|
Decision CRTC 2001-731
|
|
Ottawa, 29 November 2001
|
|
MovieMax! Ltd.
British Columbia, Alberta, Saskatchewan, Manitoba, Nunavut, the
Yukon Territory and the Northwest Territories 2000-2294-7 |
|
19 June 2001 Public Hearing
National Capital Region
|
|
Licence renewal for MovieMax!
|
|
The licence for "MovieMax!" is renewed for a full term.
During the new licence term, the licensee may broadcast
made-for-television feature films copyrighted at least five years
previously. The Commission has increased the amount the licensee
must spend on Canadian programming in each broadcast year to at
least 25% of the previous year’s revenues. The definition of
revenues will now include monies derived from direct-to-home
satellite subscribers and any return on investment in programming. |
1. |
The Commission renews the broadcasting licence issued to
MovieMax! Ltd. for the regional English-language pay television
service known as "MovieMax!", from 1 December 2001 to
31 August 2008, subject to the conditions specified in the
appendix to this decision and in the licence to be issued. |
2. |
The Commission has no concerns with respect to the licensee’s
compliance with its conditions of licence during the current licence
term. |
3. |
As part of its licence renewal application, the licensee proposed
amendments to its conditions of licence on Canadian programming
expenditures and the nature of service. These amendments are
discussed below. |
|
Expenditures on Canadian programming |
4. |
Under its current condition, the licensee must, in each broadcast
year, spend on Canadian programming at least 22.75% of its revenues
earned during the previous year. For the purpose of this condition,
revenues means monies received from residential, bulk and satellite
master antenna television (SMATV) subscribers, but does not include
revenues from direct-to-home (DTH) satellite subscribers or any
return on investment in programming. |
5. |
The licensee proposed to maintain the percentage of the previous
year’s revenues to be expended on Canadian programming at 22.75%
for the new licence term. At the same time, the licensee asked the
Commission to revise the definition of revenues attached to this
condition to include monies derived from the distribution of its
service by DTH satellite services and any return on investment in
programming. |
6. |
The Commission notes that MovieMax! currently enjoys a high level
of profitability. In 2000, its profit before interest and tax (PBIT)
was 57%. The Commission considers that the licensee should devote a
higher percentage of its revenues to expenditures on Canadian
programming. Accordingly, and as discussed in correspondence with
the licensee, the Commission will require the licensee to spend, in
each broadcast year of the new licence term, 25% of its previous
year’s revenues on Canadian programming. In defining revenues for
the purpose of this condition, the Commission will include monies
received from DTH satellite subscribers and any return on investment
in programming. |
7. |
The amended condition (set out in the appendix) will
significantly increase the level of MovieMax!’s expenditures on
Canadian programming and still allow the licensee to achieve a
healthy PBIT margin. |
|
Nature of service |
8. |
As requested by the licensee, the Commission has amended
MovieMax!’s condition of licence describing its nature of service
by adding the following to the categories of programming that it may
broadcast: |
|
· made-for-television feature films (subcategory 7c)
copyrighted at least five years prior to the broadcast year
in which they are distributed by the service.
|
9. |
While subcategory 7c also includes specials and mini-series,
the licensee indicated that it will only broadcast
made-for-television feature films. The licensee also withdrew its
original request to add subcategory 7e (animated television
programs and films), indicating that it intends to air only
"theatrically released" animated features which are
already permitted under its current condition on the nature of
service (subcategory 7d). |
10. |
The amended condition of licence is found in the appendix. |
|
Rebranding of services |
11. |
The Commission notes that MovieMax! and certain other pay
television licensees have adopted a thematic approach in programming
the multiplexed channel feeds they make available to distributors.
The Commission has no concerns about this approach provided the
programming offered on each channel meets the Canadian content
requirements for the service. Further, individual channels must not
be offered on a stand-alone basis (i.e. the licensee and its
distribution affiliates must ensure that all of the multiplexed
channel feeds that make up the service are distributed to
subscribers within a package). |
12. |
As discussed with the licensee, these two requirements are
stipulated in conditions of licence set out in the appendix
to this decision. |
|
Cultural diversity
|
13. |
The Commission expects MovieMax!, and all other specialty and pay
television licensees, to contribute to a broadcasting system that
accurately reflects the presence in Canada of cultural and racial
minorities and Aboriginal peoples. The Commission further expects
licensees to ensure that their on-screen portrayal of all such
groups is accurate, fair and free of stereotypes. These expectations
are fully in keeping with section 3(1)(d)(iii) of the Broadcasting
Act, which states that the Canadian broadcasting system should,
"through its programming and the employment opportunities
arising out of its operations, serve the needs and interests, and
reflect the circumstances and aspirations, of Canadian men, women
and children, including equal rights, the linguistic duality and
multicultural and multiracial nature of Canadian society and the
special place of Aboriginal peoples within that society."
|
14. |
In Public Notice CRTC 2001-88, Representation of cultural
diversity on television – Creation of an industry/community task
force, the Commission called upon the Canadian Association of
Broadcasters to develop an action plan for a joint
industry/community task force. The role of this task force is to
sponsor research, identify "best practices", and help
define the issues and present practical solutions to ensure that the
Canadian broadcasting system reflects all Canadians. In its notice,
the Commission emphasized the importance of having the participation
of all sectors of the broadcasting industry, including pay
television services. The Commission therefore expects Corus
Entertainment Inc., MovieMax!’s owner, to contribute to the work
of the task force. |
15. |
The Commission further expects the licensee to develop and
implement a comprehensive corporate plan that explains how Corus
intends to improve its representation of Canada’s cultural
diversity, and to file this plan with the Commission within three
months of the date of this decision. The plan should include
specific commitments to corporate accountability and to the
reflection of diversity in programming, and should make provision
for the gathering of feedback on the effectiveness of these
commitments. The plan should also set goals for achieving the full,
fair and consistent reflection of diversity in Canada.
|
16. |
With respect to corporate accountability, the plan should
address how Corus will create an environment that supports the
cultural diversity objectives outlined above, by: |
|
· creating a corporate culture that recognizes and supports
Canada’s cultural diversity;
|
|
· assigning accountability to a senior executive for corporate
practices related to cultural diversity, and for ensuring that
management becomes more reflective of Canada’s multicultural
reality;
|
|
· ensuring that managers receive proper training;
|
|
· ensuring that regular opportunities are provided for
assessing progress towards attaining these objectives and for
identifying future opportunities and challenges; and
|
|
· setting out plans for the hiring, retention and ongoing
training of visible minorities and Aboriginal peoples.
|
17. |
With respect to the reflection of diversity in programming,
the plan should focus on how the licensee will ensure the presence
and the fair, accurate and non-stereotypical portrayal of cultural
minorities and Aboriginal peoples in the programming it produces or
acquires. Specifically, the plan should include provisions for
making certain that, wherever possible: |
|
· on-air personalities reflect Canada’s diversity; and
|
|
· programming obtained from independent producers reflects the
presence of visible minorities and Aboriginal peoples in Canadian
society and provides for their accurate portrayal.
|
18. |
As for feedback, the corporate plan should describe the
specific mechanisms Corus will put in place to ensure that it
receives effective input from community groups concerning its
performance in reflecting cultural diversity in programming. |
|
On-air presence |
19. |
The Commission reminds the licensee that the expectations set out
above with respect to cultural diversity are over and above the
longstanding and more general expectations concerning employment
equity in on-air presence. Specifically, the Commission expects the
licensee to ensure that the on-air presence of members of the four
designated groups (women, Aboriginal persons, disabled persons and
members of visible minorities) is reflective of Canadian society,
and that members of these groups are presented fairly and
accurately. |
|
Closed captioning |
20. |
The Commission is committed to improving service to television
viewers who are deaf or hearing impaired. Over the period since the
Commission announced its policy on closed captioning in Public
Notice CRTC 1995-48, it has consistently encouraged broadcasters to
increase the amount of captioned programming they provide. The
Commission now requires the licensees of television, specialty and
pay television undertakings to achieve a minimum level of captioned
programming appropriate to the nature of the service that each
provides. Generally, the specified minimum requirement is 90% of all
programming.
|
21. |
In the case of MovieMax!, the licensee stated that it would close
caption 90% of all programming beginning in the sixth year of the
licence term. |
22. |
Consistent with its policy approach described above and with the
licensee’s commitment, the Commission has decided to require the
licensee, by condition of licence, to achieve a minimum
captioning level of 90% for all programming aired during the
broadcast year, beginning no later than 1 September 2006
and continuing throughout the remainder of the licence term. |
23. |
The 90% obligation is based on the recognition that requiring
100% captioning at all times may not be reasonable or appropriate.
Thus, the obligation is designed to provide some flexibility to
cover unforeseen circumstances (such as late delivery of captions,
technical malfunctions, or the lack of availability of captions for
programs acquired outside North America), or programming where
captioning may not be feasible, such as third language programming. |
24. |
The Commission expects the licensee to focus on improving the
quality, reliability and accuracy of closed captioning, and to work
with representatives of the deaf and hard of hearing community to
ensure that captioning continues to meet their needs. |
|
Service to the visually impaired |
25. |
In decisions issued last December, the Commission encouraged the
licensees of new Category 1 specialty services, over their licence
terms, to provide increasing amounts of programming accompanied by
audio or video description. More recently, in decisions issued in
the summer of this year renewing the licences for the television
stations owned by Global, CTV and TVA, the Commission imposed
conditions of licence regarding the provision of increasing amounts
of such programming. |
26. |
"Audio description" and "video description"
or "described video" are methods of improving the service
that television broadcasters provide to people who are visually
impaired. Audio description involves the provision of basic
voice-overs of textual or graphic information displayed on the
screen. A broadcaster providing audio description will, for example,
not simply display sports scores on the screen, but also read them
aloud so that people who are visually impaired can receive the
information. |
27. |
Video description, or described video as it is also known,
consists of narrative descriptions of a program’s key visual
elements so that people who are visually impaired are able to form a
mental picture of what is occurring on the screen. These
descriptions can be provided on the Secondary Audio Programming
(SAP) channel. Not all broadcasters are currently equipped to
deliver a SAP signal. Thus, the introduction of described video via
the SAP channel could require significant capital expenditures to
upgrade a licensee's transmission facilities. |
28. |
The Commission notes the increasing amount of described
programming available for acquisition, particularly from U.S.
sources. It notes as well the encouragement given to the operators
of the new Category 1 specialty services and the requirements it has
placed on the television stations operated by CTV, Global and TVA
concerning the provision of such programming. In correspondence with
MovieMax!, the Commission requested the licensee’s views on
implementing audio description, video description or described
video. The Commission considers it reasonable to expect the
operators of the pay and specialty services whose licences are being
renewed at this time to take steps to respond to the needs of
viewers who are visually impaired. |
29. |
Accordingly, the Commission expects the licensee to: |
|
· provide audio description (defined as
the provision of basic voice-overs of textual or graphic information
displayed on screen) wherever appropriate;
|
|
· undertake the necessary upgrades to
permit the broadcast of described programming (for example, via the
SAP channel);
|
|
· acquire and broadcast the described
versions of a program wherever possible; and
|
|
· take the necessary steps to ensure
that its customer service responds to the needs of visually impaired
viewers.
|
30. |
In addition, and consistent with the approach adopted for the new
Category 1 services, the Commission encourages the licensee to
provide, at a minimum, one hour per month of described programming
in the period between 1 December 2001 and 31 August 2002,
and to increase this monthly minimum by at least one hour in
each subsequent broadcast year of the new licence term. |
|
Compliance with industry codes |
31. |
In accordance with its usual practice, the Commission is imposing
on the licensee conditions of licence requiring that it
adhere to the industry codes related to violence in television
programming and sex role portrayal. Application of the sex portrayal
role code will be suspended so long as the licensee remains a member
in good standing of the Canadian Broadcast Standards Council. In
addition, by condition of licence, the licensee must abide by
the Pay television programming standards and practices code. |
|
Interventions |
32. |
The Commission acknowledges all of the interventions submitted
with regard to this application and has noted the licensee’s
response to the concerns expressed in some submissions. |
|
Related CRTC documents |
|
· Decision 2001-214 – Amendments to
licences of specialty and pay television services, to reflect
revised program categories |
|
· Decision 2001-166 – Three-month
administrative renewal for MovieMax! |
|
· Decision 2001-33 – Six-month
administrative renewal for MovieMax! |
|
· Decision 2000-752 – Intracorporate
reoganization of Corus to facilitate the sale of its interests in
The Family Channel as required by Decision 2000-222 |
|
· Decision 2000-222 – Acquisition
of effective control of MovieMax! by Corus |
|
· Decision 2000-70 – Intracorporate
reorganization (WIC Western International Communications Ltd.) |
|
· Decision 94-278 – Approval of New
Pay Television Services: "The Classic Channel" and
"MovieMax!" |
|
Secretary General
|
|
This decision is to be appended to the licence. It is available
in alternative format upon request, and may also be examined at the
following Internet site: http://www.crtc.gc.ca
|
|
Appendix to Decision CRTC 2001-731
|
|
Conditions of licence for MovieMax! |
|
Nature of the service |
|
1.(a) The licensee shall provide a
regional, English-language general interest pay television
programming service in British Columbia, Alberta, Saskatchewan,
Manitoba, Nunavut, theYukon Territory and the Northwest Territories. |
|
(b) The service shall consist of: |
|
· theatrical feature films aired on
television (subcategory 7d) copyrighted at least
five years prior to the year in which they are distributed by
the service.
|
|
· made for-television feature films
(subcategory 7c) copyrighted at least five years prior to
the year in which they are distributed by the service.
|
|
· public service announcements
(category 13).
|
|
· filler programming (category 15).
|
|
· other programming shall be limited to
programs that are feature-film-related and intended to set in
context the feature film or films they accompany in the schedule.
|
|
The subcategories are contained in item 6, Schedule I of the Pay
Television Regulations, 1990. |
|
Exhibition of Canadian programs |
|
2. During each semester of the licence
term, the licensee shall devote to the exhibition of Canadian
programming not less than: |
|
(a) 20% of the time from 6:00 p.m. to
11:00 p.m. (Mountain Time), and |
|
(b) 20% of the remainder of the time
during which the service is in operation. |
|
Expenditures on Canadian programming |
|
3. (a) During the period 1 December
2001 to 31 August 2002, the licensee shall expend in relation
to this service not less than 18.75%* of its revenues for
the broadcast year ending 31 August 2001 on the acquisition of
or investment in Canadian programming. In each of the subsequent
broadcast years of the licence term, the licensee shall expend on
the acquisition of or investment in Canadian programming not less
than 25% of its revenues earned during the previous broadcast year. |
|
(b) In any broadcast year of the licence
term, including the partial broadcast year ending 31 August
2002 but excluding the final year, the licensee may expend an amount
on Canadian programming that is up to 5% less than the minimum
required expenditure for that broadcast year, as set out or
calculated in accordance with the terms contained in the first
paragraph of this licence condition. |
|
(c) Should the licensee avail itself of
this flexibility in any broadcast year including the partial
broadcast year ending 31 August 2002, it shall spend in the
next broadcast year of the licence term, in addition to the minimum
required expenditure for that broadcast year, the full amount of the
previous broadcast year's underspending. |
|
(d) In any broadcast year of the licence
term, including the partial broadcast year ending 31 August
2002 and the final broadcast year, the licensee may expend an amount
on Canadian programming that is greater than the minimum required
expenditure for that broadcast year as set out or calculated in
accordance with the terms contained in the first paragraph of this
licence condition; in such case, the licensee may deduct: |
|
(i) from the minimum required expenditure
for the next broadcast year of the licence term, an amount not
exceeding the amount of the previous broadcast year's overspending;
and
|
|
(ii) from the minimum required
expenditure for any subsequent year of the licence term, an amount
not exceeding the difference between the overspending and any amount
deducted under paragraph (i) above.
|
|
(e) Notwithstanding the above, during the
licence term, the licensee shall expend on Canadian programming, at
a minimum, the total of the minimum required expenditures, as set
out or calculated in accordance with the terms contained in the
first paragraph of this licence condition. |
|
Closed captioning |
|
4. The licensee shall achieve a minimum
captioning level of 90% for all programming aired during the
broadcast year, beginning no later than 1 September 2006
and continuing throughout the remainder of the licence term. |
|
Multiplex channels |
|
5. The licensee shall offer its
multiplexed channels only together in a package. |
|
6. With respect to each multiplexed
channel, the licensee shall adhere to the Canadian programming
requirements set out in condition of licence 2 . |
|
Industry codes |
|
7. The licensee shall adhere to the
guidelines on gender portrayal set out in the Canadian Association
of Broadcasters' (CAB) Sex-role portrayal code for television and
radio programming, as amended from time to time and approved by
the Commission. The application of the foregoing condition of
licence will be suspended as long as the licensee remains a member
in good standing of the Canadian Broadcast Standards Council. |
|
8. The licensee shall adhere to the Pay
television and pay-per-view programming code regarding violence,
as amended from time to time and approved by the Commission. |
|
9. The licensee shall adhere to the Pay
television programming standards and practices code, as amended
from time to time and approved by the Commission. |
|
Definitions |
|
In these conditions: |
|
"broadcast year" means each twelve-month period
beginning on 1 September in any year. |
|
"expend" means actual cash outlay. |
|
"expend on acquisition" means: |
|
a) expend to acquire exhibition rights
for the licensed territory, excluding overhead costs; |
|
b) expend on script and concept
development, excluding overhead costs; or |
|
c) expend on the production of filler
programming, as defined in section 2 of the Pay Television
Regulations, 1990, including direct overhead costs; and |
|
"expenditure on acquisition"
has a comparable meaning. |
|
"expend on investment" means expend for the purposes of
an equity investment or an advance on account of an equity
investment, but not overhead costs or interim financing by way of a
loan; and |
|
"expenditure on investment" has a comparable meaning. |
|
"revenue" means revenue from residential and bulk cable
, SMATV and DTH satellite subscribers as well as any return on an
investment in programming. |
|
"semester" means each six-month period beginning in
September and March.
|
|
_____________________________
* 18.75% represents 25% of ¾ of a broadcast year. |