overall production spending for Canwest did not drop until 2009-2010.
7257 - During the three years from 2006-2007 to 2008-2009, CTV's level of independent production in the Prairies dropped from six to just two projects. We don't have information for 2009-2010 yet to confirm where that has continued. CTV did have a production office in Winnipeg until 2007.
7258 - The CMF's English-language broadcaster performance envelope allocations have increasingly been spent in Toronto. In the five years from 2005-2006 to 2009-2010, allocations have increased for Toronto-based productions from 40 percent to 60 percent of CMF funds. With a few exceptions, most other production centres across the country have seen a decline.
7259 Past experience with regional development offices has been very positive in Manitoba. Prior to 2001, few Manitoba productions had aired nationally on CTV. However, the CTV Western Development Office located in Winnipeg, from 2001 to 2007, as part of the benefits package, resulted in $11 million in production being leveraged from CTV's investment of $600,000 in the Manitoba Script and Development Fund and $1.6 million in the Local and Regional Programming Initiative called "Manitoba Moments."
7260 As a result of these two initiatives, 56 shows were licensed from over 30 Manitoba production companies. So clearly, regional development offices can contribute to ensuring that PNI and non-PNI factual and fiction projects can be realized in all regions of Canada.
7261 Despite broadcasters' best intentions to receive project pitches from regional producers, little concrete action has been taken in recent years.
7262 Even from a business perspective, it is regional producers who have borne the brunt of the cost to connect with broadcast programming decision-makers, whether through attending national conferences and markets or through all-expense-paid invitations to broadcast executives to meet with regional producers within their home province.
7263 Broadcasters also have a responsibility to ensure a broad diversity of voices on Canadian airwaves and it seems reasonable for them to assume the cost of connecting with regional producers.
7264 Without a condition of licence that sets outreach requirements and incremental regional development and production targets that are monitored, there is very little compelling the broadcasters to actively engage with producers outside of Toronto.
7265 On Screen Manitoba, along with other organizations such as AMPIA, believe that the following conditions of licence are required to meet the Commission's expectations regarding regional production:
7266 - A requirement to establish and maintain regional programming development offices that have appropriate financial resources and programming decision-making authority to support the development and the production of PNI, eventually non-PNI, fiction and factual programming with independent regional writers, directors and producers throughout Canada.
7267 - A requirement to meet minimum quantifiable targets for development and production spending outside of Toronto or Montreal reasonably distributed across Canada.
7268 We don't have access to the data required to analyze and make considered recommendations regarding how to set these targets so that they are effective and realistic. We request that the Commission review the full regional production data from the broadcasters to determine quantifiable regional development and production targets.
7269 Just as the Commission has done with setting requirements for CPE and PNI by using 2007-2008 production activity as a baseline, so could a condition of licence be set for minimum development and production spending for the regions.
7270 Finally, we ask the Commission to require the broadcaster groups to report on their work to meet these two conditions of licence. This could be completed as part of the annual Independent Production Activity Reports that are made public and are strictly monitored by the Commission.
7271 In conclusion, On Screen Manitoba supports the CRTC's group licence policy but asks the CRTC to consider the following in its decision-making process regarding the application of the policy:
7272 - PNI should be set higher than 5 percent to reflect historic spending in genres other than drama;
7273 - similar to the condition of licence of 75 percent PNI, a non-PNI expenditure could be set;
7274 - Canadian programming exhibition obligations are important and should remain, including on specialty stations;
7275 - On Screen Manitoba would welcome a separate discussion regarding broadcaster support for Canadian feature film.
7276 In all cases the group licence policy should lead to more independently produced Canadian programming that reflects the geographic, linguistic and cultural diversity of Canada.
7277 In view of this, On Screen Manitoba asks the Commission to consider adding two conditions of licence to all the broadcaster groups seeking licence renewals:
7278 - A requirement for the establishment of regional development offices with appropriate financial resources and programming authority to ensure the very talented writers, directors and producers in all regions of Canada have the opportunity to contribute to national programming.
7279 - A requirement to spend a CRTC-targeted amount on development and production with regionally based producers and that the large broadcasting groups be required to file detailed annual reports on how each group is meeting their commitments to CPE, PNI and productions with independent producers across Canada.
7280 Merci encore de cette opportunité de partager notre position.
7281 THE CHAIRPERSON: Thank you.
7282 On your second-last page, page 4, last sentence, you say:
"The condition of licence should require a spending level similar to the 75% PNI requirement for non-PNI programming."
7283 MS MATIATION: Yes. I'm sorry, I just --
7284 THE CHAIRPERSON: No, I understand that. I just didn't know there was such a thing. The 75 percent applies to PNI, but now you are saying non-PNI should be subject to 75 as well?
7285 MS MATIATION: No, not 75. We are suggesting that there could perhaps be a level set for non-PNI programming as well.
7286 THE CHAIRPERSON: I see, okay.
7287 Now, the regional development offices, I have heard lots about it. It comes up over and over again and the view among the producers is very clear that without such office, essentially, as you eloquently pointed out, they are either forgotten or they have to push themselves onto the radar screen of broadcasters and they have to visit Toronto or else ask them to come there.
7288 Now, when you say regional programming development offices, what exactly do you have in mind?
7289 MS MATIATION: Well, in an ideal situation, each of the broadcasters within the group licence policy would have a regional office who could work with the regional producers.
7290 THE CHAIRPERSON: What's the regional office in --
7291 MS MATIATION: In the experience of Manitoba producers, this has involved a programming executive who is able to work with the local producers in terms of supporting development and production of programs.
7292 THE CHAIRPERSON: So a Winnipeg office, let's say, would be responsible for Manitoba or would be responsible for all of the Prairies?
7293 MS MATIATION: I guess there are arguments to be made for how the regions might be divided up. In an absolutely ideal world, I think we are working directly within our provinces, but we understand that there are other concerns.
7294 We have certainly had some positive opportunities potentially through the CTV office based in Vancouver, but it wasn't the same as having a CTV office based in Winnipeg.
7295 THE CHAIRPERSON: And the second COL that you want:
"...minimum quantifiable targets for development and production spending outside of Toronto reasonably distributed across Canada."
7296 How would you do this? I mean what does "reasonably distributed" mean? Even if I put it out there, when would it qualify, when would it not? You want us to monitor it. I find it very difficult to deal with such a vague concept.
7297 MS MATIATION: I would agree that it's not -- we haven't attempted to set any sort of a level and we are working hard to work within the flexible notions around the policy.
7298 Certainly, the study that my counterpart in Alberta put forward earlier today demonstrates that in many cases the regions are not even attaining average production values. So that perhaps is a guide.
7299 THE CHAIRPERSON: Okay, thank you.
7300 Rita, you have some questions?
7301 COMMISSIONER CUGINI: Yes, thank you, just a couple of follow-up questions.
7302 I will continue along the same lines as our Chair regarding your recommendation to establish and maintain regional programming development offices.
7303 That is different than what you submitted in your written submission of February 9th --
7304 MS MATIATION: February, yes.
7305 COMMISSIONER CUGINI: -- wherein you said:
"A requirement for the broadcasters' programming decision-makers to travel and meet with regional producers in each province and territory at least twice a year." (As read)
7306 So this recommendation that you are making to us today is meant to replace a requirement that they travel?
7307 MS MATIATION: That's correct. Again, understanding that we are speaking in an ideal situation, this is what we would like to see, are regional offices.
7308 COMMISSIONER CUGINI: Okay.
7309 On the issue of a percentage of CPE to be dedicated to non-PNI programming, this is not the first time that we have heard this argument, and, as I am sure you know, broadcasters will counter-argue by saying, for the most part anyway non-PNI programming is in-house programming, so it's news, it's current affairs, it might be a daily lifestyle talk show, for the most part programming that independent producers are not interested in producing.
7310 MS MATIATION: We recognize that, but for those small windows of opportunity that are there for independent producers.
7311 COMMISSIONER CUGINI: So you are saying that they might be interested in producing some of that programming?
7312 MS MATIATION: Some of that programming, yes.
7313 COMMISSIONER CUGINI: One thing you said today with regards to past experience with regional development offices, that:
"...in Winnipeg, from 2001 to 2007, as part of the [CTV] benefits package, [it] resulted in $11 million in production being leveraged from CTV's investment of $600,000..."
7314 Can you give us the history there and the math?
7315 MS MATIATION: I don't have those details with me, but I would be pleased to provide them tomorrow when I am back in Winnipeg.
7316 COMMISSIONER CUGINI: Okay, that would be great. Thank you very much. Those are all my questions.
7317 THE CHAIRPERSON: Suzanne?
7318 COMMISSIONER LAMARRE: Yes, I have a question. It may be a little bit loaded, but if you could just start on it.
7319 At the bottom of page 2, you say that:
"On Screen Manitoba is very concerned that unless pay TV is excluded from the group renewal policy we will see an unintended and further erosion of broadcaster investment in Canadian feature films."
7320 What is the basis for this concern?
7321 MS MATIATION: Well, in discussions with our membership, they have seen a decrease overall in terms of broadcaster investment in Canadian feature film and it's just a key part of the financing structure for Canadian feature films.
7322 COMMISSIONER LAMARRE: But how would this decrease or continued decrease be linked to the group licensing renewal?
7323 MS MATIATION: We feel that it needs to be a separate discussion, because there was discussion -- some of the specialty television stations had requested that their CPE be -- sorry, that their Canadian exhibition, programming exhibition be reduced or changed.
7324 COMMISSIONER LAMARRE: Okay. So it's mainly linked to the request to reduce the exhibition requirement?
7325 MS MATIATION: Yes.
7326 COMMISSIONER LAMARRE: Okay, thank you.
7327 THE CHAIRPERSON: But presumably you are also worried about if it's included that then, technically speaking, there could be no spending on feature films, all the CPE requirement could be spent on other categories?
7328 MS MATIATION: Yes, we are very concerned by that.
7329 THE CHAIRPERSON: Okay. Thank you very much. Those are our questions.
7330 Madame la Secrétaire, qui est la prochaine?
7331 THE SECRETARY: We will now proceed with Youth Media Alliance/Alliance Médias Jeunesse.
7332 THE SECRETARY: Please introduce yourself, after which you will have 10 minutes for your presentation.
7333 MR. MOSS: Mr. Chair, Members of the Commission and staff, my name is Peter Moss. I am the Chair of the Board of the Youth Media Alliance/Alliance Médias Jeunesse, formerly known as the Alliance for Children and Television.
7334 Before we begin our presentation, I would like to introduce my colleague Chantal Bowen, who just recently joined the Alliance as Executive Director.
7335 On behalf of the Youth Media Alliance, we wish to thank you for this opportunity to contribute to the Commission's present examination of English-language television group licence renewals.
7336 We believe this hearing comes at a critical point in the evolution of the Canadian broadcasting system and we urge the Commission to be very cautious in reviewing the many proposed changes that have surfaced from the now highly vertically integrated licensees that are before you.
7337 The main reason we are here today is that we care about the television programming that is, or more significantly isn't, available to our children and youth within the Canadian broadcasting system. The Alliance is particularly focused on the potential impact increased integration may have on the development and availability of Canadian children's and youth programming.
7338 The Alliance has appeared a number of times before the Commission to stress the importance of ensuring a strong presence of original Canadian children's and youth programming within the different sectors of the Canadian broadcasting system.
7339 The Broadcasting Act clearly states:
"The programming provided by the Canadian broadcasting system should be varied and comprehensive, providing a balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes."
7340 Please note that Children are referenced specifically.
7341 The Broadcasting Act also considers that:
"Each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming."
7342 The Alliance recognises that in the last five years Canada's major broadcasting and telecommunications companies have, for the most part, merged into highly integrated publicly-traded corporate entities that offer a multitude of services such as local and mobile phone, internet, conventional and specialty television, satellite and terrestrial distribution services and video on demand.
7343 Notwithstanding the impressive size and financial power of these new corporations, what concerns us most at this hearing is whether the levels of contribution of the applicants are sufficient to meet the objectives of the Broadcasting Act.
7344 More precisely, how do the applicants propose to ensure the provision of a "balance of information, enlightenment and entertainment for men, women and children of all ages, interests and tastes" which is to say, the provision of interesting and challenging Canadian audio-visual content on multiple platforms, including conventional television, which will contribute to the intellectual, social and cultural growth of our children and youth?
7345 The Alliance was particularly surprised by the response of both Shaw Media and CTVglobemedia to the intervention we submitted earlier in this proceeding.
7346 Shaw Media, in commenting on our intervention, stated that:
"Rather than seeing further reductions in children's programming on conventional TV as alarming, they should be acknowledged for what they are: recognition that conventional, private, general interest TV is no longer the only or best platform for Canadian children's programming."
7347 The Commission won't be surprised to hear that we do not agree with that point of view. Simply because we now find children and youth programming on specialty channels does not mean conventional television broadcasters can step back from their obligations to offer such programming.
7348 If we follow the same logic as Shaw Media, and CTVglobemedia which expressed the same point of view, the fact there are now multiple specialty news channels, sports channels, documentary and movie channels, should lead conventional television broadcasters to vacate these programming areas as well. In fact, while we are at it, they should turn in their licences.
7349 For example, let's take CP24, a local news channel in Toronto. Can we imagine the Commission entertaining an application from Shaw Media and CTVglobemedia to step away from local news on their conventional channels in Toronto using as an excuse a cable channel already provides that service?
7350 Shaw Media further mentions in its intervention that it views conventional television broadcasters as "general interest" programming services, and as such we fail to understand why children and youth programming should not be considered under the "general interest" definition.
7351 We believe the Commission should require specific commitments to Canadian children and youth programming from each of the applicants.
7352 Just as Canadian adults expect to see programming that is of interest to them on conventional television, Canada's children and youth should also find a reflection of themselves on conventional television. After all, they are not simply the audience broadcasters want to have when they are older. They are citizens in their own right, deserving to be treated with the same respect as adults.
7353 The Alliance is well aware that many in the industry feel our youth are too busy texting, twittering and spending countless hours on the computer, to the detriment of watching television. However, recent data shows exactly the opposite. In Canada we know our children and youth (2-17 years old) are spending on average a little over 26 hours a week watching television. This is a BBM People Meters 2+ for the spring of 2010. This is an increase of one hour since the spring of 2008 and this 26 hours compares with the 30 hours a week that they spend at school.
7354 In the U.S. a recent study released by Nielsen shows clearly that young people are not abandoning television for new media. In fact, they watch more TV than ever, up 6 percent over the past five years. This is from "How Teens Use Media. It's a Nielsen report on the myths and realities of teen media trends.
7355 So it seems clear our youth are still watching television, but this begs the question are we providing them with a viewing experience which entertains and contributes to their growth as individuals as well as Canadian citizens?
7356 A study released by the Alliance in 2009, and which we have previously submitted to the Commission, entitled "The Case for Kids Programming" which was commissioned by our organisation in partnership with the CMPA and the Shaw Rocket Fund, clearly confirmed the Canadian broadcasting system is not answering the needs of our children and youth. In 2007-08 overall production of Canadian children's television programming had fallen to $257 million from $389 million in 1999-2000. This is the lowest level in a decade and in our view the direct result of the 1999 CRTC change in policy, removing children's programming from the list of priority programming requirements.
7357 In addition, our research shows that children's and youth production has dropped by 26 percent, moving from 22.4 percent of total Canadian television production in 2000-2001 to only 16.5 percent in 2009-10, this even though children and youth below the age of 18 represent 24 percent of the Canadian population.
7358 Notwithstanding the optimistic response of Shaw Media and CTVglobemedia concerning the abundance of children's programming on specialty services, it's clear there has been a steady erosion of the resources needed to satisfy the appetites of Canadian children for the high quality of children's programming our country is known for.
7359 In response to broadcaster requests for production funding, the CMF allocated only 20 percent of its funding in 2009-2010 to children and youth programming. And yet, the CMF reports for that same period that children's and youth productions continue to generate the largest amount of hours tuned, by genre, among CMF-funded programming. The CMF goes on to say:
"Viewers are increasingly spending more time watching Canadian produced children's and youth programming in [their] prime time."
7360 In other words, when we make children and youth programming available, they watch it.
7361 So if, as the above data shows, Canadian children and youth programming is so successful with its core audience, why are Canadian conventional broadcasters neglecting this key segment of Canadian programming? Why have the broadcasters consistently reduced their share of funding for this type of programming which Canadians excel in producing and clearly enjoy watching?
7362 As the Commission knows, the Alliance is currently coordinating a major national study on children's programming in Canada, sponsored and supported by CTVglobemedia through the CTVgm/CHUM tangible benefits package. This ground-breaking national content analysis study is led by a team of researchers from the Centre for Youth and Media Studies at the Department of Communication of the University of Montreal.
7363 Initial results of the first phase of the study were submitted to the Commission, with our written submission, and are part of the public file. These initial findings clearly show the important role children's and youth programming has in the lives of young Canadians "stimulating reflection, creativity, and interactivity in the viewer".
7364 The authors of the report noted their findings:
"....indicate that Canadian children are offered high quality content with positive values, but that some broadcasters are not contributing as much as they could in terms of number of programs, diversity of genres and amount of Canadian productions."
7365 It is in this context that the Commission needs to review the present group licensing renewal proposals to ensure the applicants fully contribute to the development and exhibition of Canadian children and youth programming.
7366 In addition, the Alliance is quite concerned that children's and youth programming is still not part of the CRTC definition of what is considered programming of national interest, joining dramas and documentaries.
7367 It is astonishing to us that awards shows have been singled out as a special category of programs of national interest, taking precedence over programs that encourage the appreciation of Canadian culture and values by our children and youth. Not to mention the important role such programming can have in integrating new citizens into the fabric of Canadian life, helping to teach new Canadians about the society they have joined and even helping them learn a new language.
7368 In our view, the Commission should re-consider what it has defined as Programs of National Interest to include children's and youth programming, which is, without a doubt, of national interest.
7369 Drama may be an all-inclusive category, and contain many different program genres, and children and youth are a specific and exceptional audience, and programming directed to them crosses all genres, not just drama. But it is not correct to make programs directed towards children and youth stand and compete for resources with program genres like comedy and police procedurals under the rubric of Drama.
7370 The Alliance also believes that the Canadian Program Expenditure commitment of each applicant, should include some specific financial commitments for Canadian children and youth programming on the part of conventional television broadcasters.
7371 The Alliance feels it is important that we all strive to offer our children and youth a Canadian perspective when they turn their attention to watching television which, as we mentioned earlier, they continue to do in large numbers and on a regular basis.
7372 Mr. Chair, Members of the Commission, please consider our children and youth when you are reviewing the proposals you have before you at this hearing. Ask yourself if we are we doing the best we can to offer Canadian children and youth quality Canadian programming which tells our stories and reflects our values. And further, if this programming is available to all Canadians on conventional broadcasting and specialty services, in addition to all of the different platforms being developed to reach Canadian audiences wherever they are.
7373 At these significant hearings, the CRTC has the responsibility to provide guidance and the opportunity to provide leadership to the entire television industry. Using this occasion to focus our attention on the provision of programming for our young and future audiences will galvanize all sectors of the industry and challenge us to respond with energy and national purpose. Silence on this subject will provide a different kind of response, and the erosion of our ability to create our own culture for our youngest and most impressionable citizens will continue.
7374 This completes our oral presentation and we look forward to responding to any questions you may have.
7375 THE CHAIRPERSON: Thank you. You say PNI should include children's programming. We specifically in our policy stated that children's programs directed towards children whether it be drama or documentaries will qualify to make sure that some people wouldn't read it as exclusionary.
7376 MR. MOSS: Well, it's true that you have done that, and we appreciate that. That would certainly cover all those programs that are either dramas or documentaries but that would, for example, leave out Mr. Dress Up, Friendly Giant, Fred Penner's Place, Polka Dot Door, Today's Special.
7377 Any number of children's programming that would not be made because they don't fall under the PNI, on the understanding that children's programming to those that are not specialty channels are treated as a tax.
7378 THE CHAIRPERSON: But the problem is everybody tells me in the private sector that we have a vibrant, glowing children's production industry, world leaders. We are selling it all over the world, et cetera. Why do we then have to use regulatory devices to support what is flourishing?
7379 MR. MOSS: Well, a complicated question.
7380 First of all, according to the Nordicity figures that we have quoted and the CMF figures that we have studied, there has been a steady decline and an erosion of resources over the last 10 years if not longer than that.
7381 It's very easy for people who have conventional channels to reinterpret or to interpret for their own benefit the objectives of the Broadcast Act by saying "You don't need us to do this". But as we tried to mention, if we don't need them to do it then nobody will do it except one or two companies on one or two specialty channels.
7382 Just as a small example, Degrassi which has been a shining example and is often used as the example of how Canadian television for youth is so successful and has a market application, was recently moved from the conventional channel to a specialty channel. And on the specialty channel its ratings dropped significantly. It now probably won't come back.
7383 What can we do to say anything to that other than to say you must keep it or you must make room for its replacement?
7384 You must bring the national focus to children's programming and youth programming because at the age of 12 they stop watching specialty channels and they start watching conventional channels and they don't see anything that's directed towards them. Around 12 is where the crossover happens.
7385 Six to nine year olds are well served. Preschoolers are well served. 12-plus are not.
7386 THE CHAIRPERSON: Those statistics that you show that kids are actually watching more TV than before. As we all know, they are multi-taskers. You don't see a kid watching a TV that doesn't at the same time look at its Facebook or is on the cellphone to friends or texting or whatever --
7387 MR. MOSS: I think that's the current image.
7388 THE CHAIRPERSON: Yes, and that's where I am leading, is that image correct or not? I mean you cite those statistics but without taking that into consideration. It's hard to judge whether the kids are actually taking in the program or whether it's essentially background music or background sound.
7389 MR. MOSS: First of all, because they are an audience and not a genre, we have to talk about different kinds of kids. So let me talk -- let me use 12 as a dividing line, for example.
7390 THE CHAIRPERSON: Okay.
7391 MR. MOSS: Up to 12 kids watch television when they are allowed to watch television, by and large. They have set times. They come home from school and they watch television. They finish their homework or they finish their supper. They watch television. Their prime times are at separate -- are at specific times. They are not necessarily adult prime times.
7392 Kids' primetime in the specialty world are almost 100 percent American programming. They gather their American programming so that they are there from four to six and then from six to 7:30 or six to seven.
7393 Then we have Canadian programming. Kids watch what is in front of them and they watch in huge numbers and they are not multitasking other than to say, "Are you watching this?"
7394 The second part of the study that we are undergoing with the University of Montreal has been -- which is undergoing and not yet finished, but they have been going into families and doing in-depth analysis of families while we are there.
7395 They are finding that kids are -- when they are asked to name their favourite Canadian program they name American programs because they don't know the difference because they are just watching television between four and six and they are watching whatever is in front of them, and they can't tell.
7396 Now, 12 and up they are beginning to be young adults and they move into Glee and Survivor and the Greatest Race and they move over to conventional televisions and there is nothing for them that reflects their reality at all.
7397 The thing of it is that when they are young their sense of themselves as members of a society and as the members of a culture are being established and it includes the reality of what they see. And what they see is not the reality of what they experience, and there is a disconnect.
7398 There is a study which I can't quote you but I can get you which has nothing to do with kids but did ask adults who spend a certain number of hours watching American action/adventure/cop shows and used as a blind those adults who didn't do that. And the question was, "What is the likelihood of you being robbed when you go to the bank?"
7399 Not surprisingly, the people that watch a preponderance of American shows thought the likelihood was much, much higher than the people who didn't. The people who didn't had an accurate reflection of how much crime there was in Canada.
7400 The people who did had a sense that crime involved the television that they see because they see depictions of their streets and the crossover between their streets and the streets that they are seeing on television is automatic.
7401 Now, that's adults. With kids it's just that much more powerful. And particularly when you are 12, the way you handle people, the way you treat people the way you see bullying reflected, it all becomes part and parcel of what your culture is. And if you are not given an opportunity to say, "This is what we do. This is what we don't do" you lose that opportunity to reach them.
7402 THE CHAIRPERSON: Tom, you have some questions?
7403 COMMISSIONER PENTEFOUNTAS: Just following up on what the Chairman raised -- sorry -- I'm not aware of the study you spoke of where if you are going to the bank you are going to be held up or not held up.
7404 MR. MOSS: Get you a copy, yes.
7405 COMMISSIONER PENTEFOUNTAS: I'm sorry?
7406 MR. MOSS: I will bring a copy. I will send you a copy.
7407 THE CHAIRPERSON: Just on that, anything you do you have to formally file.
7408 MR. MOSS: Okay.
7409 THE CHAIRPERSON: I'm just getting a note from staff here. It's the "Case for Kids Programming" or something that you --
7410 MR. MOSS: We have it filed in the past.
7411 THE CHAIRPERSON: Yeah. Are you filing it again with this proceeding?
7412 MR. MOSS: We have a copy but we --
7413 THE CHAIRPERSON: Do you want to file it or not? It's your choice. I just wanted to point out. You mentioned it so I have to ask you the question. Are you filing it with us or not?
7414 MR. MOSS: I don't understand. If it has been -- if it has been previously --
7415 THE CHAIRPERSON: It's a different proceeding -- for this proceeding.
7416 MR. MOSS: Oh, I see. Then, yes, we should file it. We will file it.
7417 THE CHAIRPERSON: Okay. Then file it with the secretary and if we want the other just talk to my colleague if you want to file it. You have until the close of the proceeding -- until when, counsel?
7418 MS DIONNE: You can file it as part of your final submissions.
7419 MR. MOSS: Okay.
7420 COMMISSIONER PENTEFOUNTAS: I just feel that people watching youth, young people watching Canadian news programs will see that there is bullying, that people are being robbed on the way to the bank. It's the bank machine.
7421 I don't understand what kind of distinction you are trying to make there.
7422 MR. MOSS: I suppose the -- and again I am talking 12-plus, not 12 and under.
7423 I remember the V chip and a great deal of attention that was spent to the fact that there were kids beating each other up in the schoolyard because they were watching Power Rangers.
7424 The Power Rangers' complaint which was brought to the CRTC and was taken seriously enough that they invented the V chip as a means of controlling the amount of violence that actually got through on Canadian screens. You now have a chance or you had a chance at that time to say, "We would like to stop these programs from actually coming through".
7425 You couldn't stop them being broadcast because this is the days before specialty. They were simply on Fox and they were in the air and they were coming over the air or coming through basic cable, but you needed something to stop that.
7426 Now, why did they do that and why was there such a fuss and why were parents so concerned?
7427 I think that the idea is that you can't deny the power that modeling behavior that television affects that television sort of offers to kids. Here is what cool looks like. Here is what cool does.
7428 It's not the same as news. News is a scary thing because it's reality, but fiction and the stories that you are told and the heroes that you make for yourselves are quite different.
7429 Now, we don't give new citizens and we don't give young citizens an opportunity to say, "This is us".
7430 COMMISSIONER PENTEFOUNTAS: Are you suggesting that American children's programming glorifies violence and Canadian children's programming does not?
7431 MR. MOSS: By and large for 12-plus that's true. By and large for 12-plus they are not watching children's programming because there is no children's programming that Americans make for 12-plus.
7432 They make programs that are on the Family Channel or on the Disney Channel or on Nick. When you go to Fox you do see actually that. You do see the 90210s which is very different than Degrassi -- very different than Degrassi.
7433 COMMISSIONER PENTEFOUNTAS: Yeah, but on the violence front should we censure American programing for 12-plus?
7434 MR. MOSS: No, we are not talking about censuring. We are talking about offering opportunities to be able to say this is who we are --
7435 COMMISSIONER PENTEFOUNTAS: Right
7436 MR. MOSS: Rather than saying who we are is what you see on television.
7437 COMMISSIONER PENTEFOUNTAS: Now, you mentioned in your presentation that you would like to see youth programming with a Canadian perspective.
7438 Besides Degrassi are there any other examples you can bring forward?
7439 MR. MOSS: Painfully few because their resources to be able to mount something like Degrassi is very hard. Heartland is one. It's on the CBC. On Global no; on CTV no.
7440 COMMISSIONER PENTEFOUNTAS: Okay.
7441 MR. MOSS: Specialty channels can mount half-hour shows just because of the size of the budgets and the size of the audience.
7442 But it is interesting that for all the popularity and for all the fact that Shaw and CTVglobemedia are talking about how successful we are with our cable, it's still an audience of 300,000. It is a big audience on subscription and an audience at 700,000 twice that is a big audience or a small, rather, audience on conventional.
7443 So no, unfortunately I would like to be able to say that there are two dozen Degrassis and there are shows in development that will take its place. That's one of the reasons we are here is because there isn't.
7444 COMMISSIONER PENTEFOUNTAS: Are production costs lower for youth programming in terms of drama or comedy?
7445 MR. MOSS: Degrassi is not any less well produced than another hour of drama. It's certainly less expensive than the co-produced American style action adventure series because usually things don't blow up --
7446 COMMISSIONER PENTEFOUNTAS: I am talking about Canadian drama oriented towards adults as opposed to Canadian drama oriented towards younger viewers.
7447 MR. MOSS: The fact that it's younger viewers doesn't make a difference to the budget. I think that a half-hour of Being Erica would be comparable to a half-hour of drama on CBC that was directed towards kids.
7448 On the other hand, a specialty probably couldn't afford a budget like Being Erica, neither for its adult or its --
7449 COMMISSIONER PENTEFOUNTAS: The adolescent actors don't receive a smaller fee?
7450 MR. MOSS: No. The distinction is union or not union so reality programming, designer programming, cooking programs are non-union. They are much less expensive than full union productions.
7451 COMMISSIONER PENTEFOUNTAS: I am happy to see that you made a distinction between 2 and 17 because in your document you kept talking --
7452 MR. MOSS: Children and youth.
7453 COMMISSIONER PENTEFOUNTAS: -- 2 and 17. There are two different groups there.
7454 MR. MOSS: We try -- for us we sort of say children's and youth and use 12 as the demarcation line.
7455 COMMISSIONER PENTEFOUNTAS: Okay. I know you have got studies that youth 12 to 17 watch a lot of television. I have a youth in that age group and he doesn't watch any television, nor do any of his friends. When they are not studying you know they have got the TV going on an Xbox and they have got the computer going on some other kind of computer game.
7456 MR. MOSS: Just a quick thing. I mean the means of transmission is less important to us than the content. Whether you watch a television show on a television or you watch a television show when you download it, you are watching a television show and it's made by television producers.
7457 COMMISSIONER PENTEFOUNTAS: But they are not watching television shows. They are mostly playing videogames at that age.
7458 MR. MOSS: At that age you could be on the internet and you could be a gamer but, in fact, they are exceptional because the statistics clearly say that that's not the case, that what you have is a lot of kids watching television programs and mostly -- which is the other thing that's interesting about the study that's underway, is that kids don't have access to PVR. They watch it when it's on because that's when they watch it. They watch it in the evenings because that's when they can watch it. They do other things at other times.
7459 COMMISSIONER PENTEFOUNTAS: It hasn't been my experience. A lot of my son's friends, none of them watch any television and they are all first year high school. I'm telling you, none of them.
7460 MR. MOSS: I am not disputing it. I mean --
7461 COMMISSIONER PENTEFOUNTAS: The eight, nine, 10-year old, you know, might be.
7462 MR. MOSS: I am not disputing it.
7463 COMMISSIONER PENTEFOUNTAS: Okay.
7464 MR. MOSS: Anecdotal evidence is anecdotal evidence and your family is different than all the other families.
7465 One of the things that concerns us most is that without conventional television and limiting it to three specialty channels --
7466 COMMISSIONER PENTEFOUNTAS: Yeah.
7467 MR. MOSS: -- all kids end up bundled into the same kind of choices.
7468 COMMISSIONER PENTEFOUNTAS: Don't you also feel safer that kids can go to a specialty channel and watch kids programming as opposed to being on conventional where you are mixing kids programming and perhaps some of that more adult.
7469 MR. MOSS: I don't understand why.
7470 COMMISSIONER PENTEFOUNTAS: Well, doesn't it give you a sense of safety that your youth is going to YTV or the Family Channel instead of going to a conventional channel where all kinds of other programming would be available?
7471 MR. MOSS: The Broadcast Standards Act is the Broadcast Standards Act and the nine o'clock watershed hour is a nine o'clock watershed hour.
7472 I don't understand why kids would be in any more -- I'm not even sure what they are in danger from. You are not allowed to advertise to kids that are under six in English Canada, under 12 in French Canada.
7473 The Broadcast Standards Council regulates the amount of violence that's there. You can't have sponsors. You can't have characters actually becoming the spokespeople for sponsors within the same half-hour, within the same program.
7474 I don't know why conventional would be held to a less rigorous standard. I don't know why there would be that opportunity.
7475 When there are studies that try and track violence on television it's always the news that scares kids. It's not the programs that scares kids. Real blood is scary. Pretend blood, cartoon blood not so scary.
7476 So I don't know. Unless they go -- you can't stop kids from watch the news and it's parents' choice.
7477 COMMISSIONER PENTEFOUNTAS: You just finished telling us that the V chip was created because Power Rangers was showing us too much violence.
7478 MR. MOSS: It's the modeling -- the kids were modeling behavior. Not the same thing as being affected -- when you talk about danger watching television I presume you mean scared, affected and maybe -- I don't know -- scarred in some way psychically, different than modelled behavior which is what we were talking about.
7479 In other words, when you want to see -- when you look at a television program and what you see is cool, is somebody that comes and steals somebody else's running shoes and punches them in the nose and you want to be cool, then that's what you think about.
7480 COMMISSIONER PENTEFOUNTAS: Thank you, sir.
7481 THE CHAIRPERSON: Okay. Then there are no other questions. Thank you very much for your support.
7482 MR. MOSS: Thank you.
7483 THE CHAIRPERSON: I think, Madame la Sécretaire, we have time for one more before we break for lunch.
7484 THE SECRETARY: Yes, exactly.
7485 We will now proceed with the presentation by the Canadian Association of Film Distributors and Exporters.
7486 THE SECRETARY: Please present yourself, after which you will have 10 minutes for your presentation.
7487 Thank you.
7488 THE SECRETARY: Please open your mike.
7489 MR. EAST: Mr. Chairman, Vice-Chairs and Commissioners, we thank you for the opportunity to appear before you today. My name is Ted East and I am President of the Canadian Association of Film Distributors and Exporters, or CAFDE.
7490 With me today is Mr. Brad Pelman, co-President of Maple Pictures, one of Canada's largest film distributors and a CAFDE member.
7491 CAFDE is a non-profit trade association that represents the interests of Canadian owned and controlled feature film distributors and exporters.
7492 CAFDE members distribute over 90 percent of the non-studio and Canadian films released theatrically in Canada each year.
7493 CAFDE members distribute films in Canada from all over the world and in the widest range of genres and budgets.
7494 Most of the groups and individuals that have appeared and will appear before you during these hearings are in the fulltime business of creating television programming, broadcasting television programming or distributing television programming via satellite and cable.
7495 CAFDE members are unique among them in that their business is the distribution of feature films. Feature films typically begin their life in movie theatres and then home video and DVD prior to ending up on television.
7496 However television is a critical component in the economics of a feature film. Television licences provide a significant source of revenue and the broadcasts are invaluable in expanding the audience of the film. We have appeared before you in the past several years to bring to your attention our concerns about the decreasing appetite for feature films among broadcasters in this country.
7497 As part of our intervention we submitted a study done by PriceWaterhouseCoopers last year that examined sales of Canadian films to Canadian broadcasters from 2000 to 2009. The study showed a steady decline since 2006 in the support for Canadian films on conventional and specialty networks. The impact this decline is having on the financing and audience reach of Canadian feature films is profound.
7499 MR. PELMAN: When a distributor commits to acquiring the rights to a feature film there are two financial decisions that are made upfront: How much to pay to acquire the rights; and how much to pay on the marketing and other costs to release the film. These calculations are determined by the anticipated revenue that the film will generate offset by the amount of Prints and Advertising -- or P&A -- costs associated with the release.
7500 We are not describing an insignificant amount of money and resources. A significant part of the first cycle film revenue has come from the television market. The declining support for Canadian films from broadcasters has led to distributors paying less for the rights and being more cautious about their marketing spends.
7501 Reduced advances from distributors make Canadian films harder to finance. In some cases it means some films are not getting made that could have been financed five or six years ago.
7502 For the films that do get made, a more frugal marketing budget makes if more difficult for them to reach audiences, particularly in a landscape where the Hollywood studios spend more each year in promoting their films.
7503 One of the great supporters for Canadian films in the past had been Citytv. Their financial support was invaluable in launching and sustaining the careers of a new generation of Canadian film-makers. The broadcasts and attendant promotional efforts introduced those film-makers to millions of Canadians.
7504 When CTV purchased the Citytv stations in 2007 as part of their acquisition of CHUM, we were optimistic that this support for Canadian films would continue. In their application to the Commission CTV declared that they would:
"...continue this relationship with the Canadian feature film community and build upon the efforts made to date".
7505 Shortly after the acquisition was announced, CAFDE met with Ivan Fecan and Paul Sparkes of CTV to discuss their future plans for Canadian films. We were assured that under CTV's ownership Citytv would increase its involvement and support of Canadian films. They believed that feature films represented a great opportunity. We were understandably disappointed when the Commission instructed CTV to divest itself of the Citytv assets.
7506 Under the ownership of Rogers, Citytv has purchased very few new Canadian features. Despite assurances to the Commission and the industry at the time of the acquisition that they would:
"...continue to fulfil these important commitments to the broadcast and promotion of Canadian features..."
7507 Rogers has declared itself to be out of the movie business. Rogers now dismisses this condition of license as "outdated regulatory obligations" and argues that:
"...by the time these films reach conventional television many of the titles have been exploited to the point that they hold very little interest to audiences or value to the stations."
7508 It's interesting to note that CTV, which has a much longer and successful track record as a broadcaster, did not share the same opinion. The arrival of Netflix in Canada proves Rogers' arguments to be flawed. In less than nine months Netflix has gained approximately 1 million Canadian subscribers. By contrast, it has taken traditional pay television 20-plus years to achieve a combined 2 million subscribers.
7509 Netflix' growth rate in Canada is quite extraordinary and has surprised many in the industry here. Netflix' offering to Canadian customers are dominated by feature films that Rogers believes have little interest to audiences. Among the titles Netflix is currently offering are dozens of Canadian feature films.
7510 CAFDE strongly opposes the application by Rogers to be relieved of its obligation regarding Canadian films. We appreciate that continuing with this condition of license would go against the spirit of the group licensing model. However, we believe that Rogers and the Commission have an obligation to specifically support Canadian films. In fact, we think it's appropriate that all Canadian over-the-air broadcasters have a similar condition of license for Canadian films.
7512 MR. EAST: We do not believe it is appropriate to include Movie Central in the group-based model. The mandate and business models of the pay services in Canada are unique. They have for decades been operating quite successfully under an existing CPE obligation. Including Movie Central in the group-based model would run the risk of diverting rare and desperately needed programming dollars away from feature films into other genres.
7513 The pay services are now the only consistent and reliable home for Canadian films on Canadian television. One of the motivations for the group-based model is to create a level playing field, however the other Canadian pay services are not part of the group-based hearings. Any changes to the conditions of license for Movie Central would likely have the impact of putting the other pay services at a competitive disadvantage.
7514 When they appeared before you last week, the Canadian Media Producers Association urged the Commission to hold a separate policy proceeding to examine ways the broadcasting industry can support Canadian feature films. CAFDE fully supports this recommendation.
7515 As you are probably aware, we have for many years believed that Canadian films need to be considered separately from all other genres. Feature films are unique in Canada's cultural landscape. As film director Sturla Gunnarson pointed out when he appeared before the Commission last week, " feature films are an international calling card for this country".
7516 In a 2009 study commissioned by Telefilm Canada, Peter Grant and Michel Houle examined the role that broadcasters play in indigenous cinema. The study clearly demonstrated that there is a link between a successful indigenous cinema and strong support from a nation's broadcast sector.
7517 The study also details the variety of support systems that exist in many European countries.
7518 These examples and the study itself could provide a framework for a policy proceeding on feature films.
7519 While we understand and appreciate the logic behind the group-based model, we are concerned that it could lead to further erosion in support for Canadian films by the broadcast sector.
7520 In the wake of these hearings we think a separate policy proceeding on feature films is not only necessary but long overdue.
7521 We appreciate the opportunity to appear here today and we would be pleased to answer any questions.
7522 THE CHAIRPERSON: Thank you.
7523 On page 2 you say:
"Feature films typically begin their life in movie theatres and then home video and DVD prior to ending up on television."
7524 Isn't that a big yesterday's world? I meant isn't it nowadays quite often that -- because you feel that you will be pirated, et cetera, that movies actually get released in multiple windows at the same time, or very shortly after? You even have some such places as some of them are released on new media devices right away rather than going through this chain. This is a traditional window that we have all lived with, but haven't recent technological developments really changed the industry profoundly?
7525 MR. PELMAN: I can address that.
7526 MR. EAST: Sure.
7527 MR. PELMAN: Specifically Canadian feature films are funded through Telefilm Canada --
7528 THE CHAIRPERSON: Yes.
7529 MR. PELMAN: -- and while the feature film working group is looking at new technologies -- and there is no question that you are correct that technology is creating a pressure point on traditional windows -- in Canada those traditional windows are definitely intact. Cineplex Theatres assures all Canadians of that fact by their resounding success and regional success in every province where they have theatres where Canadians are going more often than ever before.
7530 So in Canada if we are going to continue to support Canadian feature films they are always intended for a theatrical audience exclusively in the first window.
7531 MR. EAST: I could also add that the home video market, when we say that, it does capture an iTunes rental or a Rogers-on-Demand rental. That's part of the home video market.
7532 THE CHAIRPERSON: Piracy or copying is not moving you to sort of collapse those windows and make the release practically simultaneously?
7533 MR. PELMAN: The pressure is there. I mean piracy is something that we have dealt with with all outstanding regards to solve, but it's almost impossible. If somebody is going to steal off the Internet or take a camcorder into theatres and then make hard copies of it and sell them in malls around Northern Toronto -- which is where the piracy actually is well documented -- it's extremely difficult to police.
7534 It's an amount of money that we unfortunately have to apply as a shrinkage in our business, the same way retail uses shrinkage for a product that walks out of the doors under people's coats.
7535 THE CHAIRPERSON: With regard to the City obligation which we have discussed before and which they want to be relieved of, you say keep it in place and then you say in the next sentence impose it on the others as well.
7536 So let me understand clearly what you are suggesting here.
7537 Are you suggesting that each of the three networks have an obligation to show 100 Canadian feature films per year?
7538 MR. EAST: No, 100 hours. It would be one movie a week.
7539 THE CHAIRPERSON: One hundred hours, sorry.
7540 MR. EAST: Yes. We think that would make a huge difference to the Canadian film industry. It would help finance more movies, it would make them more competitive, it would bring them a much greater audience than they have now.
7541 THE CHAIRPERSON: What I'm trying to figure out is, are you suggesting if we treat -- you seem somewhat contradictory. One moment you say make sure Rogers adheres to it and in another you say we would like it to apply across the board.
7542 So what is your final recommendation?
7543 MR. EAST: Our final recommendation is that it be applied across the board.
7544 THE CHAIRPERSON: Suzanne, you have some questions?
7545 COMMISSIONER LAMARRE: Yes.
7546 Piracy set aside, it is true, though, that a movie will go through a number of windows before it was to TV. I mean if you go back to a year from now it was the theatre and then it was three or four years down the road the television. Now it comes out in the theatre and three months later it's out on DVD.
7547 So doesn't this give some validity to the issue that Rogers has in its current condition of license that it's not as appealing as it used to be because it's available way before it gets to be available on television?
7548 MR. EAST: No, I disagree. I think that first of all most Canadians see feature films in their homes.
7549 COMMISSIONER LAMARRE: But through conventional television or through --
7550 MR. EAST: Through any number of possible ways.
7551 COMMISSIONER LAMARRE: But here when we are talking about the condition of license for Rogers --
7552 MR. EAST: Right.
7553 COMMISSIONER LAMARRE: -- we are talking about viewing on conventional television.
7554 MR. EAST: Yes, I appreciate that.
7555 I have to say, when I sat down with Paul Sparkes and Ivan Fecan, they were very bullish on feature films. They saw a real opportunity there.
7556 And I think the Netflix example, as Brad said earlier, proves that there is a significant audience for films that have had a theatrical life that have been released on DVD. I mean how do you get to a million subscribers in nine months, which is unprecedented in this country, when your primary offering is feature films that are that old if there is no audience for it?
7557 I mean you look at -- if I can be critical for a moment --
7558 COMMISSIONER LAMARRE: Yes. Please do.
7559 MR. EAST: -- of Rogers programming, you know, if you program the way Rogers has programmed their feature films and they come and they say nobody is watching it, is it because there is no audience for feature films or is it because the programming isn't very good, the selection of movies?
7560 I mean that's critical. If you are good programmer -- I mean people do want to see feature films and they will watch them on network television if the films are good enough and if they are promoted enough. But if you don't promote them and you don't program them very well, sure, you are not going to get a big audience.
7561 COMMISSIONER LAMARRE: I'm sorry for being so confused, but if indeed there is demand on the other platforms and those movies are being watched, why is it such a critical issue for your members that it be also watched on conventional television since it's being watched?
7562 MR. PELMAN: The issue isn't so much that -- it's the broadcaster's role in the financing and the support of the feature film that the condition of license protects and Rogers, when they were CHUM -- pardon me, when Citytv was managed by CHUM, that was a foundation and a strong part of their programming philosophy was movies, news, music and the entire feature film community was buoyed by that. It was actually -- it blossomed, an extension of Canada's producers, because they could actually make programming that would have an audience on a guaranteed Canadian conventional channel and it would give them a competitor to what was then CBC, who was really the only broadcaster doing Canadian feature film.
7563 So it created a really robust opportunity for producers to make and take challenges in making different types of films because City was more youthful and it wasn't as sort of stalwart as the CBC was.
7564 By removing that condition of license, by removing it from all of them, you are affecting the value chain that Canadian feature film producers have in this country and the value is the benefit that the broadcasters get a broadcasting their Canadian content as part of their obligations, it's more valuable to them as such and the license fees are higher.
7565 I agree with you, the windows are shrinking. The Netflix example proves, though, that consumers are interested in getting the films sooner --
7566 COMMISSIONER LAMARRE: Yes.
7567 MR. PELMAN: -- which should be a programming position that RogerS should embrace and say: If we can put a movie a week and promote it properly we can compete with Netflix. Because today they are doing a very bad job at that.
7568 COMMISSIONER LAMARRE: Okay. So if I can summarize very grossly here, what I hear you say is that the concern you get is that the effect of those changes the conditions of license, including Movie Central into the group licensing, would affect -- your concern is with the financing not as much as it is with the exhibition
7569 MR. EAST: Right.
7570 COMMISSIONER LAMARRE: -- because you are being seen.
7571 MR. EAST: No, we are not being seen as much as we need to be seen.
7572 COMMISSIONER LAMARRE: No?
7573 MR. PELMAN: Not on broadcast.
7574 MR. EAST: Not on broadcast.
7575 I think it's --
7576 COMMISSIONER LAMARRE: But I'm talking about Canadians. mean --
7577 MR. EAST: Yes. If you talk --
7578 COMMISSIONER LAMARRE: Okay. You are baking by Canadians.
7579 MR. EAST: Yes.
7580 COMMISSIONER LAMARRE: Okay.
7581 MR. EAST: If you talk about a Canadian film, by the time a Canadian film is available for over-the-air broadcast there are still a significant, a huge audience that has not seen it yet.
7582 COMMISSIONER LAMARRE: Okay. Quantify that significant audience. How much is it?
7583 MR. EAST: Well, depending on the film. Depending on the film.
7584 COMMISSIONER LAMARRE: Okay, let's pick one. "The Trotsky". By the time it hits Citytv or CTV or whoever receives it --
7585 MR. PELMAN: More people will see "The Trotsky", which is a perfect example, in other media than theatrical and it will compound. Because the fact "The Trotsky" was a moderate theatrical success word-of-mouth then applies some level of interest when it comes out on DVD, further word-of-mouth is built there when it goes into video-on-demand world -- which, by the way, that window now is day and date, so video-on-demand and DVD is now across the board available on the same day.
7586 COMMISSIONER LAMARRE: Okay.
7587 MR. PELMAN: About 90 days, you are exactly right, three months following "The Trotsky" initial theatrical release.
7588 COMMISSIONER LAMARRE: I know, I purchased it.
7589 MR. PELMAN: Good. It's a terrific film. Kevin Tierney is one of Canada's best feature film producers, no question.
7590 So that compounding then gives "The Trotsky" its final, if you will, hurrah in a theatrical window on a Canadian conventional broadcaster, because now enough awareness has been built free of charge for Rogers to easily promote "The Trotsky" to be seen again by an audience that may not have seen it in one of the other windows.
7591 COMMISSIONER LAMARRE: Okay. And based on the window scheduling that now exists, when would that be?
7592 MR. PELMAN: That would be -- well, the pay-per-view window is 90 days --
7593 COMMISSIONER LAMARRE: Yes...?
7594 MR. PELMAN: -- the pay television window, the traditional pay television window, is 18 months after.
7595 COMMISSIONER LAMARRE: Okay.
7596 MR. PELMAN: So TMN, Corus, and Super Channel on occasion, will have the exclusive rights to promote "The Trotsky". That's to a very narrow audience, that's 2 million subscribers in this country.
7597 So Citytv then has a substantial audience to take advantage of that word-of-mouth only 18 months after its initial premiere.
7598 And they don't play it very often in rotation on TMN or Movie Central, they are limited. They can play it a number of times. That's a negotiation between the rightsholder of "The Trotsky" and the broadcaster. So they can't run it 24/7 for 18 months, they can run it 30 times over 18 months.
7599 COMMISSIONER LAMARRE: Okay. So a limited number of subscribers on video-on-demand, pay TV, but basically all Canadian citizens who can go and purchase a DVD during the same period of time and it's approximately 2 years after it has been out in theatres that it's going to hit the TV screens?
7600 MR. PELMAN: That's right.
7601 COMMISSIONER LAMARRE: Okay.
7602 MR. EAST: If I can add to that, to quantify the numbers, let's assume that in the case of "The Trotsky" a couple of hundred thousand Canadians have either seen in a movie theatre or rented the DVD or rented it on iTunes or something and then another 2 million Canadians have the possibility of having seen it in the pay window, by the time it's available for Citytv 80 percent of the country has not seen it yet, we can be pretty sure of that, but a significant portion of that -- there is no way of measuring that accurately -- have heard of it and may have a very positive impression of it because of the reviews and the awards et cetera.
7603 COMMISSIONER LAMARRE: Okay. I hope you did watch it.
7604 MR. EAST: Yes.
7605 COMMISSIONER LAMARRE: Okay.
7606 Now talking about a process, when you are asking for a separate policy proceeding to examine ways the broadcasting industry can support -- I guess you should say "should support" -- can support --
7607 MR. EAST: Yes.
7608 COMMISSIONER LAMARRE: -- Canadian feature films. You are talking follow-up process here.
7609 What would you be telling us in such a process that you can't tell us now?
7610 MR. EAST: What could we tell you?
7611 COMMISSIONER LAMARRE: Yes. That you cannot tell us in this proceeding?
7612 MR. EAST: Well, I mean just to get specific about the question you asked earlier about can you quantify it, and we are working right now with Telefilm Canada, the rest of the industry and Heritage Canada, examining the success of feature films and where we go over the next 5 to 10 years and one of the things we are talking about is a new measurement of success and quantifying audience measurement in the digital age.
7613 Because we have been operating under this sort of market share box office goal which we have for many years said isn't an accurate measure because most of the Canadians that see movies, whether they are Canadian or not, are not watching them in movie theatres, they are watching them in the home environment in some way.
7614 So we are now working on a measurement, we don't have it yet, about eyeballs, if you will --
7615 COMMISSIONER LAMARRE: Okay.
7616 MR. EAST: -- and what the opportunities are going forward to get more Canadians to see films -- and we strongly believe that you guys have a role to play in ensuring that the broadcasters do their share. It would also be a good opportunity to get the rest of the industry involved outside of the context of their other issues, just to look specifically at feature films, because that has never happened here. The Commission does not recognize feature films at the separate genre, it's lumped in with genre -- within drama.
7617 COMMISSIONER LAMARRE: Drama.
7618 MR. EAST: And even Citytv's licence, it doesn't specifically say "feature film", it says "film", and that could include and does include made for -- I mean 6 out of 10 Canadian productions that are basically made for American cable --
7619 COMMISSIONER LAMARRE: Made for television.
7620 MR. EAST: Or American cable networks primarily that are commissioning them, they get shown.
7621 So we really need the Commission to understand, with the industry's involvement, including the Producers Association and the guilds, to really understand how the feature film business works, the crisis that we are in now and the challenges and opportunities that lie ahead in the next 5 to 10 years.
7622 COMMISSIONER LAMARRE: Okay.
7623 Both in your written submission and in your presentation this morning you referred to the 2009 study commissioned by Telefilm Canada authored by Peter Grant and Michel Houle.
7624 Would you like to table this study as part of this proceeding or not?
7625 MR. EAST: I would love to.
7626 It's not a study that we commissioned, but I would certainly ask Telefilm if they are happy. I believe they have submitted in the past, but probably not for this --
7627 COMMISSIONER LAMARRE: But it's a different proceeding.
7628 MR. EAST: Yes, I will --
7629 COMMISSIONER LAMARRE: Every proceeding has its own evidence.
7630 MR. EAST: If Telefilm is agreeable, since they commissioned it, we would be happy to submit it.
7631 COMMISSIONER LAMARRE: Thank you.
7632 Those are my questions, Mr. Chairman.
7633 THE CHAIRPERSON: Rita... ?
7634 COMMISSIONER CUGINI: Thank you, Mr. Chair.
7635 Good morning. It's not the first time we are speaking about this, so I am going to ask you for a few updates on questions that I asked you last time.
7636 One of the questions I asked you were how many Canadian English-language feature films are produced per year and you said on average it was 35 to 50.
7637 MR. EAST: Yes.
7638 COMMISSIONER CUGINI: Has that number changed since the last time we spoke?
7639 MR. EAST: Not substantially.
7640 COMMISSIONER CUGINI: No. Increased? Decreased?
7641 MR. EAST: It depends what -- is it decreased? I don't know the specific answer.
7642 I would say of the theatrically released movies I think it is the same or maybe a slight decrease.
7643 COMMISSIONER CUGINI: Okay. In your oral presentation you speak a lot about the reliance that the feature film industry has on financing.
7644 The Citytv license fees, they don't contribute to greenlighting any project, do they?
7645 MR. EAST: Yes.
7646 COMMISSIONER CUGINI: How do they? How do they contribute to that? Because the impression they gave us is they buy the conventional broadcasting window --
7647 MR. EAST: Right.
7648 COMMISSIONER CUGINI: So that is after pay, after theatrical, after -- and so on.
7649 MR. PELMAN: They are pre-licensed.
7650 In the Citytv of old it was a pre-licence, the producer would take that contract to the bank, it would then form a form of their financing.
7651 So what they are telling you is accurate, they are buying the film after it's made.
7652 COMMISSIONER CUGINI: So today Citytv --
7653 MR. PELMAN: Today they aren't participating in the producers financing, which is a disadvantage and which I would agree with Ted, the Canadian theatrical features will decline as a result.
7654 The trend that we are in right now with is a dangerous one if you are a Canadian theatrical feature film producer.
7655 COMMISSIONER CUGINI: Now, as you know, and I know you listened attentively -- and if you didn't the transcript is already available -- and they went through a brief history of why they have this requirement and, you know, it is a throwback from the days of CHUM, but it also is a throwback to the days when CHUM owned specialty services as well. So it's the famous asset mix argument that we have been hearing all of last week and this week.
7656 Rogers doesn't have that same asset mix that CHUM had at the time that they made this commitment, so why should we continue to hold City to something that is extraordinary considering their asset mix?
7657 MR. EAST: They would just -- I mean I don't buy that logic. They would just pay less for a film, if you are purchasing a film.
7658 You have an obligation to play one movie a week that's Canadian, it's worth a certain value. If you are buying it not just for city but for a variety of cable stations, you can amortize that cost and maybe you are going to pay a little more. So they still have that obligation. Perhaps they are paying less than they would had they been buying it for multiple stations.
7659 So I don't really get what they are saying.
7660 COMMISSIONER CUGINI: Well, as you know, they also said that when they bought City they didn't actually own any Canadian films. Right? They didn't have that in their toolbox let's say.
7661 When Rogers took over -- let me get it. Because we talked about their moving away from the film philosophy, which was very much what City was all about --
7662 MR. EAST: Right.
7663 COMMISSIONER CUGINI: -- news, music and movies.
7664 COMMISSIONER CUGINI: I had it.
7665 Anyway, as I said they didn't own the film library --
7666 MR. EAST: Right.
7667 COMMISSIONER CUGINI: They sublicensed it from CTV.
7668 MR. EAST: Right.
7669 COMMISSIONER CUGINI: They weren't at all in the movie business and they sort of had to adopt this new condition of license.
7670 By continuing to insist that we uphold this condition of license, are you not recognizing that they have a right to move away from the original philosophy of the Citytv stations?
7671 Specialty services do it all the time, they rebrand, so why shouldn't we allow Citytv to rebrand and shift its philosophy so that it better serves its audience, so that it meets the demands of the audience and heels to the differing tastes of its audience?
7672 MR. PELMAN: I certainly understand the economics of their situation. I would certainly hope that in the Commission's wisdom, though, that you can find the balance to assist them and assist the stakeholders on the other side of the table with respect to leaving us essentially out to dry with having no conventional feature film -- and I will use the term "obligation" loosely.
7673 I think there should be encouragement from the Commission to stay -- the feature film producers in this country are world-class and it's about time that the broadcasters really reflected that and embraced that, the same way that it happens in the U.K. and in France.
7674 The Michel Houle report and Peter Grant report will demonstrate that -- and I highly recommend that everybody has a chance to look at it -- because, as you know, being situated on top of the U.S. border we are completely influenced by the American broadcasting and the Canadian drama producers have shown a lot of success, albeit with some assistance from various writers' strikes along the way to finding their game.
7675 But the fact of the matter is, the Canadian feature film producers -- and I would certainly tip my hat to the Québec-based producers directly have been finding their game for many, many years, substantially longer than Canadian dramatic television series in history.
7676 So to give City pause from their obligation is one thing, but to look at the other conventional players and find an hour a week, two hours a month, some sort of compromise, isn't an unreasonable position.
7677 COMMISSIONER CUGINI: On that point you have obviously shone the spotlight on City but we have two other conventional broadcasters --
7678 MR. PELMAN: Yes.
7679 COMMISSIONER CUGINI: -- in this country who are much bigger.
7680 MR. PELMAN: Correct. City had the obligation, the other guys didn't.
7681 COMMISSIONER CUGINI: Okay. But let me ask my question.
7682 How many hours of feature film due Shaw and Bell Media currently broadcast on average?
7683 MR. PELMAN: On the over-the-airs?
7684 COMMISSIONER CUGINI: On the over-the-airs.
7685 MR. PELMAN: Theatrical feature films?
7686 COMMISSIONER CUGINI: Yes.
7687 You are asking us to extend the requirement that City has to both, let's say CTV and Global, so I would like to know from how many hours would we going to if your request is 100 hours. So am I going from 2 hours a year to 100 or am I going from 50 to 100 or am I going from 120 to 100?
7688 So how many hours of theatrically released feature films do CTV and Global currently air?
7689 THE CHAIRPERSON: If you don't have that number you may want to file it.
7690 MR. PELMAN: We are going to file it because it's an important number. I think you will be impressed at how small that number if.
7691 COMMISSIONER CUGINI: If that is your impression, why aren't you here shining a spotlight on them as brightly as you are shining it on City?
7692 MR. PELMAN: In respect of the process it was the one spotlight that we could shine on because they shined it upon themselves with their request.
7693 MR. EAST: Can I just add an editorial about Rogers?
7694 Rogers sat here before you when they were acquiring Citytv and they said that they were going to support feature films, it was a tradition that they were proud to be part of. At the same time they were telling the industry, the distributors, the producers, "We are out of the movie business." So I think there is a motivation for continuing that obligation.
7695 I mean, had they sat down with the industry over the course of a year or two and said, "How do we make this work? We are new in the broadcast business, we have had this obligation, it used to work, is there any way that we can make this work again?" Then we would have some sympathy if it didn't work.
7696 But they didn't, they just programming a bunch of things they already had in the bag, or they inherited from CTV, they have bought very few feature films, they have been telling everybody in the industry that I am aware of that, "We don't want to be in this business, we are not in this business." And yet at the same time when the hearings came to get approval for the acquisition, they said very clearly that they were going to continue to be in this business.
7697 COMMISSIONER CUGINI: Well, thank you very much.
7698 Those are all my questions.
7699 THE CHAIRPERSON: Okay. Thank you very much.
7700 Do you want to repeat the undertaking?
7701 MS DIONNE: Yes. I have two undertakings.
7702 Please file the 2009 study commissioned by Telefilm, Peter Grant and Michel Houle; and
7703 please file the number of hours of theatrical feature films broadcast from Bell/CTV and Shaw Media on conventional stations.
7704 I would ask that you file the information as part of your final written submissions.
7705 Thank you.
7706 THE CHAIRPERSON: Thank you very much.
7707 I think we will break for lunch now and we will resume at 1:20.
7708 Thank you.
--- Upon recessing at 1203
--- Upon resuming at 1325
7709 THE CHAIRPERSON: Madam Secretary...
7710 THE SECRETARY: Thank you.
7711 Before we start, I would like to announce that the Commission has changed the deadline dates for final submissions and final reply. The deadline date for final submissions is now the 29th of April, and the deadline date for the final reply from the applicants is now the 6th of May.
7712 We will now proceed with the presentations by Toronto International Deaf Film and Arts Festival, appearing via videoconference from Toronto, the Strategic Alliance of Broadcasters for Aboriginal Reflection, appearing via videoconference from Toronto, Big White and Silver Star Ski Resorts Ltd., appearing via videoconference from Vancouver, BC Children's Hospital Foundation, appearing via videoconference from Vancouver, and Insight Production Company, which are appearing as a panel to present their interventions.
7713 We will hear each presentation, which will then be followed by questions from the Commissioners to the panel.
7714 Each intervenor will have five minutes for their presentation.
7715 I would now invite Toronto International Deaf Film and Arts Festival to begin.
7716 Please introduce yourself, and then you may begin.
7717 Thank you.
7718 MS MacKINNON: Hello, my name is Catherine MacKinnon. I am an award-winning filmmaker, producer, director and actress, as well as a festival director for the Toronto International Deaf Film and Arts Festival, which will be taking place from May 12th to the 15th in downtown Toronto.
7719 I grew up deaf myself, and I do speak English, but I also use ASL, and today I prefer to use ASL, so thank you for understanding and providing the interpreters.
7720 I would like to explain a bit about our festival, which we call TIDFAF. This is the third festival that will be taking place, and it showcases deaf, hard of hearing, deafened and deaf-blind filmmakers and artists, as well as our hearing peers who are filmmakers themselves, who make films that have a positive portrayal of deaf actors.
7721 Shaw Media has been a long-time supporter of our festival, which started in 2005, starting off with the advertising of public service announcements of our TIDFAF festival, which then led to extra benefits in funding for our festival, as well.
7722 Shaw Media has provided wonderful resources for our festival, and allowed us to have the opportunity to showcase deaf, hard of hearing, and deafened filmmakers internationally.
7723 We have a high success rate of international filmmakers attending the festival on a biennial basis.
7724 Also, part of the benefits agreement with Shaw was to provide ASL-English, American Sign Language interpretation services, as well as deaf interpreters to translate in international sign language. Without the funds for the interpretation, it wouldn't be possible to have accessibility to things such as panellist presentations.
7725 In 2009 there was a hearing panel discussing the topic of distribution, and they were our ears into the community about the distribution issue.
7726 TIDFAF is the only festival worldwide that has access to Global Toronto and Shaw Media for public service announcements on their television stations, whereas other deaf film festivals do not have this kind of access.
7727 There are other deaf film festivals in Maine, Rochester, New York, and the World Deaf Cinema at Gallaudet University, which just had their very first festival in November 2010 in Washington, D.C. Then there is the Hong Kong Deaf Film Festival, and the Deaf Festival in the United Kingdom, which has been around for more than ten years.
7728 One of my favourite TV shows, "The Lost Girl", which is also produced by Shaw Media, and is produced in Canada, uses captioning, and I find that the captioning looks fine on that program. It works very well. They have the pop-up captioning, which is where the words appear on the bottom of the screen.
7729 I also enjoy using roll-up or scroll-up captioning for live TV programming, such as watching the news.
7730 There is a difference between live program captioning as opposed to dramatic TV captioning or captioning for reality shows. Most of the captioning for dramatic or reality shows is inserted before going on-air.
7731 I am a lifelong user of closed captioning. It has been part of my everyday life since I received my first captioning decoder in the late eighties.
7732 It was thanks to Marlee Matlin, who was instrumental in getting a law passed through Congress, who supported captioning chips being installed in TVs from the early nineties onward. So now we are able to enjoy the simplicity of turning on the captioning from our remote control settings, which is installed in all TVs that have been made since the 1990s.
7733 In the TVs that we have today, like HD TV, the issues are a little more complicated.
7734 A friend of mine and I had a difficult time trying to get the captioning to work on these newer TVs. It really shouldn't be that difficult or complex an issue.
7735 Even with the word "Subtitle" or "Closed Captioning" right on our remote, we still had a problem getting it to work, and that really shouldn't be an issue.
7736 For live program captioning, such as the news, it is expected to have a little bit of lag time because of the captionist typing.
7737 Once upon a time they had an in-house captionist in the studio, but that changed about ten years ago.
7738 It is my understanding that the service provider, such as Shaw Media, has to comply with the Canadian Association of Broadcasting Guidelines. That is my understanding.
7739 Technology has changed so much, and so quickly, that there is a limited amount of resources to help find the appropriate captioning software. Even for me, I would normally install subtitles from Final Cut Pro, which is a time-consuming task.
7740 There is a difference between subtitles and captioning. Subtitles are one colour, all white, whereas closed captioning is on a black background, with a white font in the foreground.
7741 I am constantly trying to find the right kind of captioning software, without breaking my own budget, in my work as a producer.
7742 The other issue with captioning is with online content on the internet, which everyone uses. Everyone uses the internet these days to watch TV shows and get caught up on the news. There is very limited accessible software to install the captioning, so this requires more research in finding ways to make it easier for someone to install captioning without complications.
7743 Sometimes it takes hours to try to figure out how to set it up and use it properly, and these days we live in a world of quick communications.
7744 YouTube just launched their closed captioning program for their videos last year, in June 2010, but it is still a work in progress. I am even having a difficult time in trying to understand the specifications of using the online software. I know that they are trying to work to make it more effective and make it more user friendly.
7745 It is with hope that the CRTC will consider establishing a video relay service here in Canada. I am aware that it is planned to come into effect in 2013.
7746 Shaw Media has been a leader and in the forefront in improving the captioning quality for their live programming, as well as Canadian content TV shows.
7747 Thank you for having me here today.
7748 THE SECRETARY: Thank you.
7749 I would now invite the Strategic Alliance of Broadcasters for Aboriginal Reflection to begin.
7750 Please introduce yourself, and you have five minutes.
7751 MS NADJIWAN: My name is Brenda Nadjiwan, and thanks very much for this privilege. I hope that you received my second copy of the presentation.
7752 The Strategic Alliance of Broadcasters for Aboriginal Reflection is a group of Canadian broadcasters and Aboriginal organizations working to increase the contribution and representation of Aboriginal people onscreen, on-air and behind the scenes in all aspects of the Canadian broadcast industry.
7753 Shaw Media has been a member pretty much since its inception. It has been working alongside CTV, Rogers, Corus, and many other participating broadcasters, toward increased Aboriginal participation and improved Aboriginal reflection.
7754 As SABAR's co-chair, I am here today to support Shaw Media's application for the renewal of its broadcast licences because I believe this company has contributed significantly to including Aboriginal people in all aspects of its company.
7755 Shaw Media, along with other members of SABAR, has worked hard to examine and propose opportunities for Aboriginal participation in areas such as internship, scholarship and direct hiring. Shaw Media has been instrumental in addressing stay-in school-initiatives, and it has worked collaboratively with the National Aboriginal Achievement Foundation to outreach to high schools through Industry in the Classroom, a curriculum development initiative designed to introduce broadcasting careers to Aboriginal youth.
7756 All broadcasters who participate on SABAR have benefited from Shaw Media's lead on this stay-in-school related initiative.
7757 Shaw Media's partnership with NAAF is significant, as they also air the annual National Aboriginal Achievement Awards, and have done so now for the past five years. This is a program that recognizes the significant contributions of Aboriginal people and, I believe, encourages a more positive reflection of Aboriginal people and, in so doing, works to incur a more positive relationship between Canada and Aboriginal people in general.
7758 SABAR acknowledges that media has the power to change perceptions and attitudes, and continues to work with news organizations and other forms of media to emphasize the relevance and embrace the contributions of Aboriginal people in Canadian society. To this end, SABAR is currently working on a toolkit, in collaboration with Stanford University, the University of Toronto and Centennial College. This guidebook will provide a glossary of terminology, as well as ways to connect with the Aboriginal community to ensure a respectful and balanced approach to news telling.
7759 Once again, Shaw Media has assisted in this project, providing input and recommending two newsroom journalists to participate in the validation project conducted by a graduate student out of the University of British Columbia.
7760 In 2010 SABAR was invited to present at the Indigenous Media Forum, as part of the three-day World Press Freedom Day Conference, held in Brisbane, Australia. This was a group of Indigenous media professionals from all over the world who gathered to discuss issues of mutual interest and concern and examine the specific needs of Indigenous broadcasters and journalists internationally.
7761 Shaw was a vocal supporter of SABAR's participation, seeing it as a means to address transnational linkages.
7762 As a result of SABAR's participation, an organization in Australia is now seeking our advice for a similarly designed program working with Indigenous groups involved in the media.
7763 SABAR's strength is a result of collaboration with each other as broadcasting peers and with various Aboriginal and educational organizations. They value each other's efforts and contributions, and openly share information about their initiatives geared toward Aboriginal inclusion. They recognize that this open dialogue both challenges and encourages each member to try a little harder. In this regard, they have come to see themselves as an alliance of friendly competitors.
7764 SABAR seeks to ensure a more reflective Aboriginal voice and recognizes that this can only occur through active and meaningful participation. These broadcasters are strongly committed to diversity as individual organizations, and working together as an alliance ensures that this commitment includes the Aboriginal voice in a strongly unified way.
7765 SABAR members have recognized mutual benefits by working together. The advancement of Aboriginal human development is made easier when everyone works toward the same goals of inclusion, fairness and equality.
7766 Shaw is one member who has taken an active role in these principles and works hard as an individual broadcaster and as a member of SABAR's team.
7767 Thank you again for this opportunity.
7768 THE SECRETARY: Thank you.
7769 I would now invite Big White and Silver Star Ski Resorts Ltd. to begin.
7770 Please introduce yourself, and then you may start.
7771 MR. BALLINGALL: Good morning from Vancouver, home of the Vancouver Canucks. I am Michael J. Ballingall, Senior Vice-President of Big White and Silver Star Resorts, located near Kelowna, British Columbia.
7772 Our resorts are the second and third most popular ski and snowboard resorts in the Province of British Columbia, and we have just completed a snow season and achieved approximately 950,000 skier visits.
7773 As you can appreciate, when dealing with the snow as your predominant commodity, it is important to communicate your message to your potential customers.
7774 Equally important is the ability for local owners of vacation properties at our two resorts to have the local television station newscasts available to them while staying on the mountain, so they can stay informed about Okanagan news and weather activities.
7775 I have personally been dealing with Global Okanagan, or CHBC, since 1995. Our resorts depend on this television station to reach our broad customer base, from Osoyoos to Salmon Arm.
7776 We have, for many years, relied on Global Okanagan to broadcast a daily snow report to its audience. This, and this alone, can contribute to the daily success of skiers and snowboarders travelling throughout the region, and significant distances, to visit our resorts.
7777 Global Okanagan has been an important communicator of local events, promotions and community service functions taking place at our resorts. We rely heavily on the communication through the television medium, as pictures of current conditions and events are one of the most reliable tools to get our information out to the public.
7778 Global Okanagan has also covered news stories of avalanche accidents, road accidents, and catastrophic injuries of skiers and snowboarders while visiting our resorts. These local news broadcasts help to dispel rumours or word-of-mouth inaccuracies, which can cause panic amongst local families and our guests.
7779 Global Okanagan was instrumental in providing accurate live coverage of the Okanagan Mountain Park fire in 2003, and the subsequent summer fires in 2009 and 2010. Their ability to be on-site at breaking news stories has enabled local residents to receive relevant news in a timely manner. Through investigative reporting, many news reports not only clarify local issues and events, but actually help to bring about justice to wrongdoing in our communities.
7780 Global Okanagan has been active in the community and has used their market strengths to benefit many charitable organizations. Their service to the local food banks through the Good News Bears pre-Christmas campaign, the annual Wendy's Dream Life Day, the United Way Campaign and Cancer Relay for Life has raised hundreds of thousands of dollars to support worthy local charitable causes.
7781 As a winter tourism business, Global stations have assisted Big White and Silver Star Resorts in broadcasting advertising messages on the Chopper Traffic Reports in Vancouver, Calgary, Edmonton and Toronto. Their ability to take one message and distribute it across various targeted audiences has assisted our business in growing tourism revenue in our region.
7782 Today I address this honourable panel and lend my full support to Global Okanagan and their application for renewal of a broadcast licence. As a Board member of Tourism Kelowna, the Thompson Okanagan Tourism Association and the Canadian Ski Council, I can assure you that their coverage of the snow sport industry taking place in the Okanagan Valley has assisted in placing Big White and Silver Star Resorts on the world map as world class ski and snowboard destinations.
7783 Thank you.
7784 THE SECRETARY: Thank you.
7785 I would now invite BC Children's Hospital Foundation to present.
7786 Please introduce yourself, and you may begin.
7787 MS SWEENEY: Thank you. I am Deborah Sweeney, I am the Vice-President of the BC Children's Hospital Foundation, and I want to thank the panel very much for letting us speak to you. We did write the letter to you, but I actually wanted to come today to really speak from the heart on behalf of the children of British Columbia.
7788 BC Children's Hospital serves all of the million children who live in the province, in every corner of the province, and without the help of Global BC we would not be able to get our messages across to all of the children and all of their families across BC.
7789 The other thing that I think is really important to know about the people of Global BC is that they have been our supporters for years, and every single person in the station, from the station management through all of the on-air people, the production people, the assistants -- everybody in the organization is really -- they feel it in their hearts, too. They are extremely community oriented. They are very supportive, and we can't begin to say enough about their help.
7790 From a purely financial term, they have, in the last 12 years alone, raised in excess of $120 million for BC Children's Hospital, which is absolutely phenomenal.
7791 We are part of the Children's Miracle Network, which is comprised of hospitals across North America, and the work that Global BC does for BC Children's -- our levels of fundraising are probably among the highest, particularly in terms of our telethon, which we run the first week of June every year -- the first weekend in June. It is broadcast on Global BC, and it is the culmination of fundraising from people across the province -- children in schools, different communities -- the Chinese community is very large in the telethon, as well as the South Asian community. We have people from professions across the province who come together to support and celebrate us.
7792 This year our goal is $17 million, and we would not be able to achieve this without the help of Global.
7793 We have a huge celebration that weekend. We invite everybody from across the province, and in terms of a community event, it is something the likes of which we haven't seen anywhere else.
7794 The interesting thing, too, is that even one of the staff of Global BC, John Ridley, is the chair of our campaign this year. So they get involved not only from their organizational point of view, but many of them volunteer, and they give a lot of their time personally, as well.
7795 Also, Global produces public service announcements for us. They not only produce and run the public service announcements, they also enable our producers to come to their station to produce vignettes and different messaging that we use at the foundation, and they donate this service to us.
7796 It is difficult even to -- we have tried to put a price to, if you will, the in-kind voluntary support. For us it's priceless, but it's worth a lot.
7797 As well, in 2008 the foundation launched a $200 million campaign to build a new BC Children's Hospital, and when we were just getting the campaign underway and starting to convey the need for the new hospital to the province, the Global TV newsroom made an unprecedented step. Again, we have never seen a newsroom do this anywhere. They came to us and said: We would really like to help you with this campaign.
7798 So the newsroom has done a number of stories and has done momentum initiatives for us. We have had phone banks that have raised hundreds of thousands of dollars, which have taken place on the Global TV newscasts.
7799 Also, it has given us an opportunity on many occasions for the premiere and the health minister and other elected officials to come and state the commitment of the government to its part in building the hospital.
7800 So that creates momentum for the campaign and gives people across the province the confidence that the project is going through, and for them to support it.
7801 To date we have raised $133 million toward our $200 million goal for the hospital, and Global -- at the time of the economic downturn, we, like other not-for-profits, were having challenges, particularly raising major donations from people whose confidence was shaken by the economy, and if we didn't have Global on our side, keeping the momentum going, we think that the campaign very well could have failed.
7802 So, again, Global was instrumental in keeping this initiative going.
7803 In closing, I think I have conveyed it, but I can say with absolute certainty that without Global's support we would not have achieved the tremendous fundraising success that we have been able to accomplish, and their support for children in every corner of the province is just tremendous.
7804 I thank you very, very much. Obviously we are very much in support of this application.
7805 We are very pleased that Shaw is now the owner of Global, because Shaw has also been very supportive of BC Children. So we think it's a marriage made in heaven.
7806 THE SECRETARY: Thank you.
7807 I would now invite Insight Production to begin.
7808 Please introduce yourself.
7809 MR. BRUNTON: Mr. Chair, Vice-Chairs and Commissioners, my name is John Brunton and I am the President, CEO, Executive Producer and Controlling Owner of Insight Productions.
7810 Insight is celebrating over 30 years of producing some of the most dynamic and top-rated television programs, including six seasons of the smash hit Canadian Idol, 17 years of the Juno Awards, which just celebrated its 40th Anniversary in Toronto a couple of weeks ago -- very high ratings -- Project Runway Canada, Falcon Beach, Ready or Not, and our highly acclaimed original format Battle of the Blades, which is on the CBC.
7811 I have had the good fortune of producing well over 100 hours of television for Shaw Media/Canwest and its channels, including variety, drama, music, lifestyle and documentaries.
7812 Insight is extremely proud to have produced Canada's highest rated television show of all time for Global, Deal or No Deal Canada.
7813 Global's unwavering support for our Canadian production was proven when they programmed the series launch immediately following the 2007 Super Bowl, ultimately drawing 2.8 million viewers to the premiere.
7814 One of the primary reasons I am here today to speak on Shaw Media's behalf is that I wanted to acknowledge the huge impact that Shaw Media/Canwest has had on our company and the tremendous support they have given to our productions, many of which are now seen all over the world.
7815 Our relationship with Global dates back to the eighties, when Insight was an unproven drama producer pitching a controversial TV movie about homosexuality entitled The Truth About Alex. It was a taboo subject on television at the time, but Global was fearless and unwavering in its support of the project. The movie went on to win several international awards and put Insight on the map as a producer of quality dramatic programming around the world.
7816 Since then we have teamed up to produce more successful dramas, including the 65-episode, Gemini Award winning youth program Ready or Not, and the internationally acclaimed one-hour drama series Falcon Beach, co-produced with our regional partners Original Pictures in Winnipeg, and seen in over 100 territories around the world.
7817 The proposed 30 percent Group Canadian Programming Expenditures -- CPE -- for Shaw's future spend on Canadian shows seems like a reasonable and fair allocation from my perspective.
7818 I also understand that this is a slight increase from its previous commitment. Therefore, Shaw will be spending more on Canadian programs than it ever has before.
7819 I also support the Commission's decision to adopt the Group CPE. Broadcasters like Shaw will now have the flexibility to move their spend across many channels and Canadian shows, thereby creating many more time slots for Canadian producers to fill.
7820 Together, Global and Insight have showcased some of Canada's top creative talent, from fashion designers in Project Runway to culinary artists in Top Chef. Along with Canadian Idol and Battle of the Blades, these are programs that celebrate Canadian excellence from coast to coast, and are programs of national and cultural importance. They reflect a sense of national identity and make people proud of where they come from.
7821 These programs are nation building, yet don't qualify under the Commission's official definition of PNI -- Programs of National Interest.
7822 Therefore, I do not support an increase to Shaw's suggested minimum spend of 5 percent on official PNI programs, and strongly recommend that the definition of PNI be re-evaluated.
7823 Canadian Idol would never have existed if it did not qualify under the CTV benefits package. Our business is cyclical and right now audiences want shows like Canadian Idol, Battle of the Blades, and those kinds of programs. The proof is in the ratings.
7824 Insight has had tremendous success buying and producing international formats, such as Insight Project Runway, Deal or No Deal, Intervention and Are You Smarter Than a 5th Grader? But now, with Global's help, we have effectively turned the tables by creating our own format that is Canada's own.
7825 Our new format, Canada Sings, was one of the hottest shows at MipTV in Cannes, France last week. Created and produced for Global, six of the biggest distributors in the world are currently competing for the format rights. We have a bidding war on our hands at the moment.
7826 Shaw Media has been innovative in its marketing, advertising and promotional campaigns. The marketing effort that Global put into the 2005 launch of Falcon Beach was phenomenal and unprecedented, and included everything from trailers in movie theatres to promotional beach wear, Frisbees and all kinds of stuff.
7827 But it didn't stop there. Recognizing the importance of new media, Global fully supported the creation of an innovative website, including a virtual community, online game, and so on and so forth -- in many ways ahead of its time.
7828 Recently, Shaw Media's enormous multi-platform national marketing campaign behind Top Chef Canada drove awareness and further built excitement around the premiere of our show, which was on Monday night.
7829 It was the most extensive, multi-layered marketing campaign for a single show in Food Network Canada's history. Along with their strategic marketing buys, promotional sponsorships and on-air campaigns, Shaw Media utilized a variety of creative promotional tools, including wrapped streetcars, die-cut AdBars and reusable grocery bags.
7830 I just received the good news a few moments before I came in that Top Chef Canada was the highest rated Canadian original premiere in the Food Network's history on Monday night.
7831 For every new television show that we contemplate producing at Insight, we look at extending the content beyond the box. How do we get fans connected online? How do we create apps and engage our fan base? What is the social networking strategy?
7832 We are looking at unprecedented opportunities for online voting, Webisodes, SMS, Twitter, Facebook, YouTube -- all integral parts of modern day television production.
7833 Every Canadian production company is looking at creating specialized content for non-traditional broadcast, and it's all happening at lightning speed. Insight, with Shaw's support, is no exception, and we are currently developing web-specific programming together.
7834 As I have stated to the Commission in the past, the need for Canadian media companies to distinguish themselves is increasing, certainly not decreasing. Netflix, YouTube, AppleTV and Hulu are now dealing with us directly as consumers. Hollywood studios may not be far behind.
7835 No longer will Canadian broadcasters be the only portal for us to get some of this content. Those Canadian broadcasters who have traditionally relied on American networks for the bulk of their programming will need to create more original programming if they are to survive.
7836 In order for them to do this, we need to support and strengthen all of the Canadian broadcasters, so they can withstand the inevitable future changes in the marketplace.
7837 The more successful our broadcasters grow and prosper, so will the gross amount of Canadian Programming Expenditures.
7838 In closing, I support Shaw Media's application for the licence renewal of its broadcast assets. They are a vital part of the Canadian industry and for all of us independent production companies.
7839 The support that Insight has received from Canwest, now Shaw Media, over the last three decades has truly helped our company thrive and grow. They have been a loyal and dynamic partner to us over the years, and we look forward to an exciting future together.
7840 Thank you, Mr. Chair, Vice-Chairs and Commissioners, for the opportunity to speak to you today.
7841 THE CHAIRPERSON: Thank you for all of your presentations.
7842 Ms MacKinnon, let me start with you. I have never heard until today of the Deaf Film Festival. The films that you produce -- excuse my ignorance, I am just trying to get my head around what it actually means -- are these films without sound and just captioning, or are they normal films and you also make them specially adaptive for deaf people?
7843 MS MacKINNON: Okay. That's a very good question. Thank you very much for asking.
7844 We have a very good diverse group who would be interested in this. We use ASL which would be sign language and then English captioning. That would be included as well. Plus, the hearing filmmakers will have deaf actors in there as well. Plus, we have deaf filmmakers or hard of hearing, deaf filmmakers participating as well.
7845 And the films are not just about deaf people or deaf issues. Hearing characters could be included in the film as well. They could be behind the camera, in front of the camera.
7846 So our group is very diverse.
7847 THE CHAIRPERSON: But if I --
7848 MS MacKINNON: We have different needs.
7849 THE CHAIRPERSON: If I as a person, who fortunately is not deaf watched that film, would there be sound or not?
7850 MS MacKINNON: Yes, we have sound. Some have sound. It depends on the filmmaker's wishes.
7851 Yes, we have sound.
7852 THE CHAIRPERSON: I see.
7853 MS MacKINNON: Most of the time, I would say 80 percent of the time, we have sound or voiceovers.
7854 We have music as well. I would say 80 percent of the films would have sound, 20 percent would probably not. It really depends on the filmmaker.
7855 THE CHAIRPERSON: Okay, thank you. I was just saying I'm fascinated to learn there is a large enough market for this and that this exists.
7856 I think it's wonderful that Shaw supports it. As I say, if it hadn't been for this hearing I would have never known about it.
7857 Mr. Brunton, you were just talking about Shaw Media and you mentioned both that you produced the Canadian Idol and now Canada Sings.
7858 MR. BRUNTON: Right.
7859 THE CHAIRPERSON: What is the difference between the two of them?
7860 MR. BRUNTON: Canada Sings is a show that goes into a workplace and puts together a glee club together, so the Toronto Fire Department, the baggage handlers at Air Canada.
7861 THE CHAIRPERSON: Right.
7862 MR. BRUNTON: The Hamilton Police Department put a group of anywhere from 10 to 20 people together and they put a sing and dance number together that's a mash-up. They do it to win money for charity.
7863 And in the case of the baggage carriers or Air Canada, one of the chaps had donated his kidney to his daughter to save her life and so the charity that they were singing for had a connection, a personal connection. It's a very emotional, powerful dramatic program and really fun as well.
7864 THE CHAIRPERSON: How come you discontinued Canadian Idol? I would have thought the singers in this country there is a never-ending supply and so I expected to see this for many years.
7865 MR. BRUNTON: You know there is a never-ending supply. You know the fall of '08 happened. The market crashed. CTV was unfortunately looking at an enormous expenditure at the Olympics and it subsequently has not come back.
7866 That's one of the reasons that I'm suggesting that it no longer would qualify for programs of national interest where a show like that is so nation building and puts small communities on the national stage and makes people so proud regionally that it didn't make sense why a show like that might qualify but a person could make a horror movie about slicing and dicing somebody up and that qualified as a program of national interest. I don't get it.
7867 THE CHAIRPERSON: And a show like Canadian Idol obviously also showcases Canadian talent.
7868 MR. BRUNTON: It showcases Canadian talent in a way that's really inspirational and sometimes it's the bravest thing the kid has ever done in their life. It's rag to riches, zero to heroes story.
7869 And I think it's television that speaks well for a whole family. It's one of those shows that a family can watch together and that quite often doesn't happen anymore in television.
7870 THE CHAIRPERSON: Okay.
7871 Len, you have some questions?
7872 COMMISSIONER KATZ: Thank you, Mr. Chairman, and good afternoon to all.
7873 Let me build upon your statement, Mr. Brunton, you just talked about now, between what qualifies and what doesn't qualify.
7874 MR. BRUNTON: Yes, sir.
7875 COMMISSIONER KATZ: Based on your presentation today and in the past as well and knowing what you have done in the past, you have done pure drama that does qualify as well.
7876 MR. BRUNTON: I certainly have.
7877 COMMISSIONER KATZ: Can you enlighten us as to what the differences are with regard to investment exposure infrastructure between doing something that is pure drama that qualifies under the CMF and those programs that you have identified here as should qualify as programs of national interest but don't?
7878 MR. BRUNTON: Right. Well, previously as you know in drama we could get money from CMF and a number of other sources of funding. But for a show like Canadian Idol, for a show like Battle of the Blades there was no access to additional funding.
7879 Now, there was a notion that those shows were more appealing to advertisers and they had sometimes larger guaranteed audiences so they didn't need that support.
7880 But the fact of the matter is that the CBC and CTV and Global and Rogers run deficits on those shows even though they are very successful.
7881 Because the complication for us with these shows is that we are competing against the best that comes out of America. So when you do a show like Deal or No Deal Canada you know it can't be seen to be a second-class program compared to the American show.
7882 Canadian Idol can't be seen to be the cheap -- you know the one reason that I took on Canadian Idol was that I knew that we could compete against the Americans with singers that were as good as anybody in America.
7883 And our chefs in Top Chef can cook as well as anybody in America or anywhere else in the world and the same thing is true of our fashion designers.
7884 But those shows have to be produced at such a high level and they have got 300 million people living there and we have got 30 million people living here or 33. That's one of the complications we face is that we are beside, you know, this country that has unlimited funds and I have to make my Canadian Idol show look as good or everybody will say it's the cheap version of. That's not acceptable.
7885 COMMISSIONER KATZ: But when you take it on and you stepped up to the challenge without CMF money you still know that you have got a market for this? You can still sell it and it's still viable?
7886 MR. BRUNTON: Well, unfortunately, in the case of the formats that we acquire, you know, when I produce a Canadian Idol or a Project Runway, I can't export that show because the American show takes precedent in its international distribution.
7887 So now that we have created Canada Sings with Global that is a show that we are very excited about. The same with Battle of the Blades, that's our own original format and we can market that format around the world.
7888 The complication with Blades is that I need hockey players and figure skaters and there is only a handful of countries -- you know, Russia certainly, Sweden -- there is a handful.
7889 The thing about our Canada Sings concept is that it literally could play anywhere. So we are very excited about that.
7890 But the Canadian formats that celebrate, you know, shows like Canadian Idol and if we ever did Canada Has Got Talent or X-Factor, some of those shows, it truly reflects our culture back to us on the TV set.
7891 You know the singers on Idol in Canada were different than the American singers. We are a culture of singer/songwriters. The Neil Youngs and the Joni Mitchells have influenced our population. So we introduced instruments on that show and allowed people -- you know we shifted the format to suit our culture and our musical background.
7892 So our show had many, many differences. It wasn't as cynical as the American show because we don't like cynical as much here.
7893 On all these shows that we do we have to put our Canadian spin on it. The complication with funding a show like that is what reflects our Canadian culture in such an important way, it's not that easy to export.
7894 COMMISSIONER KATZ: Are you a member of CMPA?
7895 MR. BRUNTON: The Producers Association?
7896 COMMISSIONER KATZ: The Canadian Media Production Fund or Association.
7897 MR. BRUNTON: No, I don't believe I am.
7898 COMMISSIONER KATZ: Norm Bolen and company.
7899 MR. BRUNTON: I think our company is part of the Producers Association, yes.
7900 I must admit that I'm not really particularly involved with it.
7901 COMMISSIONER KATZ: Okay. The reason I asked the question is because you have taken a different position on PNI than they have and you are part of the industry. So I was just wondering whether you are or are not part of their views because obviously you have taken --
7902 MR. BRUNTON: Well, we share some of their views but on this particular issue we don't share their view at all.
7903 COMMISSIONER KATZ: Okay.
7904 MR. BRUNTON: You know, I really think that, you know, audiences' trends change all the time. You know, situation comedies were the hottest thing in American television and then they died on the vine. Now, they are coming back again.
7905 You know our drama/cop show -- you know there reaches a point where so many people copy that you get full of it and the trends change.
7906 Well, the trending lately has been to get huge ratings for these kinds of shows, you know, like Canadian Idol, like Battle of the Blades. I'm crossing my fingers, like Canada Sings. And they will trend out.
7907 For 15 years I have produced every major figure skating show in the world and it was a huge business. We did millions of dollars' worth of business and then it just fell off the edge of a cliff.
7908 We reinvented it when we came back with Battle of the Blades, but I have done all the Kurt Browning specials and all those things, and they were huge and sold all over the world and then it just died.
7909 It will come back again when the stars drive it, just like in tennis and Tiger Woods and golf. It requires that, but we are in such a cyclical business that I think that you know we shouldn't force the programming to people that are attracted to watch other forms of programming right now.
7910 COMMISSIONER KATZ: Thank you.
7911 This question is for all of you. You have all spoken volumes about the relationship between yourselves, your associations and Shaw Media. The reality is that that history goes back pre-Shaw Media. As we all know, Shaw Media just picked up Global in the last couple of months.
7912 Has anybody seen a difference in the relationship that you have had in the past with the CanWest/Global team and what you are experiencing now with Shaw Media or has it all sort of evolved transparently and the same relationships are there, the same support, the same cooperation?
7913 MR. BRUNTON: From my perspective I really feel that they are putting their foot on the gas. I really feel like they are ramping up. You know they have gone through a very difficult time over the last two or three years through the bankruptcy.
7914 But I also think that they have kept a certain continuity running their channels and Barb Williams is running the operation. There has been a continuity over the last few years.
7915 But my experience in the last few months is that the organization seems more aggressive than it's ever been in terms of producing Canadian programming, but that's my own personal experience. We are very active producing programs for them now.
7916 COMMISSIONER KATZ: Thank you.
7917 MS SWEENEY: Hi. I am Deborah from Vancouver, from B.C. Children's Hospital Foundation.
7918 So I just wanted to say that we have seen absolutely no change, that Global and Shaw are very enthusiastic about this. In fact we are starting to meet with the Shaw executives and huge support.
7919 As I said, Shaw was already involved with our South-Asian telethon, has been working with us and supporting us again very generously. And so we don't anticipate any change. In fact, we see it as an enhancement if that could be. We have already had so much that we see it as being an enhancement.
7920 COMMISSIONER KATZ: Great, thank you.
7921 MR. BALLINGALL: From the standpoint of a business that actually buys commercials on their stations we have found that, you know, from our little position in Kelowna, British Columbia with their vast network we don't have to use an advertising agency.
7922 We can actually speak to direct agents and put promotions together and buy very, very effectively because they are one company with one voice. I would like to reach out and say they are trying to help the little guy.
7923 COMMISSIONER KATZ: Thank you.
7924 Anybody else out there...?
7925 Those are my questions, Mr. Chairman.
7926 THE CHAIRPERSON: Thank you.
7927 MS NADJIWAN: It's me, Brenda, from SABAR and I would just like to say that I have really enjoyed a very seamless relationship as well since Shaw has stepped in. I always feel that I pick up the phone and talk to the contacts that I have made within this organization and they will do their best to respond.
7928 So I'm enjoying the relationship as much as I always did.
7929 MS MacKINNON: I would like to add something as well. It's Catherine, from Toronto.
7930 Our relationship has always been positive and strong and we constantly email back and forth. They respond to me quickly. The relationship hasn't changed at all. It continues to be a very positive experience and I appreciate that.
7931 COMMISSIONER PENTEFOUNTAS: Mr. Brunton, you mentioned you worked on the Junos last month?
7932 MR. BRUNTON: Yes, I did, sir.
7933 COMMISSIONER PENTEFOUNTAS: And you also mentioned you had excellent ratings.
7934 MR. BRUNTON: It did. 2.4 million people watched. In 40 years of the Juno awards it was the highest rated Junos of all time, a young audience too.
7935 COMMISSIONER PENTEFOUNTAS: Demographics off the map?
7936 MR. BRUNTON: Demographics incredible and particularly strong in Toronto which is traditionally a difficult market for Canadian programming.
7937 COMMISSIONER PENTEFOUNTAS: Would you be surprised to know that the Junos lost money for CTV?
7938 MR. BRUNTON: Not at all.
7939 COMMISSIONER PENTEFOUNTAS: What kind of numbers do they have to do to actually make money or breakeven?
7940 MR. BRUNTON: My guess is that they probably need around another million dollars' worth of revenue to breakeven.
7941 COMMISSIONER PENTEFOUNTAS: What would that mean in terms of ratings?
7942 MR. BRUNTON: I'm not sure that -- you know, I mean, every major award show in America the ratings have been shrinking. Some of them are going to start being relegated to cable off network television.
7943 The Junos is sort of a rare story. I feel that part of the reason it's a rare story is because we have travelled across the country and taken it from community to community. I said this before but there weren't any flyover States with the Junos. You know we have gone everywhere.
7944 But in terms of ratings making money I think that there may be another answer to how to make more money but it's a tricky situation because again you know we are competing against the Grammys. You know the producer of the Grammys makes $1.5 million to produce it let alone the cost of the production and all the private jets and so on and so forth.
7945 But we are compared against the Grammys and we are compared against the Brit Awards. So you know, all that being said, I mean CTV has put an enormous -- you know I think that there is an awful -- there is a huge glow for what CTV has done and CTV has built their brand up from coast to coast. So they have been getting a benefit equal to the amount of money that they have lost in the show. Maybe they have. You know, they picked it up for another five years.
7946 COMMISSIONER PENTEFOUNTAS: Back to my original question, do you know what --
7947 MR. BRUNTON: Yeah, how would the ratings have to be just to breakeven?
7948 COMMISSIONER PENTEFOUNTAS: Yes.
7949 MR. BRUNTON: My guess is that you know this year they were selling off a rating last year of 1.6 million in St. John's which wasn't too shabby either.
7950 But going into next year selling off a rating of 2.4 million, I would say that if they got up to 2.8 million, 2.9 million that might be able to fill the gap. I don't know how to do that without adding more American content in the program, international content in the program. We had a blockbuster show this year, Shania Twain, Neil Young.
7951 COMMISSIONER PENTEFOUNTAS: Based on last year's rating -- I mean they do adjust to this year's rating.
7952 MR. BRUNTON: They will adjust. Next year they will sell off this year's rating. But you know a smart advertiser will look at an average of ratings over three or four years and try to average it.
7953 COMMISSIONER PENTEFOUNTAS: Make the appropriate price.
7954 MR. BRUNTON: Yeah, exactly right.
7955 COMMISSIONER PENTEFOUNTAS: You mentioned there may be another answer but you didn't actually mention the answer.
7956 MR. BRUNTON: I think that, you know, the Junos went from one night of television into a weekend of programming. It's almost like the Grey Cup now in terms of all the shenanigans around it.
7957 COMMISSIONER PENTEFOUNTAS: Yeah.
7958 MR. BRUNTON: And I think maybe consolidating, you know, advertisers to be able to participate in a number of the different opportunities might be able to jack up their -- if we could figure out a Juno programming that runs for a month leading up to the program and the crescendo of the Junos is the show itself, that might be another answer.
7959 We are talking about a lot of these things. You know, is there a white night advertiser that would really like to own it in a bigger way? There has been in the past and maybe somebody after this year will have taken a look at the show and really want to step up and write a big cheque.
7960 COMMISSIONER PENTEFOUNTAS: You have done a lot of work for CTV. Why don't you plug in for Bell Media?
7961 MR. BRUNTON: I spoke for Bell Media not long ago when Bell Media was buying CTV. So I was up here in front of this Commission not too long ago.
7962 You know, I did that recently. I really felt that I wanted to step up for Global.
7963 It has an enormous influence on my business, particularly our drama business and our international business. And I really wanted to take the opportunity to say how much -- you know, I mean they have been great, great partners for us.
7964 COMMISSIONER PENTEFOUNTAS: You mentioned your problem with increasing PNI past 5 percent.
7965 MR. BRUNTON: Yes, sir.
7966 COMMISSIONER PENTEFOUNTAS: There is a 30 percent CPE there.
7967 MR. BRUNTON: Yes.
7968 COMMISSIONER PENTEFOUNTAS: And you don't think you can sell your wares within the 25 percent remaining?
7969 MR. BRUNTON: My issue is really philosophical. You know it's like -- so a drama qualifies but it doesn't necessarily have to have anything to do with Canada or the national interests of Canada. Yet a show that is all about Canada and Canadian talent doesn't.
7970 So you know just by definition it's a drama means that it's of national interest? Of course not.
7971 As I say, it could be a horror movie that's a piece of crap. The definition doesn't have anything to do with culture.
7972 COMMISSIONER PENTEFOUNTAS: Would you redefine PNI or would you scrap it altogether?
7973 MR. BRUNTON: I would redefine it. I understand that it's a very complicated issue, you know, and everybody has got their perspective on it. The Writers Guild has got their perspective on it and the Directors Guild. Everybody is fighting for their piece of the pie.
7974 And there is no organization in Canada that doesn't want more money. We all want more money but, as I have said in the past, businesses are strong. If there is a certain percentage that they need to spend, you know, is it not the broadcasters' right to some extent to be able to figure out how to speak to those audiences and get the highest audiences they can?
7975 And when audiences trend back to -- you know, I mean, listen, we have had some huge successes in drama lately. Flashpoint is a great of example of a show that gets big audiences and people love to watch.
7976 And Rookie Blue, the Global show, is a big success, one of their biggest dramatic successes.
7977 COMMISSIONER PENTEFOUNTAS: Back to your philosophical, do you have a philosophical problem with PNI?
7978 MR. BRUNTON: Do I?
7979 COMMISSIONER PENTEFOUNTAS: Yeah.
7980 MR. BRUNTON: You know, what is -- what does it mean a project of national interest? I don't understand the definition.
7981 COMMISSIONER PENTEFOUNTAS: As it is defined.
7982 MR. BRUNTON: As it is defined just because it's a drama that means it's a program of national interest. I don't get that. I mean just because it's drama means it's a program of national interest.
7983 You know call it something else but don't call it a program of national interest. It could have nothing to do with the national interest of the country. It could be anti-Canada.
7984 I can make a drama that --
7985 THE CHAIRPERSON: Don't be picky. It's meant to be of importance to the Canadian communications system or broadcasting system. You know that.
7986 Call it national interest. Call it --
7987 MR. BRUNTON: Well, that's what I am saying. But why a drama holds more value than a show celebrating Canadian excellence in singing and music?
7988 Now, I'm thrilled that you have added award shows and you know we do a project with Global called Canada's Walk of Fame and it celebrates Canadian excellence and I'm really hoping that that will qualify.
7989 But by the Junos qualifying breathes new life in the Junos and I think that's very, very important. I mean, the Canadian music industry is suffering. We know about what is happening with record sales, all those things. That happens at a good time.
7990 You know, my bone to pick is that I don't see why a drama has more value to the system than Canadian Idol does or Battle of the Blades. I mean you are a small town and in that arena, you know female figure skaters and male hockey players. There is nothing more Canadian than that. I mean it's as Canadian as you can get and, yet, it doesn't qualify.
7991 I don't get it. That's all.
7992 THE CHAIRPERSON: Okay. Thank you very much all of you for your presentations and as always you are supporting Shaw very wholeheartedly and we appreciate hearing from you.
7993 MR. BRUNTON: Thank you.
7994 LE PRÉSIDENT : Madame la Secrétaire, qui est la prochaine?
7995 THE SECRETARY: I will now ask CIMA, Canadian Independent Music Association, to come to the table.
7996 THE SECRETARY: Please introduce yourselves for the record, after which you will have 10 minutes for your presentation.
7997 Thank you.
7998 MR. JOHNSTON: Thank you very much for the opportunity to address you here today.
7999 My name is Stuart Johnston, and I am here representing the national membership of the Canadian Independent Music Association. Joining me today is two of our board members, our Treasurer, Jim West and our Vice Chair, Shauna De Cartier.
8000 CIMA has represented the interests of Canada's English-language music production companies for more than 30 years.
8001 Today, CIMA has over 170 member companies including recording companies, music publishers, managers, agents and other music professionals from across the country.
8002 CIMA is primarily concerned with the continued production and commercialization of English-language Canadian music, and the support of the businesses and creative individuals who make Canada's music production industry unique in the world.
8003 We are here to speak to CTV Limited's and Corus Entertainment's group licence renewal applications.
8004 First off, we would like to note for the record, CIMA's deep appreciation of the important role that broadcasters play in Canada. Our organization and our membership enjoy a healthy working relationship with the broadcast industry, and believe that we have an important, symbiotic relationship that serves to benefit all Canadians. And we sincerely wish to support those measures which serve to strengthen both of our industries from an economic sustainability point of view.
8005 From that perspective, let me be clear. CIMA is not opposing the broadcasters' licence renewal applications in general.
8006 Rather, our members have a philosophical difference of opinion as it relates to certain aspects of their applications to alter very important and long-standing conditions of their unique licences.
8007 Embedded in the CTV application is its second request for its licence relating to its MuchMusic stations to be amended -- the same amendment which the CRTC had denied almost five months ago in its decision published on November 25, 2010.
8008 CTV Limited is again requesting to amend its Category A licence so that it can, in part, cut in half the amount of annual funding it contributes to Canada's independent music sector, through its MuchMusic and MuchMoreMusic English-language specialty service stations through its funding mechanism called MuchFACT.
8009 In addition, both CTV and Corus are requesting permission to reduce their level of commitment to play music videos, both in overall numbers and time of day and replace it with programming of more so-called lifestyle programming, movie and other programming choices.
8010 CIMA and its membership would like to express opposition for the reduction of video airplay, and respectfully requests the Commission to rule against these requests at this time.
8011 In effect, these applications, and in particular, CTV's, will serve to diminish the competitiveness and growth potential of Canada's artists and the companies that support them.
8012 This, in our opinion, not only violates the spirit of the unique licence granted to CTV Limited, but it also contradicts the CRTC's mandate in our opinion, to ensure that broadcasters and others serve the Canadian public, in part through the promotion, support and development of Canadian culture.
8013 Indeed, Canada's Broadcast Act is very clear in its objectives that our broadcasting system must and should provide financial contributions in various forms to this economically and socially important Canadian sector.
8014 We all know that the cultural sector serves as a magnet for skilled and creative people, which is a desirable and needed goal of the Canadian economy given our aging demographic, shrinking workforce and our nation's shift from a manufacturing to knowledge-based economy.
8015 Now, as CIMA noted to the Commission last June, these proposed amendments affect more than just record producers and video production companies. Artists of all kinds, both musical and cinematographic, as well as their marketing partners, their distribution networks and their fans all depend on a supply of high quality video material to enhance their businesses and their access to Canadian artistic works.
8016 That is why we believe MuchFACT is a vital and important service to the industry, our members and to helping sustain and grow Canadian culture. It provides millions of dollars annually, approximately about $4 million to hundreds of applicants, to help our artists and industry representatives produce videos, and to assist in their marketing, promotion and a more robust web presence, all with the goal to help the sector grow and compete nationally and internationally.
8017 In fact, the mandated contributions that MuchMusic is required to make to MuchFact are not intended to solely create a library of content that is commensurate with MuchMusic's obligations to air Canadian videos.
8018 Nor is that funding contribution intended to finance a catalogue of music videos for its exclusive use.
8019 These contributions are intended to provide an archive of music videos that all Canadians can access and view through a number of vehicles, no matter what the programming requirements or intentions of MuchMusic may be.
8020 Those in the industry can tell you that some music videos are incredibly expensive to produce while others can be made for less than $10,000.
8021 Unfortunately, the growing reality is that there is an increasing number of acts for whom videos are not produced simply because they can no longer afford it.
8022 The fact of the matter is that videos are an essential promotional tool in the online sphere because of outlets like YouTube and because many websites will embed the content, including radio stations, blogs, music magazines, et cetera.
8023 And while MuchMusic, for example, is intent on reducing its video play, there are other digital TV offerings dedicated to music, like AUX.TV here in Canada.
8024 Now, as an aside, the Commission ruled against AUX.TV's application to increase its video airtime in Decision 2011-83 rendered on February the 10th. The Commission determined that granting AUX.TV the right to air more videos "could permit the service to become directly competitive with the Category A service MuchMusic."
8025 We fail to see how the Commission could deny AUX.TV's application, citing in part the uniqueness of the Category A licence, and then two months later be in the position to potentially reduce or amend those very same licence conditions.
8026 The bottom line for us is that MuchMusic enjoys a privileged position with respect to its genre of programming. For this exclusivity, CTV is asked to contribute funding for the production of videos for the public good, not solely for its programming supply and catalogue.
8027 That is why the funding mechanism is called MuchFACT, as in the "Foundation to Assist Canadian Talent," and not "MuchMusic programming."
8028 CTV's ambition to cut in half its mandated contributions means that over $2 million a year or approximately $10 million over a five-year life of a renewed licence will no longer be available to Canadian music artists or the independent music industry.
8029 Such a dramatic decline in funding will directly and adversely affect the businesses of many of our member companies, especially those which produce sound recordings.
8030 We are extremely concerned that this application, if granted, will mean that fewer artists will be able to present their works to the Canadian public in video form.
8031 This will be a substantial loss for Canadians, for the artists and for the companies and professionals working in the sector.
8032 Indeed, when one considers the ongoing challenges that our sector continues to face, such as the reality of dramatically declining revenues resulting from illegal downloading -- global analysis states that as much as 19 out of 20 digital music downloads are illegal; dramatically shifting business models; reductions in funding resulting in part from the Commission's Decision 2010-499 that diverted much needed funds from FACTOR and MUSICACTION; then CTV's proposal to remove an additional and substantial amount of dollars from the sector, in our respectful view, must and should be denied again by the Commission.
8033 CTV's application to amend its licence to create more space for lifestyle programming and other format changes will only serve to duplicate its MTV service, a move that CTV maintained would not happen when it originally acquired CHUM.
8034 Certainly, CTV's proposed licence amendments seem at odds with that previous commitment.
8035 Our concern is multifaceted:
8036 - that MuchMusic will quickly evolve into a second MTV;
8037 - the station's much-lauded diversity will dramatically diminish; and
8038 - the public exposure and financial support of our Canadian artists will fall victim to an ever-increasing presence of lifestyle programming.
8039 It is our opinion that CTV's amendments to its condition of licence also run contrary to the Commission's new framework for group-based licensing of television services.
8040 In Broadcasting Regulatory Policy 2010-167, it is the Commission's views that:
"While providing greater flexibility to television services, this new framework will also permit the Commission to ensure continued support for the creation of Canadian programming, particularly in categories that continue to be under-represented in the Canadian broadcasting system."
8041 We fail to see how CTV's proposed amendments meet the spirit and intent of the Commission's regulatory policy.
8042 CIMA was pleased by the Commission's views as expressed in your Decision 2010-875, in which it stated that:
"The Commission considers that the proposed amendments to MuchMusic's nature of service would be significant enough to call into question the integrity of the Category A licensing framework."
8043 And further:
"The proposed amendments ... would have an impact on its nature of service."
8044 You had again cited this concern in your aforementioned judgement against AUX.TV.
8045 We hope that the Commission again comes to these conclusions when it deliberates on CTV's latest renewal application.
8046 In conclusion, we would like to reiterate for the benefit of the Canadian music industry as a whole that we are respectfully requesting that the Commission deny the two requests to reduce video airplay on CTV and Corus Entertainment stations and that you deny CTV's proposed amendment to reduce its financial contributions to MuchFACT and keep the rates at 7 per cent and 5 per cent.
8047 As noted, removing $2 million a year from an already struggling music sector would do irreparable damage to Canadian cultural industries as a whole.
8048 Thank you very much for this opportunity and we would welcome any questions that you may have. Thank you.
8049 THE CHAIRPERSON: Thank you.
8050 Educate me a bit. How does MuchFACT work? Does it work basically as the CMF but just for music videos?
8051 MR. JOHNSTON: Do you want to do it, Jim?
8052 MR. WEST: So how MuchFACT as a board will get together and disseminate the money; is that what you are asking? I'm trying to --
8053 THE CHAIRPERSON: It's obviously a fund to finance music videos. That much I understand, but who can access it, what are the conditions, et cetera?
8054 MR. WEST: The rules and regs for that. Well, anybody can put an application that has a -- I don't even know if it's necessary to have a track record. You can apply with a single, generally a new single coming out if the artist had previous legs, say, make some sort of noise in the industry.
8055 THE CHAIRPERSON: Do you need a tie-in with a broadcaster like you do when you --
8056 MR. WEST: No, not at all.
8057 THE CHAIRPERSON: No. So any --
8058 MR. WEST: Anyone can apply, yes.
8059 THE CHAIRPERSON: Okay. And then obviously you have some principles on the basis of which you fund it.
8060 And the artist who produces is the sole owner of the rights to that video or is there some payback to the fund or anything like that?
8061 MR. WEST: No, not for that. It's a straight grant for the video and it's usually produced by not the artist themselves but an outside video production company.
8062 MR. JOHNSTON: And the fund is not strictly just for videos too.
8063 It is also to enhance the web presence of the artist or the label -- mostly the artist.
8064 It is also to contribute money towards their marketing material, sort of their calling card, their business card, in which they can, you know, market themselves.
8065 So it's more than just strictly a video that needs airplay on television.
8066 THE CHAIRPERSON: So if we acceded to CTV's and Corus' request and in effect we take their money out of the fund and allow them to spend it on their own CPE, that would be the net effect?
8067 MR. JOHNSTON: Correct, yes.
8068 THE CHAIRPERSON: I am not surprised you are opposed to it.
8069 Now, tell me, the other part, the change of licences, we had them here and they made an elaborate plea that the audience is changing, that MuchMusic in its time was a wonderful idea, but the audience has moved, they have changed their age, they have their shows, et cetera, and so therefore, the changes in their terms of licence that they won't are to allow them to move as their audience grows and serve them better.
8070 As always, part of it is truth, part of it is spinning. Help me to discern which is which.
8071 Because nobody can deny that the audience tastes have changed. The Boomers have aged, so there will be a different appeal.
8072 And also, they said that basically the video, which used to be the number one promotion, has largely been replaced by the Internet.
8073 MR. JOHNSTON: Well, I think many of the other speakers today sort of addressed this in the sense that the medium itself is not really a question, it's the content.
8074 MuchMusic still needs to deliver its content whether it has its online presence or it's through the traditional medium on television. And it is in fact growing its online presence. So in fact their programming is being broadcast in a multitude of vehicles.
8075 So in our mind, it doesn't really matter what vehicle they are using, they still have a licence to broadcast a certain definition of music and other content as defined by their licence, regardless of the medium.
8076 THE CHAIRPERSON: They were here before us and told us, for instance, that rather than doing pure videos, music videos, for instance, we do a film about a musician, about an artist. That is extremely popular and they can't do that under their present licence.
8077 But in effect they feel they want to broaden it and not only just about a musician but going beyond that and that's why they have to move in what they call lifestyle.
8078 MR. JOHNSTON: Well, showing "Grease," as an example, might in fact be defined as one version of a lifestyle programming, but I don't think that they would stop there.
8079 So what in fact is lifestyle programming and how in fact does that really address the need for protection Canadian content?
8080 So yes, they can show "Grease," which is an American film and it's a music video or a music movie, but that does nothing to support my members and it does nothing to put money back into the system in order to grow the grassroots of the Canadian independent music industry in Canada.
8081 THE CHAIRPERSON: And this decision on AUX.TV which you are citing back to me, you said we denied them to go further into it because it would undercut MuchMusic, and now, MuchMusic wants to shed the very protection that we said they needed.
8082 MR. JOHNSTON: Correct.
8083 THE CHAIRPERSON: So, as a corollary, if we accepted MuchMusic's definition, which you don't want us to do, I appreciate that, but if we did, we should then turn around and say, AUX, by the way, you can have more videos; is that where you are going?
8084 MR. JOHNSTON: Well, we would not complain to have a multitude of vehicles showing videos and music. Absolutely.
8085 But then again, you might want to look at the definition of the Category A licence and maybe grant that to AUX.TV as well, if they so in fact wish, or other applicants as you go down the road.
8086 THE CHAIRPERSON: So essentially you say turn down both requests in terms of the nature of service and also the contribution and basically any changes to the category of licence, deal with that in two years when they come up for renewal, but not as part of this licence renewal?
8087 MR. JOHNSTON: Correct.
8088 THE CHAIRPERSON: Okay, that is pretty clear and straightforward.
8089 Do any of my colleagues have any questions? Rita? Rita, did you say you --
8090 COMMISSIONER CUGINI: No.
8091 THE CHAIRPERSON: No. Okay.
8092 Well, thank you very much. We appreciate your coming here and explaining your position to us. I am glad I now understand more about how video FACT, which I didn't before.
8093 MR. JOHNSTON: Thank you very much.
8094 LE PRÉSIDENT : Madame la Secrétaire?
8095 THE SECRETARY: That's it. This completes Phase II of this proceeding, which is the Interveners' Phase.
8096 So tomorrow will be the Reply Phase.
8097 THE CHAIRPERSON: And we start tomorrow at 9:00 a.m., I assume?
8098 THE SECRETARY: 9:00 a.m.
--- Whereupon the hearing adjourned at 1442, to resume on Thursday, April 14, 2011 at 0900
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