ARCHIVÉ -  Transcription - Hull, QC - 2001/06/19

TRANSCRIPT OF PROCEEDINGS

FOR THE CANADIAN RADIO-TELEVISION AND

TELECOMMUNICATIONS COMMISSION

TRANSCRIPTION DES AUDIENCES DU

CONSEIL DE LA RADIODIFFUSION

ET DES TÉLÉCOMMUNICATIONS CANADIENNES

SUBJECT / SUJET:

MULTIPLE BROADCASTING AND OWNERSHIP APPLICATIONS /

DEMANDES DE RADIODIFFUSION ET DE PROPRIÉTÉS MULTIPLES

HELD AT: TENUE À:

Conference Centre Centre des conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, Promenade du

Portage

Hull, Quebec Hull (Québec)

June 19, 2001 Le 19 juin 2001

Volume 1

In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.

However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.

Afin de rencontrer les exigences de la Loi sur les langues officielles, les procès-verbaux pour le Conseil seront bilingues en ce qui a trait à la page couverture, la liste des membres et du personnel du CRTC participant à l'audience publique ainsi que la table des matières.

Toutefois, la publication susmentionnée est un compte rendu textuel des délibérations et, en tant que tel, est enregistrée et transcrite dans l'une ou l'autre des deux langues officielles, compte tenu de la langue utilisée par le participant à l'audience publiqe.

Canadian Radio-television and

Telecommunications Commission

Conseil de la radiodiffusion et

des télécommunications canadiennes

Transcript / Transcription

Multiple broadcasting and ownership applications /

Demandes de radiodiffusion et de propriétés multiples

BEFORE / DEVANT:

Martha Wilson Chairperson / Présidente

Andrée Wylie Commissioner / Conseillère

Andrew Cardozo Commissioner / Conseiller

Barbara Cram Commissioner / Conseillère

Ron Williams Commissioner / Conseiller

ALSO PRESENT / AUSSI PRÉSENTS:

Peter McCallum Legal Counsels /

Leanne Bennett Conseillers juridiques

Lynne Poirier Hearing Secretary /

Secrétaire de l'audience

HELD AT: TENUE À:

Conference Centre Centre des conférences

Outaouais Room Salle Outaouais

Portage IV Portage IV

140 Promenade du Portage 140, Promenade du Portage

Hull, Quebec Hull (Québec)

June 19, 2001 Le 19 juin 2001

Volume 1

ii

TABLE OF CONTENTS / TABLE DES MATIÈRES

PAGE / PARA NO.

APPLICATION BY / DEMANDE PAR

MusiquePlus Inc. 6 / 18

INTERVENTION BY / INTERVENTION PAR

Association Québécoise de l'industrie du 123 / 467

disque, du spectacle et de la vidéo (ADISQ)

REPLY / RÉPLIQUE 137 / 513

APPLICATION BY / DEMANDE PAR

Vision TV: Canada's Faith Network 140 / 529

INTERVENTION BY / INTERVENTION PAR

Canadian Cable Television Association / 276 / 1191

Association de télévision canadienne par

câble (CCTA)

Baha'i Community of Canada 287 / 1242

Extended Films 301 / 1293

Raheel Raza 313 / 1350

The United Church of Canada 324 / 1398

REPLY / RÉPLIQUE 333 / 1438

1. THE CHAIRPERSON: Good morning, ladies and gentlemen, and welcome to the public hearing of the Canadian Radio-television and Telecommunications Commission.
2. Bonjour, mesdames et messieurs, et bienvenue à cette audience publique du CRTC.
3. During this hearing, we will examine applications for license renewals by specialty channels and radio stations. We will also hear an application for the licensing of a new French language ethnic radio station in Montreal and for a new national specialty television service.
4. Nous examinerons des demandes de renouvellement de licence de canaux spécialisés et de stations de radio. Nous étudierons également une nouvelle demande de licence de station de radio ethnique de langue française à Montréal, ainsi qu'une autre de service national spécialisé de télévision. Je précise que vous pouvez vous adresser à nous aussi bien en français qu'en anglais.
5. I'd like to point out that you can use either French or English in your interventions. My name is Martha Wilson. I'm the Commissioner for the Ontario region and I will be presiding at this hearing. Here on the Panel with me are my colleagues, Commissioners Andrew Cardozo, Barbara Cram and Ron Williams, and of course our Vice-Chair of Broadcasting, Madame Andrée Wylie. I'd also like to introduce to you the CRTC staff who will be working with us during the public hearing, our legal counsels Peter McCallum and Leanne Bennett, and the Hearing Manager Michael Burnside who is in the back row. Michael Burnside will also be sharing the Secretary's duties with Lynne Poirier, and Pierre Ladouceur will be responsible for the public examination room, which is in the Patenaude Room as usual. Please don't hesitate to address any of your questions or concerns to them.
6. Si vous avez des questions, n'hésitez pas à les consulter.
7. The process for each application considered at this public hearing is to be divided into three parts. First, we will hear the applications to renew the license for specialty channels. Following that, we will hear from radio stations looking to renew their licenses, as well as an application to operate a new ethnic radio station on an AM frequency in Montreal. Finally, we will hear from World Television Network, le Réseau télémonde inc., WTM, an applicant seeking a license to carry on a national specialty television service.
8. Most of the applicants for specialty television programming appearing here today are groups who have been licensed for a very long time. These applicants have been called to appear before the Commission so that they can present their plan for future programming in order to renew their licenses. The Commission will assess individual applications in light of the proposed initiatives and will also look at a range of societal issues, such as cultural diversity, close captioning and access for the blinds.
9. The Commission will also hear from radio stations intending to renew their licenses. Three of these stations who are appearing for alleged violatins of regulatory requirements will have to present evidence to convince the Commission that they should not receive mandatory order. We will also hear from the applicant CPAM for a new license for a radio station in Montreal. Finally, we will hear an application for a new specialty television service from World/Télémonde. This group proposes to offer services in both English and French on two separate channels. WTM is proposing a national specialty service dedicated to providing news, public affairs, film and entertainment programming from around the world, some of which will be subtitled and thus be accessible to the mainstream audience.
10. In order for the Commission to have the clearest and most comprehensive exchange of information, the Commission believes it necessary to gather specific information concerning each and every applicant. We expect this hearing will last approximately three days, until June 21^st 2001. We will begin every morning at 9:00 a.m. and will continue until about 5:00 p.m. We will advise you of any changes in the schedule that may occur.
11. As a final note, I'd just like to talk about cellular phones and pagers, which is one of our favourite topics at the end of our opening remarks. I just want to remind all those who are present to please turn off your cell phones and pagers when you're in the hearing room, as they tend to distract the applicants, interveners and Commissioners, although sometimes it's the Commissioners themselves who leave their cell phones on. We would appreciate your cooperation in this regard throughout the hearing.
12. I will now call on the Hearing Secretary to explain the process we will be following. Madame Poirier?
13. MME L. POIRIER: Thank you, Madam Chair. Cette audience va se dérouler en trois phases. La première phase, nous allons entendre les demandes. Chaque requérante a 20 minutes pour présenter sa demande. C'est ensuite suivi d'une période d'intervention. Chaque intervenant dispose de 10 minutes pour présenter son intervention. Et ensuite, la requérante peut revenir en réplique 10 minutes additionnelles pour terminer la phase.
14. Nous alons débuter avec une demande présenter par MusiquePlus Inc., une demande présentée en vue de renouveler la licence de son service spécialisé de langue française connue sous le nom de MusiquePlus qui expire le 30 novembre 2001. J'aimerais inviter les représentants de MusiquePlus à s'approcher s'il vous plaît?
15. LA PRÉSIDENTE: Monsieur Arpin et vos collègues, bonjour et bienvenue.
16. M. M. ARPIN: Bonjour. I will let Mr. Marchand make the presentation.
17. LA PRÉSIDENTE: Merci beaucoup.

    APPLICATION / DEMANDE

18. M. P. MARCHAND: Bonjour. Donc, Madame la Présidente, distingués membres du Conseil, je suis Pierre Marchand. Je suis vice-président directeur général de MusiquePlus. M'accompagnent aujourd'hui, à votre gauche, Madame Johanne Ménard qui est Vice-présidente des programmes, et, à sa gauche, Monsieur Ralph Boncy, Directeur musical. Vous avez certainement reconnu à ma droite Michel Arpin, Secrétaire corporatif de MusiquePlus.
19. Cet automne, Madame la Présidente, MusiquePlus fêtera ses 15 ans. Quinze ans d'évolution, de changements, d'innovation, 15 ans demeurés au diapason et à vivre au rythme de l'auditoire cible auquel elle s'adresse, c'est-à-dire les 12 à 24 ans. En constant renouvellement, MusiquePlus a donc su s'adapter aux goûts et aux saveurs du jour, à l'évolution du marché et du paysage télévisuel, y compris la naissance d'une petite soeur, MusiMax. En 15 ans, nous avons beaucoup grandi, au point où MusiquePlus est devenue non seulement la chaîne musicale mais sans doute la chaîne de référence pour les pré-adolescents, les adolescents et les jeunes adultes francophones. C'est un résultat dont nous sommes très fiers.
20. Avant d'aborder la façon dont nous prévoyons évoluer au cours du prochain terme de la licence que nous sollicitons aujourd'hui, je voudrais dresser un rapide bilan du chemin parcouru et des accomplissements de la période de licence écoulée.
21. Depuis '94, MusiquePlus s'est diversifiée. De chaîne de vidéoclips, elle est devenue chaîne musicale à part entière, offrant à ses téléspectateurs de nombreuses émissions axées sur le sujet de la musique. La diffusion de vidéoclips continue bien sûr de constituer la part prédominante et l'ossature de notre programmation, mais nous nous sommes rapprocher de plus en plus de la mission globale que le Conseil nous a confié; c'est-à-dire de nous consacrer à la musique sous toutes ses formes.
22. L'époque du robinet à clips est révolue. L'effet de nouveauté des clips dont nous avons bénéficié à nos débuts s'est estompé. C'est devenu pour nous, comme pour l'industrie et les artistes, un instrument de promotion parmi tant d'autres.
23. Aussi, devons nous enrichir sans cesse nos blocs quotidiens de vidéoclips, comme nos blocs thématiques consacrés à des genres musicaux particuliers, d'interventions de nos vj's, d'entrevues avec les artistes, preuve de mise en contexte. Nous avons aussi dû développer en parallèle une programmation de plus en plus importante de concerts en direct, d'émissions mensuelles consacrées à des artistes vedettes, de profils et portraits consacrés à des artistes québécois, canadiens et francophones, de prestations d'artistes en studio, de longs métrages musicaux, ainsi que de galas et autres cérémonies célébrant la musique à travers la planète.
24. Ce faisant, nous avons augmenté notre contribution au développement de la musique canadienne et à la promotion des artistes de chez nous. Nous avons fait de MusiquePlus une vitrine incontournable, un lieu chaleureux et convivial où les jeunes amoureux de la musique, et c'est presqu'un pléonasme, peuvent trouver quotidiennement tous ce qui les intéressent, tous ce qui contribue à alimenter leur passion. Un lieu dynamique, un lieu de proximité situé en plein coeur du centre-ville où les créateurs et les artistes d'ici se sentent chez eux et sont toujours acceuillis avec enthousiasme, un tremplin sur lequel ils savent pouvoir compter pour se faire connaître et entendre pour promouvoir leurs albums ou leurs spectacles, pour faire découvrir et mieux apprécier l'homme ou la femme qui se cache derrière l'artiste.
25. Bien avant la radio, c'est MusiquePlus qui a fait découvrir et apprécier de nombreux artistes et groupes québécois. Ainsi, au cours de la dernière année, nous avons fait découvrir des artistes aussi divers que Daniel Boucher, Yvon Krevé, Stefie Shock, Projet Orange, Infini-t et Muzion, pour en nommer que quelques uns. Nous avons aussi fait découvrir au public québécois nombre d'artistes canadiens de l'extérieur du Québec, par exemple, Our Lady Peace, Sarah McLachlan, Moist, Barenaked Ladies, Tea Party, Econoline Crush, Tragically Hip, Nelly Furtado et Subs. Encore une fois, ces découvertes de MusiquePlus ont été connues de nos téléspectateurs bien avant leurs premières diffusions à la radio.
26. Nous couvrons annuellement plusieurs manifestations auxquelles nous sommes étroitement associé, comme les Francofolies de Montréal par exemple, le Festival d'été de Québec, celui de Woodstock en Beauce, ainsi que les Mimis et Polliwog qui sont deux manifestations consacrées à la scène musicale indépendante.
27. En moyenne au cours d'une année, nous diffusons près de 1,400 entrevues, dont 35 pour-cents sont consacrées à des artistes canadiens dont la majorité est francophone. Nous avons organisé chaque année depuis 1995 des journées portes ouvertes qui connaissent un succès retentissants et qui permettent au public de rencontrer sur l'espace de quatres jours une pléiade d'artistes d'ici dans l'environnement même de MusiquePlus. Ces activités illustrent parfaitement la philosophie de programmation de MusiquePlus qui est de traiter les artistes d'ici sur le même plan que les grandes vedettes internationales, tout en les rendant accessibles au grand public.
28. MusiquePlus est devenue une machine de promotion culturelle complexe, diversifiée, bien huilée, très largement dévouée aux artistes québécois, canadiens et francophones. Tout celà, nous l'avons accompli en respectant scrupuleusement toutes nos obligations, que ce soit en matière de pourcentage global de contenu canadien, de pourcentage de vidéoclips canadiens ou de pourcentage de vidéoclips francophones. En investisant des sommes considérables pour fournir un encadrement enraciné dans la réalité culturelle d'ici, à une programmation musicale extrêmement diversifiée et puisant aux racines de toutes les musiques du monde.
29. Même cet engagement global qui ne s'est jamais démenti depuis notre création a eu pour effet de limiter la rentabilité de l'entreprise au point où elle se situe au plus bas de tous les services spécialisés privés de langue française. Comme de tous les services musicaux canadiens, nous continuons à croire en notre mandat. On pourrait même dire aux vues de nos prévisions financières que MusiquePlus persiste et signe. En effet, pour la prochaine période, nous demandons la reconduction quasi intégrale de nos conditions de licence, ce qui devrait avoir pour effet principal d'accroître de façon très substantielle notre contribution globale à l'industrie de la musique, y compris notre contribution au financement de vidéoclips canadiens de langue française, et ce, dans des conditions de développement telles que la rentabilité de MusiquePlus continuera de se maintenir à un niveau très inférieur à la moyenne de l'industrie.
30. Si nos prévisions financières se réalisent, Madame la Présidente, notre contribution à VidéoFACT augmentera en effet de près de 33 pour-cent au cours de notre prochaine période de licence, par rapport à la période écoulée, soit plus de $600,000 pour l'apporter à près de 2.5 millions de dollars en sept ans. Cette croissance de 33 pour-cent supérieure au 26 pour-cent qu'a connu la production de vidéoclips canadiens de langues française depuis sept ans devrait nous permettre non seulement d'accompagner l'évolution préssentie de cette production pour les années à venir, mais de la stimuler et de l'acccélérer.
31. Notre proposition nous apparaît donc tout-à-fait réaliste et généreuse. D'autant que MusiquePlus ne demande aucune augmentation de son tarif de base et qu'elle est la seule chaîne spécialisée de langue française à tirer la majeure partie de ses revenus de recettes publicitaires plutôt que des abonnements. Certains ont laissé entendre que notre proposition de reconduire nos obligations en terme de pourcentage de vidéoclips canadiens et de vidéoclips francophones était conservatrice, voir paresseuse. Rien n'est plus faux à notre avis. Comme nous l'avons déjà indiqué dans notre demande, nos obligations actuelles de diffusion sont largement supérieures au pourcentage de disponibilité de vidéoclips canadiens et francophones. Certes, notre présence et notre action contribuent à réduire progressivement l'écart entre ces deux réalités. Les vidéoclips canadiens et francophones représentaient respectivement 15 pour-cent et 8 pour-cent des nouveaux vidéoclips que nous avons reçu en 1993, alors qu'ils représentent aujourd'hui 17 pour-cent et 11 pour-cent des nouveaux vidéoclips reçus en 2000. Il y a donc eu une progression encourageante, mais ces pourcentages de disponibilité demeurent très inférieurs à notre obligation de diffusion.
32. Je voudrais ajouter, Madame la Présidente, que le pourcentage global de vidéoclips canadiens présentés à notre antenne ne reflète que bien parfaitement l'emphase réelle que nous leur accordons. Les vidéoclips canadiens ont une priorité de diffusion en terme de nombre de passage et de durée de vie. L'obligation actuelle de 30 pour-cent de vidéoclips canadiens nous permet de couvrir un éventail d'oeuvres musicales en provenance des quatres coins du monde, tout en nous autorisant à accorder un appui décisif aux oeuvres québécoises et canadiennes à travers une promotion maximale.
33. Il y a désormais deux chaînes musicales de langue française : MusiquePlus et MusiMax. Cela permet à chacune des ces chaînes d'être mieux ciblées et de ne pas courir tous les publics à la fois au risque de les décevoir tous, comme c'était un peu le cas avant 1997. Concrètement, cela veut dire MusiquePlus doit, depuis l'automne 1997, consacrer encore plus d'énergie, d'effort, d'inventivité pour atteindre les pourcentages minimaux auquels elle avait consenti en 1994, d'autant que la production de disques au Québec comme dans la francophonie est plus abondante du côté adulte, couvert principalement par MusiMax, que dans les styles musicaux qui visent l'auditoire plus jeune de MusiquePlus. La reconduction de nos conditions de licence dans ce contexte nous obligent à prendre l'engagement d'être encore plus proactif, encore plus attentif au vidéoclips canadiens et francophones.
34. En terminant, Madame la Présidente, je voudrais rappeler que le financement et la diffusion de vidéoclips ne sont qu'une composante de notre contribution au développement de l'industrie canadienne de la musique. Ainsi, par les efforts que nous déployons, se concrétise à chaque année par une quarantaine de prestations et de concerts en direct d'artistes canadiens, plus de 500 reportages avec des artistes québécois de chez nous, une couverture systématique de lancement de disques dans les genres musicaux que nous couvrons chez MusiquePlus par la présentation à chaque semaine de portraits d'artistes, par une émission hebdomadaire de commentaires et de critiques sur les nouveautés de disques qui paraissent sur le marché et finalement, par des lancements de disques réalisés en direct dans l'environnement même de MusiquePlus. Tous ces éléments de programmation renforcent la mission globable de MusiquePlus auprès des adolescents et des jeunes adultes. Comme je l'ai dit en introduction, MusiquePlus est aujourd'hui dans tous le sens du mot une chaîne musicale.
35. Nous sommes convaincus que le public que nous déservons, comme les artistes et le milieu de la musique d'ici, sont les grand gagnants de cette évolution. C'est pourquoi nous entendons poursuivre dans cette voie pour la prochaine période de licence et faire en sorte de nous consacrer plus que jamais à la musique sous toutes ses formes. Madame la Présidente, Mesdames et Messieurs les Conseillers, je vous remercie de votre attention et nous serons maintenant heureux de répondre à vos questions.
36. LA PRÉSIDENTE: Merci, Monsieur Marchand. Madame la Vice-présidente.
37. CONSEILLÈRE WYLIE: Bonjour, Monsieur Marchand, Madame et vos collègues. J'espère que vous avez quelqu'un sur le Panel qui puisse adresser à vos projections financières?
38. M. M. ARPIN: Certainement, oui.
39. CONSEILLÈRE WYLIE: Evidemment, c'est un renouvellement et la raison -- bien que votre renouvellement ait été déposé sur une base statu quo, le Conseil a évidemment des questions à vous poser et peut-être des suggestions à vous faire ou à discuter avec vous. La première serait la description de votre service. Comme vous le dîtes, vous aurez bientôt 15 ans et à ce moment-là le Conseil n'imposait pas de balises aussi précises qu'il le fait maintenant pour décrire la nature du service. Alors, je vais me baser dans es questions pour peut-être établir ce genre de balises sur le renouvellement très récent de votre compagne anglophone MuchMusic. Est-ce que par hasard vous avez une copie de cette décision?
40. M. M. ARPIN: Oui.
41. CONSEILLÈRE WYLIE: Avec vous en ce moment.
42. M. M. ARPIN: Oui.
43. CONSEILLÈRE WYLIE: Autrement, ça va être un peu pénible de suivre les conditions de licence. Alors, l'exercice est d'essayer de décrire la nature du service de MusiquePlus avec plus de précision et de façon plus similaire à celle des autres services. Je me réfère maintenant à l'Annexe A à la partie 2 de votre demande. Vous avez de fait établi une nature de service. Et premièrment, contrairement à la condition de licence du moment, au lieu de dire dans la partie A -- vous avez bien l'Annexe A -- je crois que la condition de licence en ce moment est exclusivement dédiée à la musique et vous avez maintenant établi au moins 90 pour-cent de la programmation de musique. Donc, il y a ce changement que vous proposez.
44. Et ensuite, vous faites une liste des catégories desquels doivent être choisi la programmation et évidemment il y en a beaucoup plus que dans le cas de MuchMusic. Et je me demande si toutes ces catégories sont nécessaires pour avoir un service à 90 pour-cent de la programmation musicale. Et aussi, si dans certains cas, il n'y aurait pas lieu comme on l'a fait avec MuchMusic d'établir des balises ou des pourcentages, surtout à la catégorie 8(b) ou (c). Je reconnais que dans le cas des long métrages à l'Annexe A au paragraphe C, vous êtes prêts à reconduire les mêmes paramètres.
45. Mais je vous invite à voir que dans la décision du Conseil, il y a une définition ou une description beaucoup plus précise de ce qui est un ration 60/40 musique création orale. Alors, j'aimerais vos commentaires sur la possibilité de reconduire dans votre -- ou d'ajouter à votre demande à vous les mêmes catégories que MuchMusic et si vous y voyez un problème. Vous trouvez peut-être que c'est -- est-ce que c'est quelque chose sur laquelle vous vous êtes penché comme possibilité que le Conseil essayerait d'établir un lien entre les deux? Autrement, c'est un peu difficile. Peut-être je vous donnerais la chance d'examiner la chose de plus près.
46. M. P. MARCHAND: Écoutez, Madame la Vice-présidente, nous avons certainement consulté le renouvellement de licence de MuchMusic. J'aimerais peut-être préciser dans un premier temps que si nos chaînes sont similaires dans l'approche et dans le concept, ils désservent quand même deux des marchés totalement différents avec des réalités de marché culturel totalement différent.
47. Je m'explique. Par exemple du côté québécois, il existe certainement un star system fondamental qui est très présent dans le marché et ce star system a été mis en place et je pense qu'il continue d'être alimenté par une chaîne comme MusiquePlus, par le biais de ses initiatives diverses dans sa programmation pour mettre en relief les artistes, les artisans et leurs oeuvres en fait et leur musique. Donc, c'est certainement une réalité qui est un petit peu différente de celle de nos collègues de Toronto qui vivent dans un marché fortement influencé par la musique anglo-saxone américaine.
48. Je pense que c'est important déjà au point de départ de souligner cette différence-là et de la reconnaître dans le but d'établir des balises qui ne peuvent pas être les mêmes à 100 pour-cent je crois en raison de cette différence culturelle importante et de star system qui s'est installé chez nous.
49. CONSEILLÈRE WYLIE: Si on examine par exemple la demande de MuchMusic au paragraphe 3, vous n'avez pas 7(a), donc ce n'est pas un problème. Série dramatique 7(e) que vous avez indiqué, une émission d'animation pour la télévision, et ici il y a une limite à 15 pour-cent. Le fait que vous êtes prêts à vous limiter à 90 pour-cent de la programmation à la musique ne vous empêcherait pas de faire plus de 15 pour-cent de films ou émissions d'animation pour la télévision. Je suppose si elles étaient basées sur la musique.
50. M. P. MARCHAND: Donc, votre question précisemment c'est -- je m'excuse, j'ai mal saisi.
51. CONSEILLÈRE WYLIE: Bien, j'essais de comparer. Je regarde le paragraphe 3, la condition numéro 3 de MuchMusic. Ils ont eux aussi fait (e) films et émissions d'animation pour la télévision et il y a une balise qu'ils ne peuvent pas en faire plus de 15 pour-cent la semaine. Si on établit pas cette balise-là, vous pourriez avoir plus que 15 pour-cent de programmation à la semaine qui serait constituée de films et émissions d'animation parce que le 90 pour-cent dédié à la musique ne vous empêcherait pas d'avoir plus d'animation, en autant que c'est basé sur la musique.
52. M. P. MARCHAND: Tout à fait, mais ---
53. CONSEILLÈRE WYLIE: Et à ce moment-là, je suppose que la question est, est-ce que plus de 15 pour-cent d'animation, c'est acceptable dans MusiquePlus puisque nous avons déjà un service d'animation? Voilà le but. C'est simplement de cerner et de vous entendre sur les limites que vous n'êtes pas prêts à accepter qui ont été établies pour MuchMusic qui est quand même un service semblable. Je reconnais que le marché est différent.
54. M. P. MARCHAND: J'aimerais peut-être juste qu'on observe, Madame la Vice-présidente, les deux mandats de licence que MusiquePlus a vécu depuis 1988. Et lorsque vous regardez le résultat de ce que MusiquePlus a fait, nous avons toujours consacré notre grille de programmation à des émissions musicales. Si on a touché à l'animation, c'est arrivé dans certains cas. Peut-être que Madam Ménard pourrait nous donner des exemples tantôt. Mais à de très rares occasions, nous avons touché à l'animation mais c'était de l'animation qui touchait la musique. Ce n'était pas de l'animation qui peut être vu sur des chaînes spécialisées qui sont consacrées à ce style de télévision.
55. Donc, nous avons respecté et nous souhaitons continuer de respecter ce mandat-là qui fait de MusiquePlus un succès. C'est-à-dire donc de consacrer ces différents types d'émissions qui sont reliées d'une façon ou de l'autre à la musique.
56. CONSEILLÈRE WYLIE: Dites moi surtout pourquoi limiter à 15 pour-cent à la semaine serait un problème? Nous essayons simplement d'arrimer avec le système comme il existe maintenant qui n'était pas le cas à ce moment-là.
57. M. P. MARCHAND: Madame la Vice-présidente, ce n'est pas un problème. J'ai jamais dit que c'était un problème, pas du tout.
58. CONSEILLÈRE WYLIE: Oh, voilà.
59. M. P. MARCHAND: Pas du tout. Nous ne cherchons pas à faire -- le 15 pour-cent est un pourcentage appliqué (inaudible).
60. CONSEILLÈRE WYLIE: Alors, peut-être qu'on pourrait -- si vous trouvez que vous n'avez pas assez de temps à penser à cette description de service, nature du service que nous proposons, on peut attendre après la pause pour nous revenir, mais il s'agirait d'examiner ce qu'il y a comme dans le cas -- les catégories qui sont incluses dans le cas de MuchMusic et les balises qui sont établies dans chaque catégorie pour voir si vous seriez prêts à accepter une même description de service ou si ça vous causerait des problèmes. Et comme vous allez voir pour la définition d'un long métrage et comment on examine si le ration 60/40 est respecté, c'est un peu plus élaboré ici. Et c'est pour les prochains sept ans, voilà.
61. M. P. MARCHAND: Tout à fait. Ce qui serait souhaitable peut-être, Madame la Vice-président, c'est peut-être qu'on puisse le consul -- parce qu'on l'a regardé certainement, qu'on puisse en discuter entre nous. De façon majoritaire, la licence de MuchMusic peut s'applique à MusiquePlus. Je ne pense pas qu'elle puisse s'appliquer intégralement dans toutes les conditions.
62. CONSEILLÈRE WYLIE: Non. Il s'agirait d'examiner là où vous avez des problèmes, mais que nous établissions une nature de service qui est un petit plus serrer disons que l'Annexe A où il y a plusieurs catégories qui remettent en question peut-être la pertinence de ces catégories-là et de reserrer certaines catégories qui feraient concurrence, disons un service d'animation, avec le même esprit que les longs métrages, d'essayer d'établir des paramètres.
63. M. M. ARPIN: Madame la Vice-présidente, je comprends que le Conseil veuillent se rapporter à des situations existentes ou à des précédents comme celui de la licence de MuchMusic. Mais je voudrais quand même vous mettre en garde sur le fait que MusiquePlus a une vocation qui est beaucoup plus large que celle de MusiquePlus dans ce sens que depuis sa mise en oeuvre en 1988, MusiquePlus est devenu rapidement la chaîne culturelle pour les adolescents et les jeunes adultes. Et c'est vers MusiquePlus que la population jeune se retourne pour toutes les formes de contenus musicaux, tout ce qui se passe sur la scène culturelle québécoise pour son information sur les spectacles, sur les événements qui touchent la fibre des jeunes.
64. Donc, l'ensemble des catégories qui ont été mises dans l'Annexe A répondent et Monsieur Marchand pourrait faire une nomenclature en prenant chacune des catégories et vous dire qu'est-ce qu'on a fait à ce jour qui touche chacune des catégories. MusiquePlus, c'est un sevice dédié à la musique sous toutes ses formes et utilise la palette des catégories que le Conseil lui a autorisé de se servir depuis 1998 pour atteindre cet objectif-là et c'est ce qu'elle demande de renouveler.
65. Quand on demande de renouveler, quand on dit 90 pour-cent et c'est d'ailleurs la seule nuance par rapport à la licence actuelle, c'est pour s'assurer que finalement à l'occasion on a eu des hommes politiques qui sont venus à MusiquePlus rencontrer les gens.
66. Oui, ils ont parlé de leurs ambitions culturelles, de leur vue. Ils ont même dit qui étaient leur artistes préférés mais à chaque occasion, ils en ont profité aussi pour s'adresser plus spécifiquement aux jeunes électeurs qui pouvaient effectivement un jour appuyer leur vision ou quoi que ce soit.
67. De même nature, MusiquePlus appui des oeuvres sociétales carrément dédiés aux jeunes qui -- les jeune itinérants, les jeunes contrevenants. Il y a plusieurs causes sociétales que MusiquePlus a pris à sa charge parce qu'elles s'adressent carrément à l'auditoire qui écoute MusiquePlus. Ça, c'est pas nécessairement directement lié à la musique même si on a réussi dans tous les cas à en faire des liens parce qu'on a trouvé le moyen avec les gens qui sont impliqués à venir aussi parler de leurs goûts musicaux et tout. On veut être capable de continuer à faire ça et on veut le faire sans controverse.
68. CONSEILLÈRE WYLIE: Monsieur Arpin, est-ce que -- là vous me parlez de la catégorie 2 je crois, analyse et interprétation. Il y a une limite de 5 pour-cent semaine dans la décision de MuchMusic. Les questions que je vous pose c'est simplement est-ce que ça causerait un problème si certaines de ces catégories-là étaient limitées comme il l'est dans les licences qui ont été accordées plus récemment et le dernier renouvellement de MuchMusic?
69. C'est pas une question de rediscuter ce que vous pouvez faire. Vous nous avez suggéré le statu quo mais avec 90 pour-cent. Donc, moi je vous demande est-ce dans les catégories que vous établissez, dans certaines, est-ce que vous accepteriez les balises qui sont à MuchMusic? Alors, l'exercice n'est pas de dire vous ne pouvez plus faire de l'interpétation. Est-ce qu'un encadrement de 5 pour-cent par exemple serait acceptable dans cette catégorie-là? Et en animation, est-ce que l'encadrement qui a été imposé de 15 pour-cent à MuchMusic vous serait acceptable pour essayer de reserrer un peu plus la définition (inaudible)?
70. M. M. ARPIN: Je serais tenté de vous répondre oui, 90 pour-cent du temps. Parce que l'autre 10 pour-cent, parce que quand on est en période électorale, les chefs de parti veulent tous venir la même semaine, sauf que ça dure rien qu'une semaine. Donc, c'est pour ça que je serais tenté de vous répondre c'est oui, mais dans 90 pour-cent du temps parce qu'effectivement cette semaine-là ---
71. CONSEILLÈRE WYLIE: Alors, quand vous faisiez ça dernièrement, c'était à l'encontre de votre nature de service qui était de 100 pour-cent?
72. M. M. ARPIN: Non. Parce que j'ai dit qu'on le liait toujours. On a toujours réussi à le lier quand ---
73. CONSEILLÈRE WYLIE: À la musique.
74. M. M. ARPIN: À la musique. On a réussi ---
75. CONSEILLÈRE WYLIE: Monsieur Landry joue de la guitare?
76. M. M. ARPIN: Oui, puis Monsieur Pariseau qui est venu nous parler de ses artistes préférés puis qui nous a même présenté des vidéoclips en onde.
77. CONSEILLÈRE WYLIE: Voilà, à ce moment-là ce n'est plus -- c'est peut-être un vidéo de musique ou un vidéoclip. Mais, l'exercice n'est pas très compliqué. Il n'est pas question de vous limiter indûment. C'est simplement question d'essayer d'utiliser à peu près la même méthode pour établir une nature de service à laquelle on peut faire référence. Et il me semblait à moi que le plus intelligent serait de commencer par MuchMusic et voir si ça vous cause des problèmes. Alors, peut-être que après la pause, on pourra en reparler. Le but n'est pas de vous limiter. Le but est simplement de vous imposer une nature de service à peu près de la même façon qu'avec les autres services.
78. Maintenant, vous aviez quelque chose à ajouter?
79. M. P. MARCHAND: Oui, Madame la Vice-présidente. Simplement pour vous dire que certainement on va se consulter mais on est prêt à vivre avec certains pourcentages dans certaines catégories. J'aimerais peut-être juste vous apporter un exemple. Par exemple, aujourd'hui même, la première catégorie peut paraître inopportun pour MusiquePlus, les nouvelles. Nous recevons ce soir chez MusiquePlus Sheila Copps pour parler de son nouveau programme de fonds. Donc, ça c'est à l'intérieur d'un environnement de MusiquePlus, donc de musique et de nouveau média. C'est dans ce sens-là qu'on demande cette permissivité de pouvoir donc renseigner les jeunes sur des projets comme ceux-là.
80. CONSEILLÈRE WYLIE: Alors, c'est à vous peut-être de ---
81. M. P. MARCHAND: Peut-être de faire une proposition sur les pourcentages. Tout à fait.
82. CONSEILLÈRE WYLIE: C'est ça. Parce que dès qu'il y a un 10 pour-cent, c'est évident que vous n'étiez pas -- si vous comptez que vous étiez 100 pour-cent dédié à la musique dans les derniers sept ans, vous avez créé des liens. Alors, vous pouvez nous suggérer une façon d'établir des balises pour que le 10 pour-cent ne soit pas par exemple 10 pour-cent d'animation à chaque semaine possiblement. Parce que l'exercice de reserrer les natures du service est évidemment dans ce but-là et le but n'est pas de vous limiter mais simplement d'avoir un point de repère qui ressemble d'avantage à celui des autres.
83. Au chapitre des longs métrages, alors vous acceptez le statu quo, les balises qui sont déjà là. Maintenant, même dans les catégories 8(b) et (c), vidéoclips et émissions de musique vidéo, dans le cas de MuchMusic, il y a eu une limite acceptée par eux ou imposée en tout cas par condition de licence que ce soit 65 pour-cent pour bien nous assurer que c'est le genre de service que vous avez. Est-ce que vous avez un problème avec une limite de genre-là, soit sur (b) ou sur (c)?
84. M. P. MARCHAND: Madame la Vice-présidente, je pense que l'on serait prêt à accepter un pourcentage. Celui de 65 pour-cent nous paraît élevé et je vous explique pourquoi. Quand je regarde encore une fois le genre de chaîne télévision qu'on opère chez nous, elle est différente un peu de MuchMusic dans l'intégration culturelle que l'on fait avec le milieu. On se fait toujours dire au Québec vous parlez beaucoup. Il me semble que vous parlez plus que les anglophones à Toronto. C'est un fait. On parle beaucoup. Mais c'est notre nature latin je pense qui fait en sort que l'on parle davantage.
85. CONSEILLÈRE WYLIE: Mais vous, il faut que vous le chantiez.
86. M. P. MARCHAND: Pardon. Il faut chanter. On peut chanter mais on fausse de temps à autre lorsqu'on chante. Donc, on a une tendance à inviter des artistes de façon probablement plus régulière qu'à MuchMusic. On a chaque jour dans l'environnement des gens qui viennent nous parler de musique. On va inviter des comédiens par exemple qui sont des stars du Québec à venir présenter des clips, à être ce qu'on appelle des "guest VJ". C'est pas le bon terme francophone vous allez me dire, mais des VJ invités. Donc, pendant une heure de choisir leur musique, de la présenter, de nous parler de ce qu'ils font aujourd'hui, et caetera, et ça fait parti du paysage de la télévision et du star system québécois. Et ça s'est très, très différent de ce que l'on vit à Toronto avec MuchMusic. C'est pour ça que le 65 pour-cent pour moi je vois ça comme un carcan un petit peu. On est prêt à vivre avec un pourcentage. On pourrait certainement s'entendre avec vous sur un pourcentage et 65 nous paraît un peu élevé.
87. CONSEILLÈRE WYLIE: Avez-vous une suggestion de ce qui serait raisonnable et est-ce que entre 8(b) et (c), vous croyez qu'il y en a un des deux qui serait plus approprié? Et ce serait une façon évidemment de nous assurer qu'il y a une allure générale du service qui est un service de musique. Si 65 pour-cent est trop élevé, qu'est-ce qui vous semble plus raisonnable? Ce que vous me dites c'est qu'il y a plus de création orale.
88. M. P. MARCHAND: Il y a plus de création également, Madame la Vice-présidente, de moments spontanés, de prestations, d'interviews. Y'a plus de ce genre de format de télévision musicale, parce que la télévision musicale pour moi, je l'ai dit dans mon introduction, ce n'est pas un robinet à clips. C'est révolu ça aujourd'hui et je ne pense pas -- parce que le but d'une chaîne musicale, toutes les chaînes auxquelles vous donnez des licences, c'est qu'elles soient rentables et qu'elles désservent la population. Et je ne pense pas qu'en mettant en place un carcan qui soit serré, vous allez nous aider à avoir une santé financière très positive.
89. Ce que je veux dire c'est qu'il faut nous permettre donc de respecter par contre la musique et ça on est prêt à le faire à 100 pour-cent. On est très commis dans la musique, mais qu'on trouve des façons différentes et audacieuses de le faire. On a inventé plein de façon de faire de la télévision au Québec avec MusiquePlus qui est emprunté aujourd'hui dans la télévision généraliste par exemple et emprunté ailleurs. Mais on a toujours gardé la musique comme point de mire. Donc en fait, c'est lorsqu'on parle d'émissions vidéoclips et de vidéoclips, on est prêt à vivre avec un pourcentage. On pourrait parler de 45-50 pour-cent. Mais au-delà de ça, je trouve que l'on se met un carcan qui fait en sorte que vous changez la nature un petit peu de ce que l'on est au Québec en terme de télévision en la comparant trop étroitement à MuchMusic.
90. CONSEILLÈRE WYLIE: Alors vous me revenez après la pause avec une suggestion comment cerner 8(b) ou (c) qui assurera que c'est le genre de service que vous diffuserez. Et aussi, vous allez vous pencher sur les catégories qui sont évidemment celles que -- sur lesquelles le Conseil s'est penché vis-à-vis MuchMusic pour mettre des balises à certaines de ces catégories. Par exemple, on l'a fait pour les longs métrages, possiblement pour les sports professionels -- par pour les sports, pour l'animation -- on revient aux sports -- et analyse et interprétation.
91. Mais maintenant, je suis sûr que dans votre sagesse vous pouvez trouver des mots qui peuvent cerner par exemple le domaine des nouvelles, le domaine de l'interprétation pour le relier davantage à la musique. Il s'agirait simplement d'avoir un carcan quelconque. Monsieur Arpin n'aime pas les carcans, mais avec des trous suffisants pour vous rendre comfortable et que nous nous ayons un point de repère qui ressemble aux autres services.
92. Maintenant, les sports. Dans votre description de émissions, à l'Annexe C, il semble y avoir une émission assignée à 6(a), émission de sports professionels, SPAM. Qu'elle est cette émission et est-ce qu'on jouait au soccer au son de la guitare?
93. M. P. MARCHAND: Non. D'une part, ce n'est pas du sport professionel. SPAM est une émission qui est basée sur une trame musique, donc de la musique jeune, de la musique habituellement techno ou très rock, et ce sont des loisirs et des activités plein air que les jeunes font. Par exemple, ce qu'on appelle des sports extrêmes, dont le "snowboard". Je cherche les termes français mais le "snowboard" par exemple ou le vélo BMX. Donc, c'est ce genre d'activités auxquels les jeunes sont très associés et ils en font régulièrement. Donc, c'est une émission qui parle aux jeunes. On s'adresse pas à des professionels jamais dans cette émission-là et toute l'émission est bâtie sur une trame de musique. C'est monté comme un vidéoclip finalement si vous le regardez avec des interviews qui sont insérés au sein de ces montages-là et en fait ça permet aux jeunes téléspectateurs de voir les jeunes évolués dans différentes activités extérieures de sports extrêmes qui sont non professionels.
94. M. M. ARPIN: Madame la Vice-présidente, la définition de la catégorie 6, c'est de la couverture d'évènements sportifs en direct ou en différer de sports professionels ou de sports amateurs. C'est justement pas ça que MusiquePlus fait, même si on parle effectivement de jeunes qui font ds activités de loisir qui sont assimilables aux sports. Ça dépend du traitement et nous on pense que -- on est convaincus que on est pas dans le domaine du sport. On est plus dans le domaine ---
95. CONSEILLÈRE WYLIE: Même si vous l'avez catégorisé comme 6(a).
96. M. M. ARPIN: Une erreur permise.
97. CONSEILLÈRE WYLIE: Voilà.
98. M. M. ARPIN: La perfection n'est pas de ce monde.
99. CONSEILLÈRE WYLIE: Alors, ce serait des émissions qui seraient mieux catégorisées comme vidéoclips ou émissions de musique mais qui sont basées sur les sports.
100. M. P. MARCHAND: Émission de divertissement générale, d'intérêt général davantage.
101. CONSEILLÈRE WYLIE: Qui serait la catégorie 11 qui je ne crois pas est dans la liste -- ah oui, elle est là pour MuchMusic aussi. Alors en tous cas, vous voyez le but c'est d'essayer en respectant les façons courantes du Conseil pour établir la nature de service, sans vous causer des problèmes indus et en réconfortant les autres que vous allez demeurez un service de la nature qui a été établie. Alors, vous me revenez après la pause en utilisant peut-être comme point de départ MuchMusic qui semble être le plus semblable.
102. Maintenant, au niveau des vidéoclips canadiens, vous nous donnez dans votre demande et ce matin aussi plusieurs raisons pour laquelle vous ne pouvez pas accéder au suggestions de certains itervenants qu'il devrait y avoir une augmentation vers le 35 pour-cent immédiat ou à la fin du terme de la licence. Vous nous aviez dit en 1994 évidemment que 30 pour-cent était un pourcentage qui était raisonnable tenant compte des niveaux prévisibles de production à l'époque.
103. Vous avez indiqué dans votre présentation orale que ce pourcentage a de fait augmenté depuis. A la page 7 je crois, si avant on avait canadiens et francophones représentaient 15 pour-cent et 8 pour-cent des nouveaux vidéoclips en '93, maintenant il représente 2 pour-cent de plus, 17 pour-cent et 3 pour-cent de plus respectivement canadiens et de langue française. Maintenant, ceux de langue française, ce sont tous les vidéoclips de langue française, pas seulement les canadiens qui sont dans ces pourcentages. Possiblement, il pourrait y en avoir de langue française qui ne sont pas canadiens.
104. M. P. MARCHAND: Oui. Tout à fait, oui.
105. CONSEILLÈRE WYLIE: Alors, il y aurait eu une augmentation de 2 pour-cent dans le cas des canadiens et de 3 pour-cent dans le cas des francophones. Et sur cette augmentation que vous trouvez minime je suppose, vous vous basez sur cette augmentation pour nous indiquer que vous préférez le statu quo et que ce n'est pas possible d'augmenter le pourcentage de vidéoclips canadiens.
106. M. P. MARCHAND: Madame la Vice-présidente, de façon réaliste, quand je regarde les documents que j'ai devant moi et j'ai différents documents qui sont certainement pour la discussion qu'on a aujourd'hui, d'une part la production annuelle de vidéoclips francophones, de vidéoclips canadiens au fil des années, et je vois qu'effectivement la progression est minime. Les chiffres qu'on vous a donné sont basés sur tous ces chiffres-là. Également, je regarde par exemple dans -- parce qu'on a parlé -- j'ai dit dans l'introduction tantôt que le vidéoclip canadien francophone était toujours privilégié au sein de la diffusion chez nous. Je parlais de fréquence. Je parlais de durée de vie.
107. Et j'ai ici devant moi un document qui retrace les trois dernières années. Par exemple, des 150 clips les plus joués en onde chez nous à MusiquePlus et ça représente un nombre de passage important, on parle d'un nombre de passage de plus de 12,000 passages par exemple en l'année '99 comme exemple, et je vois que sur 150 clips, il y en a 54 qui sont québécois et là-dessus 52 francophones, et il y a 18 vidéos canadiens. Donc, si je regarde là, c'est donc un pourcentage de 75 vidéoclips -- 85 vidéoclips qui sont canadiens et francophones, donc québécois francophones, qui ont été diffusées.
108. Donc, c'est un pourcentage important des vidéoclips qui ont bénéficié de la plus grande diffusion, donc qui ont joué un nombre de fois accru. Au-delà de ça en plus, un vidéoclip par exemple international va avoir une durée de vie chez nous d'environ huit à 10 semaines. Un vidéoclip québécois va jouer 15, 18, 20 semaines chez nous.
109. Donc, je vous donne ces données-là parce que ce qui m'inquiète en augmentant un pourcentage, que ce soit en canadien, que ce soit en francophones, parce que je pense que les deux arguments se rejoignent, c'est le danger de la surexposition. C'est quelque chose qui me fait peur. Je pense que trop c'est comme pas assez dans la vie. Je pense qu'on a réussi à trouver avec MusiquePlus une balance intéressante. Si vous regardez l'historique, on a toujours respecté nos quotas. On a quand même des quotas importants.
110. On a des quotas de 30 et 35 pour-cent, dont 30 pour-cent canadiens, 35 pour-cent francophones. On ne dit pas que c'est trop. On dit que c'est probablement juste à l'heure actuelle. On regarde le nombre de disques qui se produisent, le nombre de clips produits à l'intérieur des ces disques-là. C'est un clip par album, un peu plus d'un clip par album. Les radios par exemple c'est 65 pour-cent francophone, 30 pour-cent de musique canadienne. Donc, on a pas -- pardon, 35 pardon. La réalité n'est pas du tout la même lorsqu'on regarde la réalité du vidéoclip et celle d'un album.
111. Donc, sur un album, je reprends cet argument-là, vous avez 14 chansons en moyenne. Vous avez un clip, parfois deux clips. Donc, déjà faire 35 pour-cent comparé au 65, c'est déjà un tour de force. La seule chose en toute honnêteté qu'on peut vous dire aujourd'hui c'est quand on regarde notre historique et on a certainement cette expertise-là parce qu'on aide le financement vidéoclip également, c'est de voir qu'on va donc jouer encore davantage les vidéoclips canadiens, encore davantage les vidéoclips francophones et toujours les mêmes. Un moment donné, est-ce que c'est bénéfique? Nous pensons que non.
112. CONSEILLÈRE WYLIE: Vous parlez du financement de vidéoclips. Justement, vous nous indiquez que, et si on fait le calcul, il y en a presque deux millions, 1.9 millions sur sept ans qui a été dépensés pour la production de vidéoclips et dans la dernière période de licence. Et il y aurait selon vos projections financières une augmentation à 2.6 millions. Donc, il y en aura davantage.
113. Est-ce que ce que vous me dites c'est que vous utiliserez ces vidéoclips -- ce nombre supérieur pour réduire les reprises et rendre votre service plus attrayant? Est-ce que c'est ça votre argumentation? Parce qu'évidemment, il y en a plus. Il y a une légère augmentation du pourcentage depuis '93 et puis j'imagine avec les sommes excédentaires que vous allez donner à VidéoFACT pour augmenter le nombre de vidéoclips, vous allez en avoir sensémment davantage dans les prochains sept ans.
114. M. P. MARCHAND: Oui. J'aimerais peut-être répondre, Madame la Vice-présidente, à cette question-là parce que d'une part, vous connaissez VidéoFACT. Je pense que les gens de MuchMusic vous en ont parlé. Nous sommes donc partenaires à l'intérieur de VidéoFACT et VidéoFACT est opéré par un tiers parti, donc pas par nos chaînes. Donc, on a un "Chairman of the Board" qui gère donc le financement de toute l'opération VidéoFACT. C'est un organisme à but non-lucratif, donc pour subventionner les vidéoclips canadiens et francophones canadiens.
115. Il y a une chose qu'il faut prendre en considération c'est oui, on va mettre plus d'argent. Je pense que c'est important quand vous regardez nos revenus qui -- notre plan de revenus qui va augmenter donc automatiquement. Vous avez parlé de $600,000. C'est les chiffres que j'ai donné au départ. Les coûts de production augmentent également pour la production de vidéoclips. Ce n'est pas une industrie qui est stable. C'est une industrie qui comme toutes les autres industries en télévision, les coûts augmentent d'année en année. Donc, j'espère que cet argent-là va permettre de faire des vidéoclips de qualité et continuer à leur donner de la valeur, assez d'outils donc pour fabriquer les meilleures vidéoclips qui sont en compétition avec des vidéoclips étrangers sur nos chaînes.
116. Je pense qu'au départ, c'est pour ça. Est-ce qu'il se fera plus de vidéoclips? Peut-être un peu plus mais il pourra s'en faire le double et je ne pense pas que le marché québécois francophone pourrait accepter ce genre de production-là.
117. CONSEILLÈRE WYLIE: On ne parle pas de double. On parle par exemple de la possibilité pendant les sept ans d'ajouter peut-être un pour-cent par année pour arriver à 35 pour-cent de vidéoclips canadiens comme possibilité.
118. Maintenant, vous nous avez donné l'historique. Il y a eu une augmentation, ce matin dans votre présentation à la page 7, depuis '93. Puisque votre terme de licence s'il était de sept ans vous conduirait à 2008, est-ce que vous avez une projection quelqconque sur l'augmentation des vidéoclips, de l'accroissement du nombre de vidéoclips d'ici 2008 en pourcentage? Est-ce que vous essayez de me dire maintenant que le coût de les produire va être tel qu'il y en aura pas plus?
119. M. P. MARCHAND: Écoutez, je pense que c'est difficile pour nous d'évaluer le nombre de vidéoclips qui seront produits dans trois ans, quatre ans ou cinq ans. L'industrie du vidéoclip est tributaire de l'industrie du disque au départ. Le produit brut est d'abord et avant tout une chanson et cette chanson-là est mise en image pour des fins de promotion et de vente de disque et de vente de spectacle. L'industrie du disque dans le moment connaît des difficultés. Je pense qu'il ne faut pas se le cacher. Elle connaît des difficultés qui sont dues je pense à un nombre de facteurs. Par exemple, le "downloading" de musique est certainement un des problèmes de la vente de disque dans le moment.
120. Donc évidemment, la courbe des vidéoclips devrait suivre l'évolution donc de l'industrie de la musique au Canada et au Québec. C'est difficile pour nous de vous donner des chiffres à cet égard-là parce que ce n'est pas notre industrie en premier. C'est-à-dire que nous sommes en parallèle avec cette industrie-là. Nous travaillons avec ces gens-là en synergie, mais nous ne sommes pas producteurs de disques au Québec et au Canada.
121. CONSEILLÈRE WYLIE: En '94, vous nous aviez dit que vous aviez intérêt à offrir aux téléspectateurs des produits qui répondent à leurs attentes. S'il y avait plus de vidéoclips d'ici disons trois ans, vous considéreriez le 30 pour-cent comme un plancher ou un minimum ou un maximum? Est-ce qu'à ce moment-là vous en diffuseriez davantage ou diminueriez les reprises? Ce que les requérantes évidemment nous disent toujours, je peux pas vous dire ce qui va se passer dans trois ans. Et souvent si les Conseillers sont de mauvaise humeur, on demande à ce moment-là voulez-vous un renouvellement de trois ans et puis on examinera ça à ce moment-là. Je suis de bonne humeur. Il est encore tôt.
122. M. P. MARCHAND: J'espère que l'on ne vous gardera pas trop longtemps pour garder votre bonne humeur. Écoutez, vous avez avec MuchMusic dans le renouvellement de leur licence, vous avez étudié cette question-là et je lisais dans l'argumentaire que MuchMusic on fait valoir qu'au Canada, un clip se produisait par album. Et donc, vous avez -- le CRTC, au renouvellement de leur licence, a donc conserver à 30 pour-cent l'obligation et les quotas de clips canadiens. Je pense que le marché québécois à cet égard-là est certainement tributaire du marché canadien. Et je ne vois pas comment l'imposition d'un pourcentage plus grand pour le marché québécois pourrait être réaliste à la lumière de votre politique pour MuchMusic.
123. CONSEILLÈRE WYLIE: Mais s'il y en a plus, vous les diffuserez?
124. M. P. MARCHAND: Mais, c'est ce que l'on fait absolument. S'il y a plus de vidéoclips, c'est certain. C'est pour ça que je vous donnais, Madame la Vice-présidente, le nombre d'exemples que je vous donnais d'artistes qui sont passés par MusiquePlus et par le vidéoclips pour se faire connaître. Les vidéoclips, on les diffuse. On espère qu'ils soient le meilleur possible et on prend certainement je dirais -- on ose quoi, on ose donner la chance à des jeunes qui vont être boudés par d'autres médias. Et c'est ce qui a fait probablement le succès de notre chaîne chez nous. Et c'est pour ça que j'ai pu vous faire une nomenclature de la dernière année, par exemple en français, qui est imposante. Ce sont tous des artistes qui vendent entre 25 et 200,000 albums.
125. CONSEILLÈRE WYLIE: Passons à quelque chose de plus facile, vos projections financières. Maintenant, vous nous avez produit l'Annexe 20 sous-pli confidentiel. Alors, je vais respecter ce statu. Mais vous y mettez les recettes qui proviendraient d'abonnés du SRD et du STSAC pour l'année 2001 qui sont quand même de beaucoup supérieures à l'année 2000. Il s'agit d'un pourcentage assez élevé que j'ai calculé mais que j'oubli -- oui, il s'agit d'un augmentation d'à peu près 42 pour-cent. Maintenant, dans vos projections financières pour les sept ans, les sept ans qui s'en viennent, vous avez utilisé quel genre de pourcentage pour projeter vos revenus de SRD?
126. M. M. ARPIN: En fait, Madame la Présidente, on note effectivement cette année une croissance assez importante des revenus SRD, compte tenu du fait que les deux entreprises ont développé les sous-marchés qui étaient mal désservis par la cablo-distribution et qu'ils ont donc ammené un nombre significatif de nouveaux abonnés qui nous a permis d'avoir pour l'année 2001 des projections de revenus qui sont en croissance par rapport à l'année 2000.
127. Pour l'avenir et on le constate déjà d'ailleurs, on commence à voir de la fragmentation entre la cablo-distribution et le SRD. Le développement de nouveaux territoires est en partie compléter (inaudible) où cette croissance-là va être plus stable et ça signifie que -- mais les compagnies de -- les exploitants de satellites évidemment anticipe la croissance et leur plan d'affaire nous indique qu'ils perçoivent qu'ils ont encore une ou deux bonnes années de croissance avant d'arriver à une certaine maturité et que cette nouvelle croissance-là va se faire au dépend des exploitants de cable, plus qu'elle s'est faite à ce jour. Donc, un dans l'autre, ce que l'on peut gagner d'une main, on risque de le perdre de l'autre.
128. CONSEILLÈRE WYLIE: Il y a aussi je suppose un nouveau développement où la croissance des cablos sera peut-être moindre parce qu'ils perdront certains nouveaux développements au SRD. Donc, vous vous êtes basés entre 2000 et 2001 sur 42 pour-cent. Et ensuite, vous voyez je suppose un certain plafonnement parce que, entre 2001 et 2002, 3.1 pour-cent.
129. M. M. ARPIN: Oui.
130. CONSEILLÈRE WYLIE: Et de là, vous avez je crois à peu près 8 pour-cent par année d'augmentation.
131. M. M. ARPIN: Effectivement. En fait, c'est que pour les données que vous retrouvez à l'Annexe 20, évidemment au moment où on les a produit, on avait déjà une partie de l'année fiscale réalisée. Donc, on était en mesure d'ajuster l'information pour qu'elle soit le plus conforme à la réalité perçue au moment où les projections financière ont été déposées.
132. CONSEILLÈRE WYLIE: Maintenant, votre projection d'une augmentation de 42 pour-cent, vous êtes prêts maintenant de la fin de l'exercice, est-ce qu'elle s'est réalisée?
133. M. M. ARPIN: Oui.
134. CONSEILLÈRE WYLIE: Alors, pas plus ni moins, à peu près correctement?
135. M. M. ARPIN: Oui.
136. CONSEILLÈRE WYLIE: L'Annexe 20 serait à peu près ce qui va se produire pour la fin d'août.
137. M. M. ARPIN: Oui.
138. CONSEILLÈRE WYLIE: À l'Annexe 18, vous avez vos hypothèses qui sous-tendrent vos prévisions financières et vous suggérez le statu quo pour le tarif de base pour les sept ans. Mais vous indiquez un tarif qui s'accroîtrait de 3 pour-cent par année hors Québec. Est-ce que vous pouvez m'expliquer de quoi il s'agit et de le relier au fait que la distribution des services hors Québec normalement se fait à un tarif moindre? Ce serait une augmentation de 3 pour-cent par année à compter de quelle somme?
139. M. M. ARPIN: Mais pas du service de base. Ce que nous anticipons et évidemment ---
140. CONSEILLÈRE WYLIE: (inaudible) à l'étage.
141. M. M. ARPIN: Ça sera à un étage et puis c'est qu'il pourrait y avoir une progression dans l'augmentation du tarif à partir donc d'un plancher pour pouvoir effectivement investir au démarrage pour être capable d'en récupérer une -- pour arriver à un tarif plus équilibré.
142. CONSEILLÈRE WYLIE: Et c'est ce que vous croyez dans le domaine du possible dans les négotiations parce que c'est à l'étage.
143. M. M. ARPIN: En fait, c'est qu'on a déjà des abonnés hors Québec. On a déjà une réalité. Je veux dire on est distribué dans environ 400,000 foyers hors Québec. La grande majorité de ces 400,000 foyers-là évidemment sont en Ontario et au Nouveau-Brunswick, dans les confins du Canada français, avec la ville d'Ottawa qui représente un peu plus de 200,000 foyers et le Nouveau-Brunswick à lui seul un autre 90,000 foyers. Et dans ces territoires-là, on a déjà des ententes qui prévoient dans certains cas déjà des augmentations. Dans nos prévisions financières, on a pas mis de nouveaux abonnés hors Québec, compte tenu que on a produit premièrement notre demande avant que la politique soit rendue public. Mais surtout parce que c'est dans un univers numérique, dans des marchés où pour lesquels on a peu de données au moment des présentes et pour des conditions qui nous sont encore inconnues.
144. Donc, par souci de présenter un portrait qui conforme à la réalité et plutôt que conforme à des expectatives, on n'a pas essayé d'être des prévisionnistes en ce sens-là. Mais de toute façon l'expérience acquise avec la distribution des services francophones hors des territoires francophones, c'est un univers de petits nombres.
145. CONSEILLÈRE WYLIE: Alors, voyez-vous un problème à ce que vous vous en teniez à ce que l'on avait discuté lors de l'exercice pour la distribution des services en milieu minoritaire? Je pense qu'on avait discuté que ça ne dépasserait pas plus de 10 à 15 pour-cent du prix à l'étage au Québec. Ce 3 pour-cent ne dépasserait quand même pas cette attente-là.
146. M. M. ARPIN: C'est sûr que vous pouvez compter sur les distributeurs pour nous le rappeler si jamais nous l'oublions.
147. CONSEILLÈRE WYLIE: (inaudible) eux ils ne sont pas -- ils ne s'acharnent pas quand ils veulent quelque chose. Alors, c'est pour ça que je vous le demande à vous. Maintenant, vous avez sans doute en lisant la décision MuchMusic réalisé que l'augmentation des contributions à VidéoFACT de 5 à 7 pour-cent était basée en partie sur une analyse du Conseil de la rentabilité ou du BAI du service en question. Donc, il nous est important d'examiner si aussi le niveau du BAI et les raison pour lesquelles il est à ce niveau-là. Et une question qui est soulevée c'est l'augmentation de certains frais, les dépenses d'administration entre '99 et l'an 2000 qui sont assez surprenantes.
148. Entre '99 et 2000, il y a eu une augmentation surtout au poste dépenses professionelles de presque 100 pour-cent et qui a eu l'effet évidemment de réduire la marge de BAI de MusiquePlus de 18.9 pour-cent en '99 à 10.9 pour-cent en l'an 2000. Et s'il n'y avait pas eu cette augmentation qui est d'une somme importante, la marge de BAI aurait été plutôt de 14.6 pour-cent ou de 15 pour-cent en l'an 2000. Nous sommes un peu curieux de savoir pourquoi il y a eu cette augmentation au poste services professionels de cette envergure.
149. M. M. ARPIN: Madame, la réponse est malheureusement trop simple. C'est tout ce qui a entouré la comparution de MusiquePlus à la Commission du droit d'auteur pour le droit de reproduction. On a fait l'objet d'un arbitrage demandé par la SODRAC et on s'est retrouvé devant la Commission du droit d'auteur avec des experts et avec des conseillers juridiques. Vous pouvez me croire la facture s'est avérée extrêmement salée et la décision de la Commission aussi. Donc, elle aura aussi une incidence dans le temps.
150. CONSEILLÈRE WYLIE: Et ce qui expliquerait ce qui est de la moyenne de vos dépenses à ce poste-là est à peu près de $75,000 et même plus bas que ça dans certains cas. Dans vos prédictions pour les sept années qui s'en viennent, de fait on commence à je crois $58,000. D'accord?
151. M. M. ARPIN: Exact. C'est un ---
152. CONSEILLÈRE WYLIE: Alors, cette année-là c'était un demi million.
153. M. M. ARPIN: C'est un événement.
154. CONSEILLÈRE WYLIE: Il faudrait retourner à la pratique du droit.
155. M. M. ARPIN: Ou à la consultation parce que ce n'est pas juste des honoraires légaux. Je vais prendre la défense des avocats.
156. CONSEILLÈRE WYLIE: Alors, sauf cette abberation-là, vous êtes d'accord avec moi que votre BAI pour l'an 2000 aurait été plutôt de 15 pour-cent.
157. M. M. ARPIN: Oui. Mais chaque année a son lot de situation. MusiquePlus est une entreprise qui a pris sa taille et puis sa place et cette année, elle est actuellement en cours d'une négociation d'une convention collective, ce qui ne se fait non plus sans avoir des dépenses. Et on pourrait croire que le futur va aussi nous apporter des événements fortuits qui font que on est obligé d'engager des sommes plus importantes que historiquement nous l'avions fait au niveau de dépenses d'honoraires externes ou d'honoraires professionels.
158. CONSEILLÈRE WYLIE: Est-ce que la création de la compagnie TV Max Plus Production aurait cet effet-là sur vos dépenses d'administration et de services professionels?
159. M. M. ARPIN: Non.
160. CONSEILLÈRE WYLIE: Maintenant, le calcul des revenus est ressorti comme un certain problème et c'est important évidemment de savoir quel est le point de référence des recettes auquel est appliqué le 2.4 pour-cent ou un autre pourcentage qui établissent vos contributions à VidéoFACT. Et vous insistez que les recettes auxquelles le 2.4 pour-cent devrait être appliqué ne devraient pas inclure certaines recettes. De fait, ne devraient inclure que les recettes d'abonnement et de publicité nationale.
161. Et à la page 3 de votre réponse aux lettres de lacune, vous établissez justement les postes qui ne devraient pas être inclus et c'est assorti de certaines concessions dans la réplique où vous indiquez que certains postes par exemple qui sont inclus dans les exclusions vous accepteriez, par exemple, si vous faisiez de l'infopublicité. Et qu'est-ce que vous nous avez dit en réplique au sujet des recettes non monétaires?
162. M. M. ARPIN: Je vous ai dit qu'il y en avait essentiellement deux sortes. Y'en a une qui est reliée carrément à -- qui est du troc et qui est pour les biens et les services pour lesquels on consent à ce qu'ils fassent partis des revenus publicitaires sur lesquels on paierait le 2.4 pour-cent. On a dit que l'autre portion est directement associée à la promotion de notre service et d'autres services de radiodiffusion et qui font l'object aussi de troc.
163. On pense que ce type de publicité non monétaire devrait pas faire partie du compte pour la simple et unique raison qu'elles servent à faire la promotion de notre service et puis d'autres services d'autres médias. Donc, c'est finalement d'attirer l'attention de nos téléspectateurs sur la consommation de produits canadiens et que c'est donc bénéfique pour le système.
164. CONSEILLÈRE WYLIE: Nous pourrons reparler de cette question. Est-ce que c'est déduit des recettes de radiodiffusion simplement parce que c'est bénéfique pour le système quand il s'agit d'appliquer le 2.4 pour-cent? On peut en rediscuter.
165. M. M. ARPIN: Bien, c'est parce que l'autre alternative, Madame la Présidente, c'est de ne pas en faire. Je ne suis pas sûr qu'on en bénéficie parce que bon, évidemment il y a ---
166. CONSEILLÈRE WYLIE: Vous voulez dire que ---
167. M. M. ARPIN: --- il y a de la publicité croisée parce qu'à l'intérieur de -- MusiquePlus est à l'intérieur de deux grandes familles de radiodiffuseurs et MusiquePlus diffuse des messages promotionnelles des entreprises qui sont membres de l'une et de l'autre des familles.
168. CONSEILLÈRE WYLIE: Vous n'avez pas -- vous n'essayez pas de me dire, Monsieur Arpin, que si le Conseil décidait d'y appliquer le 2.4 pour-cent, vous ne feriez plus de promotion pour MuchMusic?
169. M. M. ARPIN: On ne fait pas de promotion pour MuchMusic mais on fait de la promotion pour CKMF, pour CHOM, pour Radio Énergie, pour d'autres services de (inaudible), pour d'autre services de télévision canadienne.
170. CONSEILLÈRE WYLIE: Mais si vous en faites pour MuchMusic, est-ce que c'est comptabilisé?
171. M. M. ARPIN: Bien oui.
172. CONSEILLÈRE WYLIE: Et est-ce que c'est exclus?
173. M. M. ARPIN: C'est ça qu'on exclus.
174. CONSEILLÈRE WYLIE: C'est (inaudible).
175. M. M. ARPIN: C'est ça, oui.
176. CONSEILLÈRE WYLIE: Alors, ma question ---
177. M. M. ARPIN: C'est de ça qu'on parle.
178. CONSEILLÈRE WYLIE: Ma question demeure pertinente que vous n'allez pas me dire que si par exemple le Conseil insistait que c'est inclus dans les recettes pour calculer le 2.4 pour-cent, vous allez arrêter d'en faire.
179. M. M. ARPIN: Une décision d'entreprise à prendre.
180. CONSEILLÈRE WYLIE: Voilà.
181. M. P. MARCHAND: Madame la Vice-Présidente, si je peux me permettre, nous ne sommes pas d'avis en tout cas qu'à l'intérieur de la même compagnie, lorsqu'on se rend des services à l'intérieur d'une même boîte, qu'on doit calculer par exemple ce genre de pourcentage.
182. CONSEILLÈRE WYLIE: (inaudible) que c'est bénéfique au système.
183. M. P. MARCHAND: Oui. Certainement il y a un côté bénéfique c'est certain.
184. CONSEILLÈRE WYLIE: Mais la question est est-ce que c'est une recette qui est une recette de radiodiffusion?
185. M. P. MARCHAND: Mais déjà si vous on faisait la part par exemple entre ce que je vais appeler des contrats échanges avec des tiers partis et des contrats échanges à l'intérieur de la même famille, je pense qu'il faut faire une différence à cet égard-là. On ne travaille pas de la même façon à l'interne chez nous qu'avec l'extérieur.
186. CONSEILLÈRE WYLIE: Et si c'étair des tiers partis, est-ce que ce serait inclus dans les recettes qu'on utilise comme point de référence pour calculer le 2.4 pour-cent?
187. M. P. MARCHAND: Ce n'est pas ce que l'on souhaite mais ---
188. M. M. ARPIN: Oui. On a dit que c'est pour des biens et services.
189. CONSEILLÈRE WYLIE: Mais la promotion par exemple d'un autre service.
190. M. P. MARCHAND: Écoutez, c'est certain qu'on ---
191. CONSEILLÈRE WYLIE: C'est un tiers parti aussi.
192. M. P. MARCHAND: C'est certain qu'il est important pour nous de -- donc je pense qu'on s'entend quand même sur la différence qu'il y a entre les deux. Ce n'est pas notre premier choix d'accepter le fait sur un échange avec un autre média qui n'est pas dans la famille. Mais ça pourrait être la limite qu'on accepterait effectivement de notre côté de dire qu'au moins à l'interne vous reconnaissez que dans la famille, ça ne sera pas comptabilisé commes des revenus et dépenses puisque c'est d'une poche à l'autre.
193. CONSEILLÈRE WYLIE: Seulement dans la famille.
194. M. P. MARCHAND: Oui.
195. CONSEILLÈRE WYLIE: Maintenant, si je regarde vos projections financières révisées, si nous examinons la première année par exemple, est-ce que toutes ces exclusions sont incluses dans les sommes qui sont sous les postes vente, souscription d'émission, production et autres?
196. M. M. ARPIN: Oui.
197. CONSEILLÈRE WYLIE: Pour un total en 2001 ou en 2002, 2003 à peu près de $300,000. Toutes les exclusions y sont?
198. M. M. ARPIN: Oui. Si je me permets, si je réfère au document-là, ce que l'on a identifié comme recettes de publicité nationale à 7,250,000, c'est des revenus qui ne comprennent pas les échanges publicitaires dont on parlait.
199. CONSEILLÈRE WYLIE: Oui. Ma question était --
200. M. M. ARPIN: On parle de recettes publicitaires. Par ailleurs, si je regarde maintenant ventes de souscriptions 205,000, production 31, autres produits dérivés 72,000, ce serait exclus de la contribution de 2.4 pour-cent parce que ce n'est pas pour des activités reliées nécessairement à la radiodiffusion.
201. CONSEILLÈRE WYLIE: Et ma question était toutes les réductions peuvent être retrouvées sous ces postes-là?
202. M. M. ARPIN: Oui.
203. CONSEILLÈRE WYLIE: Et donc, pour établir le 2.4 pour-cent, mon addition s'arrête à recettes publicité nationale.
204. M. M. ARPIN: C'est ça.
205. CONSEILLÈRE WYLIE: Et dans ce chiffre-là, il n'y a pas de ---
206. M. P. MARCHAND: Il n'y pas d'échanges de biens et services.
207. CONSEILLÈRE WYLIE: Et à la page 2 de lacune, vous avez indiqué que pour l'année 2001, vous avez déduit 192,000 à peu près pour Internet et 139,000 pour ventes de temps d'antenne à des tiers, pour un total qui est semblable, qui est à peu près de $332,215. Est-ce que ça été -- oups, je n'aurais pas dû mettre ce chiffre sur les -- au dossier.
208. M. M. ARPIN: Non.
209. CONSEILLÈRE WYLIE: Ah, non. C'est pour ---
210. M. M. ARPIN: Ils sont dans le dossier public.
211. CONSEILLÈRE WYLIE: --- pour l'année 2001. Mais l'année 2001 supposément n'est pas au dossier. Je m'excuse. Maintenant, est-ce que vous avez fait des déductions comparables pendant les sept dernière années?
212. M. M. ARPIN: Oui.
213. CONSEILLÈRE WYLIE: Pour le calcul. Est-ce que les dépenses qui sont attribuables à ces recettes excluses sont incluses dans les dépenses au poste de dépenses? C'est-à-dire, les dépenses qui sont nécessaires pour produire ces recettes, est-ce qu'elles sont incluses dans les dépenses ou si vous les séparer?
214. M. P. MARCHAND: Madame la Vice-présidente, lorsqu'on fait allusion aux autres revenus, donc qui ne sont pas comptabilisés dans le calcul du 2.4 pour-cent, il n'y a pas de frais directs encourus qui sont calculés à l'intérieur des dépenses. Non.
215. CONSEILLÈRE WYLIE: Vous voulez dire par exemple que si je regarde le poste programmation et production, la production de commerciaux que vous excluez, est-ce que les dépenses encourues pour les produire ces commerciaux et les revenus qui en découlent sont inclus ou non dans le $6,740,000 pour la première année?
216. M. P. MARCHAND: Les frais de production ne sont pas inclus dans les frais (inaudible) ---
217. CONSEILLÈRE WYLIE: Où sont ces dépenses?
218. M. P. MARCHAND: C'est net. C'est un net qu'on vous présente ici.
219. CONSEILLÈRE WYLIE: Alors, ça inclu aucune dépenses encourues pour générer les recettes excluses.
220. M. M. ARPIN: Oui, parce que c'est net.
221. CONSEILLÈRE WYLIE: Ça c'est pour -- ça c'est évidemment dans vos états fianciers ce serait différent. Vous voulez dire c'est net pour les rapports au Conseil.
222. M. M. ARPIN: En fait en ce sens que peut-être que si je prends une année, mettons '99 où je vois un montant à autres de $374,000, le revenu réel était peut-être de 500. Il y a eu $126,000 de dépenses. Donc, on a produit le revenu net à 374,000.
223. CONSEILLÈRE WYLIE: Par exemple, pour les revenus qui pourraient découler de l'Internet et qui pourraient causer des dépenses peut-être supérieures aux revenus pour vous préparer pour l'avenir, et caetera, est-ce que vous êtes d'accord avec moi que s'il y avait des dépenses assez importantes qui seraient incluses, elles auraient l'effet de baisser votre BAI?
224. M. P. MARCHAND: Vous avez tout à fait raison.
225. CONSEILLÈRE WYLIE: Et de résister à la suggestion que vous êtes dans une position où le Conseil peut exiger davantage.
226. M. P. MARCHAND: Mais les dépenses, Madame la Vice-présidente, qui sont reliées directement à la création des ces revenus ne sont pas comptabilisées dans ---
227. CONSEILLÈRE WYLIE: Vont continuer -- elles vont continuer à ne pas être comptabilisées pour l'exercice du rapport annuel au Conseil.
228. M. P. MARCHAND: Tout a fait.
229. CONSEILLÈRE WYLIE: Vous vous engagez à ce cas-là, parce que par exemple vous pourriez décider que faire des sommes -- dépenser des sommes importantes pour l'Internet même si vous n'avez pas de revenus est une bonne décision corporative pour se préparer pour le futur. Donc, vous êtes prêts à accepter que ces dépenses-là ne soient pas incluses.
230. M. P. MARCHAND: Tout à fait.
231. CONSEILLÈRE WYLIE: Elles ne sont peut-être pas importantes en ce moment mais elles pourraient l'être. Maintenant, êtes-vous au courant si chez MuchMusic on utilise cette même façon d'établir les recettes auxquelles sont mulitipliées le pourcentage pour fin de contribution?
232. M. M. ARPIN: En fait, dans le cas de MuchMusic, on a eu une discussion avec certaines personnes de leur groupe et on sait que les revenus et les dépenses Internet sont dans une filiale non règlementée.
233. CONSEILLÈRE WYLIE: Je parle surtout des autres postes que vous voulez exclure des recettes. Par exemple, du temps d'antenne à des tiers, la production de commerciaux qui ressemblent beaucoup plus à des recettes qui découlent de vos activités de radiodiffusion.
234. M. P. MARCHAND: Par exemple, Madame la Vice-présidente, sur la production de commerciaux, ces frais-là sont rechargés au client. Donc, le revenu qui est présenté est net. La dépense est appliquée contre le revenu. Donc, le revenu intégré dans nos chiffres est net de cette dépense-là.
235. Je vais vous donner à l'exemple la production commerciale par exemple parce que vous venez d'en faire allusion, donc ce que Monsieur Arpin vous disait au niveau de MuchMusic, évidemment je sais qu'ils ont des filiales de production par exemple pour la vente d'émissions, que c'est produit à l'extérieur et vendu par une filiale qui s'appelle "Chum City International" (phonétique) (inaudible) pas sous le chapeau de MuchMusic ou de MuchMoreMusic.
236. CONSEILLÈRE WYLIE: Là, ma question ne visait plus les dépenses mais surtout sur le calcul que MuchMusic fait. Et leur calcul inclut les revenus autres que je suppose sont autres que la publicité normale et qui pourrait possiblement inclure la vente de temps d'antenne à des tiers. Il semblerait selon les rapports que j'ai que MuchMusic ne fait pas ces déductions-là. Peut-être que l'Internet est ailleurs, mais je vous parlait surtout de ce qui ressemble beaucoup à la publicité, c'est-à-dire la vente de temps d'antenne. C'est un peu curieux d'argumenter que ce n'est pas un revenu de radiodiffusion.
237. M. M. ARPIN: Ce qui apparaît sous autres dans notre document c'est en fait la vente d'émissions. MusiquePlus vend des émissions à Télé-Québec, à Radio-Canada, à TVA. On vend à TV5 et il faut rapporter le revenu en quelque part. Alors, il est rapporté sous autres.
238. CONSEILLÈRE WYLIE: Mais ce que je vous suggère c'est que c'est un revenu de radiodiffusion et vous vous l'excluez du calcul du 2.4 pour-cent, pour les fins du 2.4 pour-cent.
239. M. P. MARCHAND: Mais, Madame la Vice-présidente, je suis en désaccord un peu avec vous sur le fait que le revenu d'une vente d'émission qui est en fait un financement, nous on inclut ---
240. CONSEILLÈRE WYLIE: Pas de vente d'émission, de vente de temps d'antenne.
241. M. P. MARCHAND: Ah, bien oui.
242. CONSEILLÈRE WYLIE: Je me suis peut-être mal exprimé.
243. M. P. MARCHAND: Ah bien, tout à fait.
244. CONSEILLÈRE WYLIE: À des tiers.
245. M. P. MARCHAND: Mais ce n'est pas inclus dans autres ça. C'est pas inclus dans autres.
246. CONSEILLÈRE WYLIE: Non. Mais vous l'excluez quand même des recettes auxquelles on applique le 2.4 pour-cent, le revenu d'antenne, de temps d'antenne à (inaudible).
247. M. P. MARCHAND: Non, non. Pas du tout, pas du tout. Tous les revenus de temps d'antenne sont inclus, sauf ce qu'on appelle les contrats échanges ou les échanges de bien qu'on parlait au départ. Mais tous les revenus de temps d'antenne sont comptabilisés à l'intérieur des revenus et le 2.4 pour-cent est calculé sur ces revenus. Je pense qu'on s'est peut-être mal compris en quelque part.
248. CONSEILLÈRE WYLIE: Alors, ils ne sont pas exclus -- ils ne sont pas inclus dans la liste d'exclusion auquelle on se référait plus tôt.
249. M. P. MARCHAND: Non. Le calcul du 2.4 est basé sur tous les revenus de commercialisation, donc de temps d'antenne, et tous le revenus d'abonnés de distribution, donc ce soit cable ou DTH. Et sur ces montants que sont calculés le 2.4 pour-cent. Aucune exclusion au niveau du temps d'antenne, sauf les contrats échanges de biens et services que vous avez adressé au tout début qui ne sont pas comptabilisés à l'intérieur du chiffre qu'on vous présente.
250. CONSEILLÈRE WYLIE: Et aussi la publicité pour les services de la famille corporative.
251. M. P. MARCHAND: Ce qu'on appelle nous en langage interne le contrat échange, non ce n'est pas comptabilisé à l'intérieur de ce chiffre-là.
252. CONSEILLÈRE WYLIE: Alors, pour l'année 2002, la première année, qu'est-ce qu'il y a sous autres, $72,000?
253. M. P. MARCHAND: C'est des revenus de ventes d'émissions que nous revendons à des tiers après diffusion.
254. CONSEILLÈRE WYLIE: Mais il y a un poste pour vente d'émissions séparé, $205,000, et un poste additionnel, $72,000.
255. M. P. MARCHAND: Pardon. Ce sont des produits dérivés, je m'excuse là. Ce sont des produits dérivés, donc on pourrait appeler du "merchandising", ou autres serait donc des intérêts sur les placements.
256. CONSEILLÈRE WYLIE: Alors, rappelez moi maintenant quelles sont les exclusions si nous examinons ce que vous avez dit d'abord, ce que vous avez dans la réplique et ce que vous me dites maintenant? Pour les fins du dossier public, quelles sont les recettes qui ne sont incluses quand vous allez calculé votre 2.4 pour-cent?
257. M. M. ARPIN: Les revenus non monétaires associés à la promotion de médias, les revenus de ventes d'émissions à des tiers, les revenus Internet, les revenus de ventes de produits dérivés et les revenus de production de messages commerciaux qui sont fait au bénéfice de tiers, les revenus d'intérêts de placement s'il y a lieu.
258. CONSEILLÈRE WYLIE: Prenons l'année 2001, vous avez à l'Annexe 2 établi les ajustements que vous avez fait en 2001. C'est l'Annexe 2 attaché à votre lacune et cette somme est de beaucoup plus élevée que ce que -- pour les exclusions, les ajustements que ce que vous nous avez dit que vous avez fait pour l'an 2001 dans la lettre de lacune où vous nous avez dit en 2001 avoir déduit -- nous avons fait le calcul quelques minutes.
259. Si je regarde toutes ces sommes qui sont les ajustements, elles sont de beaucoup plus élevées que le $192,347 que vous avez indiqué à la lettre de lacune que vous aviez déduit. Il s'agit ici de 1.2 millions d'ajustements. Ces ajustements sont des déductions. Pourquoi sont-elles si élevées comparées au $300,000 dont nous parlions il y a quelques minutes?
260. M. P. MARCHAND: D'une part, Madame la Vice-présidente, ce qu'on appelle contrat échange varie d'une année à l'autre. Ce qu'on vous présente en 2000-2001 est le montant véritable de contrats échanges qui ont eu lieu durant l'année, donc, d'échanges de biens non monétaires. Ces montants-là peuvent varier aisément d'une année à l'autre. Les revenus autres de vente ---
261. CONSEILLÈRE WYLIE: À ce niveau-là?
262. M. P. MARCHAND: Absolument, absolument. Je peux vous confirmer qu'en date d'aujourd'hui, nous n'avons rien de signé avec des tiers partis pour des échanges de biens et services pour l'année fiscale qui commence en septembre.
263. CONSEILLÈRE WYLIE: Alors, ce que vous dites c'est que possiblement dans l'année qui s'en vient que MusiquePlus aurait dans ses états financiers des recettes de beaucoup supérieures à celles que nous voyons nous au rapport annuel.
264. M. P. MARCHAND: On parle d'échanges non monétaires. Donc, ils ne sont pas comptabilisés comme des revenus.
265. CONSEILLÈRE WYLIE: Et vous les avez comptabilisé ici. Moi, je vois cette ligne-là comme des ajustements au revenu. Après ajustements, il y a une réduction de 1.2 millions.
266. M. M. ARPIN: Je veux être certain que tous ça est bien compris parce que vous avez parlé de rapport annuel. Le rapport annuel qui est déposé par MusiquePlus à chaque année au 30 novembre est (inaudible) tout à fait conforme à la réalité de l'exploitation de MusiquePlus. C'est pas fait -- c'est pas des projections. Et d'ailleurs, il est supporté par des états financiers vérifiés qui sont également déposés à la même occasion.
267. Donc, dans ce sens-là, le rapport annuel est en pleine conformité avec les états financiers. Les projections financières qui ont été déposées sous la cote Annexe 20 peuvent être nettes de certains revenus pour avoir de la consistance avec les projections financières qui ont été utilisées pour appuyer la demande de renouvellement.
268. CONSEILLÈRE WYLIE: Mais si on se penche sur ce qui -- nous sommes curieux de ces ajustements que vous faites et si c'est légitime de faire des ajustements-là pour la fin des contributions à VidéoFACT. Et pour 2001 par exemple, les sommes que je voit à l'Annexe 2, même sous autres, sont supérieures à tous les ajustements qui sont fait dans les prédictions financières de l'Annexe 20. Nous discutions justement que sur vos projections financières, il s'agit d'ajustements qui se limitent à quelques $300,000. Ici, nous avons 1.2 millions. Le niveau des ajustements ne semble pas être le même que celui dont vous parlez dans votre lettre de lacune -- dans votre réponse à la lettre de lacune et dans l'Annexe 20.
269. M. M. ARPIN: J'ai pas de réponse, Madame.
270. CONSEILLÈRE WYLIE: J'essais de déterminer quel est le niveau justement des ajustements.
271. M. M. ARPIN: Écoutez, dans l'Annexe 2, dont vous faites référence là, les données sont celles du rapport annuel déposé par MusiquePlus au 30 novembre.
272. CONSEILLÈRE WYLIE: Oui, et voilà pourquoi je me demande finalement pourquoi l'Annexe 20, qui est sensée être historique et projetée, a des rajustements sous ce que vous appelez -- aux postes qui sont en dessous de ce que vous appelez vos revenus de radiodiffusion pour les fins du calcul du 2.4 pour-cent sont de beaucoup inférieurs à celles qu'on voit à cette annexe qu'on examine ensemble. Il s'agit de ventes, souscriptions d'émissions canadiennes, $200,000, production $30,000 et autres $70,000 pour un total de $300,000. Tandis que pour la même année, les ajustements sont de 1.2 millions dans l'Annexe 2 attachée à votre lettre de lacune.
273. M. P. MARCHAND: Madame la Vice-présidente, l'Annexe 2 est certainement la plus près de réalité aujourd'hui. C'est certain. On vous a défini quatres postes ici qui sont les revenus d'Internet, les revenus de commissions, ce qu'on appelle commissions Much pour la vente de publicité qu'on fait pour eux comme représentants sur le territoire francophone. Les revenus autres sont des revenus de ventes d'émissions principalement et ce qu'on appelle contre échanges sont les revenus non monétaires, en fait la valeur des non monétaires qui n'est pas véritablement un revenu. Ce sont donc les quatres exclusions au revenus totaux que l'on indique.
274. THE CHAIRPERSON: Madame la Présidente, je prends l'engagement de vous redéposer l'Annexe 20.
275. CONSEILLÈRE WYLIE: Revenons maintenant à vos prédictions financières pour les sept ans du terme qui s'en vient. Les sommes qui sont excluses des recettes sont à peu près de $300,000 et c'est curieux de voir pourquoi celles de 2001 à l'Annexe 2 étaient de plus d'un million et pour 2000 aussi et qu'elles n'atteindront jamais un chiffre qui ressemble à ça avant l'année -- avant même la dernière année du terme qui s'annonce.
276. M. P. MARCHAND: D'une part, Madame la Vice-présidente, il y a des postes qui sont très variables d'une année à l'autre. Je vais vous donner l'exemple de la vente d'émissions de télévision. Il n'y a pas de revenus anticipés annuellement sur la vente d'émissions de télévision, contrairement par exemple à Internet où il y a un plan d'affaire sur Internet et un développement d'Internet avec des prévisions.
277. Donc, par exemple, les revenus de ventes d'émissions peuvent varier énormément d'une année à l'autre. L'année que vous avez sous les yeux effectivement, les revenus peuvent paraître imposant à comparer à l'Annexe 20. L'an prochain, ils peuvent être plus bas que l'Annexe 20. Je veux dire on a pas -- donc, c'est changeant. Ce sont des revenus véridiques qu'on vous dépose ici auprès de la réalité d'aujourd'hui avant la fin de l'année fiscale.
278. CONSEILLÈRE WYLIE: Les projections ne sont pas basées sur la réalité vécue en 2000 et 2001.
279. M. P. MARCHAND: Les projections de l'Annexe 2?
280. CONSEILLÈRE WYLIE: Les ajustements.
281. M. P. MARCHAND: De l'Annexe 2?
282. CONSEILLÈRE WYLIE: Mh'm, et l'Annexe 2 n'a même pas l'allure de l'Annexe 20 à ce poste-là. Vous comprenez?
283. M. M. ARPIN: L'Annexe 2 a été produit en réponse à une demande du Conseil pour couvrir la période 1994 à 2001.
284. CONSEILLÈRE WYLIE: Oui, je comprends ça. Ma question est pourquoi ce sont des sommes qui sont si évidemment plus élevées que celles que vous projetez et si vous avez des raisons pour les projeter si basses, le niveau des ajustements?
285. M. P. MARCHAND: Tout simplement -- j'aimerais ajouter tout simplement elles reflètent davantage la réalité dans l'Annexe 2. Ça c'est certain. C'est des produits beaucoup plus tard que l'Annexe 20 au départ. Donc, elles reflètent davantage la réalité. Cette année, c'est une bonne année par exemple pour la vente d'émissions de télévision. Ça crée un changement important s'il y a beaucoup d'échanges non monétaires qui ont été fait au courant de cette année fiscale actuelle. Donc effectivement, c'est ce qui vous donne l'impression que les montants sont très différents de ce qu'on a déposé, qui a été fait sans tenir compte de la réalité de cette année.
286. CONSEILLÈRE WYLIE: Parce que vous comprenez que pour les fins du calcul du 2.4 pour-cent, si le Conseil accepte vos ajustements, c'est assez clair. Mais pour les fins du BAI, quand on calcule quelle sera la marge BAI dans les huit première années, il est important d'avoir des projections qui vont avoir la même allure que la réalité. Parce qu'évidemment maintenant nous allons discuté de cette question de est-ce que le 2.4 pour-cent devrait être augmenté comme le Conseil l'a fait pour MuchMusic? Et il faut à ce moment-là examiné quel effet s'aurait sur la marge BAI et quelle est la marge BAI projetée de la façon la plus réaliste pour les sept ans qui s'en viennent.
287. Alors, vous avez sans doute fait ou je ne sais pas si l'ADISQ peut-être l'a fait dans leur intervention, mais nous nous avons fait le calcul à 3.4 pour-cent, disons dès maintenant et pour les sept ans qui s'en viennent, qui serait une augmentation comme on l'a fait pour MuchMusic et en fait d'une certaine façon pour le Country Network, qui serait une augmentation de presque 40 pour-cent, mais qui quand même vous permettrait d'avoir une marge BAI qui ne serait pas inférieure à 11 pour-cent. Est-ce qu'à votre avis c'est un calcul qui est correct?
288. M. M. ARPIN: Mais à 11 pour-cent qui sera une des plus basses sinon des entreprises de radiodiffusion commerciale.
289. CONSEILLÈRE WYLIE: Et ce calcul qui ne serait pas inférieur à 11.6 pour-cent même quand c'est calculé sur toutes les recettes brutes, pas seulement sur le 2.4 pour-cent. Alors, ce serait moins si c'était calculé selon les ajustements que le Conseil trouve appropriés. Alors, le calcul que nous avons fait et qui donne pas moins de 11.6 pour-cent si on augmentait de 1 pour-cent, c'est-à-dire de 2.4 pour-cent à 3.4 pour-cent la contribution. J'ai fait le calcul moi sur les recettes brutes totales, sans ajustements. Et la marge de BAI ne descend jamais en bas de 11.6 pour-cent.
290. M. M. ARPIN: Mais, encore une autre fois, je me répète. Mais je vais pour prendre le risque de me répéter pour dire que ça fait un BAI à la marge pour un service qui a quand même une fonction importante dans la société québécoise. Et qui si je regarde -- parce que je n'ai pas fait le même calcul que vous, mais si je regarde la demande de l'ADISQ et l'ADISQ elle demande qu'on double la contribution, alors que ce que nous avions projeté nous comme augmentation de BAI (inaudible) cumulée sur la période de sept ans représentait une augmentation de 42 pour-cent. Donc, qui est moindre que la moitié de ce que voudrait avoir l'ADISQ.
291. Et puis si on prend la proposition de l'ADISQ, ça fait une augmentation de 19 pour-cent de la marge bénéficiaire aussi cumulée sur sept ans, ce qui représente une augmentation de la marge bénéficiaire de 3 pour-cent par année. On ne couvre pas l'inflation du dernier mois.
292. CONSEILLÈRE WYLIE: Même, vous avez fait le calcul de la proposition de l'ADISQ et il n'y a qu'une année où c'est 10.9 pour-cent. Évidemment, tout dépend si les projections au niveau des recettes se réalisent aussi. Alors, vous trouvez qu'une marge BAI de 11 pour-cent n'est pas acceptable. Donc, avec 2.4 pour-cent, la marge est tout au près de 13 ou plus.
293. M. M. ARPIN: Dans la vie, tout est relatif. Tout ce compare à d'autres choses. Et les services musicaux de langue anglaise ont quand même des BAI nettement supérieurs à celui de MusiquePlus. Les autres service spécialisés bien établis de longue date, la même chose. MusiquePlus aussi, c'est une donnée qu'on a pas considéré ici parce que -- mais on a fait le calcul. On a aussi une des masses salariales les plus importantes des canaux spécialisés de langue française et puis des canaux musicaux. C'est notre contribution. C'est notre façon de faire, mais ça nous donne aussi notoriété. On ne demande pas de changer ça. Mais c'est aussi notre contribution à la société. On fait travailler plus de monde que bien d'autres entreprises.
294. CONSEILLÈRE WYLIE: Mais, j'ai d'autres -- j'ai quelques questions sur le service aux malentendants, la vidéo description, la diversité culturelle et le reflet hors Québec que je vais garder pour après la pause. Et nous allons prendre une pause. Je laisse à la Présidente d'établir le temps qui vous donnera peut-être le temps de vous pencher un peu plus sur la nature du service et comparer à MuchMusic comment on peut cerner mieux la description de votre service. Merci. Madame la Présidente.
295. THE CHAIRPERSON: Monsieur Arpin, how long do you think you'll need to come up with the answers to the questions that the Vice-Chair has been asking you?
296. M. M. ARPIN: Ten minutes.
297. THE CHAIRPERSON: You're fast.
298. COMMISSIONER WYLIE: Oh, you're agreeing to everything.
299. THE CHAIRPERSON: So, you're ready to break now. You want to continue with some questions.
300. COMMISSIONER WYLIE: Yes, yes.
301. THE CHAIRPERSON: Okay. So, we'll take a short break, 15 minutes then, until 11:05. That's right. An extra five minutes, we'll throw that in. Thank you. Merci.

     --- Upon recessing at 10:50 a.m. / L'audience est suspendue à 10h50.

     --- Upon resuming at 11:10 a.m. / L'audience est reprise à 11h10.

302. LA PRÉSIDENTE: Bonjour Monsieur Arpin et Monsieur Marchand. Vous êtes prêts?
303. M. M. ARPIN: Oui. Merci, Madame la Présidente. Madame la Vice-présidente, si vous me permettez en premier lieu de répondre aux questions sur lesquelles vous nous avez demandé de nous pencher. Je voudrais en premier lieu m'excuser pour la confusion peut-être de certaines de nos réponses et j'espère que nous pourrons clarifier avec plus de précision ce que nous voulions vous dire.
304. En premier lieu, je vais parler des conditions de licence et de la nature du service, si vous permettez, pour réitérer que ce que nous demandons c'est que 90 pour-cent de notre programmation soit reliée à la musique tel que nous l'avions spécifié. En ce qui regarde la diffusion de vidéoclips, nous serions prêts à ce que le Conseil indique comme condition de licence que la majorité de notre programmation doit être dévolue au vidéoclips. En fait, la majorité signifiant 50 pour-cent et plus.
305. En ce qui a trait aux catégories 7(a) et 7(b) -- et 7(e), pardon, nous sommes prêts à accepter la limitation que vous avez donné à MuchMusic comme condition de licence. Pour ce qui est des catégories 7(d) -- (a), (b), (c) et (d), nous sommes prêts à accepter des conditions de licence qui sont stipulées dans la décision MuchMusic. Et finalement, en ce qui regarde la catégorie 2, sur la question des analyses interprétation, nous sommes prêts également à accepter la condition de licence attribuée à MuchMusic.
306. CONSEILLÈRE WYLIE: Et en ce qui concerne le reste, par exemple nouvelle documentaire de longue durée, vous vous fieriez à ce moment-là au 90 pour-cent musique pour garder une limite ou une balise quelconque.
307. M. M. ARPIN: Exact.
308. CONSEILLÈRE WYLIE: Merci, Monsieur Arpin. Les conseillères peuvent aussi porter à confusion. Alors, j'accepte facilement. C'est probablement ma faute aussi, pas les conseiller, les conseillères seulement. Maintenant, services pour malentendants ---
309. M. M. ARPIN: Madame la Présidente?
310. CONSEILLÈRE WYLIE: Oui.
311. M. M. ARPIN: Également, en ce qui a trait au calcul du 2.4 pour-cent, j'aimerais quand même revenir sur cette question-là et être encore plus spécifique. Évidemment, ce que nous demandons au Conseil, je voudrais le réitérer, c'est que dans l'application du calcul du 2.4 pour-cent, le Conseil exclus les contrats à échange qui sont avec d'autres médias, qu'ils soient de la même famille ou qu'ils soient avec des tiers, ainsi que les revenus qui sont pour les ventes d'émissions de production, de produits dérivés, les revenus d'intérêts, les revenus d'Internet et les commissions que MusiquePlus obtient pour la vente de publicité au bénéfice de MuchMusic. C'est un service qui est intégré. Donc, c'est ce que nous demandons de manière spécifique.
312. En ce qui regarde la confusion qui puisse exister entre l'Annexe 20 et l'Annexe 2 de notre réponse aux lacunes, je réitère que les données de l'Annexe 2 sont des données exactes. Alors que celles de l'Annexe 20 sont des données nettes de certaines dépenses. Ceci étant dit, si -- et l'Annexe 20 aurait dû plutôt, et pour les années subséquentes également, montré que les autres revenus pourraient être de l'ordre de 1 million et plus plutôt que de $300,000. Ceci étant dit, si je mettais les revenus de contrats à échange, il faudrait aussi que je mettre des dépenses de contrats échange parce qu'elles ne sont pas dans le modèle financier.
313. Donc, ce qui viendrait affecter le BAIA et pas la différence entre 1.2 millions et $300,000, donc 900,000 qui irait enrichir le BAIA. Il faudrait aussi y inclure un certain nombre de dépenses qui sont associées et qui n'apparaissent pas dans les données financières. On peut prendre l'engagement de vous déposer des nouvelles -- et ainsi qu'aux intervenants des projections financières qui vont montrer l'incidence des autres revenus tels qu'on peut l'anticiper au moment de les présenter et basés sur l'historique de MusiquePlus au cours des 14 dernières années qui vont faire en sorte que le Conseil aura un portrait tout à fait exact. Je réitère que nous nous excusons d'avoir peut-être confondu le Conseil avec des données qui sont nettes plutôt que des données brutes.
314. CONSEILLÈRE WYLIE: Et que cette ventilation-là nous donne une idée, parce que le Conseil peut ou non accepter tous les ajustements que vous faites. Et évidemment, il ne s'agit plus à ce moment-là simplement du 2.4 pour-cent. Mais aussi le Conseil se penche et vous aussi sur la marge de BAI pour dire on ne peut pas faire plus parce que le BAI va être trop bas. Si les recettes ne sont pas très bien expliquées, le BAI est plus bas évidemment. Et ce n'est pas une question du 2.4 pour-cent à ce moment-là mais une question de la rentabilité et donc de la faisabilité d'augmenter sans que votre marge de BAI soit trop basse. Alors, je pense que maintenant on s'entend bien mieux et que vous pourrez peut-être nous ventiler la différence de façon raisonnable pour les années à venir.
315. M. M. ARPIN: On en prend l'engagement ferme.
316. CONSEILLÈRE WYLIE: Merci.
317. M. P. MARCHAND: J'aimerais peut-être ajouté quelque chose, Madame la Vice-présidente, parce qu'on vient quand même d'éclaircir un petit peu la confusion qu'il y avait. Donc, ça donne une lecture d'environ $500,000 de BAI parce qu'on exclue des revenus et dépenses de contrats échanges qui s'annulent. J'aimerais juste vous faire prendre en considération tout de même que donc ça nous laisse quand même dans une marge bénéficiaire plus basse que la moyenne. Ce qui faut prendre en considération c'est l'argent également qu'on investit dans la production, donc à travers le personnel, la production pour donner une vitrine aux artistes autres que le vidéoclip.
318. Je pense que c'est important qu'on prenne ça en ligne de compte parce que je vois des dépenses qui varient de 6.7 millions à près de 9 millions à la fin de l'année de la licence, des sept ans. Donc, c'est un montant considérable qui est mis finalement à la disposition de notre industrie puisque l'on met toujours en vitrine des gens de chez nous et on l'a démontré à travers les différents exemples qu'on vous a donné depuis ce matin.
319. CONSEILLÈRE WYLIE: Maintenant, passons au service aux malentendants. Vous vous êtes engagés si je comprends bien à ce que toute la programmation soit sous-titrée avant la fin du terme de la licence -- 90 pour-cent de la programmation sauf les vidéoclips. Je comprends bien?
320. M. M. ARPIN: Exact.
321. CONSEILLÈRE WYLIE: Et aussi que vous allez continuer à exiger de VidéoFACT et aussi des vidéoclips qui sont produits avec l'aide du Fond Astral Média qu'il y ait sous-titrage de ces vidéoclips-là.
322. M. M. ARPIN: Et nous savons aussi que les vidéoclips qui sont produits avec le soutien financier de Musique Action comporte également cette exigence.
323. CONSEILLÈRE WYLIE: Maintenant, à la réplique au paragraphe 7, vous nous dites aussi qu'au moins 90 pour-cent des vidéoclips canadiens postérieurs ou produits après l'année '95 seront sous-titrés codés.
324. M. M. ARPIN: Oui.
325. CONSEILLÈRE WYLIE: Alors, il s'agirait -- le 10 pour-cent qui reste s'agirait de très vieux vidéoclips?
326. M. M. ARPIN: Premièrement, et ça vous pouvez le demander au spécialiste qui nous accompagne ici ce matin, les vidéoclips ne sont pas tous produits avec du financement de VidéoFACT ou de Musique Action ou du Fond Rodrinburg (phonétique).
327. CONSEILLÈRE WYLIE: Quelle est la proportion?
328. M. R. BONCY: Madame la Vice-présidente, les vidéoclips subventionnés par VidéoFACT représentents grosso modo la moitié de notre ---
329. CONSEILLÈRE WYLIE: Oh, seulement la moitié.
330. M. R. BONCY: Donc, il y a beaucoup de vidéoclips indépendants par des artistes qui ne sont pas encore signés sur des étiquettes de disques mais qui veulent quand même pénétrer le marché et on pas effectivement le contrôle au moment de la livraison sur le sous-titrage et le codage.
331. CONSEILLÈRE WYLIE: Et vous vous engagez à ce qu'ils soient sous-titrés codés à 90 pour-cent avant le terme de la licence. Donc, ce 50 pour-cent là ce serait fait à vos frais à vous.
332. M. P. MARCHAND: Si je peux me permettre, Madame la Vice-présidente, y'a donc trois sources importantes de financement au Canada pour le vidéoclip. On parle de vidéos canadiens pour l'instant parce que le vidéo étranger, c'est une autre discussion qu'on peut avoir avec vous. Pour le vidéo canadien, Ralph Boncy nous confirmait que c'est environ la moitié des vidéoclips qui sont subventionnés par l'organisme VidéoFACT au Canada.
333. CONSEILLÈRE WYLIE: Et eux, ils sont sous-titrés.
334. M. P. MARCHAND: Ils sont sous-titrés. C'est une obligation dans la livraison du vidéoclip pour avoir donc le paiement, donc la subvention. La même chose existe au niveau du Fond Rodrinburg (phonétique) et au niveau de Musique Action. C'est donc un nombre encore plus grand de vidéoclips parce que ce n'est pas tous les vidéoclips qui profitent des subventions de VidéoFACT et de Musique Action simultanément.
335. Donc, il y a un nombre plus grand que 50 pour-cent des vidéoclips canadiens qui sont déjà sous-titrés pour malentendants. En fait, c'est déjà un grand pourcentage. Nous demandons aux producteurs de sous-titrés leurs oeuvres dans la mesure du possible, de toujours nous le livrer sous-titré. Dans le cas des vidéos étrangers, nous n'avons pas ce contrôle de relation avec les producteurs, avec les distributeurs.
336. Nous travaillons avec des multinationales du disque qui nous fournissent les vidéos, en fait qui nous sont prêtés pour des montants annuels de licence. Et ces vidéoclips-là, on n'a pas le droit évidemment dans aucun cas de les toucher ou de les retravailler et la majorité d'entre eux malheureusement ne sont pas sous-titrés pour malentendants.
337. Nous avons même fait démarches chez nous auprès des américains, auprès de MTV par exemple pour voir le sous-titrage et ce n'est pas quelque chose qui est très mis de l'avant. On pousse de ce côté-là chez nous, mais on a aucun contrôle sur ce produit-là. Il nous est tout simplement livré et on le diffuse ou on ne le diffuse pas. C'est en fait la seule flexibilité qu'on a avec les vidéos étrangers.
338. CONSEILLÈRE WYLIE: À la réplique au paragraphe 7, vous disiez qu'au terme de la licence, il y aura 90 pour-cent des vidéoclips canadiens qui seront sous-titrés et monsieur me dit que seulement que 50 pour-cent viennent des vidéoclips subventionnés. Comment allez-vous vous organiser pour vous assurer que le reste de ceux qui ne sont post '95 ---
339. M. P. MARCHAND: C'est-à-dire que ce que Monsieur Boncy vous a dit ce sont les vidéoclips qui sont subventionnés par VidéoFACT. Il y a deux autres source de financement au Canada.
340. CONSEILLÈRE WYLIE: Ah, bon.
341. M. P. MARCHAND: Donc, il y a plus. Ce que je vous disais tantôt, je n'ai peut-être pas été clair, il y a donc un pourcentage déjà à l'heure actuelle plus élevé que 50 pour-cent des vidéoclips canadiens qui sont sous-titrés pour malentendants.
342. CONSEILLÈRE WYLIE: Sous-titrés parce qu'ils sont subventionnés.
343. M. P. MARCHAND: Parce qu'ils sont subventionnés.
344. CONSEILLÈRE WYLIE: Et qu'on exige le sous-titrage.
345. M. P. MARCHAND: Parce qu'ils sont subventionnés parce que la politique est la même partout. Ils sont tous dans la même direction pour que les vidéoclips canadiens soient sous-titrés.
346. CONSEILLÈRE WYLIE: Donc, on accroît d'année en année le pourcentage sous-titré qui vous permet de vous engager à ce qu'il y en est 90 pour-cent de ceux qui sont post '95 à la fin du terme de la licence qui soient sous-titrés.
347. M. P. MARCHAND: Précisément.
348. CONSEILLÈRE WYLIE: Maintenant, au niveau du sous-titrage, le RQST n'est pas d'accord avec vous sur le fait que c'est traduit plutôt que sous-titré dans la langue du vidéoclip. Je veux bien comprendre. Il y a des vidéoclips que vous recevez qui est dans une langue autre que le français. Disons que c'est en anglais. Et ce que vous montrez à l'écran c'est une traduction en français des paroles anglaises.
349. M. M. ARPIN: On ne parle pas ici de vidéoclips. On parle ---
350. CONSEILLÈRE WYLIE: On parle de programmation, d'accord.
351. M. M. ARPIN: On parle dans la programmation d'entrevues avec des artistes où on laisse à l'antenne la personne s'exprimer dans la langue de son choix et nous traduisons à l'écran en français pour le bénéfice de l'ensemble des téléspectateurs.
352. CONSEILLÈRE WYLIE: De l'auditoire.
353. M. M. ARPIN: Le RQST n'est pas d'accord. Évidemment pas dans le mémoire qu'il a déposé ici parce qu'il n'a pas soulevé cette question-là dans sa lettre. Mais dans d'autres circonstances, il a déjà indiqué qu'il ne considérait pas que la traduction à l'écran était du sous-titrage pour malentendants. C'est du sous-titrage mais pas pour malentendants.
354. CONSEILLÈRE WYLIE: Pourquoi ne pouvez -- alors, si je comprends bien, cette programmation disons qu'elle est en anglais, elle est sous-titrée en français pour votre auditoire.
355. M. M. ARPIN: Pour l'ensemble de notre auditoire.
356. CONSEILLÈRE WYLIE: Et elle n'est pas sous-titrée pour les malentendants en anglais. Donc, ils n'entendent pas la programmation je crois ---
357. M. M. ARPIN: Non. Je ne pense pas que ce soit ce que le RQST est demandé. C'est que le RQST nous dit les malentendants utilisent la trame de la ligne 21 et quand leurs appareils est ouvert sur cette trame et lorsque vous présentez en surimposition à l'écran, bien la trame laisse la petite boîte noire en vide ou le récepteur (inaudible) ne se télécharge pas aussi rapidement. Donc, nous considérons que oui, c'est du sous-titrage, mais ce n'est pas du sous-titrage pour malentendants.
358. CONSEILLÈRE WYLIE: Et qu'est-ce qui vous empêcherait de faire les deux pour atteindre votre 90 pour-cent? Est-ce que vous pouvez avoir et la traduction et le sous-titrage dans la langue originale?
359. M. P. MARCHAND: Mais c'est un peu, Madame la Vice-présidente, ce qu'on confirme dans notre renouvellement, le 90 pour-cent de nos émissions préenregistrées.
360. CONSEILLÈRE WYLIE: Incluant ceux-là.
361. M. P. MARCHAND: Exactement. Il n'y a aucun problème à le faire dans les sept prochaines années de la licence et arriver à un pourcentage de 90 pour-cent des émissions qui sont préenregistrées. En fait, le problème que l'on rencontre chez nous, MusiquePlus c'est une télévision certainement différente des autres télévisions que l'on retrouve spécialisées au Québec de langue française et le fait que nous sommes en direct chaque jour.
362. Donc, la traduction est simultanée et véritablement pour le sous-titrage. C'est-à-dire malentendant simultané est un problème réel. Nous n'avons pas trouvé de solution à ce jour pour le contourner. Il n'existe pas d'appareil technologique adapté pour la langue française qui nous permet donc de sous-titré malentendant en temps réel. Ça c'est véritablement un problème. Donc, c'est pour ça qu'on vous dit pour les vidéoclips, 90 pour-cent des vidéoclips canadiens. Donc, nous controlons -- ils seront sous-titrés malentendant et 90 pour-cent de notre programmation préenregistrée sera sous-titré pour malentendant à la fin de la licence de sept ans.
363. M. M. ARPIN: Les coûts associés au sous-titrage en direct sont extrêmement élevés et comportent -- parce que je cotoie le RQST régulièrement -- comportent un nombre d'erreurs assez importants pour ceux qui les utilisent. Les deux principales têtes de réseau française au Québec font du sous-titrage en direct et le RQST fréquemment porte à leur attention la qualité du sous-titrage. MusiquePlus s'est engagé avec l'ensemble des télédiffuseurs francophones dans une démarche avec le RQST pour trouver des solutions au sous-titrage en direct par le processus de la reconnaissance de la voie et par le langage machine.
364. Notre engagement d'atteindre 90 pour-cent est lié à notre confiance que des solutions soient mise en place au cours de la prochaine période de licence. Les experts consultés par le RQST -- et j'ai assisté à des rencontres d'experts consultés par le RQST -- nous laissent entendre que l'avancement technologique est sur le point de nous donner la possibilité d'arriver à ce genre de solution. Alors, notre engagement, notre espoir est mis dans la réalisation de ce projet-là.
365. CONSEILLÈRE WYLIE: Monsieur Arpin, expliquez-moi d'avantage ce problème des vidéoclips qui vous arrivent avec une trame de sous-titrage.
366. M. M. ARPIN: Bien, si ils nous arrivent avec un ---
367. CONSEILLÈRE WYLIE: Et que vous avez des problèmes de droit d'auteur à substituer une autre version.
368. M. M. ARPIN: Enfin, si le vidéoclip est en langue anglaise, par exemple qui est financé par VidéoFACT, mais c'est un vidéoclip de langue anglaise, la question -- évidemment, nous passons le vidéoclip tel quel parce que c'est une oeuvre audiovisuelle protégée par le droit d'auteur et nous la diffusons tel que nous la recevons. D'aucun pourrait nous poser la question oui, mais vous êtes un diffuseur de langue française. Est-ce que la trame ne devrait-elle pas être en français? Nous croyons que un, nous ne pouvons la modifier. L'oeuvre ne nous appartient pas d'une part et puis on est certe pas équipé non plus pour faire ce genre de travail-là.
369. CONSEILLÈRE WYLIE: La modifier, vous voulez dire ---
370. M. M. ARPIN: Bien, y substituer une trame en français, même si l'interprète chante en anglais.
371. CONSEILLÈRE WYLIE: Mais, il pourrait y avoir une traduction en français. Je croyais qu'une des revendications du RQST était que dans certains cas, la programmation est traduite de l'anglais au français, plutôt que sous-titré pour que le malentendant entendre ce que le francophone entend, c'est-à-dire l'anglais. Et s'il le veut, il peut utiliser aussi le français en le lisant si c'est ça qu'il veut faire. Est-ce que ce n'est pas une des revendications?
372. M. P. MARCHAND: C'est-à-dire qu'à ce jour MusiquePlus fait beaucoup de traduction. Moi j'appelle ça de la traduction. Ça va être un autre mot différent. Ça va être plus clair un petit peut. Donc, nous traduisons les entrevues qui sont présentées en langue anglophone sur les ondes de MusiquePlus avec du sous-titre, donc du titrage francophone qui n'est pas encodé pour malentendants en date où on se parle aujourd'hui.
373. CONSEILLÈRE WYLIE: Est-ce que les malentendants s'attendraient à voir l'anglais?
374. M. P. MARCHAND: Pas nécessairement. Moi j'ai compris que les malentendants s'attendre à le voir encodé dans le système d'encodage pour malentendants. Nous ne le faisons pas dans le système. C'est simplement incrustré dans l'image.
375. CONSEILLÈRE WYLIE: Mais pourquoi est-ce que ce n'est pas possible de faire les deux?
376. M. P. MARCHAND: C'est tout à fait possible. C'est l'engagement qu'on prend pour les prochaines années.
377. CONSEILLÈRE WYLIE: Et vous allez le faire dans le futur à 90 pour-cent.
378. M. P. MARCHAND: C'est l'engagement qu'on prend, voilà.
379. CONSEILLÈRE WYLIE: Avant la fin de la période de licence.
380. M. P. MARCHAND: Précisément.
381. CONSEILLÈRE WYLIE: Alors, c'est vraiment leur revendication, c'est qu'ils veulent avoir sur leur système à eux la langue originale.
382. M. P. MARCHAND: Dans leur système de sous-titrage pour malentendants plutôt que juste sur l'écran.
383. CONSEILLÈRE WYLIE: Oui. Et donc ils sont dans la même position que les francophones. Ils entendront en anglais et ils pourront lire en français s'ils veulent.
384. M. P. MARCHAND: Exactement.
385. CONSEILLÈRE WYLIE: Maintenant, au niveau de la vidéo description, vous dites dans votre demande que vous n'avez pas les infrastructures nécessaires et que vous préférez attendre que l'industrie soit en mesure de mettre au point une solution collective plus efficace et apte à répondre aux nécessités du procédé de la vidéo description avant d'accepter aucun engagement à ce niveau-là. Est-ce que vous avez quelque chose à ajouter? Vous savez que dernièrement, pendant les renouvellements des groupes de télévision conventionnel, nous avons établi des attentes. Est-ce que c'est simplement pour MusiquePlus ou si vous pensez que, au niveau des services spécialisés, il est trop tôt pour exiger ce genre d'attente?
386. M. M. ARPIN: Je dirais deux choses. Évidemment, un service dédié à la musique pour les malvoyants en fait c'est un peu -- pour un malvoyant un peu comme écouter une station de radio. Et puis je pense qu'ils en tirent un bénéfice même s'il n'y a pas de description vidéo. La description vidéo s'applique beaucoup plus dans le dramatique que dans l'opération studio et présentation de vidéoclips comme le fait MusiquePlus. Ce que nous disons c'est qu'au moment des présentes, on a une partie des équipements parce que certains équipements ont déjà les bases pour faire de la transmission de vidéos descriptifs parce que ça prend quatre canaux audios. On a une partie de nos équipements.
387. Au fur et à mesure que nous remplaçons de l'équipement, évidemment nous faisons les investissements avec les technologies les plus de pointe. Donc, nous prenons tous les moyens pour arriver un jour à être aussi au diapason avec les autres télédiffuseurs et on y arrivera probablement sensiblement au même moment.
388. Ceci étant dit, nous croyons que la solution pour les exploitants de canaux spécialisés qui sont de petites opérations, c'est de travailler comme on le fait actuellement avec le RQST, collectivement à la recherche de solutions semblables pour tout le monde. Et on prend l'engagement d'être actif dans ce développement-là, au fur et à mesure que les équipements deviendront de plus en plus facile d'accès.
389. CONSEILLÈRE WYLIE: Au niveau de la diversité culturelle, vous nous expliqué longuement la participation de MusiquePlus dans le reflet de la communauté dans tous ces aspects. Mais le Conseil s'intéressait à savoir quels sont vos commentaires vis-à-vis une participation éventuelle d'apport et d'appui et problablement de contribution financière si nécessaire au groupe de travail dont on a discuté pendant les renouvellements de Global et CTV pour avancer ce dossier-là davantage et qui est un dossier assez courant? Je remarquais par exemple dans les coupures de journaux sur la conférence à Banff que ça avait un aspect assez important. Alors, on voudrait savoir qu'est-ce que vous pensez de cette idée de groupe de travail et quelle participation vous pourriez voir MusiquePlus apporter?
390. M. P. MARCHAND: Avant de parler de groupe de travail, j'aimerais peut-être moi vous -- peut-être soit sensibiliser les membres du Conseil, vous raconter un peu là-dessus notre philosophie, notre histoire, parce que MusiquePlus qui en fait est né en '86 avec l'extension de MuchMusic a une philosophie de base d'être dans un milieu très urbain et de refléter un Québec dans lequel nous vivons moderne et contemporain, et ça c'est depuis la première journée. C'est pas des quotas qu'on s'est imposé. C'est pas une façon. C'est une philosophie de boîte.
391. Donc, dès le début, on a mis à l'antenne chez nous des gens de minorité culturelle. On a été les premiers à le faire au Québec. Et ce courant-là continue à se développer au fil des années, si bien qu'aujourd'hui on retrouve à l'intérieur de la télévision québécoise différente je veux dire culture en onde, en vitrine sur les écrans. Cette philosophie-là a également exploser à l'intérieur de la boîte, parce qu'en fait elle reflète tout simplement la réalité urbaine dans laquelle nous travaillons.
392. Nous sommes basés à Montréal sur la rue Sainte-Catherine et la rue Sainte-Catherine à Montréal où Montréal n'est pas un centre uniquement francophone, 37, 38 pour-cent je pense de la population maintenant à Montréal est allophone. On a toujours eu cette volonté de refléter un Québec moderne et contemporain. Donc, à cet égard-là, beaucoup de gens qui travaille derrière les caméras viennent de milieux divers. Je regardais une statistique récemment à l'intérieur de la boîte, 14 pour-cent des employés de MusiquePlus sont des employés de racine culturelle autre que francophone québécois. Vous avez ici Ralph Boncy qui est notre directeur musical, qui est un des représentants certainement de ces cultures autres que l'on met dans la vitrine à MusiquePlus.
393. Deuxièmement, à travers la grille de programmation, on a toujours reflété des genres musicaux par le biais d'émissions, les goûts et les aspects de cette culture-là. Je pense récemment à tout le mouvement Rap ou Hip-Hop qu'on appelle récemment qui est vraiment une culture noire fondamentale, une culture certainement pas francophone québécoise blanche. On a été les premiers à le mettre de l'avant et on reflète cette culture-là quotidiennement et de façon hebdomadaire à travers des émissions sur MusiquePlus. Et même l'animateur qui est chez nous s'appelle Chahid (phonétique), donc qui est même présent dans le monde culturelle.
394. On a participé récemment avec lui comme porte-parole un mouvement pour la discrimination jeunesse-là au niveau raciale. Donc, on est très, très actif chez MusiquePlus et ça fait partie de notre philosophie. Je pense simplement que je trouve ça bien quand j'entends parler de groupe de travail et tout ça.
395. CONSEILLÈRE WYLIE: Et voilà, si vous le faites si bien, votre appui serait important pour enseigner aux autres comment faire.
396. M. P. MARCHAND: Bien, ça fera plaisir de pouvoir y participer.
397. CONSEILLÈRE WYLIE: Bonne réponse.
398. M. P. MARCHAND: Absolument, mais je pense que quand vous parliez de -- vous parliez tantôt est-ce que vous seriez prêt à mettre de l'argent, on le fait déjà depuis des années finalement en embauchant des gens, en faisant travailler les gens de ces cultures-là.
399. CONSEILLÈRE WYLIE: On vous a parlé plutôt de la structure d'un groupe de travail qui évidemment va, je suppose, générer des dépenses et où l'appui de tous les radiodiffuseurs va être important.
400. M. P. MARCHAND: Oui. Et il ne fera très plaisir ---
401. CONSEILLÈRE WYLIE: Alors, nous comptons sur vous.
402. M. P. MARCHAND: Il nous fera très plaisir même de les inviter chez nous et qu'ils puissent constater la façon comment ---
403. CONSEILLÈRE WYLIE: Comment on fait ça.
404. M. P. MARCHAND: Oui. Et puis c'est un avantage certainement qui a profité à MusiquePlus au fil des ans d'avoir des points de vue de différentes cultures à l'intérieur d'une même boîte, donc pour dicter une façon de voir et de penser.
405. CONSEILLÈRE WYLIE: Parce que c'est évident que c'est devenu un sujet beaucoup plus -- les gens sont davantage conscients et mon collègue Monsieur Cardozo s'assure que tous les gens y pensent. Et c'est évidemment une question au Canada de grande importance que les médias s'y penchent et que vous participiez. Alors, vous êtes d'accord que c'est une idée qui devrait ---
406. M. P. MARCHAND: En fait, je vous dirais même qu'on y participe déjà à notre façon depuis longtemps.
407. CONSEILLÈRE WYLIE: D'accord.
408. M. P. MARCHAND: Et qu'on va continuer à y participer.
409. CONSEILLÈRE WYLIE: D'accord. Maintenant, le reflet hors Québec, nous avons parlé un peu au niveau de la clarification de votre stratégie de mise en marché dans les marchés hors Québec. Et vous nous avez parlé aussi assez longuement de vos efforts pour sortir de Montréal et aller participer -- donner une certaine participation aux régions dans la programmation. Est-ce que vous pouvez nous parler de ce à quoi vous avez pensé au niveau du reflet des francophones hors Québec? N'oubliez pas que ça m'inclut.
410. M. P. MARCHAND: Donc, je serai doublement prudent dans mes réponses. D'une part peut-être juste faire un aparté sur la présence de MusiquePlus en terme de chaîne de télévision, une époque où on était beaucoup plus présent dans le Canada anglais en terme de chaîne de télévision. On avait même à une époque près d'un million de foyers qui étaient abonnés à MusiquePlus hors Québec. Aujourd'hui, ce nombre-là est malheureusement un peu plus limité. C'est dommage. Je pense qu'on est environ -- je pense que Michel peut me corriger -- 400,000 foyers qui sont abonnés à MusiquePlus hors Québec dans le moment. Donc, j'espère que tout le mouvement du numérique qu'on vit dans le moment nous permettra d'offrir, même sur un étage de façon facultative, MusiquePlus pour permettre aux gens qui vivent donc hors Québec et qui sont francophones ou qui ont des intérêts pour la francophonie de pouvoir avoir accès à un véhicule et à une vitrine 24 heures par jour qui fait la promotion de cette culture-là, parce que la culture francophone n'est pas uniquement québécoise. Elle est canadienne.
411. Au niveau de la visibilité, par exemple ce que l'on fait depuis plusieurs années avec nos collègues de MuchMusic, parce que je pense qu'ils ont un rôle là-dedans, je pense que c'est important, les gens de MuchMusic nous ont permis depuis plusieurs années de les approvisionner pas seulement en vidéoclips, mais en terme de contenu pour une émission qui s'appelle "French Kiss".
412. Je dirais presque que nous sommes les producteurs délégués pour eux de cette émission-là parce qu'on leur envoie des reportages qu'on fait au Québec ou avec des francophones. Et on leur envoie donc les nouveautés. On les tient en fait au courant de ce qui se passe et grâce à ce contenu-là, ils font une émission d'une demi-heure par jour, cinq jours semaine. Donc, déjà c'est une belle visibilité pour la francophonie à travers le pays parce qu'eux, leur pénétration à travers le pays est indiscutable.
413. Également par le biais de MuchMusic, il y a certainement un réseau de collaborateurs. On a pas une compagnie chez nous MusiquePlus assez grande, assez forte. On vous le montrait tantôt. C'est la profitabilité qui est la plus faible à peu près dans le milieu francophone pour installer à travers le pays des unités de reportages. C'est là qu'on travaille en synergie avec un groupe comme MuchMusic pour avoir accès à du personnel de chez eux et pouvoir avoir donc des reportages sur ce qui se passe au Canada anglais.
414. Donc évidemment, le moindre mouvement francophone hors Québec nous intéresse, c'est certain, que ce soit le festival de Vancouver qui a lieu l'été, francophone de Vancouver, ou à Sudbury, ça nous intéresse. Donc, le maximum de reportages qu'on peut obtenir des gens de MuchMusic, on le prend et on le met en ondes et on travaille en synergie avec eux.
415. Je pense que la véritable façon dont on peut aider les francophones hors Québec c'est véritablement par VidéoFACT. On met cette année donc un bon montant. On parle de $325,000, $350,000 cette année pour la musique francophone, parce que MuchMusic est présent avec nous et couvre très bien l'anglophone. Nous on couvre le francophone et on est plus -- c'est-à-dire que les gens hors Québec sont plus que bienvenue à appliquer.
416. Par exemple, Brasse Camarade qui vient hors du Québec ont eu une subvention pour un vidéoclip par VidéoFACT. Et c'est probablement le moyen le plus efficace pour nous parce que ça leur donne des moyens et ça leur donne ensuite une visibilité sur les ondes chez nous parce que c'est certain qu'un vidéoclip qu'on subventionne, on a un double intérêt de le jouer. C'est-à-dire un intérêt de le jouer, de le faire voir en tout cas, et donc c'est une façon, une action concrète qu'on fait et qu'on stimule le marché francophone hors Québec.
417. CONSEILLÈRE WYLIE: En région au Québec, si je me souviens bien, vous avez parlé de possibilité quelquefois de concerts qui sont radiodiffusés et qui proviennent des régions.
418. M. P. MARCHAND: Mais c'est-à-dire on fait différentes choses hors Montréal. On collabore -- je parlais un peu plus tôt aujourd'hui dans mon introduction de différents festivals, en autre le Festival d'été de Québec. On fait des choses avec eux. On a fait des captations, un nombre de captations au Festival d'été de Québec. Et lorsqu'on en a pas fait, on a travaillé avec des producteurs indépendants pour obtenir du matériel qui venait justement des concerts tournées hors Montréal pour donner une visibilité également à la région. Je sais que les gens n'aiment pas ça entendre le mot régions mais je vais appeler ça les territoires hors Montréal. Donc, c'est une action qu'on fait concrètement.
419. On a des animateurs qui font le tour du Québec régulièrement. Par exemple cet été, le décompte de MusiquePlus se fait en province partout à travers le Québec et ça nous permet d'entrer en contact avec ces gens-là et de leur donner une visibilité sur nos ondes chaque semaine à raison d'une heure, deux heures par semaine. Et c'est une chose qu'on fait de plus en plus et qu'on essaie de faire grandir à l'intérieur de la boîte.
420. CONSEILLÈRE WYLIE: Et qui pourrait s'adapter si vous réussissez à percer hors Québec. La même méthode pourrait être utilisée hors Québec aussi.
421. M. P. MARCHAND: Ce serait très intéressant, Madame la Vice-présidente, si MusiquePlus était diffusé à travers le Canada de penser à avoir des reportages de façon régulière de ces régions-là, mais il faudrait vraiment être diffusé là-bas. Dans le moment, notre diffusion comme je vous l'ai dit est malheureusement très limitée pour des raisons X, Y, Z qu'on pourrait discuter. Mais c'est certain que nous ne sommes pas simplement ouvert. Notre raison d'exister à MusiquePlus c'est de refléter la francophonie. Et je pense que la raison d'exister de MuchMusic est de refléter le Canada, sinon il s'appelerait MTV tout simplement et ce n'est pas la volonté certainement des gens qui sont qui sont là aujourd'hui.
422. CONSEILLÈRE WYLIE: Je vous remercie messieurs. Merci Madame la Présidente. Voilà mes questions.
423. LA PRÉSIDENTE: Merci Madame. Peut-être les autres Conseillers ont des questions? Mr. Cardozo?
424. CONSEILLER CARDOZO: Merci Madame la Présidente. J'ai une question sur le sujet de la coopération ou des synergies entre MuchMusic et MusiquePlus. Trouvez-vous qu'il y a beaucoup de duplication de musique entre votre service et MuchMusic?
425. M. P. MARCHAND: Vous parlez en terme francophone ou en terme générale?
426. CONSEILLER CARDOZO: En général.
427. M. P. MARCHAND: Parce qu'évidemment du côté de la francophonie, le pourcentage de MuchMusic est je pense de l'ordre de 5 pour-cent, donc beaucoup plus minime. Donc, il y a très peu de recoupement à ce niveau-là. Au niveau de la musique canadienne, il y a énormément de recoupement qui est fait avec MuchMusic parce que l'on encourage en gros les mêmes artistes canadiens. Il y a eu des exceptions, des artistes au Canada anglais qui ont très bien fonctionné et qui n'ont pas fonctionné au Québec. Rankin Family par exemple est un bon exemple d'un artiste qui n'a pas fonctionné chez nous au Québec mais qui a eu un succès considérable au Canada anglais.
428. Rita McNeil par exemple est un autre exemple d'un artiste qui chez nous est à peu près inconnu, tout comme chez nous il y a des artistes qui percent le marché. Je pense à Day Moist (phonétique) par exemple, Our Lady Peace, qui ont commencé véritablement, pas par MuchMusic, mais par MusiquePlus à se faire connaître au pays. Le Québec a toujours été une pierre angulaire.
429. Donc, à ce niveau-là, il y a un recoupement. Il y a quand même des spécificités sur des marchés qui sont différents. Il faut le reconnaître. Mais il y a quand même un recoupement qui existe. Au niveau de la musique internationale, Madonna c'est Madonna. Madonna, elle fonctionne partout. Je vous prends des exemples faciles parce que ça illustre bien.
430. Il y a quand même des exemples internationaux qui fonctionnent beaucoup mieux en Canada français qu'au Canada anglais, et vice versa. Donc, je ne sais pas le pourcentage de recoupement des deux chaînes. J'ai jamais fait de chiffres, mais je vous dirais que -- je ne sais pas si quelqu'un dans mon équipe, dans mes experts aurait une idée là-dessus?
431. M. R. BONCY: Mais c'est le principe quand même de deux stations soeurs qui travaillent sur une base d'échange continuel. Donc, déjà on s'échange le matériel des vidéoclips. Alors que, en ce qui concerne le francophone, ils sont approvisionnés très régulièrement et de manière en fait très à jour sur tous ce que nous recevons, ce qui leur permet d'assurer la programmation de l'émission "French Kiss". Et il y a un autre exemple qu'on pourrait mentionner, c'est le fait qu'ils est inclus de manière annuelle dans le MuchMusic Video Awards un prix pour meilleur vidéoclip francophone. Ça serait une manière de dire le meilleur vidéoclip québécois chaque année qui est honoré sur une chaîne canadienne.
432. CONSEILLER CARDOZO: En général, est-ce qu'il y a beaucoup de similarités entre les palmarès anglophones et francophones dans les deux services?
433. M. P. MARCHAND: Je vous dirais que le palmarès de MusiquePlus est composé de matériel francophone et anglophone, presqu'à 50/50 je dirais. Tandis qu'au Canada anglais, c'est à peu près 100 pour-cent anglophone le palmarès, les ventes de disques et de vidéoclips (inaudible).
434. CONSEILLER CARDOZO: Est-ce qu'il y a des artistes francophones qui sont populaires dans le monde anglophone?
435. M. P. MARCHAND: Vous voulez dire qui chante en français? On ne parle de Céline Dion évidemment.
436. CONSEILLER CARDOZO: Non. Des artistes qui chantent (inaudible).
437. M. P. MARCHAND: Des artistes qui chantent en français et qui sont populaires? Je pense qu'il y a eu Mitsou à une époque qui a connu un certain brin de popularité hors Québec.
438. M. R. BONCY: Je pense qu'on pourrait parler aujourd'hui de Jovan (phonetic) qui commence à se payer sa place à travers du Canada.
439. M. P. MARCHAND: Ce sont des exceptions. Il y en a très, très peu qui se produisent.
440. CONSEILLER CARDOZO: Okay. Merci beaucoup. Merci, Madame la Présidente.
441. LA PRÉSIDENTE: Merci, Monsieur Cardozo. Perhaps before I pass you over to our legal counsel, I hope you'll permit me to tell the story to you in English because it will be a little easier. But I was amused by the comment that you made about how you think that one of the differences between the Québec culture and the Anglophone culture in Canada is that you maybe like to talk a little bit more. About 15 years ago, I was producing videos on Parliament Hill and I was doing a half-hour show with a Cabinet Minister from Québec. At the interview, we asked him one question and he spoke for 17 minutes.

     (LAUGHTER / RIRE)

442. THE CHAIRPERSON: So, maybe that's what you were talking about.
443. COMMISSIONER WYLIE: Almost as good as Mr. Arpin.

     (LAUGHTER / RIRE)

444. LA PRÉSIDENTE: Conseil juridique s'il vous plaît?
445. Me McCALLUM: Deux ou trois questions très rapides. Vous avez dit que vous déposerez une ventilation des chiffres, notamment des dépenses. Je voulais just un échéancier pour le dépôt de cette ventilation. Quand est-ce que vous prévoyez pourvoir déposer cette ventilation?
446. M. M. ARPIN: Si vous me le permettez, d'ici vendredi de la semaine prochaine parce que je dois m'absenter pour les trois prochains jours de toute façon. Donc, on parle du 28.
447. Me McCALLUM: Au 28 juin.
448. M. M. ARPIN: Oui.
449. Me McCALLUM: Merci. Okay, parfait. Ceci est juste pour clarifier si nous avons bien entendu ce que vous avez dit. Pour les vidéoclips qui viennent de l'étranger notamment ou qui sont en anglais, qui contiennent déjà un sous-titrage en anglais, si je vous ai bien saisi, vous n'enlevez pas le sous-titrage en anglais mais vous le passez tel qu'il est.
450. M. M. ARPIN: Exact. Exact.
451. Me McCALLUM: Venant de l'étranger et chaque fois que ça contient un sous-titrage en anglais, vous passez tel qu'il est.
452. M. M. ARPIN: Absolument parce que MusiquePlus également présente des vidéoclips en d'autres langues que le français et l'anglais. Et si le vidéoclip nous ai fourni avec trame de sous-titrage dans une autre langue que le français et l'anglais, la trame de sous-titrage sera représentée telle quel.
453. Me McCALLUM: Merci. Et finalement, just pour finir avec une discussion des conditions de licence 3 et 4 de la licence de MusiquePlus, 3 dit au moins 30 pour-cent du nombre total de vidéoclips doivent être des vidéoclips canadiens. Si je vous ai bien entendu, vous auriez une difficulté si le Conseil voulait monter ce pourcentage à 35 pour-cent. C'est exact ?
454. M. M. ARPIN: C'est exactement ce que nous avons dit et nous avons expliqué au Conseil pourquoi.
455. Me McCALLUM: Et si le montant devenait 35 pour-cent à la fin de la licence, ça vous causerait également un problème?
456. M. M. ARPIN: Évidemment, c'est plus difficile à répondre avec la même clarté puisque dans sept ans, il peut se passer bien des choses au cours d'une période de sept années. Donc, c'est difficile de dire que la dernière année, le pourcentage serait de 35 pour-cent. Donc, on demande conséquemment le statu quo avec la situation actuelle.
457. Me McCALLUM: Donc, comment réagiriez-vous si le conseil mettait un échellonnage disons des pourcentages au cours des années pour devenir 35 pour-cent à la fin, commençant par exemple en l'année disons 4 pour devenir 31 pour-cent ainsi de suite jusqu'à la fin?
458. M. P. MARCHAND: Si on regarde l'évolution de la musique canadienne au fil des dernières années, c'est-à-dire la parution de disques sur le marché, l'augmentation de vidéoclips disponibles et la réalité au Canada anglais, entre autre avec MuchMusic, je vois difficilement comment nous pourrions vivre avec 35 pour-cent de musique canadienne sur nos ondes quand le pendant anglophone par exemple qui diffuse de la musique anglophone canadienne a pu le concevoir et vous faire concevoir que le 30 pour-cent est un chiffre réaliste.
459. Me McCALLUM: Mais si le conseil décidait de faire ça, vous vivrez avec une telle condition?
460. M. P. MARCHAND: Nous vivrions avec ces conditions mais ce serait certainement une contrainte.
461. Me McCALLUM: Même chose, même question et même réponse est-ce que je présume pour la condition de licence 4 qui dit que pour chaque semaine de diffusion, 35 pour-cent ou plus du nombre total de vidéoclips distribués doivent être en langue française. Si la condition devenait 40 pour-cent vers la fin de la licence et aussi échelonné à 40 pour-cent au cours de la licence, est-ce que c'est la même série de réponse que vous donneriez?
462. M. P. MARCHAND: Tout à fait.
463. Me McCALLUM: Merci. Merci, Madame la Présidente.
464. LA PRÉSIDENTE: Merci, Monsieur McCallum et merci mesdames et messieurs pour votre collaboration ce matin. Madame la Secrétaire?
465. MME L. POIRIER: Merci, Madame la Présidente. Nous allons maintenant passer à la phase 2 qui est l'intervention présentée par l'Association québécoise de l'industrie du disque, du spectacle et de la vidéo, l'ADISQ, représentée par Solange Drouin et Annie Provencher.
466. LA PRÉSIDENTE: Bonjour Madame.

     INTERVENTION

467. MME S. DROUIN: Bonjour. Alors oui, je suis accompagnée d'Annie Provencher, Analyste aux affaires publiques, mais également de Pierre Rodrigue, Président sortant de l'ADISQ que vous connaissez déjà. J'aimerais d'abord vous dire qu'on a pas l'intention de reprendre -- je vais parler lentement pour vous faire, Madame Wylie et aux traducteurs.
468. CONSEILLÈRE WYLIE: Je ne suis pas très vite, moi.

     (RIRE / LAUGHTER)

469. MME S. DROUIN: Alors, j'aimerais vous dire qu'on a pas l'intention évidemment reprendre notre mémoire. Je pense que nos demandes par rapport ou nos demandes de MusiquePlus sont assez claires. Elles sont appuyées aussi. Mais on aimerait plutôt prendre le temps qu'on a, les 10 minutes et le temps que vous jugerez bon pour nous entretenir de ce renouvellement-là, pour plutôt avoir des commentaires sur la réplique déposée par MusiquePlus et aussi un peu nos réactions face à la présentation orale.
470. Avant moi de passer à des éléments plus particuliers de la réplique, j'aimerais d'abord tout de suite céder la parole à Pierre Rodrigue qui va vous présenter un peu de façon générale le sentiment de l'ADISQ face à la réplique de MusiquePlus.
471. M. P. RODRIGUE: Eh bien malheureusement, Madame la Présidente, j'ai le regret de transmettre au Conseil le sentiment de déception des producteurs de disques du Québec face à la réponse de MusiquePlus, une réponse équivalente à une fin de non recevoir alors que nous proposions des avenues intéressantes pour continuer à progresser ensemble. Que ce soit au niveau des quotas de contenu canadien ou francophone ou à celui même des contributions, nos demandes se basent sur des réalités historiques propre à MusiquePlus et des cadres récemment suggérés par le Conseil.
472. MusiquePlus aura beau plaider de la grandeur de son mandat, son amour de la musique et répéter adnoséame (phonétique) son rôle moteur dans le développement du star system québécois et canadien, la réalité est brutalement mercantile. MusiquePlus est un commerce dont l'object fraye et frôle avec la musique et la culture, mais ils ne sont pas dans le commerce de la musique, ni dans la culture propre qui s'exprime par la musique.
473. Les inquiétudes de MusiquePlus pour la surexposition ou encore pour un potentiel problème d'alimentation en vidéoclips nous laisse froid. Cousine des radios, les arguments de MusiquePlus sur les quotas n'ont jamais ébranlé le Consei. Et évidemment de l'avis de l'ADISQ, le fait de n'avoir jamais été ébranlé constitue un des plus grands faits d'arme du CRTC.
474. MusiquePlus a une responsibilité envers les canadiens et l'ADISQ soutient qu'après 15 ans, MusiquePlus doit faire mieux que ce qu'elle propose.
475. MME S. DROUIN: De façon plus technique, j'aimerais reprendre deux arguments qui ont été soulevés par MusiquePlus dans leurs répliques qui ont été déposées devant le Conseil. La première évidemment a rapport à la base de comparaison que conteste MusiquePlus, base de comparaison que l'ADISQ a utilisé pour établir le taux de rentabilité de MusiquePlus par rapport -- son taux de rentabilité relatif par rapport aux autres services. Ce qu'on a fait à l'ADISQ c'est d'utiliser les chiffres sommaires utilisés par le CRTC qui amalgament à la fois les services anglophones et les services francophones. C'est selon nous la façon judicieuse de le faire. On persiste et on signe.
476. Et aussi, on pense sincèrement qu'il est nécessaire que le CRTC maintienne cette comparaison-là parce que ce sont des données objectives de comparaison qui ne s'adaptent pas justement selon les intérêts de l'un ou l'autre service. On prend les données de la base de comparaison globale sur les services et en faisant cette base de comparaison-là, bon -- premièrement MusiquePlus rejette cette base de comparaison-là et se fait plutôt sa propre base de comparaison qui le sert bien sûr, qui sert ce service dans le cadre de la présente audience. Il dit tout simplement bon, c'est pas l'amalgame des services anglophones/francophones que le CRTC devrait considérer pour établir le taux de rentabilité de MusiquePlus, mais plutôt la base, le rapport avec les services francophones seulement et pas tout les services francophones. On va en retirer quelques uns, donc les quatre qui sont les derniers en liste qui sont hautement déficitaire.
477. Alors, c'est comme si MusiquePlus était, on a l'impression -- c'est peut-être pas leur intention, mais on a vraiment l'impression que MusiquePlus a voulu se faire la base de comparaison qu'il souhaite et qui est la plus avantageuse. C'est-à-dire en démontrant son caractère non rentable par rapport aux autres services. Donc, ils se sont comme concocté leur propre base de comparaison qui nous, selon nous n'apparaît pas du tout objective.
478. D'ailleurs, on trouve un petit peu bizarre que MusiquePlus même utilise cette base de comparaison parce qu'à la fois dans le même mémoire, après avoir fait cette démonstration-là que ce devrait être la base de comparaison des services francophones seulement, il vous soumet -- il soumet au CRTC que dans la décision de MusiquePlus où vous avez décidé pour augmenter le service de 5 à 7 pour-cent, vous vous êtes basé sur deux choses: la solide situation financière de MuchMusic et la rentabilité supérieure à la moyenne de ce service-là. Et ce que MusiquePlus vous soumet c'est utilisez donc les mêmes critères de comparaison. À ce que je sache, la solide situation financière de MuchMusic -- bon évidemment elle est là. Celle de MusiquePlus on peut dire qu'elle est là aussi.
479. Ça fait cinq ans que ce service est rentable et prévoit un taux de rentabilité important aussi au cours de la période de licence. Et le deuxième argument qui est rentabilité supérieure à la moyenn, MusiquePlus vous dit vous devriez regarder ça aussi. À ce que je sache aussi, dans la décision de MuchMusic, comme vous avez regardé rentabilité supérieure à la moyenne, c'est pas précisé rentabilité supérieure à la moyenne des services anglophones.
480. C'est par rapport à l'industrie en générale que le CRTC a analysé le service de MuchMusic. Alors, soit que vous prenez l'ensemble des arguments que vous avez utilisé dans MuchMusic, ou vous en prenez aucun ou vous en prenez d'autres. Mais à la fois, MusiquePlus ne peut pas utiliser le parlé des deux côtés de la bouche dans ce sens-là.
481. Un dernier point parce que j'aimerais aussi encore retourner la parole à Pierre Rodrigue, il y a un autre argument qui traite pas nécessairement des contributions à VidéoFACT, mais plutôt un autre argument qui a été soulevé par MusiquePlus pour refuser justement l'augmentation des quotas au motif que dans la discothèque -- je ne sais pas, vidéothèque je devrais dire, pardon, totale de MusiquePlus, il n'y avait pas 30 ou 35 pour-cent de contenu canadien ou francophone. On vous a dit ici il y a plutôt de l'ordre de 11 ou 17 pour-cent. On trouve cet argument-là hautement farfelu dans le sens que c'est comme si MusiquePlus à chaque semaine devait passer 100 pour-cent de sa discothèque à chaque semaine. On sait très bien que c'est pas ça.
482. C'est sûr et c'est évident que dans sa vidéothèque, MusiquePlus il y aura toujours un nombre beaucoup plus grand de vidéoclips étrangers et non francophones. C'est l'entièreté de la production mondiale qui peut être là-dedans. Alors bien sûr, la proportion de vidéoclips canadiens et francophones, c'est sûr qu'elle est moins en proportion. Elle sera toujours moins que 35 pour-cent. Alors, on pense que c'est un argument hautement farfelu que de vous le soumettre.
483. Par exemple aussi, pour aller dans le même sens, c'est comme si vous aviez attendu le CRTC que les stations de radios commerciales aient vraiment accès à 65 pour-cent de disques francophones et canadiens pour imposer des quotas. C'est sûrement pas ça que vous avez fait. Vous vous êtes dit écoutez, il y a X pour-cent de disques francophones disponibles. Il y en a pas 65 pour-cent dans le marché mondial. Ça c'est bien sûr, mais vous avez jugé la disponibilité suffisante avec le facteur de répétition pour établir un taux, un quota de 65 pour-cent pour les radios francophones.
484. Sans compter aussi que pour les stations de radios francophones, on peut dire -- puis ça peut-être que MusiquePlus va trouver ça un peu tiré par les cheveux mais quand même je le dis -- que les stations de radios commerciales ont accès à peu près au même bassin de disponibilité de disques francophones que MusiquePlus. Parce que pour un disque, c'est vrai qu'il y a 12 chansons sur un disque, mais c'est pas vrai que les stations de radio ont accès aux 12 chansons sur un disque. Un producteur va soumettre à une station de radio de jouer ce premier single-là. Je ne sais pas comment le dire en français, ce premier -- cette première place-là et peut-être une deuxième et puis peut-être dans certains cas une troisième sur un même disque. Mais ce n'est pas vrai que les stations de radios francophones commerciales, à cause que sur un disque il y a 12 chansons, qu'ils ont 12 fois la disponibilité de MusiquePlus.
485. Je retourne la parole à Pierre Rodrigue.
486. M. P. RODRIGUE: Un tout petit mot concernant les propriétaires de la requérante parce que le Conseil a déjà affirmé être intéressé par l'état et le statue des propriétaires. Astral et CHUM sont toutes deux très actives sur le marché des acquisitions, deux joueurs majeurs au Canada. Et quand à nous, deux joueurs qui ont toutes les ressources suffisantes pour attaquer les prochaines années avec des obligations accrues. Merci.
487. MME S. DROUIN: On est maintenant ouvert à vos questions.
488. LA PRÉSIDENTE: Madame la Vice-présidente, encore une fois?
489. CONSEILLÈRE WYLIE: Merci. Acceptez-vous, Madame Drouin, la suggestion faite à la page 7 de la présentation ce matin -- je ne sais pas si vous étiez déjà là -- que depuis '93, il y a eu une augmentation des vidéoclips canadiens et francophones de 15 pour-cent, à passer de 15 à 17 et de 8 à 11? Acceptez-vous ces chiffres?
490. MME S. DROUIN: D'une façon écoutez, on n'a pas fait l'analyse exhaustive, mais de façon générale, ça nous apparaît conforme.
491. CONSEILLÈRE WYLIE: Juste,
492. MME S. DROUIN: Oui, juste.
493. CONSEILLÈRE WYLIE: Et quel est votre commentaire sur les revendications de MusiquePlus à l'effet que, avec une augmentation qui est quand même assez basse considérant que c'est depuis '93 et nous sommes déjà en -- je pense que leur point de repère était 2000, donc il s'agit de sept ans, que si on exigeait plus, il y aurait un effet sur la qualité du service à cause des reprises de vidéoclips canadiens et de langue française?
494. M. P. RODRIGUE: Écoutez, c'est pas scientifique comme réponse. Ce que je peux vous dire c'est que ces arguments-là au moment de fixer ou de réévaluer les quotas en radio, je répète, n'ont pas affecté le jugement du Conseil et c'est tant mieux. Ce que ça fait, ça stimuler la création et la production. Un pour-cent d'augmentation par année ou par cycle de -- je ne sais pas, 5 pour-cent sur sept ans, ça peut laisser une chance au marché de se placer et ça ne devrait pas mettre en péril la programmation efficace et gagnante de MusiquePlus.
495. MME S. DROUIN: Écoutez, là-dessus si je peux rajouter, les quotas nous en tous cas à l'ADISQ on ne les a jamais vu en vase clos. C'est sûr qu'il faut voir ça avec pas nécessairement -- même on le dit dans notre mémoire encore une fois -- on persiste à dire que les quotas on un effet générateur.
496. Il ne faut pas baser les quotas sur la disponibilité actuelle des produits. Mais on croit sincèrement qu'avec des niveaux de quotas un peu plus élevés que la disponibilité, évidemment les sources de financement adéquats qui le soutiennent et ce qu'on propose aussi nous évidemment d'augmenter, on pense sincèrement que -- conjuguer ces deux éléments-là, on pense sincèrement qu'une augmentation de un pour-cent par année, même pas un pour-cent par année sur une période de sept ans de 5 pour-cent, on pense que MusiquePlus devrait être capable de s'en tirer.
497. CONSEILLÈRE WYLIE: (inaudible) s'appelerait le 3.4 pour-cent et l'oeuf serait 35.
498. MME S. DROUIN: Pour nous la poule s'appelle plutôt 5 pour-cent sur une période graduelle. On a vu que le CRTC avait déjà ---
499. CONSEILLÈRE WYLIE: Mais c'est 3.4 pour-cent la première année. J'essayais de ne pas trop décourager Monsieur Arpin là.
500. MME S. DROUIN: Même nous on est plus -- on est moins dure que vous parce que nous la première année c'est 2.4, 3.4, 3.4, 4.4, 4.4, 5.5. Alors, ---
501. CONSEILLÈRE WYLIE: Oui, oui, d'accord, 2.4 pour-cent la première année. Maintenant, au sujet de la façon de terminer la comparaison pertinente de la marge de BAI, vous dites qu'évidemment MusiquePlus a choisi la façon la plus avantageuse et vous aussi je suppose, en y mettant les -- pour que la marge de BAI soit basse, en y mettant même les nouveaux services plutôt que de faire une comparaison avec les services qui ont déjà atteint une certaine maturité. Alors, c'est un jeu qui se joue
502. à deux, non?
503. M. P. RODRIGUE: Mais avec respect, Madame la Vice-présidente, la méthode de calcul qu'on a pris est celle de votre Conseil. On a pas trouvé une troisième piste avantageuse. On a pris celle que vous avez utilisé dernièrement.
504. CONSEILLÈRE WYLIE: Dans le cas de MuchMusic?
505. M. P. RODRIGUE: Oui.
506. MME S. DROUIN: De façon générale, l'évaluation des services spécialisés au Canada, on les fait globalement et les chiffres sont publiés.
507. CONSEILLÈRE WYLIE: Mais ça dépend pour quel -- ça dépend dans quel but évidemment.
508. MME S. DROUIN: Et de façon générale, écoutez on peut comprendre MusiquePlus qui dit bon, avec une marge avant impôt de -- nous la proposition qu'on fait -- la proposition qu'ils font évidemment vous l'avez vu dans notre document au tableau 3. On dit évidemment avec 2.4 pour-cent en moyenne, ils auraient une marge avant impôt de 13 pour-cent. Avec votre proposition à 3.4 pour-cent, mettons si on la gardait stable, c'est 12.1 pour-cent et notre proposition c'est 11.4 pour-cent. Nous on pense que c'est un taux de rentabilité hautement correct.
509. Ce n'est pas le taux de rentabilité avec lequel nous dans l'industrie du disque et du spectacle avec lequel on était habitué de travailler. Alors là, pas du tout. Mais, c'est un taux de 11.4 pour-cent qui est amplement suffisant pour que MusiquePlus puisse rencontrer des obligations accrues et c'est encore très correct là évidemment.
510. CONSEILLÈRE WYLIE: Je vous remercie, madame et monsieur. Merci, Madame la Présidente.
511. LA PRÉSIDENTE: Merci beaucoup, Madame Drouin. We're going to take a lunch break now until 1:30 and we'll reconvene then.
512. There has been a change of plans. Befoe we take our lunch, we are going to have MusiquePlus do their reply. And then, we'll break for lunch. Monsieur Marchand?

     REPLY / RÉPLIQUE

513. M. P. MARCHAND: Merci beaucoup, Madame la Présidente, Madame la Vice-Présidente. Vous voyez, je suis seul, donc ce sera pas très, très long et Monsieur Arpin est resté sur la chaise, donc ça va être un peu moins long.
514. En fait, on a pas ---
515. CONSEILLÈRE WYLIE: Pas de déjeuner pour monsieur.

     (RIRE / LAUGHTER)

516. M. P. MARCHAND: Et ce n'était pas méchant pour Michel au contraire. En fait, on a très peu de commentaires à faire suite à l'intervention de l'ADISQ. Je pense qu'on a couvert en gros tous les points que l'ADISQ ont bien voulu mettre devant vous, vous exposer aujourd'hui c'est quoi la base de comparaison qui n'incluait pas les nouvelles chaînes, que ce soit le pourcentage de clips dans la banque totale ou l'arrivage annuelle. On a passé à travers tous ces points-là.
517. La seule chose que moi j'aimerais peut-être rajouter c'est simplement une chose. C'est que on vous a fait mention de la fréquence et de la durée des vidéoclips francophones et canadiens. On vous a expliqué un peu plus tôt qu'un vidéoclip canadien ou québécois ou francophone je devrais dire va jouer facilement jusqu'à deux fois plus longtemps et ça c'est une réalité qu'on vit chez nous depuis des années.
518. Et quand on nous dit que c'est la même de comparaison, le nombre de disques disponibles à la radio c'est le même nombre de clips disponibles, c'est la pire insanité que j'ai entendu depuis tellement longtemps. Parce que quand il se fait un clip par album ou deux clips, je peux vous dire moi que j'ai pris une note tantôt. Un peu moins de 60 pour-cent des chansons qui sont dans le palmarès francophone québécois à l'heure actuelle ont des vidéoclips. Donc, déjà nous sommes pénalisés de 40 pour-cent tout de suite.
519. Et en plus, ils sortent trois ou quatre ou cinq singles par album et s'il font deux clips, c'est déjà beaucoup. C'est tout ce que l'on a à dire comme commentaire. Je pense que les autres points on les a fait très clairement. Merci beaucoup.
520. LA PRÉSIDENTE: Merci beaucoup, Monsieur Marchand. Now, we'll take our lunch break. We'll still come back at 1:30.

521. THE CHAIRPERSON: Good afternoon, ladies and gentleman. Welcome back to our hearing.
522. Before we start, I'm just going to have our secretary review some procedure. We went over it this morning in the other official language and now we will do it in the other official language.
523. MR. M. BURNSIDE: Thank you, Madam Chair.
524. I would just like to point that for the remaining applications on the agenda of this hearing, they all unfold in three phases each. In Phase I the applicant will be provided with a maximum of 20 minutes to do their presentation.
525. In Phase II, intervenors to the particular item will appear; a maximum of 10 minutes each will be granted for the interventions.
526. And in Phase III, the applicant will be provided with the opportunity to rebut the interventions; a maximum of 10 minutes will be allowed for the rebuttal.
527. I would now like to call the representatives of Vision TV, Canada's Faith Network, to present their application for the renewal of their licence for a national English language specialty television service.
528. Mr. Roberts.

     APPLICATION / DEMANDE

529. MR. B. ROBERTS: Good afternoon, Madam Chair, members of the Commission and staff. My name is Bill Roberts. I'm the President and CEO of Vision TV, Canada's Faith Network.
530. Before starting our presentation in chief, I would like to introduce our team to you. To my immediate left is Erika Kramer, our Director of Technical Operations; to Erika's left is Rita Deverell, one of Vision TV's founders, Vice President New Concept Development and the Executive Producer of our flagship program, "Skylight"; to my immediate right is Susan Bower, our Chief Operating Officer who has been with Vision TV since 1989.
531. In the row behind me, starting on our left, your left, Kaan Yigit of the Solutions Research Group, who undertook the consumer research filed with our application. Beside Kaan is the newest member of our team at Vision TV, Joan Jenkinson, our Director of Programming Operations. Joan came to us in May after five years as Executive Director of Women in Film and Television, Toronto. Beside Joan is Grant Buchanan of McCarthy Tetrault, our regulatory counsel. And beside Grant is Paul de Silva, our Vice President of Programming. Paul has been with Vision TV since 1996.
532. I would also like to point out the presence of some of our board members in the front row of the audience. On your right in the row is Irving Abella, historian, professor and author as well as Chair of Vision TV's Board of Directors and beside him is Charles Keating, Secretary-Treasurer of our Board.
533. And just before beginning I would like to acknowledge our gratitude to the more than 2,400 individuals and associations who wrote to support our application. They are certainly here with us today in spirit.
534. We are now ready to start our presentation in chief.
535. Madam Chair, members of the Commission, this is my first opportunity to appear before you since joining Vision TV. We are approaching this renewal and application for a rate increase with a view to both continuity and change. Continuity because Vision TV remains constant to its mandate of meeting an ongoing public policy objective, and change because we face enormous challenges in the way we fulfil that mandate.
536. Vision TV was licensed in 1987 to provide television programming that speaks to the single-faith viewpoints of a wide range of Canadians, without the problems inherent in religious broadcasting models from elsewhere.
537. Vision TV is unique both here in Canada and internationally, providing millions of Canadians with a connection to spirituality in its broadest sense. Our programming serves people of diverse faiths, as well as those on their own personal quest for meaning and purpose.
538. At Vision TV, we consider ourselves to be a public service broadcaster.
539. Why public service?
540. First -- our mandate. Vision TV provides a wide range of religious programming, in an environment of respect for different viewpoints and voices. We are a multi-faith, multi-cultural and multi-racial broadcaster, dedicated to reflecting Canada's diversity in our programs, our workforce and our on-air personnel.
541. Second -- our structure. As a not-for-profit broadcaster and as a charitable corporation, Vision TV does not respond to the demands of shareholders, but to its mandate and the needs of its audience.
542. Third -- our unique relationship with the independent production sector. Vision TV provides significant support for small independent producers, helping ambitious and sometimes difficult-to-finance projects get off the ground.
543. Fourth -- the audiences we serve. We cater to many viewers not sought by other broadcasters or advertisers, such as older Canadians and small multi-cultural groups. More than 60 per cent of our viewers are female and nearly half over the age of 50, a fast-growing demographic group. We bring to these audiences content that others do not air.
544. Fifth -- a unique perspective on issues. We are one of the few services left that is not part of a large corporate group. Vision TV is an independent broadcaster.
545. Since Vision TV was first licensed in 1987, the ownership of media has become concentrated in fewer and fewer hands, both nationally and internationally. To ensure that Canadian interests and concerns are addressed and Canadian stories are told, this country needs large, integrated companies with the ability to produce, broadcast and sell Canadian programs. These companies and the content they produce must be able to compete with the best from around the world.
546. But at the same time, we need to ensure that there remains a place in the system for services like Vision TV that are not part of large corporate groups. It is these smaller, independent and often not-for-profit broadcasters that provide the diversity in our system and ensure that truly distinctive voices are heard.
547. Competition and costs are escalating in a television marketplace that grows ever more fragmented. A station like ours, which cannot derive cost and revenue synergies through affiliation with distributors or other analogue channels, is increasingly at risk of losing the ability to deliver a high quality of service. Our programming inventory has reached the end of its life cycle. Our hardware and software systems are in urgent need of renewal. We have suffered several operating deficits during this licence term. Vision TV faces a crisis.
548. Today we wish to outline in further detail Vision TV's importance to the Canadian broadcasting system, to our viewers and to independent producers and our need for an increase in our basic rate to maintain current levels of service and to provide additional programming not readily available in the system.
549. I will now call upon one of Vision TV's founders, Rita Deverell.
550. MS R. DEVERELL: Vision TV has been addressing the spiritual needs of Canadians since its inception. Over this term of licence, our paid-to-air Mosaic programs have served 1666 different faith groups and congregations representing 20 denominations, including Roman Catholics, Protestants, Muslims, Sikhs, Baha'is and Hindus. Our Cornerstone schedule added programs on many faiths and spiritual practices. Among them, Judaism, Buddhism and Aboriginal spirituality.
551. In addition, Vision TV broadcasts a very popular values-based block of family programs, inspirational music, documentaries, current affairs programs, all of these enrich and enhance and provide balance in the schedule.
552. Our Code of Ethics, Standards and Practices ensures that all faiths are treated with respect and that audiences will not be subjected to questionable fundraising practices.
553. At present, more than seven million Canadian households receive Vision TV. More than three million people tune in at least once a month.
554. Our network's most important relationship, however, is not with cumulative numbers but with the individual viewer, with the audience of one. For the Sikh in Truro, the Muslim in Fort McMurray, the Baha'i in Regina, the Catholic shut-in in Toronto, Vision TV is a link to their faith and to their community, as well as a window to other cultures. This was noted by many intervenors, such as Rabbi Irwin Zeplowitz of Hamilton, who wrote:
555. "Vision's TV's programs reflects the religious diversity and pluralism of our society. Unlike many other religious networks, Vision TV provides a variety of voices, which only strengthens our country."
556. Vision TV's Cornerstone schedule complements our Mosaic program with content devoted to issues of faith, morality and the human condition. This includes in-house productions such as "Skylight," our Gemini Award-winning human affairs show. In its exploration of the spiritual and ethical dimensions of current events, "Skylight" has given voice to more than 370 community groups and organisations across the country.
557. The Cornerstone schedule also includes many point-of-view documentaries, commissioned or acquired from independent producers. Through programs such as these, Vision TV tells important stores with an impact where it matters most -- on the millions of individual Canadians who are moved, informed, helped or inspired by this.
558. Vision TV also partners with other Canadian broadcasters. Recent examples include a live special with CPAC on the ethics and values in the last federal election and a collaboration with APTN and Newsworld on a two-part special and interactive Web site on the Aboriginal Residential Schools issue.
559. More than 2,400 Canadians wrote to you, and more than a third of their letters spoke of Vision TV as a valued alternative to mainstream television. Many of them also noted the personal impact of our programs. Viewer Ann Goddard wrote:
560. "The programs on this station ... have had a huge beneficial impact on my recovery from bereavement and recent illness ... I could not have coped so well without their uplifting messages and the company they provide."
561. Now, we would like to note some of Vision TV's accomplishments in developing Canadian content, particularly with the independent sector. Here is Paul de Silva, Vice President of Programming, and himself an independent producer for two decades.
562. MR. P. de SILVA: Thank you, Rita, and good afternoon.
563. Vision TV devotes a major part of its program budget to independent Canadian productions. This spending falls into three areas.
564. First, script and concept development. About $1.2 million dollars has gone into this critical area over the last seven years, much of it with new producers. This is among the highest development expenditures of any English language specialty service. Many programs simply would not be made without this initial commitment from Vision TV.
565. Recent examples include "Journey to Little Rock," a documentary widely regarded as a contender for next year's Academy Awards and the Inuit feature, "Atanarjuat," which won high honours at the Cannes Film Festival this year. Our development funding was vital to the financing of both these films, enabling their producers to access other sources of investment.
566. The impact of Vision TV's seed money is felt by many of our fellow broadcasters as well. Projects on which we have taken a risk often end up appearing on other channels besides Vision TV, including CBC, Bravo!, History Television, Life Network and WTN.
567. The second area of program spending is acquisition of shelf product, often on second and third windows for documentaries relevant to our mandate. This is an important source of funds for small independent producers and distributors.
568. The third area is commissioning of new product. A total of $13 million dollars went into new Canadian programs over the course of our last licence, mainly on first windows. This is the area in which Vision TV excels, working with our regional offices and with other broadcasters to create new Canadian content.
569. In all, nearly a third of our Canadian programming expenditure over this licence term has been in the independent sector, a total of almost $20 million dollars.
570. In the new term, we propose to earmark $108.2 million dollars for Canadian programming, of which 44 per cent will go towards independent production. This includes a $1.7 million investment in script and concept development.
571. Numbers, however, tell only part of the story. Vision TV also helps to nurture the independent production industry through the work of its development offices. Our representative, Charles Doucet in Halifax and Maureen Levitt in Victoria and our programming staff in Toronto lend invaluable support not only to the individual producers with whom they work day to day, but also to the sector in general.
572. More than a hundred independent filmmakers, as well as the CFTPA, the Canadian Independent Film Caucus and the National Film Board of Canada wrote to you in favour of our application. Many noted our support for important projects that, while unique and valuable, are not necessarily of interest to profit-driven services. Vision TV is frequently the way films like these, many of them critically acclaimed, many of them award winners, find their way to a national audience.
573. Susan.
574. MS S. BOWER: Madam Chair, Vision TV wants to continue to provide this level of service. But to do so, we need access to more subscriber revenues. We are requesting a seven cent increase to our current rate of eight cents per subscriber per month.
575. In the application and in our replies to deficiencies, we detailed the pressures on our revenues.
576. The English language speciality services that reported to the Commission in 2000 had annual revenues averaging $29.5 million. Vision TV operates with less than half of that at $14.5 million.
577. Those same services averaged operating profits of $6.9 million, while Vision TV has operated precariously close to break-even over the last six years. We have suffered deficits in three of the past four years, and project the largest one yet for the current year.
578. Most of the reporting services are part of large, integrated companies and benefit from synergies that include shared facilities, multiple program windows, co-promotion and joint sales teams. While Vision TV, as a not-for-profit charitable corporation, does not enjoy the advantages of having a large parent company, it faces all the same economic pressures as the bigger players.
579. Since our last renewal, the Commission has licensed two rounds of new specialty services, many of which feature documentaries. New conventional religious television stations have also been licensed in Toronto, Lethbridge and Vancouver. These new services offer additional choices to viewers. But they have also fragmented the audiences of existing services, and have increased competition and costs, for quality programming, for public funding and for staff. With 21 new Category 1 services and an uncertain number of Category 2s expected to launch this fall, we anticipate that these trends will become even more pronounced.
580. Eight years have passed since Vision TV last received a rate increase. Over the course of this licence term, we have undertaken concerted efforts to increase revenues from other sources. We have nearly doubled our advertising sales, and are projecting annual growth of 7 per cent in ad revenues over the next licence term. We have also embarked on new fundraising initiatives, and plan to continue our activities in this area.
581. Unfortunately, none of these efforts will be sufficient to meet our needs. Growth in advertising revenues, for example, will inevitably be limited by the nature of our viewing audience, which includes a high concentration of adults 50-plus, not a group that most advertisers seek out. Almost half of our schedule, moreover, consists of Mosaic programming which does not carry commercial availabilities.
582. While we can achieve modest revenue gains by raising the fees we charge to Mosaic groups for this air time, significant rate increases are out of the question. To do so would disenfranchise the faith communities we are dedicated to serving.
583. At the same time, our costs continue to rise. The price of both Canadian and foreign programming has grown significantly, and the introduction of new specialty services will only push it up further. Demand for staff is also increasing. Unless we pay competitive salaries, we risk losing talented people, and we need significant investments in both hardware and systems to make it all work. It will take a rate increase to ensure that Vision TV can maintain its existing level of service.
584. In addition, our viewers continually tell us about programming that they would like to see. For example, of the more than 2,400 Canadians who wrote to you, nearly 40 per cent mentioned music programs that no service other than Vision TV presents or produces. From viewer comments, letters and e-mails, we also know that there is a high demand for programming devoted to spiritual journeys, examining the bridges between traditional religious faith and more unorthodox practices.
585. We have costed a number of programming initiatives. To better address our audiences' preferences, we will need additional subscriber fees.
586. We feel that a total increase of seven cents is a reasonable request, one that will enable us to preserve the quality and integrity of the service and enhance our offering in the areas that matter most to viewers.
587. To find out what cable and satellite subscribers, as well as our core viewers, think of Vision TV and to gauge the reaction to a potential seven cent increase, we asked Solutions Research Group to undertake a national survey. The results are clear, Vision TV viewers strongly support the increase. Of other cable and satellite subscribers, 40 per cent support an increase and only 29 per cent oppose it.
588. From its earliest days, Vision TV has maintained a lean, efficient organisation and will continue to operate in such a manner. As a not-for-profit institution, should our revenues be higher than anticipated, more original programming will be produced or acquired.
589. MR. B. ROBERTS: Finally, Madam Chair, we would like to speak to the issue of compliance with Canadian content exhibition levels. We realise now that we failed to devote proper resources to the systems necessary to ensure compliance on an ongoing basis.
590. Immediately upon my discovery of this problem, I took responsibility for the introduction of new procedures that will ensure we know exactly our position with respect to Canadian content. Most importantly, we are taking logging in-house and have hired an experienced scheduling executive, Chris Johnson, who handled Canadian content effectively for TVOntario for several years. Joan Jenkinson and her staff will be responsible for monitoring performance effectively. And I have made Canadian content exhibition levels the highest priority of our management team.
591. The team sitting at this table can assure that we are in compliance now and will be, without fail, throughout our licence term.
592. Please understand that we did not deliberately attempt to avoid our responsibilities. This problem grew out of inexperience and frugality. It has been my number one priority to make certain this failure of our systems is repaired. We trust that this blemish does not obscure our considerable achievements.
593. Over the past seven years, Vision TV has made a significant contribution to the broadcasting system.
594. We have delivered programming that speaks in a balanced way to the spiritual lives of Canadians. We have reflected Canada's multi-faith, multi-cultural and multi-racial reality through our programming, and in the face we present both on air and behind the scenes. We have offered a unique and independent voice and we have provided critical support to this country's independent production sector.
595. Now, we face a crisis situation. We have had operating losses for three of the last four years. Programming costs have increased steadily and we need to make significant investments in both hardware and systems. We are asking that you help Vision TV continue its record of accomplishment by granting us a rate increase of seven cents per subscriber per month.
596. Thank you for your attention and we would be pleased to reply to your questions.
597. THE CHAIRPERSON: Thank you, Mr. Roberts. Thank you to all of you.
598. Ms Deverell, I thought you were on sabbatical. I was surprised to see you sitting at the table. I thought -- but, of course, you wouldn't want to miss this.
599. MS R. DEVERELL: It doesn't start until September.
600. THE CHAIRPERSON: Oh, I see because I remember you telling me about it a few months ago.
601. I'm going to be doing the questioning this afternoon. Maybe what I will do is I will just give you an idea of where I'm going.
602. Obviously, the major issue that we are going to want to look at is the rate increase. Leading into that I am going to go through some of your financial information and get you to clarify some of that for me, and I want to talk with Mr. Yigit about the survey, which I know he enjoys because I have talked to him before about surveys. But he always likes to be asked questions about them.
603. We are going to talk about your Cancon non-compliance in spite of your very eloquent apology, and your request regarding carriage, the addition of certain categories to your nature of service and then some of the societal issues that I mentioned in my opening remarks.
604. And forgive me if I'm sort of shuffling back and forth amongst pieces of paper. As you can see, I have been busily reading as much of your submission as I possibly could and tagging the pages to try and help me go back and forth. But sometimes I might refer to things without actually telling you where they are and hopefully somebody on your team will remember kind of where it is.
605. So let's start off with the financial stuff and I guess Ms Bower is going to help me with some of this. Basically what I want to do is just go through the schedule, starting with Schedule 20 we will go through. I just want to clarify some of the information and look at some of the assumptions underlying your projections. I know that there were a number of different statements that were filed. The ones that I'm looking at right now are the ones that were filed as part of the original application. Ms Bower, I will leave it to you to sort of point me to any area in those statements that may have been updated as a result of either of the other two, although I realise the other two statements were based on a denial scenario.
606. The first thing I wanted to ask you about, and basically the whole purpose of the financial questions really is to test your assumptions about what kind of economic needs you have in order to justify a rate increase to the entire basic subscriber base. So I want to ask you some questions about some of your spending and how it relates and that is where this stuff is coming from.
607. If you look at page 1 of Schedule 20, which is your financial projections for 2001, and when I looked through your projections for the seven year licence term, there is sort of a similar relationship showing. But you look at your national advertising revenue of about $1.5 million and your sales and promotions expense budget of $2.6 million, and I am just wondering if you can explain to me what the relationship is between those two lines in the budget?
608. Because typically the sales and promotion budget would be there to support the generation of advertising revenues. It just struck me as odd that the amount that you are spending on sales and promotion is significantly higher than what you are actually generating in terms of advertising revenue. So I wonder if you could explain to me how those two numbers relate to one another?
609. MS S. BOWER: Thank you.
610. Vision has always wrestled with this challenge of selling advertising within the context of a religious offering, and it has been a struggle from day one. I would like to draw your attention to historically we have nearly doubled our advertising revenue over the term of the existing licence. A large part of that increase was driven in 1996/97 as a result of putting the Family Drama Block on in the afternoon as a result of the last licence renewal. That Family Drama Block drives about 75 per cent of our advertising revenue.
611. I think the piece that is perhaps missing from the equation here, if you simply looked at the advertising revenue in isolation, is the sale of air time for the Mosaic faith groups, which is 50 per cent of our schedule, and co-relates directly to the promotion expense, helps to drive that up and position Vision as a worthwhile and valuable venue for Mosaic groups to place their programs.
612. THE CHAIRPERSON: So you do not have people breaking your door down to place their programs. You actually have to go out and solicit people and build them as ---
613. MS S. BOWER: No, sorry. I didn't mean to indicate that the sales team was -- or those expenditures are not related to selling Mosaic air time. No.
614. THE CHAIRPERSON: They are not.
615. MS S. BOWER: No.
616. THE CHAIRPERSON: The $2.6 million.
617. MS S. BOWER: No.
618. THE CHAIRPERSON: Okay, so ---
619. MS S. BOWER: There is about $350,000 or $300,000 of expenditure related to promoting the service as a charitable service and soliciting donations. Our viewers guide is part of those costs, which is a vehicle for communicating directly with viewers for instance and it's not a traditional sales tool.
620. THE CHAIRPERSON: Right. So how much of those -- of the $2.6 million would be directed towards actually increasing your revenue stream in some area?
621. MS S. BOWER: Those are general promotion and communications expenditures. Placing ads in TV Guide, placing ads in other magazines, radio advertisements. It's more of a general promotion nature rather than directly related to securing revenue.
622. THE CHAIRPERSON: Okay. The next question that I have -- actually I think this may have been -- something that I saw in your Statement of Changes in Financial Position at Schedule 21. I think I understand it now. It's presented in a way that I'm not familiar with, but if you look at the bottom line, maybe because these numbers are presented in brackets, which is typically the way that you would present a loss.
623. The way that I'm -- the way that I was reading that before I checked the side of the schedule where it explains that -- well, even then I was confused. Are you saying that by the end of your new licence term you will be in debt to the bank to the tune of $8.5 million?
624. MS S. BOWER: No, just the opposite. Your reading is correct. The indebtedness is at the beginning of the period, the $322,000 and we gradually grow out of indebtedness over the term.
625. THE CHAIRPERSON: So I checked this with one of my financial guys and he had never seen this. It is sort of like a positive being presented as a negative because it's in brackets, which is typically how you present a loss in financial statements, or an amount owing. So I was just -- okay. So you are not indebted to the bank. That is the bottom line.
626. MS S. BOWER: And there was no intention to obfuscate. No.
627. THE CHAIRPERSON: Okay. I wondered because I thought well if you were really indebted to the bank to the tune of $8.5 million, no wonder you are asking for such a big rate increase.
628. Okay. Balance sheet, the pro forma financial statements. The seven year summary, it's page 1, part 1, Schedule 22. You show a loan to Vision Digital and I have checked through, again I have reviewed this with our financial people and the loan shows in the amount of -- under your assets -- $1.6 million, and it remains flat across the seven years. When does that loan get repaid by Vision Digital?
629. MS S. BOWER: That loan is primarily for Vision Digital's participation in the new Category 1 service, which was formerly called "Wisdom" and now is called "One, The Body, Mind and Sprit Channel." And that new service does not have a break even point in our projections until year seven. So there would be some repayment after that point in the future.
630. THE CHAIRPERSON: So that would be like shareholder equity in the service if you had such a thing?
631. MS S. BOWER: That is right. Vision Digital Inc. is the wholly-owned subsidiary of Vision TV.
632. THE CHAIRPERSON: Right.
633. MS S. BOWER: It is a for-profit entity. And it will participate -- is participating as an equity holding shareholder in "One, the Body, Mind, Spirit" channel, and so that represents that.
634. THE CHAIRPERSON: And how much of that $1.6 million would come from that rate increase?
635. MS S. BOWER: None of it.
636. THE CHAIRPERSON: None of it.
637. MS S. BOWER: No.
638. MR. B. ROBERTS: Madam Chair, I think that is an important point to underline, that we are not cross-subsidising any of those digital channels. All of our suppositions for the purpose of this licence renewal are based on Vision direct cost. There is no cost subsidy involved.
639. THE CHAIRPERSON: Yes, I think I was going to ask you that and I may as well just ask you now.
640. But you do talk in your submission about the synergies between Vision and One and you talk about the technical facilities needing to be upgraded and that those technical facilities will be shared. There is a cost directly attributable to the upgrade of those technical facilities in your justification for the rate increase. So maybe you want to clarify that.
641. How much of -- I mean the amount -- am I to assume that the amount of the technical upgrade that you are showing as part of the justification for the rate increase is only half of what it is actually going to cost or two-thirds or whatever? Because obviously -- and then you get into the whole issue of the fact that "One" is a for-profit entity and Vision is not. So who should be paying for that upgrade?
642. MS S. BOWER: Any provision of services from Vision to the new service would be at fair market value. There is two existing Canadian broadcasters that are minority shareholders in that arrangement and the shareholders' agreement and the management agreement that have been filed with the Commission indicate that any provision of services will be at fair market value. So there is a built-in safeguard, if you like, in terms of any possibility of cross-subsidisation.
643. In terms of -- we have reflected on our income statement, management -- revenue from management services coming from our provision of services to One and you will see that revenue which ---
644. THE CHAIRPERSON: What statement are you ---
645. MS S. BOWER: The income statement. It is page 5 of the ---
646. THE CHAIRPERSON: The pro forma.
647. MS S. BOWER: It's line number 6 of the revenue.
648. THE CHAIRPERSON: So you are looking at $4.3 million over seven years.
649. MS S. BOWER: Exactly.
650. THE CHAIRPERSON: That is management services. That doesn't include the upgrade to the technical facility.
651. MS S. BOWER: Any leasing of the facility -- so Vision would pay for the upgrade and then One would lease it.
652. THE CHAIRPERSON: Right.
653. MR. B. ROBERTS: Madam Chair, if I could turn to Erika for some clarification on the technical facilities.
654. MS E. KRAMER: We absolutely have to upgrade our technical facilities for Vision TV. We have built a production facility in 1996 in order to produce "Skylight" but filled it with a lot of used equipment, which is reaching its end of life. And we have to ensure that we are producing content in a digital format so that it will have some shelf life and will take us into the future.
655. In regards to our master control facility, that needs to be upgraded as well. We still have our operators manually rolling tapes from printed logs and we have to introduce automation and digital master control.
656. MR. B. ROBERTS: Madam Chair, before we go back to Susan, I can assure you that since November I have found that Vision TV has some of the very best technology of the late 1970s and perhaps early 1980s. Furthermore to assure you that the spending proposals contained in this application for renewal are strictly for Vision regardless of other properties.
657. THE CHAIRPERSON: Thank you, Mr. Roberts.
658. If you look at page 8 of the pro forma financial statements, I want to look just a little bit at the new programming initiatives from a cost perspective. You are budgeting $28 million over seven years for, I believe, it's four new programming initiatives. I was just wondering if you could tell me how many hours of original programming that translates to in each year?
659. MS S. BOWER: I would like to turn to my colleague, Rita, for that answer.
660. MS R. DEVERELL: The new programming initiatives total 72 hours of original programming in a year. I would like to stress that these are 72 additional new hours of programming. Each time we have increased our revenues, when we went from zero cents to eight cents, we added 104 hours of original programming and with these new initiatives we will add 72 hours.
661. THE CHAIRPERSON: So if I were going to be really cynical I could say, well, maybe that would help you meet your Cancon obligations, those 72 hours with one repeat thrown in. But that would be very cynical.
662. MS R. DEVERELL: Yes, we won't deal in cynicism.
663. THE CHAIRPERSON: Okay. So 72 hours each year, at a cost of $3.5 million a year going up to $4.5 million.
664. Okay. I had a bit of a chuckle when I was reading through, it's actually section 3, I guess, of your supplementary brief when you talked about the shoestring budget. I think the place that I used to work had an even shorter shoestring that you do. It operated at about one-third of the level of your annual budget.
665. On page 8 you talk about some of the changes in the broadcasting environment that you have faced, including being moved, having your channel placement changed and licensing of specialty services resulting in audience fragmentation and increased competition for advertising sales, the pressure on funds available from the CTF, competition for programming product, competition for staff, the renewed interest by conventional broadcasters in documentaries, which I am sure was helped by our TV policy decision when we made documentaries a priority program.
666. I want to ask you about this 37 per cent decline in audience. Because a lot of the underlying assumptions that you use to argue for the rate increase have to do with the downward pressure on the channel, and yet the information that I have from both BBM and Neilsen shows no audience -- reduction in audience at all after your move. It is not borne out in your advertising revenues either which increase year over year on average 7 or 8 per cent.
667. So I am just wondering how you reconcile the notion that your audience has declined 37 per cent when it's not reflected in your numbers and it's not reflected in your ad revenues? Where is that coming from?
668. MR. B. ROBERTS: Yes. Before Susan gathers her response to that, I would like to go back to some of the suppositions provided by the Chair.
669. This is a service that is running on empty. This is a service that has lost money in the last three of the last four years. This is a service that will incur its largest operating deficit of this current licence period this year, and it is a service that operates dangerously close to the break-even level.
670. THE CHAIRPERSON: Aren't you supposed to as a not-for-profit service?
671. Not-for-profit didn't mean no profits I don't think. I have worked in public broadcasting and in private broadcasting in this country, the United States and Asia and Europe and in South America. And I would be hard pressed -- I would challenge anyone actually to find another broadcaster that can stretch a dollar the way Vision TV has been able to stretch a dollar. I find it frankly amazing what Vision has been able to do, what this team has been able to do.
672. Anyway, Susan.
673. MS S. BOWER: I believed we supplied to you some audience statistics in Appendix 10 to the supplementary brief, which are the statistics that we track our performance, both ability to sell advertisement and in terms of reporting back to our Mosaic clients how their programs are being received. We, both in the stats for weekly share, weekly reach and average audience, we have seen a substantial decline over the past four years and ---
674. THE CHAIRPERSON: Where are you getting those statistics?
675. MS S. BOWER: This is Neilsen statistics.
676. THE CHAIRPERSON: I am just wondering why our Neilsen numbers would be different then. Numbers speak in different languages.
677. MS R. DEVERELL: If I might add to that.
678. You may perhaps be reflecting that immediately upon the channel change there was no decline in audience? No.
679. THE CHAIRPERSON: No, what I'm talking about is the constant audience figure for Vision over a period of five years.
680. MS R. DEVERELL: Then we do have different numbers.
681. THE CHAIRPERSON: But I have looked at both BBM and Neilsen and they don't show that. But I will have a word with our staff and see if I'm off track somehow on this.
682. Okay. So BBM, your Neilsen numbers say that you have declined 37 per cent. Our BBM numbers say there has been no decline and your advertising revenues have gone up, which would be a pretty good indicator in any case since advertising revenues are based on share.
683. So since your advertising revenues have gone up and we both agree on that, explain to me what the downward pressure is with respect to the audience fragmentation? I mean, would you not suspect, as I would have at CPAC when I was there, that you appeal to a certain demographic, to a certain segment of the audience. And that is the segment of the audience that you are generally going to appeal to for the rest of your life just as CPAC. Maybe you can shift it a bit this way or that way. If you throw enough money at something, I guess you could, expand it or shift it to a completely different demographic.
684. I guess what I am trying to figure out is whether or not there really is significant downward pressure on your audience and if that is a valid underlying assumption to the request for a rate increase?
685. MR. B. ROBERTS: Madam Chair, it's a very important question and thank you for posing it.
686. Once again while Susan gathers her response, I think it is important to think these things through often in a context. We have offered a fairly aggressive approach to our advertising revenues over the next seven years in the 5 to 7 per cent growth range. Over the same next seven years, CTV and Global offered a 2 to 3 per cent growth rate with regard to their advertising revenues. Discovery offered a 3 per cent average growth in advertising revenues. TSN offered a 2 per cent.
687. So I think we are being fairly aggressive with regard to where we can go in this marketplace for our advertising revenues practically double what some of these other players are suggesting.
688. THE CHAIRPERSON: Although it is based on -- and you are using historical reference points because that is the rate at which your advertising revenues have increased over the past five years, generally speaking, in the 7 per cent range. So there would be some reference point for that aggressive projection.
689. Is that what it's based on, your historical performance?
690. MS S. BOWER: It's based on our historical performance. There is some jumps in those historical performances that we don't expect that we can repeat. The addition of the Family Block in 1995/96 resulted in an increase in 1996/97. We won't be able to repeat that because we are not putting in another Family Block.
691. We also have a fairly aggressive, I think, go forward position. Even though our audience has tended to skew towards the 50-plus audience, we don't think it necessarily has to be limited there. So we will be positioning programming for younger audiences and we will always do that. And that is because people who are interested in spiritual issues dip into that at any point in their life, whether it's a crisis precipitated by a death of a family member of an illness. So it is not something that is necessarily confined to an older generation. So that is why we are looking fairly aggressively towards the future.
692. THE CHAIRPERSON: Okay. The other thing that I wanted to ask you about was on page 9 of your supplementary brief where you talk about US avails and the fact that they now cost approximately $300,000 per year.
693. If you were to spend that $300,000, what budget would that come out of? Would that come out of the sales and promotion budget?
694. MS S. BOWER: Yes, that is where it is.
695. THE CHAIRPERSON: So that is where you do creative emplacement?
696. MS S. BOWER: That is right.
697. THE CHAIRPERSON: And is that, if you were getting placement on the avails of all the US channels that are available, the US specialties or can you just pick one or another to have your spot run on?
698. MS S. BOWER: I'm not familiar how they work.
699. THE CHAIRPERSON: Because I was just wondering, it seemed to me that, for example, A&E and I think you mention A&E in terms of viewership, it's in the Solutions Research Group study actually, awareness: 93 per cent of the people surveyed were aware of A&E. Why you wouldn't chose -- I mean it has very high viewership -- why you wouldn't chose to put your promotional spots or your ad spots there as opposed to -- it seems to me that it would be a good expenditure of $300,000. I kind of take the point where it used to be free and now it's not. But sometimes it is still better to pay more than you were paying before but still not as much as you would if you were actually trying to buy that time on that channel at standard rates.
700. MR. B. ROBERTS: Madam Chair, that is a very interesting suggestion and I think one that we will take up.
701. The underlying issue is, however, one of how a charity, a not-for-profit like Vision TV, maximises its awareness throughout a viewing public. We are not able to cross-promote as might some others, I think of CanWest and the Post for example. The loss of the US avails for a not-for-profit and for a charity is a staggering blow and this kind of strategy is one that we will certainly look into.
702. The research has told us that there is a question of visibility. Once people find us, they like us. But it's getting to know us part that is so important, and we are certainly in the business of trying to reach new eyes. So we appreciate that.
703. MS S. BOWER: I would just like to add to that, the context of our expenditures, I think over the next licence term we are proposing an average of 2.8 million annually. Vision spends about 10 per cent of its total expenditures on sales and promotion compared to an industry average of about 13.8 per cent. So we are still quite low. The WeatherNet, for instance, which has a very high awareness rating, still spends 3.3 million annually. So our budget -- we try to stretch it as far as we can.
704. THE CHAIRPERSON: I have been in that position so I am well aware of the kinds of choices that you have to make.
705. I want to look at the -- let me just pick this book up so I can see my little labels here. Looking at your assumptions, it is Part 1, Schedule 18, so there are a number of things again that I wanted to ask you about with respect to whether or not you should be funded by the general base of subscribers.
706. You talk about the increased cost of Internet activity and marketing and promotion, inflation of 3 per cent, technology upgrades and salary increases of 7 per cent. Just so you know, there are a lot of people who would like to come to work at Vision if the salary increases are really 7 per cent annually. Because that seems quite generous compared with what is happening in the federal government, for example, and a number of other organisations that I am familiar.
707. But how did you get to the 7 per cent? It's the average annual growth rate, I think. I mean most places are talking 2 per cent, 2 and a half, 3 per cent increase, if that.
708. MR. B. ROBERTS: I know Susan wants to jump in here but there are just two small table-setting points. One is that perhaps inflation is a misnomer for our purposes. What we are really dealing with is competitive pressures, and competitive pressures are infrastructure which are integral to the nature of a broadcaster.
709. Secondly, with regard to salaries, Vision TV's salaries are significantly below industry standard with regard to the broadcasting industry. And as to infrastructure or fixed assets, our fixed assets of somewhere around 1.8 million are perhaps the lowest, if not amongst the lowest, in the broadcast industry. So just small matters of clarification.
710. MS S. BOWER: I would just like to further clarify that the 7 per cent was not intended as an annual merit increase or performance bonus. I think it's a good thing we are not televised and that is getting out to staff today. It's an average annual growth rate that combines both merit increases that are roughly about 3 per cent, 2 to 3 per cent annually, plus just the increase of adding staff to maintain your competitiveness. Where it was taken from, is historically that is what we have had to pay in terms of base remuneration over the last licence term and it has to do with growing our staff from about 20 in 1994 to 44 over the past six years.
711. THE CHAIRPERSON: When I looked at the inflation, obviously you have looked at other applications by analogue specialty services for basic rate increases and most of them which included inflation as a reason have been denied. So when I saw inflation at 3 per cent I thought well this is the triumph of hope over experience. Because there is not much -- I mean not that the Commission can't take a different position. Certainly one never knows. But inflation has generally not been used as a reason for a basic rate increase.
712. MR. B. ROBERTS: I think it was perhaps a victory of misnomer over fact. We should not have referenced it as inflation. It is truly competitive pressures.
713. THE CHAIRPERSON: Now, how many hours a week is Mosaic programming on?
714. MS R. DEVERELL: Mosaic programming represents approximately 45 per cent of our schedule. So 45 per cent of the total number of broadcast hours. If, by any chance -- no, I won't assume where you are going with that.
715. THE CHAIRPERSON: That is okay. You can assume if you want to.
716. MS R. DEVERELL: I will assume that maybe one of the places that you are going with that is the cost of Mosaic air time, and historically we have privileged Canadians in the selling of that time. So we sell Mosaic air time to Canadian groups at a lower cost than to offshore folk.
717. THE CHAIRPERSON: That was partly where I was going. I wanted to ask you about it because I think in your opening remarks you mentioned the fact that you couldn't really increase what you charge for Mosaic programming, in terms of trying to find the balance between the groups who can't afford to pay those dollars.
718. So it is essentially your foreign Mosaic programmers who are paying the high rates and the Canadian programmers are paying the lower rates?
719. MS R. DEVERELL: That is correct, yes.
720. THE CHAIRPERSON: Because the notes that I wrote at the bottom of the page was, can some afford higher rates than others, and I say this being one, but the Catholics, for example, could they not afford to pay a bit more? Would that be one way? I'm trying to look at different ways of generating revenue out of this service. So I say that with all due respect to the Catholics.
721. MS R. DEVERELL: In recent years we have had some increases in our Mosaic rates. But I would also like to advance the notion that this has also been affected by our audience numbers. One of the reasons Vision is attracted to Mosaic clients is because of its overall audience numbers. So when we did experience the disputed decline, this made it much more difficult to raise Mosaic rates.
722. MR. B. ROBERTS: Madam Chair, if I could just add very briefly that the relationship of advertising or Mosaic or even donations from viewers is directly related to our ability to refresh, revitalise and renovate our program initiatives, which are part and parcel of this rate request.
723. THE CHAIRPERSON: Okay. Another point that you have made in terms of the pressures on your revenues are the licensing of the new digital services. In your opening remarks today you said that you anticipate that these trends of fragmentation of audience and increased competition and cost will become even more pronounced.
724. How soon in your projections are you expecting that they are going to become more pronounced? The reason I am asking is because when you talk about carriage for Vision, and I think that you have modified your position on carriage since the initial filing because there is a decision that has come out since. But when you were making your argument about carriage you were talking about how low those digital numbers are going to be, and yet, when you talk about the pressures on your revenues, you talk about how those services are going to have an impact on you.
725. So I'm trying to reconcile once again the disparity between those two pictures. It's like is it that or is it not. I mean the Commission itself when we went through the whole licensing process of the digital specialty services and developing that framework expected that it was going to be some years. You, yourselves have a break-even point of seven years down the road for one.
726. So how realistic is it to suppose that those digital specialties are going to have a real impact on an analogue basic specialty service with 90 per cent penetration of the cable subscriber or the distribution subscriber universe?
727. MR. B. ROBERTS: I would like to begin that response and then turn it over to Susan and perhaps others of my colleagues.
728. But there is currently tremendous competition for programming in the marketplace which as a direct impact on Vision TV as a not-for-profit. We are in need of replenishing our programming and that is extremely competitive at this moment.
729. THE CHAIRPERSON: So you are talking about, when you say there is tremendous competition for programming, you are talking about the second and third acquired -- second and third window acquired programming that Vision -- and what proportion of your schedule is that?
730. MR. B. ROBERTS: Rita.
731. THE CHAIRPERSON: And what proportion of your budget is that?
732. MS R. DEVERELL: I could turn that over to Joan.
733. MS J. JENKINSON: The percentage of our programming budget for the new programs would be for the new initiatives 25 per cent of the total budget for Canadian programs.
734. THE CHAIRPERSON: That is for the four new programs, the 72 hours a year?
735. MS J. JENKINSON: That is correct.
736. THE CHAIRPERSON: What I am asking about is the acquired programming that you are competing for in the marketplace that Mr. Roberts was just talking about.
737. MS J. JENKINSON: That represents 44 per cent of our total Canadian programming budget.
738. THE CHAIRPERSON: Acquired programming.
739. MS J. JENKINSON: Yes, acquired.
740. THE CHAIRPERSON: But how much of that acquired programming is programming that other people are running on their channels? Like it may be 44 per cent of your overall programming budget that you are spending on acquired programming but you wouldn't be competing in the marketplace for all of those hours. Because some of those hours would not be appropriate for other channels that are in the system.
741. MR. P. de SILVA: Madam Chair, if I could just make a comment on that.
742. I think -- I don't have an exact percentage of what the acquired programming that we would have would be on other channels, but we can find that out for you and provide that to you. But in general, the kinds of acquired programming that are Canadian for us would tend to be in the documentary genre. There is some drama that is available to us. For instance, we will be running "Anne of Avonlee" starting this fall. But the kind of programming that is available is very, very limited, partly because drama, as you know, there is a short supply of drama in our genre in terms of family programming. We have been, in fact, waiting for almost five years for "Anne," which is very suitable for our family audience to become available because Showcase has it after CBC.
743. In terms of the documentary programming, we generally presale most of our documentary programming. But there are second windows that have been either -- have had a run on CBC initially or History or WTN, et cetera. I would take a guess that maybe it might be 25 to 30 per cent or more of that.
744. THE CHAIRPERSON: Twenty-five (25) to 30 per cent of your schedule is documentaries?
745. MR. P. de SILVA: Yes, 25 per cent of our prime time, in fact, is documentaries.
746. THE CHAIRPERSON: At the time. Okay.
747. I just have a couple more and then I want to talk to Mr. Yigit.
748. One of the things that you said to us in our back and forth leading up to this hearing was that you might have trouble meeting your Canadian programming expenditures if your rate increase request was denied. Your CPE is 45 per cent, I believe, of previous years' revenues.
749. So how would that work? Since your CPE condition is a percentage of the previous years' revenues, regardless of what the revenue is, what would the impact of denial of your request be on the Canadian programming expenditures? I mean you have overspent it quite significantly over the course of last -- the last licence period.
750. MS S. BOWER: Yes, I think there is several factors in the environment that impinge on our ability to continue it to achieve the success level that we have been able to achieve. As a not-for-profit, I should just point out that one of the reasons we overachieve is because what in another broadcaster might go into profit and go into shareholder dividends, does go into our primary activity, which is programming.
751. We began the last licence term at a high -- at a much higher rate, 62 per cent of our expenditure went into programming and that has declined gradually. This past -- this last year or this current year it will be at 49 per cent. So we see it diminishing as time goes on. So we have to ask why is that? And it is primarily because of the reasons Bill and Paul have been pointing to, that we are operating in a much more competitive environment and that competition has a big impact on the availability to us of the public funding for license fees that we can trigger. We have seen those license fees rise from 15 per cent to 30 per cent in order to trigger the top-up funding. The new services that were created in 1995/97 created that new demand.
752. In comparison, Vision does have a high percentage rate going into Canadian programming. But it is on a much lower base to begin with. So it's less absolute dollars even though we are competing within the market arena of the competitive environment. So in fact what is happening is we are paying more for less hours as time goes on.
753. THE CHAIRPERSON: But it wouldn't actually reduce the percentage of your previous years' revenues.
754. MS S. BOWER: No, but it would reduce our ability to fill the schedule with interesting programming that fulfils our mandate. I guess what I wanted to come back to and remind ourselves of is that Vision is this incredibly unique broadcast undertaking that provides a balanced religious service. That is not something that is easily identifiable for the mass market consumer.
755. When you say religious broadcasting, a lot of immediate connotations come to mind. So in order for us to carry out this broad-base service that we have been providing, we have to do interesting, different, special -- very special kinds of programs. That has been our privilege and it is one that we would like to continue.
756. THE CHAIRPERSON: Two of the proposals that you include in your plan pursuant to being granted a rate increase are expanding your interactive elements and the enhancement of your offshore program sales. I wonder if you could just explain why you think that those two things, which I mean the first one, the interactivity and improving -- enhancing the web site I guess you could certainly make your argument that there is a benefit to subscribers. But the offshore sales, I guess you could also make an argument that there is a flow through in terms of what kind of programming. So I am answering your question for you.
757. MR. B. ROBERTS: But we would like to help too.
758. THE CHAIRPERSON: This is a great hearing. You just have to sit there. I will ask and answer all the questions.
759. I am just trying to understand -- I mean it might be argued that those initiatives are more to your benefit than they are directly to the benefit of subscribers and yet you are seeking a rate increase from the entire base. So explain how they are -- other than how I explained that they were -- of benefit to the subscriber.
760. MS S. BOWER: I think Erika would like to add something when we talk about the interactivity and probably could speak about some examples that we have experimented with this year. What we see there is a very, very modest proposal in terms of an expenditure line to basically keep our toe in the water and keep dabbling at this thing that we are calling "interactivity" so that we can continue to move as the stream is moving.
761. In terms of offshore distribution, we have been trying to give you a picture of Vision TV which is not readily apparent, which is that as a not-for-profit we simply don't have capital at our disposal, nor do we have the means to access capital. We can't just sell an equity share in the venture for instance and raise capital.
762. So one of our strategic directions is to create strategic alliances. The first of that being the participation of the new Category 1, and as part of what we would like to do is create programming that will have legs and that can travel and can bring a return back to the primary business. Hopefully that will lead to strategic partnerships with others around the world that are interested in spirituality programming.
763. But Erika probably would like to talk about some of our experiments in interactivity.
764. MS E. KRAMER: We have found that consumers expect to find interesting program enhancing information on the Internet. I just want to refer to the Residential Schools project that we worked on in cooperation with Newsworld and APTN.
765. We partnered with Ryerson on developing some embedded interactivity and we even produced a high definition half hour documentary. So Ryerson is working on embedding interactivity in that. Now, that is very futuristic.
766. But on our web site with a small investment of $13,000 we developed a very comprehensive web site with links to resources, and it gave people the opportunity to share stories. Our intention was initially to only have the web site up for one month before the broadcast of the program and one month after. But we still have it up and we still have people coming into the web site to get more information and they continue to share stories with us. Once you put it out there, it's pretty hard to take it back.
767. MS S. BOWER: Interactivity has always been a hallmark of the network before "interactive" became a fashionable word. We have always solicited viewer input and read viewer letters on air, and that has been an integral part of "Skylight" as well with the phone-in show. That is because the nature of the programming is about spirituality and where spirituality happens is in the stories of people's lives and it's in the sharing of those stories that we create our common identity.
768. THE CHAIRPERSON: It is interesting to see how the definition of interactive has changed over the years from reading mail on air to phone-in shows to a web site and interactive television.
769. MR. B. ROBERTS: Not to mention that old term "information highway" that went somewhere.
770. THE CHAIRPERSON: Where exactly is that road?
771. In response to one of our deficiency questions you suggested that if your rate increase request were denied, that the programming initiatives that you are proposing would fall by the wayside but there would also be cuts in other areas.
772. I am just wondering if you could explain, Ms Bower, I guess this will be you, how you arrived at some of those cuts? And I will give you some examples: 3.65 million over seven years for administration and other expenses such as institute relations, business development, membership in associations; a decrease of 6 million in sale of air time to Mosaic programs; audience erosion factors projected to reduce overall advertising revenues by 2.4 million and donations and grants would reduce to the tune of 5.3 million because of audience erosion.
773. So how did you come up with those? How far down did your audience go and what is that based on?
774. MS S. BOWER: The total package that we have presented to you for the new term, including the seven cent rate increase is a package of about $84 million above current levels of spending over the seven years. The way I understand our needs here is that less than one-third of that is in effect priming the pump to keep the operation whole, to keep it -- to have some integrity, to be able to carry out the business in a competitive manner. About 36 per cent of that $80 million is for maintaining the interesting high levels of Canadian programming that we have become familiar with that can be seen on Vision TV. Then the final third is for the new initiatives that are a direct response to viewer inquiries and interest.
775. In terms of what Vision would do to cope with not getting a rate increase is very challenging. Would we first of all not take care of business and not look after primary operational requirements? Well, I don't think so because we need to keep carrying out our business. Would we reduce expenditure in Canadian licences? That would be a very difficult choice to make because that is what has made us so distinctive.
776. So the first thing we took off the list was the new program initiatives. Then that led to what would the impact be on our revenues. We have already talked about the pressures, the difficulty in raising Mosaic rates year over year. We think that if we continue to lose audience that it would be difficult to justify a rate increase, because those constituencies depend on donations to pay their bills. So we had flat-lined that in our go forward projections. A corollary to not replenishing the programming schedule, and I don't think we -- we should spend a little time talking to you about our repeat factor, how high it is. Some of the programs that we created four and five years ago are still being repeated on a regular basis on Vision and we need to replenish those.
777. In the face of not doing that replenishment, it would be difficult to generate the fundraising growth that we have anticipated in the seven year plan. So we have reduced that. And the advertising is corollary to the decrease in audience share.
778. THE CHAIRPERSON: How do you arrive at the decrease in audience share? I mean how do you calculate that or is it a guesstimate that if you don't replenish your programming, your audience is going to drop so much or is it based on some historical data that you have collected or ---
779. MS S. BOWER: It's based on the trend lines that we see in the audience share and reach numbers that we have presented in the Appendix tab. So it is just based on a trend.
780. THE CHAIRPERSON: So if you were to use my numbers, it might not be such a bad trend? It might not be going downwards. It might be going straight out or even up if you use the BBM.
781. MR. G. BUCHANAN: Madam Chair, if I could jump in here. I'm not sure we know what numbers you are basing your questions on or asking questions ---
782. THE CHAIRPERSON: The Bureau of Broadcast Measurement audience shares.
783. MR. G. BUCHANAN: There is lots of different sequences, lots of different cuts, age groups, demos, years, sequences.
784. THE CHAIRPERSON: Two plus, all day.
785. MR. G. BUCHANAN: Do we have on the record of this proceeding what you are talking about?
786. MR. P. McCALLUM: I think the BBM numbers are available to members of BBM.
787. THE CHAIRPERSON: They are available to members of BBM. Are they on the record at this ---
788. MR. P. McCALLUM: Not as such, but as an expert gathering body where we gather information. This is information that the Commission has normally gathered from the industry.
789. MR. G. BUCHANAN: It just seems that we are having a disagreement about whether -- the extent of audience erosion or whether indeed there ever was any. And it's very difficult to have a sensible conversation if you are not aware of what numbers you are using to compare them to the numbers that are in Appendix 10 that we filed.
790. THE CHAIRPERSON: Well, we subscribe to BBM as we have for years and those are the numbers that we use to cross-reference the numbers that are given to us by applicants. So when you file your numbers, we have a way of double checking to see if -- otherwise, I mean, if the CRTC doesn't have some way of trying to verify the veracity of the numbers, then there is no way to come up with ---
791. MR. G. BUCHANAN: We are not quibbling with the use of BBM. I just don't know what it is you are quoting from that you don't think there was any erosion whereas the panel seems to think there was.
792. THE CHAIRPERSON: Okay.
793. MR. K. YIGIT: If I could just try to help here.
794. I haven't verified these but the ones that were filed are Neilsen Media Research, their full year, two-plus, weekly reach numbers, average-met audience numbers under Appendix 10 and weekly share of viewing numbers. This doesn't come from our research, which I know you will want to discuss a little later. Also in response with efficiency, I see here -- yes, Toronto/Vancouver numbers filed. But the source is Neilsen Media Research full year numbers and it's not completely unheard of for Neilsen and BBM not to agree.
795. THE CHAIRPERSON: No, it's not.
796. MR. K. YIGIT: So there might be something that I'm not quite sure. I haven't seen those BBM numbers whatsoever. So I'm just trying to help out in terms of what is filed here and it does show a decline, and most radically from 1996/97, which I believe, is the year prior to the channel line-up change. Then there is a sudden drop, 1997/98, 1998/99, and 1999/2000 numbers are soft decline but it could be depending on which scale you use. It could almost be flat, but there is a drop that I see here from those numbers, from the Neilsen Media Research numbers, full coverage, two plus.
797. MR. B. ROBERTS: Madam Chair, I would just like to embroider on Kaan's comment that we do subscribe to Neilsen. This is also reflected in the audience decline of what our sales folks also reflect in terms of their ability to sell advertising.
798. On the other hand, since we don't subscribe to BBM, if granted the rate increase, we will do that immediately.
799. THE CHAIRPERSON: And on that note I think we will take our afternoon break and we will reconvene at a quarter after three. Thanks.

     --- Upon recessing at 2:58 p.m. / L'audience est suspendue à 14h58.

     --- Upon resuming at 3:20 p.m. / L'audience est reprise à 15h20.

800. THE CHAIRPERSON: Welcome back. Before I move on to the Solutions Research Group study, there was one other question that I wanted to ask you, Mr. Roberts and Ms Bower, about synergies between Vision and One. I know that you said that on a technical basis there won't be any cost to Vision that wouldn't be recovered through the digital specialty.
801. What about programming? Synergy and programming. Will there be any programming being shared between the two channels and of that, for example, the new programming initiatives that you are undertaking the 72 hours a year, will any proportion of that be run on One?
802. MR. B. ROBERTS: Let me begin. The answer is no. There is no cross-subsidy whatsoever between our analogue core service and these digital undertakings.
803. THE CHAIRPERSON: Okay. Right.
804. Mr. Yigit, nice to see you again.
805. MR. K. YIGIT: Good to see you too.
806. THE CHAIRPERSON: I think I am going to be an expert on surveys by the time I finish at the Commission since I have read a lot of them.
807. MR. K. YIGIT: Not a bad thing.
808. THE CHAIRPERSON: Many of them have been yours.
809. You did 1,008 interviews, 603 of them were the total cable DTH universe and then you did two smaller subsets; not actually subsets of that 603 but two smaller groups that were identified for you by Vision through their lists, the donors and the GBG subscribers.
810. MR. K. YIGIT: Correct.
811. THE CHAIRPERSON: Okay. So the total cable DTH universe that you looked at, I just want to bring this down to some real numbers.
812. So when you say on page 4, for example, the fourth point down, four and five Vision TV viewers, you are talking about the 26 per cent of subscribers 18 and older?
813. MR. K. YIGIT: Correct. Those who have reported in our survey having viewed the channel at least once.
814. THE CHAIRPERSON: So 26 per cent of the 603?
815. MR. K. YIGIT: That is correct, yes.
816. THE CHAIRPERSON: Which is 156 people.
817. MR. K. YIGIT: Correct. Yes.
818. THE CHAIRPERSON: Okay. Then of those 156, of those 26 per cent, then you start looking at support for the rate increase?
819. MR. K. YIGIT: Yes.
820. THE CHAIRPERSON: So 63 per cent of the 26 per cent, and those are actual viewers?
821. MR. K. YIGIT: Yes.
822. THE CHAIRPERSON: People who have watched Vision?
823. MR. K. YIGIT: That is right. That is right.
824. It is really in effect the same measure recorded for different bases, viewers in this instance.
825. THE CHAIRPERSON: So then when you look at the total cable DTH universe you are ---
826. MR. K. YIGIT: That is the next page, correct?
827. THE CHAIRPERSON: Yes. Where we are looking at two and three viewer support, a seven cent per month rate increase. If you don't look at this very carefully, you would think 63 per cent that is pretty good but it is 63 per cent of 26 per cent.
828. MR. K. YIGIT: Yes. In all cases the support numbers are as most other measures in the survey are reported against different relevant bases. The one relevant base is obviously what is the level of support or what is the level of anything for that matter among Vision viewers. So we report that.
829. We also report the same set of numbers basically across the whole universe, meaning, you know, the random selection of cable subscribers. In separate instances, I think, they are also reported for what Vision calls the super core. They are donors who financially support the station plus the subscribers of their program guides. So depending on what we are looking at, those different universes, if you will, are reported.
830. THE CHAIRPERSON: Okay. So then in the next point, and you actually expand on this on page 19, where ---
831. MR. K. YIGIT: Yes.
832. THE CHAIRPERSON: --- where you are doing your summary of support for these initiatives and specifically support for the notion of a rate increase you say, "a plurality express support." I love that word.
833. MR. K. YIGIT: It means ---
834. THE CHAIRPERSON: What is the dictionary definition of "plurality"?
835. MR. K. YIGIT: We had this discussion over the years and ---
836. THE CHAIRPERSON: It sounds good. It sounds really good. It's not a majority.
837. MR. K. YIGIT: The roots are in political research to be honest.
838. THE CHAIRPERSON: It is the minority.
839. MR. K. YIGIT: It means the largest of different numbers without that number being the majority. What it is saying is, well if you look at the numbers, obviously there is 40 per cent expressing support for the rate increase, 29 per cent in opposition and 31 per cent "I have no opinion." They don't Vision enough to be able to take a stand one way or the other.
840. THE CHAIRPERSON: So it actually means the largest of different numbers?
841. MR. K. YIGIT: Yes.
842. THE CHAIRPERSON: Then that is not right. Unless you add the 33 and the 7. Oh, I guess the 33 is the largest. The 40 itself is not the largest.
843. MR. K. YIGIT: Yes.
844. THE CHAIRPERSON: The 33 per cent that support ---
845. MR. K. YIGIT: Right.
846. THE CHAIRPERSON: --- that is the largest.
847. MR. K. YIGIT: If you were cutting into individual scale points, yes, that would be correct.
848. THE CHAIRPERSON: Okay. So then that still means that less than half the people who were in the cable DTH universe support it?
849. MR. K. YIGIT: That is right.
850. THE CHAIRPERSON: Fewer than half. Only 40 per cent.
851. MR. K. YIGIT: It would be 40 per cent. Yes. You know, if you did a poll tomorrow, arguably, and picked a hundred cable subscribers at random, what this survey is saying that 40 would -- if you asked them the question that we asked -- 40 would be in support, 30 would be in opposition, 30 will probably say "I don't know," to the specific proposal of Vision increasing its rates. Correct.
852. THE CHAIRPERSON: Do you make any assumptions about the "I don't knows"? The ones who say that they cannot express an opinion due to lack of familiarity?
853. MR. K. YIGIT: Well, there is two things you can do. In some types of research, especially in the kind of political research that you hear on CNN, sometimes -- well, more often than not the "no opinion response" is considered to go as -- in other words, when they are forced into a response that they would break out much as the respondent did. That is number one.
854. But number two here, I wouldn't even make that assumption. I think that group may be in opposition to cable rate increases period of any sort. But, you know, in this context they can't tell you whether or not Vision is, you know, they simply don't know enough. But a common assumption is to assume that "don't knows" will eventually fall, and that is the important point, eventually fall as the responding categories.
855. THE CHAIRPERSON: Okay.
856. MR. K. YIGIT: But we didn't make that assumption. As you can see in the research, we simply kept it as, we didn't say, well, they will just come on to the support side or anything like that. We just left them as is.
857. THE CHAIRPERSON: Now, a famous broadcast ---
858. MR. K. YIGIT: One point for context though ---
859. THE CHAIRPERSON: I remember a famous broadcasting example of that during the referendum when they got efforts for guessing on a pro rata basis how much was going to yes or no, and they were wrong.
860. MR. K. YIGIT: Yes, and it can happen if it's a very close kind of race in something of great public policy matter.
861. I just want to make sure that it's -- the numbers are read in context without trying to make them sound better or anything like that. But the numbers have to be interpreted in context of two things. One, you know, what is the appetite for support for any rate increase for cable for any channel. Number one.
862. THE CHAIRPERSON: Did you measure that?
863. MR. K. YIGIT: Unfortunately no, not in this instance. Not in this survey research, but generally speaking, of course, people will tell you that they are tired of rate increases.
864. Having said that, there is an expectation that there will always, each year as the price of bread maybe goes up by two or three cents, that it will rise by a few cents. That is not going to get people to take to the streets if I could put it in those terms.
865. But if you look at Vision as a niche broadcaster, with appeal to somewhere in the neighbourhood of one in three Canadians or one in three cable subscribers, the support level is really arguably consistent with the viewership or even the knowledge and understanding of the channel.
866. If I did a survey today of support for a rate increase for YTV, let's say, okay, a well-known channel, a big audience, but really when you get down to it, relevant to something like 35 per cent of Canadian households and no more. I may get those 35 per cent of Canadian households saying they are in support and another 15 per cent coming along for the ride.
867. The point I'm trying to make is when asked these questions in this context, the days where you could get majority support anything are well past. They were in the early nineties, maybe really early nineties. For niche services you will get the segments that those services speak to coming along and supporting you for any initiative like this. And others may be -- and what you are hoping for is that there isn't hard opposition, meaning there isn't a large number of -- group of people who say, "Oh, I'm really strongly opposed to this," and that kind of thing.
868. THE CHAIRPERSON: Is that how you would read this?
869. MR. K. YIGIT: Sorry?
870. THE CHAIRPERSON: Is that how you would read this situation? That there is -- I mean if you are saying the best we can hope for is no hard opposition, is that ---
871. MR. K. YIGIT: Well, I think we ---
872. THE CHAIRPERSON: I guess what I am asking is ---
873. MR. K. YIGIT: Yes.
874. THE CHAIRPERSON: --- what is the usefulness of this information to ---
875. MR. K. YIGIT: Purely that. I mean if I ask people, do you want a rate -- nobody wants a rate increase. We know that. But will you take to the streets if there was a rate increase of this magnitude, that is more relevant for the Commission I would argue. But I don't want to step out of the bounds of what we reported here. But if you were trying to figure out how to place any kind of research of this sort, support is much more context driven in this instance.
876. THE CHAIRPERSON: Okay. Thank you.
877. So I guess what I would like to do, just on the issue of the rate increase before I move on to the other issues, is sort of wrap up by offering you an opportunity, Mr. Roberts, to sort of on a philosophical level and a practical level, I guess, explain why you think passing a rate increase through to the entire subscriber base is justified in this instance.
878. Let me just create a bit of context for you, which is that the Canadian analogue specialty service industry is a big success. There were certain decisions, regulatory decisions made in the mid-eighties about how to create that industry, about how to create Canadian panels and Canadian content and that included giving the analogue specialty services, some of which were licensed as recently as 1996, preferred status, a lot of regulatory support, a rate which you originally did not have, the sometimes carriage on basic, sometimes on discretionary or basic if agreed, modified dual status.
879. That was a very heavy time I think for specialty channels because their business plans were guaranteed. They knew that they had revenues coming in from certain streams and they knew that they could turn a profit if that is what their motivation was based on that scenario, and the subscribers were the big supporters of that regulatory initiative. We have built an immensely successful Canadian broadcasting system on that basis.
880. But times have changed. Now we are moving to digital and the whole push to digital is subscriber choice and putting that choice back in their hands and offering them the opportunity to be able to choose, for once, what they are going to see instead of having to buy in bulk in the analogue environment where you get tier 1, tier 2, tier 3. That is the way it is, that is what you are offered. Sort of like the commercial with Mike Bullard, you know, here you go. That is what you can have. They are finally going to be able to choose.
881. When I made the comment about the triumph of hope over experience a little earlier, and you look at sort of the recent decisions coming out of the Commission, I think certainly they are pointing in that direction. Why shouldn't they point in that direction for you?
882. I mean you have had many of the same benefits and supports. I hear what you say about the losses that you have suffered. Could it be that you were inattentive? The same way that you were inattentive to your Cancon by outsourcing it. Inexperience and frugality, I think are the words that you used in your opening remarks.
883. Is it possible that those losses flowed partly from that, from an approach to -- I don't know. I don't work there. But these are questions that I have to ask because what you are asking is a lot. What you are asking of subscribers is a lot so I have to ask you a lot in return in terms of justifying it. So I guess I would like you to sort of talk about how that environment, the regulatory environment has changed and why you should be an exception to that?
884. MR. B. ROBERTS: Thank you, Madam Chair. I think Susan is going to want to speak to part of this as well and I do believe there will be a chart coming up at Susan's part of the response. But an important question.
885. Why is it a lot? Our rate increase that we are requesting of the Commission can be characterised somewhat as follows: 0.4 of 1.0 per cent of the basic cable rate is another way of characterising that rate. I also heard this morning, just to show I was paying attention, heard this morning that there was another licensee before you who claimed that 11 per cent PBIT was insufficient and inflexible and difficult to wrestle with.
886. I think you would make a collection of right arms at this panel if we could get 11 per cent. We are operating at about 1 per cent, and as I repeat, three of the last four years at a loss and this year the most profound loss.
887. Was it a matter of mismanagement? No, it was a matter of being frugal. It was a matter of being frugal with the intention of maximising our contribution as a distinct public service entity within the broadcasting system as a not-for-profit, as a charity and not wanting to invest in the -- necessarily in the infrastructure, hence the third party farming out, but to put it on the screen and to put it into the hands of independent producers, not into shareholders, not into dividends.
888. I made reference to, and perhaps it would seem somewhat in jest, the best technology of the late 1970s and early 1980s. It might be a little amusing but it is also true. This broadcaster, this licensee has put it into content, not into infrastructure. If we are going forward into a world, which is increasingly competitive, this broadcaster needs to be there with regard to infrastructure and technological investment where it is not simply going to be a matter of being under water, it will be thoroughly submerged.
889. I would like to think that what we are asking for is a relatively modest investment in the ongoing distinctiveness of the Canadian broadcasting system. I have also mentioned that it is not inflation. This is dealing with competitive pressures and it is also a broadcaster that is broke and yet still pulls out all the stops to put on the screen that tremendous contribution to Canadian content and to independent production community.
890. I think one of the other issues that Madam Chair alludes is one that hasn't really been fleshed out here too much and it is, is there a future for divergent and alternative voices in the Canadian broadcasting system. In an era where convergence and merging and bigger is the theme, can not-for-profit, charitable, alternative, public service entities survive especially where they can't access capital markets? This is an important question. Susan.
891. MS S. BOWER: Thank you, Bill.
892. We prepared a chart for you to illustrate our profitability challenge and the downward trend that we are facing. The blue line is the average profitability, PBIT for all English specialty channels. It is about 16.8 average over the last five years, six years and Vision is at a 1 per cent PBIT and a declining trend. The reasons for that are the increased costs of original Canadian production, the higher triggers required to access the funding bodies, increased competition so pressures on wages and salaries, need to replace capital equipment.
893. We have presented to you a restraint model that if we didn't get a rate increase what kinds of restraints we could impose on our operation. They are fairly significant. They begin with advertising and promotion but they also then go to basic administration costs and then they end up affecting programming.
894. This is an operation that takes very seriously it's commitment to original Canadian production. We take very seriously our commitment towards balanced spiritual programming and it is one that requires -- needs a rate increase to continue to support it.
895. THE CHAIRPERSON: With respect to your non-compliance on Cancon and, you know, I certainly -- I acknowledge the work that you have done with independent producers and the incredible work that you did trying to reconcile the discrepancies in the numbers for the last four years. As I said, Mr. Roberts, you were very eloquent in your apology. And I probably shouldn't even mention this person in the same breath as Vision TV but it reminded me of Machiavelli, which I studied in first year university, who said if you are caught red-handed, you may as well just admit it, apologise and get on. Because people forget pretty quickly if you are humble.
896. I guess what I want to find out is you have talked about what you have done a little bit in terms of bringing this activity in-house and adding staff in order to be able to monitor it better. Could you just describe in a little bit more detail for me what exactly you are doing?
897. MR. B. ROBERTS: Yes, Madam Chair, although I think I would have preferred some allusion to Leviticus as opposed to Machiavelli.
898. THE CHAIRPERSON: I know. I said I hesitated to mention it.
899. MR. B. ROBERTS: And well you should. Well, you should have.
900. But I think in Leviticus there is some paragraph that refers to every seven years having the wisdom to forgive if someone transgresses.
901. THE CHAIRPERSON: Leviticus isn't the one that Dr. Laura was quoting. It might have been.
902. MR. B. ROBERTS: Madam Chair, I am going to turn this over shortly Joan because she is putting those instruments in place. But I want to kind of try and stick to the message here a little bit.
903. This is a good broadcaster. This is a good licensee. This is a licensee who is zealous about creating and nurturing Canadian content and overreaching in that nourishing and that exhibition of Canadian content.
904. What it has not been so good at is counting. It has invested in the creation and exhibition but not in the infrastructure of counting.
905. THE CHAIRPERSON: It actually hasn't exhibited the amount that it is supposed to. So that is not just necessarily accounting.
906. MR. B. ROBERTS: Well, we might come to that in what is actually logged and counted versus exhibited. But yes, I admit, we dropped the ball. We dropped the ball and we have taken precise measures to correct that, to pick that ball up and run with it.
907. For the first time in Vision's 13 year history, we now have a planned 52 week schedule. So we know where we are going to be with regard to Canadian content.
908. Now, this has also been a systemic issue with other broadcasters and specialty services and I recognise that and the CAB has become involved as well. But internally, this is the first agenda item on a bi-weekly basis for our executive management committee from now going forward.
909. THE CHAIRPERSON: We are so glad to hear that.
910. MR. B. ROBERTS: Leviticus.
911. We will be in compliance. I have said to staff and to others, we will be in compliance if I have to dance under a halogen bulb in our studio, we will be in compliance. I will turn if over to Joan.
912. MS J. JENKINSON: Thank you, Bill.
913. My position as the Director of Programming Operations at Vision TV is a new one as of May of this year. It is now my responsibility to develop, implement and monitor systems to ensure compliance. We have completed a thorough review of our programming system and we now have a complete understanding of the causes of our deficiencies and how to correct them. As a result we have put the following measures into place.
914. First, software. We now have a comprehensive software solution for program inventory management and scheduling. The software is used to project Canadian content level during the schedule planning stages. Before we programmed by season, now we program on a 52-week schedule, as Bill has mentioned. We can now monitor the Canadian content of the schedule on a daily basis and any corrections to the schedule, if needed, will be implemented immediately to ensure the year end totals achieve 60 per cent.
915. Second, staffing. The programming department has increased to ensure greater efficiency. To eliminate the tracking problem, I am now overseeing the work of three people who will, as part of their job, be responsible for the following: calculating and monitoring Canadian content levels; bringing in-house reporting to the CRTC; reviewing errors and omissions reports; resubmitting reports; maintaining regular contact with CRTC staff to keep abreast of changes; and making timely corrections and adjustments as required; obtaining CanRec and CAVCO number for as many programs currently in our inventory as possible; and for programs for which we are unable to obtain numbers, they will be hidden or archived in our system. So now we have four people doing the work and taking on this responsibility where previously there were none.
916. And thirdly in our business affairs policies, we have decided that no program will go to air without the proper certification and documentation that it is Canadian content. We will treat all programs without numbers as we would foreign content.
917. On a go forward basis as part of the deliverables that we are requiring of producers, they will have to show us proof of application at the principal photography stage, which will allow the producers enough lead time to apply and to account for any delays in the process.
918. On final delivery, programs requiring CanRec or CAVCO numbers will not be accepted without these numbers. So we are confident that these changes that we have made will ensure compliance this year and in the future.
919. MR. B. ROBERTS: I'm having fun embroidering on some of these things.
920. Let me be clear, we will never be in non-compliance, not this year, not ever on a going forward basis.
921. THE CHAIRPERSON: Well, that is good. You just answered the question I was going to ask you, which I learned from the Vice-Chair. Can you ensure us that you will never be in non-compliance?
922. MR. B. ROBERTS: Not now, not never in non-compliance.
923. THE CHAIRPERSON: Okay. If we were to go away and not feel confident in your assurances and decided that we were going to impose some kind of a condition of license to ensure that you are going to be better at tracking your Cancon and reporting it, for example, over a six month period rather than over a yearly period, what would be the impact? I mean from the sounds of it with the service -- the staff that you have got in place and the system that you are developing it should be no problem for you to report every six months as opposed to every year.
924. MR. B. ROBERTS: I think we would be prepared for that undertaking, yes.
925. THE CHAIRPERSON: Now, I said earlier that I thought you had clarified in one of your deficiencies, your carriage question. Is that correct? You are not asking for anything specific now that the decision has come out with respect to ---
926. MR. B. ROBERTS: That is correct, Madam Chair. There was some uncertainty at the time of filing of our -- given the time lag, et cetera, with regard to filing our application. But our existing carriage status with regard to dual status along with the developments along access rules and the Class 1 clarification, we are fine.
927. THE CHAIRPERSON: Okay. You did make a comment, I think, with respect to the transition to digital. But, of course, that is being discussed in another forum. So I think we can leave that.
928. Just a few other matters to wrap up with. You have done a lot in the area of cultural diversity and I think that you have probably heard, coming out of the group TV renewals for CTV and Global that we are going to be setting up, there is probably -- it's not "we" necessarily, but it looks like there will be an industry task force of some kind. And would you be prepared to participate in that and fund -- and don't come back and say if we get our rate increase, we will -- but fund the participation of one of your staff members in that task force in terms of developing some strategies system-wide?
929. MR. B. ROBERTS: Absolutely.
930. THE CHAIRPERSON: Okay. Descriptive video. Did you follow the Group TV renewals? And you are familiar with the offers that have been put on the table by both Global and CTV with respect to descriptive video?
931. I think that you have said that it is your position that it is inappropriate, it is an inappropriate time for the specialty services to be required to do described video programming. Has your position changed at all since you heard about what the conventional broadcasters are prepared to do over their licence term?
932. MR. B. ROBERTS: Yes, an important question and I will actually ask Erika to contribute to the response. But yes, it is a very important initiative especially with the ageing population that Vision serves. But at the same time, as a charity and as a not-for-profit, I don't think we can ignore the economics of descriptive video. CanWest and CTV with revenues approaching about $1 billion a year each over their licence term are talking about four hours a week. So our capacity is a little limited here given our current financial straits or given the fact that we are broke.
933. So yes, we are interested in following these trends. We are interested in seeing what happens in the United States, but there is some financial capacity that still makes it price prohibitive. Erika.
934. MS E. KRAMER: We have been in touch with AudioVision and are actually looking at their catalogue of programs which are available which have been described. Unfortunately there is not too much in their catalogue right now which fits in within our mandate, Paul I think ---
935. THE CHAIRPERSON: This is the NBRS library.
936. MS E. KRAMER: That is right. Yes. And it would be a reasonable amount of money to license a described version of a program on occasion if we do find something in their catalogue that fits in with our mandate. But the other thing that we need to consider is the technical distribution of described video and what we might do is if we can find a program is run it in open description, which would increase awareness.
937. We are also working with industry associations such as the CAB and the Canadian Satellite Users Association looking at alternative means of distributing described video, which would make it a little more cost-effective and a more widely available.
938. THE CHAIRPERSON: Okay. Thanks. I am sure you are aware that in the TV policy we encouraged some movement in that area and after a couple of years discovered there had been none. So it was really gratifying when the networks came forward and made these offers and said yes, they were actually going to do something. Of course, the decision in the US has helped. There will be a supply there and there is some stuff going on in other countries.
939. Now, captioning, I just want to ask you about your numbers. If you look at 9.4.2 of the actual application form and the numbers of captioning that you have done is 2,460 for year six. Then for the new term you are projecting 4,022, that is with the rate increase. You have a lot of extra money there to pay for captioning, I guess. That is a huge increase in captioning hours. You are going from 2,400 to 4,022 right off the bat next year and maintaining that level right across. So how do you get there that fast?
940. MR. B. ROBERTS: I'm going to let Erika respond to how do we get there that fast, but I would like to underline why we get there.
941. Given the nature of our audience and I referred to the nature of our audience in the previous line of questioning around descriptive video, but we are committed as Vision, as a public service entity, to optimal access for all of our viewing audience. So this is a very important undertaking for us and we treat it as a real priority.
942. THE CHAIRPERSON: So it's really a philosophical choice that you are making to increase?
943. MS E. KRAMER: We have actually been working towards captioning our entire Cornerstone library and this year, by the end of this year, we project we will be at 3,200 hours. So it won't be quite a stretch for us to reach 4,200 next year.
944. THE CHAIRPERSON: Okay. It seems like a big jump in one year to go that many hours. But that is why I thought I would ask.
945. Finally, with respect to your nature of service, and I actually meant to touch on this when I was going through your financials. But you want to add, right now your COL 1B, I believe, says that 90 per cent of your programming has to come from Category 4 and you want to add Categories 12, 13 and 14 to that. So interstitials, public service announcements and infomercials.
946. The interstitials and PSAs I think are fairly understandable. You already have 10 per cent of your schedule that you can do virtually anything you want with. You can use any category you want. So what would the effect be of adding those categories to COL 1B, which is 90 per cent has to be from Category 4. Are you proposing limits on any of those and I mean, you are talking about including infomercials now in the 90 per cent that is supposed to be religious programming. Are they going to be religious infomercials? I'm being a little facetious but I'm just trying to ---
947. MR. B. ROBERTS: It went with Machiavellian, okay.
948. THE CHAIRPERSON: I mean you could fundamentally change if there are no limits attached to those or -- I mean we could say, no, this just doesn't make sense. But you could fundamentally change the nature of your service by -- not with PSAs and interstitials but infomercials certainly.
949. MR. B. ROBERTS: Thank you, Madam Chair.
950. THE CHAIRPERSON: Although, Mr. Buchanan and I did have a very interesting discussion about infomercials in 1999, which I haven't forgotten and how good they are.
951. MR. B. ROBERTS: Thank you, Madam Chair.
952. I am going to ask perhaps two or three people to contribute to the response here. First, Rita with regard to history of nature of services, to touch upon that a little bit. Secondly, Erika to deal with some of the logging aspects of this query. And then perhaps, lastly, legal counsel to address some of the implications on nature of service.
953. But in order to set this up a little bit, of the 2,400 intervenors, positive and negative, all of them supported the value and nature of our service. I think that we would be quite adamant in arguing that everything we do is religious. So it is a hundred per cent essentially, subject to some logging and other considerations. Erika -- excuse me -- Rita, I am wondering if you can speak to that from a historical perspective.
954. MS R. DEVERELL: We have no desire to change the nature of service, and it is interesting that this discussion has come up when we were licensed originally 13 years ago and at our renewal, whether there was any of our programming that was not religious. When we get down to that discussion, it is essentially a discussion about the difference between form and content. In content, our programming, all of it always has been religious. Even when we were licensed, we got into the discussion of how religious programs could be drama, could be music, could be documentary, that religious programs did not mean church services.
955. So we have never intended to change the nature of our service. Those three categories, however, are new categories that have been introduced into the logging system and we were updating to reflect that change.
956. So certainly you are correct that interstitials and PSAs fall within the religious parameters. Our interstitials certainly do. They are always faith based in content and PSAs, as well. You are also correct that infomercials, which we run in the middle of the night, are not religious, however they do meet our code of advertising standards.
957. MS E. KRAMER: In terms of logging, it probably would make more sense for us to log the infomercials as part of the 10 per cent and everything else under the 90 per cent. So it might be more accurate to have our conditions of license reflect that.
958. THE CHAIRPERSON: Well, I was just trying to figure out -- I mean, if we are saying that 90 per cent of your service should be religious programming and then a big hunk, or not a big hunk of it, but a hunk of it is infomercials, like what is that hunk and what is the 10 per cent? What is that? What is making up the 10 per cent and why are the infomercials -- I would assume looking at your schedule knowing what your COLs are, that the infomercials are being logged under the 10 per cent and not under the 90.
959. MS E. KRAMER: Yes.
960. THE CHAIRPERSON: So it just raised a red flag. It's sort of like well, you are going to reduce the 90 per cent with the infomercials so why would we do that. There would have to be some really good reason when you have already got the space.
961. MS E. KRAMER: I think we were just concentrating and not changing the nature of service.
962. THE CHAIRPERSON: Okay. So now you are changing.
963. MS E. KRAMER: We want to stay in -- well, we want to be able to reflect the schedules more accurately in keeping with the logging softwares.
964. THE CHAIRPERSON: Right. But then the infomercials would not become part of COL 1B?
965. MS E. KRAMER: No. Not if we were to make that change.
966. THE CHAIRPERSON: Is that right, Mr. Buchanan?
967. MR. G. BUCHANAN: I'm enjoying listening to this evolve. That sounds like that is correct. But it is all subject to 1A, which says "shall consist exclusively of interfaith religious programming." So I only raise that in the context of your suggestion that you can run anything you want. I know that was a hyperbole but ---
968. THE CHAIRPERSON: Right. Except that if you put infomercials in 1B, you will be out of compliance. Because your infomercials are not religious or multi-faith. Right? You are saying they are all subject to 1A? That they shall all be.
969. MR. G. BUCHANAN: I would not put it like that. I think where Rita was going with the non-religious has to do with Category 4 and not logged as Category 4 religion. You have got a Category 4 religion that says it's programming dealing with religious and religious teachings, including spiritual condition.
970. THE CHAIRPERSON: Right.
971. MR. G. BUCHANAN: And you have got an umbrella condition that covers all of your programming that says almost the same thing. It says "exclusively of inter-faith religious programming inspired by people's spirituality," and so on.
972. So I think you have reached a consensus that the logical thing to do is to have the 10 per cent that you were referring to at the outset capture the infomercials and move it out of what was proposed in 1B.
973. THE CHAIRPERSON: Right.
974. MR. G. BUCHANAN: And allow it to become part of the grab bag.
975. THE CHAIRPERSON: That is exactly what I'm saying.
976. MR. G. BUCHANAN: I think that makes a lot of sense.
977. THE CHAIRPERSON: So you wouldn't want it in 1B?
978. MR. G. BUCHANAN: It sounds like you are prepared to have it in one -- in the 10 per cent that is outside of 1B and that seems to make good sense.
979. THE CHAIRPERSON: Okay. That makes me happy. Does that make the lawyers happy?
980. Okay. So that concludes my questions. I will just see if any of the other members have questions before I turn it over to our legal counsel. Oh, we have lots of questions for you. Okay, Madam Vice-Chair, we will start with you.
981. COMMISSIONER WYLIE: How long have you been trying to resolve the Canadian content problem and how much financial energy has been put into that?
982. MR. B. ROBERTS: For a while and considerable. Erika, could I ask you to respond to this.
983. COMMISSIONER WYLIE: In terms of one physical year, six months? And what is the expenditure? I heard Madam Jenkinson, I believe, say that four people are involved in doing this. Obviously to get into compliance there appears from reading the application there has been a lot of energy put into it that will not continue at that level once you get it right.
984. So what has been the amount you have spent at it and the cost and on an ongoing basis how will it compare with sourcing it out, doing it in-house at the end of the day once you have cured the problem? Just to get a better feel of how costly this exercise has been in recent months or perhaps even years.
985. MR. B. ROBERTS: Madam Vice-Chair, I want to be clear about -- before I pass to my colleagues -- I want to be clear about what we have done with regard to third party or farming out our CanRec responsibilities. We have brought those responsibilities in-house, not on a temporary basis but on a permanent and ongoing basis.
986. COMMISSIONER WYLIE: Oh, I understand that. My questions was more all this energy into trying to cure the past, if you are right that you now have a system that will keep it going is obviously not going to continue or is it going to continue as expensive as it has been in the last year. You must have had people looking for producers and trying to backtrack and so on.
987. I just want to get a feel because what we have is the licensee says it is in crisis financially and we love to regulate, of course. But it is kind of difficult to hear you say we are in crisis and what we have been doing in the last year is expending our energy, meeting your regulatory requirements and your logging and the reporting and so on. So I would like you to put it in perspective financially for us.
988. MS E. KRAMER: In February of 2000 was the first time we became aware that there was a problem. It took us about two months to peel this onion and get to all the layers of what the different problems were. At that time we hired a consultant to help us refile our logs applying correct key figures to the programs.
989. We also invested in program inventory management and scheduling software, which is about $50,000 a year on an ongoing basis. We spent about $250,000 implementing the program. I'm not sure how much we spent on the consultant. Perhaps Susan has that figure. But another consultant was brought in to help us analyse our staffing needs in the programming department and as a result of that we hired Joan and the additional staff in programming to help us manage this on a go-forward basis.
990. COMMISSIONER WYLIE: So these additional employees and resources, in-house resources were not involved in correcting the past. They are going to be. And how will that compare to the cost of sourcing it out which did not -- was not very successful? Is it going to be much more expensive? We know it is going to be more successful because Leviticus or the Holy Ghost is going to get into it.
991. MS S. BOWER: It is in fact new costs for us. The sourcing out was rolled into the Commission structure for the ad sales, which was part of the logging. So it's a little hard for me to unravel exactly what it costs for us to be non-compliant. I can tell you be in compliance, it is about three or four salaries plus about half a year's worth of additional labour to do catch up in the past.
992. COMMISSIONER WYLIE: Now, if we eliminate the catch-up, would you say that on an ongoing basis being in regulatory compliance is going to be more expensive than in non-compliance? And you don't know the exact figure but ---
993. MS S. BOWER: In terms of the staffing and the resources it is about a quarter of a million dollars and then you have to overlay on top of that the licence fees for the program inventory and scheduling software that Erika has mentioned.
994. COMMISSIONER WYLIE: I gather you can't tell us how that compares with the sum which was rolled in with the Commission? You don't even have a sense of a ballpark figure?
995. MR. B. ROBERTS: We don't have a ballpark figure but it is a significant increase in terms of ---
996. COMMISSIONER WYLIE: In compliance.
997. MR. B. ROBERTS: Correct.
998. COMMISSIONER WYLIE: I only have one other question. You filed with a deficiency response, I believe, projected financial operations on an approval scenario what would be the effect of the seven cent increase.
999. Now, you also stated, I gather, that half of the increase would go to new programming initiatives and half simply continue the existing level of service, including, I gather, in that filing this additional resource for being in compliance would be under the expenses that are here in that appendix that you filed with the response.
1000. MS S. BOWER: Yes. The half of the rate increase is -- we have indicated that is for economic need or competitive pressures. It is also to keep us operationally whole and sound and compliance is part of that.
1001. COMMISSIONER WYLIE: Including the compliance.
1002. MS S. BOWER: Yes.
1003. COMMISSIONER WYLIE: But in the financial projections you have put to show what an approval scenario would give, are included the new programming initiatives as well?
1004. MS S. BOWER: Yes.
1005. COMMISSIONER WYLIE: Have you -- and I gather half would be the programming initiatives of the increase and half for being in compliance and continuing the existing level of service. Have you run this schedule with a 3.5 cent increase? In other words, taking out the new programming initiatives, staying alive and remaining in compliance.
1006. MS S. BOWER: We haven't run them specifically. We have considered what the impact would be and can't give you exact quantitative results but we do see the programming initiatives as central to the refurbishment and the replenishment of the schedule and for positioning Vision for the future in terms of increased audience and broadening the audience scope.
1007. If we didn't have the initiatives, then we perhaps wouldn't achieve the same levels of the growth in the advertising dollars and the fundraising growth.
1008. COMMISSIONER WYLIE: What does that mean that half of the seven cents would allow you to keep the same level of service. It means, since you don't have the new programming initiatives, more repeat of your inventory? What does it mean?
1009. MS S. BOWER: That is what it means is primarily a repeat of the inventory. Rita can speak to this more carefully than I can. But we also are aware of the increase. We have mentioned the increases in the licence fees and the triggers to access the top-up funding that is available.
1010. COMMISSIONER WYLIE: Yes. But I'm trying to figure out whether half of the increase -- you have stated that you were a licensee in crisis and that you need seven cents to stay out of crisis. By crisis I mean not being able to operate. And I think you have stated that half of the seven cents would allow you to maintain the existing level of service and perhaps with Leviticus and the Holy Ghost, lo and behold you would do not too badly. But you would do much better because you would have more programming initiatives, et cetera, et cetera, being able to refurbish more easily with seven cents. Would you be in crisis if you had a 3.5 cent increase is my question?
1011. MR. B. ROBERTS: Rita.
1012. COMMISSIONER WYLIE: I know you want seven cents.
1013. MS R. DEVERELL: We would be in less of a crisis if we had 3.5 cents but it is a bit of a downward spiral. The reason I say that is this would leave us not refreshing our programming, not reducing our repeat cycle and I will give you what for us is perhaps the most glaring example in terms of programming, which was an enormously popular program, is an enormously popular program called "Let's Sing Again."
1014. We have been unable to produce that program, new episodes for some years. It has a tremendous amount of audience involvement and so on and so forth. Checking the mail recently, we are starting to get literally complaints about the number of repeats of that program, and that is just one program. So it is a bit of a downward -- we can't really tread water.
1015. COMMISSIONER WYLIE: I haven't brought up my grandchildren yet in this hearing. So it would be like saying to the grandmother, "Not that one again."
1016. MR. P. de SILVA: If I may add, Madam Vice-Chair, there was a very direct connection with the CTF, for instance. The fact that we had to put more money into topping up the licence fees to get programming and we had to take it from somewhere, which was from the production of the "Let's Sing Again" program. So that is now becoming, as you say a grandmother complaining about it, "Not that one again." We certainly are getting those complaints. And in order to refresh that very important program to our core viewers, we need this money to produce those programs in addition to keep the independent sector alive and at the level of Canadian production that we would like to.
1017. COMMISSIONER WYLIE: If I look at the approval scenario in the second year of the new licence you would be in a positive cash flow. Correct? You haven't run how -- what would happen if it were a lower increase, four cents, three cents?
1018. MS S. BOWER: No, we haven't run those specific iterations. Just to underscore though that in terms of being in a positive cash flow, we have to understand that in context again for a service that only has $1.8 million in net assets, that is really only two and a half months of operating cash. So as the business grows and the operation becomes more expensive, you need a little more cash each year to be solvent and to be able to pay payroll on time.
1019. COMMISSIONER WYLIE: That would be the scenario of the existing level of service including repeat "Let's Sing." Thank you.
1020. THE CHAIRPERSON: Commissioner Cardozo.
1021. COMMISSIONER CARDOZO: Thank you, Madam Chair. Just three quick questions and I don't want to take too long. I see your intervenors and supporters are here. I wouldn't want to bore them into leaving.
1022. In 1997 when we had the hearing for the licensing of Cross Roads, Vision expressed quite a bit of concern there and a concern that you would lose viewership to Cross Roads, especially in the Toronto/Hamilton area. How did that fair? How has the licensing of CTS affected Vision? How has it affected your numbers? Do you have any sense of that?
1023. MS R. DEVERELL: In fact, the year from the move in the GTA to Channel 60 to the licensing of Cross Roads, which was, I think, precisely a year was when this sharp audience decline happened. I suspect that it is related to two things, the main one being channel position. The multi-faith broadcaster is less accessible at Channel 60 than the single faith, the balanced broadcaster at Channel 9 in more than half the television sets in Canada.
1024. The other thing is there are certain overlaps in programming and in the construction of the schedule. So both of those factors -- you can get there faster and do some of the same things. So it did precipitate a drop in audience.
1025. COMMISSIONER CARDOZO: A drop in audience but your revenue numbers had been largely increasing or steadily increasing over this period?
1026. MS R. DEVERELL: Susan, do you want to answer that?
1027. COMMISSIONER CARDOZO: Did it affect your revenues?
1028. MS S. BOWER: The way it affected our revenues is we believe we didn't achieve the audience advertising sales that we had expected and had planned for. So that was the primary direct impact.
1029. COMMISSIONER CARDOZO: On the matter of cross-promotion, Mr. Roberts, you mentioned as a standalone service you don't have the abilities that other integrated companies might. But as I recall about a year ago, if not more, you signed or began a cross-promotion agreement with APTN, if I am not mistaken. Is that the kind of thing you can still do? Does that -- I mean are there other public service broadcasters that you can cross-promote with, have agreements of cross-promotion?
1030. MR. B. ROBERTS: Yes, Commissioner. I think by and large those sorts of cross-promotion opportunities amongst not-for-profit or public service broadcasters still deal with market values. What I was referring to earlier was cross-promotion within a corporate entity where it is a heavily subsidised cross-promotion, where there are internal synergies which simply aren't available to independent or standalone entities.
1031. COMMISSIONER CARDOZO: Do you see yourself, like just in terms of the kind of cross-promotion that you have or have had going with APTN, do you see those expanding or continuing?
1032. MS S. BOWER: Just to clarify, Commissioner, it really wasn't a cross-promotion relationship. It was us providing services to them in affiliate relations and basically it was a cost-recovery ---
1033. COMMISSIONER CARDOZO: I understand that. I thought that you were going to be promoting their channel and they were promoting yours. Have I got that wrong?
1034. MR. P. de SILVA: May I make a comment, Commissioner Cardozo?
1035. COMMISSIONER CARDOZO: Please.
1036. MR. P. de SILVA: I think that there was no formal arrangement in terms of cross-promotion. But there was quite a bit of discussion about co-producing programs where Susan has referenced the shared sales activities as well as the cable affiliate activities. But there was discussion about co-production and that has increased a bit. In fact, Mr. Cherniack, who is one of our intervenors here today is a case in point of a major landmark program, a five-part series of Alkali Lake that is being done with Vision as a first window and APTN as a second and there are several others in development.
1037. So I think our focus was in terms of co-producing programs that would result in cross-promotion eventually.
1038. COMMISSIONER CARDOZO: Well, that leads to my third question which was shared windows. You had mentioned "Journey to Little Rock," and I know a little bit about this because the protagonist, Mary-Jane Brown is a personality here in Ottawa. We have some local personalities and she is one of them.
1039. As I understand that film, that is shared with other -- other networks have windows in that film as well?
1040. MR. P. de SILVA: That is correct. I believe WTN and SCN and Knowledge Network have windows and it is a particular case in point where the initiating broadcaster was Vision TV. But in order to make the numbers work for CTF and the other funding, it is necessary to bring second windows in. But we were the initial investor in terms of both the development and for financing the first window broadcast.
1041. COMMISSIONER CARDOZO: So do you find yourself at Vision doing more shared windows than you might have done say five years ago?
1042. MR. P. de SILVA: I would say we do more shared windows now. I think there has always been the two kinds of programs that we have done. One is the kind of core value programs that have -- it's only application, if you will, or only broadcast window on Vision TV. They are the kinds of programs, a lot of them that have been done by the sleeping giant production company, Life After Death, the Dreams Program, et cetera. Then there are others that have a cross-over, that may have a second window on. We have done, in fact, shared windows with Bravo! for instance. We in this case had a second window arrangement with WTN on a series called "Mystic Women of the Middle Ages," and then we flipped. We took a second window on a series called "Spiritual Journeys."
1043. So to answer the question, I think there is definitely an increase in the number of second and third windows now that has been triggered by the fact that you have to have a higher licence fee now to trigger the CTF. So it is forcing producers to go around and get those second windows prior to production as part of the pre-sale package rather than as a post-production sales scenario.
1044. COMMISSIONER CARDOZO: (Off mike) -- would it not?
1045. MR. P. de SILVA: Yes, very much so. In fact, this was a major topic in terms of recently as, you know, the hot box conference was -- I was on a panel with all the major documentary commissioning editors. Everyone says we want first windows in terms of landmark programming. So there is an increased competition for first windows, which means we also would like to have first windows particularly in programs that are core to our genre. But that means in order to trigger the financing for it that we have to anti up. I have seen licence fees for instance go from when I joined Vision as Head of Independent Production of limits of 15,000. They are now peaking at about 55-60, in order to get those first windows.
1046. COMMISSIONER CARDOZO: Okay. Thanks very much.
1047. Thank you, Madam Chair.
1048. THE CHAIRPERSON: Commissioner Cram.
1049. COMMISSIONER CRAM: Thank you. I guess my first question is that, Mr. Roberts, you said that the cost of monitoring the Canadian content is significantly higher. I find it difficult to understand that because you don't know what the costs were in the first place. In order to give us some idea, when was this contract first entered into and maybe if we looked at that financial year versus the year before, we could ascertain some costs of the contracting out. Are you doing that, Ms Bower, right now?
1050. MR. B. ROBERTS: The contract for services, I believe, began in 1988 and perhaps I wasn't clear. It was my supposition that they would be significantly higher given that this was a fee built into another fee structure. But I would ask Susan to be more specific.
1051. MS S. BOWER: I think probably a comparison to the beginning of the commission structure wouldn't be accurate because a lot of what was required from the commission wasn't in place at that point. But if we just look at the past couple of years, probably what is built into our commission is probably 1 per cent of the total commission would be -- if the commission is about 13 per cent or 14 per cent. So if we assume 1 per cent of that is related to servicing, because I think it is understood that about 12 per cent is industry average for commission on sales, somewhere in that area, 11 to 12 per cent.
1052. So it is a very, very small amount that we would -- if we are able to negotiate a recoupment of that, given that our gross advertising sales are only 1.4 million. You know, we are talking about probably recouping less than $10,000 on an annual basis from a sales agent versus now having three or four salaries plus our own programming inventory and scheduling system in place. So it's a very minuscule amount.
1053. COMMISSIONER CRAM: I would expect next year or the year after or the year after, that the computer will be able to handle almost all of the issues of monitoring. I mean once you -- the software system is set up, it really is not going to take four people full time to monitor the Cancon compliance. I just have a lot of difficulty in believing that.
1054. MS S. BOWER: It's not just putting numbers into the computer system, which is a straightforward data entry task. But because of the high number of independent sector and one-off programming that we do commission, there is a lot of tracking and monitoring of the relationship with those independent producers and ---
1055. COMMISSIONER CRAM: So it is more in the commissioning of the work ---
1056. MS S. BOWER: Yes.
1057. COMMISSIONER CRAM: --- that other broadcasters would have to do anyway. They would have to do the same thing, wouldn't they?
1058. MS S. BOWER: Yes, there certainly is parallels there. We have a much higher percentage of our inventory coming from the outside.
1059. COMMISSIONER CRAM: That is another thing that I wanted to get into because I was getting confused.
1060. Forty-five (45) per cent of your total programming is Mosaic programming over which you have -- you are paid to air it and there is no advertising. Out of the remaining 55 per cent, how much is acquired programming? Because we got into 45 per cent of something and I didn't understand if we could break it down. Forty-five (45) per cent is Mosaic, 55 per cent is left. How much of that is acquired programming?
1061. MR. B. ROBERTS: I would like to ask Joan to respond to that.
1062. MS J. JENKINSON: As I said, 44 per cent of our total Canadian programming is programs that are licensed by Vision TV.
1063. COMMISSIONER CRAM: If you say 44 per cent of your total Canadian time, then that is -- I then would do 44 per cent by 60 per cent to end up with 24 per cent would be acquired Canadian programming?
1064. MS S. BOWER: That is correct.
1065. COMMISSIONER CRAM: Of your total time. So then the remainder is in-house.
1066. MR. P. de SILVA: It is a combination of in-house and pre-sales, Madam Commissioner, of independently acquired programming.
1067. COMMISSIONER CRAM: So would that not also be acquired programming?
1068. MR. P. de SILVA: Yes.
1069. COMMISSIONER CRAM: So as a percentage of a hundred, excluding the Mosaics, which leaves you with 55 per cent left, how much is acquired programming in that very contentious market that you are -- that competitive market that you are talking about?
1070. MS R. DEVERELL: Just to leap in here for one moment. It is not 45 and 55. It's 45 and 45 because of the 10 per cent that we were just talking about earlier.
1071. COMMISSIONER CRAM: Okay. So out of that 45 per cent how much is acquired programming that is in that very competitive rights market?
1072. MR. P. de SILVA: Sorry. Go ahead, Joan.
1073. MS J. JENKINSON: About 10 per cent of our programming is programs that we do at the Canadian programming, programming that we do in-house. The other 90 per cent we either acquire or do commission with independent producers.
1074. COMMISSIONER CRAM: So then 41 per cent of the total programming then is acquired programming?
1075. MS J. JENKINSON: That is correct.
1076. COMMISSIONER CRAM: Thank you.
1077. I found it interesting when you were talking about the purpose of the increase. Have I got it correct that half of the increase would be to maintain where you are, but the other half would be these new programming, this new four hours? Is that correct?
1078. MR. B. ROBERTS: That is correct.
1079. COMMISSIONER CRAM: Why didn't you at the same time volunteer to increase your Canadian content then? Because if that adds up to four hours, and believe me, my colleagues know me as a mathematician, four hours a week out of 126 hours, that adds up to three per cent. You play it twice in a week, that is 6.6 per cent.
1080. So if you want us to give you something, i.e., a rate increase, for something that you say is an increase in Canadian content in new programming that will be four hours a week. And if it is played twice, eight hours a week, 6.6 Canadian content. Why wouldn't you offer to increase your Canadian content to 66.6 per cent, I gather?
1081. MR. B. ROBERTS: If the Commissioner is suggesting that perhaps moving from our 45 per cent condition of licence with regard to expenditure on Canadian content to ---
1082. COMMISSIONER CRAM: No, percentage.
1083. MR. B. ROBERTS: Exhibition.
1084. COMMISSIONER CRAM: Yeah, exhibition. Four hours out of 126, which is six to twelve -- six to twelve to twelve, 18 hours a day.
1085. MS E. KRAMER: We need the new program initiatives to replenish some of the content we are repeating over and over again on the air. There are some programs that we have run eight times, eleven times in the last five or six years. So it is not additional Canadian content but it is to replace some of the ageing Canadian content.
1086. COMMISSIONER CRAM: Oh, I thought that was just the cost of maintaining what you got now. I thought that was what the 50 per cent was for, was maintaining what you had now and then the other 50 per cent was for the new programming. But the new programming is not going to be additional or incremental programming. It is going to be replacement programming of your present Canadian content. Is that it?
1087. MS E. KRAMER: Yes, some of it.
1088. COMMISSIONER CRAM: So then I'm having a problem distinguishing between the 50 per cent that is going to maintain your present commitments and the new programming. Because some of it is not going to be essentially incrementally new programming, is it?
1089. MR. B. ROBERTS: That is a question we hadn't anticipated, but let me begin a response.
1090. If what the Commissioner is suggesting is that we would move, let's say, 60 to 65 per cent in prime, that would be a condition of licence we would consider. Yes.
1091. MR. P. de SILVA: I would also like to add, Madam Commissioner, that there are implications of repeat factor here as well that if we were replacing some of the programming, that means replenishing. That in order to balance the 60 per cent, we would naturally have to also, if we were increasing, you know, in terms of, yes, we are going to be creating new programming and we are taking on some old programming. But in order to maintain the levels that we are doing, we also have a very significantly high repeat factor. So it would affect the repeat factor. So I would want to be crunching those numbers before I committed to increasing our Canadian content in terms of what the implications for repeat factor might be as well.
1092. COMMISSIONER CRAM: You see my problem is I just want to see what the money is for. Forty million you say is to keep you where you are at, which is the 3.5 per cent. The other 40 million is for new programming and you have named four programs, four hours, and it doesn't sound like it is new Canadian content. It doesn't sound like it is incremental Canadian content to me, which is the impression I had from when you said 50 per cent is to maintain where you are at and the rest is for new programming.
1093. So what is the 50 per cent for new programming? Is it new incremental Canadian content or no? Is it simply to maintain your present Canadian content commitment and replenish or replace programming that is presently on?
1094. MS R. DEVERELL: It is new Canadian content. But as Paul says, there is still the factor of reducing our number of repeats. As our revenues have grown, we have lessened our repeat wheel each term of licence. So it is new content. But we are also retiring repeated programs.
1095. COMMISSIONER CRAM: So is one-half of this increase for incremental Canadian content programming on your station -- on your channel or not?
1096. MR. G. BUCHANAN: Can I give a comment from the back row here, Commissioner Cram?
1097. COMMISSIONER CRAM: Sure you can.
1098. MR. G. BUCHANAN: It sounds like the way you are posing the question is that the only way this could be incremental is if the Canadian content level rose.
1099. COMMISSIONER CRAM: That is exactly what I am saying. Incremental Canadian content.
1100. MR. G. BUCHANAN: And I think the answer is it's incremental Canadian content that would not otherwise get made, but it's replacing old stale Canadian which will be taken off the schedule and replaced with it. So incremental, I think the word is tripping us up here. You are looking for a quantitative incremental as opposed to a replacement incremental and what I heard Mr. Roberts start down the road was if what you are looking for is incremental dollars and performing the alchemy of converting those dollars into incremental Canadian content, he thought you were headed towards the revenue condition which may make a lot of sense.
1101. COMMISSIONER CRAM: So then I will summarise. The increase as requested will not result in any increased Canadian content exposure on this channel.
1102. MS E. KRAMER: I would like to elaborate just a little bit.
1103. COMMISSIONER CRAM: Well, that is the question. Is there going to be more Cancon on the channel or not?
1104. MS E. KRAMER: There will be unique Cancon.
1105. COMMISSIONER CRAM: Is there going to be more?
1106. MR. P. de SILVA: We would not be looking to increase the 60 per cent Canadian content because of the new initiatives.
1107. COMMISSIONER CRAM: Thank you. That was my question.
1108. My next question comes to -- and I know we are not talking about the foundation tier. But in the event that something like a foundation tier is considered, and in the event that Vision would be in that, I hear you, Ms Bower, saying that all of that money would go to Canadian content if you made more money as a result of being in a foundation tier or any increased revenue. Is that correct? Above that being budgeted.
1109. MR. B. ROBERTS: Yes, I think what Susan was referring to, and I stand to be corrected, is that any surpluses beyond our budget forecasts would perforce go directly to the screen, go directly to Canadian content.
1110. I'm not sure that is necessarily related to the foundation tier concept but that is related to the nature of Vision TV itself as a not-for-profit.
1111. COMMISSIONER CRAM: So then my concern is if we do grant you an increase and if, and of course based on your -- your presumptions are based on present day presumption, not if there were a foundation tier and if Vision were placed in a favourable place as a result of that. What would happen to the moneys, the unexpected revenues that you would receive as a result of being on a foundation tier? Would that all go to Canadian programming?
1112. MR. B. ROBERTS: Yes, it would.
1113. COMMISSIONER CRAM: And would you, if that should happen in the meantime between today and your next renewal, you would report that in your next renewal to the Commission on the moneys you have -- the unexpected revenues you would have received?
1114. MR. B. ROBERTS: Correct.
1115. COMMISSIONER CRAM: Thank you. That is all my questions.
1116. THE CHAIRPERSON: Commissioner Williams.
1117. COMMISSIONER WILLIAMS: Good afternoon. I have a question for Mr. Roberts or Ms Bower.
1118. What is the interest rate on the proposed loan to Vision Digital?
1119. MR. B. ROBERTS: We are looking it up.
1120. COMMISSIONER WILLIAMS: Okay.
1121. MS S. BOWER: I think I put it in at 8.75.
1122. COMMISSIONER WILLIAMS: Okay. That is my only question. Thanks.
1123. THE CHAIRPERSON: Legal counsel. One moment, please.
1124. MR. G. BUCHANAN: Madam Chair, I had one additional item to raise and it was suggested to me that perhaps before we turned to legal, it might be a good time to do it.
1125. THE CHAIRPERSON: Okay.
1126. MR. G. BUCHANAN: That relates to the condition of licence regarding the Board of Directors. It currently says "The Board shall consist of nine members." During the run-up to this, we thought it might make a little more sense to have it say a minimum of nine members and a maximum of say 12 members in order that when someone resigns, you would not be left out of compliance. It seemed all other terms and conditions of that would remain the same, including the diversity of the different religions and so on. But it was a housekeeping matter where I don't think anyone had focused on the fact that it did not say a minimum of nine, it said nine. So we wanted to raise that and if we could deal with that as a housekeeping matter, it would save us having to apply later to change it.
1127. THE CHAIRPERSON: You don't really want an even number on the Board, do you?
1128. MR. G. BUCHANAN: It speaks to the nature of Vision that that is not the kind of board it is.
1129. THE CHAIRPERSON: Just checking.
1130. Ms Bennett.
1131. Maybe while we are waiting for counsel, I could just go back to saying that the outsourcing of the monitoring of your Canadian content was quite minuscule because it was 1 per cent. Is it 1 per cent of the 13 per cent or is it like just less than 10 per cent of that total amount?
1132. MS S. BOWER: I referred to those figures because if we contemplate what we could recoup of the commission, I think that is probably all we would be able to recoup against the new costs that we now have. So I just wanted to give Commissioner Wylie some response in terms of the costs.
1133. THE CHAIRPERSON: Do you have any notion at all of what that would translate into in terms of dollars?
1134. MS S. BOWER: Yes, it would be less than $10,000.
1135. THE CHAIRPERSON: Less than $10,000. And the four people that you have got, the only function they will be performing is monitoring of Canadian content or they will be doing other things? Scheduling, commissioning. Okay.
1136. MR. P. de SILVA: Actually I wanted to clarify that as well. Those people are also in our business affairs department, Madam Chair, and the functions include contracting, monitoring of return in terms of the CTF financing. So this is part of their function, but it's also making our business affairs departments more robust as well, which will have the result in our better reporting. So ---
1137. THE CHAIRPERSON: So that is just one of the benefits that will flow from it.
1138. MR. P. de SILVA: Yes.
1139. THE CHAIRPERSON: So I am just trying to -- following on what the Vice-Chair said about, is it costing you to be in compliance, because I guess based on the answers that you have given, the notion that it is costing you to be compliant with virtually the only obligation that you have as part of the broadcasting system which is Canadian content, kind of goes against -- I mean you are a non-profit for sure. That means you are supposed to come in close to the line every year. But part of your costs of running your operation is to be compliant with that regulatory requirement.
1140. So to me it's not really the same equation.
1141. MR. B. ROBERTS: I understand the Chair's point. I hope I was candid in saying that the ball was dropped here. I hope that there have been other inferences with regard to the infrastructure needs of Vision that are long overdue and that part of that infrastructure deals with assuring on-going compliance. However, that requires an investment. And really what we are talking about is being viable as a broadcaster in what is only going to be a more and more challenging environment.
1142. Madam Chair, as legal counsel is still caucusing, I wanted to ask for one moment of clarification with regard to the BBM/Neilsen matter that we broke with earlier.
1143. It is my understanding, I have consulted with my colleagues, that BBM is purchased only for local television stations and that virtually no networks or specialty channels buy or use BBM. They survey only a few weeks and focus on the US Sweeps. The November Sweeps in themselves are not representative of the programming year. So they are principally used by local broadcasters. Network program data is not recorded. So just in terms of clarification for the panel's benefit.
1144. THE CHAIRPERSON: Well, that is not my understanding. I mean the CRTC has subscribed to BBM for decades. Those are the numbers that we use, that we have used.
1145. MR. B. ROBERTS: I am only sharing with the Commission industry practice.
1146. THE CHAIRPERSON: I mean across the country BBM -- they may use different methodology but their sample is 80,000 people versus what -- 8 to 10 for Neilsen. So as Mr. Yigit knows if the margin of error drops, the larger your sample size is. So I guess we could -- I mean the bottom line is -- I mean you could talk about the audience going up a point or down a point and if you look at the charts that you submitted based on Neilsen, you have got 0.4, you have 0.3, you have got 0.5, you have got 0.3, you have got 0.4. It's pretty -- if you take off the end two bars, you can see a downward trend. But if you put on those -- and I'm talking about the charts that you submitted in Appendix 10. If you look at that whole picture, you are looking at a fairly stable audience level across a period of five years, which is the point that I was making is that the audience level was pretty much stable.
1147. Now, we may have been using different numbers but -- and there may be fluctuations and variations along the way, but last year it went back up to 0.4 according to Neilsen. Now, in terms of raw numbers, I saw Mr. Yigit's light go on.
1148. MR. K. YIGIT: I just wanted to add I think that in part the issue is, and with all due respect to the different methodologies and they will, you know -- I think the currency that agencies tend to use in real terms for the kind of television we are talking about is Neilsen.
1149. THE CHAIRPERSON: It's Neilsen with people ---
1150. MR. K. YIGIT: Exactly.
1151. THE CHAIRPERSON: BBM is introducing meters and ---
1152. MR. K. YIGIT: Yes. So I mean, and of course, this has been a major struggle, not only for the Commission but for us in the business too. So if we did call up a range of agencies after this hearing and asked them, you know, as far as television is concerned, who would you go with, it is not that they don't use BBM in certain contexts. But for the kind of context we are dealing with, I think it is fair to say that they will say Neilsen because people know it's instant data, it's overnight, it's more range of things, notwithstanding sample size issues. So that is -- neither are wrong, neither are completely right.
1153. THE CHAIRPERSON: Right. Just like a survey you would do versus the survey some other company would do.
1154. MR. K. YIGIT: Right. But as far as the -- I'm having a hard time recalling the last time I have seen BBM numbers in this kind of context. Typically a lot of the work that we do when we do secondary work on behalf of our clients typically tends to be Neilsen-based for specialty television. I mean that is the distinction I want to make, for specialty television of the kind that we are dealing with.
1155. THE CHAIRPERSON: Okay.
1156. MR. K. YIGIT: I'm not sure that we are going to resolve it fully, but I think there are -- those are the ---
1157. THE CHAIRPERSON: Well, your comments will be part of the record, Mr. Yigit.
1158. MR. K. YIGIT: Thank you.
1159. THE CHAIRPERSON: Ms Bennett.
1160. MS L. BENNETT: Thank you.
1161. THE CHAIRPERSON: Oh, one moment, please.
1162. Commissioner Wylie.
1163. COMMISSIONER WYLIE: I would hate to leave with the impression that we have a misunderstanding as to what being a non-profit organisation is. Mr. Roberts, does it mean trying to get even every year or is it supposed to make every effort to actually generate cash, to plough back in the following year into the operation?
1164. MR. B. ROBERTS: A fair and pertinent question. I don't think that a not-for-profit goal should be to lose money. I do believe that a not-for-profit goal, especially as a public service, should be to create a surplus, both for strategic reasons and also for the reinvestment in content.
1165. THE CHAIRPERSON: Ms Bennett.
1166. MS L. BENNETT: Thank you. We just wanted to follow up on your responses to a couple of the questions that Commissioner Cram asked you relating to Canadian content exhibition.
1167. Your responses seemed to intimate that if your requested rate increase was granted that that might result in a higher CPE percentage. Was that the case?
1168. MR. B. ROBERTS: Yes, I said we would be willing to consider it. My preference and I'm sure the panel's preference on this side would be to look at dollar expenditures, not hours.
1169. MS L. BENNETT: So if the CPE percentage went up, what would the percentage be?
1170. MR. G. BUCHANAN: Maybe it would be appropriate if we took a minute to caucus about this. Obviously you are aware at 60 and 60 there is nobody higher on basic cable. And to push it up higher at this point with a repeat -- sorry -- other than all news services, but amongst general interest services, these are very high percentages anyway together with 45 per cent of revenue there is nobody.
1171. MS L. BENNETT: Maybe I should clarify what I am referring to is the 45 per cent Canadian program expenditure.
1172. MR. G. BUCHANAN: Okay. The question was misunderstood then.
1173. MS L. BENNETT: Okay. If you are going to caucus, maybe I will finish the question.
1174. What would the percentage be if the percentage would increase and would you accept that as a condition of licence.
1175. MR. B. ROBERTS: I think we would like to caucus and if you would give us a second.
1176. THE CHAIRPERSON: Let's take a five minute break. Two minutes. Well, we will take five minutes actually. It is an appropriate time. We will reconvene at 5:00 p.m. Thanks.

      --- Upon recessing at 4:53 p.m. / L'audience est suspendue à 16h53.

      --- Upon resuming at 5:00 p.m. / L'audience est reprise à 17h00.

1177. THE CHAIRPERSON: I trust you have had a fruitful few minutes to discuss -- oh, I'm sorry. I'm minus one member. One moment, please.

      --- Pause / Pause

1178. THE CHAIRPERSON: You may proceed.
1179. MR. B. ROBERTS: Shall I go?
1180. Yes, we had a chance to caucus and thank you very much for affording us that.
1181. With regard to if Vision TV were successful with regard to its seven cent rate increase, we would be willing to accept a condition of licence which moved us from 45 to 50 per cent with regard to expenditures in year one, and from year two through the remainder of the licence, two through seven, to extend that 50 to a 55 per cent investment expenditure.
1182. I should add this coupled with the 60 and 60 with regard to hours, probably puts Vision TV at the very top of the heap with regard to Canadian content commitment with regard to all English language non-news services on basic.
1183. THE CHAIRPERSON: Thank you. Any other questions? No.
1184. Thank you very much for spending this time with us. I hope it has been as fun for you as it has been for us.
1185. MR. B. ROBERTS: Thank you.
1186. THE CHAIRPERSON: And we will look forward to seeing you at reply. We will move on to the intervenors.
1187. MR. M. BURNSIDE: We will now begin Phase II, the intervention process and I would like to call Canadian Cable Television Association.
1188. THE CHAIRPERSON: Good afternoon, Ms Yale. Welcome.
1189. MS J. YALE: Thank you.
1190. THE CHAIRPERSON: Anytime you are ready.

      INTERVENTION

1191. MS J. YALE: Good afternoon, Madam Chair, Commissioners. My name is Janet Yale and I'm President and CEO of the Canadian Cable Television Association. With me today is Suzanne Blackwell, Vice President, Economic Research.
1192. CCTA is appearing today only on the matter of Vision TV's request for an increase to its wholesale rate. While we had some initial concerns on Vision TV's carriage-related proposals, we note that in its reply comments that Vision TV has addressed these issues to the complete and total satisfaction of CCTA.
1193. Vision TV is requesting an increase of seven cents for its wholesale rate, from the current level of eight cents per subscriber per month. This increase would generate $54 million in new revenue over the seven year licence term.
1194. About $24 million of the additional money is sought to cover inflationary increases in expenses, and I know we have had quite a discussion already about that term. Another $28 million is being requested to pursue new programming initiatives.
1195. In our view, the rate increase is not fully justified for four key reasons.
1196. First, Vision TV has underestimated growth in advertising revenue. Vision TV has demonstrated advertising revenue growth of almost 20 per cent annually over the past several years. In contrast to this strong track record, Vision TV is now forecasting annual growth in ad revenue of only 7 per cent annually.
1197. Second, the Commission generally does not approve requests for rate increases to compensate for inflation. Notwithstanding this practice, Vision TV has based almost one-half of its rate increase, as I said $24 million, on the need to offset these inflationary pressures.
1198. Third, Vision TV's forecast operating expenses for the first year of the licence period are more than 22 per cent higher than those projected for the year 2001. This is before taking into account $3.5 million planned for new programming initiatives. The sudden jump in expenses in a single year is unprecedented and cannot be reasonably attributed to "inflationary pressures."
1199. Fourth, there is some question as to the impact on Vision TV's operations resulting from the launch of its affiliated Category 1 digital service, and I know there was also discussion of that here today. When the new service was proposed, Vision TV projected expense savings and other financial benefits. In contrast, Vision TV is now projecting substantial increases in expenses.
1200. CCTA has filed with the Commission and Vision TV a more detailed analysis of Vision TV's financial projections. This analysis demonstrates that the proposed rate increase is not needed for Vision TV to be able to maintain, as well as build on its current service levels.
1201. Those are our opening comments and thank you for the opportunity to provide them. I would be pleased to answer any questions that you may have.
1202. THE CHAIRPERSON: Thank you, Ms Yale.
1203. Commissioner Cram.
1204. COMMISSIONER CRAM: Thank you, Ms Yale, and welcome for the first time at this hearing.
1205. I did read your intervention that you filed with us and I would like to take you to Table 1.2. If I understand enough of your appendix -- I'm sorry.
1206. If I understand Vision correctly, it was the year 1996/97 when they brought in the Family Block, I think that is correct. So if one took out that year, the 63 per cent increase, would you more logically come down to something along the lines of seven to eight to nine per cent?
1207. MS S. BLACKWELL: We haven't actually had an opportunity to do that calculation. I would note, though, that there have been other years when the revenue increases have been over 20 per cent and other years where even the 15, 16 per cent increase. So it is not unreasonable, I would think, to be able to achieve those levels in other years.
1208. COMMISSIONER CRAM: Yes. I also think and I'm trying to -- if I have got it right 1994 was the first year they were able to advertise. So an increase over that base year, that that 32 per cent, 32.8, wouldn't really be something that I would necessarily follow on. So if I took out 1995 and 1997 as being abnormal years, we would probably end up at somewhere around seven to ten per cent growth in revenue? Subject to check.
1209. MS S. BLACKWELL: That may be the numbers that come out. As you mentioned earlier, you are the math whiz on these.
1210. COMMISSIONER CRAM: Yes. You have got the wrong person. I'm into math.
1211. MS S. BLACKWELL: There are other years and it just depends on how you want to select which years. It is a well-recognised brand. It is distributed to 90 per cent subscriber base. Those are the kind of fundamentals that we think a service such as Vision TV can draw on to have a strong going forward track record on advertising.
1212. COMMISSIONER CRAM: You also said in your written intervention, and it is at paragraph 11, that Vision has assumed only 10 minutes per hour advertising as opposed to 12.
1213. MS S. BLACKWELL: Yes.
1214. COMMISSIONER CRAM: Is that based on your calculations would be ten minutes for each broadcasting hour? Like six to midnight, 6:00 a.m. to midnight?
1215. MS S. BLACKWELL: It is drawn from Schedule 18 of their application, paragraph 6. It says:
1216. "Thus while the network is permitted 12 minutes per hour, the network chooses to limit the avails in order to provide a more meaningful program experience and financial projections assume on average 10 minutes avails at CPM OF $5."
1217. So that is where that information is taken from.
1218. COMMISSIONER CRAM: So Vision, however, could change that assumption if the necessity arose and increase their revenues by two over 12, which would be about ---
1219. MS S. BLACKWELL: That is one possibility.
1220. COMMISSIONER CRAM: --- 12 per cent.
1221. You heard Mr. Roberts talk about inflation, which he calls competitive pressures. If I understand competitive pressures, and I may not, I understand him to be talking about essentially the number one, the necessity to upgrade the infrastructure and that would be, would you agree, a fairly common expense that broadcasters would have especially going into the digital age?
1222. MS J. YALE: Yes.
1223. COMMISSIONER CRAM: The second issue, if I understand him correctly, is the issue of purchasing rights. That also would be -- would that be something that they would have in common with other broadcasters also?
1224. MS J. YALE: There is no disagreement that these are pressures that are faced by a variety of service providers. What is unusual is the 22 per cent jump from 2001 to 2002 in expenses. We don't see that even though there are common pressures across service providers. So it's the fact that it stands out is unique in terms of the per cent increase that has caused us to suggest that perhaps it could be scaled back to what would be ordinary levels of increases as reflected by the Commission's own past practice in this area.
1225. COMMISSIONER CRAM: Thank you. Thank you very much.
1226. THE CHAIRPERSON: Commissioner Cardozo.
1227. COMMISSIONER CARDOZO: Thank you for that. I just wanted to get your thoughts or your guidance on when you think the Commission should be entertaining a request for an increase in rate, whether you think there are certain circumstances which you could support?
1228. MS J. YALE: I think what we are looking for on behalf of our customers is to see added value. So where as we don't support rate increases because of what we labelled in our intervention "inflationary expenses," what we were focused on in our analysis is whether or not they needed the money to deal with some of their new programming initiatives. Because then there is added value potentially that would be seen on the screen and that you could argue, from a customer perspective, is something that they wouldn't otherwise have access to.
1229. We did some adjustments to the financial projections, both on the advertising side and on the inflation side, which suggested that over the licence term they would be able to implement about 90 per cent of their proposed programming initiatives. But would have to clearly implement some of them later in their licence term than would otherwise be the case. So they would have to defer some of the implementation of the new programming initiatives, but over the course of the licence term, would be largely able to implement those initiatives.
1230. I think that is a judgement call for the Commission obviously to make as to whether or not that is a reasonable trade-off. But our focus would be on whether or not the money is really needed to focus on those new programming initiatives having made the adjustments that we think is appropriate both for the underestimation of advertising revenues as well as the overstatement of expenses because of the inflation adjustments.
1231. COMMISSIONER CARDOZO: Okay. So I guess in terms of added value, one of the things they were saying was they would be able to do their 60 per cent Cancon with less repeats. So now given their budgetary situation, they have more repeats than they would like to have with this increase. There would be less repeat factor, more original programming. Is that added value or are you saying there are other adjustments they could make that could take care of their interest in having less repeat and more original Canadian content?
1232. MS J. YALE: No, I agree with the thrust of what they are trying to do from a programming perspective. We have no quarrel with that. The question is whether or not -- they are saying those new programming initiatives would cost them about $28 million. That is the chunk of the money that they are looking for with the adjustments we have made. If you look at our Appendix 2 in Table 2.3, we made a couple of adjustments to their operating revenues to reflect the increase in advertising revenues we think it is reasonable to assume on the one hand. And we have adjusted their operating expenses to exclude the -- what we call sort of abnormal, if you will, one time jump in expenses and so on. If you look at the net operating income in Table 2.3 that flows from that, there is operating income that can finance those new programming initiatives without the need for a rate increase.
1233. So as Table 2.3 says, over the seven year licence term, they would have $25 million of funds available to fund new programming initiatives. And that $25 million is what we compared to the $28 million that they have targeted for new programming initiatives, which is why we say that they could fund 90 per cent of their new programming initiatives without the need for a rate increase. Obviously not entirely, and the timing of that would be different and that is really a choice for the Commission to make in terms of the timing.
1234. COMMISSIONER CARDOZO: Okay. Thanks very much.
1235. MS J. YALE: Thank you.
1236. COMMISSIONER CARDOZO: Thanks, Madam Chair.
1237. THE CHAIRPERSON: Thank you very much, Ms Yale, Ms Blackwell.
1238. MR. M. BURNSIDE: I would now like to call Gerald Filson, representing the Baha'i Community of Canada.
1239. THE CHAIRPERSON: Good afternoon.
1240. DR. G. FILSON: Good afternoon.
1241. THE CHAIRPERSON: Any time you are ready.

      INTERVENTION

1242. DR. G. FILSON: Madam Chair, and fellow Commissioners, I am Gerald Filson. I'm Director of Public Affairs for the Baha'i Community of Canada. I also am the Executive Producer of our regular program on Vision TV and have been for the past 13 years. I co-chair the Mosaic Program Management Group, which is a committee advising Vision TV made up of the representatives of the Mosaic partners or those who purchase air time on Vision TV.
1243. You have heard earlier, and you are going to hear later probably from some of the other intervenors, about the importance of Vision TV being a voice of diversity, religious understanding and a service that offers programs of ethical, spiritual and cultural values largely absent on many of the other services. So I won't go into that in much detail, except to say that the 30,000 members of the Baha'i Community who are in 1,400 localities, every province and territory, a small community, thinly spread out through the country, are very, very supportive of Vision TV.
1244. When I checked my e-mail basket yesterday before leaving our office in Toronto, two e-mails caught my attention. One was from Professor David Randall, a former chair of the Physics Department at Memorial University. He was saying good luck with the appearance before the CRTC, hopefully Vision TV will achieve its goals. The other was from Manou Greenall (phonetics), an Iranian Canadian from West Vancouver who sits on the Police Commission of West Vancouver and is very active in cultural education, cross-cultural education with the West Van and North Vancouver Boards of Education. She too said that we hope things are successful before the CRTC. These were just two voices expressing their strong support for Vision Television.
1245. Amongst our sister communities in other countries, Vision TV is the envy of our colleagues. In February of this year I was in Israel at our administrative centre and there were representatives of 22 countries; six Asian countries, five European -- five African, six European, six from the Americas. We were discussing a special broadcast we wanted to have, a landmark event in the history of our community that took place last month. We discussed what we could do in our countries to get our opening of our World Administrative Centre on television. I described to them Vision Television and what it does and it was the envy of the room let me tell you. It was something that simply doesn't exist in other countries.
1246. Between 1994 and 1997 I participated in a series of television conferences in seven countries around the world that drew together people from the development community, the religious community, the broadcasting sector and independent producers, with an attempt to describe to them the need for development agencies and religious communities to cooperate together to produce programs that put the spotlight on people in civil society, in the NGO sector because conventional television is not doing that. At those conferences in Chile, India, Kenya, Zimbabwe, Georgetown, Guyana, in Jamaica, I described the Vision Television Network and it again drew gasps and "awes" from the audience, particularly in India and in Guyana because I was speaking at a time shortly after major religious conflict in the streets of those countries. Again, they said how we wish we had a regulatory framework in our countries that would allow the development of a network such as Vision Television.
1247. So it is a success, and it has been a success. I have been observing it and participating in Vision Television well before the licence itself was granted. But what I want to talk about a little bit is the 21^st century and where Vision TV can go.
1248. We have in this country a genius for mixing public and private sector, and we have done that in our communication infrastructure with public supported television, with the CBC. No one is more a fan of that than I am. We have a terrific competitive and high quality private sector. You just simply have to travel in Europe or Asia, turn on the television and realise that no country offers the variety on their cable systems that we have here in Canada.
1249. However, there is this third sector of society, the voluntary sector, the non-profit sector, the non-governmental sector and religious communities are at the heart of that sector, which has emerged over the past two decades that is, I would say, the promise of humanity. That sector has not received the attention from conventional television nor the public sector television that it deserves.
1250. We have sports heroes, political heroes, movie stars. We have not made heroes of the people who are doing the voluntary work, the development work, the non-profit work in our communities. Vision TV has done that. They have put the spotlight on them.
1251. But to maintain it and to move it ahead, they have to have the kind of resources and the kind of quality programs that allow them to seize and capture audiences. I can tell you that with the move to Channel 60 in the GTA, my first degree was in mathematics and my second was in educational media research, so I followed the Neilsen's figures and I have to report them to the National Executive in my community. I, like other Mosaic partners, saw a drop in our audiences. Those are figures, both BBM and the Neilsen figures, are at the bottom end of the range therefore there is the floor or ceiling effect as statisticians would tell you. So the figures are not that reliable.
1252. But when we look at phone calls. When we look at the number of complaints about the move, we know that it had an effect and there was a dampening and depressing effect on the Mosaic partners.
1253. What we have seen with Vision TV over the last three or four months has been a new dynamic. The seasoned senior executives at Vision TV along with some of the new staff have developed a dialogue with the Mosaic partners that is fresh and new. There is a new energy there. We have had discussions with the President, the Vice President for Programming, the Executive Producer of "Skylight" that we did not have before. Therefore we see that this is an opportune time to refurbish and rebuild Vision TV so that it can become and continue to be a Canadian example that really should draw the attention and the applause of the world.
1254. On that point I would end and just hope that the Commission will take seriously the submission by the Vision TV team. Thank you.
1255. THE CHAIRPERSON: Thank you, Mr. Filson.
1256. Commissioner Cardozo.
1257. COMMISSIONER CARDOZO: Thanks. Thanks for coming. I just have a couple of questions with regards to, in a sense, the part that you talked about last.
1258. Well, actually just one question on the Baha'i Community. What is your estimate of the size of the Baha'i Community in Canada?
1259. DR. G. FILSON: Our size is 30,000. In the last census in 1991, our numbers were exactly those of the census. They were 16,000. Since then we have moved up to 30,000.
1260. COMMISSIONER CARDOZO: You have been doing the program you said for 13 years and you have been co-chairing the Mosaic community for how long?
1261. DR. G. FILSON: Just for the last year.
1262. COMMISSIONER CARDOZO: I just want to get a sense of your -- well, I would like to get your sense of how Vision TV is run. Because in this renewal we are faced with two things. One is the fact that things went askew in terms of Canadian content and things may be somewhat askew in terms of the budgetary situation, the financial crisis that they are facing.
1263. There is no question, and certainly the record has talked a great deal about the value of Vision that all its supporters have written in about and we are well aware of that part of it.
1264. But in terms of the administration of the organisation, what is your sense about why things have gone wrong in these two areas and do you see that turning -- do you see things -- a corner being turned?
1265. DR. G. FILSON: I think it was because it was understaffed. I think that Vision TV -- if you look at the variety of what they have done and the different constituencies that they have had to work with, the variety of religious communities alone, I think that they were understaffed. I think that it was an operation that was new, that attempted to seek out new kinds of programming and my own estimates of the problems they have had has to do with that, has to do with their seeking programs that would attract audiences but faced with -- faced against the kind of competitors that we know are on some of the other channels. That was my opinion. I have always been impressed with the administration.
1266. COMMISSIONER CARDOZO: But isn't part of the responsibility of running any organisation, but a television station that you, to use the old cliché, you cut the cloth ---
1267. DR. G. FILSON: Cut the ---
1268. COMMISSIONER CARDOZO: --- according to the cloth -- cut the cloth according to the coat. I mean you can't sort of take on more than you can deliver or you can't promise to run an organisation that is more than you can afford in a sense. Should they have come back to us at an earlier time?
1269. DR. G. FILSON: I think it was a very ambitious project. It's unique and I think it's a very odd kind of network if you really look at it. I mean to bring together our Mosaic management group and we sit around that table, you know, I can't tell you the variety of religious groups we have there. It's quite extraordinary. That, plus the fact that they had to mix in with this documentaries that reflected ethical, spiritual values.
1270. Now, you look at our networks, our television that is being produced. We don't have a lot of material out there that reflects a high level of ethical, spiritual, moral values. So I think they had to hunt and choose. They brought in a lot of British programming, I think, because some of that did do that out of a very fine public broadcasting system. So they perhaps went overboard on that.
1271. We, ourselves, and I think the religious communities, and I know the Church of Jesus Christ of the Latter Day Saints are a little bit like us, in that when you run a very thin operation, as we have done, we too have a problem with the Cancon regulations because we don't draw borders. I mean we are an international religious community. So that was not high on our priority.
1272. At the same time what Vision TV has allowed the religious communities in this country is to increase the vitality of their audio-visual work. I can speak a little bit for the United Church and certainly for us, by having to produce a regular program on Vision TV, what it did, it allowed us to stimulate video production within our own community using those programs for other kinds of off-air, visioning off-air kind of distribution and so on. All of that served as a tremendous -- a tremendous stimulus for those religious communities that took advantage of it.
1273. I think there was, speaking for myself, my own observation, there has been some disappoint that the conventional religious communities in this country over the last few years have run into other financial constraints at the very time when they probably would have preferred to support their broadcasting on Vision, which might have allowed Vision to access more dollars through their Mosaic purchasers. We were -- as I say, we are a small community although on a per capita basis, I suspect we are one of the leading purchasers of Vision time. But we thought the costs were high until we began to look elsewhere and we realised we have a terrific, terrific opportunity there.
1274. Our sister community in the United States, from time to time they will have special broadcasts on Black Entertainment Television at very odd hours of the day and night but they can't access something like we can access.
1275. But the religious communities of this country could have bought more time or they could have bought time at a higher price. Vision TV has held the line on that purchase price. We have not had to pay higher because we know the kinds of struggles that our communities are in.
1276. So I certainly have been impressed once I took a real look at the administration of Vision TV and as I got to know it more. But as I say, they were very ambitious.
1277. COMMISSIONER CARDOZO: Yes. What are some of the issues that you deal with as a Mosaic Committee?
1278. DR. G. FILSON: Well, we engage Vision senior staff once a year in a discussion of the kinds of programming that they chose so that the Cornerstone programming has some input from the religious communities. So okay, that is one.
1279. Two, if there are differences of view or issues, for instance, I can mention one, between the Sikh community and the Indian community, a program that maybe went over the line in attacking one side or the other, we have set up panels of members from different religious communities not involved in the dispute to regulate the dispute. To bring the parties together and to decide in a fair and equitable way how to resolve the issue. So we do that from time to time.
1280. And we also generally have a great deal of sharing of insider notes on the kind of production challenges we are facing as religious communities. We buy studio time at the United Church headquarters to do our voice overs for our program. We started our programs initially with Shan Shandra Shaker's (phonetic) operation. He was doing programs for, I believe, the Hindu community and the Muslim community. We were sharing his studio in the early days. So we have had those kinds of cooperative arrangements.
1281. COMMISSIONER CARDOZO: Do any of you use the studios of Vision TV?
1282. DR. G. FILSON: We have never. I'm not sure that ---
1283. COMMISSIONER CARDOZO: But the others?
1284. DR. G. FILSON: I think some have. I mean we have -- obviously we have been involved in some of the "Skylight" programming, which if I could add on this point. I have just finished my term as the Chair of the National Executive, the Network in International Human Rights, a coalition of 40 Human Rights groups in this country. Nobody other network has looked at the human rights issues the way Vision TV has. I think they just did a series on "Skylight" two weeks ago.
1285. This is critical because the reporting -- one of the great achievements of humanity over the last 50 years was the human rights system in this world. But none of the other networks look beyond a superficial glance at it. Vision TV has gone out and interviewed people, has gone and looked at the families and the homes and the suffering in human rights cases, and my God, we need that. Many of the church groups and the religious communities are involved in those human rights efforts. We haven't yet learned to access all those stories but the stories are out there waiting to be told. We need Vision TV to tell them.
1286. COMMISSIONER CARDOZO: Okay. Thanks very much, Dr. Filson.
1287. DR. G. FILSON: Thank you.
1288. COMMISSIONER CARDOZO: Thank you, Madam Chair.
1289. THE CHAIRPERSON: Thank you, Commissioner Cardozo, and thank you Dr. Filson.
1290. DR. G. FILSON: Thank you.
1291. THE CHAIRPERSON: I called you Mr. Filson earlier and I stand corrected. Mr. Secretary.
1292. MR. M. BURNSIDE: Yes, I would now like to call David Cherniack of Extended Films. This is a change in the order. We will go back to number 3 after this.

      INTERVENTION

1293. THE CHAIRPERSON: Good afternoon, Mr. Cherniack.
1294. MR. D. CHERNIACK: Good afternoon.
1295. THE CHAIRPERSON: Thank you for being with us and for waiting for us.
1296. MR. D. CHERNIACK: Thank you. It has been a very, very interesting afternoon. I have been able to watch the wheels of the Commission grind and grind and grind.
1297. THE CHAIRPERSON: I am not sure I'm flattered by that.
1298. MR. D. CHERNIACK: No, no, it's been fascinating. It really has been interesting and I would like to begin by stating that I'm delighted to be here on behalf of Vision TV and especially on behalf of their application for a rate increase, which I think, from my point of view as a filmmaker, is extremely important. Because I'm going to tell you that Vision TV provides a service for documentary filmmakers in this country that no other broadcaster provides.
1299. Let me begin with a brief personal introduction. After obtaining my BSC in Physics -- there is a lot of mathematics around here today -- from Manitoba, I spend four years in Prague at the Film Academy studying feature filmmaking. When I came back to this country I began doing documentary films. It seemed like the Canadian thing to do and I have never really regretted it.
1300. In 1981 I was asked to join the "Man Alive" production unit at CBC where I spent 14 years doing the kinds of films that I really wanted to do as a documentary filmmaker. When the CBC decided it could no longer afford the "Man Alive" production unit, I began producing films through my own production company. I have produced over 51 of documentary films and that doesn't include obviously any series that I may have done.
1301. I am also a practising Buddhist and I count being a student of the Dalai Lama one of my life's great treasures.
1302. As a documentary filmmaker, I travel around the world a great deal and meet filmmakers from all over. They are incredibly envious of the kinds of filmmaking that I can do for Vision TV and express it with great envy. In a way, Vision TV is a gift and I think it deserves your wholehearted support actively.
1303. I just want to say a few brief words about the importance of spiritual programming in the cultural life of this country, really in any country. Because I think it is, as Gerald was saying just now, it is a very neglected -- it is a very neglected forum in the broadcasting landscape.
1304. Our broadcasting landscape really consists, the vast majority of it of entertainment. I would like to say that after studying the art of media, entertainment puts people to sleep. It encourages them to avoid dealing with life's problems. This is not necessarily a bad thing but it is a rather low thing.
1305. At the other end is programming which enriches our lives, that encourages us to deal with life's problems. This kind of programming is the highest aspiration that television can really obtain. It rarely does so, but when it does, it changes people's lives. That I think is the critical thing and that is what Vision TV attempts to do. In that sense it is quite unique in the programming landscape in this culture and really around the world.
1306. Nobody else is really interested in doing it. I think that the public broadcaster in this country gave it somewhat of a luke-warm support. In fact, "Man Alive" was very much considered to be an odd duck in the Current Affairs Department at CBC, and I think the end of the programming unit at CBC really speaks to that fact. Right now on the public broadcaster there is no prime time spiritual programming at all. None. Doesn't exist and that tells us something.
1307. I will avoid talking about the private networks. I don't want to -- I don't really wish to become too negative. But Vision TV supports programming that wakes people up. It funds content that is not dominated by considerations of the marketplace, or of that most creatively deadening of monsters, format.
1308. I have done films for Vision TV where we could get rid of commercials. I find it unbelievable -- sorry, I'm going to try not to become too negative. But I am quite passionate about commercials in spiritual programming, and for representatives of the Cable Company to get up and suggest that Vision TV can increase its revenue by increasing its commercial content is unbelievable to me. Programming that attempts to change people's lives can run without commercial content and should be encouraged to do so.
1309. My own experience as a filmmaker since leaving the CBC has been actually quite wonderful thanks to the opportunities that I have had to do projects that are creatively and spiritually fulfilling. Much more so than all my time and all my programs at "Man Alive." These are films that could not have been made for any other broadcaster in this country. I will just give you a few examples.
1310. I did a film called "Fire on the Mountain," which is a documentary about a gathering of Shamans from around the world three or four years ago to discuss what they had in common and to do rituals for one another. The program ran for two hours on Vision TV. It was quite a unique experience to watch these people from Siberia, from Africa, from South America, from North America and from Australia discover what they had in common. Not just ritually, which was a fascinating thing to watch, but the kinds of pressures that they were facing from the modern world were the same wherever you went around that circle of people. It was really the beginning, I think, of a kind of movement.
1311. Now, Vision TV funded that film. No other broadcaster in this country would touch it. I did approach one of the public broadcasters in Ontario who actually -- the commissioning editor for documentary films told me, "We don't do things like that. That is the providence of Vision TV."
1312. I did a 26-part series called "Spiritual Literacy," for a company called "Sleeping Giant," that was broadcast on Vision TV, which attempted to -- they were tone poems on the experience of meditation. But they were actually more than that in that they attempted to create the experience of meditation on television. I think the people from Vision will tell you that the mail that they received confirmed that for the people who watched it.
1313. At present I am doing a very interesting project that Paul de Silva alluded to. It's five one hours on a First Nations Reservation over the course of a year. Cinema verité following 30 people around through one year. It will be landmark programming, not just on Vision TV, but really in this country because nobody has ever done anything like this. There is no other broadcaster who would have attempted it. It is being done with APTN as a second window and with SCN and with the support of Telefilm Canada and the LFP. But it couldn't have happened without the support of Vision and I think that hopefully it will really give people a window on a situation that has existed in this country for the last hundred years that people have never had before.
1314. In conclusion, I just wanted to say that as an agency that regulates media, you should aim to encourage the making and viewing of life-enriching programs through the policy you set. Seven cents on top of eight cents in this landscape is not a lot. If you don't do that, I think you are avoiding your responsibility to the public and I think that is what you are here to -- that is who you are here to serve. I think this is one way that you can do it and do it very effectively by providing something that provides a long-term benefit to Canadians.
1315. Thank you very much.
1316. THE CHAIRPERSON: Thank you, Mr. Cherniack.
1317. Commissioner Cram.
1318. COMMISSIONER CRAM: Thank you.
1319. Mr. Cherniack, welcome. For the record it was me who said that Vision could add two minutes per hour.
1320. MR. D. CHERNIACK: You didn't.
1321. COMMISSIONER CRAM: I asked the CCTA.
1322. MR. D. CHERNIACK: Could I tell you what happened to "Man Alive" when they had to increase their commercial content?
1323. COMMISSIONER CRAM: Sure.
1324. MR. D. CHERNIACK: We went from 27.50 down to 22.50 in the space of about three and a half, four years. This is on the half hour. The effect on the stories we could tell was devastating. It really made a huge difference. In 27.50 we could actually tell a story which built character. In 22.50 we were doing long form items and everybody on the unit felt that, yet there was not choice. So you can add commercials but you take away from content and ultimately that hurts.
1325. COMMISSIONER CRAM: I guess the question in my mind and it is one for another day is if there aren't ads, then who pays for the programming?
1326. MR. D. CHERNIACK: Oh, I think ads have their place. I'm not saying they don't. I'm not sure that you go ahead and willy-nilly start expanding their time on the dial.
1327. I was awake late last night and I was flipping down the dial. Incidentally in the hotel I was staying at there was no Vision TV. They only went up to Channel 38. But as I flipped, I was hitting 40 per cent, I counted, 40 per cent commercials or infomercials. Mind you, this was at two o'clock in the morning, the infomercial time, 40 per cent. You know, at 13, 14 minutes on the hour, it's a substantial bite.
1328. COMMISSIONER CRAM: I actually wanted to talk to you about something totally different.
1329. We were listening to Mr. Roberts this afternoon talking about the market for acquired programming being very, very competitive and having to pay higher and higher rates. Yet, what I hear from you is that some of your programming, which frankly I would be very interested in seeing, nobody -- nobody else would want to air that kind of programming. So ---
1330. MR. D. CHERNIACK: How do I explain the contradiction?
1331. COMMISSIONER CRAM: Yes. Like I mean there is -- I am assuming and Mr. de Silva was talking about it, particularly in documentaries there is a fairly heavy duty competition. So like are you underselling yourself or what?
1332. MR. D. CHERNIACK: No, I don't think so. You can ask Mr. de Silva about it because he is the one that is making that statement. I can only really talk about the kinds of programming that I love to produce. I don't have a window elsewhere and this is -- but this is -- these are kinds of films that are uniquely Vision TV material. There is a lot of programming that Vision runs that is overlap and it is, I believe, those kinds of films that Mr. de Silva is talking about. So not really -- it's just an apparent contradiction.
1333. COMMISSIONER CRAM: So of those kinds of programs that you have sold to Vision and that is -- especially "Fire on the Mountain," and "Spiritual Literacy," would you say Vision would do at least 10 per cent, 15, 20 per cent of their programming of that kind of genre that really has no appeal to anybody else?
1334. MR. D. CHERNIACK: Well, if they did, I could be employed for a long time.
1335. COMMISSIONER CRAM: Okay. So they do 1 per cent, 2, per cent perhaps if we are lucky?
1336. MR. D. CHERNIACK: I think this is true. Although they would have to speak to that. I'm just guessing.
1337. COMMISSIONER CRAM: There is no cross-over, I heard you talk about SCN and, of course, I'm from Saskatchewan so I mean I know they are a wonderful broadcaster. But there is no cross-over with SCN on a lot of your programming or APTN?
1338. MR. D. CHERNIACK: This was the first project that we did co-fund. And we only co-funded after the LFP rejected it the first time for not having high enough points just on the Vision TV licence. Then we went out and we managed to get APTN and SCN involved. So there is always the opportunity to produce with everybody. I didn't stop at SCN. We tried to get Alberta in and B.C.
1339. COMMISSIONER CRAM: Yes. You will never get them. Sorry. I didn't mean that.
1340. MR. D. CHERNIACK: No, I know.
1341. COMMISSIONER CRAM: Thank you very much and thank you very much for coming here.
1342. MR. D. CHERNIACK: Thank you.
1343. THE CHAIRPERSON: Thank you, Mr. Cherniack.
1344. MR. D. CHERNIACK: Thank you.
1345. THE CHAIRPERSON: Bon voyage. Mr. Secretary.
1346. MR. M. BURNSIDE: I would like to now call Gerry Kelly representing the Canadian Conference of Catholic Bishops.
1347. Okay. Gerry Kelly had to leave.
1348. I will now call Hammond Grange representing Industry Pictures.
1349. I will now call Raheed Raza.

      INTERVENTION

1350. THE CHAIRPERSON: Good afternoon, Ms Raza.
1351. MS R. RAZA: Good afternoon. The name is actually Raheel just for the record.
1352. Madam Chair, Members of the Commission, good afternoon. Now, that I have got my name correct, I am a media consultant and a free-lance journalist. I am also an immigrant who came to Canada 12 years ago, just probably a year after the inception of Vision Television. My faith background is Muslim and I truly value ethnic and cultural diversity and fair representation in media.
1353. I happen to have both a personal and professional interest in seeing Vision's licence renewed for seven more years at seven additional cents so that it can be easily accessible by the largest number of Canadians.
1354. When I first came to Canada, I saw my faith reflected on Vision for the first time and it was like a breath of fresh breath and I was immediately hooked. I will also tell you that I never watch television except for Vision Television because to me that is not just commercial television, it is an education. It is a voice for the minority and it is a voice for the voiceless in the mainstream.
1355. Since that time when I first arrived, I have been involved with Vision both as a viewer and as a participant, very enthusiastically promoting the cause of Vision, which is why I am here today while my two boys are writing school exams. In my experience with media in the past 12 years, I believe that no other broadcaster has so openly and honestly invited faith groups to participate the way Vision has. To me it is a true and accurate reflection of Canada's multi-faith, multi-cultural, multi-racial mosaic.
1356. Vision gave the Muslim community the first opportunity to actually present a 13-part series called "Salaam," and the reason why it was very special was that Vision not only gave us the time but gave us the technical assistance and advice on how to actually run quality programming. I was co-producer of that program so I have very, very fond memories of the kind of work that we did with Vision.
1357. This was a time when Vision was seen all across Canada and I also remember it was seen in small communities and I still recall the positively amazing feedback that we received from Muslims all over Canada. As you know, sadly that easy channel access is now an issue and I think it affects all faith groups, not just the Muslim community because it is not accessible to everyone.
1358. During elections last year, Vision invited me to be part of a CPAC special debate about values within the political framework. This once again to me was an opportunity to be a voice for our community. So to me Vision represents not only a multi-faith network, but it actually represents -- it is the only broadcaster that invites people of different faiths to discuss social, moral and ethical issues. This is through their "Skylight" programming.
1359. Earlier this year I had a very special arrangement with Vision when they invited me to come in as a Muslim woman on a controversial BBC documentary titled "Licence to Kill." I'm extremely impressed of the way Vision handled this because it was very important to have an introduction by a Muslim woman to this documentary. At that time I was recovering from surgery and I couldn't go to the Vision studio. So as they say in our faith that when Mohammed can't come to the mountain -- when Mohammed can't go to the mountain, the mountain will come to Mohammed. So they actually brought the entire Vision studio to my house and they taped the introduction.
1360. So these are only a few reasons why I believe that Vision should have the support that it is asking for. It certainly has my full support and the support of many people in our community.
1361. As a not-for-profit broadcaster, Vision reflects the diversity of nearly one million South Asians across Canada, including nearly 650,000 people in the Muslim community. Apart from exclusive faith programming, Vision has given South Asians an opportunity to reflect their thoughts on various mainstream ethical, social and moral issues. I have been personally part of multi-faith panel discussions on Vision through their "Skylight" programming, a concept that I haven't seen taking place truly in any other country of the world or in any other network.
1362. I have also been part of Vision's Mosaic Program Management Group on an ad hoc basis and you just heard someone talk about that. This actually ensures a code of ethics and balanced representation.
1363. It is not only about programming, about faith programming. What Vision actually represents is quality faith programming. And in answer to a question that I think that one of you had asked the gentleman here a while ago, that although there are other networks that do represent minority faiths in a very casual sort of a way, Vision actually gives time for people of different faiths to have a voice and to actually have Canadian content so to speak. So these are programs made by us with their help with Canadians.
1364. So I can't reiterate how important it is that Vision get not only the renewal of their licence but the seven cents extra fee. I think as a view I would have absolutely no problem supporting them, not only for that amount but even if it went to a higher amount. Because I think for us and the future generations of minorities living in Canada, Vision is very, very important for our continued stay and to give us spiritual satisfaction and I thank you for your time.
1365. THE CHAIRPERSON: Thank you for your time, Ms Raza.
1366. Commissioner Cardozo.
1367. COMMISSIONER CARDOZO: I just wanted to ask you about the -- by the way, do you write columns for the Toronto Star?
1368. MS R. RAZA: Yes, I think you do too.
1369. COMMISSIONER CARDOZO: Yes, I did too in my previous life and I thought you were a fellow columnist at one time.
1370. THE CHAIRPERSON: Please use your mike.
1371. MS R. RAZA: Yes.
1372. COMMISSIONER CARDOZO: I just wanted to get from you as well what you find your experiences working with Vision in terms of the Mosaic committee. What are the kinds of issues that you deal with at the committee?
1373. MS R. RAZA: As I mentioned, I'm not a permanent member of the Mosaic committee. I have sat in for the Muslim representatives when they have not been there. So it has been on an ad hoc basis.
1374. But I found that sitting on the Mosaic Management Group has, you know, it is discussion about fair and balanced programming. It's discussion about, for example, when we wanted to air our program "Salaam," it was an issue of, you know, how we could afford to do it within prime time. What were the various resources we could use to make it viable, to make it affordable, to see that we didn't have to bring in commercial programming in the middle of this program, where we would get the technical help, where we could actually go and record the program.
1375. So the Mosaic Management Group actually helped us, as a Muslim community, put together our 13-series program.
1376. COMMISSIONER CARDOZO: Okay. You say you don't watch TV. I have a question for you in reference to other television but is there programming that you know of, since you don't watch TV, on other channels such as CFMT or Asian Television Network, other places where there is programming that reflects the Muslim community or allows the Muslim community to have a say?
1377. MS R. RAZA: I think I lied there a little bit. I do pick up bits and pieces of CFMT and ATN. This is in passing. When I meant I don't watch television, I guess what I was saying, to sit down and actually watch a half hour program, which is virtually impossible when you are a mother.
1378. But yes, CFMT and ATN do not reflect the Muslim community from a faith perspective. They reflect the Muslim community from more of a cultural perspective. They will once in a while come and, you know, cover as reporters various events taking place. But in terms of having actual programming and quality programming is what I'm stressing here, you know, a half an hour program which reflects the issues and the passions of the Muslim community living in Canada, no. I have never seen that taking place on any other television.
1379. I will mention here at various times in my career, much to the regret of Rita and my friends at Vision, I have appeared on CTS on invitation of Michael Coran (phonetics) for various debates. But once again, the difference there is that they invite you for a specific agenda item and in many ways it is just you are there as a guest. You are not really not representing the entire community.
1380. COMMISSIONER CARDOZO: In terms of the quality of the programming for the Muslim community beyond the series that you have mentioned, are you generally satisfied with what you see there?
1381. MS R. RAZA: Absolutely. Absolutely.
1382. COMMISSIONER CARDOZO: Okay. Lastly on the matter of seven cents, which you have bravely mentioned a few times. If we were to grant this, would you continue to be brave about this and go and speak to the media? I say this seriously, not to get your support ahead of time for something we may or may not do.
1383. But in general increases in prices don't go down very well in an atmosphere when you have seen reduction in taxes and people wanting to pay less for things like taxes and sometimes people look at cable fees as something they don't have that much choice about.
1384. Do you see a lot of negative reaction to it? You are an avid supporter of Vision so I am sure you are going to say no. But how does -- maybe you will say yes. But how does one deal with explaining why -- how will the Commission explain why an increase is warranted and why people who may not watch Vision as much as you do should be prepared to pay for it?
1385. MS R. RAZA: Well, Commissioner, if the Commission ever decided to hire me as a spokesperson, I would be certainly very happy to go out and round up the crowds.

      --- Laughter / Rires

1386. COMMISSIONER CARDOZO: Well, that may be part of the increase that Vision will hire you to do that.
1387. MS R. RAZA: I have absolutely no qualms in going out and speaking about that support. My support to Vision comes purely from the heart and I can speak from, I think, quite safely on behalf of a community which really needs to see itself reflected in a very fair and balanced way. Obviously if you have been following media, you know that the Muslim community has had its share of media bashing. So at this point in time more than anything else, our community, like many other minority communities, needs support of a broadcaster like Vision to be able to have that time -- to be able to have that affordable time.
1388. COMMISSIONER CARDOZO: Yes. I mean that is dealing with the issue of support for Vision.
1389. MS R. RAZA: Yes, and I am coming to ---
1390. COMMISSIONER CARDOZO: That part I can deal with.
1391. MS R. RAZA: And I am coming to the point -- the point about the increase. In order to have that kind of reflection, I think that the community -- well, I can't speak for all of them. But I certainly think that the part of the community that I deal with would be very supportive of the increase because everything comes with a price. I mean there is inflation, yes. So why not put some of that money, why not put some of our effort into something that is going to give us a better understanding with the mainstream, that is going to give us a better placement and I think something that will place us as a minority Muslim community in a better light for our life in Canada.
1392. COMMISSIONER CARDOZO: Okay. Well, thanks very much for that, and as a columnist at the Star, I wish you the best. I now have to keep my opinions to myself as I'm in this job. So I hope you will continue to expose and expound on your views.
1393. MS R. RAZA: Thank you very much.
1394. COMMISSIONER CARDOZO: Thanks for coming here.
1395. THE CHAIRPERSON: Thank you very much, Ms Raza.
1396. Mr. Secretary.
1397. MR. M. BURNSIDE: I would like to now call Reverend John Hartley representing the United Church of Canada.

      INTERVENTION

1398. THE CHAIRPERSON: Good afternoon, Reverend.
1399. REV. J. HARTLEY: Good afternoon, Madam Chair, Commissioners, others present. It is good to be here.
1400. I am a filler in though. I think you are all aware of that. You would be normally looking at Marion Party (phonetics), the Moderator of the United Church of Canada. She has been unable to come and so I was asked to sub. So I am here in that mode.
1401. THE CHAIRPERSON: We are just as happy to see you.
1402. REV. J. HARTLEY: Thank you very much.
1403. I'm also here as a local minister of the United Church. It's St. Andrews United Church in Toronto.
1404. After hearing all that has been said today what is left to be said, except to share some of the passion and maybe some of the history if I may do that. Because I think the name of the channel sums it up: Vision.
1405. It came as a result of vision in the country from people who cared about having an inclusive and diverse channel of communication within Canada. I would like to take you back to a very early incident.
1406. You may not be aware that some of us believe it was the multi-faith community that gave rise to one of the radio institutions of Canada. A program called "As It Happens." Now, you may see it differently as the CRTC but when I was in Montreal, I was on the Montreal Religious Advisory Committee to the CBC and one of the things we did was get involved in programming. One of the programs that I was part of was something called "Clergy View the News." A priest, a rabbi, yes, and a minister. We were given the opportunity to hear "The World At Six" at five. On the basis of newspaper and stories, we managed to put together about three items that could be done in a half hour and we were invited to bring in a guest, a specialist in the field and the odd time a telephone call.
1407. Now, the FLQ crisis happened in that year, in 1970. We were taken off the air in those weeks. We didn't reappear, but you know what did? "As It Happens." So we take some credit for the birth of "As It Happens."
1408. Now, through that we moved from that kind of representation and reflection on radio to a vision of a deeper sin. We discovered after the fact that we were into sin by the virtue of the acronym from the group that was established called the -- it was a movement to bring about a Canadian Interfaith Network and the acronym is CIN. A lot of work done across the country, in grassroots communities and congregations with people interested in bringing together a voice for people to be included, as it were and those who were not being heard from a faith perspective.
1409. That took well over ten years or more involving people and the United Church was very much a part of that. We were paying the salaries of two people at the time when there was no Vision TV but to help do the research, to do the connecting with people, to really see if this was a need that would be responded to by Canadians and by the CRTC. Eventually Vision was born. We were part of that and we believed in that vision then and we believe in it now.
1410. St. Andrews, the congregation I serve, in fact I'm told that we were first out of the gate to offer some free space when there was no money at all. I recall our committee of stewards working on how are we going to pay for this. We had to re-establish wiring, establish a studio and a room, a control room, which we did. It was just part-time of course. They came in and did a number of hours of programming there and we think we helped get it launched.
1411. As we look at it now, we find it is a very successful venture and vision, that grew out of Canadian concern.
1412. Now, the United Church has been involved fairly heavily for 14 years, up till last year. We had a full season of programming. Now, we are into documentaries but I think you are aware that we are facing some very major issues financially in relation to the community. But part of the issue of Residential Schools, for example, is not something that is being hidden. It's an attempt through the various media to bring to bear the stories from all sides. It's to look to the future, to find some form of reconciliation and growth for the Canadian society with some of the major issues that have emerged from the past and which we face and want to work through together.
1413. I'm watching my watch and I hope you are too and you will give me the right signal because I can go on. Who do I look to? All right. Thank you. This is the danger, you know, when you are a preacher.
1414. THE CHAIRPERSON: Do you use one of those at the pulpit as well?
1415. REV. J. HARTLEY: I like that idea though. Yes, it's excellent.
1416. The one at the pulpit, I heard the story where one church they have a clock in front of the minister and they also have a button. When the clock strikes twelve, the button is pressed and he disappears or she disappears.

      --- Laughter/ Rires.

1417. REV. J. HARTLEY: So timing is really important. So I will try to keep on time.
1418. So I want to tell you about people I have talked to when I knew I was coming. It was last minute obviously but I just made some just on the street kinds of things from United Church People.
1419. Grace Scott, a biologist who really believes that science and faith need to connect with each other. They are necessarily interrelated. She said, you know, "I get from it," of course over the years, she said, "I have got a lot of information about my own church, the United Church." She said, "I have learned so much more about other churches and other faith communities and I like the music too."
1420. Helen Ducloud (phonetics), blind, I note this in your opening remarks about the blind and access. She does sit by her TV and her response to Vision, she said, "It really helps me to understand other faiths," and her term was this, "and nurtures me spiritually."
1421. Marjorie Kirby (phonetics) is a senior and she said, "I can't -- I didn't write out one of those papers and send in one to the CRTC but I did do this for you." She gave me a little poem, I'm not going to read it. But she wrote a little poem and it is quite interesting she would take the time to do that so that she could express her feeling about Vision.
1422. Then last Friday I just happened to be having lunch with Roseanne Runta (phonetic) who is President of Victoria University, University of Toronto and I didn't tell her I was coming here. But I asked her what she knew about Vision TV, and she said, "Oh, do you know last year at Expo 2000, have you heard, at Expo 2000 in Hanover, Germany, they were noting exemplary projects." This is her wording, "Exemplary projects around the world of people working together using technology to better humanity. Vision TV was one of the five selected for Canada."
1423. I think from the United Church perspective the issue of humanitarian concerns is vital. The United Church has had that kind of role in this country for decades and continues to feel very strongly in terms of the United Church reconciliation and healing ministries with First Nations as a critical example.
1424. Also the clear decision of the United Church not to use the medium for social -- at least not for evangelism but for social ministry. To discuss, to be in dialogue with people across the country, other faiths, about social issues.
1425. As I said, we are facing a financial crunch at the moment. But I do not for one moment believe that that will end our commitment in any way, shape or form. We will be there and supporting. That is why I am here today.
1426. I would just like to add as a final comment, speaking on behalf of the United Church of Canada through its Moderator, that we support the request for seven year renewal. We didn't think that was particularly in doubt but we also support the seven cent rate increase.
1427. As a citizen I would like to add a note. I have watched the CRTC over the years. It's a major commitment of time and effort and a wealth of experience. You used two words today that I would like to pick up on and end with. You spoke of experience and hope. Well, I believe quite honestly that for Canadian citizens for many -- for the most of us, I think, the wealth of experience that you represents embodies for us, you embody the promise, the hope of a fair and equitable sharing of the channels of communication of radio and television in this country. It is a wonderful responsibility and I'm here to thank you for having had an opportunity to be part of it.
1428. Thank you.
1429. THE CHAIRPERSON: Thank you, Reverend Hartley. Just to clarify that quotation, the triumph of hope over experience was Samuel Johnson's definition of a second marriage, I believe, if I recall correctly studying Samuel Johnson in fourth year university and probably in Victoria College at U of T.
1430. REV. J. HARTLEY: Yes.
1431. THE CHAIRPERSON: I don't have any questions for you. Thank you for your comments and your views and for sharing the views of some of the people that come from your community as well.
1432. REV. J. HARTLEY: Thank you.
1433. THE CHAIRPERSON: We will certainly take those into account. Just on a final note I want to tell you, we seem to have something in common with "As It Happens." The Vice-Chair of Broadcasting, Madam Wylie, always mentions her grandchildren when she is chairing hearings, I always like to mention my dog. You may be responsible for "As It Happens," but my dog sings to the theme song of "As It Happens."
1434. REV. J. HARTLEY: That is your dog?
1435. THE CHAIRPERSON: My dog. Every time you put on "As It Happens" theme music, the dog starts to sing. So I don't know. It's a great program.
1436. Anyway, thank you very much for being with us. That concludes our interventions. I will now turn it over to our secretary.
1437. MR. M. BURNSIDE: I would like to ask the representatives of Vision TV to come forward to present their rebuttal.

      REPLY / RÉPLIQUE

1438. THE CHAIRPERSON: Welcome back, Mr. Roberts.
1439. MR. B. ROBERTS: Thank you.
1440. THE CHAIRPERSON: It's the end of a long day.
1441. MR. B. ROBERTS: It has.
1442. THE CHAIRPERSON: Do you have a bit more eloquence in you? You may proceed whenever you are ready.
1443. MR. B. ROBERTS: Thank you very much, Madam Chair.
1444. Good afternoon again, Madam Chair, Members of the Commission and staff. My name is Bill Roberts. With me are Susan Bower, Erika Kramer, Rita Deverell and our regulatory counsel, Grant Buchanan.
1445. We are here to reply to the interventions, both written and oral, that have been submitted to our application. First I would like to thank again the more than 2,400 individuals and organisations that wrote to you in support of our application. They represent a wide range of Canadians from all regions and backgrounds. I would also like to thank the intervenors who took their time out of their busy schedules to appear here today, and I wish to acknowledge the endorsement by the CCTA that our proposed new programming initiatives are value-added for their customers and are supported.
1446. Now, I would like to turn to the interventions that oppose part or all of our application for a rate increase.
1447. When we look at the major BDUs, it is interesting to note that the satellite providers did not oppose our rate increase. ExpressVu indicated support for Vision TV's renewal, while Star Choice did not choose to file an intervention. LookTV and the CCTA did oppose our application with the Cable Association taking the position that a full rate increase was not justified.
1448. First I would like to address one issue related by both Look and CCTA.
1449. Both characterised the proposed increase as a staggering and unprecedented 87 per cent increase. Well, let's put this in perspective. A large increase in percentage terms, yes. But it is a large percentage of a very small amount. Raising a one cent fee by another cent could easily be categorised as a staggering 100 per cent increase but we are still only talking about a single penny.
1450. Let's look at the real impact in percentage terms of implementing Vision TV's proposed increase. The chart on the easel indicates what portions of the average basic cable costs Vision TV currently makes up. If the current average basic fee is $21.29, Vision TV makes up less than four-tenths of 1 per cent. If the rate increase is approved, we will make up less than three-quarters of 1 per cent of the average basic rate. A total increase of less than one-third of 1 per cent of what the basic cable subscriber pays. If you can see the difference, you have got better eyesight than I do.
1451. Vision TV's advertising projections are realistic. The CCTA states that Vision TV has increased its advertising revenues at an annual -- average annual rate of 20 per cent over the course of this licence. In fact, since 1996, our annual growth in advertising has averaged 9.6 per cent, less than half that figure. A substantial part of the growth, moreover, was a one time increase of 64 per cent from 1996 to 1997, resulting from the introduction of our Family Viewing Block. We cannot expect such a dramatic increase again.
1452. It is true that over the last two years we have seen 20 per cent growth in advertising. This has been fuelled mainly by an increase in gross audience numbers, which in turn reflects a substantial growth in DTH subscriptions. But that growth has come to the pursuit of new customers outside the cable universe. Having plucked the low-lying fruit, DTH providers now must try to win over cable households, a far more difficult task. I repeat the point.
1453. We begged, borrowed and stole to stay afloat over the last few years. All that saved us was the totally unexpected arrival of DTH. For this reason we expect only modest growth in subscriber revenues over the licence term and thus only modest growth in our advertising dollars.
1454. Moreover, we are entering a period of heightened competition. Conventional religious television stations have launched in Lethbridge and Toronto and a third licence has been licensed in Vancouver. Additional applications for London and Ottawa are forthcoming.
1455. These stations sometimes air family programming identical to our own since we cannot afford to buy exclusive rights. Added to this is the prospect of as many as 60 new digital channels launched in the fall, all vying for advertising revenues. Given these circumstances, we believe that a projected average of 5 per cent growth annually is realistic if not optimistic. At least much more optimistic than the two and three per cent ad growth projected by such licensees as TSN, Discovery, Weather, Musique Plus, both appearing and not appearing at this hearing.
1456. The increases in operating costs are not normal inflationary increases. I will grant that we may have erred in our application by describing escalation and Vision TV's costs as inflationary. In fact, it is caused by increased competition and by the need to make investments in both hardware and systems. As we noted in our application and in reply to questions earlier today, Vision TV operates in a world of intense competition, for programming, for audiences, for advertising and for people.
1457. Programming, in particular, accounts for much of the pressure in our operating costs. Vision TV has a unique mandate, to focus upon the religious beliefs and practices of Canadians and on issues related to spirituality in an environment of respect, for diversity and balance. Programs that fit this mandate rarely can be bought off the shelf. So Vision TV must produce or commission much of what it puts on the air, an extensive proposition, especially given the ongoing escalation of licence fees.
1458. As an independent broadcaster, we are not able to buy programs in bulk for a variety of windows. A rate increase would allow us to invest in new programming initiatives result in 72 incremental, original, first-run hours of Canadian programming in each year of the new licence term.
1459. Madam Cram, earlier this afternoon you asked me where is the increase in Canadian content? We are willing to accept a condition of licence on these 72 incremental and original hours.
1460. Have we overestimated our expense increase? The CCTA has provided a chart showing the increases in a number of categories of expenses. Once again we need to deal with percentage increases in context.
1461. For example, they point out a 40 per cent increase in administration costs. In fact, our administration costs include an increase in client services that is more than covered by increased management fee revenues. When you take out these charges, the actual increase in administration is 6.5 per cent. The industry average for mature services is 10.2 per cent, while we spend only nine. If anything, we have underestimated our expenses.
1462. Already in the course of the current year we have had to increase spending in several areas well beyond projected levels outlined in our application. The need for improved systems to ensure Canadian content compliance, among other things, has pushed us over budget. At the end of the day, our spending in most categories, other than Canadian programming, is below the industry averages, as is the average salary paid to our staff. This application attempts to bring us more in line with industry norms.
1463. This rate increase is not a subsidy to one. The intervenors allege that our application does not reflect the operational synergies we hope to realise with the launch of our new Category 1 digital service, "One, The Body, Mind and Spirit Channel." Indeed the CCTA expresses some concern that the expenses filed include some that will be incurred on behalf of the new channel. I would like to make a number of points here.
1464. First, One will launch this September well in advance of the introduction of any rate increase. We have partners in the channel, none of whom have proceeded with their investments or would have proceeded with their investments if they thought that our participation was dependent upon an application for a rate increase.
1465. Second, our investments in digital equipment are intended solely for Vision TV, not for our digital channels. We need to replace ageing equipment to reduce costly downtime and repairs. A wholesale migration from analogue to component digital is required for Vision TV to ensure that it can provide technically acceptable programming and to operate efficiently into the future.
1466. Third, although there are some expenses in the budget that are incurred on behalf of One, they are more than covered by the increase in management fees in the revenue line.
1467. Vision TV's case is based on economic pain, not private gain. Madam Chair, in our opening remarks we outlined the financial crisis facing Vision TV. The chart on the easel illustrates it more clearly. Vision TV has suffered pre-tax losses in most of the years of this licence term. Compare our performance in 2000, the averages for English language specialties. Clearly we are not rolling in money. Vision TV stands at a crucial juncture now. We face ever-increasing competition for programs, audiences, advertising revenue and people. Much of our programming inventory has been repeated so often, it is growing stale. We need investments in systems and equipment to put ourselves on a more business-like footing.
1468. This request is not about increasing Vision TV's profitability. It is about ensuring that we continue to provide the outstanding service that so many intervenors, even those who oppose the rate increase, spoke of in their letters, their faxes and their e-mails. Our request is exceedingly modest, just seven cents per subscriber per year. Surely the risks involved are vastly outweighed by the benefits.
1469. Thank you for your attention. We would be pleased to reply to your questions.
1470. THE CHAIRPERSON: Thank you very much, Mr. Roberts. Thank you for the time that you spent with us today. We have no questions for you.
1471. MR. B. ROBERTS: Thank you.
1472. THE CHAIRPERSON: Thank you.
1473. I'm sorry. I'm a little new at this.
1474. The hearing is adjourned for the day.