All posts by Kelly Lynne Ashton

Kelly Lynne has over twenty years of experience on the business side of Canadian film, television and digital media as an entertainment lawyer. She took a slight departure to produce children’s digital media. When it was time for something new, moved back to business affairs but now in film, television and digital media. More recently she discovered that all along her true calling was as a Canadian media policy wonk. Now she assists clients with research projects, policy and strategy development, government and government agency submissions and social media consulting.

Prime Time in Ottawa – A Little Real Life

Last week the Canadian Media Producers Association put on its annual Prime Time in Ottawa conference.  There was a theme that I felt throughout Prime Time in Ottawa 2018 that I think was intended but was also a little unexpected and I will sum up that theme as ‘Real Life’.  While producers were meeting with potential funders, buyers and broadcasters and attending sessions on how to use data and what’s going on with ‘new’ formats these days, running through the conference was a preoccupation with a few big picture issues which rarely get much attention.  You can check out the hashtag #PTiO and the CMPA’s YouTube channel  for recorded livestreams of four sessions to see if you agree.

The most obvious was gender parity.  Marguerite Pigott, CMPA’s VP of Outreach and Strategic Initiatives and responsible for Prime Time, announced at the beginning of the conference that half the speakers were women and ‘it wasn’t that hard’.  Well, it appears to be for some conferences so that was a welcome start. Women in View presented a glossy ‘Diversity Toolkit’ aimed at getting more women hired in front of and behind the camera.  It is inclusive of women of colour but the priority is gender parity.  While that work clearly needs to be done, the Toolkit reflects a use of the word ‘diversity’ that I find problematic.  When people conflate gender parity with diversity then other forms of diversity (visible minorities, ability, neuro-diversity, income, education, gender orientation etc.) are swept under the rug.  I would have liked that report to spark a conversation about how the Canadian media industry does not do a good job of reflecting the full diversity of its audience in front of or behind the camera and then a discussion of ways to improve that.  That’s my Real Life.  [Full disclosure – I authored a Diversity and Inclusion Toolkit for Interactive Ontario and earned a Certificate in Leadership in Inclusion from Centennial College so I love the big discussions about how to improve diversity and inclusion.]

The panel on Underserved Audiences: Finding a Market could have touched on diversity but didn’t really. What it did highlight was how OTT can help broadcasters and producers aggregate underserved audiences and find larger audiences for what mainstream broadcasters might consider ‘niche’ content.  I was fascinated to hear Brad Danks of OutTV talk about the channel becoming viable now that they can go over the top and aggregate LGBTQ audiences from around the world.  It was depressing to hear Lisa Meeches of Eagle Vision talk about major broadcasters turning them down for “We Were Children”, a documentary about the residential school system, which at the time limited their audience to APTN.  Now, however, it is finding a much bigger audience and a lot of success on Netflix.   However, there was little discussion about how storytellers from these less mainstream audiences could get their content funded when the main gatekeepers are still the mainstream broadcasters.  As Netflix made clear in their fireside chat, they do not develop but rely on mainstream broadcasters to do that work and then they’ll partner on production.  Underserved storytellers were encouraged to create content themselves and prove their audience exists using YouTube and similar platforms but that is still requiring them to jump an additional hurdle that mainstream storytellers don’t have to do – ‘prove there’s an audience and then maybe we’ll license it’.  For example, if the industry continues to ignore the 22% of Canadians who self-identify as visible minorities (much higher in Canada’s urban centres) and the stories that they want to see, they will increasingly turn away from the broadcast system and find their entertainment on YouTube.  Real Life.

Another big topic was Harassment, which I’m sure that we can all agree was very timely.  It was my favourite session as PrimeTime invited accomplished women from other sectors who have a great deal of experience with the topic to come talk to and engage with us.  It was a great opportunity to learn how institutions as patriarchal as the military and the Senate were trying to change their cultures.  Both Senator Marilou McPhedran and Rear Admiral Jennifer Bennett broadened the conversation beyond sexual harassment to what they see is an abuse of power and authority against vulnerable people – which in many cases but not all are women.  They encouraged the industry to keep shining a light on the issues and keep the conversation going while trying to fix the culture which allows such abuses to happen within the industry.  [As the mother of a young woman who was screamed at by an A.D. for fumbling a pizza order while on an unpaid internship, I concur with everything they said.]  McPhedran and Bennett also provided very specific advice for next steps: provide not only someone to complain to but someone who can provide advice, don’t just look at complaints but try to fix the culture that gives rise to them, build your own plan for long term change and don’t get distracted by quick fixes.   Real Life.

The other Real Life theme I’ll call generational change.  Media leaders in Canada are getting older and there were three tributes that marked the passage of time.  Jay Switzer, co-founder of Hollywood Suite and former CHUM CEO, died from brain cancer at the age of 61.  Bob Crowe, Saskatchewan producer and CMPA board member died of a heart attack at 62.   Carolle Brabant retired after eight years as Executive Director of Telefilm Canada.  While both Switzer and Crowe’s passings were unexpected and early, along with Brabant they mark the passage of time and the evolution of the industry and for me raised the question – where are the next generation of media leaders?  Some organizations are planning for it, bringing up young producers, programmers, administrators but others seem to be waiting to deal with it when forced to.  This would be a worthwhile conversation to have as we discuss OTT services, using data and ‘new’ formats because I suspect the next generation of leaders will also have some new ideas about how to do business and reach audiences.

There were other good moments at PrimeTime 2018 (another great opening speech from Reynolds Mastin, Jesse Wente’s first speech as Director of the Indigenous Screen Office, a very detailed explanation of the FairPlay proposal by lawyer Barry Sookman) but this theme of the impact of Real Life on the Canadian media industry and how well we’re dealing with it, is what I’m taking away with me this year.

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Creative Canada – Sounds Good So Far

As you may remember, last year Minister of Canadian Heritage Mélanie Joly conducted a broad public consultation toward developing a strategy for Canadian content in the digital world.  “Everything” was on the table.  At long last, on September 28, 2017, Minister Joly announced the government’s strategy for Canadian content in the digital world.  This strategy, as contained in her speech and a ‘framework’ document is called “Creative Canada”.  Catchy.

There are a lot of great messages in Creative Canada.  It talks about growing the creative economy, which reflects this government’s understanding that culture is not a frill but an economic driver.  It talks about investing in our talent so that they can flourish at home while being financially successful around the world.  It cites three pillars for the strategy:

  • Investing in creators and cultural entrepreneurs
  • Promoting discovery and distribution
  • Strengthening public broadcasting and local news

This is a terrific preamble, but what makes up this strategy?  We were presented with a number of initiatives, including several already in place, which on their face all sound good.  The big problem is that there is not a lot of detail on these programs and policies so it is difficult to assess their impact.  Here are a few highlights:

The government deal to get Netflix to agree to set up shop in Canada and spend $500 million on production here has made headlines. However, it raises many questions.  Will these be Canadian certified productions (i.e. they invest in Canadian producers’ productions) or service work produced by a non-Canadian controlled Netflix Canada?  Will it be incremental money to what they already spend on production in Canada?  What happens if they don’t spend what they promise?  What we do know for sure is that it is not regulation and it does not apply to any other streaming services operating in Canada.  The government did not choose to level the playing field between Netflix and the regulated broadcasters through any kind of regulated contribution or quota system.  It also did not choose to impose a sales tax on streaming services, which would have generated significant revenue.   It did however commit to seeking more commitments and agreements with new digital platforms (i.e. Amazon Prime, Hulu, maybe Google).

UPDATE:  As soon as I hit Publish on this post I saw a tweet from the Minister with a press release providing more info on the Netflix deal.    The most important clarification is that the deal includes:  “Investing at least CAD $500 million over the next five years in original productions in Canada that will be distributed across Netflix’s global platform. As part of this investment, Netflix will continue to work with Canadian producers, production houses, broadcasters, creators and other partners to produce original Canadian content in both English and French.” [emphasis mine]

The Canada Media Fund, which funds Canadian television and digital media, has been slowly losing some of its revenue generated by mandated contributions from cable and satellite companies as Canadians cut or reduce their subscriptions. Canadian Heritage announced that it will provide additional funding to allow the CMF to maintain the level of funding that it has.  The exact amount to be provided is not set out but the concept is a great one.  In fact, as Canadian Heritage has not increased its level of funding to the CMF since it was created as the CTF in 1998 (it re-allocated money from other funds but no new money), even a small increase is something to celebrate.

In Budget 2017 the government had previously promised that the Broadcasting Act and Telecommunications Act would be reviewed. Creative Canada confirms this and provides a bit more info on timing.  Last Friday Cabinet quietly instructed the CRTC to issue what is called a s. 15 report on well, a lot of the things that were part of the DigiCanCon consultation:

  1. the distribution model or models of programming that are likely to exist in the future;
  2. how and through whom Canadians will access that programming;
  3. the extent to which these models will ensure a vibrant domestic market that is capable of supporting the continued creation, production and distribution of Canadian programming, in both official languages, including original entertainment and information programming.

The CRTC is to provide this report to the government by June 1, 2018 and this report will inform the government’s review of the Broadcasting Act and Telecommunications Act.  So we won’t see a new act until some time late 2018 or 2019.  We wait to hear from the CRTC on whether the s. 15 report will trigger a public consultation and whether the report will even be public.

Creative Canada announced a Creative Export Strategy Fund of $125 million to be spent over 5 years starting some time in 2018. Details on this fund will be released in 2018.  I expect that this fulfills the Liberal campaign promise to reinstate the PromArts and Trade Routes programs cut by the Conservatives and the Liberal government’s promise to modernize them and not just reinstate them.   There is a lot of potential for this fund to help producers export their Canadian Content but we will have to wait and see.

The commitment to modernize and streamline the administration of the federal Canadian Film or Video Production Tax Credit will be welcome to many producers. The tax credit is an essential part of any television financing but it takes up a great deal of time and money to apply for it and interim finance it for production.  An easier and faster tax credit frees up resources to go into content production.

Previous announcements which are now incorporated in Creative Canada include: review of the Copyright Act, new appointment process for CBC board and CBC President, review of the CBC’s mandate, new audio-visual co-production treaties, Indigenous Screen Office, programs to improve gender parity (the priority in improving diversity and inclusion) and recommitment to cultural diversity under the UNESCO convention and to the cultural exemptions under NAFTA.

The bottom line is that Creative Canada sounds good but we will have to wait and see if these bundles of policies, strategies and programs will actually help support Canadian programming in this changing media landscape.

Or as I said on Twitter:

 

 

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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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The CRTC’s Differential Pricing Decision – for us content people

Over here on the content side of things most of us are not familiar with phrases such as ‘zero rating’ and ‘differential pricing practices’ so might tune out of a CRTC decision titled “Framework for Assessing the Differential Pricing Practices of Internet Service Providers” but we shouldn’t.  Net neutrality is an increasingly important concept for content creators and consumers.

Let’s go through a few definitions first.

Net neutrality is the principle that all data on the Internet should be treated the same.  It costs the same to the user, it is regulated (or not) the same and it is delivered the same (i.e. no throttling of certain kinds of data).  So the video or the game that you create is not treated any differently from email or music or apps etc.

Differential pricing is the practice of offering the same content or services to consumers at different prices.  Examples are:

Zero rating:  the practice of not charging consumers for certain kinds of data.  That could be sports or all video or gaming.  That data would then not be counted towards the consumers data cap and would make that service more competitive.

Sponsored data:  an application provider arranges with an Internet Service Provider (ISP) to discount the data associated with its app.

The CRTC’s decision is to disallow these differential pricing practices (and any others that arise, based on a framework that has been developed to assess the practices) in order to maintain net neutrality.

In practical terms this means that immediately Vidéotron’s Unlimited Music Service, which excluded the data used by that music streaming service from certain mobile plans, was offside.  What it means for content creators is that ISPs cannot distinguish themselves on the basis of what content they have to offer – no exclusive access or zero-rated access to Netflix, or CraveTV or gaming.  They can compete on price and speed and size of the data caps but not content.  Look at this quote from the decision:

“The Commission considers that any short-term benefits of differential pricing practices would be greatly outweighed by the negative long-term impacts on consumer choice if ISPs were to act as gatekeepers of content through their use of such practices.”

Gatekeepers.  Does that sound familiar?  This is why the decision should be of interest to content creators, particularly those who are moving away from broadcasters as gatekeepers to offer their content directly to consumers.  The Differential Pricing Practices decision means that you will not be moving from broadcaster to ISP as gatekeeper.  For digital content creators it means that the ISP cannot insert itself between you and your audience.

 

 

 

 

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The Wonk Report: Group Licence Renewal

Over the past two weeks the CRTC held hearings on first the French and then the English licence renewals for the big broadcast groups.  For the English (my focus) that means Corus (which now owns Shaw), Rogers and Bell.

A lot of the hearing went as expected.  The broadcast groups have argued that because of competition from Netflix they need more flexibility and that has as always been code for lowering their CanCon obligations.  They want lower CPEs (Canadian Programming Expenditures) for all Canadian programming and in particular, PNI (Programs of National Interest—drama, documentary and award shows).   The biggest issue for the content side of the industry is what will be the group CPE (set by policy at 30% of revenues but was it intended to be a goal or floor?) and the PNI CPE (set by policy for Bell, Rogers and Shaw at 5% but for Corus at 9% and now proposed by the CRTC as 5% for all).   The CRTC had said in the notice of hearing that spending levels would be maintained, the broadcasters all asked for breaks and the content side of the industry argued that historical levels should be maintained.

Traditionally, licence renewal hearings are about implementation of policy and are not intended to make policy.  Off the top, the Chair suggested that the TalkTV policy decision needed to be tweaked to reflect the changing circumstances so there were few challenges from the Commission about whether a discussion was really about policy and not licence.  Stakeholders brought up the question when it suited them (i.e. Corus complaining that the CMPA proposed definition of independent production was policy but still requesting a change to the policy to lower the PNI expenditure requirement). Some stakeholders reiterated policy proposals that they had taken during the TalkTV hearing.  CAFDE asked for a sub-quota of PNI for feature films, DOC for a sub-quota for documentaries and WGC for a sub-quota for development.  They were not challenged by the CRTC on the basis that these proposals were still policy proposals.

CMPA did refer to Terms of Trade in their questioning but their real goal was to block Corus’ use of Producer of Record (producer is pretty much independent in name only to get tax credits and other financing but Corus owns distribution rights and profits) agreements through a tighter definition of independent production.  There is no love lost between CMPA and Corus right now, which led to a rather surprising allegation that the CMPA had snuck in the independent production definition proposal in their presentation, which the Chair had to correct (it was in their submission as well as presentation – Corus admitted to never having read it).

Corus had asked to have all its conditions of licence specific to its children’s services removed as that would be consistent with the removal of the genre exclusivity policy under TalkTV.  That would mean that there would be no obligation to maintain YTV, Teletoon and Treehouse as children’s services but also that there would no longer be ad restrictions or a higher than average obligation to spend on Canadian programming.  Surprisingly, the CMPA appeared to be the only stakeholder concerned about this and had proposed keeping the restrictions or treating the Corus kids services as a mini-group.   As no one else expressed any concerns about the potential loss of significant players in Canadian children’s television, there is a serious risk that the CRTC will agree to Corus’ requests.

Two recurring themes in the questions in the hearing come from the TalkTV decision.  In that decision the CRTC proposed two pilot projects which would lower the required Canadian key crew point count (only screenwriter and one lead performer need to be Canadian) for certain circumstances:  literary adaptations and dramas with budgets over $2 million per hour.  The CRTC has the power to change the eligibility for CRTC certification to allow for these two exceptions but not to change all the other financing components.  In the recent new CIPF framework, it lowered the point count to 6 points in part to allow for these pilot projects.  The CRTC has not been able to convince Heritage that CAVCO and the CMF should also be amended to allow for these pilot projects.  Heritage is apparently still studying it.

It is not that surprising that Heritage might be reluctant to lower the point count for these two circumstances, particularly as there does not seem to be a need.  There are plenty of literary adaptations being produced under the current system and average budgets for one-hour dramas are over $2 million and are being financed.  What is surprising, a little, is the Chair complaining publicly about the lack of support from Heritage.

The other theme that came from TalkTV was the idea that there are too many thinly capitalized production companies.  The decision quoted the approximately 900 production companies tracked by the CMF, failing to understand that many of them were single-purpose production companies incorporated for a production but owned by the main production company.  The Chair revisited this theme several times during the hearing, asserting that there was not enough consolidation in the independent production sector and this was likely the reason that producers were not able to fully exploit their programs.  Stakeholders responded with different strategies.  On the one hand, the CMPA tried to explain the need for a diversity of production company sizes to ensure the existence of the next generation of successes while DOC took the position that its 700 members needed support so that they could stay “mom and pop” shops.

There were other themes of more interest to other participants in the broadcasting system, such as news, the application for OMNI to reduce its third language programming and have s.(9)(1)(h) status and whether there was any undue preference taking place among the vertically integrated media groups.

What happens now?  Based on past decisions there is no way to predict what the final decision will be, but the production industry is right to be worried that requirements to spend money on Canadian programming may be reduced for the next licence term.

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