Category Archives: Industry News

Industry Update – CRTC: Mandatory Carriage vs. Channel Drift

On April 23, 2013, the CRTC began a public hearing on “distribution orders under section 9(1)h) of the Broadcasting Act” – in other words, mandatory carriage orders. Mandatory carriage automatically adds a service to a cable/satellite/IPTV provider’s basic package, and – unless the service is distributed for free – requires distributors to pay that service a wholesale fee per customer. This is a privilege ten services currently enjoy. A new or existing service granted mandatory carriage is the CRTC equivalent of winning pole position in a horse race. It practically guarantees that service some form of subsidy.

New and/or unlaunched services applying for mandatory carriage, such as Starlight: The Canadian Movie Channel, ACCENTS, and FUSION, are forward-looking statements in search of stable funding. Starlight, in particular, has made some noise in the media about its commitment to Canadian film. Existing services, such as Sun News Network and Vision TV, see mandatory carriage as the way to secure their futures.

At the other end of the spectrum, there’s a Steve Ladurantaye Globe and Mail piece about four services — Blue Ant Media’s Travel + Escape, OUTtv Network Inc.’s OUTtv, Stornoway Communications’ ichannel, and ZoomerMedia’s ONE – asking the CRTC for licence amendments. To that end, the Independent Broadcast Group — the four previously mentioned broadcasters, plus APTN, Channel Zero, Ethnic Channels Group, TV5 Quebec, and ZoomerMedia — lobbies to protect the independent broadcasters’ interests.

ichannel, OUTtv, ONE, and Travel + Escape’s renewals are part of the same CRTC Broadcasting Notice of Consultation as the applications for mandatory distribution orders. To demonstrate what a new “basic” service could become in the future, I point to two current services on differing prosperity levels — OUTtv and Vision TV — as they have at least one thing in common.

OUTtv debuted as lesbian/gay/bisexual/transgender (LGBT) service PrideVision, and struggled to attract viewers in its early days – it aired pornographic content in the late night hours, and lacked a West Coast feed. Shaw Communications, in particular, resisted PrideVision. Headline Media Group (later Score Media Inc.) sold the service in 2004, to a consortium led by broadcaster William Craig.

PrideVision, by then doing business as HARD on PrideVision, briefly aired porn between 9:00 PM and 6:00 AM. In 2005, HARD on PrideVision spun off into a separate service (now Playmen TV), making the “new” OUTtv a full-time, general-interest LGBT service. Today, OUTtv is almost fully owned by Shavick Entertainment (Re:Source Media owns 4.16%), and has 939,200 subscribers as of 2012. Arguably, it took a decade, two ownership changes, and the “spinoff” of a questionable program block for OUTtv to find its footing.

Vision TV began in 1988 as a multi-faith religious service, initially owned by a company that evolved into S-VOX Foundation. ZoomerMedia acquired the service in 2010. Under ZoomerMedia ownership, Vision TV is more of a general-interest service for older audiences. ZoomerMedia’s chief argument is that cable and satellite companies want to remove Vision TV from their basic tiers, in part due to Vision TV straying from its original mandate. In the event Vision TV is bumped off basic cable, ZoomerMedia will attempt to amend Vision TV’s licence.

Where OUTtv and Vision TV intersect is their desire to amend their licences, and reduce Canadian content levels. This is why I don’t see a future for Starlight, EqualiTV, Dolobox TV, or other unlaunched services vying for mandatory carriage. The history of Canadian specialty services suggest that a service will rebrand, and/or amend its broadcasting licence, at some point. Even well-established, profitable services like The Comedy Network want to reduce their Canadian content levels.

Canadian television is littered with services that failed – C Channel, WTSN, The Life Channel, Edge TV, Cool TV, X-Treme Sports, Fox Sports World Canada, etc. Other services have new storefronts – Drive-In Classics is now Sundance Channel, TV Land is now Comedy Gold, mentv/The Cave is now H2, and so on. Services might wrap themselves around noble goals – engaging youth, reviving the Canadian film industry’s fortunes, appealing to underserved minority groups. What matters is whether the services are managed well enough to survive on their original mandates, and whether channels will still be maintained, if their preferred source of funding doesn’t materialize.

In the end, I don’t think CRTC’s current mandatory carriage hearings will produce much of value. In 2013, there are too many examples of services that meant well, but gave in to the pressures of commercial broadcasting. I rarely see a CRTC licence amendment that increases Canadian content, or strengthens a service’s mandate – maybe AUX’s 2011 application to play more music videos, which the CRTC denied.

I neither want to see overfunded services that can’t sustain themselves, nor services using mandatory carriage orders as a substitute for venture capital. In the wake of CRTC’s second round of Bell-Astral hearings, there are more pressing matters in Canadian television.

In defence of the CRTC

From Kelly Lynne Ashton of Butter Tarts and Brown Drinks:

Does Canadian TV need an overhaul? Maybe. Probably.
Does the Canadian broadcasting system need improvement? I think we can all agree to that, including the CRTC. Without the CRTC how do we do that? Do we advocate scrapping the Broadcasting Act and the CRTC with it and let the free market dictate what gets made and who airs it? I seriously do not think that any of us want the broadcasting system that we’d end up with then, it as it would likely be nothing but retransmission of US signals. Continue reading.

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If a Mad Men fell in the Canadian TV forest, would it make a sound?

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In ancient Twitter times, maybe a year ago, a discussion popped up: where’s Canada’s Mad Men? Why can’t we produce something so excellent, so embraced by critics and audience?

My answer: we have. We had it before Mad Men. But we have to scale down our thinking from Hollywood levels.

Slings & Arrows was an intelligent, fun, carefully crafted series, and a critical favourite. I posit there is no show better, Canadian or American or Mexican. Girls is no cleverer or funnier or well-loved than Michael: Tuesdays & Thursdays. Durham County, Intelligence, Call Me Fitz, Less Than Kind – we have shows that in another country, with a larger population base, and not as overshadowed by the Hollywood machine — in a country with a healthy TV industry and more diverse media — these shows might have received the same kind of attention as a Homeland in the US or a Luther in the UK.

A crucial element to sustain these critical darlings, however, is buzz. Mad Men, Breaking Bad, Girls, all have tiny audiences compared to a network hit — even an NBC hit — yet command a much greater percentage of critical and social media attention than an NCIS.

The problem: Canada’s population base is 10 times less than the US. Canada’s TV critic community is even tinier per capita. Canadians consume American media, including television criticism, while our critics are time-sharing their attention with American shows. Homegrown TV is crowded out of every thought-space.

It’s easy to say Canadian media should write more about Canadian shows, but it starts to become a no-profit endeavor very quickly, and the Canadian media are struggling with that well enough now. They check in with the hits, and their favourites, but there’s little checking in beyond once a season, never mind the kind of obsessive episodic analysis that’s become a staple for American critics.

My direct comparative experience is out of date now, but when you get over a thousand people clicking on an article about House and over a dozen clicking on an article about Intelligence, you have to have a certain will – one not driven by chasing ads – to persist in writing about a low-rated but thoughtful Canadian series.

Audiences aren’t talking much either, because a cult audience in Canada is a microcult spread over 10,000,000 km2. There are pockets of chatter on social media, and if a particular show is in your bubble you’re bound to see talk of it, but there’s little spreading to the greater water cooler out in the wild.

We notice loudly when the Canadian TV industry produces more mediocrity. Let’s listen for the excellence falling among us too. Because in Canada, we have to listen very carefully to hear it.

Canadian TV: “The whole system is messed up”

From Scott Stinson of the National Post:

See you, regulator: Canadian TV needs an overhaul
The CBC opted against developing any new shows next season and instead renewed its entire schedule. CTV ended Flashpoint and replaced it, surprise, with another police procedural. Showcase and Space have had new success with Canadian-made drama, provided that the drama stars an attractive woman in some sort of science-fiction setting who wears tight pants. And one private network in particular made history by scheduling an entire weeknight of Canadian programming — except that was the Syfy channel in the United States. Read more.

CanCon basics from an expert wonk

A few podcasts ago, cohost Anthony Marco and I grilled Canadian media policy wonk Kelly Lynne Ashton, who has been my resource for a lot of “is it CanCon or not?” type of questions. She answered a lot of questions around funding, coproductions, the CRTC and vertical integration that keep popping up, so I thought I’d include a partial transcript in a post for easier reference for all. I also thought I’d get Rachel Langer to help transcribe (thanks Rachel!)

On Vertical Integration Re: The Bell/Astral Merger
We’ve got the vertical integration policy which encouraged cable companies owning broadcasters owning prod cos owning internet service providers. Over the years the commission encouraged that under the idea that bigger is better and these companies needed to be bigger to be able to compete international and be stronger Canadian companies.

The market has shown that big companies have evolved. Whether we agree with it or not, the horse is out of the barn. They’re big companies. They own almost everything. We do need competition, we need to have different options and voices, but one of the problems is that Astral wants to sell. We can’t make them continue business.

Regarding Our Blended System
We are completely muddled. Every cable company argues out of both sides of the mouth. “It’s a free market, you have to let us do what we want to do” then “but we survive because of regulation”. So we are blended. Everybody knows it’s a blended system, but when you’re standing in front of the commission [CRTC], you argue out of one side of the mouth or the other…frequently at the same time.

On Mandatory Carriage
It’s the individual broadcasters who are looking for mandatory carriage. Other than Sun News, it’s Vision, Starlight, APTN — these are small guys and they’re looking for mandatory carriage to have a secure revenue stream, because they’re niche broadcasters, for the most part.

As for Sun News, their arguments aren’t very strong. They’re a news service. News was released as a competitive, it’s not a protected genre. For mandatory carriage there is a very high standard that you need to meet of exceptionality. You have to be an exceptional service that is necessary to Canadians, and there are all the other news services.

On the Power of the CRTC
The CRTC is growling more than they used to. They have the same tools that they’ve ever had. They seem to be much more willing to use those tools, and be aggressive with those tools. [In terms of enforcing consequences] the big hit is pulling your license, but they can also issue a short license. With Shaw Cable, they didn’t fulfill a number of their obligations, and they didn’t do the reporting they were supposed to do and they were playing games with the services they didn’t like, so they got a short license – instead of the usual 7 years, they got 3.

It’s a real pain [for broadcasters]. Those license renewal hears are huge. The amount of staff you have to put in, the amount of money and projections and studies– it’s actually quite costly to have to go through that process, so to have to go through it twice in the normal period you were expecting, it’s a real wakeup call to any licensee.

On OWN Network operating under the original licence’s educational mandate
To bring it back to Oprah Winfrey [and the OWN Network] the commission is doing something it always had the power to do, but wasn’t willing to do and that is a mandatory order. That is telling a licensee “you have to do this and we are filing the order with the federal court.” The federal court has much greater penalties than anything the CRTC has. They can fine, they can seize assets, they can seize personal assets of the directors of the company.

On Network Reporting Obligations
[Networks] DO have annual reports, but all that info is deemed to be confidential so the commission aggregates it. So what the stakeholders, the unions and guilds are trying to do is to get that info a little bit disaggregated so you can actually have SOME idea whether say Corus or Shaw or Bell is living up to their expectations as a group.

You can’t get [stats for] one channel. What is publicly available to everyone in annual reports — “this is what is spent by Canadian broadcasters.” They argue the info is competitive between one service and another. I’m not going to defend it, I’m just saying this is the game we have to play.

On the “Confidentiality” of CanCon Reporting Data
The CRTC says that they’re privy to all the information and we have to trust them, that they’re reviewing it all. We do know that they go back. We hear the commission being frustrated and saying “You didn’t meet your CanCon regulations”. … We want to encourage the current commission’s toughness. It’s gotten more and more opaque. We used to get data whenever a company was buying another company (like a Bell/Astral), we used to get a lot of financials but then they just started calling it confidential.

On Determining CanCon Requirements for Productions and Co-Productions
It’s not that complicated. [For measuring CanCon] first we’ve got CAVCO. It’s a point system. You have to have 6/10 points for any show to be Canadian. That’s your writer, director, top two lead actors, composer, designer, editor. Plus on top of that the producer has to be Canadian and own all the copyright, and you have to have spent 75% of the money in Canada. So that’s a basic outline [for a completely Canadian show] and one of the writer or director has to be Canadian.

The funding system is set up for 8/10 point productions. Those are the truly Canadian shows. Flashpoint is 10/10. (Any Canadian Media Fund show) is 10/10. There are some exceptions – you can bring in an American lead if you apply for certain exemptions, but generally [the CMF funded shows] are 10/10.

Co-Productions: Two countries have agreed that when they work together the resulting product will qualify as domestic under each country’s rules. So for example, a Canada-UK production. You’ve got UK leads, UK writer, UK talent, but it still qualifies as a 10/10 Canadian production. It gets complicated here. It applies for broadcast [but not necessarily funding]. It depends on the size of your budget, whether it’s worth going to CMF. A lot of the copros don’t, but I think Borgias did.

There is a minimum level of Canadian involvement [required]. So first off, when you’re talking about copros, the idea is that overall your minorities and majorities are going to balance out, so other countries are not just using Canada as a source of financing. That’s the idea. I myself have looked at the stats, and overall they balance. But overall means feature films, it means docs, it means animation – a LOT of animation is done through copros. Overall it balances. Where there’s a problem is really prime time drama.

We started to bring to people’s attention that while the system worked overall it was NOT working with prime time drama – there was an imbalance there. When you’ve got excessive minorities (and you can name them all, The Tudors, The Borgias, The Pillers of the Earth) they’re using Canada for post-production, that’s how they’re getting their minimum. The minimum you have to do with the minorities is 20% of your budget. They’ll have a couple actors who are killed off early. Name actors with red shirts. ;)

On Canadian Awards for Copros
First off, do we want to be known as a country of post production? I agree that composers and post-houses and editors are important but they’re not the only part of our sector that we need to be supporting. When we celebrate Canadian, do we celebrate minority co-prods? I was offended when Telefilm said “We do such great Canadian productions like The Borgias”. … Some of the other countries have separate categories for international productions.

Regarding American Shows that Shoot in Canada
They get production service tax credits. So they do get funding from the government, but the benefit of that is that they employ crews. They don’t [count as CanCon].

On US-Canadian Co-Ventures
A co-venture is a very definite term. …Defying Gravity was a co-venture. I believe it was a co-venture because it didn’t have a US broadcaster. It had an American producer. It was a co-venture between a Canadian producer and a US producer to allow the US producer to have creative say.

A production with an American pre-sale (like Rookie Blue)… they don’t own a piece, there’s no need for a formal designation.

On the Public’s Understanding of Canadian Shows
I honestly don’t think that many Canadians think that much about whether a show is Canadian or not. If they find out it’s Canadian then they’re pleased and they’re happy and they’re proud. I do think that people are proud of the fact that …we have a really strong lineup right now. When you tell people that these shows are Canadian they’re surprised because they thought they didn’t like Canadian TV.

For more from Kelly Lynne Ashton, listen to the podcast or read her wonktastic blog