April 29, 2011 Mr. Robert A. Morin Secretary General CRTC Ottawa, ON K1A 0N2 Re: Broadcasting Notice of Consultation CRTC 2010-952: Group-based licence renewals for English-language television groups. Dear Mr. Morin, 1. This is the Final Written Submission of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) and the Canadian Federation of Musicians (CFM) in response to the above noted Applications for the group-based licence renewals for English-language television groups. UNDERTAKING 2. A list of proposed changes to conditions of licence filed as part of the group s applications in this proceeding you do not object to. 3. ACTRA and CFM do not object to any of the requests for conditions of licence that serve the administrative function of bringing about consistency with A group-based approach to the licensing of private television services Broadcasting Regulatory Policy CRTC 2010-167 and additional programming flexibility consistent with the Commission s policy set out in Regulatory frameworks for broadcasting distribution undertakings and discretionary programming services Regulatory Policy, Broadcasting Public Notice CRTC 2008-100. ADDITIONAL COMMENTS SUMMARY 4. Our key preoccupation in this proceeding continues to be making sure that the new, Group- Based Licensing Policy 1, moves our industry forward, not backwards, by correcting the gross imbalance in broadcasters spending between Canadian and foreign programming; and bringing more scripted Canadian dramatic programming to our screens. 1 Broadcasting Regulatory Policy CRTC 2010-167.
5. While it is easy to get distracted by the multitude of details and other issues that permeated the hearings, ACTRA and CFM stand by the key recommendations outlined in our original submission to this process: I. A CPE of 30% for ALL broadcasting groups BCE, Shaw, Corus and Rogers. II. A minimum group-based PNI spending level greater than 5% III. Maintain Canadian content obligations for specialty services, except those changes required to bring these into line with the 2010 Television Policy rule which reduced from 60% to 55% the content requirement over the broadcast day. IV. Introduce a requirement that conventional broadcasters air at least two hours of PNI each week, in real prime time, 8-11 p.m. Sunday to Friday. GENERAL OBSERVATIONS 6. We appreciate the opportunity we were given to appear before the Commission on April 4, 2011 as part of this proceeding to expand upon our original submission and to respond to the Commissioner s questions. We also welcomed the opportunity it presented to respond directly to the Applicant s appearances. 7. We came away from the hearings with mixed feelings. On the one hand we were buoyed by the Commission s commitment to ensure that the Applicants are subject to fair and reasonable CPE and PNI contributions and not to allow them to nickel-and-dime the system. 8. However, to say that we were disappointed by the Applicants attitudes is an understatement. For the most part, the broadcasters whined about creating Canadian content while seeking all of the benefits with none of the obligations. We heard Rogers all but admit that the CPE they proposed was based on nothing but being the lowest number they thought they could sell to the Commission. As the Chair noted, the new Group-based Licensing Policy gives broadcasters unprecedented flexibility. There needs to be quid pro quo. Unfortunately we still do not see that. 9. As key creative players, we are not oblivious to the changes and challenges that our broadcasting industry is facing. Indeed, our members are on the frontlines of many of these changes. We therefore appreciate that broadcasters are also facing challenges as they try to respond to and seize upon the potential that digital revolution is presenting. As we stated in our appearance, we want broadcasters to be financially successful to ensure a robust and diverse broadcasting system. Indeed, the more financially successful they are, the more they will be able to contribute to the production of Canadian programming. However, there must be a balance. Broadcasters cannot be rewarded for under-performing in the past and the Commission must not allow them to increase their profits at the expense of Canadian programming and ignore their obligations under the Broadcasting Act. 10. We are also concerned with the breadth of the discussion that took place in camera. The conversations went well-beyond financial discussions. To the Commission s credit, much of those sessions are available as un-redacted transcripts. Nevertheless, we find it a dangerous precedent for so much conversation to happen behind closed doors. Page 2 of 6
CPE AND PNI CALCULATIONS 11. We regret that we are not privy to the data that we require to be helpful to the Commission in offering precise numbers for CPE and PNI obligations. 12. We are concerned that the Applicants appeared to be shifting numbers and re-categorizing certain types of programming during the hearings to alter and lower their historic spending levels. However we trust the Commission staff will do due diligence to ensure a clear, and accurate calculation of historical spending. 13. ACTRA and CFM believe that a 30% CPE still appears to be fair for all Applicants. 14. Proposing a specific PNI is a little more difficult given the challenges as stated above. However, we offer the following guiding principles: 15. The objective of PNI spending requirements must be to raise the bar and, where appropriate, to require broadcasters to do significantly better over the next licence term. The Commission cannot reward historical underspending with a licence to keep underspending. 16. The Commission s original proposal of 5% must still be the floor since that number was calculated on drama alone and did not include spending on long-form documentaries. It would be a disastrous for the new Group-based Licensing Policy to result in less Canadian drama. 17. The definition of PNI must not be expanded; it must be interpreted narrowly to only include programming which is underrepresented. COUNTERING APPLICANTS CLAIMS OF LACK OF CAPACITY AND RETURN ON INVESTMENT 18. The Applicants made some statements in the in-camera session that we want to address. There is no capacity to create more Canadian drama 19. Less than 50% of ACTRA members reported income last year. That means there are more than 10,000 professional, trained performers not working. And thousands more who are underemployed. The other guilds will tell you the same thing about their membership. 20. Canadians talent helped produce $1.51 billion in foreign service production in Canada 2009/10. That s 53 theatrical feature films, 61 television series, 67 MOWs, mini-series, pilots for a total of 35,900 jobs. That s a significant amount of world-class capacity that could be creating new Canadian programming given the opportunity. 2 21. It is also a red-herring for broadcasters to argue that their CPE should be reduced since public benefits obligations will put money into the system in coming years. Public benefits monies are incremental. Public benefits are an obligation imposed on broadcasters in exchange for the privilege of not being subject to a competitive application process when licence terms expire, or when ownership or control of broadcasting undertakings is transferred. Taking benefits contributions into account when calculating CPE and PNI obligations undermines this quid pro quo, rendering the Commission s longstanding benefits policy futile. 2 Profile 2010. CMPA, APFTQ, Department of Canadian Heritage. Page 3 of 6
Canadian programming doesn t make money 22. The Writers Guild of Canada is refiling the joint study The Economics of Canadian Programming 3 in their Reply. Based on interviews with representatives from six leading media buying agencies, audience data, examination of the implications of consolidation on the licensing of television programming, and broadcasters marketing, technical and administrative costs, the analysis compares the revenues and costs associated with airing Canadian television programming. The conclusion was that Canadian programming can and does make money. The study also found that it is common practice for broadcasters to undercut their own ad rates by 25% for Canadian programs, regardless of the show s ratings and popularity. Broadcasters could perhaps make more money on Canadian programming if they valued it more. We urge the Commission to build on this study by undertaking its own similar analysis to update the date and include data from forms of revenue, for example DVD sales, that due to limited resources and access, we were not able to undertake. 23. We would also add that creating Canadian programming is not enough. In order to draw eyeballs. Canadian programming must be given a consistent timeslot when Canadians are apt to watch TV and the programming must be publicized. It is our hope that having CPE and PNI spending requirements will encourage broadcasters to invest more time and effort ensuring Canadian programming is a success to maximize their returns. EXHIBITION REQUIREMENTS FOR CONVENTIONAL SERVICES 24. ACTRA and CFM stand by our initial proposal that conventional services be required to air two hours of Canadian PNI in real prime time, Sunday-Friday 8-11 pm. 25. We again note that Section 3(1)(s) of the Broadcasting Act states that private networks should, to an extent consistent with the financial and other resources available to them, (i) contribute significantly to the creation and presentation of Canadian programming. (emphasis added). The Act gives equal weight to production and exhibition. 26. As noted above, we hope that spending requirements for PNI will encourage broadcasters to schedule these programs on conventional services in prime time when they can attract the biggest audiences possible. However, the reality is, Canadian broadcasters schedules are still slave to U.S. simulcasts. Without an exhibition requirement, it is tempting for them to leave their prime time schedules wide open so they can respond to the whim of U.S. network scheduling. SPECIALTY SERVICES: GENRES AND COLS 27. We trust the Commission will review each of these proposals carefully and will agree to changes only where they make sense for the broadcasting system and further the objectives of the Act. If broadcasters aren t happy with the licences they have, they should go through the formal process of applying for changes to their nature of service; or they should sell their licences to someone who does want them. It is disingenuous for them to keep chipping away and watering the services down. Also, as noted by a number of Commissioners during the hearings, the services stretch the limits of their nature of service, e.g. when Hellcats airs 3 The Economics of Canadian Programming. Nordicity, Commissioned by ACTRA, the Canadian Film and Television Production Association (CFTPA), the Directors Guild of Canada (DGC), and the Writers Guild of Canada (WGC), May 7th, 2009 Page 4 of 6
on Access and Ice Road Truckers on History. These may be fine shows with loyal audiences; they just don t belong on these services that were promised to Canadians when licenses were granted. 28. We urge the Commission to reject the application to change Showcase s COL regarding the broadcast of programs produced outside of the United States. The 10% limitation on US programming was a very special and important commitment that was made when the service was first licenced. Canadians have more than sufficient access to U.S. drama and scripted comedy programs. We can see them on the U.S. services directly, on our conventional broadcasters, on any number of cable and specialty services and over-the-top services such as Netflix. When Atlantis applied for the Showcase licence is promised that it would bring Canadians drama programs that they would not otherwise see, so they freely proposed the 10% limitation. This was accepted by the Commission and was one reason they received the licence. Showcase is now an extremely successful service and we suggest that it is successful because it is different. 29. During Shaw s appearance at the proceedings, they were adamant that they would not use this change to duplicate what is on Global or CTV. It's not the big U.S. studio stuff, instead they said they would use the space to bring in the cable stuff that's a little quirkier, a little edgier. 4 Shaw would have plenty of room for such interesting fare if they cleared out the mainstream U.S. programming such as Law and Order SVU, NCIS, Bones, House, CSI New York, CSI Las Vegas, and CSI Miami that currently fills Showcase s schedule. 30. Moreover, why should more Canadian shelf-space be given away to U.S. product? 31. We also do not feel that BCE made a compelling case to reduce the amount of programming featuring music clips on MuchMusic and MuchMoreMusic. BCE claims the television audience for music videos has vanished. This could be the consequence scheduling them when no one is watching: from 6 am-12 noon their audience is in school and from 5 am Saturday morning, their audience has likely just gone to bed. We fear that allowing MuchMusic to air fewer videos will mean more shows similar to what is currently on their schedule: Hellcats, Vampire Diaries, Jackass, Punk d, and Trending, and Hollywood films, programs that stretch the definition of music related. 32. If the Commission is inclined to grant this change, we urge you to still refuse their request to cut MuchFact by 50%. By BCE s own account, MuchMusic has 14,000 videos on its website; clearly they are still benefitting from this fund and will continue to do so. More importantly, the point of the fund wasn t to subsidize MuchMusic s conditions of licence, it was to support emerging artists. Even if these additional funds were redirected to independent production for music-related programming, investing money in independent production isn t investing in artists. SUPPORT FOR INDIGENOUS CANADIAN FEATURE FILMS 33. ACTRA and CFM note that the difficulties in financing indigenous Canadian feature films have become more acute as broadcasters support has declined. We support calls by CAFDE and the CMPA for a policy proceeding to consider the critical role of broadcasters in respect to broadcasting indigenous feature films. 4 Barb Williams, Senior Vice-President of Content for Shaw Media, CRTC Hearing Transcript, Volume 3, 6 April 2011. Page 5 of 6
34. We also agree with arguments that pay television services should be excluded from application of the Group-based Licensing Policy. Otherwise licensees could use their flexibility to move their historical expenditures on Canadian feature films to other services. The obstacles to producing indigenous Canadian features films are already great; we urge you not to add another. CONCLUSION 35. For too long, our own Canadian content has been overshadowed by American product and undervalued by our own broadcasters. We must do better. The Group-Based Licensing Policy can get us there, but only if the Commission applies conditions of licence that ensures that Canadian broadcasters are positioned to compete with a global, digital distribution system by requiring them to broadcast the only thing that makes them distinct: Canadian programming. 36. We thank you for the opportunity to participate in this important proceeding. Thank you. Stephen A. Waddell National Executive Director, ACTRA Bill Skolnik Vice President from Canada, AFM Chief Executive Officer, CFM CC: David Spodek, CTVglobemedia (david.spodek@ctv.ca) Sylvie Courtemanche, CorusEntertainment(Sylvie.courtemanche@corusent.com) Charlotte Bell, Shaw Media (charlotte.bell@shawmedia.ca) Susan Wheeler, Rogers Broadcasting (susan.wheeler@rci.rogers.com) - End of Document Page 6 of 6