TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
APPLICATIONS FOR LICENCES TO OPERATE NEW PAY AND SPECIALTY
SERVICES FOR DIGITAL DISTRIBUTION / DEMANDES DE LICENCES
VISANT LA DISTRIBUTION NUMÉRIQUE DE NOUVEAUX SERVICES DE
TÉLÉVISION SPÉCIALISÉE ET PAYANTE
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 23, 2000 le 23 août 2000
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
However, the aforementioned publication is the recorded
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Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
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Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Applications for Licences to operate New Pay and Specialty
Services for Digital Distribution / Demandes de licences
visant la distribution numérique de nouveaux services de
télévision spécialisée et payante
BEFORE / DEVANT:
Françoise Bertrand Chairperson of the
Commission / Présidente
Andrée Wylie Chairperson / Présidente
Jean-Marc Demers Commissioner / Conseiller
Ronald Williams Commissioner / Conseiller
Martha Wilson Commissioner / Conseillère
ALSO PRESENT / AUSSI PRÉSENTS:
Peter Cussons Hearing Manager
Secretary / Gérant de
l'audience et secrétaire
Alastair Stewart Legal Counsel /
Peter McCallum Legal Counsel /
HELD AT: TENUE À:
Conference Centre Centre de Conférences
Outaouais Room Salle Outaouais
Hull, Quebec Hull (Québec)
August 23, 2000 le 23 août 2000
TABLE OF CONTENTS / TABLE DES MATIÈRES
PRÉSENTATION PAR / PRESENTATION PAR
CORUS ENTERTAINMENT 2301
PRÉSENTATION PAR / PRESENTATION PAR
SALTER STREET FILMS LIMITED (OBCI/SDEC) 2459
Hull, Quebec / Hull (Québec)
--- Upon resuming on Wednesday, August 23, 2000
at 0830 / L'audience reprend le mercredi
23 aôut 2000 à 0830
18130 THE CHAIRPERSON: Good morning and welcome to
the eighth day of our hearing. Bonjour et bienvenue à la huitième journée de
18131 Monsieur le Secrétaire, s'il vous plaît. Mr.
18132 MR. CUSSONS: Thank you, Madam
18133 Good morning, everyone.
18134 We will now hear six applications by Corus
Entertainment for new Category 1 services. This means of course that Corus will
have 45 minutes to make its presentation.
18135 These six services will be known as CHROME,
Booknet, Discovery Travel & Adventure, Land & Sea, Parent TV
Incorporated, and The Canadian Documentary Channel.
18136 We have Mr. Cassaday and his
18137 Good morning, sir.
PRESENTATION / PRÉSENTATION
18138 MR. CASSADAY: Good morning.
18139 Good morning, Madam Chairperson, and
18140 My name is John Cassaday, President and Chief
Executive Officer of Corus Entertainment.
18141 THE CHAIRPERSON: Hello.
18142 MR. CASSADAY: We would like to take a few
minutes to introduce our panel before commencing with our opening
18143 Joining me today is a diverse team of
experienced and dedicated individuals.
18144 From Corus, and beginning on my right, they
are: Paul Robertson, who is President of Corus Television; Kathleen McNair,
Vice-President, Regulatory Affairs; and, Vicki Dalziel, General Manager of
Country Music Television. To my left are: Susan Ross, General Manager, Treehouse
TV; and, Sheldon Teicher, Vice-President, Business Development.
18145 At the table behind, beginning on my right
are: Jamie Haggarty, Vice-President, Finance; Karen Gifford, Senior Manager,
Programming, YTV; John Whish, Director of Operations, YTV; Steve Rolufs,
Director, Corus Interactive; Andrew Eddy, Vice-President, Affiliate
18146 Also with us is Kaan Yigit, Partner,
Solutions Research Group.
18147 At the side table, representing our partners,
and beginning at the near end are: Scott Hollander, Vice-President, Marketing,
Discovery Networks; Rex Recka, Vice-President, Programming, Discovery Networks;
Kelly Bray, Vice-President, Business Affairs, Salter Street Films; Laszlo Barna,
President, Barna-Alper Productions; Sandra Macdonald, Chairperson, National Film
Board of Canada; Marc Starowicz, Executive Producer Television, CBC; Jane
Chalmers, Prairie Regional Director, CBC; Michael Hirsh, CEO, Nelvana; and,
Valerie Hussey, President and CEO, Kids Can Press.
18148 It is indeed a pleasure to appear before you
today in the company of such impressive partners, partners who share our
commitment to the creation and exhibition of quality Canadian programming,
partners who share our belief in Canadian programming, and partners who will
work with us to bring six new, distinct and compelling Category 1 services to
18149 CBC, Discovery Networks, The National Film
Board of Canada, Nelvana, Salter Street Films, and Barna-Alper
Productions -- one of Canada's leading independent documentary
producers -- this is truly a blue-chip partner roster and we think
indicative of the willingness of Corus to be a new collaborative and
constructive force in Canadian broadcasting.
18150 We sincerely hope that by day's end you will
share our enthusiasm for our digital applications. The licensing of digital
channels is a fundamental turning point in our industry, an event that we have
been waiting for with great anticipation for some time.
18151 We commend the Commission on the development
of an appropriate framework to foster the introduction of digital programming
services. Now is the right time to licence attractive Canadian digital
programming services that will help drive the roll-out of digital television and
foster further innovation and creativity in our industry.
18152 Digital television is a reality. There is no
question that it will provide Canadian viewers with increased choice, combined
with high quality sound and pictures, all of it bundled with exciting
18153 Digital services will ensure that Canadians
see and hear Canadian voices and stories in an increasingly global and
competitive marketplace -- voices and stories told from different
perspectives that reflect the country's rich cultural and regional
18154 Commissioners, the digital world will provide
opportunities, but also unique challenges: licensees must have the capability to
invest substantial resources in Canadian programming and marketing; and then,
further investments will have to be made to develop exciting new interactive
18155 The revenue at the outset will be quite
limited and applicants must be prepared to stay the course.
18156 Corus has the experience, expertise and
resources necessary to play an important role in the digital future. We are a
strong Canadian company with a clear compelling vision of where we are going and
how we are going to get there.
18157 MR. ROBERTSON: We are very proud of our
Category 1 applications. We undertook a rigorous selection process to ensure
that each application was worthy of a Category 1 licence. In particular, each
concept has proven to be highly attractive based on qualitative and quantitative
18158 During the process we were thrilled to find
like-minded partners who shared our vision and enthusiasm for these services and
who we recognized could help turn our concepts into reality.
18159 There are fundamental themes that are evident
in each of the Corus applications before you: diverse program offerings, strong
Canadian content, commitment to the independent production community, and
collaboration through partnership.
18160 The applications before you reflect a
philosophy that independent producers add diversity and creativity to our
services and to the broadcasting system as a whole. As a reflection of this
belief, we have: set aside envelopes for arm's-length production in all our
services, we have pushed hard to enable new independent production in the first
year, and we have applied safeguards to enshrine these
18161 Furthermore, every application before you
surpasses the 50 per cent Canadian content requirement by year seven as laid out
in the Call.
18162 Although it will take time for digital
penetration to grow, we did not use this as an excuse to deliver low levels of
content in the early years. We believe Category 1 services should deliver
18163 You will see reflected in these applications
a great deal of collaboration through partnership. At Corus, we believe that
collaboration with all sectors of the industry is essential to ensure that we
enhance the broadcasting system in a relatively small country with scarce
18164 This commitment to collaboration has led us
to partner with the outstanding group of organizations that are with us
18165 Our applications have been enriched through
debate, stimulating ideas and general good humour.
18166 We firmly believe that these services will
stimulate digital television using full-featured and interactive digital
18167 At Corus, we are passionate about
interactivity. Our Web site content is totally interwoven into our television
18168 Our proposed services are particularly well
suited to the digital platform and the innovative applications it
18169 Over the course of the next few minutes, we
will provide you with an insight into the nature, depth and breadth of each of
our six offerings.
18170 They are: Booknet, Land & Sea, Parent TV,
The Canadian Documentary Channel, Discovery Travel & Adventure Canada, and
18171 To begin, Susan Ross will present Booknet,
and Valerie Hussey of Kids Can Press will join her in her
18172 MS ROSS: Thank you.
18173 Madam Chairperson and Commissioners, Booknet
will build on Canadians' love of books.
18174 Our vision is for a service that will appeal
to Canadian families and increase exposure and promotion for Canadian books and
18175 It is a specialty service dedicated to
exhibiting programming based on published works, bringing the written word to
life for all Canadians.
18176 We would like to share a sample of Booknet
--- Video presentation / Présentation vidéo
18177 MS ROSS: Booknet will give prominence to
Canadian content, with 75 per cent of our schedule devoted to Canadian
programs by the end of the licence term.
18178 Over the 7 year licence term, Booknet will
expend 40 per cent of revenues on Canadian programs.
18179 We will spend over $20 million on Canadian
programs over this period.
18180 And we have put safeguards in place to ensure
arm's length producers have a significant opportunity to
18181 We are delighted to partner with Nelvana and
Kids Can Press on Booknet.
18182 Nelvana is well-respected worldwide as a
creator of outstanding animation. Through its ownership of Kids Can Press and
Klutz Books, Nelvana is now a major independent publisher in North
18183 MS HUSSEY: Thank you, Susan.
18184 Book publishing is at the heart of Booknet.
For almost 30 years Kids Can Press has been a part of the dynamic growth of the
Canadian publishing industry.
18185 For as many years books have been life.
Whether publishing educational books or trade books for reading pleasure, I have
been committed to the development of an indigenous Canadian
18186 From the beginning of Kids Can, when there
was a staff of one and sales of $17,000 to today when Kids Can is one of
Canada's most successful publishers, I have believed that our success would be
best achieved in a dynamic and growing environment. My involvement with the
industry, whether participating in the development of cultural policy, teaching
or lobbying, reflected that belief and has been steadfast.
18187 The Canadian publishing community is small.
It is an industry that has delivered cultural and regional diversity, against
all odds. Statistically, our population is too small to sustain a publishing
industry. And yet, today publishing is one of Canada's most successful cultural
18188 Our national literature reflects the Canadian
experience in all its diversity and richness. It is through our stories that we
know ourselves as a nation. And through writers like Michael Ondatjee, Carol
Shields, Bonnie Burnard, Josef Skvorecky or Margaret Atwood that the world knows
18189 Statistics show that 70 per cent of
Canadians purchased a book in the last six months. Sales of Canadian authored
titles reached $700 million last year, approximately 30 per cent of
all trade sales in the country. Canadian-owned publishers produced approximately
80 per cent of those Canadian authored titles.
18190 It takes Canadians to teach our children
about our own history. No one else is going to publish a book on Canadian Prime
Ministers or The Group of Seven, or an overview of Canada for children. We can
do it, and when we do it we get it right. This is for us to do. Kids Can Press
has excelled in telling Canadians the story of their own history, as well as
giving birth to one of the most successful book characters of the decade --
18191 But nothing reaches the mass public as
effectively as television. So what happens when a channel is conceived that
combines the very best of our writing, in all its diversity, with the talent and
vision of our television industry? We have Booknet, a channel which
18192 Enrich and strengthen the cultural fabric of
18193 Will give prominence to Canadian
18194 Will feature Canadian authors and books
across a range of children's and adult programs;
18195 Will encourage, promote and strengthen family
18196 Will enrich the television viewer's
experience through innovative, interactive Web sites.
18197 Booknet is about television for Canadians, by
Canadians, about Canadians. It is about our voice as a nation, expressed in our
18198 MR. ROBERTSON: Vicki Dalziel will now present
Land & Sea to you along with Jane Chalmers of the Canadian Broadcasting
18199 MS DALZIEL: Land & Sea is the voice of
rural Canadians, a channel dedicated to their viewpoints and spirit. This
application represents an historic opportunity to provide a vital and
distinctive specialty service to a large, under-served population of Canada,
18200 We would like to share with you a video
example of the service we envision.
--- Video presentation / Présentation vidéo
18201 MS DALZIEL: We know firsthand that rural
Canadians need and want their own channel. That is the headline from the letters
of support that have poured in from every sector of our rural
18202 Victor Young, CEO of Fishery Products
"Much of Canada's TV today is urban oriented ..., it results in a growing
lack of knowledge about the continued importance of rural life, both social and
economic, across our
18203 Rural Canadians have told us they are hungry
for television that informs, educates and entertains them from a rural
18204 MS CHALMERS: The core strength of this
service is information programming, providing daily original news coverage of
rural industries and issues in depth not currently found in the Canadian
broadcast system. It will report on commodity markets, provide tailored weather
and climate information, plus offer a platform for national discussion and
18205 This programming is all about perspective and
18206 Take a few minutes to reflect on a typical
national news program. You will hear reports like this:
18207 "More good news at the grocery counter.
Statistics show consumers today are paying less for a loaf of
18208 Or, "Get out the sun tan oil." Another
glorious day that will shatter record highs."
18209 From the urban perspective that is all good
news. On the farm, where rising costs and dropping grain prices are making it
harder to stay in business, low bread prices are not good news, and quite often
"happy-talk" weather forecasts for the city may in fact signal a devastating
drought in the country.
18210 These are simplified examples of how the
rural perspective, at times, is ignored or clearly
18211 MS DALZIEL: Our rich program schedule is
possible because of the unique partnership of Corus and CBC. Land & Sea will
complement CBC's extensive news infrastructure and commitment with a national
service for rural Canadians. Land & Sea will include current affairs,
documentaries and educational programs that will inform and enlighten. Comedy,
variety, sports and drama that will entertain. All programs will emphasize rural
themes and promise to embrace and respect rural values and
18212 We propose a strong commitment towards
Canadian programming beginning at minimum of 50 per cent and increasing to
60 per cent by the end of the license term.
18213 Land & Sea will invest over
$28 million in Canadian content over the license term.
18214 We will expend, at a minimum, 43 per
cent of the previous broadcast year's revenues on Canadian
18215 In a letter of support from Senator Sharon
Carstairs, she states:
"One of the great advantages of new technology is that people of common
interest can be linked
18216 We agree.
18217 If this connection is to be made, if this
vision is to be realized, if rural Canadians are meant to have a home in the
digital broadcast spectrum, now is their time.
18218 MR. ROBERTSON: Our third specialty service is
Parent TV. Susan Ross will describe this service to you.
18219 MS ROSS: Thank you.
18220 Parent TV is devoted to providing information
about parenting, child development and child care directed to parents,
grandparents and caregivers.
18221 It is a natural extension of our successful
children's services, YTV and Treehouse, and our commitment to Canadian children.
In addition, this team has experience in producing and broadcasting programs for
18222 Out of 10,000 available hours of television
weekly, we found on average less that one half of 1 per cent are devoted to
parenting programs. Canadian parents, and perhaps grandparents, looking for help
or advice on teen self-image, homework hassles or toddler tantrums have no
dedicated channel to turn to. In other words, 5.6 million Canadian parents
represent a huge and under-served group.
18223 Television is the only media source that can
offer the faces and voices that share the ideas and experiences of other
parents. Parents need to know they are not alone.
18224 Let me show you Parent TV.
--- Video presentation / Présentation vidéo
18225 MS ROSS: Parent TV will give prominence to
Canadian programs. In year one, 55 per cent of the schedule will be devoted to
Canadian content, rising to 65 per cent at the end of the licence
18226 Over the seven year licence term, Parent TV
will expend 38 per cent of revenues on Canadian programs; and, we will spend
$12.9 million on original independent production. That represents 85 per
cent of our total Canadian spending over the seven-year term.
18227 Parent TV has received tremendous support
from educators, child psychologists, family resource centres and parent support
services. In consumer research, 65 per cent of all respondents, not just
parents, support the Parent TV concept.
18228 Good parenting helps children reach their
full potential, but being a parent today is difficult and challenging. Parent TV
is not about drama or movies. It will inform Canadian parents by providing
programming of interest to them when they want it and when they need it. Busy,
time-pressed parents cannot be tied to appointment viewing.
18229 Parent TV's vision, to positively affect
parenting in Canada, can and will make a difference to parents and children. It
will be a valuable contribution to the Canadian broadcasting
18230 MR. ROBERTSON: John Cassaday will now
describe the Canadian Documentary Channel. John is joined by Marc Starowicz of
CBC, Sandra Macdonald of the National Film Board of Canada and Laszlo Barna of
18231 MR. CASSADAY: The Canadian Documentary
Channel will exhibit the enormous depth and diversity of Canadian documentary
18232 The documentary genre meets the obligations
of the Broadcasting Act by providing a broad diversity of subject material and
point of view. The genre lends itself fully to downstream interactive
applications as viewers seek additional information to broaden their
appreciation of an issue or join in the debate. Finally, Canadians are
internationally acclaimed for our documentary programs and this genre deserves
more dedicated shelf space.
18233 Here is a look at the Canadian Documentary
--- Video presentation / Présentation vidéo
18234 MR. CASSADAY: Commissioners, the Canadian
Documentary Channel is the strongest of the applications in this
18235 We will have a starting exhibition level of
60 per cent Canadian content rising to 66 per cent by the end of our first
18236 We will expend at least 47 per cent of
revenue on Canadian programming over the licence term.
18237 We will commission 26 new hours of
programming a year from arm's length independent producers, totalling close to
$5 million during the initial term; and we will provide a minimum of 50 per cent
of our Canadian licensing and acquisition budget to independent
18238 The Canadian Documentary Channel is the
result of an exciting collaboration between CBC, Corus, the NFB and four
independent documentary producers who are industry leaders: Barna-Alper
Productions, Ciné Nova Productions, GalaFilm and Omni Film.
18239 MR. STAROWICZ: A service dedicated to
exhibiting only documentaries and primarily Canadian documentaries is long
overdue and has tremendous appeal to Canadian audiences.
18240 We will provide an attractive service with
deep Canadian content across a range of series:
18241 One, regional documentary strands such as
Eyes Ease, which is for maritime filmmakers, Eyes West for western filmmakers,
and Cinémathèque from Canada's francophone filmmakers.
18242 Two, platforms for new voices such as
Northern Lights, covering First Nations and our northern communities, Reel
Diversity promoting cultural diversity, Director's Debut for first films and
People's Camera, a web inspired opportunity for ordinary Canadians to share
18243 Appointment viewing strands, such as the POV
series, featuring opinionated and subjective one-off independent documentaries,
and the NFB Showcase, from the award-winning library of the National Film Board,
and the CBC Screening Room, from the highly-regarded library of the Canadian
18244 What enables us to provide a much richer,
deeper and more varied schedule than others is a combination of the best of
independently produced documentaries with an unmatched archive of courageous,
thought-provoking documentaries that exist in our public institutions, the
National Film Board and the CBC.
18245 MS MACDONALD: The CBC and the NFB hold
significant ownership positions in this service. This is a key advantage for our
application given the unique position, and trusted reputation, that these two
institutions enjoy stretching back over generations of documentary filmmakers.
We appreciate the 70-plus letters of support that this application received. We
would like to quote one that might put the issue of CBC and NFB participation in
this channel into perspective. This is a quote from Bernard Zukerman, a name
that I guess will be known to everybody:
"It is unthinkable that there could be a documentary channel without CBC and
NFB involvement. These two organizations have nurtured the documentary format,
given it prominence, spawned the independent production community, and have
archival material and organizational memory to make the channel compelling
18246 MR. BARNA: As the representative of the
independent producer partners involved in this application, please understand
that we know the issues that face documentary filmmakers from across the
country. As part of the programming committee for the channel we will ensure the
needs of independent documentary filmmakers are respected. Moreover, we will
ensure that the next generation of documentary filmmakers are given a start up
through our generous and unique scholarship and bursary program.
18247 We believe the Canadian Documentary Channel
best serves the Canadian broadcast system, the Canadian community of documentary
filmmakers and the dedicated documentary audience.
18248 MR. ROBERTSON: Discovery Travel &
Adventure Canada is devoted exclusively to travel. Joining me to present this
service to you are Scott Hollander and Rex Recka of Discovery Networks
18249 Discovery Travel & Adventure Canada will
present stunning travel programming targeted to adults, satisfying their sense
of exploration and need for a dedicated outlet showcasing the sights and sounds
that Canada and the world around them has to offer.
18250 We believe that it will inspire both
travellers and non-travellers alike to explore Canada in a different light, as
they are entertained with programs such as: Best Skiing Destinations; Riding the
Rails; and Cottages and Waterways.
18251 Here is a sample of Discovery Travel &
--- Video presentation / Présentation vidéo
18252 MR. ROBERTSON: Commissioners, with Discovery
Travel & Adventure Canada we will deliver a programming schedule that will
build throughout the licence term to 55 per cent Canadian content; and, we will
expend at least 41 per cent of revenues on Canadian programming over the licence
18253 MR. HOLLANDER: The strength of the Discovery
brand will ensure that the Discovery Travel & Adventure Canada channel
receives a very high level of interest by Canadian digital
18254 Strong brands will encourage Canadians to
subscribe to digital television.
18255 According to Roper Reports Worldwide,
Discovery ranked first in unaided global awareness among all measured media
brands. As the world's foremost provider of real-world entertainment, Discovery
services are seen in 147 countries and by over 1.2 billion people
18256 Capitalizing on the unparalleled travel
programming expertise and brand equity of Discovery, Discovery Travel &
Adventure Canada will feature newly created Canadian travel programming along
with the most popular travel shows from Discovery Travel & Adventure
18257 MR. ROBERTSON: Canada is a key travel
destination. Accordingly, there is a major opportunity for Canadian produced
travel programming to find a place on other Discovery Network channels around
18258 Canada has extraordinary natural beauty that
should be shared with Canadians and with Discovery Travel viewers in other
countries. Consider: The roaring Fraser Canyon and Hell's Gate in British
Columbia; Peggy's Cover, the world's most photographed lighthouse, in Nova
Scotia; whale watching in Newfoundland and Labrador; the history, culture and
cuisine of Quebec City; Canada's vast system of magnificent national
18259 Discovery Travel & Adventure Canada is a
strong Category 1 application that will provide regional reflection and exciting
export opportunities for Canadian produced programs.
18260 Sheldon Teicher will now describe CHROME.
Kelly Bray of Salter Street Films joins him.
18261 MR. TEICHER: CHROME will fulfil a significant
gap in the current programming spectrum.
18262 The target audience of CHROME is comprised of
almost six million Canadian men 18 to 49 who do not have a channel designed
specifically for their interests, aspirations and lifestyles.
18263 CHROME is a service created especially for
men -- in essence "A Canadian Man's Guide to Modern
18264 CHROME will provide a wide variety of
lifestyle, informational and entertainment-based programming. Men will turn to
CHROME for programs on health and fitness, career and business, travel and
adventure, fashion, sexuality, music, sports, gadgets, gear and
18265 We will provide a forum for social, political
and pop cultural discussion and will feature topics such as "Navigating the
Pitfalls of Office Politics", "Opening an On-Line Investment Account" and "Being
a Better Father" -- all content that can't be found anywhere else and
presented from a unique "guys" perspective.
18266 Let us have a look.
--- Video presentation / Présentation vidéo
18267 MR. TEICHER: Throughout the licence term
CHROME will make a significant contribution to Canadian
18268 CHROME will achieve a minimum Canadian
content level of 65 per cent by the end of the licence term -- the
highest percentage of any of the proposed men's specialty
18269 CHROME will spend over $21 million and
commit to expend 40 per cent of revenues on Canadian programming over the
licence term -- again, the highest percentage of any of the proposed men's
18270 And we will commit at least 50 per cent
of Canadian drama expenditures to independent producers who are arm's length
from the service.
18271 From our research, whether over the phone, on
the street or in focus groups, one this was clear: Canadian men want CHROME.
This has been overwhelmingly reflected in both our qualitative and quantitative
18272 The incredible popularity in Canada of
magazines from England and the United States, such as GQ, Men's Health, Maxim
and Esquire, is further evidence of our target audiences interest in this type
of information. But Canadian men want, require and deserve this information from
a Canadian perspective.
18273 In addition, with CHROME's target audience
being early adopters of new technology and very interested in interactive
content, CHROME will be a key offering in the successful roll-out of digital
specialty services into the marketplace.
18274 We are delighted to partner with Salter
Street Films on CHROME. Salter Street is one of Canada's leading producers of
edgy, humorous, and smart programming. Salter Street has a great track record
creating engaging programs with strong appeal to men aged 18 to 49 from "Made in
Canada" to "Lexx", from "Michael Moore's The Awful Truth" to "This Hour Has
22 Minutes". In addition, Salter Street has extensive new media experience
in developing innovative web content that will be a valuable resource to
18275 MS BRAY: Salter Street is thrilled about the
opportunity of partnering with Corus and committing our resources to what we
feel is the strongest application for a men's channel.
18276 Being a recognized producer of Canadian
programming for 20 years has allowed us to develop a reputation and
expertise at producing niche programming in such areas as comedy, science
fiction and variety. The CHROME service focuses on niche programming for a
specific niche market and we are experienced producers of programming
particularly appealing to this niche. Jointly with Corus and the independent
production community we will create exciting, original programming for
18277 Some potential programs
18278 "Search for the Holy Ale" -- a
globetrotting hunt pairing the world's finest brews with eclectic
18279 "Hot Topics" -- a Canadian version of
"Politically Incorrect" which will provide a forum for debate of current issues
from a man's point of view.
18280 "Guy Rules" -- a wildly humorous
interactive game show where guys compete to prove their
18281 "THE HTML Files" -- a sitcom set at a
Canadian Internet start-up focusing on a group of young entrepreneurs who are
struggling to reach a billion dollar market cap and find time to get a
18282 As you can see, CHROME will present
programming unlike that seen anywhere else on television. We hope that the
Commission will lend its support to address the needs of this large under-served
segment of Canadian society. Together with Corus we look forward to bringing
this channel to Canadian men.
18283 MR. CASSADAY: As you have seen and heard from
our presentation, we have a number of exciting and compelling specialty services
that will fill programming voids for Canadian viewers and help drive the
development of digital television.
18284 Our digital services will reflect fundamental
18285 Diverse programming
18286 Strong Canadian content;
18287 Commitment to independent production;
18288 A collaboration through
18289 Our partnership strategy was designed to be
inclusive. We have ensured a vibrant programming vision through this approach.
In our view, such collaboration dramatically increases the likelihood of success
for these digital services. We will be able to draw upon the expertise and
creative resources of our partners to ensure that each digital offering provides
the best possible programming.
18290 We intend to maximize the creativity and
effectiveness of the digital medium by acting as a leader and champion for
creators of interactive media, and by offering the best set of features to our
18291 Corus will honour the commitments required to
ensure the success of its services, even in the early stages of digital
18292 We are prepared to stay the course and work
to ensure that digital television becomes a true success.
18293 This concludes our presentation. We would be
pleased to answer any of your questions.
18294 THE CHAIRPERSON: Thank you,
Mr. Cassaday, Mr. Robertson and your colleagues.
18295 Commissioner Demers.
18296 COMMISSIONER DEMERS: Good morning,
Mr. Cassaday, good morning to the Corus team and to Corus
18297 I will follow the same pattern as we have
since the beginning and no doubt some and most of the questions will not be a
surprise to your team. I will follow the pattern.
18298 As you know, the first question we ask
concerns criteria. I understand from your oral presentation that you did
exercise a choice in deciding which application you would bring to the attention
of the Commission, so this may be interesting for us since you have already
exercised some discrimination in setting up criteria for you.
18299 You will be maybe an inspiration for the
Commission in discussing what its criteria should be and the accent it should
give to some of these criteria it has published already in the public
18300 So criteria. Which ones do Corus think the
Commission should emphasize? Which ones should be first on the list when the
Commission deliberates on these applications?
18301 MR. CASSADAY: Well, we will do our best to
inspire the process.
18302 In terms of thinking about the process, we
think that the first premise that the Commission should consider is that the
development, the successful development of digital is good for everyone in the
industry, so if we can use this process as a means of ensuring the success of
the deployment of digital, whether it is through satellite or through cable
set-top boxes, that will create opportunities for all
18303 So we feel the first important consideration
is that we accept the premise that if we licence the top services, that they
will have the greatest opportunity of stimulating the development of
18304 The second element that we would suggest the
Commission consider in their deliberations is to move to the area of genre or
category. So, for example, when you go to a grocery store -- and I know its
always expected that I will use my grocery analogies -- but you go to a
grocery store and you are trying to decide what to have for dinner, you begin a
hierarchy of choice and you decide, you know: Am I going to go carbohydrate? Am
I going to go protein? If I go protein, am I going to go fish or poultry? I
think the same kind of decision has to be made here.
18305 What we would encourage the Commission to do
is to think about genres first. We think that the important consideration here
is: What are the genres or categories that are going to be the most appealing
and create a thought on the part of viewers that "I really want to get these
channels and to get these channels I have to move to digital".
18306 So once that decision is made, then we go to
the question of: What is the appropriate service within that
18307 Now it comes back to using your criteria in
the most helpful way possible. You laid out in your call a number of
considerations: Cancon of at least 50 per cent, proven market demand,
program diversity, affordability, the strength of a business plan and innovation
in the use of digital.
18308 Clearly all of these things are important,
but as in any strategic decision some things are more important than
18309 What we would encourage in the final decision
as to which particular service that we want to select in the category is to put
a heavy weighting on three areas: Cancon, market demand and program diversity.
Our personal recommendation would be that it be something to the tune of
50 per cent in terms of program diversity, 25 per cent Cancon and
25 per cent market demand.
18310 The reason for that is that I think
ultimately what we want to address here is that old cliché, you know: 200
channels and nothing on. If we can provide to viewers opportunities to see
programs that they could not ordinarily see, then we have been successful in
18311 So if you have a service that has clearly
demonstrated that they are going to be showing something to Canadian viewers
that they would not see otherwise, that is a winner.
18312 We think that everybody has done a pretty
good job in stepping up to the plate in terms of Canadian content. I don't think
anyone here was negotiating less than the level that you had asked for, so that
is pretty much, I think, a par for everybody on this one.
18313 Then the research to demonstrate that they
have made the commitment to go out and prove to you and to others that this is
demonstrably a viable service would be the other consideration.
18314 We have discounted, to some degree, the other
aspects because, quite frankly, if somebody has a faulty business plan I think
you have set the environment up here that this is going to be more open-market.
If you are going to fail, you are going to fail. That's up to
18315 In terms of affordability, we could address
this issue of affordability forever. We are of the view that the big element in
the equation here is going to be value. So I think licensing 10 inexpensive
services would not be the way to go. I think what we want to do is we want to
license 10 great services.
18316 So that would be our thought.
18317 I don't know if any of my colleagues would
like to add.
18318 COMMISSIONER DEMERS: Thank you,
18319 Maybe my colleagues at one point will have a
few more questions on that point. That would be what I would
18320 Implementation of these services after they
have been licensed. Should the Commission impose a minimum time by which
Category 1 licensees must implement services?
18321 MR. ROBERTSON: Yes. We believe that all the
services and the stakeholders in the industry have to work together to make the
most powerful launch of digital as possible, and because of that we all bear
responsibility to be there at the right time with the services. The date that is
being suggested in the industry seems to be September 2001. Clearly, we would be
ready to go at that date or in advance of that date.
18322 With respect to your specific question, if a
service cannot be ready to go on that date, we think that they should have to
apply to the CRTC for an extension and then the CRTC can decide at that time
whether indeed that extension would be granted or denied. That would put the
proper focus on making sure that everybody is ready to go when the time is
right. That's going to make the difference.
18323 COMMISSIONER DEMERS: Is the understanding or
the agreement with the distributor important in light of a
18324 MR. ROBERTSON: With respect to the
arrangements that are made with the distributors, often what happens is that
there is a high level of debate and to-ing and fro-ing that happens right up
until -- right before the curtain goes up, has been our historical
experience. So while the idea of perhaps trying to come to grips with what
arrangements have been made might be helpful prior to the launch, in practical
terms, it would be a very challenging thing, I think, to try to come to grips
with that much in advance of the overall launch date.
18325 I don't know if John has anything to add on
18326 COMMISSIONER DEMERS: So the industry, as we
say, the distributors and the broadcasters, they are sufficiently experienced in
that to manage to get to the point where there could be a common launch without
the intervention of the Commission?
18327 MR. CASSADAY: We believe so.
18328 We are moving into an era where entitlement
is being replaced with negotiation. I think there has been ample evidence that,
you know, while it's not going to be easy -- it's never easy to introduce a
new product, whether it's in our business or any other business. It's a
challenging exercise that requires skilful negotiation. At the end of the day,
we are living in a competitive environment where there is a realization amongst
all distributors that there are new channel opportunities available, and the
stimulus to come to a conclusion will be to remain competitive with those
18329 For example, if ExpressVu comes to a quick
decision as to which services they wish to launch and announces their plans to
introduce 20 or 30 new digital offerings, that will be a significant stimulus
for other carriers. By the same token, if in fact another carrier, whether it's
Rogers, Shaw, Vidéotron, makes a similar decision, that will serve to stimulate
18330 So what we have now in the marketplace is
vibrant competition and that vibrant competition will stimulate resolution of
these disputes. But we shouldn't expect that everyone is always going to come to
quick conclusions because demands can be unreasonably made on both sides of any
18331 COMMISSIONER DEMERS: Thank
18332 On the Category 2 services, where do you see
them in light of a common launch of Category 1s?
18333 MR. ROBERTSON: Certainly some of the Category
2 services will be ready to go and will be part of that overall launch. But we
expect the large majority of them will be waiting in the wings, hoping to find
carriage and placement down the road, working on developing the business plan,
perhaps developing partnerships between some of the like-minded folks that would
like to launch a similar service.
18334 We think there needs to be a longer time
frame available for these sort of issues to be worked out. We have discussed a
time frame somewhere in the three year range, where someone would be able to
hold a licence for that period of time while they look for opportunities to get
those services up and running. We think that's consistent with the overall
approach of a strong launch in the early going, in September 2001, if that's the
date, and then several subsequent launches of new services or waves of services
in the subsequent months and years.
18335 COMMISSIONER DEMERS: Thank
18336 Now I would like to go to the independent
production you have covered statistically, at least, in your presentation and in
your application, but speaking from a general point of view.
18337 I'm sure you have heard our discussion with
other applicants. The Commission has stated expectations or imposed conditions
of licence traditionally on producer-affiliated programming services requiring
that certain amounts of programming or minimum levels of expenditures be devoted
to supporting independent production. That's the tradition, I think. We all
agree with that.
18338 Given the challenges of the near-term digital
environment, do you think that this approach is warranted for digital services
that have some involvement or affiliation with the producer?
18339 MR. ROBERTSON: We believe very strongly that
diversity of programming is well served by a strong representation of
independent producers in the Canadian broadcasting system as a whole. Because of
that belief, we have really focused on our applications to be sure that we have
a strong voice for independence and a strong envelope that's made available for
18340 Perhaps Kathleen McNair has more to add in
terms of this point.
18341 MS McNAIR: We understand the discussion here
to be focused on access by arm's-length producers to a particular service. Since
"affiliate" is a term that's defined under corporate statutes, we have preferred
to use the term arm's length and non-arm's length. As Paul has suggested, each
of our services have been designed to provide an envelope for arm's-length
18342 Maybe I'm anticipating the next question, but
we do have a proposed definition for this issue. We would suggest that the
following definition would be appropriate for our services: that a producer
would be considered to be non-arm's length if Corus or a company controlled by
Corus owned 30 per cent or more of the voting interests of the production
18343 We would also extend the definition of
non-arm's length in respect of a particular service to any producer or
production company that owned any voting interest in that service. We would say
that any production company that is involved in any of our services, if they own
one voting share they would be considered to be non-arm's length in the
18344 COMMISSIONER DEMERS: Thank you. In fact, you
have permitted me to go along, hop along.
18345 You are in partnership of course, in
different applications, with CBC and NFB, especially on The Canadian Documentary
Channel. What provision would you employ to ensure that non-affiliated producers
would have access to The Canadian Documentary Channel's program
18346 You have touched on arm's length,
18347 MS McNAIR: Actually, I believe that there are
two safeguards we have proposed for The Documentary Channel, and anyone can
correct me if I'm wrong.
18348 One is we have put an envelope of money
together to stimulate original new Canadian documentaries. CBC, NFB and the four
independent producers who are participating in the service would not have access
to that envelope of funding.
18349 Additionally, we have committed that 50 per
cent of expenditures would go to arm's-length documentary
18350 COMMISSIONER DEMERS: Thank
18351 No doubt you would accept a condition of
licence in that sense?
18352 MS McNAIR: Yes, we would.
18353 COMMISSIONER DEMERS: Thank
18354 On interactivity you no doubt followed where
we are at at the moment in our discussions. You have made reference to enhanced
informational content in several of your applications. Could you elaborate on
18355 MR. ROBERTSON: We would be
18356 First, we were very pleased to see the amount
of focus that the CRTC has put on this issue throughout the hearing, because it
is certainly an area that we are really excited about. We have been getting our
feet wet with YTV by developing an extraordinary Web site that started about
three or four years ago and now gets about 10 million hits a week. We have been
able to advance the content there so that it really drives a high level of
18357 Through that experience, we have applied that
knowledge to development of these applications that are before you. What we
would like to do is ask Steve Rolufs to comment on our overall approach to
interactivity in the applications.
18358 ME. ROLUFS: Thank you, Paul.
18359 Just to expand on a few of the points that
Paul made, first of all -- and this was outlined in our opening remarks as
well -- our Corus interactive group is passionate about interactivity. This
is something that we have extensive proven experience in, particularly, as Paul
said, in the area of developing complementary Web sites for our services --
as he mentioned, the award-winning ytv.com site.
18360 If I may, I just want to use that site as an
example to talk about where we are today with some of our efforts, and then to
talk about where we see some of these further phases of enhanced content and
beyond and how we are preparing for that today.
18361 We are already in the business of developing
deeper, more detailed information experiences integrated with program content.
For example, on the YTV site we have show pages that our kid's audience rely
upon to come and get deeper information, deeper character information, story
information, episode synopses and media gallery.
18362 We also have experience developing rich
entertainment experiences. Earlier this summer we developed a game for Intel
that was featured exclusively on their Intel web Outfitter's site for Pentium
III owners and that was YTV's Super Sewer Scramble.
18363 We also are already in the business of
developing hybrid content. You have heard people talk about this notion of where
interactivity is integrated with webcasts or with digital video and we are in
that business today as well. We have had several concert events that we have
webcast, things such as our Cycoblast annual event, where we have taken
streaming video to the web and made it available to our
18364 We have gone a bit further than that. We have
enhanced it with added content or added experience that is bundled in with the
video signal and integrated with that.
18365 We are also very experienced in developing
and providing mechanisms for our audience to communicate back to us and give us
feedback and participate. On YTV there are continual calls to action that direct
kids to participate in our programming, to vote for favourite episodes or shows
to be shown, to participate in chats such as with Gerri Halliwell and it was
with some of these more recent chats this summer around our Cycoblast concert
that we added additional functionality with that, where rather than just give a
textual chat that is a little bit boring, we added a webcam feature to that, so
that the kids could actually see who they are chatting with. It really pumped up
the dynamic nature of the experience.
18366 So these things all speak to Corus' passion
and experience in the area of interactivity today in delivering those
18367 I would like to talk for a moment about some
of the things we are doing to prepare for tomorrow for some of these enhanced
18368 Corus is one of the few Canadian members of
ATVEF, you see that referenced throughout many of our applications. ATVEF is the
Advanced Television Enhancement Forum. What it is is a cross-industry alliance
of broadcasters, distributors, set-top box, consumer electronics manufacturers
and computer manufacturers who have all come together to define a standard and
champion the adoption of web-based technologies, common web-based technologies
that are here today for implementation on an interactive TV
18369 So the ATVEF specification, it allows for
easy deployment across disparate manufacturers' set-top boxes and also via the
web for those consumers that have these computers with television tuner cards,
where they can tune into television signals as well. ATVEF allows us to deliver
enhanced content on that platform as well.
18370 You may have heard, these are technical
specification does is defines a framework for use of those common technologies
that there is expertise in today for use on a set-top box
18371 At Corus, as we develop some of our web
products and experiences today and as we acquire some of the tools that we need
to deliver those experiences, we are always thinking in terms of compatibility
with things like ATVEF. So that when we, for instance, purchase a chat
technology that we want to implement on a site today, we want to make sure that
that technology can be repurposed down the road and that we can deliver the same
experience to our users through alternate types of media, like a set-top
18372 We encourage all distributors to look to
standards like ATVEF that utilize common web technologies. An example of one
that has is Star Choice. They have announced that in the fall of 2001 the next
generation of their set-top box will include Liberate as the middle ware which
is fully ATVEF compliant.
18373 So just to summarize this point, as a content
creator and supplier we want to develop content once and we want to be able to
easily offer it across a variety of platforms via the web.
18374 Your question was primarily around enhanced
informational content. I just want to talk for a moment about how we see that
rolling out. We see three distinct phases. I know it seems to be a moving target
and there is a lack of clarity at times as far as how this is going to roll out,
but we have really partitioned it I think into three key phases.
18375 First of all, it's the complementary Web site
phase and that's what we are in today. That we continue to be important at time
of launch and actually throughout the life of these services and that's where
you have a two box, or in some cases a two-channel solution which I will
elaborate on in a moment, where there is programming that is integrated with web
contents. There are calls to action on the air that direct viewers to the web,
to go deeper, to get additional information to participate. As I said, it can be
a two-box experience, being the television or the set-top box and the
18376 In many cases now we see that actually in the
same room, or when I say two channel what I mean by that is there is a new
generation of set-top boxes that are just about to roll out. I believe Rogers is
one of the people offering that, that offer a limited web enabled experience on
the set-top box. It is not integrated with programming. It is not in any way
completely integrated with the television experience, but allows you to flip
over to another channel and get a limited view of surfing the
18377 What we see as the next phase, and that phase
is around the time of launch of some of these services or a year from now, the
fall of 2001, is the enhanced television or data enhanced television phase. This
is where additional content is bundled with the digital video signal as it
streams down to the viewer.
18378 It loads into the memory of the set-top box
and it can be executed there. This is interactive TV. I want to make the point
that this is still highly interactive, much in the way that DVDs are a highly
interactive media. But it's a local interaction. It's an interaction with the
data that it's in the box locally.
18379 This will, of course, and you have heard many
examples of how this will let viewers as they are watching programming go deeper
into the programming. It gives some sort of an enhanced experience that is
appropriate, either the particular segment they are watching in a show, the show
in general or even the service in general.
18380 The third phase that we see is where the
first two phases really come together and that's where the two way interactive
capabilities of the web come together with the immediacy of the set-top box.
What we call that is fully interactive two-way television.
18381 It is at this point that the set-top box
offers a return path and that's the key term here, where either to the head end
of the distributor or out to the web there is a return path that allows that
direct interactivity. It's at this point where some of those really enhanced
television experiences begin to occur, where you can chat during a program while
you are watching a program. You can participate in an issues-oriented show and
give your opinion on the issue and see over the hour how that opinion is
integrating with others.
18382 You can play along at home with game
experiences and there is also the notion of impulse e-commerce or t-commerce at
18383 So from our discussions with distributors we
see that third phase of fully interactive two-way television following two to
four years after launch or approximately three to five years from
18384 Our strategy around these three different
phases is to consider the possibilities of each and the challenges of each, but
to be ready for each as they come on stream and when those capabilities are
18385 We don't want to say once those capabilities
are available then we will consider it. We want to be ready when they are
18386 So just to summarize again, we are successful
in this area today. We are making preparations tomorrow for digital TV and we
are very clear on what the future of it is. Thank you.
18387 COMMISSIONER DEMERS: Thank
18388 It's interesting that you have had
discussions with distributors on that and I imagine that what you have indicated
is that they share what you are outlining as being what's coming
18389 MR. ROLUFS: Absolutely. I think that even
though there haven't necessarily been announcements by all distributors, I think
all of them share in the notion of authoring content once for distribution
across all of the platforms and that's where standards where ATVEF come in. I
think everyone wins and I think that enables us as the creators to really
maximize the capabilities of the content.
18390 COMMISSIONER DEMERS: Thank
18391 So no doubt when there are licensees of
Category 1 you would expect that the distributors would provide this
interactivity to the subscribers?
18392 MR. ROLUFS: Yes, we would expect so. I think
Paul has some thoughts on that.
18393 MR. ROBERTSON: Thanks Steve.
18394 What we have heard so far from the
distributors that we have been in conversation about these topics is that they
are absolutely highly enthusiastic about testing out anything that we might be
able to come up with with respect to interactive content.
18395 It's never been an issue of will they carry
it or won't they carry it. It has always been how soon can the programmers come
up with creative interactive solutions that we can get out to our
18396 We think that there is a lot more demand than
supply right now and that the programmers have a job to do to get this content
18397 COMMISSIONER DEMERS: Thank
18398 So at the very moment you do not have --
do you broadcast on some of your channels any programs that are already
interactive in some way, in the way you describe it?
18399 MR. ROLUFS: Absolutely, they are interactive,
a large amount of our YTV programming, our CMT programming. There are those
calls to action where what you see happening on the screen is very integrated
with the Web site at present. For instance, Hit List and YTV, kids can vote on
their favourite videos and that's tallied on the site. There is always: Hey
kids, tell us what you think about this particular issue or e-mail
18400 So things are highly interactive today. There
are participatory aspects where kids send in their artwork and stories and we
18401 As far as the actual latter phases of
interactivity, we are not doing anything at present. I know that there is some
experimentation going on on an analog platform with others, but what we are
doing more is positioning ourselves and becoming educated and experimenting with
an eye to the future.
18402 COMMISSIONER DEMERS: Thank
18403 Now, to Canadian programming
18404 You have covered most of this in your oral
presentation, but a general question on that point also is: Is a condition of
licence requiring minimum levels of annual Canadian programming expenditures
necessary on digital services?
18405 MR. ROBERTSON: We aren't certain that an
annual requirement is necessary. We think that some of the conversation --
and we have been following with interest the conversations concerning adding
more flexibility to the determination of Canadian content, but the idea that you
might perhaps take the total seven year expenditure and divide by the total
seven year revenue and come up with an overall level of commitment over the term
is an appealing concept that we think is sensitive to the kind of flexibility we
are going to need in the digital universe.
18406 Now, presumably, one could take a modified
approach to that and say overall the commitments on a term of licence basis, but
in any given year there is a minimum or a maximum that one could employ and we
thought that plus or minus 15 per cent might be the number that might work in
terms of the required flexibility.
18407 In actual terms, what is going to happen is
there is going to be a great need to front-end load the spending to make sure
that we kickstart the new programming at a time when the revenue is not that
strong. So really what will happen is that you will get a front-end loading of
spending rather than a back-end loading, which is probably what the minimum per
year is meant to address.
18408 But those two things taken in combination
could be a very effective approach to regulating in a digital
18409 COMMISSIONER DEMERS: So you haven't given
thought to the fact that there may not be a rule on that point?
18410 MR. ROBERTSON: We presumed that there would
always be a commitment to spend a percentage of revenue on Canadian content.
Whether there is a need to provide a rule on an annual basis, fundamentally we
don't think that there is a requirement for an annual rule but there is a
requirement for a rule over the term of the licence so that we know exactly what
each of the services is promising.
18411 COMMISSIONER DEMERS: Thank
18412 Based on your applications, I have a general
question that ends up in specifics here. The question goes on as
18413 Would you accept the following Canadian
programming expenditures as conditions of licence starting in year 2? These are
based on Commission calculations, and here I will be specific on each of your
18414 In my book, the first one coming is: CHROME
TV, the percentage would be 40 per cent as a condition of licence -- maybe
I will go through all of them and then you will comment on it; Booknet, 37 per
cent; Discovery Travel & Adventure, 37 per cent; Land & Sea, 51 per
cent; Parent TV, 38; The Canadian Documentary Channel, 47.
18415 MR. ROBERTSON: Just to be clear, this would
be on the basis of years 2 to 7?
18416 COMMISSIONER DEMERS: Starting in year 2,
18417 MR. ROBERTSON: And these amounts would be a
minimum requirement by year or a total for the term?
18418 COMMISSIONER DEMERS: In my view, it would be
18419 MR. ROBERTSON: Okay. I would like to ask
Jamie Haggarty to respond to your question.
18420 COMMISSIONER DEMERS: Thank
18421 MR. HAGGARTY: Thank you,
18422 I'm just cross-checking the Commissioner's
numbers to our records.
--- Pause / Pause
18423 MR. HAGGARTY: I guess, going down the
checklist of the applications, generally we do agree with using an average of
the seven years as a percentage of revenue. However, I do have some slight
differences from the percentages the Commissioner just noted and would be happy
to ensure that we are both working off of the same averaging
18424 In particular, we agree with the CHROME at 40
per cent. We agree with the Parent at 38 per cent, and Documentary at 47
18425 On Book, our calculation would show an
average of 40 per cent instead of the 37 per cent that I think I heard, that
number. And Travel & Adventure, our calculation of the -- I guess we
will call it the new method, the new method would be 41 per cent. I think the
Commissioner mentioned 37 per cent.
18426 Maybe it's my calculator that's
18427 Now, Land & Sea is the last, our sixth
figure that we have talked about. Our application is based on a 43 per cent
commitment as a percentage of revenue, and the Commissioner has noted that the
new method works out to 51 per cent. We deeply believe that the 43 per cent is a
sufficient level that would be able to accommodate the service, not just from an
attractive content point of view, but also to sustain the business
18428 THE CHAIRPERSON: Commissioner Demers, excuse
18429 What do you mean by the new method? The
calculations that were made by the staff was using the traditional method, which
is to take the revenues over the whole year and the expenditures on Canadian
content and arrive at a percentage, which then applies starting from year 2. The
new method would be to take the traditional method and give it more flexibility
by allowing the traditional calculation to be checked or conformed with over the
year with some flexibility from year to year, which can be by using a minimum or
18430 I'm not quite sure what you mean by "the new
18431 MR. HAGGARTY: Sure, I would be happy to
18432 Our definition of the "new method" is really
just taking the total for the seven years -- as Paul mentioned -- the
total seven years' expenditures divided by the total seven years' revenue. We
view the traditional method as being a percentage of prior year
18433 THE CHAIRPERSON: The method is to take all
seven years in both cases and then derive a revenue from it and apply it to the
previous year. At the break, you can perhaps talk with Ms McNair and see whether
you are too young to know about the traditional method --
--- Laughter / Rires
18434 THE CHAIRPERSON: -- so that we know
what we are talking about.
18435 Sorry, Commissioner Demers. Go
18436 MR. CASSADAY: Madam Chair, you may have to
apologize to Kathleen after --
Laughter / Rires
18437 THE CHAIRPERSON: I meant young in a
--- Laughter / Rires
18438 COMMISSIONER DEMERS: Thank you. So we are
both young here.
18439 I will move on to original Canadian
programming, and here again a general question that may end up having
particulars for clarification purposes.
18440 Could you give us an estimate of what
proportion of your program schedules original Canadian productions represent,
excluding the repeat factor?
18441 If this needs some time I can go on to
the next. If you prefer, you could come back later on.
18442 MR. ROBERTSON: That is certainly information
that we have available, but would take some time to develop it.
18443 Perhaps we could provide that after the
18444 COMMISSIONER DEMERS: Thank
18445 Then to demand study. How have you linked
your market study to your business plans?
18446 MR. ROBERTSON: I would be pleased to answer
18447 We have developed an approach to research. We
had qualitative research across all the services and that led to, then, a
quantitative study that asked the question about: Would you be interested in
18448 What I would like to do is ask Kaan Yigit,
who represented our research, to talk about how we translated from that into our
approach with distributors.
18449 I would like also Andrew Eddy to comment on
18450 MR. YIGIT: Thanks, Paul.
18451 I will just quickly review and hand it over
18452 The market research studies for each of the
applications had measurement regarding both general interest and in the context
of a price point. What that generated, in essence, is a baseline estimate for
the general cable population as well as likely digital subscribers. So with that
baseline information in mind, the results were handed over to, I guess, the
18453 At the end, after the business plans
were -- or the assumptions were incorporated, we had a chance to review
just to make sure that those baseline estimates that we provided and what has
actually been used in the business plan are within general narrow
18454 MR. EDDY: Just to add to that, the research
that Kaan mentioned measured overall acceptance for service and then
specifically focused on early digital adopters. That gave us, for instance in
the case of Parent, a measure of 40 per cent to 48 per cent. We did
compare that to our business model and our assumptions for penetration and
found, you know, a correlation there with our assumptions for Parent TV
distribution growing from 38 per cent to 47 per cent over the term.
That is one example.
18455 Across the board we found that the research
was helpful in validating our assumptions on distribution
18456 COMMISSIONER DEMERS: Thank
18457 In all your applications the proposed
penetration level is projected to increase from year 1 to year 7 while
your proposed monthly fee is expected to decrease for the same period. What is
the rationale for the decreasing subscription fee?
18458 MR. ROBERTSON: I will ask Andrew Eddy to
18459 MR. EDDY: Digital is really about choice and
we believe that distributors will offer our services in a number of ways within
the same system to customers, perhaps even at the same time. The same service
may be offered in a thematic package, it may be offered to customers as part of
a deluxe package, and it may be offered in a pick-and-pay environment or à la
18460 So our assumption really was that
distribution for each service would come in all of these different
18461 In developing our penetration assumptions, we
looked at both the incumbent customers, those who have digital today, and we
also projected for the ongoing deployment of digital what sort of penetration
the service would get in each of those types of carriage.
18462 So I think the important thing is that
digital is here, it's real, but it is also a product that will continue to
deploy throughout the term of the license, and our penetration reflects that
ongoing deployment of digital.
18463 In terms of how we presented our rate, the
rate will vary depending on how the service is packaged and how it is retailed.
So there will be a number of different rates depending on the type of carriage a
18464 For the purpose of stating our affordability,
we presented an equivalent basic rate for each of the services. This was not to
intend to imply that we expected basic carriage on digital, but really formed a
comparison basis for our affordability.
18465 COMMISSIONER DEMERS: In a sense these
decreases are taken into account to get the projected penetration level that you
believe you will have?
18466 MR. EDDY: Again, the decrease does reflect
our belief that over the term the average penetration the service will grow
among digital customers.
18467 This is a factor of really two elements. One,
on initial launch there is an incumbent base of customers and so an operator
will have to have a strategy to convert those customers. Then, on an ongoing
basis, digital will broaden in appeal and we think it will draw new subscribers
to the system.
18468 COMMISSIONER DEMERS: Thank
18469 In some cases you have noted -- in your
Schedule 1, page 28, to give the reference -- that the rate for
universal digital distribution would be 17 cents per subscriber per month.
On what basis would the 17 cents be applied?
18470 MR. EDDY: The 17 cents is stated as an
equivalent basic rate. The assumption there would be that if a service had
100 per cent distribution among digital subscribers for a system, that
would be the equivalent rate. If, for instance, it is carried as part of an
optional tier, the rate would likely be tied to the penetration of that tier.
Subsequently, if it's offered on an à-la-carte basis we would have a rate for
that type of offering that would reflect the kinds of retail rates that might be
in place by an operator and the success that that product has among
18471 COMMISSIONER DEMERS: Thank
18472 Madam Chair, that would be the end of my
18473 THE CHAIRPERSON: Commissioner
18474 COMMISSIONER WILSON: Mr. Cassaday, I was
interested by your comments on the implementation and I just wanted to pursue a
little bit on that topic.
18475 The opinion that you expressed was quite
different from the opinion that we have heard in the last couple of days, which
is that the Commission should be quite prescriptive in how the implementation of
these services should take place, in the sense that the negotiations should have
a date set for conclusion six months prior to launch and the launch date should
18476 I think there were a couple of other
suggestions about how we might direct the distributors to handle launching the
services, including the one that Commissioner Demers mentioned, which is that
Category 2s would not launch before Category 1s, that they could
launch potentially simultaneously but not before. The approach that you were
suggesting was more flexible.
18477 I'm just wondering if you could comment on
the divergence of your opinion from the others where it has been suggested to us
that we lay out a timetable.
18478 MR. CASSADAY: Thank you.
18479 We are really suggesting that as we move
towards a more open market, free market régime for the licensing of new
services, the previous sort of approach, which was one of entitlement, basic or
tier guaranteed rate, tier rate -- you know, this is a new world that we
are going into.
18480 What we believe is that the basic rules of
negotiation will now take hold and the obligations for both parties to come to
agreement will be no different than they are in a labour dispute or a
baseball-style arbitration. Ultimately one knows that a decision has to be made
in time to achieve a certain end.
18481 So, for example, if we believe that the
optimal time to launch this service is September 1, 2001, there is an onus
on both parties to come to some agreement on the terms under which these
services will be carried. It is in both parties' best interest to do
18482 For a cable operator or a satellite operator
to introduce a service post-September 1 is going to be awkward, possibly
even impossible. For an operator to miss that window and be competitively
disadvantage would be inopportune.
18483 So we think that, you know, by simply
allowing market forces to take hold, put the obligation on the shoulders of both
parties to come to an agreement -- after all, there is as much interest in
the part of a distributor in being allowed to offer new product to their
subscribers and therefore generate more revenue than there is on the part of the
programmer to achieve widespread distribution for their
18484 So all we are suggesting is that, you know,
welcome to the real world where one negotiates whether -- you know, us
individually buying an automobile or whether it is Air Canada dealing with their
pilots, ultimately they both know the consequences of not being able to come to
18485 We are simply saying that we believe the
industry is mature enough and that the mechanisms are in place to deal with
disputes, should they arise, that we don't need to put, you know, the proverbial
gun to the head of one party to make this thing come to pass because we think
there is a mutuality of interest.
18486 COMMISSIONER WILSON: Some might argue that
because you share common ownership with the distributor your view might be
tempered by that, and I'm just wondering -- because I could imagine if, you
know, you have you, on the one end of the spectrum, and services that are
unaffiliated with the distributor, on the other end, saying, "Well, you could
discount that point of view", because, of course, there's, you know, a
commonality of interest, from a business perspective, and I'm just wondering if
you could comment on that.
18487 MR. CASSADAY: I don't like to personalize
things but I will, in this case.
18488 I have been in the business for 10 years
and I would like to think that my reputation is one of fairness, and I think
that's one of the reasons that we have such an array of partners at the table:
they know that we are going to treat them fairly and they wanted to be in
business with us. And while Corus has an affiliation with Shaw, through the Shaw
family's ownership, my position on this would have been no different had I still
been sitting here as president of my previous company. You know. I just believe
in the fundamentals of fair play. I believe that our industry is moving to a
more open market environment and we think that this behaviour that we are
suggesting is consistent with everything that we believe in and has absolutely
zero to do with the affiliation that we have with Shaw.
18489 COMMISSIONER WILSON: So it would be your
view, then, that the sort of traditional regulatory approach wouldn't be
appropriate in this environment.
18490 How much of that has to do with the
technology itself and the fact that it's not -- the penetration level is so
low, at this point?
18491 MR. CASSADAY: Clearly, everyone in a system
is at different levels of development. There are going to be cable operators
that will not be ready to accept any digital channels, at this time. So,
clearly, every -- we are all moving out into this world with more
uncertainty than certainty. We don't know what our levels of penetration will
be. The cable operator doesn't know what the receptivity to the offering is
going to be. All of us are moving out, you know, as an act of faith, that,
ultimately, this is going to be good for the system; let's get our running shoes
on and let's make it happen.
18492 I don't think there is any edge to any party
here because the uncertainty rests equally on both -- on all of our
18493 COMMISSIONER WILSON: Thank
18494 MR. ROBERTSON: I just might add that we
really support the development of a pre-launch working group that has been
proposed, I think, that the CAB and the CCTA work together with interested
industry parties to work on the protocol, how it's going to be approached, and
we would really support that idea and would be active participants in that sort
of a mechanism.
18495 THE CHAIRPERSON: Madam
18496 CHAIRPERSON OF THE COMMISSION: Good
18497 In following with the questions of
Commissioner Demers and Wilson, I'm interested in your idea about "appeal,
appeal, appeal" is like -- the attractiveness of the service we will choose
should be the only element we should really be looking for and then kind of
choose the right mix in order to provide the best service to the viewers. And in
that perspective, you seem to think that we cannot find more than 10 genres that
could be really attractive to drive packaging to the viewers.
18498 Can you expand? Because we have had other
views, for example, too, and we have had ideas that we should give priority on
Category 1 to the ones that, through free market, will not find its way to the
distributors and, eventually, to the viewer, for example, you know, some
more -- less mainstream type of services should be Category 1 because they
would be the one left out. You know.
18499 What's your view? What's your experience?
And, certainly -- and I repeat that we have been talking about that since
last week -- we all want the roll-out of digital, but we want it with the
best of what the Canadian broadcasting system can offer. We don't want it just
to be digital. We want it to be digital with Canadian distinctiveness, and
that's why you, even in your own applications, you have a high level of Canadian
content -- and all applicants do -- it's important.
18500 So, where do you see that this attractive and
that distinctiveness is in play here with the idea that we should favour, in
Category 1, the one that the market will not necessarily pick up on its
18501 MR. CASSADAY: I will try to address your
question in two ways: First of all, dealing with the question of why go with the
bigger categories, or the bigger genres, as opposed to the niches; and then,
secondly, you know, why 10.
18502 On the matter of why the big genres, clearly,
it's a matter of judgment, and your judgment could be that, "Look, ultimately,
they are going to take a travel channel. I don't have to impose a travel channel
on the system because there's some terrific ones here; they are going to pick
one and, who knows, maybe there will even be a rational approach and they will
all pick the same one and then we will have achieved the same end and we
can -- we can introduce a worthy service that might not ordinarily have
such an easy time getting accepted". So we appreciate there's two ways of
looking at it.
18503 Why we are arguing in favour of bigger being
better here is because we start with the premise that we know, in the case of
digital, based on our research, that more movies and more sports -- all of
which have really been addressed and we are not really talking about
here -- will help digital. The other thing is: programs that I haven't seen
before. So, more unique programming.
18504 And our feeling is that if we take this
opportunity to present to consumers, or viewers, across Canada viable, big
genre, big category services that they can understand, whether it's because of
the prominence of the brand name or just the general understanding of the
category, that that will cause people to be more interested in moving from their
current analog environment into a digital environment. And if we can do that, if
we -- you know, at the recent WIC hearing, we used the expression that
"Digital will not be a line extension; it will be the core business". If we are
right and, ultimately, we are moving to an era of where digital will ubiquitous,
then the quicker we can accelerate that then the better opportunity there is for
all the Category 2s.
18505 If this launch of the Category 1s is
successful, it will create a much more fertile environment for the smaller niche
services that will be left in Category 2.
18506 So that's why, recognizing that, you know,
one could argue either case why we believe bigger is better, in this instance,
because of its ability to build the market.
18507 In terms of the question of why 10 and,
you know, why not 15, or more -- because, you know, after all, you know, we
are told that there is virtually unlimited capacity and, surely, they can find a
way -- really, thinking about this, it breaks it down into, I guess, a
couple of different thought patterns.
18508 One, again, from a consumer point of view, 10
seems to represent a good bite-sized chunk. It's something that they can get
their minds wrapped around. Whereas, you know, if we go much further than this,
you know -- perhaps, you know, history would say seven is sort of the right
number, everything seems to be in sevens, but 10 is something that, I think,
people can understand, and as we begin to think about the marketing and how we
communicate this, we felt that that was an appropriate number.
18509 Secondly, from a distributor point of view,
whether it's Star Choice, ExpressVu, Rogers or Shaw, the fact that the CRTC
suggests 10 Category 1 applications in no way limits the amount of offering that
they can make available to their viewers.
18510 So, if ExpressVu, having the advantage of
their recently launched satellite, wants to use as a differentiating factor the
offering of, you know, 50 new digital channels -- which no one else can
compete with -- good for them. What a great advantage that would be, if
they choose to go that route.
18511 So, by licensing 10, you are in no way
limiting the ability of a distributor to take advantage of the availability of
18512 And then, finally, again, getting back to our
theme of open market, we think that by allowing the Category 2s to get on with
it promotes this whole spirit of entrepreneurship, encourages people that really
say, you know, through the hearing, everybody's willing to take the chance and,
you know, spend the $2 million, dip into their pockets for the first couple of
18513 Well, we will see, you know, how many are
genuinely interested to get out there and spend the money, you know, knowing
that there's, in this time, there's no guarantees, you know. You are own your
own; make it or break. You have said very clearly: Don't come back to us during
the licence term because we are not changing it. It's 40 per cent Cancon or 47,
whatever the case may be. Go for it.
18514 So that's our thinking on that "Go big" and
why we think 10 is an appropriate number.
18515 CHAIRPERSON OF THE COMMISSION: Do you think,
from your 10 years in broadcasting, that the offering that will observe --
if we were to go even with nine or 10 or 12, that the offerings that will be
done by distributors will be distinctive? Do you really think that we will have
different ways of pleasing the viewers? And do you think we have that many
specific markets that it calls for a different approach and different
18516 MR. CASSADAY: Andrew spends more time talking
to distributors than I do, so he may want to talk this point. But, you know,
clearly, you know, we are moving into an era where marketing is going to become
much more important, and the way services are --
18517 CHAIRPERSON OF THE COMMISSION: Does that
explain your presence in the broadcasting system?
18518 MR. CASSADAY: Well, hopefully, it maybe
explains why I have survived.
18519 One of the things that we think is ultimately
going to happen here is that the distributor will use the way they present tiers
or pods or whatever they become known as as a differentiator. If they can find
the right button to push, the right collection, combination of services that
stimulates someone to buy their service, then they become the beneficiary of
18520 So we think we are going to see much more
imagination in terms of how these services are packaged and that there is a high
likelihood that there will be differentiation in what services are selected and
how they are put together.
18521 If you are an operator in Vancouver or
Toronto, we suspect there is going to be a much higher level of interest in
ethnic services than there will in Manitoba. So, you know, just by virtue of
being able to target specific demographic segments, we think that you are going
to see much more diversity as a result of the way we are setting this process
out than we would ordinarily have.
18522 MR. EDDY: I would echo what John said and
really our expectation is that distributors will create compelling and creative
offerings for customers because they are existing in a very competitive
environment and they have an interest in rolling out the
18523 So we envision that they won't be choosing
one particular launch service. They will be offering services in different ways
to the customer and that customer will choose based on what best serves their
needs and creates value for them.
18524 CHAIRPERSON OF THE COMMISSION: There is a
difference between the way you make the offering to the consumer in terms of
packaging and what's in the packaging. Do you think there will be as much
difference in the packaging of those services and the way it will be presented
to the consumer as there will be diversity of services chosen by the
18525 MR. EDDY: Yes. I think the experience that we
have seen with direct-to-home satellite is good evidence of the kinds of
creative packaging that distributors create. They do have some similarity, but
on the other side have great difference in how they are presenting because they
are so directly competitive.
18526 The experience has been that thematic
packages have been successful. We don't expect that that may necessarily be the
same approach that others take. So there will obviously be some self-selection
where subscribers will create that diversity of packaging for themselves, but it
won't be left strictly to the distributor. That you as a viewer will find a
package that creates value for you in this environment and that will add real
18527 CHAIRPERSON OF THE COMMISSION: That's the
addressability once it's offered to me, but before it's offered to me there is
like a mediator that will kind of organize and make the choices. I was curious
about your views there.
18528 Another question I have is Category 2. You
say: Well, we should allow for launch at the same time, yet a different kind of
schedule in terms of the limit on the value of the licence before they come back
to the Commission for an extension and you propose three years.
18529 Talking about the dimension, you were talking
about ethnic groups and the necessity to offer more diversity towards those
services and the fact that we have in the framework favoured Canadian partnering
with ethnic services first before we kind of expand the eligibility list. What
would we do with the eligibility list if for three years that means that we
wouldn't bring much more services of that very niche that are not likely to be
the ones, the first ones to be picked up in offerings to the
18530 MR. CASSADAY: We believe that the status quo
should prevail and that if there is a licensed Canadian service that there would
not be a foreign service taken off the eligibility list. We would have a
pre-emptive opportunity in that particular sector.
18531 CHAIRPERSON OF THE COMMISSION: But don't you
think that then for the ethnic groups that could get a service, three years, and
that's three years from the issue of the decision, that's a long time in order
to wait for some service that could be of interest to them?
18532 You know, don't you think that three years
for Category 2 is a long time in comparison to what we say it seems from all the
voices we have heard since last Monday is the 1st of September 2001, everybody
should be ready to launch if they are granted a Category 1, unless they come
back to the Commission and have a very --
18533 MR. CASSADAY: We think there is a difference
between being ready to launch and being able to get an agreement to have your
programming distributed because there will be capacity
18534 We really debated this question and would be
misleading you if we thought that three years was just irrefutably the right
answer. We don't know.
18535 What we were thinking about is what's a
suitable amount of time to give the Category 2 licence a fair shot at getting up
if they are genuinely interested in doing it, and yet not so long that precludes
someone else that actually has a real interest in doing it from going out and
making it happen?
18536 We just netted out at that time, we are
roughly a year from today before we get the first ones off the ground. So,
therefore, it's just another two years before the remainder have to go. We all
know, unfortunately, that three years does fly by.
18537 CHAIRPERSON OF THE COMMISSION: It
18538 I would like to hear your views on the value
of partnering. Obviously, you value that dimension and you kind of have
organized your applications around partnering. Could you help us in assessing
the value of partnering in the assessment of the different applications we will
have to do? What for you are elements that do provide stronger application
depending on the partnering?
18539 I am sure you have views on that and could
you share your insights with us on this?
18540 MR. CASSADAY: First and foremost, we thought
about how do we provide the most diverse and compelling offering that we can,
and the way to do that was to bring in partners.
18541 I think one of the things that might be
interesting here is if we could just ask our partners to briefly comment on what
they thought the value was in this collaboration and perhaps start with Michael
at his end.
18542 MR. HIRSH: Sure. In the case of Nelvana, we
are a company that is very invested in books. We live and breathe books, but we
aren't a direct broadcaster. We aren't I guess the broadcaster of any other
signal. We are a partner in another service which is Teletoon.
18543 And partnering with a terrific broadcaster
like Corus and bringing our expertise in books and our kind of invested
knowledge base in that area we think is a great combination. So we have got the
passion and the specific category. We have got the strong knowledge base and the
relationships with the publishing community and combined with Corus we think we
can have a great service.
18544 CHAIRPERSON OF THE COMMISSION: Frankly, what
I am looking for here are more criteria than kind of, you know, why you are
great. You know, Corus is a great company certainly, we are convinced of that.
What we need here and what I am asking for is are there beyond the criteria we
have talked about elements that we should be looking for because we haven't been
discussing that with all the partnering. So, I don't want to here kind of
prolong the time of presentation. What I am looking for is really references by
which our analysis will be helped.
18545 MR. CASSADAY: We started off with -- in
terms of the hierarchy of our thinking which categories did we feel had the most
relevance and the most appeal and who was the appropriate partner to reach out
to in achieving the best possible outcome for the service. So, you know, it was
as simple as that.
18546 We feel that in each of these applications we
have the perfect complement. If you were going to launch a travel channel, can
you think of anyone you would rather do it with than Discovery who offers this
in hundreds of countries around the world.
18547 If you are going to launch a documentary
channel, can you think of anyone you would rather do it with than the CBC and
the National Film Board.
18548 So we just thought that from our point of
view with our criteria of big being better as it relates to Category 1, what are
the most compelling genres and what's the most desirable package to bring to
bear to make those as successful as possible.
18549 CHAIRPERSON OF THE COMMISSION: My last
question, sharing of revenues, talking about interactivity and the necessity to
when the time comes every step or every face, as you call it, of interactivity
being available and possible, what's your views on the sharing of costs?
Actually, that was a question we had in terms of what we have heard from most of
the applicants as what is relevant to programs should be the responsibility of
the service and the programmers and the program producers and what part of the
distribution system should be the responsibility of the
18550 But when interactivity comes and t-commerce
is there, what's your view in terms of sharing of revenues? Do you see that as
an interesting possibility? Do you have views on that?
18551 MR. ROBERTSON: As you have set up, in the
early going we expect that these will basically be programming content elements
that will be provided and, as such, as part of the overall programming service
and will be integrated with them and enhance the overall experience that the
Bureau will have. But down the road there is going to be some very interesting
models created that will look to drive e-commerce opportunities.
18552 As that happens, we think there will be a lot
of unique partnerships created between the distributors and the programmers to
find ways to exploit the opportunity and to share in the costs and the
18553 So we would like to maintain sort of an open
perspective on these sorts of issues and say that as we get closer and time
unfolds that the parties will find a way to work together to work at these
opportunities in the most constructive way through partnership.
18554 CHAIRPERSON OF THE COMMISSION: So in our kind
of framework we put that as open to discussion and negotiation
18555 MR. ROBERTSON: That's correct, yes. Thank
18556 CHAIRPERSON OF THE COMMISSION: Thank you very
18557 THE CHAIRPERSON: I gather that you are in
agreement with most parties who feel that the Commission should retain a
methodology or a mechanism for checking conformity with commitments in
expenditures on Canadian programming?
18558 MR. ROBERTSON: Yes, we are.
18559 THE CHAIRPERSON: Now, how important do you
think it is that, number one, we use the numbers that are presented before us,
albeit projections and that we apply a mechanism that is the same, if there is a
need for one, in order to take into consideration the highly competitive nature
of this hearing in light of the number of applications?
18560 MR. ROBERTSON: I think it would be
constructive to have a single method of determining the Canadian content
expenditures, so that we are consistently working to one
18561 THE CHAIRPERSON: I will point out to you some
of the difficulties with your applications and you will have an opportunity to
discuss it at the break and come back to us. The traditional method that the
Commission uses is not terribly complicated. It is done by taking all the
subscriber revenues projected and the advertising revenue projected as part of
the fraction that is used to get at a percentage, and the other number is the
expenditures on Canadian content that are promised.
18562 The percentage that then results is applied
beginning in year two to the actual revenues in year one, at the moment with a 5
per cent underpayment possible to be made up, or overexpenditure, rather than
underpayment, overexpenditure to be applied in a forward-looking manner. That
would have been the way that the personnel has calculated it.
18563 I don't have your entire application with me,
but I have some portions of it and I stand to be corrected where I am wrong. And
in some cases you have made a commitment in your presentation where there may
not have been one in the application itself in as express a
18564 Now, in three of your applications there is
no discrepancy between the calculations, so that would be my understanding,
CHROME, Travel and the Documentary Channel where it's the same.
18565 There are two problems, the numbers in Land
& Sea and Booknet and Parent -- well, in Booknet are not the same. In
the case of Parent it's okay if we take your presentation as an additional
comment. So, if I look at your presentation at page 14 you say that you will
expend 38 per cent of revenues on Canadian programs.
18566 However, both in that case and in the case of
Booknet you say expend 40 per cent of revenues on Canadian programs, which is
our number. With Parent it would be our number, whereas your initial one was
33 per cent.
18567 But are you saying that you accept the manner
in which conformity would be tested or simply over the seven years, which is
different from what you committed to in the others, which is not simply 38 per
cent of revenues. It is 38 per cent of the revenues of the previous year after
you have got the numerator -- the denominator and arrived at a
18568 So it is not clear whether you are accepting
the traditional method and your commitment is the same everywhere because there
is a difference between saying spending 38 per cent of revenues on Canadian
programs and accepting that the percentages apply year by year to the revenues
before and the flexibility would be something that would be over and
18569 So in the case of Land & Sea, and I don't
see a -- I stand to be corrected, but I didn't find in the presentation
anything that would change the fact that your percentage -- yes, it's
repeated. It's a minimum of 43 per cent. Our calculation arrives at 51 per
18570 In the case of Booknet, yours is 33 per
cent; ours is 37.5, but some of us don't like decimals.
18571 Parent TV, it's more a question of what does
the 38 mean.
18572 So I hope that's helpful. You can tell us
when you come back whether these numbers, as we calculate them, are acceptable
to you as applied in what I refer to as the traditional manner, with of course
the Commission examining, during this process, the possibility of enlarging the
5 per cent flexibility.
18573 Do you have any questions? You can come back
to us after the break.
18574 MR. ROBERTSON: Madam Chairperson, we
appreciate your diligence in ensuring that these numbers clearly reflect our
conditions that we are committing to and we will take time during the break to
come back and ensure that we are all working with the same
18575 THE CHAIRPERSON: Yes. Where the staff
calculation and yours are different, perhaps you can try to see why it is. I
don't have the full applications so I'm not aware in each case whether a
clarification question was sent to you to explain that you weren't arriving at
the same percentages.
18576 Now, independent production as well, in some
cases -- no. Let me go back.
18577 This morning you have substituted a
definition of "affiliate" -- the use of "affiliate" to a definition of
"non-arm's length" instead. Correct?
18578 Because you use the word "affiliate" in some
of your applications, would it be fair for us, then, to substitute your
definition of "non-arm's length"?
18579 MS McNAIR: Yes.
18580 THE CHAIRPERSON: Which, if I understand it,
would be where Corus owns more than 30 per cent of the voting interest;
and, secondly, any companies that are your partners in the application,
vis-à-vis that application, is non-arm's length. Is that
18581 MS McNAIR: Yes.
18582 THE CHAIRPERSON: And we could substitute that
in every application.
18583 Now, there is one that raises an interesting
question for me, it's the documentary one, where your commitment is to spend 50
per cent of your programming on arm's length, correct, of your programming
18584 MS McNAIR: Canadian. Yes.
18585 THE CHAIRPERSON: Yes.
18586 Now, your partners -- again, we are not
examining ownership or any related matter during this hearing, but am I right
that their contribution will be in kind, so to speak -- they won't have an
equity position providing cash?
18587 MS McNAIR: The CBC and NFB, we have entered
into a program supply agreement with them under the partnership.
18588 THE CHAIRPERSON: Not Barna-Alper and
18589 MS McNAIR: No. Under the partnership
agreement, and I will just ask Sheldon to comment further, we have a first look
at their libraries. There's no requirement.
18590 THE CHAIRPERSON: But there is no -- my
question is more general.
18591 MR. TEICHER: There is no cash contribution,
if that's where you were going.
18592 THE CHAIRPERSON: Okay.
18593 So my question, then, is, that
$50 million budget, if I were an arm's-length producer I may be curious to
know what the size of it is. I'm wondering if the size of it is decreased by the
notional value of the programming you will get from your non-cash
18594 MR. TEICHER: I will try to answer this
question. If I go wrong I'm sure Jamie or Karen will correct me.
18595 THE CHAIRPERSON: Do you understand what I'm
18596 MR. TEICHER: Yes.
18597 THE CHAIRPERSON: That sum, 50 per cent of
which would be available, could be less or more depending on whether you would
diminish it by the value of the programming supplied.
18598 MR. TEICHER: The first thing I would say is
that the value of the programming that is coming to us from our partners is
highly discounted, so we are getting I think an average hourly rate of $2,000 an
hour for wonderful programming from the CBC and NFB. It's a huge advantage for
programming the service.
18599 What I think has happened, and my colleagues
will correct me, is that we have taken half the budget and ensured that's going
to arm's-length producers. Included in that half of the budget will be the newly
commissioned documentaries, the 26 hours a year.
18600 Then we have the CBC and NFB contribution,
and the independent producers who are our partners. Should they contribute
programming, it would come out of the 200 hour allocation from the CBC or the
100 hour allocation from NFB that provides us with the low-cost baseline to
program the service.
18601 I'm not sure if that's fully responsive to
18602 THE CHAIRPERSON: What you are saying is it is
in the budget but it is at a discounted value --
18603 MR. TEICHER: Yes.
18604 THE CHAIRPERSON: -- so that the sum
that goes to arm's length is still high.
18605 MR. TEICHER: Absolutely.
18606 THE CHAIRPERSON: -- but is not exactly
50 per cent?
18607 MR. TEICHER: It would be no less than 50 per
18608 What happens is, of the
$2,000 contribution per hour, $1,000 in cash would go to the CBC or NFB
primarily to help with rights clearance costs, and the other $1,000 would go
into kind of a running account that will enable them, ultimately, to catch up
and share the full load of costs that Corus will shoulder initially for launch
of the service.
18609 THE CHAIRPERSON: Thank you.
18611 MR. STEWART: Thank you, Madam
18612 Three quick questions.
18613 Please confirm that you have taken measures
to ensure that you will be in compliance with the Personal Information
Protection Electronic Documents Act.
18614 MR. ROBERTSON: Yes, we will.
18615 MR. STEWART: Thank you.
18616 Please confirm also that your proposed
services will be technically equipped to permit descriptive
18617 MR. ROBERTSON: Yes, they
18618 MR. STEWART: Thank you.
18619 Last but not least, filler programming,
Category 15. Could you state your position for the record?
18620 MR. ROBERTSON: That we would not have filler
programming in the overall program categories but distribute those shows into
the other categories.
18621 MR. STEWART: Correct. Yes.
18622 Thank you, Madam Chair.
18623 THE CHAIRPERSON: We licence a pet channel and
insist that one of the animals be called Category 15.
--- Laughter / Rires
18624 THE CHAIRPERSON: It seems to be a pet peeve
18625 We will give you a break of 15 minutes.
We will be back, then, with the more specific questions directed to each
application in 15 minutes.
18626 Nous reprendrons dans 15 minutes.
--- Upon recessing at 1040 / Suspension à 1040
--- Upon resuming at 1105 / Reprise à 1105
18627 THE CHAIRPERSON: Welcome back to our hearing.
Rebienvenue à notre audience.
18628 Before we begin, I intended to do this this
morning and did not, at Phase II of the proceeding we would like applicants to
give us the number of hours of original read first window Canadian programs that
they are committing to, excluding repeats, in each year of each of the services,
and to indicate to us where in your application we should find this or deduce it
or calculate it.
18629 We will be asking questions about original
programming. We have asked some consistently. By doing it at Phase II, each
applicant should have a preview of the answer to that question before Phase
18630 We will now proceed.
18631 Commissioner Demers.
18632 COMMISSIONER DEMERS: Thank you,
18633 My first specific application that I have on
my book is CHROME TV. It was not to mix you up in any way. If you agree with
that, we will -- and I have only three questions in there. They concern
content related to programming.
18634 The first one is of course of a general
18635 Programming for men could be a very broad
concept, especially if one is targeting different types or cultures of men.
Please expand upon the criteria you would use to determine if a program is for
men? How can you assure us that you would not become a general-interest service?
This is the question.
18636 MR. TEICHER: Thank you,
18637 Our nature of service suggestion was for a
television network geared for men 18 to 49 focused on information and
entertainment programming, and our view is that it will engage men on two
levels. One, the content will be content of interest to men, which women may
find interesting, but they are not the audience we are targeting. In addition to
the content, it is the attitude, the approach to the content which will again be
from the male perspective, hopefully in a humorous and intelligent
18638 COMMISSIONER DEMERS: It is still rather
general in nature. On the other hand --
18639 MR. TEICHER: Well, within particular
categories, for example in the film category, we would tend to work towards
adventure films, action films, films of that nature, things that perhaps might
be difficult to approach on a condition of license basis, but which our audience
would clearly understand and our programming would understand the audience we
are trying to direct.
18640 In fact, the nature of service is very clear
because when we speak to people about it, whether it is through sophisticated
research or casual conversation, and describe it as a men's channel, people seem
to intuitively understand, as we discuss the types of programming we are
interested in, what is and isn't a fit.
18641 MR. ROBERTSON: If I just might add. In the
research that we conducted we were quite surprised at how quickly the men
understood exactly what we were trying to do and how quickly they embraced the
18642 So we do understand and appreciate how it is
a regulatory challenge, but there is something clear that binds this programming
service together and it has an attitude, an approach. We have also set certain
maximums in types of programming to help get us over the hurdle of: Is this
indeed a distinct niche.
18643 But in terms of its appeal to the target
group and the appeal of these magazines that the target group are
enthusiastically buying and reading, we know that this is a genuine niche that
we have every confidence will be specific to the programming and the
18644 COMMISSIONER DEMERS: Thank
18645 On feature films, you propose to limit
feature films but not other types of drama.
18646 First, can you confirm whether you plan to
schedule all the subcategories of drama, 7(a), (b) and --
18647 MR. TEICHER: Thank you,
18648 We were looking for the flexibility to
potentially schedule all those forms of drama, although at the present time the
areas that would be of strongest interest, as would be reflected in our current
sample schedule, are ongoing dramatic series, some comedic series,
perhaps -- feature films certainly, and those would be the primary areas of
interest to us in the drama category currently.
18649 COMMISSIONER DEMERS: Okay. You have already
described in a way what content, the format of drama. Anything to add as to what
comedy programs or other programs, other than drama, that you would have that
you would indicate why you categorize these or why you think it is in the nature
of CROME TV, if you wish?
18650 MR. TEICHER: Sure. I will start and then
perhaps I could ask Kelly Bray to elaborate on my answer, as Salter has a good
history of developing programs that are innovative and of high interest to this
18651 I think with respect to what sort of
programming we would be looking for, we would really try to develop a very
strong bond with our audience, in part through the interactive applications we
are thinking about, but just to generally understand what types of programming
would be of interest to them and ensure that, you know, if there is a category
of programming, whether it is because it is an action/adventure-type dramatic
series, or because of the nature of the lead protagonist it would be of
significant interest, those are the types of programs that we would schedule and
that we would look to audience response for.
18652 COMMISSIONER DEMERS: Thank
18653 As to the amount, how much of your drama
programming, apart from feature films, would you broadcast? Could you give us an
idea of a quantity?
18654 MR. TEICHER: Karen will correct me if I'm
wrong, but I believe our current schedule is in the neighbourhood of about
35 per cent drama.
18655 Is that correct?
18656 Yes, it is about 35 per cent
18657 COMMISSIONER DEMERS: This does not include
18658 MR. TEICHER: Feature films would be
additional to that.
18659 COMMISSIONER DEMERS: Thank
18660 Your nature of service definition includes
scheduling sports programs. Would CROME schedule both professional and amateur
18661 MR. TEICHER: We have asked for both
18662 I think, given the nature of the digital
environment, it is unlikely that we would be scheduling the type of professional
sports that the other networks would be interested in. From a cost point of view
it would probably be prohibitive. So we would be looking for probably the more
unusual professional sports.
18663 We don't have a significant component in our
schedule of sports and we were certainly prepared to accept a pretty stringent
restriction on the amount of sports, but it is key to the CROME vision of what
sort of a men's service we would like to bring forward, that it is a place men
can go where all their favourite things can be found. So to have a men's service
that doesn't have some sports or some music or some drama we think would be an
incomplete service, at least with respect to the sort of vision that we would
like to bring forward.
18664 COMMISSIONER DEMERS: How much would that be
on your schedule?
18665 MR. TEICHER: I think we have suggested a
10 per cent limit on sports.
18666 COMMISSIONER DEMERS: Thank
18667 That would be the questions I have, Madam
Chair, on CROME TV.
18668 THE CHAIRPERSON: Commissioner
18669 COMMISSIONER WILSON: You probably saw me
grinning through the presentation for this channel. I have been grinning through
the presentations for all of the men's channels, so you
18670 MR. TEICHER: We will take that as a very good
18671 Thank you.
--- Laughter / Rires
18672 COMMISSIONER WILSON: You will excuse my
irreverence, but I have to say that in all three presentations for the men's
channels there was a common comment that was made and that is that men are very
difficult to reach. I was wondering why that is? Is it something innate
18673 MR. TEICHER: My wife would say it's because
we're thick that we are tough to reach, but --
--- Laughter / Rires
18674 COMMISSIONER WILSON: Does that play a part in
the kind of programming you will be targeting to them?
18675 MR. TEICHER: We may have to say things more
than once and loudly to get it through, but I think -- you know, it's hard
to say that men don't watch television or that we are not well-served in pockets
throughout a variety of schedules, but men are more than just wanting to go to a
18676 I think for many people, and men are no
different, it is nice to have a place called home. What we are trying to do with
CROME is create a place that is designed specifically for men, that covers all
their favourites and that does it in a way that honours them and respects their
point of view.
18677 We think it is, what John was saying earlier,
quite a big desirable genre and could be an extremely important driver for a
group of services that it goes with.
18678 COMMISSIONER WILSON: Thank
18679 CHAIRPERSON OF THE COMMISSION: It just
occurred to me, you spoke in your general criteria that affordability would not
be a question that we should really be concerned or over concerned with, that
out there the first viewers or the first subscribers will be ones that will come
for added value and they will be really willing to pay the price if there is
really a rendez-vous that is worth it. Yet I notice here in other projects you
have that you have a quite low wholesale rate.
18680 So how do you kind of reconcile your first
comment about it is not that important, but yet you are aiming at a very
affordable rate for the subscriber?
18681 MR. CASSADAY: We think the criteria that you
laid out was the appropriate criteria. In terms of trying to be inspirational,
we went to some degree of polarization to try to really focus on what we thought
the true hot buttons should be for you in making your decision.
18682 So clearly price is important, but we tried
to make it a broader equation, say it's about value. Something that you pay a
lot of money for that you perceive to be great value is still looked at as being
a good deal.
18683 So the price -- what we really were
trying to imply is that the goal shouldn't be to try to find five services that
we can package at a wholesale rate of 50 cents, because that is not what
this is about.
18684 To use the analogy of a CD, people will pay
$21 for a CD of music if there is two or three or four things on that CD
they really like. The likelihood of them paying $21 for a CD that they only have
one thing that they would like is pretty remote.
18685 So we are talking about value as opposed to
the actual price.
18686 CHAIRPERSON OF THE COMMISSION: Especially
18687 MR. CASSADAY: Right.
18688 CHAIRPERSON OF THE COMMISSION: Thank
18689 MR. ROBERTSON: I just might add that we were
really pleased that once we made our projections on price and then were able to
see the other applicants that we were really pleased that we fit comfortably
within the kind of range of prices that were offered and that indeed we would
represent good value. I think it's another compelling part of our
18690 CHAIRPERSON OF THE COMMISSION: Thank
18691 I'm sorry.
18692 THE CHAIRPERSON: Counsel?
18693 MR. STEWART: No questions, Madam
18694 THE CHAIRPERSON: Commissioner Demers. A big
break for you.
18695 COMMISSIONER DEMERS: Thank you, Madam
18696 Booknet is now on my list and the first
questions are, of course, on the nature of service and competitiveness. You have
stated that not more than 55 per cent of the evening broadcast period will
include programming from Category 7, drama, excluding feature film and specials.
Would you please clarify which type of Category 7 programs, other than 7(d),
feature films, you are actually referring to in your proposed 55 per cent limit
for the evening broadcast period?
18697 MS ROSS: Certainly. Under our proposed
category definition our reference to drama would include all of the Category 7
individual categories, excluding 7(e). That's right, 7(d).
18698 COMMISSIONER DEMERS: Thank
18699 Given that many feature films are based on
literary works, how can we assume -- how can you assure us that the drama
in feature film programming will be identifiably book related?
18700 MS ROSS: If you are referring to the
restriction, 10 per cent still gives us I think it is approximately six hours of
feature films per week. We think that we can still do a very good job of
delivering a service that includes discussion, as well as dramatization of
18701 The other opportunity is through dramatic
series or I guess other dramatic presentations in a shorter form that would be
covered off. So we think we can still do a very good job of delivering the
service based on books with that restriction.
18702 COMMISSIONER DEMERS: Thank
18703 How do you see 7(f), comedy sketches,
improvisation, stand-up comedy, fitting into the book genre
18704 MS ROSS: I think we are just leaving the door
open for creativity there, but I think that is certainly one subcategory we
could probably live without.
18705 COMMISSIONER DEMERS: Thank
18706 How much programming does Booknet project to
exhibit that would be related to family, youth, kids and
18707 MS ROSS: I will start and I will ask Karen
Gifford to just step in. But in terms of children's target, the way we have
conceived the service, kids are certainly a very important target audience in
18708 Our thinking behind that is that we have a
huge opportunity here to offer up book based children's programs, especially in
the animation genre where a lot of the most successful and most classic Canadian
children's books are best expressed in animation.
18709 So we see both animation and children's as an
integral part of the service. We hope by presenting it through the television
medium to stimulate more interest in reading, stimulate some enthusiasm for
books and show that they are accessible and that they can be
18710 As far as our percentage of children's,
currently in this proposal we are looking at 48 per cent of the schedule and
animation currently sits at, and, Karen, you can correct me here, but it's about
37 per cent of the whole schedule.
18711 Karen, do you want to add
18712 MS GIFFORD: No. Those are the correct
18713 COMMISSIONER DEMERS: Thank
18714 What kind of restrictions, if any, would
Corus be prepared to accept with regard to the exhibition of these types of
programming that we have discussed; family, youth, kids,
18715 MS ROSS: If we look in particular at
children's, as I mentioned it's an important part of the schedule. We are
currently in our schedule at 48 per cent and we could accept a restriction
of 40 per cent against a target audience of children, which I guess in your
breakout is either zero to five or six to twelve.
18716 COMMISSIONER DEMERS: Thank
18717 We have discussed previously the Cancon
exhibition and Cancon expenditures, but a few particular questions here and they
may relate to what our Chair has put forward when we came back just a few
18718 Given the relative high Cancon proposed, can
you explain how you will achieve your Cancon levels, especially in early years?
This question is put in perspective of how many repeats and how much Canadian
programming will come from Corus associates, associated services such as YTV and
18719 MS ROSS: Yes. I think we have a good schedule
with a large percentage of Canadian content that is quite easily deliverable. I
will get Karen to be specific in terms of what we have proposed in-house in
terms of production.
18720 There is great opportunity here to do weekly
programs, such as Book Magazine, that we could produce in-house by using our
18721 We also believe that we can work closely with
the independent production community to create brand new series. one in
particular that we have had a conversation with a producer on is targeted to
children and it's called "Draw Me a Story". It's a very interactive preschool
program that would feature a host who would draw out and create a story as he
takes contributions from children in a studio audience.
18722 So we have lots of great ideas. We know that
the repeat factor falls in line with most niche specialty services. We are
looking at a three to four repeat over the course of the broadcast
18723 The overlap with our existing services, we
are looking at less than 10 per cent with Treehouse in
18724 Karen, do you want to give the numbers on
18725 MS GIFFORD: Sure. In our first year of the
schedule what we have planned to do is 52 hours of in-house programming and also
to commission 78 hours on top of that. To break that down, 60 per cent of that
first-run programming would come from non-affiliated sources and 40 per cent
would be done with us directly.
18726 MR. ROBERTSON: I might add on this one that
this is a very exciting aspect of the service because with respect to within
this genre this is the highest level of Canadian content delivered in the early
going. We believe that it's something that is very achievable through the
relationships that we have with the independent producers.
18727 We have so many ideas that we can put into
action quickly that we can drive an exciting new service in the early going at a
high level of Cancon. We think that is one of the key benefits of this
18728 COMMISSIONER DEMERS: Thank
18729 This would be the questions I have concerning
Booknet, Madam Chair.
18730 THE CHAIRPERSON: Counsel.
18731 MR. STEWART: Thank you.
18732 I don't believe you answered the question of
Commissioner Demers with respect to animation, limits on
18733 MS ROSS: Yes. On animation, as I mentioned,
it's a good portion of our preschool programming. In looking at our schedule we
could accept a restriction that would fall outside of the children's block. So
what we would propose is a 20 per cent restriction between 4:00 p.m. and 10:00
18734 MR. STEWART: Would you be prepared to accept
that as a condition of licence?
18735 MS ROSS: Yes, we would.
18736 MR. STEWART: Thank you.
18737 With respect to categories within sort of the
family group, other than children, would you propose any limits?
18738 MS ROSS: Such as family?
18739 MR. STEWART: Or youth, for instance, i.e.
categories for children with respect to individuals that are older than the age
category with respect to children.
18740 MS ROSS: I think by covering children's and
animation we have probably put restrictions in place that would alleviate any
concerns of any of the interventions that we have seen.
18741 Family is broadly defined. Since a good
portion of our target audience is going to be adults, families come in all
shapes and sizes and combinations. So I think it would be a difficult one for us
to put a fine point on.
18742 MR. STEWART: Thank you.
18743 Thank you, Madam Chair.
18744 MR. HIRSH: If I could add something on behalf
of the animation industry. One thing to remember is that there are very few
channels that actually play animation. We all seem to think there are quite a
few, but when you strip away Family Channel, Teletoon and YTV and Treehouse,
there is very little animation on traditional channels in
18745 If you look at other sectors, whether it is
drama or whether it is documentary, there are many more services in those
categories and feature films that carry those types of programming. So the
animation industry, which has really benefited from the launch of services like
Teletoon, really could use additional homes for its output.
18746 THE CHAIRPERSON: I have to admit that I did
not take stock of whether or not you were asked a question on Canadian
18747 COMMISSIONER DEMERS: No.
18748 THE CHAIRPERSON: No, you
18749 COMMISSIONER DEMERS: No.
18750 THE CHAIRPERSON: I thought I hadn't heard
18751 This is the first of your specific
applications where there is a discrepancy. The staff calculated 37.5 per cent in
what I like to call the traditional manner and you had calculated 33 per cent
and today at page 7 you say that over the licence term you will expend 40 per
cent of revenues on Canadian programs.
18752 Would you be prepared to accept 38 per
cent, calculated and applied in the traditional manner, with the benefit of
whatever flexibility the Commission may insert into the formula?
18753 MR. ROBERTSON: I will let Jamie Haggarty
respond to this one.
18754 MR. HAGGARTY: I thought you'd
18755 In the calculation, I was able
18756 THE CHAIRPERSON: You don't have to wait until
we ask; you can just barge right on.
--- Laughter / Rires
18757 THE CHAIRPERSON: Anticipate our questions:
you get bonus points.
--- Laughter / Rires
18758 MR. HAGGARTY: Thanks.
18759 I had the ability just to discuss with the
staff, on the break, and we agreed and concluded that both of our calculators
are working; however, the definition of what was in the 37 per cent was --
it included unregulated revenue, and I think what we are happy to offer up is
not just the 38 per cent that the Commissioners offered but our percentage that
we would accept as a commission of licence is the 40 per cent that was referred
to in the opening comments; and that is based on what -- now, my
experienced colleagues have told me what the traditional method is and we would
accept a condition of 40 per cent, based on the traditional
18760 THE CHAIRPERSON: Not all applicants have
included in the fraction that we use, the numerators and denominators, the
revenue attributable to other than traditional advertising and subscription
revenue. Some have not. Others have included it -- which may well be your
case -- into your general revenues.
18761 Does your application allow us to take out
the revenues attributable to other than traditional advertising --
broadcast advertising revenue and subscription revenue?
18762 MR. HAGGARTY: Yes, it does. And that's the
reason that a percentage goes -- equates to 40 per cent.
18763 THE CHAIRPERSON: Yes. So, if we were to take
that out, what would be the percentage? If we only use what we refer to as the
regulated revenue, which would be this description "revenue attributable to
18764 MR. HAGGARTY: In Schedule 15 of our
application, it does display the other revenue, and it totals $3 million. And if
we remove the $3 million from our total revenue, the percentage of total
advertising and subscription revenue expenditures on Canadian programming would
be 40 per cent.
18765 THE CHAIRPERSON: Forty per cent, then, is
what you are committed to on that traditional calculation. Thank
18766 MR. HAGGARTY: Right. I'm glad we had this
18767 THE CHAIRPERSON: Thanks.
18768 And you are welcome to clarify it where there
was a discrepancy. We are just attempting to -- since all the applicants
tend to say "Yes, there should be a calculation and, yes, it should be the same,
based on what's been brought forward", we are attempting to see whether the
method is understood properly by everyone in the same way, so -- and it's
nice that you have learned something you didn't know.
--- Laughter / Rires
18769 THE CHAIRPERSON: Commissioner
18770 COMMISSIONER DEMERS: Thank you, Madam
18771 I would, now, want to discuss Discovery
Travel & Adventure, and I have only one short group of
18772 Your nature of service definition refers to
travel and travel-related programming.
18773 Could you explain what you mean by
18774 MR. ROBERTSON: Yes. Everything that would be
on the service would relate to travel destination or could have to do with
preparing for a vacation or -- but it's all, clearly, associated with
18775 COMMISSIONER DEMERS: Thank
18776 And, in the case of drama, travel-related
themes could be an especially broad concept.
18777 How can you assure the Commission the program
would fall in an identifiable genre?
18778 MR. ROBERTSON: Well, everything that we would
do in the drama category would relate, specifically, to travel-oriented subject
matter, and we also would be prepared to accept a limitation on that drama
programming to ensure that drama didn't become a large proportion of the total
18779 COMMISSIONER DEMERS: You state that your
drama will be restricted to no more than 10 per cent of the broadcast year, not
18780 How much of the schedule could be made up of
drama when repeats from the wheel are taken into account?
18781 MR. ROBERTSON: I would ask Karen Gifford to
respond to that.
18782 MS GIFFORD: Our schedule is set up such that
the wheel would repeat two and a half times in the schedule. So it would be
reflective of that.
18783 COMMISSIONER DEMERS: Okay. Then we should be
able to make the calculations.
18784 That's all I have, Madam Chair, on this
18785 THE CHAIRPERSON: Now, to further confuse
matters, the staff has just advised me that, in the question of travel, 41 per
cent would be the percentage arrived at.
18786 Is that your calculation, as
18787 MR. HAGGARTY: Yes, we agree with that 41 per
18788 THE CHAIRPERSON: So, now, you have a bonus
point at our expense.
18790 MR. STEWART: Thank you.
18791 Just to confirm, that 41 per cent is based on
the previous year's revenues. That's your understanding, as
18792 MR. HAGGARTY: Yes, we agree
18793 MR. STEWART: Thank you.
18794 Thank you, Madam Chair.
18795 THE CHAIRPERSON: Not based on the previous
revenues; it's applied to the previous year's revenue.
18796 We will never get out of this if we are not
--- Laughter / Rires
18797 THE CHAIRPERSON: Commissioner Demers, go
18798 COMMISSIONER DEMERS: We can't see each other
18799 THE CHAIRPERSON: The Chair is losing it. I
was in the way. I'm sorry.
--- Laughter / Rires
18800 COMMISSIONER DEMERS: Land & Sea, a
programming for rural audiences, can be a broad programming concept -- and
there was reference to that in your presentation -- especially given the
number of program categories you plan to broadcast.
18801 How would you define programming for rural
18802 MS DALZIEL: Well, I think I would like to
begin by just saying that rural Canadians, they define themselves as individuals
who live outside of the large urban centres, in smaller communities, who
predominantly make their living from the land and the sea and/or through
businesses that are directly associated with those that do. So that's how rural
Canadians define themselves.
18803 What we did, when we were looking at our
program schedule, is we took a look at that definition and we said, "We are
going to provide six streams of programming", and in looking at those six
streams, we identified how it would be addressed, from a rural
perspective -- and maybe I could just take a moment and I will just touch
base on each one of those, to clarify.
18804 For example, in the first stream of
programming, we talk about the core of the service being news and information
programming; and this will mean providing daily news coverage, tailored weather,
commodity reports -- and, again, much is what we talked about in our
opening address -- from a rural perspective, and in a much greater depth.
Any of these stories.
18805 Our second stream of programming would be
country connection programming; and, again, this is where we provide rural
Canadians with a platform, or a meeting place, where they can discuss issues or
debate areas of mutual concern -- and, again, it would be debates within
18806 The rural documentary programming will add
context and texture to the land and sea experience, but it will choose to
explore the history, the events and the issues of rural Canadians -- again,
people living outside urban centres, in smaller communities.
18807 And the lifestyle programming that we looked
at is where we thought this is where we could touch base and talk to rural
Canadians about, I call it "old-fashioned expertise" -- or maybe I should
say that's what my mother calls it. But it's looking at everything from, you
know, canning rhubarb to how to fix a fishing net. Again, these are all things
that are of interest to a lifestyle of people living in rural
18808 And in the drama scenario, we looked at the
best of Canadian world drama with an emphasis on rural themes and
locations -- and/or locations. So that would be what our definition would
be in that area. And it would include programs such as "North of 60", "Road to
Avonlea". They are very easily identifiable from their rural
18809 Finally, we had included variety and
18810 For us we believe that this service wouldn't
be complete if we weren't able to provide a country music component, as well as
local festivals, perhaps curling bonspiels, pro rodeo and fairs, festivals
and fairs from a rural perspective.
18811 That is more or less the summary of where we
come from with a rural perspective to all of our programming
18812 COMMISSIONER DEMERS: Thank
18813 Then can we look at it from the outside. How
can you assure that the service would remain distinct and would not become of
18814 MS DALZIEL: We have put some provisions into
our conditions of licence regarding feature films and in regards to professional
sports and amateur sports. Those provisions have already been
18815 COMMISSIONER DEMERS: Nothing to add. Thank
18816 Could you explain if Land & Sea would
benefit from synergies such as shared programs with the Corus-owned
18817 MS DALZIEL: Actually, this is what we are
very excited about with this application. We believe that the synergies that are
offered between Corus and CBC are what make this service viable. We think
without this type of unique partnership this service wouldn't
18818 Perhaps what I could do is I could forward
this question to our partner and to Jane Chalmers to address a little more
18819 MS CHALMERS: We are talking about programming
here from a perspective of a substantial group of Canadians who really have very
little and in some cases nothing on the airwaves -- 3.7 million Canadians
basically turning on the TV sets -- that is, if they have access to cable
or satellite yet, and many of them don't still. They are watching largely urban
discussion, urban debate, urban programming.
18820 We have talked to them in depth, virtually
every rural organization in this country, and they speak passionately about the
overwhelming need to have a voice in this country, to have a connection with
this country. It's kind of a digital railway, if you would like, about what this
service might mean to them.
18821 They want the ability to connect to each
other, to share and to make their lives better. Then, on the broader scope, as a
secondary importance, is they want and need an ability to connect with urban
Canadians who they feel have very little appreciation toward their lifestyle and
18822 CBC, I would agree totally with what Vickie
says, that this is only possible because of this partnership. CBC is going to be
offering its journalism, its tradition. We are very proud of our track record.
We have a tremendously good relationship with Canadians in terms of trust and
integrity in our journalism, as well as our stringent journalistic
18823 We have a substantial news infrastructure
across the country and Land & Sea will certainly be harvesting and
repurposing material both from CBC sources and international sources that we
have already. We will be repurposing that material from a rural perspective and
talking to the experts and individuals across rural Canada to engage them in
18824 We will also be augmenting that with a
significant investment from this channel and brand new journalistic resources
whose jobs it will be to generate new journalism from rural Canada, and
certainly engage them in a variety of ways in national debates and also specific
stories from specific regions.
18825 We also bring to the table our extensive
rural archives, and that can't be underestimated. I think one of the wonderful
things about working with CBC is that we have history and we have these archives
that we are just in the process of digitizing that speak to 50 years in this
country and every region of this country. What that allows us to do, from a
journalistic point of view, is to provide the context and history towards any
given issue that I can think of that might arise in the country.
18826 We also have, I think, a good entrusted
relationship. We have shown on our main channels, and certainly through CBC
radio, a commitment to rural Canada through shows like: Country Canada, which
has run for over 40 years -- it's the longest running current affairs
program; Land & Sea; On the East Coast; On the Road Again, of course; and,
of course, CBC Radio.
18827 This programming that we are going to be
doing is brand new. It's brand new because of its perspective, because it
is -- a group of people are going to get to talk first and ask questions
first of policymakers and of each other.
18828 Just as a closing, I want to just really
emphasize a couple of things that they told us they need and want, and they
don't have this now -- I mean, that's why this application is so much about
service. They are crying out for this. They want information, that's the core
service. They want knowledge. They are in a highly technical, competitive,
global environment now, and they want, you know, any news that they can get on
scientific research and technology that can give their companies an
18829 They want connection, and right now they
don't have that living in isolation. I'm from a farm myself and I can tell you
it can be fairly lonely.
18830 So suddenly we have these technical means to
be able to connect people together, from coast to coast to coast, to be able to
share experiences and successes and concerns.
18831 And they want context, an appreciation for
their history, an appreciation for their lifestyles and traditions, and
appreciation for the challenges they face in the future.
18832 This is the kind of commitment that we are
trying to bring in terms of the development and design of our information
18833 COMMISSIONER DEMERS: Thank
18834 Thank you, Madam Chalmers.
18835 Is it one of the applications where we agree
18836 MR. ROBERTSON: No. We are going to have to
clarify this one too.
18837 COMMISSIONER DEMERS: Please.
18838 MR. ROBERTSON: Thanks for
18839 We will get Jamie Haggarty to set the record
18840 MR. HAGGARTY: We do agree with the
calculation now. Earlier, we had indicated a reluctance to go up to the higher
percentage of Cancon spending, but on further review we not only agree with the
new calculation but also agree with it as a condition of licence of 51 per
18841 THE CHAIRPERSON: Mr. Haggarty, you are
becoming an expert in a flash.
--- Laughter / Rires
18842 COMMISSIONER DEMERS: These are all the
questions I have, Madam Chair.
18843 THE CHAIRPERSON: Counsel.
18844 MR. STEWART: Thank you,
18845 How much CMT programming will be scheduled on
Land & Sea?
18846 MS DALZIEL: We foresee a marginal amount of
programming that will be shared. But we certainly hope to have some music
programming that will be a part of the service. We have done several concerts
and seasonal program specials that would be an ideal fit for this service and
would certainly offer these programs, you know, a great potential for another
18847 MR. STEWART: Can you be a little bit more
18848 MS DALZIEL: We would be more than prepared to
set some sort of stipulation with regards to overlap, if that's what you are
18849 MR. STEWART: And what would you be prepared
18850 MS DALZIEL: Excuse me. I'm just so compelled
by that comment that James said.
18851 We would be prepared to accept the parameters
that 10 per cent of the programming on Land & Sea in any given month would
not overlap CMT; and the same could be said for CBC.
18852 MR. STEWART: Thank you.
18853 Thank you, Madam Chair.
18854 THE CHAIRPERSON: Commissioner
18855 COMMISSIONER DEMERS: Thank you, Madam
18856 The next application I would like to question
on is Parent TV.
18857 The first question is on the nature of
service. Would you accept the following as part of your nature of service:
Parent TV's programming will consist exclusively of education, discussion and
information about family life and parenting issues?
18858 MS ROSS: Yes, we would.
18859 COMMISSIONER DEMERS: Thank
18860 Cross-promotion opportunities with YTV and
18861 Your application states that Parent TV would
further benefit from the Treehouse and YTV relationship through ongoing
cross-promotion opportunities allowing it to capitalize on parent-child viewing.
Please explain the correlation amongst the services: duplication of programming,
sharing of programming costs.
18862 MS ROSS: Thank you.
18863 I think with Parent TV we have a tremendous
opportunity to expand on what we already know about producing and broadcasting
Parent programs. We have produced I believe it's about 136 episodes over three
Parent series that have aired both on YTV and one in particular on Treehouse as
part of our Parent block. So within certainly the Parent block on Treehouse, we
would be able to cross-promote Parent TV programming.
18864 In terms of duplication, we would see very
little, less than 10 per cent duplication between the services. We think
that the optimum opportunity is to take advantage of the enthusiasm, especially
with the Treehouse audience that their parents in particular have for
participating in their television viewing and also what they do and how they
engage with Treehouse off-air, if you will.
18865 Treehouse is a very active, on-the-road live
performance series and it is within that context that we are able to attract a
lot of parents and grandparents and caregivers.
18866 So we see that Parent TV could benefit
tremendously from those sorts of venues where we can give profile for the
network as part of a new digital tier, give profile for some of the programs and
the hosts. So we think that the synergies are very, very strong between the
18867 COMMISSIONER DEMERS: Thank
18868 On original production, Schedule 10
indicates that Parent TV will provide approximately 183 hours of original
Canadian production. Can you confirm how much original production your service
would broadcast? Here again we exclude repeats.
18869 MS ROSS: Okay. Yes, the original production
is going to be an important part of this service. I think it will help make it
distinctive. I believe we have existing partnerships with independent producers
that will bring forward brand new ideas and brand new ways to impart really
important parent information.
18870 I will ask Karen Gifford just to give you the
specifics that you are looking for.
18871 MS GIFFORD: Within the first year of our
schedule that we have provided here we have approximately 97.5 hours of
first-run programming. Fifty-three per cent, in fact, of the Canadian
programming is first-run.
18872 COMMISSIONER DEMERS: Thank
18873 Independent production, and the question
would relate to the -- would be based on the synergies of YTV and
18874 Please explain how these synergies will
affect Canadian independent production.
18875 MS ROSS: Well, I think that, as we have
stated, the independent production component of the service is going to be
extremely important in order to bring new creative methods of disseminating
important information in any number of combinations and ways.
18876 But I think that what we will offer or what
we have offered is a level of independent production in terms of
18877 Karen, maybe you can just
18878 MS GIFFORD: Again within our first year
46 per cent of the Canadian production that I indicated earlier is from
non-affiliated partners. After our first year we intend to do our first-run
independent production outside of affiliation.
18879 COMMISSIONER DEMERS: Does Parent TV use any
18880 MS ROSS: Yes, we would do a limited amount of
18881 I think in a service such as this there are
sometimes very straightforward opportunities that exist with the infrastructure,
within the existing infrastructure. So yes, we would.
18882 We have currently produced for Treehouse a
program called Caring for Kids, and because it has already been produced and
developed we would, for Parent TV, continue to produce it in-house and create
18883 Karen, do you want to add
18884 COMMISSIONER DEMERS: Thank
18885 Again here are we in agreement with the
statistics, Parent TV 38 per cent from the beginning?
18886 MR. HAGGARTY: Yes, we are in
18887 COMMISSIONER DEMERS: Thank
18888 Thank you, Madam Chair.
18889 This would be the questions I have on Parent
18890 THE CHAIRPERSON: Counsel?
18891 MR. STEWART: Thank you.
18892 Just to clarify, for year two did you --
what commitment with respect to independent production did you give, if
18893 MS ROSS: For year two
18895 MR. STEWART: Year two and subsequent years,
because I heard you to give a percentage with respect to year one, but I just
wasn't sure what you committed to, if anything, for subsequent
18896 MS ROSS: Yes. I will pass that to Karen,
--- Pause / Pause
18897 MS GIFFORD: Across the seven years of the
term we are looking at $12.9 million to independent production,
18898 MR. STEWART: I'm sorry, I must have
18899 So you didn't say anything about years two
and subsequent in terms of percentage of --
18900 MS GIFFORD: No. The numbers I quoted earlier
were for year one of our plan.
18901 MR. STEWART: Only.
18902 MS GIFFORD: Yes.
18903 MR. STEWART: Thank you.
18904 Thank you, Madam Chair.
18905 THE CHAIRPERSON: Commissioner
18906 COMMISSIONER DEMERS: Thank
18907 We are at the ultimate, the last application,
The Canadian Documentary Channel. The question concerns
18908 As you are aware, the Commission is also
considering applications for independent film channel, all of which propose to
include at least some documentaries in their program schedule. What percentage
do you consider to be the threshold level of documentaries that an independent
film channel could broadcast above which it would be directly competitive with
your proposed service?
18909 MR. CASSADAY: We believe that in the
television environment that we operate in today many services are indirectly
competitive. The History Channel shows a number of documentaries, and yet it
hasn't impacted on CBC which perhaps might previously have been the leading
purveyor of documentary programming. You know, there is a Headline News channel
that has not irreparably harmed NewsWorld.
18910 So we believe that the importance of the
documentary channel is not in any way diminished by the fact that there may be
documentaries on other services.
18911 The significance and importance of the
documentary channel is that we believe that this is a genre, a category which in
and of itself deserves to be heard seven days a week, 24 hours a day, that
there is sufficient interest in this category itself that we can withstand
competitive operators showing documentary programming.
18912 I would like to just ask my colleagues to
comment, if they will, on the legitimacy of this category as it relates to a
full stream documentary channel.
18913 Perhaps, Sandra, if you would, you could
18914 MS MACDONALD: Certainly our presence here I
think indicates how important we think it is to have a service that is devoted
to the documentary as such, a service that is different from a themed service
like History or Discovery and also different, of course, from news and current
affairs. Because the documentary is a distinctive form, it has its own shape, it
has its own rationale, and we have a lot of it in Canada, we are very good at
it, and the things that we have have actually, as with animation, fewer outlets
than you might imagine.
18915 Although the proliferation of specialty
services in recent years has created some opportunities for Canadian programs to
be made according to particular formulas and limited restricted themes, there
are very few places to put the unique documentary, the documentary that doesn't
fit a formula, the documentary that is very Canadian.
18916 Anyone who attempts to market documentaries
in the world will tell you that the more local and distinctive the thing is, the
harder it is to find an international market for. Although we do sell a great
deal abroad, we see every single day that the thing that works against us in the
international market is how Canadian we are, but we think that what would work
for us in the Canadian market and on this channel is how Canadian we
18917 That is my perspective, but I think my
colleagues are kind of passionate on this topic too and would hate me to hog the
18918 MR. STAROWICZ: Commissioners, what you see in
front of you is a rainbow coalition of one of the most respected specialty
channel operators, four of the finest independent production companies in the
country, the senior service in cinematography in this country, the National Film
Board and the Canadian Broadcasting Corporation, and I think it is a historic
alliance. We are all here together to fight for the documentary
18919 The documentary forum was born in this
country between 1920 and 1922 as Robert Flaherty's film "Shot on Ungava
18920 John Grierson coined the word "documentary"
in this country. The documentary is essential to the discourse, the civil
discourse and the community discourse in this country.
18921 It's not that we are more enlightened than
anybody else, but the documentary is an empowering form. The documentary camera
points in dark places. The documentary camera goes to Ungava Bay. The
documentary camera goes into slums. The documentary camera goes to dying fishing
18922 MS MACDONALD: Dance
18923 MR. STAROWICZ: Dance competitions and comedy
clubs too. I mustn't be too earnest.
18924 Nevertheless, the reason it's essential to
the Canadian discourse is, and the reason it has taken root so deeply in this
country is perhaps dictated by its geography, dictated by how scattered we are,
but the documentary has become one of the central grammars by which we
communicate with each other, one of the ways someone in Sudbury is able to tell
their story, that someone in St. Jérôme is able to tell their story, the way in
depth. So it's a form of empowerment.
18925 The reason it must have, in our view, its own
platform and that the genre has its own integrity is that this is one of the
central means by which Canadians communicate with each other, have communicated
with each other and that the base of our application is that this is a
predominantly Canadian service, emphasizing the exchange of the Canadian
experience and Canadian stories and crossing linguistic lines.
18926 That's why we believe it is a specific
channel, a specific genre and essential actually to the conduct of Canadian
18927 MR. BARNA: I just would like to add something
brief. I think what this channel is about is recapturing something that we
shaped, something that we got very good at, the documentary.
18928 This weekend I was amazed. I had never
actually watched the program, but I was amazed at the number of covers
"Survivor" got and it has got a new name, it's reality
18929 There is "Big Brother". I actually tried
watching that a couple of times and it's rough.
18930 I think we need a forum where we can redefine
community in this country. Community, as it was brought to us originally, first
with the advent of up to 60 millimetre that was able to go out. I remember just
sort of losing my breathe the first time I saw Leonard Cohen in his element in
the NFB movies and Paul Anka.
18931 I remember the excitement when I was able to
go to Beirut and travel with the CBC crews and have the
18932 I think that this channel will address
partially some of those historical roots, but also help us move into the
18933 Perhaps at some point we can bring up the
whole notion that also connected with this channel is an important notion of
training a new generation of filmmakers. I have the platform and so I can say
this, but the documentary forum, in addition to bringing communities together,
has actually trained almost every single one of our directors, documentary or
18934 If you think of some of the classic names,
John Smith, Denis Arcand, Gilles Carle, Norma Bailey, all have gotten their
18935 MS MACDONALD: Sterla
18936 MR. BARNA: Sterla Gunnerson. All have gotten
their start in documentaries and all have gotten their passion from sharing
stories with Canadians about Canadians.
18937 So I think this is what we can bring as a
genre to an audience and to an audience that is hungry for something distinct
and at home. That's all.
18938 MR. CASSADAY: I think you get the sense from
this that we are less concerned about whether the Indie channel has 20 or 25 per
cent as a maximum on documentaries than we are about the fact that this is a
genre which we feel will attract an audience because everyday, every hour of
every day there will be a documentary for people to watch.
18939 So we are quite comfortable with whatever
decision you make in that regard.
18940 COMMISSIONER DEMERS: Thank you,
Mr. Cassaday. Thank you also to your partners.
18941 On Cancon exhibition commitments, maybe we
have cleared that one, but I am not sure. It's section 7.4 of your application.
You indicate Cancon levels of 60 per cent, increasing to 66 by year seven. Yet,
Schedule 1 of your submission states that you expect to begin at 66 Canadian
content and grow to 75 by the seventh year. Can you explain the differences in
18942 MR. CASSADAY: Yes. The higher number refers
to our business plan and simply reflects the fact that as a core value our first
core value is we do what we say we will do. So, our commitment, as stated in the
condition of licence, is the lower number.
18943 However, it is our intention, our business
plan, to perform at the higher numbers that you stated and, in fact, because we
have every intention of doing so, we would be willing to commit to those
business plan numbers.
18944 COMMISSIONER DEMERS: Thank you,
18945 My last question concerns original Canadian
programming. Here again maybe we have cleared that one, but I want to make sure
18946 The involvement of the CBC and NFB provide
your proposed service with access to both of those organizations' vast program
inventories. Can you provide the Commission with an indication of how much of
this service's Canadian content would be new material and how much would be
drawn from NFB archives or programs which have already been broadcast by the
18947 MR. CASSADAY: As you will note from our
numbers, at least 26 hours a year will be programming actually triggered by this
service. So at minimum, once every other week there will be a new documentary
available to Canadians by virtue of licensing this service.
18948 Perhaps, Karen, you could help elaborate on
the more detailed question.
18949 MS GIFFORD: Sure. In addition to the 26 new
hours each year that we will get from independent production that is not
affiliated, we are looking at acquiring from the CBC 200 hours and the NFB the
100 hours that you had indicated. From that NFB we could expect that potentially
about five hours would be first run on our channel.
18950 In addition to that, we would be acquiring
from the independent production sector, non-CBC, non-NFB, an additional
approximately 164 hours of documentary programming.
18951 COMMISSIONER DEMERS: Thank
18952 Mr. Cassaday, these are the questions I had.
Thank you very much to you, to your team and to all your partners. Madam
18953 THE CHAIRPERSON: Madam
18954 CHAIRPERSON OF THE COMMISSION: I have two
questions coming back on the attractiveness. You know, travel seems to be one
that many applicants have seen as being an area and demand studies seem to be
kind of supporting, but there are other genre where we have a similar kind of
demand. So how do we choose in the case of travel, you are there, you are one of
the applicants, so it is not any more the attractiveness of travel if we were to
make it like the first. How do we see what's the best combination to bring that
18955 Why is it that in your applicants that there
are some genre that through demand studies that we have provided by other
applicants you are not there? What has made you choose not to be there in some
genre that could be very in demand, but you have chosen not to be
18956 I am trying to see from two sides what has
been your own reasoning to make your own choices to help inspire ours, and
eventually help or provide real choices to the viewers because that's at the end
of the day what we are all working for. It's to provide real, valuable choices
to the viewers.
18957 MR. CASSADAY: I think in some respects it
came down to doability. For example, let's take the computer channel. It's an
area that appears to be quite fertile. Everyone is interested in learning more
18958 ZDTV has defined the category. We had
significant discussions with them about partnering with us and they decided to
choose other people to partner with. So if you can't out ZDTV in the computer
category, let's move on to the next one. So there was an element of that in each
of our decisions.
18959 What we wanted to make sure, given the time
and effort that goes into preparing for a hearing such as this, is that the
applications that we put forward we viewed to be competitive within the
18960 Let's look at the second part of your
question. Okay, so you can't be in every one. We understand why you are not in
some and why you are in others because you have explained that to
18961 Now, how do we choose within genres and let's
talk about Discovery, for example.
18962 The Commission is either going to love our
application for Travel because we have a large successful global U.S. based
partner in Discovery, or they are not going t like it because of that, but
that's who we are. We have the company that defined this category around the
18963 If you were to look at their Web site, given
our interest in interactivity here, you would be hard pressed to find any Web
site for any area of interest that is as fertile as that particular Web
18964 What this application offers is the
opportunity to provide a window on that element of our schedule which is
Canadian to Discovery's network around the world. So people will be exposed by
virtue of this partnership to programming about Canada that they would not
ordinarily have been exposed to.
18965 Other applicants will say: Why on earth would
we want a travel channel which is partnered by a U.S. company? So again, that's
a tough call. Our view is that they defined the category and the opportunity to
expose Canadian programming to their network is great. And let's face it, if we
are denied, the successful applicant will be on the first plane to Discovery to
try to arrange for the output that we contracted with them
18966 So, you know, these are the trade-offs and at
the end of the day you are going to have to make a number of difficult
decisions. Again, we have simply suggested that we think -- and we don't
think this is a personal agenda. This is about building the distribution of
digital to the benefit of the entire system, that we should start off trying to
do our best job to say: Here are the ones that are going to drive digital
deployment. Then, within those genres or categories that we have selected, here
are the most worthy applicants because of the partnership, because of the level
of content, because of our belief in the leading player to deliver what they
said they would deliver.
18967 If these were all obvious, we probably
wouldn't be here today.
18968 CHAIRPERSON OF THE COMMISSION: Tell me, with
that -- you know, understanding your approach to it, what I read is either
you had within Corus the strengths to go with, you know, as Corus because you
had the proper channels and the proper expertise, or you looked out there who
had the best expertise to complement yours, so that you could -- that's how
I understand it.
18969 Does that mean that you see that any ramp-up
type of strategy wouldn't work, that we need and some have been saying more than
even in the last round of analog there is a definite pressure to make it
successful from day one. Otherwise, the promises that are there, especially that
we are talking at first with the small numbers of potential subscribers, that
unless it is something that is really striking and that we can create some noise
around, that there will be no go eventually, or that it will be a more slow go
that there is no business purpose.
18970 So do you see a relationship there on the
necessity of having something that is as good on the first year, for example, as
the seven years?
18971 MR. CASSADAY: If you hear about a new
restaurant in your neighbourhood and you go to it and you have a terrible meal
and the restaurateur explains to you that he's just ramping up and, you know, if
you will come back and try again, you may find yourself much better satisfied
next time. I think the analogy here is the same, you know, if your neighbour is
not saying to you, you know, "I just got that new digital box" or "I just
subscribed to Star Choice and I just was looking at some of these new channels
that I have been reading and hearing about and, you know, they are terrific",
then we have got something really positive going for us.
18972 If, on the other hand, the word of mouth is
that these services aren't worth, you know, the price of a newspaper, then, you
know, what is the likelihood that we are going to see the kind of momentum that
we would all like to see?
18973 Our only point is that if we start off
strong, the other worthwhile Category 2 applications, of which we have numerous
ones, will have a much better chance of being successfully received because
people, having been satisfied with the first pod of digital tiers, will then
experiment with the second, which will probably end up being much more
thematically driven and, you know, that's sort of my thinking on this
18974 MR. ROBERTSON: Can I just add on to that one,
that the other related point is that the Canadian content exposition, we
believe, should be very strong, in the early going -- and we do understand
that some of the applicants may say that it takes time to develop good Canadian
content and there isn't an availability of existing programming.
18975 In our experience, looking across all these
applications, we feel that, through an extraordinary effort and through building
on the relationships and relying on the independent production community's
resourcefulness and creativity, you can drive high levels of Canadian content in
the early going.
18976 So we would ask you to be a little sceptical
of the long-term promise that, "In Year 7, we are going to get there" and look
to the licensees that are willing to step up, in the early going, from an
exhibition standpoint, as being favoured.
18977 CHAIRPERSON OF THE COMMISSION: Thank
18978 MR. STAROWICZ: May I add something, Madam
18979 I believe ramp-up is code for American
importation and counting on an unregulated universe.
18980 You have a business plan in front of you here
by people that are not used to losing money; that is, at 60 per cent, 66 per
cent Canadian content. It is doable and it is possible, without ramp-up, to come
on stage dramatically, now, with a Canadian documentary channel -- and I
don't understand the ramp-up argument. It does not take five years to incubate a
Canadian documentary, and I would encourage, along with my colleagues, some
scepticism about this phrase.
18981 Thank you.
18982 MR. HIRSH: I would like to add something, as
well, Madam Bertrand.
18983 I agree totally. I think that if we look at
the services that have been successful and have been good locomotives in other
tiers, they are services that have come out of, you know, the box, basically,
very strong, with lots of new programming, and I think that, in looking at the
applicants that are in front of you, overall, I think it's critical to look at
applicants who have very successful services, are great operators, know how to
reach the public with services, how to market those services so that the
satisfaction level is very high, and I would argue that you have great team in
front of you, today, with the Corus people.
18984 THE CHAIRPERSON: Merci.
18985 Commissioner Wilson.
18986 COMMISSIONER WILSON: As a regulator, and as a
member of this Panel, I'm probably not supposed to say this, but I'm a huge fan
of documentaries. You know, you have sort of a seminal memories of things that
happened in your youth, and I remember going to the church basement for
screenings of NFB documentaries and, you know, just being so overwhelmed by the
views of Canada that I got in a small Ontario town -- not so small any more
18987 So I'm very happy to see that many of the
applications have included documentaries in their schedules, in addition to the
fact that there are a number of applications for documentary channels. But I
just -- for that reason, I wanted to ask a question about the nature of
your arrangements with the CBC and the NFB, with respect to the documentaries
that you will source.
18988 I believe you said that it would be 200 hours
from the CBC and 100 hours from the NFB, each year? Or over the life of the
18989 MS GIFFORD: Each year.
18990 COMMISSIONER WILSON: Each
18991 Do you have an exclusive arrangement for the
use of the documentaries that you choose from their catalogues, or their
inventories, in terms of -- as I mentioned earlier, there are other
services that are planning on offering documentaries that are thematically
related to the genres of their services and so, I'm just curious about what
kinds of arrangements you have made with the CBC and the NFB for the
documentaries that you would use on your channel.
18992 MS MACDONALD: Maybe I will answer
18993 First of all, I want to add a nuance to the
200 and the 100. Our partners, the four independent production companies, also
have catalogues -- which the channel has no right to ask for but we can
look at -- and, in the event that the catalogues from the independent
companies are going to find a place on the schedule, the number of hours coming
from the NFB and the CBC, in each year, would be reduced by that amount, so that
the amount of shelf space, shall we say, available for non-affiliated
independent producers will never go below 164 hours a year. So that's -- I
just wanted to clarify that our amount can diminish, but it wouldn't
18994 The second thing --
18995 COMMISSIONER WILSON: It's really the
exclusivity notion --
18996 MS MACDONALD: Yes,
18997 COMMISSIONER WILSON: -- that I'm more
18998 MS MACDONALD: Right. And, actually, given the
nature of specialty services of all kinds, basically, the material we are
offering will not be exclusive.
18999 We have 7,000 documentaries in our catalogue.
Last year, alone, to broadcasters around -- in Canada and around the world,
we sold, of distinct different titles, over 4,000. There is plenty of inventory.
And so, the fact -- the possibility of our films being over-exposed and,
therefore, needing exclusivity is simply not there.
19000 COMMISSIONER WILSON: It would not be in the
interest of the services, I guess, to have the same documentary running on
multiple services but --
19001 MS MACDONALD: But it's -- well, it's so
unlikely to happen.
19002 And the second thing is, of course, that one
of the reasons why this service has a good business plan is that what we, in the
CBC, bring to it is a wealth of good, interesting programming, which is offered
to the service at a very bargain-basement price, because of the volumes that's
going to be taken. And what that means is that, of course, for a
bargain-basement price, you don't get exclusivity. That's one
19003 And the second thing is that, of course, that
means that the available program funds can offer higher licences to the
independents and the non-affiliated parties than they are offering to the CBC
and the NFB.
19004 COMMISSIONER WILSON: And what about the
19005 MR. STAROWICZ: There is no exclusivity
included in the contracts. We regard the assets of the Canadian Broadcasting
Corporation to be public assets.
19006 COMMISSIONER WILSON: Thank
19007 THE CHAIRPERSON: Mr. Haggarty, now that you
are an expert --
--- Laughter / Rires
19008 THE CHAIRPERSON: -- can I get your
comments on -- one of the difficulties that has been brought forward about
this formula that, in a sense, we have somehow twisted your application into
fitting within the mould, once you agreed that a mould is a good idea,
considering the competitiveness of the process, Year 1 hire expenditures and
Year 2 hire expenditures are the difficulty, of course, that it's not recognized
because they are higher compared to the revenues, so the numerator and the
denominators are a bit artificial, for the beginning years, therefore, so is the
percentage. Is a 10 -- I think Mr. Robertson or Mr. Cassaday said a
flexibility of 10 per cent to 15 per cent of over- and under-expenditures
would be helpful.
19009 Would it be your view that it would have a
bit of an effect of helping this first-year problem by allowing over-expenditure
in the first year carried forward than by a lower -- a higher expenditure,
rather, in the first year, and that would be recognized in the following year
and would have a bit of a smoothing effect?
19010 MR. HAGGARTY: Yes, I would agree with that
rationale, that it would have that advantage. And I don't think it would
encourage us to over-spend, regardless, in Years 2 or 3; I think we will spend
what's necessary to drive viewership. But to allow us that flexibility for carry
forward would be welcome.
19011 THE CHAIRPERSON: Yes, but you are familiar
with the labyrinthian regulatory process. The problem of course is we have to
have some way of testing conformity with promises made, which I'm sure your
company would be glad to see that that is what your competitors are held to if
indeed in certain genres they are the winners and you are not.
19012 So I'm glad that you are now as old as Ms
--- Laughter / Rires
19013 MR. HAGGARTY: Actually, I looked younger
before this whole process started.
--- Laughter / Rires
19014 THE CHAIRPERSON: Counsel.
19015 MR. HAGGARTY: Excuse me, Madam Chair.
You invited me to interrupt earlier, so I will take you up on that
19016 I wanted to clarify a percentage on the
documentary application that was discussed earlier this morning. It's to clarify
the reference to 50 per cent of our spending towards
19017 I would just like to clarify that the 50 per
cent is of our total spending on Canadian licensing and acquisition spending.
Just for further clarity, that refers to the line in section 8.2 of the
application under the "Acquisitions" line.
19018 THE CHAIRPERSON: Thank you very much. Keep
this up, you will be a Commissioner soon.
--- Laughter / Rires
19019 THE CHAIRPERSON: Counsel.
19020 MR. STEWART: Thank you, Madam
19021 That commitment to the independent sector,
would you be prepared to accept it as a condition of licence?
19022 MR. HAGGARTY: Yes, we would.
19023 MR. STEWART: Thank you.
19024 The higher Canadian exhibition percentages
that you have referred to today, would you be prepared to commit to those as a
condition of licence as well?
19025 MS McNAIR: Yes, we would.
19026 MR. STEWART: Thank you.
19027 Thank you, Madam Chair.
19028 THE CHAIRPERSON: Thank you.
19029 We have exhausted our questions, so we invite
you, Mr. Cassaday or Mr. Robertson, or whoever but not both, to wrap
--- Laughter / Rires
19030 MR. CASSADAY: Thank you,
19031 THE CHAIRPERSON: For the benefit of Mr.
Haggarty, this is the part where you answer questions that were not asked.
--- Laughter / Rires
19032 MR. CASSADAY: The next time we promise to
have Mr. Haggarty in the front row so he can play an even more important part in
19033 We certainly appreciate the opportunity to
have appeared before you today. We hope that we were of some help in our
discussion as to how we see the important roll-out of digital television, and
that our views are seen only as constructive suggestions, but we believe that
they can be fruitful, and hopefully you feel the same way.
19034 We attempted to come to you today with our
Category 1 licences with an eye to recognizing the importance of significant
genres. As we mentioned earlier, we have a number of Category 2 applications
which you did not hear about today, but what we bring in these applications
today is two things.
19035 First of all, diversity in terms of both
voices with our partners and in terms of the programs. We believe that there
will be programs that can't be seen otherwise, with the addition of these
services to the roster of available licences.
19036 Each of our services, as Paul has indicated
earlier, has a high level of Canadian content: documentaries, 66 per cent,
committed to 70 per cent earlier; Booknet, 75 per cent; Parent, 65 per
cent; CHROME, 65 per cent. So, again, I think clearly we have stepped up to the
plate on that front.
19037 We think that if you think the celebration of
books is a worthwhile category to be licensed, the involvement of Nelvana, the
experience of YTV and Treehouse, and the experience of Valerie and Kids Can
Press make that a very difficult application to deny.
19038 If you think travel is a worthwhile category
to enter, the participation of the world's defining player in this genre in
Discovery again make it an application hard to deny.
19039 In the case of documentaries, I think we have
heard a passionate discourse from CBC, NFB and the independent sector to support
the need and the viability of a seven by 24 documentary service available in
19040 Parenting. Through our involvement again with
Treehouse TV, we have become aware of the demand for information about the whole
difficult task of parenting.
19041 CHROME, with the addition of Salter Street
and their particular point of view, we believe can be an excellent service for
that hard-to-reach male that you have heard so much about.
19042 Then, finally, Land & Sea. As Jane, I
think, pointed out so eloquently, we do have a lot of disenfranchised Canadians
that are rural Canadians that have an opportunity to be connected within a
significant and meaningful way through the service Land & Sea that we
19043 So we wish you well in your
19044 Thank you for the opportunity to present and
for the opportunity to wrap up. We look forward to your
19045 Thank you.
19046 THE CHAIRPERSON: We will see you again
first -- twice.
19047 You will remember that there were some
questions posed for which we expect an answer in Phase IV, some of which you
have already given us answers, but as the process goes on you may change your
mind by then.
19048 We thank you for your co-operation. I think
it's been a fruitful morning. We look forward to seeing you at Phase II --
or some of you at least. Don't forget Mr. Haggarty.
--- Laughter / Rires
19049 THE CHAIRPERSON: We will resume at two
o'clock. Nous reprendrons à deux heures.
--- Upon recessing at 1235 / Suspension à 1235
--- Upon resuming at 1400 / Reprise à 1400
19050 THE CHAIRPERSON: Good afternoon and welcome
back to our hearing. Rebienvenue à notre audience cet
19051 Monsieur le Secrétaire. Mr. Secretary,
19052 MR. CUSSONS: Thank you, Madam
19053 We will now hear applications for six new
Category 1 services by Salter Street Films Limited, OBCI. This means of course
that Salter Street will have 45 minutes to make its
19054 The proposed services are: Comedy for Kids;
Girls TV; the Independent Film Channel of Canada; ZTV; Nature TV; and, Play
19055 We have Ms Catherine Tait and her
19056 Ms Tait.
PRESENTATION / PRÉSENTATION
19057 MS TAIT: Good afternoon, Madam Chair,
Commissioners, Mr. Secretary, Commission staff.
19058 It's a pleasure to appear here today and to
present to you Salter Street Films' applications for digital specialty
19059 Before proceeding with the formal
presentation, let me first introduce our panel.
19060 My name is Catherine Tait. I am President and
Chief Operating Officer of Salter Street Films. I joined Salter Street in 1997
and took the company public in 1998.
19061 To my right is Michael Donovan, our Chairman
and CEO. Michael co-founded Salter Street with his brother Paul in
19062 To my left is Claude Galipeau, Vice-President
of Corporate Planning. Claude is in charge of the digital broadcasting project
and developed the business plans for all our channel concepts.
19063 To Michael's right is Deborah Carver,
Vice-President of Communications. Deborah worked on the marketing plans of our
channel proposals and was particularly involved in the concept development for
19064 Behind Deborah, going from your left to
right, is Tracey Jardine, Co-ordinator of Digital Channel Applications for
Salter Street Films.
19065 Next to Tracey is Gord Hendren, President of
Charlton Research. Gord's company conducted polling on our channel
19066 Next to Gord is our legal and regulatory
counsel, Joel Fortune, of Johnston & Buchan.
19067 Next to Joel is Sudhir Morar, General Manager
of Salter New Media. Working in both our Halifax and Toronto offices, Sudhir is
in charge of the development and operations of our Internet
19068 Sitting at the table across from us is Rob
Power, our Vice-President of Salter Street Digital, Salter Effects and
Electropolis Studios. Rob worked closely with our technical advisor in assessing
the requirements for a broadcasting centre in Halifax.
19069 Next to Rob are Salter Street's partners for
the Independent Film Channel Canada. First, Robin Cass, a partner in Triptych
Media, a feature film production company based in Toronto. Robin is also Chair
of the CFTPA Feature Film Committee.
19070 Next to Robin is Ed Carroll, Executive
Vice-President and General Manager of Cablevision's Bravo! networks and The
Independent Film Channel, the leading independent film channel in the United
States. Ed is joined by Frances Berwick, Senior Vice-President, Programming at
The Independent Film Channel. Ed and Frances are here to answer any questions
you may have with regard to our partnership.
19071 Next to Frances is Bruce Bauman, Director of
Research, M2 Universal. Bruce advised us on the marketing and ad sales
projections for our channel concepts.
19072 Today we plan to present Salter Street's
vision for digital broadcasting. Michael Donovan will make an introductory
statement. A short video on our company will follow, and our team will then
outline Salter Street Films' Category 1 applications. Michael will also make a
19073 MR. DONOVAN: Good afternoon, Madam Chair,
19074 For 20 years we have been making Canadian
movies and television. When we started, many people believed that Canadians
couldn't produce popular entertainment television. Today, we know that's not
true. Original Canadian productions play now to popular audiences in Canada and
around the world, and you, the CRTC, have been critical to this
19075 I am proud that Salter Street Films has
played a part in helping achieve this. Our programs which are unashamedly and
identifiably Canadian, are amongst the highest rated programs in the country. We
sell them in almost every country in the world. In fact, we are the only
Canadian company to have three 10 out of 10-point Canadian productions playing
in the United States right now.
19076 Our approach to Canadian programming has been
that if it first speaks to your own experience it will speak to the world.
That's why, despite the odds, we have stuck to primarily making Canadian
television and movies.
19077 Our experience has shown that, no matter
what, audiences always recognize the magic ingredient of "creativity". Where we
have succeeded, it has been as a consequence of being sensitive to this. Where
we have failed, it's because we have lost sight of this. We have learned that
all the business deals in the world add up to nothing when what is being said
has no meaning.
19078 It is this understanding that has truly given
us our competitive edge and allowed us to survive and thrive. I am happy to
report that we have received awards from around the world, including 37 Geminis
in Canada, but our business has grown in each year in the past 20
19079 In the last seven years alone, Salter
Street's revenues have grown by over 1,000 per cent. Our library of Canadian
content now represents over 1,000 half hours.
19080 In fact, our company is more profitable than
it has ever been. Our balance sheet is one of the strongest in our sector in
this country. We have achieved this -- in fact earned it, dollar by dollar,
show by show -- this team has achieved it, through hard work, sweat,
determination and ingenuity. I am proud of this, as a Canadian, as an Atlantic
19081 Broadcasting is the next logical step in our
company's corporate evolution. In this respect, we are following in the
footsteps of many existing licence holders.
19082 We have been watching these proceedings with
great interest. They have raised some crucial issues about the next stage of
television and how our industry will meet the challenges of digital
19083 You have stated that digital means the end of
scarcity of spectrum and the emergence of a new era of competition in broadcast
services. This is why this hearing is historic for us, because this may be the
last opportunity for new entrants to position themselves so as to be able to
compete in the new environment. This represents an unprecedented opportunity for
us to make our contribution to broadcasting in this country, as we have done in
production in the last 20 years.
19084 I know I speak for all of us here when I say
we are excited by this challenge. That is why we have been encouraged to develop
and submit the Category 1 applications you have before you. We have the
experienced management team. We are publicly traded, well financed, growing, and
we have proposals that are exciting, well considered and ones you will hopefully
find as compelling as we do.
19085 I was urged actually at this point by my
fellow team members to say something funny to introduce the video and as hard as
I tried, I couldn't think of anything funny because I am essentially not a funny
19086 So I will introduce it by saying, it's
--- Laughter / Rires
--- Video presentation / Présentation vidéo
19087 MS TAIT: Salter Street Films is applying for
six Category 1 licences. We believe each is a unique concept and service. Each
will bring choice and diversity to the Canadian broadcasting
19088 We approached the challenge of selecting
proposals for Category 1 licences by asking ourselves the following questions:
From our experience as producers, will Canadian audiences want to watch the
service and does consumer research support this? Does the service warrant the
privilege of carriage and will it make a significant contribution to Canadian
programming? Does the service fill a gap in the system and is there evidence
from other markets that the service will be successful? Does Salter Street bring
particular creative strength to the service? And finally, is there a viable
19089 We have developed all our services with
interactive and converged television as a priority. In 1995, Salter Street Films
created Salter Interactive with MT&T to explore interactive TV services,
employing unused telephone bandwidth.
19090 In 1998, with MT&T as our partner, we
created Salter New Media. Its mission is to create and commercialize original,
branded services for the Internet. In the past two years alone, we have spent
over $10 million on digital and Internet infrastructure.
19091 We have been broadly acknowledged as a leader
in Canada with several Internet services launched, including Canada's first
local auction site and the leading aggregator of webcast information on public
19092 All of Salter Street's proposed services
target younger audiences, children and young adults as a core, though not
exclusive demographic. We believe that it is young Canadians who will
revolutionize the medium. They are the highest users of the Internet, the early
adopters of interactive television. They will be the consumers who drive the
roll-out of set-top boxes.
19093 It's important to underline that we do not
consider technology as a barrier to the successful launch of interactive
services. Many viewers, especially younger ones, are now operating on dual
platforms. Watching TV with PCs in their laps, while not the perfect converged
experience, still allows for an enhanced experience.
19094 For the Web-only phase of digital television,
we see building communities of interest through chat, e-mail and audience
feedback, integrating Web sites with on-air program offerings, incubating new
program ideas, and providing a new way to distribute content on demand, and
inviting the audience to produce content through digital video.
19095 We are ready and have the existing
infrastructure to bring all of these experiences to viewers now. And when the
technology is ready, we can move seamlessly from a dual to a single
19096 As an independent producer, Salter Street
understands the importance of the arm's length relationship between distributor
19097 With industry consolidation, increasing
pressure on these distinct roles has become a key issue. For this reason, we
have made a transparent and clear commitment in all our channels for independent
producers and for arm's length production. No less than 50 per cent of Canadian
expenditures will go to non-affiliated independent producers.
19098 We will now describe each of our applications
and I will start with The Independent Film Channel Canada.
19099 I believe there is a consensus in this
country, and certainly among the applicants before you. The Canadian film
distribution system has failed Canadian filmmakers and video artists. Canadian
films continue to represent a shockingly low percentage of screen time in
19100 When is needed is a radical solution. We
believe that Salter Street's proposal for Independent Film Channel Canada
provides the greatest safeguard for Canadian filmmakers and audiences. First,
because of the channel's commitment to Canadian content, a commitment that is
unequivocal, irrespective of penetration level, a commitment of 60 per cent
Canadian content at the end of the first licence term. Second, because of the
channel's close ties to the independent film community. Third, because it's the
only channel before you that offers a U.S. platform for Canadian filmmakers and
because the IFC relationship contributes a strong recognized brand to the
Category 1 package.
19101 Finally, our proposal offers a new voice to
the Canadian feature film landscape, a landscape where only one Canadian company
holds approximately 80 per cent of the English-language independent theatrical
distribution market, a landscape where young filmmakers would benefit from more
doors to knock on.
19102 I know how difficult it is to finance and
distribute films, both in Canada and the United States. So does Robin Cass, our
partner from Triptych Media.
19103 While at the Department of Communications
here in Ottawa and at Téléfilm in Montreal in the '80s, I worked on Canada's
feature film policy.
19104 I also helped young filmmakers turn their
dreams into reality when I ran the Independent Feature Project in New York City
for six years. There, I learned about the importance of distribution networks. I
also witnessed the improvement in the independent filmmakers' scene that was
made possible by cable television.
19105 Both the Sundance Channel, and the more
widely distributed Independent Film Channel, have helped to finance, promote and
sustain independent film in the United States. In fact, Canadian filmmakers have
already profited from this added exposure.
19106 U.S. cable distribution has shown that a
limited theatrical run, or not getting a theatrical distributor at all, does not
have to be fatal to one's film. Cable services can and do find a filmmaker's
19107 It's this solution that we want to bring to
the Canadian system. IFC Canada will be Canada's first specialty programming
service dedicated to independent film, the filmmaking process, and the world of
19108 IFC Canada is a collaboration between Salter
Street films, Triptych Media and Cablevision's Independent Film
19109 Triptych Media has produced some of Canada's
finest independent films such as Thom Fitzgerald's The Hanging Garden and John
Greyson's Lilies. It is our belief that the participation of Triptych provides
an invaluable link to the truly independent film community in this
country -- the filmmakers that are working in the trenches.
19110 The IFC is the leading independent film
channel in the United States. It currently reaches over 30 million
households in that market. Salter Street has licensed the IFC brand, which will
allow our filmmakers to join the international film community. Feature films, we
know from experience, are not like sitcoms. They need international audiences
and buyers to survive. Quite frankly, for English-language filmmakers in Canada,
the U.S. market is all important.
19111 The IFC will provide our service with
promotional material, market knowledge and some programming. But, most
importantly, the IFC will give an American window for productions showcased on
the Independent Film Channel Canada.
19112 I would like to ask Ed Carroll to say a few
words on why Cablevision chose to partner with Salter Street
19113 MR. CARROLL: Good afternoon. It is a pleasure
to be here in Ottawa today.
19114 Cablevision and the Independent Film Channel
chose to partner with Salter Street Films for a number of
19115 First, we are very, very impressed with
Salter Street Films' record as an independent producer. We believe their
firsthand knowledge of the challenges facing Canadian filmmakers will be key to
the successful launch of the Independent Film Channel Canada.
19116 Second, we are very comforted by Salter
Street's financial position and track record of growth and innovation,
particularly in the area of new media.
19117 Third, we have know Catherine Tait for almost
10 years. I watched her successfully build the Independent Feature Project
in the U.S. You could not find anyone who better understands the independent
film community and is more respected throughout the Indie film community, not
only in Canada but also in the United States and internationally. This
experience and network of contacts will be invaluable in building a great new
19118 MS TAIT: IFC Canada will program the finest
in Canadian feature films, documentaries, shorts and experimental works. It will
feature original programming on the Canadian independent film scene, and on the
filmmaking process in Canada. The aim is to create a destination for film lovers
and filmmakers. The service will provide a unique tool to promote Canadian
19119 We will leverage the new television platform
to create a digital community for Canadian creative talent. In collaboration
with IFCTV.com, our channel and its Web site will provide a new Canadian and
global outlet for short films and other works by Canadian
19120 Internet distribution of short format films
is now common, pioneered by AtomFilms.com and iFilm.com. With broadband, large
formats will soon be available. Canadians need to build firm footing in this
broadband arena. We need to ensure that digital film distribution is not a lost
and foreclosed opportunity, as theatrical distribution has
19121 IFCC.ca commits to be a Canadian-based portal
for Canadian filmmakers. It will provide industry resources, filmmaking
handbooks, electronic press kits and digital links for Canadian filmmakers and
their colleagues around the world.
19122 Other support mechanisms of the channel
include film student awards, mentoring programs and development funds for
19123 We are confident that this formula will work,
for our filmmakers, for Canadian cultural policy objectives but, most
importantly, with audiences.
19124 I now would like to ask Deborah Carver,
Vice-President of Communications at Salter Street Films, to present Girls
19125 MS CARVER: Good afternoon.
19126 Most television is aimed at men or boys. It
is often violent, either overtly or covertly sexual in nature. Few shows feature
girls as main characters. Of those few, the protagonists often do exactly what a
male hero would do, only in tighter clothing. There are virtually no talk shows,
information or how-to shows designed to be of interest specifically to girls.
Parents know this. As a mother of a teenage girl, I know it.
19127 More than anything, girls want to hear about
themselves, to tell stories and to share experiences with their peers. They are
preoccupied by the complicated issues presented by growing up
19128 The television universe is not serving them.
Other media, such as magazines and the Internet, have acknowledged the unique
set of interests of the girl demographic by creating destinations for them. In
the U.S., Fox Family has launched Fox Girlz, and many other cable services are
targeting this valuable demographic.
19129 But the Canadian broadcasting system provides
little distinction in regards to gender-specific needs and interests of
19130 In our analysis of programming available to
Canadian children, less than 5 per cent was found to target girls. Girls TV
will fill a clear gap. It will be the first Canadian specialty channel dedicated
to the interests, entertainment and aspirations of girls aged 5 to
19131 Girls TV will feature programming suitable
for girls, covering everything from family, school and boys, to careers, sports,
money and health.
19132 On Girls TV, Canadian girls will have an
opportunity to see positive role models and not unrealistic stereotypes. They
will hear solid advice and accurate information about the issues that are
relevant to them. Girls TV commits to feature female protagonists and hosts in
50 per cent of its acquired programming and in 80 per cent of its
19133 In providing information, advice and
entertainment, Girls TV will celebrate the accomplishments of girls and women
from Canada and from around the world.
19134 Some examples of original programming
proposed for the channel include:
19135 "Oracle", a talk show with young female hosts
that gives girls the forum to seek advice about boys, relationships and
19136 "Androgina" is a flash animation sci-fi
series for TV and the Net based on the adventures of a girl who sometimes has to
masquerade as a boy, and a number of other strange creatures, in her quest to
find her missing brother.
19137 And "Her-oics" --the stories, true and
fictional, of brave girls and women.
19138 On Girls TV, Canadian girls will be able to
watch Canadian programming. The channel commits to 65 per cent Canadian
content at the end of the first license term.
19139 The National Post recently report the latest
survey of Internet use in the U.S. Women and girls are becoming the "defining
demographic" of the Net, with Internet use among girls jumping 126 per cent
in the past year.
19140 Serving the programming needs of Canadian
girls before they head south is an urgent matter.
19141 Girls TV companion Web set provides many
opportunities for Canadian girls to connect and communicate among themselves. As
a parent knows, girls have a passion for sharing and communicating. Girls often
watch TV while they are on the phone or on the computer. In fact, ICQ messaging
is a big part of my daughter's nightly routine.
19142 Some of the proposed offerings on the Web
site for Girls TV are:
19143 "Blast Off", a moderated discussion area
where girls can spill their guts on what's bothering them.
19144 "Calliope", a place where girls can post and
share their poetry.
19145 "TPB", "The Polling Booth", where girls can
vote on their top 10 books, movies, music and more.
19146 As you know from the letters of intervention,
the reaction of girls and women across Canada to this channel has been
overwhelmingly positive. Seventy-three per cent of teen girls surveyed want
19147 Girls TV, we believe, will add balance to the
current offerings in our broadcast system, and diversity to a new package of
19148 Catherine Tait will now present Comedy for
19149 MS TAIT: Comedy for Kids presents a first for
Canadian, American and world television. A channel focused on live-action
comedy -- one of Canada's most important natural resources -- but for
19150 This channel has a dual mission. First, to
provide a platform for new Canadian talent. And, second, to provide an
alternative in a distinct genre of comedy for young Canadian
19151 Comedy for Kids will fill a gap in the
broadcast schedules for children in this country. Existing children's comedy
programming is predominately animation. This service will be predominantly live
action. It will offer an important alternative to cartoons.
19152 As a company that works in the area, Salter
Street knows that Canadians want more good comedy programming, especially for
their kids. That is why we came up with the idea of Comedy for
19153 Children are innate comedians. The ability to
get a joke or make fun of a situation starts with a child's first language
skills. Children are masters of improvisation and performance. A child's delight
at imitating his or her parent's goofy expressions is
19154 Salter Street Films believes strongly in
providing a stage for Canadian children looking for an opportunity to enter the
world of comedy. To nurture these budding talents is, as Rick Mercer said in his
intervention, an "awesome responsibility".
19155 We have also grown to realize that Canadian
kids not only want this channel; they need it.
19156 Existing commodity programming is
predominately adult, often with inappropriate language or sexual content. Comedy
for Kids will offer more choice for children and teens, and for their parents,
by exposing them to a broad range of age-suitable humour.
19157 Comedy for Kids will put Canadian programming
first. It commits to 65 per cent Canadian content at the end of the first
19158 The channel will feature interactive and
silly home videos, zany stand-up, off-beat newscasts, and sketch comedy shows
with young performers.
19159 Some of our program ideas are:
"Rubberish" -- a series that celebrates physical comedy, and encourages
kids to express themselves with their bodies.
19160 "In Other Words" -- a show that will add
comic voice-overs from kids to newscasts, movies and home
19161 "Horrible History" -- one minute
interstitials featuring some of the grossest and funniest facts from history,
19162 "Parents Say the Dumbest Things" --
where kids show us how smart they are, and how funny we look to
19163 Canada has produced some of the most renowned
comic performers since the advent of mass entertainment. Comedy for Kids will
build on this Canadian artistic legacy, and secure it for the
19164 In this sense, Comedy for Kids will do for
Canadian live-action comedy programming what Teletoon has done for
19165 Finally, Comedy for Kids will be a unique
service in North America. It will build on our domestic expertise in comedy and
satire. The Hollywood Reporter's recent "Comedy Issue" reported an increasing
focus of U.S. broadcasters on making comedy shows which feature younger
19166 Comedy for Kids offers an important export
opportunity -- a real opportunity for Canada to take leadership in a form
of entertainment where we have the creative resources. As Canada's leading
comedy producer, we are passionate about this opportunity.
19167 I will now ask Sudhir Morar, General Manager
of Salter New Media, to present ZTV.
19168 MR. MORAR: Good afternoon.
19169 In the creation of ZTV, we asked ourselves,
"How relevant is existing television to a generation of Internet
19170 In Canada, specialty services exist for
toddlers, kids, teens and adults in their prime. Yet there is no channel focused
exclusively on the interests and aspirations of young Canadian adults --
the so-called Generation Y.
19171 Salter Street commissioned research on an
alternative channel for the "Generation Y" demographic, as well as the concept
of an Internet-focused television service. Our conclusion is that the two
concepts intersect in a compelling fashion.
19172 This generation of television viewers are
sophisticated Internet users. Sixty-five per cent of 19 to 24 year olds use the
net daily. As do 74 per cent of 12 to 18 year olds -- the upcoming
demographic for ZTV.
19173 The Internet has provided unparalleled choice
to young Canadians. Our focus group research found that "control and the ability
to choose" rank above all other considerations for
19174 We believe that Salter Street Films can
leverage both its expertise in traditional production and its experience in new
media to develop compelling Canadian content for converged
19175 ZTV's look and feel will be contemporary and
alternative. Critical and intelligent. Informative as well as quirky. But above
all, interactive. ZTV will be converged television.
19176 ZTV will not be a specialty channel only
about computers and technology. It is a lifestyle channel for the most critical,
demanding and valuable of all audiences -- an audience that has grown up
19177 ZTV will present entertainment and
information for Canadians aged 18 to 29, who want great TV, true convergence in
Internet and television formats, interactive offerings, and a break from the
conventional scheduling of the broadcasting system.
19178 ZTV will feature a range of programs designed
by and for its viewers. It commits to exhibiting 60 per cent Canadian content by
the end of the first licence term.
19179 Some of the original programs proposed for
ZTV's first year include: "Download" -- a weekly "uncensored" current
affairs show that highlights the "news behind the news". The audience's
editorial input will be key to this show.
19180 "A Day in the Life of..." -- A series
that puts the camera in the hands of the viewers and explores their daily
19181 "Dis This" -- A show on what's hot, and
what's not -- an opportunity for real-time polling of ZTV's
19182 New technology has created new forms of
distribution. It has also created a new lifestyle. Often I find myself at a loss
when looking for up-to-date, relevant television content for me, a young
Canadian, who has grown up and lives in Canada.
19183 Salter Street is ideally suited to create
ATV. We have built a reputation as an innovative producer of programming that
appeals to young adults. Programs such as "Lexx," "This Hour Has 22 Minutes,"
"Made in Canada" and "The Awful Truth". Salter Street knows and understands the
19184 We know we can succeed in bringing this
sensibility and commercial sense to digital television. We have done it in
traditional television. We are doing it on the Net. We can do it in interactive
television by creating appealing content for people in my age
19185 Canada has one of the highest Internet
adoption rates in the world. We are leaders in technology and creativity, and
should be a natural place to incubate a specialty service that is geared towards
young adults. We know this from discussions with American companies that several
"Generation Y" channels are currently in development south of the
19186 ZTV is an opportunity to break new ground for
Canadians at home and in the international arena. Young Canadians have spoken
and are challenging us with their demand for choice. Salter Street and ZTV can
meet their challenge.
19187 MS TAIT: I will ask Claude Galipeau,
Vice-President of Corporate Planning at Salter Street Films, to present Play
19188 M. GALIPEAU: Madame la Présidente,
19189 We believe that Salter Street should bring
its creative strengths to the challenge of creating a Canadian game show
network. That's why we are proposing Play TV, which will be Canada's first
specialty television service dedicated to Canadians who like to
19190 The importance of licensing Play TV as a
Category 1 channel is twofold. First, we believe there is an important
opportunity to create a Canadian brand of game show programming. And second, due
to the popularity of game shows, we believe Play TV will be an attractive driver
in the package of Category 1 services.
19191 Studies of human behaviour show that cultures
are defined in large part by humour and "play" activity. At the moment, there
are few game shows on Canadian television. And the game shows that are on
television are mainly American made.
19192 Canadians love watching game shows --
the ratings prove it. The resurgence of game shows on network television has
breathed new life into a genre largely forgotten for the past decade. The
increasing capacity to directly involve at-home viewers has transformed the
format, and will continue to do so. As conventional television sets become
computer assisted, a new generation of games and game shows will be
19193 With digital television, Canadians have an
opportunity to play their own game shows -- just as they view Canadian
news, Canadian dramas, Canadian sports, and check up on Canadian weather.
Digital television gives us a chance to reclaim a very popular form of
19194 We believe there is a tremendous opportunity
here. It's why we have committed to 70 per cent Canadian content by the end of
the first licence term. This commitment represents a great window for all
Canadian independent producers, in both traditional media, but especially in
emerging new media.
19195 Leveraging the computer literacy of
Canadians, Play TV will create a new generation of Canadian games and game shows
for the converged computer and television set. Play TV will present a slate of
original programs that provide a distinctive Canadian flavour and reflect our
game show preferences. Some of the ideas we are proposing are:
19196 "Sleuth" -- a weekly game show where
contestants, at home and in studio, seek to trap the murderer in a recreated
19197 "Virtual Snowboard" -- a game show aimed
at younger viewers who can "virtually" snowboard in a race with other viewers,
as well as with real boarders, and;
19198 "The Great Canadian Game" -- a trivia
contest starring famous Canadians competing against the public.
19199 With Canadian content plus interactive
offerings, Play TV will find and will have a dedicated audience.
19200 By its nature, Play TV will advance the
interactive features of digital television. And for this reason, Play TV offers
a unique opportunity for Canadian content programming.
19201 Because of this the result will be a new
generation of Canadian converged game shows.
19202 Catherine will present Nature
19203 MS TAIT: More than any other national
experience, Canadians' relationship with nature informs our national identity.
It is not surprising then, that Nature TV registered the strongest general
interest among Canadians in all the concepts we tested. Sixty-five per cent of
Canadians want the channel. Seventy per cent of parents want the channel for
their children. This is significant support. So much so, that it warrants a
positive licensing decision in Category 1 on the basis of consumer
19204 Nature TV has also drawn enormous support
from associations across Canada, from the Sierra Club to the Canadian Nature
Federation. From the Canadian Parks & Wilderness Association to Ducks
19205 All agree. Current programming does not
adequately inform or showcase nature and the important work being done to
preserve it. In fact, as one intervenor observed, much of the nature programming
available is of the "gee whiz' variety -- presenting animals and wildlife
without reference to the fragility of their habitat.
19206 As a new service, Nature TV will
significantly deepen the range and amount of wildlife and nature programming
currently available to Canadians.
19207 First, the service will build an inventory of
new Canadian programming focused on Canada's rich animal, plant, marine life and
geography. Nature TV commits to exhibit 60 per cent Canadian content by the end
of the first licence term.
19208 Second, Nature TV will bring an entirely new
schedule of programs in each of the categories of interest from around the
19209 And third, Nature TV will create an
environment to support education, participation and community building for
students, professionals and enthusiasts of the natural world.
19210 In our first year, some of the original
programs we are proposing include: "Grassroots", a series which looks at success
stories in local preservation; "Arctic Adventure", a program dedicated to the
wildlife and natural world of Canada's North; and "Natural Instinct", a program
that explores the lives of natural historians, their passions and their
19211 Nature TV will provide an important new
showcase for the extraordinary work of Canada's documentarians.
19212 Natural history programming is an area of
expertise in the Canadian non-fiction tradition.
19213 Central to Nature TV's mission is the
development of new, original programming from the independent production sector.
In fact, we are proposing, in our first broadcast year, to commission 90 per
cent of original Canadian programs from independent producers.
19214 Nature TV is ideally suited to the
development of digital programming innovations. Some of these include enhanced
programming with on-demand information on the natural world; a digital link
between environmental associations and their members, wherever they are; and a
database of observations of species at risk, submitted by both professionals and
19215 For all these reasons, we believe that Nature
TV is a very attractive digital offering. Consumers want it. And, as a part of
Category 1 package, Nature TV will be an important vehicle for Canadian content
and secure a Canadian focus on nature, in the digital
19216 Finally, Salter Street brings the strongest
commitment to independent production before you -- a very important
consideration, in this genre of programming.
19217 I will turn the floor back to Michael, who
will conclude our formal presentation.
19218 MR. DONOVAN: In its call for these hearings,
the Commission challenged us to provide new programming services to enhance
diversity and choice for viewers and to bring fresh programming ideas to help
roll out digital services, to make strong commitments to Canadian program, to
find international partners.
19219 You challenged us, in effect, to bring
forward the most attractive Canadian-focused services for early digital
distribution -- and I think we have met these challenges.
19220 All our channel concepts are new to the
broadcasting system and, therefore, would add diversity to the television
19221 Our applications have strong consumer
support. They are attractively priced. Our business models are conservative,
viable, reasonable, financing secure. Our contributions to Canadian programming,
particularly original Canadian programming, are consistently high, and our
spending will grow as our services become established.
19222 This demonstrates, unequivocally, I believe,
our commitment to what really counts: Canadian programming.
19223 Our proposals are proactive and innovative,
with respect to interactive offerings.
19224 It's not surprising, because Salter Street
was one of the first -- was the first Canadian production company to
embrace interactivity; and this is a crucial point for us.
19225 We believe that small, nimble players are the
true innovators in new media, new technology.
19226 As a recent article in "The New York Times"
reported, the U.S. networks, despite incredible resources and market leverage,
are now also also-rans in the Internet space.
19227 "Big" does not always mean "better at
19228 I believe Salter Street is well-positioned to
meet the challenges of digital broadcasting.
19229 You have seen the creativity, the team, our
innovative spirit, solid track record in production, and we bring diversity, not
only of offering but of ownership.
19230 In fact, as Atlantic Canadians, we bring
unique diversity to the broadcasting system, since there are no specialty
channels in the four eastern provinces.
19231 Finally, I want to convey our understanding
of the difficulty of the choices you will have to make. In our hands lies the
future of Canadian television in a brave new word; and this is an historic
19232 In effect, you are deciding who the "green
lighters" of tomorrow -- that's what producers call "broadcasters" --
who they will be.
19233 This ends the formal part of our presentation
and we welcome your questions.
19234 THE CHAIRPERSON: Thank you, Mr. Donovan,
Miss Tait and your colleagues.
19235 Commissioner Williams,
19236 COMMISSIONER WILLIAMS: Good afternoon, Miss
Tait, Mr. Donovan and Salter Street Films panel members.
19237 Okay, here's the plan: For the next hour and
22 minutes --
--- Laughter / Rires
19238 COMMISSIONER WILLIAMS: -- we will focus
on general and corporate questions, as they relate to your applications; we will
then, most likely, enjoy a short break; and then return for more specific
questioning on each of your specific Category 1 proposed services, described as
"creative and competitive edge".
19239 As custodians of the Broadcast Act and,
certainly, the pay and specialty digital framework, we have established the
following certain degrees of freedom for ourselves, to help make the appropriate
decisions within this hearing.
19240 Specifically, the Commission has indicated
certain selection criteria that it will use to license Category 1 services:
Canadian programming; contribution to program diversity; attractiveness or
demand; and the use of interactivity.
19241 What criteria do you think are most important
in licensing the Category 1 services?
19242 MS TAIT: Thank you.
19243 We have had the advantage, and disadvantage,
of time to reflect upon this question and we believe that the answer lies in the
privilege of carriage and genre protection that the Category 1 licences
19244 Of the six criteria, we believe priority
should be given to attractiveness of service; contribution to Canadian content;
and, finally, diversity -- diversity of programming, diversity of service
offering and diversity of ownership.
19245 Would you like me to expand?
19246 COMMISSIONER WILLIAMS: If you
19247 MS TAIT: In terms of the assessment of
attractiveness, we believe that the criteria of attractiveness, in fact,
captures the other three, in your list of six.
19248 It captures interactivity, in the sense that
in a digital universe interactivity will be essential to evaluating
19249 It obviously captures affordability because
the consumer will be very sensitive to price.
19250 And it will attract -- and in
affordability is, of course, the business plan and the viability of the
19251 With respect to contribution to Canadian
content, we would urge, obviously, special care in this area where independent
producers -- that's our core business, for the time being -- and this
is the last opportunity to secure very meaningful contributions to Canadian
production; and for us, Canadian production is synonymous with the contribution
that the independent production community can make. So we consider this to be an
extremely important component.
19252 And, finally, with respect to diversity,
obviously, diversity of program offerings, that the service offerings taken as a
package be a balanced package but, also, given the existing infrastructure and
leverage that multiple licence holders hold, that certain sensitivity be
considered, with respect to new entrants to the Canadian system.
19253 COMMISSIONER WILLIAMS: Thank you, Miss
19254 Should the Commission impose a minimum amount
of time by which a Category 1 licence must implement its
19255 And how about a Category 2 service; should
the time frame be the same as a Category 1 service?
19256 MS TAIT: As you would have noticed in our
applications, we indicated that we would be ready to launch within six months of
licensing, but we have heard, obviously, in the last eight days -- is
it? -- that --
19257 COMMISSIONER WILLIAMS: It seems longer.
--- Laughter / Rires
19258 COMMISSIONER WILSON: Not in a bad way.
--- Laughter / Rires
19259 MS TAIT: We would, obviously, support the
position of many of the other applicants, that it makes sense to launch this
Category 1 package together. And if September 1, 2001, is the agreed-upon date,
we would obviously support that. The benefits of marketing together are
19260 With respect to Category 2, it's a slightly
different consideration because we will have to negotiate carriage and, as you
know, that can be a competitive process and so there, perhaps, should be more
flexibility, in terms of the time frame imposed.
19261 COMMISSIONER WILLIAMS: In the area of
independent production, given the challenges of the digital environment, do you
think that the Commission should require digital services to make specific
commitments to independent production?
--- Laughter / Rires
19262 MS TAIT: Do I need to answer that
19263 COMMISSIONER WILLIAMS: It's a low, soft pitch
19264 THE CHAIRPERSON: It would depend on whether
you get a licence or not.
--- Laughter / Rires
19265 MS TAIT: We would say, without hesitation,
yes, of course.
19266 COMMISSIONER WILLIAMS: Okay. You have stated
that 50 per cent of the annual Canadian original programming budget will be
earmarked for arm's-length, independent productions. You have also stated that
all independent productions and co-productions will be truly independent. An
example: copyright will remain with the producer.
19267 Could you confirm what you mean by "arm's
length" and how you believe the Commission should define "independent" and/or
19268 MS TAIT: I think there's been, actually, some
divergence on this particular question, and our position on independent
production is that a non-affiliated, or arm's-length, production company should
not have -- or we should not hold more than 10 per cent of voting
shares in such a company.
19269 COMMISSIONER WILLIAMS: Could you
19270 MS TAIT: I beg your pardon. All shares.
Someone just whispered to me.
19271 COMMISSIONER WILLIAMS: That's all
19272 Could you please confirm your commitment. Is
it 50 per cent of original Canadian programs?
19273 MS TAIT: I beg your pardon. No. It would be
50 per cent of all Canadian expenditures.
19274 COMMISSIONER WILLIAMS: All.
19275 MS TAIT: And I think there is some variance
in our applications, just to put that on the record, yes.
19276 COMMISSIONER WILLIAMS: In the digital
environment, is a condition of licence requiring minimum levels of annual
Canadian programming expenditures necessary or appropriate?
19277 MS TAIT: I think that the privilege of
carriage and genre protection absolutely requires minimum commitments,
19278 COMMISSIONER WILLIAMS: Several different
approaches to calculating Canadian programming expenditures have been proposed.
Do you have any comments on any of the suggestions that have been made during
the course of this hearing?
19279 MS TAIT: I just hope we don't get into the
kind of discussion that occurred this morning. Not that! Oh, no!
--- Laughter / Rires
19280 MS TAIT: I believe that we support the
traditional approach at the Commission. While flexibility is always good, I
don't think that we would insist upon it. We feel that the current guidelines
that the Commission has are absolutely sufficient for the services that we are
19281 COMMISSIONER WILLIAMS: Thank
19282 You have made specific commitments to
Canadian programming expenditures in each application. Could you please describe
the methodology you used to arrive at the proposed levels?
19283 MS TAIT: I'm going to invite Claude Galipeau
to comment on that as the master of our business plan.
19284 MR. GALIPEAU: The methodology to calculate it
I think is similar to what the Commission uses. What I did was I took an average
of Canadian programming expenditures, an average of the total revenues for the
year, I did it each year, and then I averaged those years over seven years. That
was the level I think we said that we would commit to.
19285 COMMISSIONER WILLIAMS: Okay.
19286 The Commission's formula takes the seven year
total Canadian expenditures and divides it by the total seven year projected
advertising and subscription revenues, and this approach comes up with slightly
lower levels than you have proposed in your application.
19287 Please confirm whether you would accept the
percentages as set out in your application as a condition of licence starting in
year 2 specifically: Comedy for Kids, 40 per cent; Girls TV, 41 per cent;
Independent Film Channel, 37 per cent; ZTV, 38 per cent; Nature TV, 40 per cent;
and, Play TV, 39 per cent?
19288 MS TAIT: I believe that that corresponds to
our applications. Yes, we would commit to that higher level.
19289 COMMISSIONER WILLIAMS: Okay.
19290 I'm now going to move into the area of
19291 If we licence a Category 1 service with
interactive elements by the set-top box, do you think distributors should be
obligated to carry those interactive components?
19292 MS TAIT: Yes. We would support the notion
that if the programming or the services that are being provided have these
features that they should be carried, yes.
19293 COMMISSIONER WILLIAMS: Thank
19294 All of your applications project use of the
digital box to provide interactivity for viewers. What are your projections for
the timing of the introduction of such interactive elements? How would delays in
the implementation of set-top box interactivity impact on your programming and
19295 MS TAIT: I think I will answer the first part
and I may ask Claude to answer the second part.
19296 COMMISSIONER WILLIAMS: Okay.
19297 MS TAIT: You have heard a lot from other
applicants on the phased-in approach on set-top boxes and we don't have much
more to add to that discussion except to say that we anticipated such a
phased-in approach. I would just say that, from our point of view, the quality
of the interactivity should not be underestimated when the viewer is still
operating on a dual platform.
19298 We are already producing webcasting services
and reaching audiences very effectively. We launched a television show with a
companion Web site and we saw how you could drive audiences between those two
19299 So, again, it doesn't have to be a negative
that you are not yet on that single platform, so we don't see it as a major
barrier to providing good, interesting and exciting services just with the Web
only piece of the Phase I.
19300 Having said that, obviously, there is going
to be much more interesting and exciting things that you can bring to Phase III.
I will just ask Claude to talk about the business plan on that.
19301 MR. GALIPEAU: We anticipated the roll-out of
enriched interactive features in the business plan. It appears in the costs that
are booked in section 8.2, we booked interactive spending as costs of
interactive and merchandising, and there's a ramp-up over seven years. The range
of spending that we have budgeted for our channels over seven years, it ranges
from about slightly over $1 million to $1.5 million.
19302 COMMISSIONER WILLIAMS: Okay. So how would
delays affect that, delays in the roll-out of the boxes?
19303 MR. GALIPEAU: I think if there are delays of
roll-out of boxes, we will basically be spending the money on the Web and
exploiting the dual platform. I think it is important to keep the community
together, and on the dual platform we do believe it's possible.
19304 COMMISSIONER WILLIAMS: Ms Tait, how confident
are you that the technology will permit you to fulfil your interactive plans on
all distribution undertakings?
19305 MS TAIT: Again, I would stress that we don't
see the technology as a barrier in this exercise. Regardless of whether or not
the set-top box actually provides the converged experience, we are already
operating as an Internet provider and as a webcaster, so we would see the
service evolving with the extremely strong Web component.
19306 COMMISSIONER WILLIAMS: Whether it was a cable
undertaking or a DTH undertaking, there would be no effect?
19307 MS TAIT: Exactly.
19308 COMMISSIONER WILLIAMS: In the case of ZTV,
you have described its program concept as an alternate channel for Generation Y
as well as an Internet-focused television service. Recognizing that elements of
your proposed service, including the target 18 to 29 demographic, are already
present on some of these services it seems that the degree to which ZTV succeeds
in programming itself as an interactive television service will largely
distinguish the channel from others. How dependent is this channel on
19309 MS TAIT: I believe all of the programming on
ZTV will have an interactive component. In fact, this is how we are
distinguishing it from general interest broadcasting. Again, that doesn't
necessarily mean that your required interactive television in Phase III is in
place. So for us that means that there is a companion Web service that is
present for all of the programming that is being provided on the specialty
19310 Again, not to belabour the point, we do not
see the technology as being an impediment to introducing the
19311 COMMISSIONER WILLIAMS: Thank
19312 Similarly, Play TV seems to be somewhat
reliant on interactivity, in particular, on interactive viewer participation.
How attractive would the service be in absence of interactivity, for example, if
the technology does not permit you to fulfil these aspects of your
19313 MS TAIT: I hate to repeat myself,
19314 COMMISSIONER WILLIAMS: I guess, specifically,
would subscribers need additional hardware, like remote keyboards and cameras,
and other technologies?
19315 MS TAIT: No. I think the key on the game show
application is that this show distinguishes itself from -- I believe you
have a video game application before you in the sense that the game show format
does not necessarily require the more complex keyboard or whatever you might
have in front of you.
19316 Obviously, we would be doing the kind of
audience participation from the launch, but again it would have to be through
the Web. In fact, we consider that to be completely sufficient. The idea here is
to involve a community of viewers and the Web should not be a problem in doing
19317 COMMISSIONER WILLIAMS: In the area of
projected sales and promotional expenses, your projected sales and promotional
expenses range from 6 per cent down to 4 per cent for years 3 to 7, which
would be lower than the industry average of about 12 per cent. Could you
provide the reasons behind this level of expenditure?
19318 MS TAIT: I'm just letting Claude gather his
19319 COMMISSIONER WILLIAMS: Yes.
--- Pause / Pause
19320 MS TAIT: Are you talking about all our
services? Are we still talking about -- sorry. Are we talking about Play TV
here or all the services, just to help Claude?
19321 COMMISSIONER WILLIAMS: All of your
19322 MS TAIT: Okay.
19323 MR. GALIPEAU: We budgeted on the basis of
what we thought the dollar amount, the proper dollar amount would be. We have
particularly focused on pre-launch as well as the first years of the service, so
we have dedicated for each channel about $1 million for pre-launch and
advertising, sales and promotion.
19324 In the budgets, you will see that they
are -- in fact, the spending is front loaded. We expect, when we launch, we
will be able to spend our dollars wisely but also be able to work in conjunction
with the other applicants or the other licensees that are launching, as well as
19325 I think it's going to be pretty much a shared
spend and a partnership to make the packages, as they roll out,
19326 COMMISSIONER WILLIAMS: Madam Chair, that
concludes my list of questions in the area of administrative and
19327 THE CHAIRPERSON: Madam
19328 CHAIRPERSON OF THE COMMISSION: Good
19329 I didn't think it would come that early. I
have a few questions around the notion of criteria -- kind of get your
ideas and help us so that after the hearing the work won't be too hard. Of
course it's in comparison to the applications. It's about how do you define
"attractiveness" and how will we find our way through, eventually getting the
best projects into those packages so that the viewers really get the added value
of interesting Canadian programs. We are all aiming at that so my questions are
19330 Before I go into partnering and why you have
partners in some and not in others, I would be curious -- I was looking at
your list of Category 2 and Category 1, and I see that some other applicants,
for example, have chosen to go with genres you have here in Category 2 for
Category 1, and I suppose vice versa.
19331 Can you take us by the hand in terms of what
has been your thinking and your strategy to choose which applications -- I
noticed that the ones that are in Category 2 are also in -- no, the 1 are
also Category 2, but some genres where other applicants have seen differently,
why have you chosen not 2 and what is your thinking, because it has to do, I
suppose, with the criteria also.
19332 MS TAIT: When we looked at the landscape we
imagined, perhaps brazenly, the best possible outcome for our company which
would be that all our channels would be licensed. When we did that, we thought:
what would be the best possible package of Category 1 licences for Canadian
consumers? We decided that first and foremost we wanted a balance in the
package, that we needed to have, on the one hand, categories -- I shouldn't
use that word any more -- genres of service that would be broad drivers for
the roll-out, and when I say "broad", I mean obviously services where you have
the highest consumer appeal and you are reaching a broad demographic. So for
example, in that group I would put Play TV, I would put The Independent Film
Channel and I would put Nature TV.
19333 At the same time, because we believe that
this is a privileged package, we felt that there should be a balance and there
should be services that address certain areas of -- perhaps for simplicity
we will use the word "social", that had a social benefit of some sort and that
also address niche demographics because a broad service doesn't necessarily
reach a deep service, a deep audience.
19334 So the idea was to have a broad range of
viewers interested, but then also to pull in other viewers that might says,
"Gee, I don't want to take that new package. There's nothing in it for me". So
in that sense we went to Girls TV, we went to ZTV because we didn't want to miss
those early adopters of technology and we went to Comedy for
19335 So I guess the answer would be that obviously
from our list of Category 2s we had lots of ideas -- ideas are not a
problem -- but we wanted to make sure that the Category 1 package was
balanced, made sense and would reach the greatest group of people. I would just
add one more thought and that is that we felt that there had to be a place for
everyone in the Canadian household.
19336 So again, we imagined a family and the
decisions that they would be making on taking that package. So we were thinking
parents, we were thinking children, we were thinking girls, and we tried to make
sure there was something for everyone in the package.
19337 CHAIRPERSON OF THE COMMISSION: So I guess, if
I draw from your own selection, future selection, you would define
attractiveness and Canadian content and the diversity with that kind of concern
that there is at the end of the day a package that is offered to the Canadian
viewer -- well, the Canadian household -- that would present for every
member of the family some choice. Is that how we should be kind of interpreting
19338 MS TAIT: Yes, and I think the key even on
what we consider to be the driver, that is where we found the largest consumer
appeal from the research that we did. We also felt that because this is, in our
minds -- I don't want to overstate the seriousness of it, but it is an
historic event in the sense that this may be the last time that we will see
these levels of Canadian content commitments, and we were sensitive to that, and
so while Play TV, one could say there already is a game show network available
through the American service, is this really a priority program, and we say
there is an opportunity to make a Canadian commitment here, to create a Canadian
library of programming, and there is an opportunity for independent producers to
contribute in a serious fashion to the service.
19339 So it wasn't just that it would drive the
package, but that there would be also an opportunity for a Canadian contribution
and that's why we have such strong commitments for Nature as
19340 CHAIRPERSON OF THE COMMISSION: Tell me, there
has been some discussion or ideas submitted to the Commission that some of the
licences we would be granting in Category 1 should be of genres that would not
necessarily be mass appealing, that would be indeed niches so that the kind of
audiences they are trying to reach brings diversity, but also would not
necessarily get to be carried through Category 2 because the negotiations would
be very "féroces" when we would get there because there is a lot of interesting
projects out there.
19341 So some were saying, if you want to be more
concerned with social kind of concerns or some particular groups, you should
consider giving Category 1. Others say attractiveness, attractiveness,
attractiveness and based on demand study.
19342 You have made a mix of the two, but more
generally speaking, aren't you torn between the two in a sense? Is it possible
to reconcile the two at that early age of digital roll-out?
19343 MS TAIT: Well, obviously the danger of simply
restricting the package to purely niche services would be creating a package
that might not, in fact, reach the broadest number of users, and ultimately we
have to be cognisant of the need of getting those people, the general public, to
buy the box.
19344 So I guess our response was simply to try to
balance the pros and cons of both approaches, and with all respect, we would
suggest that you do the same, that ultimately we will be for consumers the
choice that we want to make sure that there are choices there for them and that
there is something there for each of them.
19345 I would just add, and I don't want to digress
if you want to go further with this.
19346 CHAIRPERSON OF THE COMMISSION: No, no, that's
19347 MS TAIT: There is another consideration that
perhaps dovetails a little bit in this discussion, and it may take off --
and interrupt me if I go too far -- but one of the issues for us, and we
haven't heard much talk of it in the last few days, and maybe the discussion is
over, but with the so-called nesting -- because I think really nesting is
where you find extremely niche services, and our thought was, again coming back
to your position, would those niche services survive in Category
19348 Our belief or our observation was that those
multiple licence holders, existing multiple licence holders today have enough
market leverage -- I think they called it deep pockets -- to apply to
the Category 2 arena, and probably those extremely niche services that flow out
of their existing services would be able to be launched in Category
19349 So I would say that really that would be a
way to consider what to do with these extremely niche services. I don't know if
that confuses the discussion or helps the discussion.
19350 CHAIRPERSON OF THE COMMISSION: Well, thank
you. It is the kind of ideas that are challenging, but interesting and kind of
enrich our own analysis and thinking.
19351 In partnering, we have been talking about
this morning and for the last few days, about different criteria and there is in
the applications that are put forward some applicants -- and you are one of
those -- that talk about their partnering and you are doing it for your
independent film channel.
19352 Where do you see the importance? How are we
to assess the value of a partnership? What should be there again some kind of
parameters that should guide our analysis? And why in your projects, are there
only one project you felt it was value-added to have a partner, and others you
didn't? So you made an analysis there, I am sure you were not short of partner
possibilities. So I would like to hear you, if it's not indiscreet, to
understand why you have chosen not to have partners on all your
19353 MS TAIT: I guess -- I will take the
first part first -- in terms of the why did we not pursue partners on those
five Category 1st where we had no partner. We felt that the contribution that
Salter Street Films can make as a broadcaster could be realized with the benefit
of an existing player in the market.
19354 For us often the question of a
partnership -- and again I say this extremely respectfully of the many
applicants before you -- it seems that the partnerships really are there to
define the creative in the proposals before you, or the content.
19355 Again, this is not an area where we feel that
we have a problem or challenge, that ideas really are not going to be a
challenge for us. Because we have carved out such a strong position for the
independent production community and we have very strong ties with that
community, again we didn't feel that that was going to be a
19356 The exception for us was really for the
independent film one, that when we looked at it we felt that -- and I think
I explained this in our opening remarks, that the independent film challenge is
19357 The independent film community is an
international community. I know this, obviously, from having worked both here
and in the United States being exposed to it -- that ultimately independent
films function somewhat at a different level and independent filmmakers
communicate among themselves. You know, not to say that Canadians don't speak to
Canadians, but there is an international community and we, quite frankly, felt
that there could be real benefit brought to this application by securing that
presence with an established player.
19358 Balanced with that, too, we thought that the
IFC brand would bring value to the Category 1 package as a driver for the
package. So it was sort of a win-win and that made sense to us.
19359 CHAIRPERSON OF THE COMMISSION: You talk about
diversity and you talk about -- you know, there are applicants who say "We
have a strong history, we have had conventional channels, specialty channels,
please choose us. We have what it takes to deliver." You say "Well, we are not a
broadcaster yet, we want to be one, we have everything." So it's good opinions
and solid values and we will have to balance the two elements.
19360 But I was wondering, in terms of diversity,
in fact what you are bringing to the table is the diversity of ownership in a
sense, because the diversity in terms of your programs, they are already very
present on the Canadian scene, isn't it.
19361 You know, it's not as if somebody decides, I
don't know, from the book industry, for example, deciding to come into play.
It's a new -- it could be -- but it's a new player with no presence in
the market in any form or shape. In the case of Salter it is already there in
many forms and shapes and many expressions, so the diversity is more one of
19362 I just want you to elaborate about the notion
of diversity, where you see it and if you see that in program creation and
choices there would be an added value of having Salter being a broadcaster not
only the independent producer.
19363 MS TAIT: I have to be careful not to sound
negative in terms of obviously our programs are extremely widely viewed. But in
any given year Salter Street Films might have 100 -- 200 ideas in terms of
new programs and shelf space in the broadcasting system is, of course, limited.
Shelf space for Canadian programming is also limited.
19364 So for us the desire to move from being only
a production company to also a broadcasting company is, I would say, the drive
to see more Canadian good, high-quality, challenging, funny, smart programming
on the air. It's a little bit of an "embarras du choix" when we are looking at
what we can do any year we have, again, a surplus, but the broadcasting system
is the gatekeeper obviously, it's their business, we are still very much at
their mercy, let's put it that way, or at the mercy of financing our
19365 That would be the first statement I would
make in terms of, yes, obviously Salter's programs are on the air, but we have
lots more that we would like to get on the air.
19366 I think also from an evolutionary point of
view, what Michael was mentioning in terms of the growth of the company, we have
been producers for 20 years and we believe that as broadcasters we can
really make a very distinctive contribution to the broadcasting environment. We
have done it in our television shows.
19367 I think it is fair to say that we are
probably the producers of some of the most unique programming in Canada and we
would bring the same sensibility, presumably, to the broadcasting arena and I
think that that would be a benefit to the Canadian system to have our point of
view and our ideas.
19368 And the people that we work with. It's not
just the group here, there is another -- you know, all the creative people
that we work with and the talent that we have around our
19369 So as a broadcaster we would bring that to
the table and I think that the English-language broadcasting system would
benefit from that new point of view.
19370 I may have lost my train of thought. A final
point. Thank you.
19371 Two or three years ago we decided that the
Internet was in fact everything and that to survive we would have to enter into
the Internet business. We made a very significant investment, we raised money in
the markets in order to finance our Internet company, and we did what no other
production has done, or broadcaster for that matter, we created original content
for the Internet -- that is not repurposing existing programming, that is
not marketing or promoting existing programming, we created new services --
because we believed that the Internet, and we continue to believe that the
Internet will in fact transform our experience.
19372 It was extraordinarily empowering, as a
producer, to be able to put up a show or a webcast ourselves and to experience
that, to make a decision and to put it on the air, as it were, or on the wire,
and we would like to have that opportunity in the broadcasting arena as
19373 CHAIRPERSON OF THE COMMISSION: Thank you.
19374 THE CHAIRPERSON: In this discussion we can
add as well, of course, the competitiveness of services, diversity,
attractiveness. Eventually they are all part of the same overall goal. There are
commitments made to fence in or describe more narrowly your services one-by-one,
which I'm sure Commissioner Williams will go through, but as a general
philosophy what is your view of the concerns expressed by existing services to
you as a new player getting into genres of programming that leave some room for
duplication in documentary films, series, et cetera.
19375 MS TAIT: Well, I think there are two issues
19376 There is the concern that existing license
holders might have where we are entering into a genre of programming where they
are already a dominant player and then there is also the new application, so I
will take --
19377 THE CHAIRPERSON: Yes. That was going to be my
19378 But I want to see first what your view is on
the concerns of others about your plans, after which I will ask you what
concerns you would have about other Category 1 participant's
19379 But now you know what the second part of the
question is it may alter the first part of the answer.
--- Laughter / Rires
19380 MS TAIT: All these questions are sort of
melding into one at this --
19381 THE CHAIRPERSON: But you are the one who
raised the second question and destroyed my plot.
--- Laughter / Rires
19382 MS TAIT: Our position on the notion of
competitiveness is, first and foremost, that we believe that there should not be
an exclusive right of any existing licence holder to any particular genre of
programming. As a --
19383 THE CHAIRPERSON: Isn't that what the
Commission has said? To the extent that it is feasible, hasn't the Commission
said that it will not license a service that is directly competitive with an
existing one? So it has said that to a certain extent.
19384 Measuring it, of course, is not so easy, or
to confine it, but to a certain extent it has said, yes, that there would
be -- as a whole the genre should not be directly
19385 MS TAIT: What I meant there was a broad genre
of programming. I think it is generally agreed that, for example, film is a
broad genre --
19386 THE CHAIRPERSON: Oh, yes, I agree.
19387 MS TAIT: -- and children's is a broad
19388 THE CHAIRPERSON: And documentary is not a
package service. Okay, I get you.
19389 MS TAIT: That's right.
19390 So my point there is that there is no
evidence that diversity is served by allocating one broad genre of programming
to one company, film, children's, documentary. So that would be the first
19391 That, in fact, diversity is served by
introducing competition in the marketplace and seeing, a level of competition in
the marketplace and ensuring that other players can make a
19392 I think that the question of, just to speak
to documentaries, I think you have heard from Sandra Macdonald this morning that
there are obviously -- the question really goes to is there inventory, is
there available programming, what are the parameters we are going to draw in
terms of the types of documentary programming, for example.
19393 Again, I think we could go to the specific
applications and deal with that perhaps, and I am trying to avoid giving
specifics because, no, I am not yet in the specific part of
19394 THE CHAIRPERSON: I understand you to say that
film, comedy, even sports, there is no particular type of programming that
should be the sold preserve of one licensee, but you agree or disagree with
parameters of this hearing, which was that as a packaged service the genre
should not be directly competitive with an existing service?
19395 MS TAIT: Oh yes, absolutely. So we are not
applying for a women's channel, for example.
19396 THE CHAIRPERSON: And the parameters that you
are proposing may or may not be sufficient to those who have a concern and,
conversely, with regard to Category 1, you may have a concern with the lack of
parameters imposed by others.
19397 You have been following the hearing, so you
know that at the end of the process we will expect you, as we will all others,
although no one has to answer any of our questions, which services that are
proposed you would consider such as to render any one of your proposals feasible
because it would be spreading the genre too thin.
19398 MS TAIT: I think there has already been a
lively debate in some of the intervention letters and when we get to our
specific applications we can respond to some of those concerns. Obviously, we
will ultimately all be working together. Hopefully, we will also join the
broadcasters and be part of this debate and, obviously, it is not going to be in
our interest to be directly competitive.
19399 THE CHAIRPERSON: Yes, except with Mr.
Williams today you talk about how you will narrow your service at the
intervention stage. You can talk about other services at the reply
19400 You can respond to other people's concerns,
but we also want to know having heard all this, if we were to grant you any one
licence, would you live with any other licence as proposed with the fencing or
lack thereof that has been proposed by the applicant, which I am sure is not an
easy exercise, but should help us, especially since -- would help us in how
you view competitiveness in that sense.
19401 Mr. Galipeau, did I hear you say that --
well, let me say first that there is a discrepancy between your calculations of
CPE and ours which varies from 0.5 to 2 per cent.
19402 I think I heard you say that you did your
calculations year-by-year. My suspicion, I don't have a calculator with me, is
that the distortion is created by that. Would you test that with one of the
applications, or maybe the staff will if they have a calculator, and let me
19403 Two per cent, you may find yourself happy to
have that, 2 per cent less. Yours is always a little more than ours, 2 per cent
or 1 per cent. I suspect it's because we add all the revenues to get the
numerator and then we add all the expenses to do the -- so maybe if
somebody tests one we will find out because eventually, when we get to year five
or six, no one may remember that this is how you calculated it, as opposed to
how we calculate it and you may be short, and you may be happy to know that it's
19404 MR. GALIPEAU: Right. Actually, I am pleased
to know that and I am confident and I move forward with that
19405 I think what happens is really it's rounding
errors created by the spreadsheets --
19406 THE CHAIRPERSON: By the fact that you do it
one by one.
19407 MR. GALIPEAU: Yes, by the
19408 THE CHAIRPERSON: Yes.
19409 MR. GALIPEAU: It's Excel and it's an American
program, so it's very boastful. It automatically rounds up.
19410 THE CHAIRPERSON: So you may not be surprised
when we grant you six licences there has been a slight downward of your Canadian
content expenditures, as a test, not as a real expenditure?
19411 MS TAIT: I do believe, though, that I did
commit earlier to the higher number.
19412 THE CHAIRPERSON: Yes. I am just warning you
that year five, if you have a problem, you may have a cushion there that you are
not aware of because I suspect that we will do the calculation, as we do it for
everybody by taking the total, not a very important jurisprudential point, but
it may come to your rescue at some time.
19413 So if you confirm with me or the staff may
have a calculator because that's probably what happens, if you take one and you
do it, the total, you will probably find that that's where the distortion
19414 MR. GALIPEAU: Right. I have the spreadsheets
worked out actually I think.
19415 THE CHAIRPERSON: You could just tell us when
you come back.
19416 We will hear from counsel.
19417 Commissioner Williams, you have another
19418 COMMISSIONER WILLIAMS: Speaking of risk, yes.
Thank you, Madam Wylie and Chair Bertrand, for taking over some of the
questions. I had developed such a tickle in my throat I thought I was going to
choke, and then my eyes started watering and I couldn't read my questions. All
in all, it was a very traumatic few minutes and I am glad it passed
19419 THE CHAIRPERSON: We now know that
Commissioner Williams is a kid and Comedy for Kids got to him.
19420 Did you have any other
19421 COMMISSIONER WILLIAMS: No.
19422 THE CHAIRPERSON: Counsel.
19423 MR. McCALLUM: There are just three small
things I wanted to take up with you. The first one is you seem to have put what
looks like some other criterion for judging it and it seems to run through your
applications. I thought I would ask you if it is and what it
19424 Just taking Comedy for Kids and reading from
what seems to be page 7 of the application, the supplemental brief, you said,
"diversity and localism". It is the word "localism" that I want to focus on.
"Diversity and localism, alternative approaches to the programming, are key
to building smaller niche audience programming services."
19425 Is localism to be considered one of the
criteria for selection and, if so, what does it mean in this context? I say that
because I think this runs through all six of the applications.
19426 MS TAIT: Localism is a word that we use,
especially in respect to comedy. Obviously, Salter Street Films has built its
company largely in the initial years through the contribution of comedians from
Newfoundland, for which we are greatly appreciative, and that talent --
what we have learned in comedy, and perhaps you have noticed it on "This Hour
Has 22 Minutes" is that the local experience speaks to the national
19427 So, for comedy especially, it is a key
concern or a defining characteristic for us. Would I call it one of the
selection criteria? No. It is embedded in the notion of diversity, I would say,
diversity of programming. So the local expression, I believe, would be captured
by diversity of programming.
19428 MR. McCALLUM: I think you have the same
notion, for example, in the independent film application. How does localism
relate in that context then, for example?
19429 MS TAIT: Also to independent film I would say
that the technology now with digital cameras has revolutionized the notion of
filmmaking. In one of our surveys, I believe conducted for the round that was
never heard --
19430 THE CHAIRPERSON: (Off microphone / Sans
19431 MS TAIT: -- we looked at the results of
what the younger, the so-called "Generation Y" audience demographic want to be
when they grow up, when we look at what careers they would choose. The first
career selected by young Canadians was entrepreneur.
19432 The second was filmmaker, which may strike
all of us as peculiar, but in fact the notion of filmmaking as a primary choice
in career is something new in our culture. From a filmmaking point of view,
digital video and cameras, lower-cost cameras mean that really you can be living
anywhere in Canada, in the world, and making movies. So again, localism,
regional expression for us means empowering the audience to
19433 Obviously, the web has utterly transformed
the notion of mass media. Instead of the one to many, it's the many to one and
anybody, it doesn't mater where you live, it can be in Halifax or it can be in
Vancouver or Whitehorse or any city, not even city, any household that has a
computer can participate. So, again, it is a key notion and concept, but I think
we have captured it in diversity.
19434 MR. McCALLUM: Thank you.
19435 Dealing, for a second, with your independent
production commitments, I take it if your commitments in the cases were made
conditions of licence that you would be comfortable with that? In all the
19436 MS. TAIT: Yes.
19437 MR. McCALLUM: Thank you.
19438 Again, I want to come back to something else.
It's common to all the applications, and so, if it could be answered, I guess,
at the general stage, it would be helpful, and it was in the Schedule 15, which
is the assumptions behind the subscriber penetration levels. And what I didn't
understand -- I'm just taking, for example, "Comedy for Kids", and I'm
looking at page 263 of the application, which is Schedule 15, and on the table,
it says, "Long-Term Forecasts", and then it has "Pessimistic", then it has, in
bold print, "Optimistic - Assumed", and it looked to me, in this case, and in
the other cases, that you were assuming the optimistic scenario of the CCTA
projections and, it looked like, the optimistic scenario of Bell ExpressVu
projections, et cetera, and I didn't quite understand why you would make that
assumption. If I understood it correctly.
19439 MR. GALIPEAU: That's correct.
19440 Basically, what I did was looked at the
information filed with the Commission by the CCTA and the DTH providers, and
then I talked to people in the industry, as well as a technical consultant that
we have, and I asked them, "What do you think of the CCTA projections?", and
people said, "It seems all right. Rather conservative because they do not want
to represent that they are rolling out too fast because there have been
statements made, in the past, about quick roll-out" So, given the context that
people agree that their projections were conservative, I assumed the optimistic.
Although I played with them, in terms of making it go over seven
19441 With regards to the DTH providers, I asked,
again, "What do you think of the projections?", and some people thought them
highly aggressive, particularly in the later years, in the five, six, seven. So
what I did was I discounted them 25 per cent and made them more
19442 MR. McCALLUM: So you only discounted the DTH
but not the cable projections?
19443 MR. GALIPEAU: Correct.
19444 MR. McCALLUM: And you didn't fear that this
might lead to slightly high penetration rates, as a result?
19445 MR. GALIPEAU: My general concern about
penetration was to look at the aggregate numbers. So if you look at our
projections, they are kind of in the similar range, between 900,000, in Year 1,
and then around two million, in Year 7.
19446 Again, I benched -- I tested that by
talking to people in the industry and benchmarked that. And that, as a
percentage of the overall cable and satellite universe, is very, very low. It
ranges from about 11 per cent penetration to 25 per cent penetration. So I
figured that was quite conservative and defendable.
19447 MR. McCALLUM: So, what you did was
use -- you assumed a fairly high universe but, then, a fairly low
penetration rate. Is that --
19448 MR. GALIPEAU: Right. I did look at some of
the -- exactly. I did look at some of the other applications, and I think
I'm kind of in the middle range of assumptions on aggregate numbers, but I could
be corrected on that. I looked at a number of them. Five or six different
19449 MR. McCALLUM: Well, thank you very
19450 Thank you, Madam Chair.
19451 THE CHAIRPERSON: Thank you.
19452 We will take a break, now, and make sure
Commissioner Williams is, indeed, recovered, and we will come back in 15
19453 Somehow or other, we will ask you
--- Laughter / Rires
19454 LA PRÉSIDENTE: Nous reprendrons dans 15
--- Upon recessing at 1545 / Suspension à 1545
--- Upon resuming at 1600 / Reprise à 1600
19455 LA PRÉSIDENTE: Rebienvenue à notre
19456 Commissioner Williams is fully recovered, so
19457 COMMISSIONER WILLIAMS: Why don't we start by
taking a serious look at "Comedy for Kids".
19458 My first questions are going to be in the
area of nature of service.
19459 Comedy suitable to an age group of 5- to
17-year-olds can encompass a fairly broad range of programming.
19460 Could you describe the criteria you will use
in determining what programming is appropriate to the service, particularly in
terms of films. And how can you ensure that "Comedy for Kids" will provide a
service that is distinguishable from existing specialty and pay services that
serve youth and families, like YTV for example, or provide other comedy
programming, such as the Comedy Network?
19461 You have emphasized that "Comedy for Kids"
will focus on encouraging children from across Canada to express themselves
through laughter and share their stories of growing up, in a lighthearted
19462 Could you also describe how you will get
children involved in contributing content for the service?
19463 MS TAIT: I believe there are three questions
there, and if I lose the last one, someone will remind me.
19464 COMMISSIONER WILLIAMS: I can give a Reader's
Digest version of each one of them.
19465 The first one is: Describe the criteria you
will use determining what programming is appropriate to the service,
particularly in terms of films.
19466 How will your service be distinguishable from
other existing pay and specialty services?
19467 And how do you plan on getting children
19468 MS TAIT: Okay. With respect to the criteria
for programming, we would describe the programming as, obviously,
primarily -- entirely focused on thematic and suitable programming for that
age demographic and we would program our blocks, accordingly, you know, securing
younger viewers earlier in the day and older suitable -- programs suitable
for older viewers later in the wheel.
19469 With respect to distinguishing it from other
services, we would be willing to accept some of the descriptions, or guidelines,
for YTV, in terms of ensuring that the service is suitable for children. I think
there are existing regulations there where we can obviously
19470 In terms of the competitiveness with existing
services, such as YTV, we have committed to entirely focusing on live action
comedy, and when we did our analysis of programming of the various services that
provide children's programming, we saw very a minimal amount of programming in
this type -- of this nature. So, we don't believe that we are, in any way,
directly competitive with existing services. However, in order to ensure that
there is no confusion there, we have put a restriction, or a limitation, of 15
per cent on Category 7(e), "Animation" -- and I believe that will comfort
the other services that might be concerned about us encroaching in the area of
cartoon programming, which we believe is very well-served
19471 I'm going to go back to the first part of
your question because I realize I didn't address feature films.
19472 We also put a restriction of no more than 15
per cent of the programming being from the feature film category; and, again,
those films will be of a kids' nature. We will be looking for films with
protagonists that are from the age demographic; again, following the kinds of
guidelines that you have put forward for YTV.
19473 And the third question was: How to involve
kids, I believe?
19474 COMMISSIONER WILLIAMS: Well, your application
says you will encourage children from across the country to
19475 So how do you plan on involving
19476 MS TAIT: There are two ways.
19477 We talked about the increasing interest of
the U.S. broadcasters and actually seeking professional performers, in terms of
comedy performers. Many of the -- in terms of our experience, many of the
comic performers that we worked with, in fact, begin their performance very
young. You are actually born to be a comedian. And we will be -- and we
have worked with a number of them, quite young, but none at the early stages
that we are talking about.
19478 So, we would be ensuring that we find these
comedy performers at an earlier age and working with them and using the manner
in which we find talent, which is basically going to clubs or -- obviously
kids won't be performing in clubs -- but talking to agents and,
specifically using the Web. There will be an opportunity for kids, again, from,
really, anywhere, to submit material, whether it's digital video or anything
they have written, in terms of being able to access the channels. So, obviously,
the Web piece of this is going to be extremely important, in terms of finding
talent. I think many homes, now, have video cameras and -- I know, from my
own experience with my stepsons, that they started making animation with their
toys early on and would qualify as filmmakers, at this point, at 16 years
19479 So that's how we would do it.
19480 COMMISSIONER WILLIAMS: Thank
19481 In the area of foreign programming, your
Schedule 10 identifies a majority of your non-Canadian programs as American
19482 Elsewhere in your application, for example,
on page 11 of your supplementary brief, you state that:
"Particular emphasis will be placed on finding the best comedy programming
from territories outside of the United States in order to expose Canadian
children to other cultures and attitudes."
19483 Can you comment further on the types of
non-North American programming your service might provide and the sources from
which such programming may come?
19484 MS TAIT: I might call on Tracey in a moment,
who conducted a lot of the research in terms of the programming for this
service. But we have again adopted the YTV model in terms of the exposure of
American programming on the service, which I believe is -- 35 per cent of
non-Canadian programming should be non-North American.
19485 The schedule that is submitted is for
illustrative purposes only but maybe I would just ask Tracey to talk about some
of the other comedy live action programming that we identified.
19486 MS JARDINE: Thanks Catherine.
19487 We did research a number of other areas
outside of North America, including of course Britain, Australia, and even some
Asian programming. There are some programs listed on the schedule that are from
sources outside of North America. What we did find generally exists, though,
that there isn't a lot of the live action programming that we really want to
focus on on our channel. That lack of live action programming has been
recognized worldwide in the past year or so and we expect that there will be a
lot more live action comedy programming suitable for children from sources
outside of North America by the time this service launches.
19488 COMMISSIONER WILLIAMS: In your application,
you state that there is currently no television service dedicated to providing
comedy programming to children in Canada or the United States and that your
service would bring an entirely new Canadian-conceived innovative programming
service to North America.
19489 Have you explored other market opportunities
for exporting your product?
19490 MS TAIT: We certainly have been. In the
process of preparing for this hearing, we talked to a lot of American cable
broadcasters and explored the opportunities. We are always, as producers, in
discussion with broadcasters, not only in the United States but
worldwide -- in Britain we have relationships and also Germany and
France -- so I would say that some of -- this comes from direct
experience in the international markets, our belief that there is an opportunity
19491 Certainly there is a consensus, and we have
seen this on Nickelodeon, that there is an opportunity to pool and to draw upon
younger performers in what we consider the traditional forms of comedy, sitcoms
or sketch comedy programs. In Canada right now, I don't believe there are these
kinds of programs. We conducted research. It showed that there was very, very
little live action programming available and it seems to be something that's
working in other markets.
19492 COMMISSIONER WILLIAMS: Thank you,
19493 That concludes my questions on the Comedy for
19494 THE CHAIRPERSON: Counsel.
19495 MR. McCALLUM: Just two small
19496 In response to one of Commissioner Williams'
questions, you referred to your programming wheel. What is your programming
19497 MS TAIT: We have a six-hour wheel three times
a day for an 18-hour day.
19498 MR. McCALLUM: And it starts
19499 MS TAIT: I believe it starts at
19500 MR. McCALLUM: So the younger material would
be repeated, then, just after noon, I guess.
19501 MS TAIT: That's right.
19502 MR. McCALLUM: And then in the early evening
hours. Is that the way it goes?
19503 MS TAIT: That's right.
19504 MR. McCALLUM: Then the programming targeted
at the older demographic is repeated later in the wheel three times a
19505 MS TAIT: That's right.
19506 I should just add to that that obviously we
are sensitive to the time differences. One of the reasons we are
interested -- and I think I didn't answer one of the Commissioner's
questions, it just popped into my head -- one of the reasons that we are
interested in creating this service is that, as comedy producers, we are very
sensitive to the issue of age-suitable humour.
19507 I think everybody knows that it's probably
easier to get a joke if you go certain directions with the humour. We are
committed, in creating this service, to ensuring that it is age-suitable, so
there will not be inappropriate language or subject matters in any part of the
19508 MR. McCALLUM: When you refer to
6:00 a.m., which time zone are you referring to?
19509 MS TAIT: Halifax.
19510 MR. McCALLUM: So it would be an hour later
than the eastern time zone.
19511 MS TAIT: That's right.
19512 MR. McCALLUM: Thank you.
19513 COMMISSIONER WILLIAMS: That would be 9:00 in
the morning out west.
19514 MS TAIT: That's right.
19515 THE CHAIRPERSON: Not with hours that have 22
--- Laughter / Rires
19516 MR. McCALLUM: You mentioned you are focusing
on live comedy. Could the word "live" be inserted to the description of
"service"? In your nature of service you have, just reading the words:
"...and focusing on comedy suitable for this age
19517 I'm just wondering if the word "live" can be
or should be inserted in that, in the definition of the service?
19518 MS TAIT: A distinction between "live" and
"live action", "live" assumes that you would say real time live, so "live
action", it means real bodies as opposed to animated figures, so just that one
19519 But the other thing is, we do have
15 per cent in animation, so as long as you were able to describe it in
such a way that would allow us to do that that would be fine.
19520 MR. McCALLUM: Yes, I think the
19521 MS TAIT: Predominantly live
19522 MR. McCALLUM: Predominantly live
19523 MS TAIT: -- would be absolutely fine,
19524 MR. McCALLUM: Thank you.
19525 Thank you, Madam Chair.
19526 THE CHAIRPERSON: Thank you.
19527 Commissioner Williams.
19528 COMMISSIONER WILLIAMS: We will now move on to
19529 I have extensive personal experience in this
demographic being the father of a 15-going-on-20-year-old daughter.
--- Laughter / Rires
19530 COMMISSIONER WILLIAMS: Yesterday I enlisted
her to teach me a bit more about ICQ and PalTalk and similar technologies, and
she arrives for the weekend tomorrow.
19531 Yesterday's issue of the Ottawa Citizen
carried an article entitled "Teen girls stage their own Web revolution". It
"The teen girls demographic is growing five times faster than the Internet
overall, with new users between the ages of 12 and 17 increasing by 126 per cent
in the last year alone in the United States."
19532 All this according to Jupiter Communications
and Media Matrix, a couple of Internet research firms.
19533 My question is: Could you please detail your
interactivity plans as they relate to Girls TV and elaborate on this
dynamic trend amongst the 12 to 17-year-old female demographic?
19534 MS TAIT: I have a seven year old going on
19535 I think the article in the Citizen has been
confirmed in the research that we cite in our --
19536 COMMISSIONER WILLIAMS: You mentioned
19537 MS TAIT: There absolutely seems to be a
19538 Just a comment on that.
19539 I think that anybody who has been exposed to
girls understands the -- especially teenage girls, understands the struggle
that they go through. What is extraordinary, what that article also pointed out,
was the community that the Internet is providing girls: a private place to
communicate among themselves in a way that is not embarrassing to girls,
especially on certain issues.
19540 I think very specifically on what we have
come up with -- and I think we have literally just skimmed the surface
because once we started in on designing this particular channel the list of
ideas was pages long, but I would divide it into three basic categories, the
first being that we would create a community of interest of girls through chat,
through e-mail, and hopefully create a network of pen pals or e-pals so girls
can communicate -- Canadian girls -- can communicate with each other
on a constant basis, whether it's about loving horses or sports or boys,
whatever their interest is.
19541 The second would be the programming itself,
that there is an opportunity, because this is a lifestyle channel primarily for
girls -- the information programming, the talk shows, all of those
elements -- there is an opportunity to involve the viewer and the user on
the Web and participate in whatever programming has been created. So whether
it's a talk show where the viewer is also participating, asking questions,
getting a chance to interact with whomever, it is that we have presented on air,
again, talk show hosts not necessarily being grown ups but also being girls of
their peer group.
19542 Obviously, that is a very important part of
the service as well.
19543 Finally, there is an opportunity to create
what we believe is going to be compelling original programming with independent
producers that can involve interactive components to a great extent or not but
really to put girls in roles that you don't normally see on
19544 There are some great shows on TV. I think
that Shirley Holmes or even our own Emily of New Moon are positive shows for
girls but there are not a lot of them. The Web obviously allows us to do things
with flash animation. Deborah mentioned one example of a show that we have
thought up. But there are opportunities there to create positive role models for
19545 COMMISSIONER WILLIAMS: You talk about your
Web site being a vehicle for viewers or your audience to learn about each other
in a safe and friendly environment. Can you please describe how you will
maintain the safety of this environment?
19546 MS TAIT: Yes. One is the creative content of
19547 I will ask Sudhir to address the technical
part of it in terms of the Web, in terms of providing safety. This would also
apply to the Comedy for Kids.
19548 Our interest --
19549 COMMISSIONER WILLIAMS: With the chat lines. I
mean, like, people disguising themselves as 14-year olds.
19550 MS TAIT: That's right.
19551 As I said, on the technical side, obviously,
we are very sensitive to that.
19552 But from a programming point of view also, I
think the key here is that this is really for Canadian girls and the focus will
be to create a community of interest for those girls.
19553 Maybe I will ask Sudhir to talk about
protecting children on the Web.
19554 MR. MORAR: Our approach to safety on the Web
for this demographic is actually in two parts. First, we would educate the
visitors to the site through a section of the site for safe surfing. We would
also encourage parental support in that arena as well where there will be
consent from parents when they are on the site.
19555 From a technology perspective, what we will
do is we will moderate all the chats and discussion groups and also provide some
sense of filtering as well, just to make sure that inappropriate content isn't
displayed at any time.
19556 COMMISSIONER WILLIAMS: An example was --
I was talking to another father earlier today actually and he was giving me his
concern about a chat line and his 14-year-old daughter gets on and gives out
some information. Then in a subsequent chat she then says she plays on the
school's volleyball team, and another chat later she says 14 is her favourite
19557 So now a predator, I guess, would know
sweater number 14 at such and such a school which would then identify the
individual, and then the individual is identified and they can be approached at
any time in any place with all that information by following various
19558 That is an area I wouldn't mind to hear you
19559 MS TAIT: Obviously, this is a huge issue that
you have touched upon for any parent of a child of either sex.
19560 COMMISSIONER WILLIAMS: Any
19561 MS TAIT: Or any age. Obviously, this is a big
concern. I think the monitoring of chat rooms, especially in the area of
children, is absolutely essential.
19562 One of the things we did in bargoon.com,
which is our local auction site, is we were very concerned about inappropriate
material being put up for auction, you know Nazi memorabilia or anything related
to hate materials. We have in that particular instance launched the site and
introduced, again on the technical level, a system for constant monitoring to
ensure that there would be nothing that would be offensive to the policies that
we had put in place.
19563 Related to that, obviously, would be the
privacy issue as well, which again on our current Web sites we have a very
restrictive system for ensuring that users have comfort about the kind of
information that is being gathered on their use of the service.
19564 But I don't know if Sudhir has anything else
to add in terms of comfort in this area. Obviously, this is a big issue. It
touches on everything in terms of Web use, not just for specialty
19565 MR. MORAR: We are of the opinion that what we
need to do is educate the user, therefore the children in this case, by
providing them with the information that they need to safely surf. So what that
means to us is within our site we will have components that talk about sort of
the rules and regulations, but in a way that the girls who are visiting a site
will understand. So then we will make sure that they are aware of not giving
away information, like you mentioned, sweater number of the school that you go
to just to avoid that.
19566 But it's actually, as I said earlier, two
parts: primarily education and secondly, technology. The technology will do the
filtering and the education will come from the information we put up on the
19567 Would you like me to talk more about the
privacy and trust as well?
19568 COMMISSIONER WILLIAMS: It might be a good
area to cover because we haven't had a whole bunch of discussion in that area so
far in the hearing.
19569 MR. MORAR: Our approach to privacy and trust
is also in three parts. We start off with privacy protection where we ensure the
protection of the information given to us by our users.
19570 Secondly, we have a policy around business
practice disclosure where we will post what we do with the information that we
collect. And third, in the event that transactions are taking place, we ensure
transaction integrity, using both technology services and
19571 COMMISSIONER WILLIAMS: Right.
19572 MR. MORAR: I think this approach will ensure
that we embrace and exceed any of the proposed privacy legislation that is
before us now.
19573 COMMISSIONER WILLIAMS: It's one question the
lawyers won't have to ask you.
19574 In the area of programming, a five year old
is very different from a 15 year old, let alone a 17 year old. How would you
handle this programming challenge, the challenge of keeping the programming
relevant and interesting to such a -- well, it's not a large number, the
very different interests at various age groups?
19575 MS TAIT: That's a challenge that we look
forward to having. Obviously, a five year old is very different than a 17 year
old and, as I said, we are creating blocks of programming that will feature
programming that's suitable for a five year old.
19576 My own daughter watches Treehouse and she
watches also Teletoon. She is watching a range of programming. I think the
important part of the service will be to create communities for different groups
within girls. Now we are talking about little girls and big girls, but again the
philosophy of the channel is to talk to all girls in a positive manner, and we
believe that that thread will be throughout the programming.
19577 Obviously, the 15 year old is going to tune
out if the show is aimed at a seven year old and we are obviously comfortable
with that. This is a niche service and they will pick, they will find the
programming that's suitable for them.
19578 COMMISSIONER WILLIAMS: Your niche within a
19579 MS TAIT: Exactly, exactly.
19580 COMMISSIONER WILLIAMS: As part of your
services program description, you propose to:
"... target young females between the ages of 5 and 17 with a special
emphasis on programs that embody a sense of confidence and power and positive
19581 You have talked quite a bit about that, both
in your opening and in answer to some of these questions. Are there any specific
programs that will reflect this stated program emphasis?
19582 MS TAIT: I would say that many of the
information programs would without being preachy. This is not a channel intended
to necessarily breed radical feminists. I don't want to sound too earnest
either. I mean, this is going to be a fun channel. It's going to be funny, it's
going to be informative, it's going to be entertaining. So the idea here is not
to get up on a soapbox and tell girls what it is to be a girl.
19583 If I can relate a personal experience. I went
to a girl school in England for a key period of my teenage years and returned to
Ottawa for grade 12 at Lisgar and I personally saw the difference between girls
competing in sports, for math, for all academics in the English experience that
I had, and I came back to Ottawa and I saw girls for the first time in my life
putting make-up on between classes, and watching their boyfriends playing
basketball. This was an extraordinary experience and I think for all of the
people involved in creating this channel, we wanted to address the issue of sex
role stereotyping, and we think that WTN has done an amazing job for women, but
sexual stereotyping does not begin at age 20. It begins, unfortunately, very
19584 So our hope is not to be preachy, but at the
same time to be positive and again, I think the programming, some of the ideas
that we put forward, are illustrative of that.
19585 COMMISSIONER WILLIAMS: If the Commission
wished to limit the sports programming that could be carried on Girls TV, which
limit would you recommend? You have included in your nature of service condition
19586 MS TAIT: Yes, I am looking at my
19587 COMMISSIONER WILLIAMS: Yes.
19588 MS TAIT: Obviously this isn't a sports
channel and we are committed to showing no live sports, but I think we you were
looking for some comfort, we would be thinking somewhere between 10 and 15 per
cent. If this is not intended as a sports channel, and certainly again no live
sports at all.
19589 COMMISSIONER WILLIAMS: What type of
programming would you envision being on there then if not live
19590 MS TAIT: Well, again, we would be looking at
things, you know, for example equestrian events, looking at what girls do that
want to compete, how they compete, if they are interested in getting into a
sport, swimming, perhaps a show that would feature athletes and how they got
into their field of athletics. Maybe an Olympic star sports, female sport star.
I know Nancy Green, for my age group, was an extremely important Canadian skier.
Again, if she was skiing today, we would feature her on the channel. But it's
more about how do I get into the sport? What is it about, than showing
19591 COMMISSIONER WILLIAMS: As part of your
Schedule 10, you have included programs for Category 3, which is reporting in
actualities, 7(f), programs of comedy sketches, improvisation, stand-up comedy,
and 7(g), other drama that have not been proposed in your nature of service
condition of licence.
19592 Could you please clarify your plans in this
area? In Schedule 10 you include them, and in your nature of service, you
--- Pause / Pause
19593 If you need a bit of time, we can go on to
19594 MS TAIT: Actually is the 3 that I am looking
for because I have a little diagram here that describes our schedule and I am
not seeing 3 at all. So I am wondering that you came up with 3.
19595 Maybe we could just look at that and come
back to it.
19596 COMMISSIONER WILLIAMS: Sure. That can be
worked out with the staff at the end. I have the information from them as well,
so we may as well just match the information with them.
19597 MS TAIT: Okay.
19598 COMMISSIONER WILLIAMS: We are going to move
into the area of competitiveness. How can you ensure us that Girls TV would
provide programming that would distinguish it from existing specialty and pay
services already licensed to service youth and family viewers?
19599 MS TAIT: I think the key here is the
commitment with respect to protagonist. We have committed that 50 per cent of
acquired programming would feature female protagonists and 80 per cent of the
original programming. So you are going to see a lot of girls on this
19600 We didn't want to eliminate boys because
obviously girls are interested in boys.
19601 COMMISSIONER WILLIAMS: Sixteen and seventeen
year olds are interested, right.
19602 MS TAIT: That's right. So there may be an
opportunity to have a boy and a girl host, a talk show. But I think that that
will absolutely distinguish this service on the dial.
19603 COMMISSIONER WILLIAMS: Can you describe your
channel's plans with respect to scheduling of movies?
19604 MS TAIT: When we conducted our survey we
found that movies are an important part of the interest of the girl demographic.
This is a lifestyle channel so we wanted to allow for a broad range of
programming. But again, we would be looking for movies that feature girl
19605 We have restricted this type of programming
to no more than 25 per cent of the schedule, and you will see actually in
our illustrative schedule that it is quite a bit lower than this. We do not see
this as being a vehicle for movies, other than movies that feature
19606 COMMISSIONER WILLIAMS: Okay.
19607 On what basis would you select films or other
drama programming for the service? What selection criteria would you use to pick
the films that suit the genre?
19608 MS TAIT: Well, again we would be looking for
the protagonists so I'm thinking -- again, from more my generation, movies
with Haley Mills obviously would qualify.
19609 I think, again, themes that girls would be
interested in. This would be -- there might be some National Velvet, those
kinds of movies that are real classics for girl viewers and really are defining
19610 There are not a lot of them and I don't
think -- again, it is really not a central part of our schedule. It has a
role to play, but it is not a central part.
19611 The same would apply to drama, looking for
shows that are going to feature girls in any -- whether it's adventure or
science fiction, again the girl protagonists.
19612 COMMISSIONER WILLIAMS: Okay.
19613 In the area of programming diversity, you are
proposing as part of Girls TV application to feature female protagonists and
hosts in 50 per cent of acquired programming and 80 per cent of
19614 Why the different levels? Can you comment on
19615 MS TAIT: That was really our consideration of
inventory. There are not -- again, as I said, part of the -- one of
the ways we created this service was we did a content analysis of what is
available on the airwaves right now, and there is not a lot of -- there is
some good programming, but there is not a lot of it where you would see female
19616 So that was simply to allow us a flexibility
at the outset of the service and, obviously, all the original programming from
the outset would have the female protagonist and as we go forward obviously you
would be seeing more and more of that girl-centric programming.
19617 COMMISSIONER WILLIAMS: So you would be
willing to adhere to this undertaking as a condition of license
19618 MS TAIT: Yes, absolutely.
19619 COMMISSIONER WILLIAMS: Now we will go into an
area of non-Canadian programming.
19620 In the area of foreign programming, your
Schedule 10 identifies the majority of your non-Canadian programs as American
productions. Elsewhere in your application, for example on page 12 of your
supplementary brief under "Acquired Programming" you offer that:
"An emphasis will be placed on finding programming that can provide insight
into girl's lives beyond the North American experience."
19621 Can you comment further on the types of
non-North American programming your service might provide and where you would
get it from?
19622 MS TAIT: We have -- and again I might
ask Tracey to jump in in terms of the actual programs for
19623 But I believe we would be -- I'm
surprised that you say they are predominantly American because the same
commitment that we make in our Comedy for Kids would apply here with respect to
the American programming.
19624 Having said that, we would be looking for
primarily English-language programming from the U.K. and Australia, though I
think there is some opportunity there for foreign language as
19625 But maybe, Tracey, you could give some ideas
on the foreign programming, non-American.
19626 MS JARDINE: Again, it was much like Comedy
for Kids to find a lot of products or productions that would meet the type of
criteria that we wanted to assign to it, to have either a female protagonist or
dealing with subject matter that directly appeals and is intended for girls.
There is not a lot of it out there.
19627 I don't like to repeat myself, but that is
another gap that has been identified in the system and that again plays back to
the growth of girls in media in general to, you know, such things as the
Internet. We believe that there will be suitable production, and certainly our
own productions that will be original to the service will focus strongly on
promoting girls in that way as protagonists and provide them with the subject
matter that they are looking for.
19628 Areas that we will be looking, as Catherine
had said, would be mainly English-language markets.
19629 COMMISSIONER WILLIAMS: Okay.
19630 Madam Chair, that concludes my questioning on
19631 THE CHAIRPERSON: Counsel?
19632 MR. McCALLUM: None at this
19633 Thank you.
19634 THE CHAIRPERSON: Go ahead.
19635 COMMISSIONER WILLIAMS: Thank you, Madam
19636 Independent Film Channel Canada.
--- Pause / Pause
19637 COMMISSIONER WILLIAMS: In the nature of
service it is noted that you have included the program Category 5(a),
formal education and preschool, in your proposed nature of
19638 Could you clarify what role that type of
programming might have on an independent film channel?
19639 MS TAIT: We are seeking in that particular
category some flexibility with respect to the kind of information programming
and educational programming that we might be providing to
19640 COMMISSIONER WILLIAMS: Okay.
19641 Definition of an independent film. In your
proposed nature of service you state that:
"The Independent Film Channel Canada will broadcast independent films and
programs focusing on the independent filmmaking process, filmmakers and film
19642 Can you provide the Commission with your
definition of what constitutes an independent film?
19643 MS TAIT: There has been, obviously, some
discussion on this and we have come up with a definition which will hopefully
advance, so I won't go into the preamble on the grey areas. I think you are
aware that there are some grey areas in the independent film sector in terms of
19644 But what we would suggest is that in
considering what an independent film is, or how to qualify it or how to describe
it, that no more -- in terms of our service, that no more than 5 per
cent of programming from Category 7(d) would be feature films that
are -- and here comes the definition -- "produced, financed or
distributed by one of the Hollywood major studios".
19645 So what we are doing there is, we have
defined it basically as "produced, financed or distributed" but, as you have
heard, it is sometimes difficult to know about the financing behind a film. So
what we are saying is a very -- allow for a very small number of titles
that might have a Hollywood major attached to them.
19646 So, for example, the case of Roger & Me,
the Michael Moore documentary which is owned by a Hollywood major, is obviously
a key film for the independent film movement. I think that captures that
19647 COMMISSIONER WILLIAMS: Thank you,
19648 Directly competitive. In Public Notice 2000-6
the Commission stated it would not license a digital service that would be
directly competitive with an existing pay or specialty service. The nature of
service description for Showcase states that it:
"... will offer an all fiction programming service consisting of the best
independently produced movies, drama, comedy and miniseries from Canada and
around the world."
19649 Well, it can be argued that the licensee of
Showcase by filing an independent film application themselves may have opened
the door. I guess I would like to hear from your company as to why you feel you
would not be competitive with Showcase Television, an existing specialty
19650 MS TAIT: It would seem to me, if I recollect
the proceedings, that Showcase was licensed primarily as a second window for
Canadian drama, and part of that obviously was feature films.
19651 In the case of the Independent Film Channel
Canada, this is primarily an independent film channel, and while clearly the
independent film component which we have put a limit on it of 60 per cent,
that is one very important piece of the channel, but also the remaining
40 per cent is about filmmaking. These are programs that would be of a
magazine nature. Again, it's lifestyle programming around the filmmaking culture
19652 I think, quite frankly, when you look at the
service in its entirety it doesn't have a lot to do with what Showcase is doing.
Obviously, Showcase has identified film as a valuable part of their service, but
I don't think the overlap is too significant.
19653 I think you heard from another applicant.
There are thousands of films in the marketplace and I think we have made it very
clear that we are interested in not just featuring, or not just showcasing
feature films, but really miming the short film area, non-fiction, theatrical
19654 So we don't feel that there is any kind of
significant overlap with Showcase.
19655 COMMISSIONER WILLIAMS: As you are aware, the
Commission is also considering a number of applications in this proceeding to
distribute primarily documentary programming. Do you consider the Independent
Film Channel to be directly competitive with these proposals?
19656 MS TAIT: No, we do not.
19657 COMMISSIONER WILLIAMS: Could you please
clarify for us what percentage of the Independent Film Channel's schedule would
be devoted to documentary programming?
19658 MS TAIT: We gave a lot of thought to this. We
have suggested a limit of 25 per cent of the schedule. I would just like to make
some comments on that because I think there is -- I don't know if it's a
misunderstanding, but just to clarify the role that documentaries play in the
independent film movement.
19659 Most young filmmakers do not have the means
to hire actors to perform in their early films. Often they will choose the
documentary as the form that they would like to communicate with at the early
parts of their careers.
19660 When I ran the IFP in New York, one of the
vehicles was we held an annual market, a trade show for independent feature
films and mostly coming from first and second time feature filmmakers. The 1,200
submissions that we received every year, a good half of them was in the
documentary form. Many of those films went on to be aired on television and
actually with The Independent Film Channel in the U.S.
19661 So I would say that the documentary
expression is key to independent filmmaking as part of the culture, but also I
would make a further distinction, that we are not talking about series
documentaries here. We are talking about point of view
19662 Just to use an example that pops into my
mind, there was an extremely beautiful film made by a woman called Debra Huffman
called "Memoirs of a Dutiful Daughter," which was a 90-minute film on the
experience of this young woman with her mother suffering from Alzheimer's. It
completely qualifies as an independent documentary in my mind, a very personal
film. That is not to be confused with a documentary series on
19663 So, clearly, for us we are talking about
documentaries that advance the film culture of non-fiction
19664 COMMISSIONER WILLIAMS: So you offered a
limitation of 25 per cent. Would you accept that as a condition of licence
19665 MS TAIT: Yes, we would.
19666 COMMISSIONER WILLIAMS: Programming from other
countries. In your application you indicate that the Independent Film Channel
Canada would broadcast independent films from Canada and around the world,
including the United States, Mexico, Europe, India and Japan. Do you have an
approximate break down of how much of the non-Canadian programming would come
from the U.S. and how much would come from the other countries?
19667 MS TAIT: We didn't focus on the percentages
of the other countries, but we did focus on the percentage on
19668 COMMISSIONER WILLIAMS: So just if it's 70 per
cent American and would it be 30 per cent from the other countries
19669 MS TAIT: Exactly. So what we would say is
that we would suggest that no more than 50 per cent of programming from Category
7(d), the feature film category, would be from any one non-Canadian
19670 COMMISSIONER WILLIAMS: Let's spend a minute
on your relationship with the U.S. Independent Film Channel. You have indicated
that you have licensed STET, IFC brand and will benefit from the market
experience, promotional material and promotional programming of the American
19671 Could you provide more details about your
relationship with The Independent Film Channel and this may be a bit redundant,
but your percentage of non-Canadian programming would be supplied by them. What
percentage would be supplied by The Independent Film Channel?
19672 MS TAIT: I will invite Ed Carroll to get a
chance to talk about their role in this partnership, but first this is a
licensing arrangement and as part of the licensing arrangement we do have a
programming output contemplated in that.
19673 However, I should say that that portion would
be of our schedule that would come from IFC, would be limited to no more than 10
per cent of the schedule overall.
19674 We have basically contemplated receiving
from -- licensing from IFC certain original productions that are already
produced for that network, but also some coverage of film festivals that again
we would be able to benefit from and certain specials.
19675 We also have in the programming agreement
access to a certain number of films a year, but again no more than 10 per cent
of the schedule is contemplated for coming from the IFC.
19676 COMMISSIONER WILLIAMS: Thank you,
19677 Madam Chair, that concludes my questioning on
the Independent Film Channel.
19678 THE CHAIRPERSON: Counsel.
19679 MR. McCALLUM: This last commitment that you
just made about no more than 10 per cent of the schedule coming from IFC, that
could be made into a condition of licence if the Commission so
19680 MS TAIT: Yes, it could.
19681 MR. McCALLUM: On that same topic, could you
outline the continuing role that IFC would play and also Triptych
19682 MS TAIT: First, I would just say that I will
ask Ed -- because he didn't get a chance on the last
19683 MR. CARROLL: Is that how the partnership is
going to work out?
19684 MS TAIT: -- to describe what they bring
to the table and then I will come back to Rob and Triptych.
19685 MR. CARROLL: One of the main things we think
the Independent Film Channel brings to the partnership with IFC Canada is
branding experience, is promotional materials and reciprocal product, but the
benefits flow two ways.
19686 We believe that the partnership will help The
Independent Film Channel in the U.S. to find and exhibit new Canadian talent,
and finding fresh talent is critical for an independent film
19687 It will also provide us with a means to
contextualize the Canadian talent that we currently show. We regularly show
movies by people like David Cronenberg and Atom Egoyan and Denis Arcand, but we
don't normally represent these as being Canadian.
19688 We also show films that appear in the Toronto
Film Festival and appear in the Montreal Film Festival, so we would envision
exhibiting them on an Independent Film Channel Canada showcase in the U.S. due
to the partnership.
19689 MS TAIT: Robin, do you want to say
19690 MR. CASS: Sure. I am happy to jump in on this
19691 A couple of years ago our company made a
movie called "The Hanging Garden" that was absolutely culturally specific and it
was a maritime-based story. It was a very deeply felt, very personal story by
that filmmaker. He was a first time feature filmmaker that we got behind because
we just really liked what he had to say and what his work was all
19692 We premiered that movie at the Toronto Film
Festival and had an enormous response. It was picked up by MGM in the U.S. after
bidding wars, sold to some 20 countries around the world.
19693 Within the context of the independent feature
filmmaking activity it really is increasingly essential that one is open to and
had the advantage of multiplicity of partners in financing and in terms of
profile and exposure internationally.
19694 It is obviously important that films that
come from Canada that I think are seen in the U.S. are viewed as Canadian.
People I think they gain something in the reputation internationally when people
understand that they come from here and that they show the world something about
life here and who we are here and represent us as a nation.
19695 So I think that the idea of context within
the channel in the U.S. and the way that work would be presented is very
important and extremely beneficial and useful to the future careers of Canadian
19696 MS TAIT: Maybe because I realized the
question was coming from counsel, you might have been inquiring about the nature
of the Triptych relationship from a technical point of view?
19697 MR. McCALLUM: Well, I was also going to
follow up with, for example, an ownership perspective.
19698 I take it that Triptych would have a small
ownership percentage in this undertaking if its licence is going forward. But,
from what I understand, IFC would not. It's strictly a business and commercial
relationship. Is that the way I understand it?
19699 MS TAIT: That's right.
19700 We wanted to include Triptych in the
ownership of this channel because we felt that they would bring a truly
independent point of view, which even, believe it or not, for us, we might be
sometimes farther away from than Robin and his partners, who work every day with
new first-time directors. So, that was key for us. This is a 100 per cent
Canadian channel. We did not feel that it was necessary for the channel to have
the equity participation from the American partner, and they were in
19701 MR. McCALLUM: Would you be intending to, for
example, co-produce films with IFC, or anything like --
19702 MS TAIT: Oh, absolutely. Our agreement does
contemplate co-production, not only on features but also in the production of
the magazine programming. And, obviously, the more financing partners you can
bring to the table, the better. And, from our point of view, the -- for
example, the IFC, in the United States, has two funds available: one called
"Next Wave", which is a finishing fund for filmmakers who have managed to get
their film almost done but they need finishing funds for the blow-up or
post-production; and they also have a fund which finances, in its entirety or in
part, six to 10 feature films a year, in the five-million U.S. budget
19703 So, obviously, our agreement would
contemplate Canadian filmmakers also being able to participate in those
particular financing mechanisms -- though it does not oblige IFC, in that
19704 MR. McCALLUM: Thank you.
19705 A few minutes ago, you were also asked for a
definition of an "independent film" and you referred to, I think: something that
was not to be produced, or financed, by the major Hollywood studios. And I asked
one of the earlier applicants -- I think it was CHUM, with their Indie
application -- and they gave me a list of the eight Hollywood major studios
that they considered would fit within the definition of what would be the "major
studios", for the purpose of a definition.
19706 I don't know if you were listening to that
particular discussion, at that time, but I'm wondering if the sort of list that
they had of major studios is the sort of list that you would have had for the
purpose of that same definition?
19707 MS TAIT: Yes, we would.
19708 MR. McCALLUM: Thank you.
19709 Just one last question on this one --
and I suppose it would be true of the others: Would this be set up to,
technically, have descriptive video?
19710 MS TAIT: All of our services
19711 MR. McCALLUM: Thank you very
19712 THE CHAIRPERSON: Commissioner
19713 COMMISSIONER WILLIAMS: Well, now, I guess
it's time to take a look at ZTV, your alternative service aimed at the
"Generation Y" demographic, better known as the "cellphone-powered 20-things of
the new digital economy".
19714 I guess I should note that, in this
demographic, I also have personal experience through observing and participating
in the life of my 25-year-old son.
19715 We have already discussed the interactivity
components, so I'm going to focus my questions in the nature of service
19716 As part of your Schedule 10, you have
included programs from Categories 2(b), the "Long-Form Documentary"; 7(e),
"Animated Television Programs and Films"; 7(f), "Programs of Comedy Sketches,
Improvisation and Stand-Up Comedy"; and 10, "Game Shows", that have not been
included in your nature of service conditional licence, as set out in 7(1) of
19717 Could you please clarify your plans, in this
19718 MS TAIT: This is primarily a lifestyle
channel, so we, again, were, similar to Girls, looking for a broad range of
programming to attract our audience.
19719 I think the inclusion of 10 in the schedule
and the exclusion of it in our nature of service was an
19720 Again, we would be looking at a very small
portion in the game show area, probably not exceeding 10 per cent, so it would
not be a big part of the schedule. But I would say that that was an oversight on
the condition of licence -- unless someone wants to correct
19721 COMMISSIONER WILLIAMS: Okay, I'm going to
leave that question there, for now, but I think Legal with come back with 50
more enquiries, in that area.
19722 Of the program categories offered for ZTV,
where will the majority of the programming fall under?
19723 MS TAIT: I think we would be seeing a balance
in the dramatic and information-type of programming.
19724 From our schedule for the first year,
obviously, comedy and drama series are included there and are taking up a bigger
piece of the schedule, simply from an acquisition point of view in getting
original programming going. But, again, this is a lifestyle channel, so we would
be looking for a balance on all of those categories, in the range of, you know,
20 per cent. Something like that.
19725 COMMISSIONER WILLIAMS: Could you please
describe the criteria you will use in determining what programming is
appropriate to this service, particularly in terms of feature
19726 MS TAIT: We have made a defining commitment,
in terms of the programming, that all of the programming, all the original
programming, would have some interactive component, and that would be the key to
distinguishing this service from more general interest programming, and I think
that -- from the original point of view, that's something that we would be
ready to commit to.
19727 In terms of feature films, when we conducted
our survey -- first of all, it was not easy to survey this particular
group. They are not generally that communicative or satisfied with many things.
But we did determine that choice was the primary consideration for the
demographic and so, we were worried about eliminating anything from their list
of preferred programming, and they did indicate that films were of interest to
them. And when we -- if you look at our schedule, we were careful not to be
looking at first-window films here. What we are talking about more is cult
movies, movies that are defining for the generation rather than new releases.
We, hopefully, would have those in other parts of the Category 1 package. But I
think that, in terms of our commitment on movies, we have suggested no more than
25 per cent and a three-year copyright on those films being
19728 COMMISSIONER WILLIAMS: Okay. Notwithstanding
your emphasis on alternative programming, the range of program categories,
coupled with your target audience, could be viewed as being very
19729 How can you assure the Commission that you
will offer a service that is distinguishable from existing specialty
19730 MS TAIT: I think I answered that in the last
question, but, if you want me to elaborate again, it would be that the original
programming is going to be interactive but, again, also, in the actual
description of programs that we have suggested, we are looking at issues, on the
information programming, that are of interest to 20-year-olds. If you look at
conventional broadcast core audience of 18-to-49, issues of jobs, how to be an
entrepreneur, even some of the Internet ideas that we have, are really of, I
would say, limited interest to the 30- or 40-year-olds. So, I think, again, we
talked about the sort of forgotten generation, that 20-year-olds, in fact, have
very specific concerns, in terms of being young adults, and setting off on
their, you know, career paths. That would be addressed by this
19731 COMMISSIONER WILLIAMS: Okay.
19732 Madam Chair, that concludes my questioning on
19733 THE CHAIRPERSON: Counsel.
19734 MR. McCALLUM: Just on the programming
categories, I think what you did was you answered that you would be happy to
look at the categories, with staff, Category 2(b), 7(e) and 7(f), as you had
done with Girls TV, and perhaps come back with percentages, at Phase II, as an
19735 If you are happy to do that as an undertaking
here, then that would be acceptable.
19736 MS TAIT: I think that sounds like a good
19737 MR. McCALLUM: Thank you. We will take that as
19738 Thank you, Madam Chair.
19739 THE CHAIRPERSON: Thank you.
19740 Commissioner Williams.
19741 COMMISSIONER WILLIAMS: Okay, let's hear about
the "wild kingdom". Your Nature TV application.
19742 Would you accept the following conditional
licence as part of your nature of service definition? Nature TV's programming
will consist, exclusively, of entertaining and informative aspects of nature and
wildlife, featuring plants, animals, marine life, geography and people who
explore the natural world.
19743 MS TAIT: Yes, we would.
19744 COMMISSIONER WILLIAMS: Given that your
service constitutes a genre that could cover a fairly broad range of
programming, how can you assure us that your service would serve a
distinguishable nature-related programming genre?
19745 MS TAIT: I believe that the condition of
licence that we just agreed to would be --
19746 COMMISSIONER WILLIAMS: Would lock you into
19747 MS TAIT: Yes. So, having just committed to
that, I would assume that that would protect it.
19748 But if you wanted to talk more about how we
consider this program to be distinct from other existing services, I'm happy to
19749 COMMISSIONER WILLIAMS: Yes. I think that's
the approach that would be nice, if you could tell us what makes you distinct
for the nature channel.
19750 MS TAIT: I think the key to Nature TV is
obviously the broad categories of nature that we have described as plants,
animals, marine life and geography, which in themselves all have a broad range
of programming potential. When we looked at other services, and I guess
Discovery is the obvious one, nature forms only one part of its
19751 When we looked at the consumer research, we
felt that it was clear that there is a huge area of concern among Canadians with
respect to environmental issues and protecting the -- preserving the
environment and nature, so we did not feel that not only in the substance in
terms of the category of programming nor in the positioning, which was the
preservation and environmental concern, would we be in any way encroaching on
the territory of others.
19752 COMMISSIONER WILLIAMS: Okay.
19753 You have included movies and drama
programming in your proposed description. Given that such programming could
encompass a fairly broad range of dramas and movies, could you provide specific
examples of the types of Category 7 programs that you would propose to air? And,
what mechanisms will you put in place to assure that the movies and dramas
selected for your service properly reflect your nature of
19754 MS TAIT: This is not a big part of our
service, but there are some key movies in the nature area -- there he goes.
Are you all right?
19755 COMMISSIONER WILLIAMS: No.
19756 THE CHAIRPERSON: It's the air of the
--- Laughter / Rires
--- Pause / Pause
19757 THE CHAIRPERSON: We will take a five-minute
break or a ten-minute break, but don't go too far.
19758 MS TAIT: Okay.
19759 THE CHAIRPERSON: Mr. Williams, I mean you,
don't go too far.
--- Upon recessing at 1700 / Suspension à 1700
--- Upon resuming at 1705 / Reprise à 1705
19760 THE CHAIRPERSON: Welcome
19761 We are going back to questioning by
19762 COMMISSIONER WILLIAMS: Thank
19763 I seem to be experiencing a slight reaction
to a medication that I'm taking, Amitomorphin. What it does is it dries your
throat out and causes you to cough, but I can tell you when you are doing it in
this type of forum it's even amplified.
19764 I'm going to go back to questioning
19765 My next question, again on Nature TV, is: How
can you assure us that you would not be directly competitive with the Discovery
Channel and that you would contribute to program diversity given your channel's
array of Nature programming?
19766 MS TAIT: Do I get to answer the question when
you left the room, the one about dramatic programming?
19767 COMMISSIONER WILLIAMS: Sure.
19768 MS TAIT: Okay.
--- Laughter / Rires
19769 COMMISSIONER WILLIAMS: I wasn't sure whether
you answered or not.
--- Laughter / Rires
19770 MS TAIT: I know.
19771 First of all, the Category 7 would be an
extremely minimal part of our schedule and all -- we were suggesting that
we do not anticipate more than 10 per cent including feature films in that
category of programming. But I would just say, for example, there is an
important French film, Microcosme/Microcosm, which was obviously absolutely key
to presenting nature, in particular insects, in a most beautiful and important
way. So we would want to be able to at least include a film like that.
Obviously, nature would be the centre of that kind of
19772 But back to the second question on Discovery,
we would say, and as I described before, that Discovery is a more broadly-based
service than nature. Nature is only one part of its mandate -- science and
technology, and exploration being other parts of its mandate.
19773 I should say that obviously if we were
licensed we would not be showing programming, nature programming, that might
appear on Discovery, because they would hold the rights to that
19774 So there would be no overlap practically, but
also substantively we do not consider our service to be directly
19775 COMMISSIONER WILLIAMS: Okay.
19776 Salter Street is an important producer of
Canadian nature and wildlife programming to both Discovery and other channels.
Under the commitments, you propose that as much as 50 per cent of Nature TV's
programming could come from Salter Street. How will this affect your ability to
continue to produce programming for the other channels?
19777 MS TAIT: We were surprised at that
19778 We have only produced, and in fact not
delivered yet, one program in the nature area, or one program at all to
Discovery, and that would be a three one-hour documentary called: COD, the
Biography of the Fish that Changed the History of Man. That program, as I said,
constitutes three hours of programming to Discovery, so I'm a little surprised
that we would be considered to have a problem supplying to other
19779 But more importantly, in the area of Nature,
unlike some of the other services before you, we see Nature TV as being
primarily a vehicle for independent producers. We are in the documentary film
business as well as comedy, variety and drama programming, and Salter Street
recently acquired the library of a very important documentarian, Michael Mclear,
for its own library, which we distribute worldwide now.
19780 But we do not see ourselves as non-fiction,
as documentarians per se. It's not the top of our list of things that we do. So,
as I said in our opening remarks, we are looking to the independent production
sector here. While we made the broad-based commitment on the 50 per cent for all
our services, we in fact see this being -- as I mentioned, in our first
year, we are looking at 90 per cent of the original programming to be coming
from the independent community, so this is an opportunity for filmmakers across
the country to participate in the channel.
19781 COMMISSIONER WILLIAMS: Very good. Thank you,
19782 That concludes my questions on Nature TV,
19783 THE CHAIRPERSON: Counsel.
19784 MR. McCALLUM: Just following up on that last
question, then, you were mentioning that Salter produces quite a number of
documentaries, films, et cetera, for other channels that are currently aired.
Under the commitments that you propose for not only this service but even the
other services, do you see any difficulty or any effect on your ability to
continue to produce programming for other channels if any one of these is
19785 MS TAIT: Not only do we not see it as a
problem if any one of them is licensed or if all of them are licensed, we will
be creating a separate division of Salter Street Films for the broadcasting
business with an independent management. We will continue to work as independent
producers for the CBC, for Global, for any broadcaster that wants to order a
show from us, and we do not, in any way, see this as being conflictual with the
new broadcasting business.
19786 MR. McCALLUM: Thank you on
19787 I just want to pick up on the point that you
made at page 37 of your opening remarks where you made the commitment or the
proposal in your first broadcast year to commission 90 per cent of original
Canadian programming from independent producers. I don't recall that from your
application. Did you make that commitment in the application as
19788 MS TAIT: We calculated that actually when we
looked at the illustrative schedule. In fact, because we have almost no nature
programming in our own library and we feel that this is an opportunity for
independents, we took the illustrative schedule and then translated that into
the commitment for the first year.
19789 As I said before, our broad-based commitment
of the minimum 50 per cent would be the condition of licence, but we would be
willing to step up on this particular issue for the Nature TV
19790 MR. McCALLUM: What does it go to, then, for
the other years?
--- Pause / Pause
19791 MS TAIT: I'm just discussing that with our
19792 I think that what we would be suggesting here
is the 90 per cent, certainly for year 1. We might develop some capacity
and see that dropping down a little bit. But, again, I would say we would be
happy to stay within the range of 75 per cent.
19793 MR. McCALLUM: Even those commitments could be
made conditions of licence if the Commission were so disposed.
19794 MS TAIT: Yes.
19795 MR. McCALLUM: You are thinking 75 per
cent for year 2 and beyond?
19796 MS TAIT: And beyond, yes.
19797 MR. McCALLUM: Thank you.
19798 Thank you, Madam Chair.
19799 THE CHAIRPERSON: Commissioner
19800 COMMISSIONER WILLIAMS: We will now move along
to Play TV.
19801 You have proposed a condition of licence that
would allow Play TV to broadcast 30 per cent programming other than game shows.
Could you please detail your plans regarding the programs you propose to carry
that are not game shows?
19802 MS TAIT: I am going to ask Claude to answer
that because he is more intimately involved in the programming
19803 Just to say that also from our point of view
this channel represents a lifestyle component in the sense that people who watch
game shows tend to be avid game show participants so there might be
opportunities for information programming around the game show Culture. But
perhaps Claude could elaborate.
19804 MR. GALIPEAU: For some reason that is a
mystery to me I have been identified as the game fanatic, but I am willing to
19805 We actually do have some magazine-type shows
in the schedule and they are basically around the communities built around the
particular kind of game. So you would think of bridge, or scrabble. In fact,
it's something you might not know, but some of the best scrabble players in the
world are Canadians, and there is an extremely strong scrabble playing community
in Canada. So magazine shows around those kinds of interests.
19806 We have one show, I think, called Rules and
Regs which would be a magazine show that would spotlight the different games
from scrabble or bridge, and we actually have, for those who are interested in
the most popular games, Bridge Fanatics and we would have some of those
19807 We would also possibly have -- we have
also listed a few movies that would include movies that have games as their
particular themes. So you might remember the Robert Redford production Quiz Show
done about the scandal in the 1950s over quiz shows, the show 21 and so thinking
of the possibility of playing a movie of that type.
19808 COMMISSIONER WILLIAMS: Thank you, Mr.
19809 Ms Tait, you indicate that Play TV proposes a
conditional licence that:
"No more than 15 per cent of all programming broadcast would be from Category
7 drama and that all programming from Category 7(b) shall have been
copyrighted for at least five years".
19810 In your schedule, you also indicate that
movies would be focused on games and game shows. Could you elaborate on your
plans to broadcast feature films?
19811 MS TAIT: Just for greater clarity, we would
include 15 per cent of the schedule to include all Category 7, so that includes
feature films, and I think that Claude has described what we mean by feature
films as having a game show or game as an absolute central character to the
19812 COMMISSIONER WILLIAMS: Okay. Are there many
feature films available copyrighted for at least five years which have game
shows as their central theme?
19813 MS TAIT: I believe Quiz Show is over five
years old so, yes, there are, again, Champagne for Caesar. So they are extremely
minimal. Again, we don't see this at all as the primary focus of the channel,
but again if you are a game show enthusiast you might be interested in seeing a
film that touches on this subject. But there is not a large
19814 COMMISSIONER WILLIAMS: Would Play TV include
video games in its schedule?
19815 MS TAIT: We have a magazine show on video
games. We do not see this channel as a video game channel at all. The game show
experience is a group experience and in defining what a game show is, that would
be part of it, that we are looking at play activity that involves many people,
not one person working on a Game Boy or something like that, or some of the
video game ideas that I think you have had before you.
19816 But it is part of the culture. Again, from an
information point of view there might be some interest, but it is absolutely not
the focus of this proposal.
19817 COMMISSIONER WILLIAMS: Thank
19818 The U.S. Game Show Network is on the
Commission's Part II list of eligible satellite services. You indicated that
Play TV would offer a greater variety of programming from Canada and around the
world than the U.S. service. Aside from that, can you describe the similarities
or differences between the two services? And where the U.S. service is also
available, are you confident that your service will be able to successfully
attract the subscribers you need to meet the goals of your business
19819 MS TAIT: I might answer the last first and go
19820 COMMISSIONER WILLIAMS: Sure.
19821 MS TAIT: And perhaps Claude will have some
comment on it. From our point of view, the reason why we felt Play TV should be
included as a Category 1 licence was in fact related to the fact that there is
already a Game Show Network from the United States available in
19822 We felt that there was a real opportunity to
create a new library of Canadian programs in this format of programming that has
been largely ignored despite the fact that Canadian audiences want to watch game
shows. Despite the fact that Canadian audiences are watching game shows, they
are just watching American game shows.
19823 So that is why we consider this channel to be
a driver because we know Canadians want game shows. We also think it has some
social benefit in the sense that it would allow a Canadian service and Canadian
programming to be created. So for that reason we put it in Category
19824 Most importantly, this service has the
highest level of Canadian content of all of our services proposed because we
simply don't want to create another window for American game shows and that's
why we have the 70 per cent content by the end of the licence
19825 The idea here is to take the talents of the
independent production community and we, as producers of variety and comedy,
think that there is lots of opportunity here to create very, very interesting
Canadian programming. So we don't see it as competitive.
19826 MR. GALIPEAU: I could add a few things about
how the Game Show Network looks to me. The Game Show Network in the United
States is predominantly a channel that reruns the history of game shows, of
American game shows, and they also have programming about the history of
American game shows.
19827 So they might have programs about the
dominant game shows in the '60s or the '70s. Then they also have moved in just
recently into newer original productions, and again it is uniquely American game
shows produced by Americans for the American market.
19828 The programming on Play TV, we plan to be
slightly different. On the one hand, we are not going to have shows that deal
with the history of game shows, American game shows. We are going to try to
broaden the programming to have as much international programming as possible
with British game shows or Australian game shows, or even foreign-language game
shows some of which can be quite enjoyable and interesting.
19829 It's an interesting point because the format,
the game show format, is often taken from one territory and imported to another
territory. So one of the most popular game show at the moment, Who Wants to Be a
Millionaire, was a format taken from British game shows and brought to the
19830 I think there is quite a good appetite in
Canada for seeing foreign game shows. Perhaps we have a higher tolerance for
seeing foreign cultures at play. I would venture that as a
19831 The other thing that is quite important about
Play TV is that it will be creating original new programming with interactive
features focused on the Canadian market and focused on Canadian game
19832 COMMISSIONER WILLIAMS: In the area of
finance, what assumptions have you made about Play TV being carried in Quebec,
as part of your answer, in the view that Play TV is essentially an
English-language service? What if the cable or the BDUs in Quebec decided not to
carry Play TV? What effect would that have on your overall plan?
19833 MS TAIT: I don't believe we included Quebec
in our survey. So Claude wants to answer that.
19834 MR. GALIPEAU: I did project some
French-language carriage and it's my understanding that it's not -- some
carriers are not going to be excluded from BDUs, are not going to be excluded
for carrying it.
19835 On the business plan, it's extremely low the
numbers. I have from year one to year seven 10,000 subscribers to 60,000
subscribers. So the material effect runs from about $10,000 to $70,000 which is
19836 So I don't consider nothing on the Quebec
market or on the French-language market as undermining the business plan. It
does rely on national carriage in that respect in both English and
19837 COMMISSIONER WILLIAMS: Thank you, Mr.
19838 I would like to thank you, Ms Tait and Mr.
Donovan and Salter Street Films' panel for your answers and contribution to this
process. I have enjoyed the privilege of leading the questioning on your
proposed Category 1 applications.
19839 Madam Chair, I have one final lighthearted
comment, if you will indulge me, to share prior to returning this applicant to
19840 Let me set the scene. Eighty-eight Category 1
proposals. Millions of dollars the prize. A new digital era begins. Exciting new
partnerships, the digital pay and specialty hearing. Only ten will survive.
Catch the action, sense the drama daily on CPAC. Good luck to all and also
remember tonight is the grand finale of the popular show Survivor.
--- Laughter / Rires
19841 CHAIRPERSON OF THE COMMISSION: It's not
Canadian content, as I recall.
19842 COMMISSIONER WILLIAMS: No, but there is a
significant Canadian interest though.
19843 THE CHAIRPERSON: I hate to return you to the
nature of service, but I will.
19844 This is a good application to illustrate what
I was saying earlier about fencing in this one, the Play TV. It is described
"...a service dedicated to quality film, game shows and Canadians who like to
play. Programs will include popular and class game shows from Canada and around
the world, provide Canadians with the opportunity to participate in game shows
designed for them and their interests, as well as the chance to interact and
compete with other Canadians on a wide variety of new game shows via the
19845 And then you give us the categories that the
programming will come from, and under drama there is only 7(d), theatrical
feature films aired on TV. Correct?
19846 You talk about drama, but you only --
did you not just talk about 7(d)?
19847 MS TAIT: No, I believe that we had all the
categories. We had Category 7 dramas.
19848 THE CHAIRPERSON: (a), (b), (c)
19849 MS TAIT: Yes.
19850 THE CHAIRPERSON: Since 70 per cent of
your programming would be game shows under Category 10 and then there would
be another 30 per cent of the programming other than Category 10 that
could be devoted to other, of which 15 per cent could be drama, so it could
presumably be all 7(d)? These are the only boxes I have crossed out, but I will
take your point that it is all of it.
19851 Nevertheless, if we leave it like this, on an
18 hour day, in a week 15 per cent would give you 18.9 hours, let's say 19
hours, which means you could have a two hour movie every night in prime time.
Based on a 24 hour day, you would have possibly 25 hours of movies, which could
be 12 movies per week, and unless you accept to tell us that it will only be
movies about games, that could be quite a few movies and would certainly put
into question the narrowness of the nature of service.
19852 And then, of course, if games include --
isn't there, for example, a James Bond movie that goes on in a casino? Would
19853 If you are Showcase or another competitor and
you are trying to say "Well, what is this going to be, this programming?", there
could be -- you know, we need fences, and I presume if you are an applicant
you will want others to have fences as well.
19854 So would you add what you responded to that
it would be only about game shows to your description of service to narrow the
19855 MS TAIT: Yes, we would.
19856 I think the -- here is a fence, that any
programming from Category 7 would have to relate directly to the nature of
service description. Would that perhaps help you narrow it down?
19857 THE CHAIRPERSON: Well, would it help you in
this competitive process if that were the manner in which we
19858 MS TAIT: Yes, this is
19859 THE CHAIRPERSON: -- description of
19860 MS TAIT: The intention here is that this is a
service about play and game shows. We have no interest in showing films that are
not related to that.
19861 Just with respect to your James Bond comment,
we would consider the game or game show would have to be a central character,
that is the central theme of the film, as an example of Quiz Show, rather than a
circumstantial or setting let's say.
19862 THE CHAIRPERSON: Because, interestingly,
there is more than one aim at this fencing in the genre of service. It's not
just to please us. It is, yes, in that we want diversity therefore we don't want
all the services to look alike, but it is also protection in a sense of trying
to make the system work in our particular market by not only having diversity
but allowing services to function in a feasible way by having niche services
that people can identify and you can brand.
19863 MS TAIT: We are not
19864 THE CHAIRPERSON: So you think it is a good
19865 MS TAIT: We are completely in agreement with
you on this point.
19866 THE CHAIRPERSON: Oh, so that possibly you
would accept this additional fence.
19867 But I thought that this illustrates the point
best because there is a big difference between Play TV as a game niche with a
movie and perhaps more in prime time every night.
19869 MR. McCALLUM: Yes. To get at just about the
same point, I would assume that if the word "exclusively" were added into your
condition of license or your nature of service that would be acceptable
19870 What you have in 7.1 on your nature of
"The licensee shall provide a national English-language specialty programming
19871 Could I add the word:
"...exclusively games, game shows and the way people play"?
19872 MS TAIT: Yes.
19873 MR. McCALLUM: Thank you.
19874 Just to clarify, do I take it from your
answer with respect to the U.S. Game Show Network that unlike your relationship
in the IFC case you do not have a relationship here with the U.S. Game Show
19875 MS TAIT: No, we do not have a
19876 MR. McCALLUM: Do you intend to enter into a
relationship in the future if this is licensed?
19877 MS TAIT: I don't think so, but possibly for
programming, but it is not anticipated or contemplated in our business plan
19878 MR. McCALLUM: Thank you, Madam
19879 THE CHAIRPERSON: Madam
19880 CHAIRPERSON OF THE COMMISSION: I am sorry,
the discussion you were having with the Chair just raised a concern that is more
defined for me than it was when I first started thinking about all those
19881 If we allow -- on the principle that all
the applicants seem to have a wheel of programming and that they are repeating,
you know, high repeats, either because the principle is in the digital universe
or you come at different times and it's not the same kind of rendezvous. It's
the genre rendezvous, but there is still a lot of people with the kind of
obligations that we have to be at work during the day and prime time has still a
lot of meaning to them in terms of that's still their viewing
19882 If we are looking for diversity in that new
universe, making sure that there is really a new or an added value for the
viewer and if all prime time ends up being film again, of all different kinds,
but film, have we achieved something? Isn't it important -- you know, I am
just asking the question at the same time as I am thinking about it, but
shouldn't we fence prime time to be really related directly to the very core
nature of the genre and not be taken for something else?
19883 We all understand that at the end of the day
when we will conclude on competitiveness everybody will expect that will say
there is a certain percentage that can overlap, but a certain percentage has to
19884 But if in prime time that's the time that
everybody's overlapping with everybody, have we achieved something significant
for the viewers in terms of diversity?
19885 MS TAIT: I think it's a legitimate concern
and again I would look at this on a case-by-case basis because for certain
services this is more relevant than for other services.
19886 In the case of Play TV, for example, we would
have absolutely no problem removing films from the prime-time schedule. It is
not at all the intention of this particular service, clearly with independent
19887 But let's take maybe a more middle of the
road example, like Girls TV, where there would be an interest to have one movie
possibly in prime time, and because of the nature of wanting to have girls in
the role of protagonist.
19888 So I think that there are certain services
where this may be useful and I hate to add to the list of homework, but it may
be something that you want to invite from others to comment on. We certainly
would be willing to look at the prime-time issue and go back to our applications
and see what we might offer up as a suggestion. I think it is a legitimate
19889 CHAIRPERSON OF THE COMMISSION: Thank
19890 THE CHAIRPERSON: Hopefully, by the time
homework is brought in it won't say "I don't have any problem with you licensing
this one of my channels and this one of their channels, as long as they accept a
condition that they don't do movies in prime time." It will be a bit late in the
process to do that. But it is striking in some -- you look at Play TV and
you ask yourself is 15 per cent possible and movies -- yes, five years old,
but you know we are entering a world where you are probably yourself going to be
involved in making movies about games because that's the world we are moving
19891 So before the end of your licence term there
may be quite a few available ones. That would be now the fencing. It would be,
well, it is about game shows, but it could be one or more in prime
19892 MS TAIT: Are you seeking additional
19893 THE CHAIRPERSON: No.
19894 MS TAIT: I guess I just add just for greater
clarity that we were looking at all of Category 7. Again, it is not just
feature films, the 15 per cent. As I said, the inventory is limited at this
time, so there is not a lot -- but I understand the
19895 THE CHAIRPERSON: But telling us A, B, C and D
and at my choice 15 per cent can be 15 per cent and there is no way I can say
you are not abiding by what you said. Your competitors are looking at this and
saying, "Well, what's this service going to look like?" That's the only way we
can address this is to try to see not what is it going to look like, what could
it look like is the way it has to be addressed, considering the requirements and
the promises made, what could it be, after it gets going I suppose, to what it
would like to be.
19896 MS TAIT: Here's a suggestion. As I said, I
think you need to look at case by case, but certainly on the Play TV we would be
willing to accept a restriction on prime time because it is absolutely not the
intention of this service. I hope that it's very clear that the idea here is
that when people are surfing the dial, then they are seeing movies on every
other channel, that they will see a game show on this channel.
19897 THE CHAIRPERSON: I believe the point that
Madam Bertrand was making is that a number of TV viewers may well view TV mostly
in prime time.
19898 Therefore, presumably it wouldn't help very
much I suppose because it would be difficult to brand your service if you did
that, but we have to look at it from the perspective of probably commercial
imperatives will also help in keeping people to try to brand their
19899 We will then give you the last word, Ms Tait
or Mr. Donovan, to wrap up a rather fruitful afternoon, a bit hard on
19900 MS TAIT: Thank you.
19901 On behalf of the Salter Street Films team,
both here, but also in Halifax and Toronto because I am sure they are viewing
this, thank you for the opportunity for participating in these hearings. It has
really been very, very edifying.
19902 If I had to choose one word from these
hearings and many have been uttered, I would choose the word "diversity" as the
most important one.
19903 Basically, for diversity of programming we
have advocated a continued role for the independent production sector and
strong, clear commitments to the sector and to Canadian content.
19904 For diversity of service offerings we have
advocated a case-by-case approach in the interest of a strong Category 1
19905 In the case of diversity of ownership, we
have advocated the role that new entrants can play.
19906 I hope that you come away from this with a
solution because I believe you are facing a very considerable challenge and we
believe in a balanced approach, but we also think there is an opportunity to
open up the Canadian broadcasting system in the interest of
19907 We have suggested, I hope respectfully, that
you consider new entrants as a priority for Category 1 licences because
realistically it is the last time we can make a contribution to the system as
19908 We have suggested that you invite the
established multiple licence holders to apply their market position and their
deep pockets to the arena of Category 2.
19909 So, thank you, and I think Michael would also
like to say a few words.
19910 MR. DONOVAN: I would also like to express my
thanks. It has been a long and educational process for all of us and I am sure
for you. We empathize with your decisions and the difficulty of the choices
given the changing technological environment.
19911 I would like to respond to Commissioner
Williams' last screenplay outline and in Hollywood for most scripts there is
usually a happy ending. In fact, I read in the paper this morning that the
betting money is on the virtuous participant in that game of "Survivor". In
fact, surviving may be the operative word for this particular set of hearings I
think for you, as well as for the participants.
19912 Also, survival is one of the critical things
for our company given the issues of consolidation.
19913 To take up on what Madam Bertrand said
earlier, this is the question that is before us. There are expanding numbers of
channels, plus shrinking numbers of players. The range of choices for producers
is becoming more limited and we feel the best way that we can continue to make
our contribution to Canadian programming is through these
19914 I think that they will also expand the
opportunities for Canadian viewers in terms of range of programming
possibilities. I think expanding the number of doors helps to achieve that and I
think that we will make great channels.
19915 So I thank you and I wish you well in your
19916 THE CHAIRPERSON: Thank you,
19917 You may find out that being a broadcaster is
not always easy.
19918 We will now give the evening off to
Commissioner Williams. He can recover.
19919 We thank you for your co-operation and we
will see you in the next phase, or some of you at least. Have a good
19920 We will now adjourn until tomorrow morning at
19921 Nous reprendrons à 8 h 30.
--- Whereupon the hearing adjourned at 1755, to resume
on Thursday, August 24, 2000 at 0830 / L'audience
est adjournée à 1755, pour reprendre le jeudi 24
août à 0830