The Wonk Report: CRTC’s Group Licence Renewal Decision

Yesterday, the CRTC released its decision on renewing the group licences for the French and English broadcast groups. The English groups are Bell, Corus (which now owns Shaw) and Rogers. Their licences expire August 31, 2017, and are now renewed (for the most part) for another five-year term.

The major news in the media has been the decision to give OMNI mandatory carriage for three years and then require it to compete for that licence with anyone else who is interested, which to some is seen as giving them a head start. However, the bulk of the decisions relate to the group licence renewals. I can understand why they aren’t making headlines as there isn’t much there. The CRTC’s priority seems to have been standardizing the licences to be consistent with each other and with the TalkTV decision and not dealing with many of the issues that were raised at the hearing or in the submissions. Not dismissed, just not even mentioned. Not surprisingly, a few things were added that had not been discussed.

Bell and Corus had tried to have their group Canadian Programming Expenditure (“CPE”) reduced from 30% to lower levels based on arguments such as how hard it is to make money as a broadcaster in the days of competition from Netflix etc., etc.  As the CPE is based on previous year’s revenues that competition is built into the calculation so the CRTC did not buy it.  Group CPE is maintained at 30% of revenues.  That’s the good news.

Bell and Rogers were subject to a Program of National Interest, a.k.a. PNI, (drama, documentaries and award shows) CPE of 5% as was the old Shaw, while Corus had a higher PNI CPE (9%) due to the higher requirements of its children’s services.  Bell and Corus argued that it should be a standard 5% for all services while Rogers had asked for historical levels.  The production sector expressed concern that a standard 5% PNI would result in a net loss of production.  The Commission decided on a flat 5% PNI CPE but encouraged the broadcasters to see that as a floor and to do more than 5%.  We’ll see.

New topics were incentives for Indigenous production and Official Language Minority Community (“OLMC”) production.  If these productions are broadcast, the broadcaster will receive a 50% credit on Indigenous production and a 25% credit on OLMC production, provided that both together are no more than 10% of group CPE (the 30% up above).  On the face of it, that seems like a good thing but there was no chance to discuss it or pick it apart at the hearing.  I wonder why there is a requirement that OLMC production has to be independently produced but not the Indigenous production.  What does APTN think of this proposal?  Does the current CRTC know that drama incentives did not work to increase drama production when it was tried and so it was specifically dropped?  Has anyone done the modelling to see how much extra production this could create and how that relates to the audience?  Given that it’s only an incentive and not a requirement will it even mean more Indigenous programming and OLMC programming or will it just mean Bell gets a bonus for 19-2 that it wasn’t expecting?

The other new topic is the CRTC holding an event on the role of women in production with an eye to increasing women in key production roles. They will also require broadcasters to report on the number of women in key roles in the programs that they commission.  While I applaud the added reporting, I do question why the broadcasters have to extend their existing Employment Equity reporting on women, visible minority, Indigenous and disabled employees to only women.

So what was left out?  The CMPA had a lengthy discussion about the definition of independent production which sought to prevent broadcasters from turning producers into service producers in all but name only (“Producer of Record” arrangements).  They asked for a return to evening exhibition requirements for discretionary (specialty) services as they are still a prime spot for programming.  They asked for a quota for non-PNI independent production as independent production is important in all programming.  They had proposals for how Corus could be required to stay in the kids business despite the removal of the genre protection policy and wanted TMN to continue with a commitment to Canadian feature films.  They asked for a definition of original programming with an eye to later requesting regulation.  ACTRA had asked for two hours of PNI in prime time.  The DGC had asked for an increase to PNI for features and long form documentaries.  The WGC asked that Bell Media’s prior contributions to BravoFACT and MuchFACT should be added to their PNI CPE and that a minimum amount of broadcaster CPE should be spent on development.  None of these issues were addressed in the decision.  That is an awful lot of effort on the part of stakeholders with very little return.

So the question is, what impact will this have on the producer or consumer?  There could now be a drop in PNI at Corus.  They will likely continue with their Producer of Record contracts and now other broadcasters may pursue that strategy.  There could be fewer original programs on all the broadcasters.  We could also see fewer children’s programs on Corus, the only one of the groups airing children’s programming.  We could see more indigenous and OLMC programming.  Possibly.

As with any CRTC decision, it will take time to see the impact of this decision.  However, there is a very real risk that the decision is not likely to make any improvements in spending on Canadian programming and may actually allow the broadcasters to spend less on independently produced drama, documentaries and children’s programming.


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