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Broadcasting Public Notice CRTC 2004-93
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Ottawa, 29 November 2004 |
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Incentives for English-language Canadian
television drama
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In this public notice, the Commission
reviews the comments received in response to Proposed incentives
for English-language Canadian television drama – Call for comments,
Broadcasting Public Notice CRTC 2004-32,
6 May 2004, and sets out its final incentive program designed to increase
the production and the broadcast of, the viewing to, and the expenditures
on, high quality, original, Canadian drama programming. A summary
of the incentive program is appended to this public notice. |
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A review of the comments received in response
to Proposed measures to ensure that French-language Canadian drama
programming remains a key component of peak time viewing – Call for
comments, Broadcasting Public Notice CRTC 2004-38,
8 June 2004, and the Commission’s final incentive program for high
quality, original French-language Canadian drama, will be set out
in a separate public notice to be issued shortly. |
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Background
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1. |
In Support for Canadian television drama
– Call for comments, Broadcasting Public Notice CRTC 2003-54,
26 September 2003 (Public Notice 2003-54),
the Commission invited comments on actions it might take to support
the production and broadcast of more high quality, original, English-language
Canadian drama and to attract larger audiences to such programming.
The Commission also sought comment on the actions it might take to
ensure that high quality, original French-language Canadian drama
remains a key component of prime time viewing. |
2. |
In Proposed incentives for English-language
Canadian television drama – Call for comments, Broadcasting Public
Notice CRTC 2004-32, 6 May 2004
(Public Notice 2004-32), following
its consideration of all of the comments received pursuant to Public
Notice 2003-54, the Commission
invited comment on a proposed program of specific incentives designed
to increase the production and broadcast of, the viewing to, and the
expenditures on, high quality, original, English-language Canadian
drama programming. These proposed incentives were also intended to
decrease the pressure brought to bear by producers for funding from
the Canadian Television Fund (CTF). In Public Notice 2004-32,
the Commission presented the following proposal. |
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Proposed incentives to broadcast original hours of Canadian drama
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3. |
These proposed incentives had, as their
objective, an increase in the broadcast of original hours of Canadian
drama. The initial proposal included three different triggers, each with
a different reward. |
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- Trigger: the broadcast of 10-point, original, CTF-funded
drama in peak time (7:00 p.m. to 11:00 p.m.) with a production budget
of at least $800,000 per hour and a minimum licence fee as established
by the CTF.
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Reward : two-and-a-half minutes of additional advertising for
each original hour broadcast.
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- Trigger: the broadcast of 8- to 10-point, original drama at
any time or 10-point original drama broadcast in peak time, having a
production budget of less than $800,000 per hour.
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Reward : half a minute of additional advertising for each
original hour broadcast.
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Trigger: the broadcast of 10-point, original drama,
broadcast in peak time (7:00 p.m. to 11:00 p.m.) having a production
budget of at least $800,000 per hour and a minimum licence fee as
established by the CTF, but without having CTF funding.
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Reward : A total of six-and-a-half minutes of additional
advertising time for each original hour broadcast – i.e. the
two-and-a-half minutes earned under the first trigger described above,
plus four minutes for not accessing CTF funding.
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4. |
In the case of each trigger, hourly
production budgets would be determined on the basis of CTF policies.
Implementation of the triggers and rewards would be by condition of
licence. Licensees would be required to submit a report to the
Commission at the end of each broadcast year, specifying the following: |
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- the number of qualifying hours broadcast including titles, episode
number and date and time of broadcast on each conventional television
or specialty service;
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- the production budget of each qualifying hour broadcast and an
identification of those productions financed with revenues derived
from the additional four minutes of advertising provided in lieu of
CTF funding; and
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- the name, time and date of broadcast of the programs in which the
extra advertising minutes were placed.
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5. |
As required, the Commission would
cross-check a licensee’s reports against the Commission’s logs. |
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Proposed incentive to increase viewing to Canadian drama
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6. |
The objective of this incentive was to
increase the viewing to Canadian drama on Canadian English-language
services, as a percent of all drama viewing to Canadian services. |
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- Trigger: an annual increase in the ratio of total viewing
to all Canadian drama compared to total drama viewing by all stations
and specialty services within a broadcast group. The increase would be
measured using metered data throughout the broadcast year.
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Reward : 25% of the additional advertising minutes earned by the
broadcast of qualifying original Canadian drama programs.
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7. |
Licensees taking advantage of the incentive
would be required to submit a report to the Commission at the end
of each broadcast year providing the same information as that specified
in paragraph 101 of Public Notice 2004-32.
Implementation would be by condition of licence. |
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Proposed incentive to increase expenditures on Canadian drama
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8. |
This incentive had as its objective an
increase in the spending on Canadian drama by the English-language
conventional television industry, as a percent of total revenues, from
4% to 6% over a five-year period. |
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: a total increase by all conventional television
stations within a broadcast group of 0.4 percentage points in annual
expenditures on Canadian drama.
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Reward : 25% of the additional advertising minutes earned for
the broadcast of qualifying original Canadian drama programs.
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9. |
Licensees wishing to take advantage of the
incentive would be required to provide the appropriate calculations with
their annual returns in order to enable the Commission to monitor
performance. Again, implementation would be by condition of licence. |
10. |
In Public Notice 2004-32,
in addition to questions relating to the specific incentive proposals,
the Commission asked for comments on a number of issues as follows. |
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- For the purpose of the proposed incentives, please comment on the
following definition for an original program:
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An original program is a program that has never before been
distributed by any licensee of a broadcasting undertaking and that
will be distributedfor the first time by the licensee.
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- The Commission proposes incentives for Canadian drama programs
directed to children when such programs are broadcast at times of the
day appropriate for children. Should the Commission define these time
periods? If so, what specific hours of the day should be considered as
appropriate for television viewing by children?
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- How can the Commission best ensure that revenues derived from the
additional four minutes of advertising for drama programs that are not
funded by the Canadian Television Fund (CTF) flow through to Canadian
drama production?
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- Is it necessary, or appropriate, to place a cap on the number of
extra advertising minutes earned? If so, what should that cap be?
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- Will the proposed incentive program for drama impact negatively on
other program categories such as documentary? If so, what could be
done to minimize any negative impact?
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- Please comment on the Commission’s proposed five-year viewing and
expenditure targets. Should such targets be established for a shorter
period of time, such as three years? If so, what would be appropriate
viewing and expenditure targets over a three-year period?
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- How should the Commission ensure that broadcaster equity
investments are demonstrably at risk investments? Are any other
safeguards necessary or appropriate?
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11. |
In this public notice, the Commission reviews
the comments received in response to Public Notice 2004-32
and sets out its final incentive program designed to increase the
production and broadcast of, high quality, original, English-language
Canadian drama, and to encourage increased viewing to and greater
expenditures on such programs. |
12. |
The incentives set out in this public
notice apply only to English-language licensees. An incentive program
designed to fulfil the Commission’s objectives with respect to
French-language Canadian television drama will be set out in another
public notice to be issued shortly. |
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Review of comments received in response to Public Notice 2004-32
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13. |
The Commission received a total of 119 comments
in response to Public Notice 2004-32.
The comments came from a number of individuals, licensed broadcasters,
producers, guilds, unions and industry associations. The Commission
also received comments from Telefilm Canada (Telefilm), the Shaw Broadcast
Fund (Shaw) and Friends of Canadian Broadcasting (Friends). In general,
the comments supported the Commission’s proposed incentive approach
although most offered specific suggestions to modify the Commission’s
proposals and several suggested alternative incentives. More than
80 of the comments focussed primarily on the need to include incentives
to ensure that Canadian television drama reflects
the diverse nature of Canadian society, in particular visible minorities,
Aboriginal peoples and persons with disabilities. |
14. |
The Canadian Association of Broadcasters
(CAB) congratulated the Commission "… for its creative efforts to
provide economic incentives to broadcasters…" The Canadian Film and
Television Producers Association (CFTPA) said , "We consider that, on
balance, the approach is clear, transparent and fair." The Documentary
Organisation of Canada (DOC), an association representing Canadian
documentary producers, indicated that, "… the proposed incentives for
English-language drama programs are quite imaginative, and in general,
should significantly improve funding for domestic television drama." |
15. |
The Canadian Broadcasting Corporation (CBC)
predicted that the Commission’s proposal would provide the CBC with
limited opportunities to benefit. It nevertheless commended the
Commission on its initiative, stating that, "by linking contributions to
original Canadian drama with the profitability of top programs, the
Commission has developed what may be a positive incentive, primarily for
the major private broadcasters, to do more original Canadian drama." |
16. |
The Association of Canadian Advertisers
(ACA) noted that, "Even though advertisers feel that current levels of
clutter are too high, it seems valid that the Commission’s proposed
incentives for English-language Canadian television drama, for the most
part, would not substantially increase clutter…. Advertisers would not
object to the implementation of these incentives." |
17. |
The Coalition of Canadian Audio-Visual
Unions (CCAU) maintained that the crisis in Canadian drama "… can only
be properly addressed by a combination of regulatory measures and
incentives." The CCAU noted that, "Provided they supplement and do not
replace clear regulatory requirements, the Commission’s proposed package
of incentives set out in the Public Notice, subject to a number of
recommendations … may be able to play a useful role." |
18. |
While all broadcasters supported an
incentive-based approach, CTV Television Inc. (CTV) noted that it "…
does not support the submission made by the Canadian Association of
Broadcasters in these proceedings." Instead, CTV put forward its own
incentive proposal that would provide advertising minute rewards for
original hours of Canadian drama that achieve "hit" status in the first
broadcast. CTV considered that its approach would be simpler than the
Commission’s proposal and would focus on rewarding creative risk and
audience success. |
19. |
The CAB and several conventional broadcasters
raised the possibility of a return to the time credit incentive that
would give licensees a 150% (or a 125%) credit against the Canadian
content requirements set out in the Television Regulations, 1987.
These interveners maintained that, in Public Notice 2004-32,
the Commission, had "overestimated the impact of the time credits
on the system." The CAB and certain individual broadcasters also
proposed that viewing and expenditure incentives be separated or ‘de-coupled’
from the incentives for broadcasting original hours of Canadian drama,
thus permitting licensees to receive rewards for meeting viewing or
expenditure targets whether or not they broadcast any original hours
of Canadian drama. Global Television Network (Global) also proposed
that the airing of repeats be rewarded. Certain broadcasters, many
of them specialty licensees, recommended an expanded definition of
an ‘original’ program to include all parties involved in the financing
of the program. |
20. |
Specialty licensees Alliance Atlantis
Communications Inc. (Alliance Atlantis), Corus Entertainment Inc. (Corus),
CHUM Limited (CHUM) and Rogers Broadcasting Inc. (Rogers) argued that
advertising-based incentives would benefit the major broadcast groups at
the expense of other broadcasters. They specifically recommended that
"Incentives used to encourage broadcasters to increase the amount of
English-language Canadian drama and to encourage viewing to that
programming must be granted on the basis of incremental hours only."
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21. |
The CFTPA, DOC and the Alberta Motion
Picture Industry Association (AMPIA), (collectively, "producers")
generally supported the Commission’s proposed approach as long as only
incremental hours of drama were rewarded - that is, only those hours in
excess of the average number of hours of original drama broadcast over
the past three years. The guilds and unions that form the CCAU, as well
as specialty licensees, also supported this approach. Producers and the
CCAU also argued that the Commission should establish and enforce clear
and timely reporting performance standards so that interested parties
have the information they require to monitor the rewards being claimed
by broadcasters. |
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Examination of the issues
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22. |
The Commission appreciates the comments submitted
during the second phase of this proceeding. The submissions have been
helpful in refining the Commission’s proposal set out in Public Notice
2004-32 and in determining the
specifics of the final incentive program announced in the current
Public Notice. In the following sections, the Commission sets out
its analysis and determinations on the issues below: |
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a) the Commission’s objectives
b) the 150% drama time credit
c) the impact of additional advertising minutes
d) a ceiling on advertising minutes
e) incentives for incremental hours only
f) the definition of "drama program" and "original program"
g) the separation of viewing and expenditure rewards from original
programs
h) rewarding successful drama
i) modifications to the proposed "triggers" and "rewards"
j) evaluating the incentive program
k) reporting results and monitoring compliance
l) drama that reflects Canada’s regional and cultural diversity
m) drama directed at children
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23. |
In addition, the Commission provides its
determinations with respect to certain other issues raised in the
comments, including: |
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n) drama funded with ownership transfer benefits
o) drama programs produced by licensees
p) third party promotion expenses
q) equity at risk
r) licence fee "top-ups"
s) non-simultaneous substitution
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24. |
Attached to this public notice is an appendix
that summarizes the final drama incentive program, as determined by
the Commission following its consideration of comments received in
response to Public Notice 2004-32. |
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a) The Commission’s objectives
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25. |
The Commission received no comment
questioning its view that effective measures to increase the
availability of, and viewing to, Canadian drama are needed at this time
and that such measures would further the objectives of the
Broadcasting Act (the Act) |
26. |
The Commission re-affirms its objectives
for English-language television drama: that is to provide an incentive
program designed to increase the production and the broadcast of, the
viewing to, and the expenditures on, high quality, original, Canadian
drama programming. |
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b) The 150% drama time credit
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27. |
Global, CHUM, Craig Media Inc. (Craig),
the CAB and the CFTPA proposed the reinstatement of the 150% time
credit for Canadian content. This incentive for certain Canadian drama
programs was originally introduced in 1984. In Building on success
– A policy framework for Canadian television, Public Notice CRTC
1999-97, 11 June
1999 (the 1999 Television Policy), the credit was modified so as to
apply to priority programs only. Global argued that a time credit
for all Canadian programs would add stability to an incentive program
that was based upon fluctuating television advertising revenues. In
response to the Commission’s concern, set out in Public Notice 2004-32,
that Canadian programs might be scheduled in off-peak times, Global
said that the adoption of 52-week programming schedules eliminated
such practices. Global’s recommendations also extended to children’s
programming. |
28. |
CHUM recommended that the Commission
reintroduce time credits as an incentive for those broadcasters for whom
the Commission’s proposal would not provide the financial incentives
necessary to create additional drama productions. The CAB stated that
the reintroduction of time credits would provide an incentive to larger
broadcasters to maintain and increase levels of Canadian drama and that
the existing priority programming requirements and the proposed viewing
incentive would act as a safeguard against the scheduling of Canadian
drama programs in off-peak times. The CAB also recommended a 125% time
credit for a drama program earning less than 10 Canadian content points,
as long as the licensee was involved in the financing of the program.
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29. |
The CFPTA also recommended that a time
credit be applied against overall Canadian content rather than priority
programming alone. In the opinion of the CFTPA, this form of time
credit, in combination with the CFTPA’s proposal that a drama time
credit should only reward Canadian drama in the peak viewing hours of 8
p.m. to 11 p.m., Monday through Saturday, and from 7 p.m. to 11 p.m. on
Sunday, would "…not diminish the amount of peak evening shelf-space that
should be made available for Canadian drama programming". Friends and
Vision TV: Canada’s Faith Network/Réseau religieux canadien (Vision TV)
recommended variations on the time credit approach. Friends recommended
tying time credits to the airing of Canadian drama in the peak viewing
period of 8 p.m. to 10 p.m., Monday to Wednesday during peak viewing
months. Vision TV recommended applying the time credit against
expenditure and exhibition requirements for investment in, and broadcast
of, pilot programs in the drama category. |
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The Commission’s analysis and determination
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30. |
In Public Notice 2004-32
the Commission stated that the proposal to use drama time credits
to reduce required Canadian content levels raised a fundamental problem,
namely that the introduction of a time credit to encourage more Canadian
drama would permit licensees to broadcast less Canadian programming
overall. In addition, the Commission expressed the view that time
credits would likely encourage licensees to schedule Canadian programs
during low-viewing periods and encourage them to make more use of
simultaneous substitution. |
31. |
Time credits, by their nature, effectively
permit a reduction in Canadian content to a level below that which would
otherwise be required by regulation. In the Commission’s view, to permit
less Canadian content in exchange for more Canadian drama would reduce
the effectiveness of the 1999 Television Policy and would result in
incentives that would work at cross-purposes. |
32. |
In support of a drama time credit, some
parties argued that broadcasters would not shift Canadian content to
low-viewing periods. However, the Commission notes that the existing
priority program requirements are measured on an annual basis and that a
licensee might therefore be tempted to schedule a larger number of
highly profitable U.S. programs at peak-viewing hours during the
high-viewing months in order to maximize advertising revenues. The
licensee could then fulfil its priority programming requirements during
low-viewing months. Global argued that year-round scheduling of new
programming has eliminated off-peak times to which Canadian programming
could be relegated. However, such scheduling practices are a relatively
new phenomenon and have not been universally adopted. The Commission
believes it is premature to claim there are no off-peak times or
low-viewing periods. This assessment is supported by the 2003-2004 TV
Basics Report, published by the Television Bureau of Canada, in which
recent Nielsen Media Research seasonal viewing trend data are published.
An analysis of this data reveals there are still pronounced seasonal
viewing trends: the average people viewing television (PVT) figure for
2002-2003 was 21.2%, but there was an 8% difference between the peak
recorded in December and the trough recorded in June. |
33. |
In light of the above, the Commission has
decided not to reinstate the 150% drama time credit as part of its
incentive program for Canadian drama. |
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c) The impact of additional advertising minutes
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34. |
In Public Notice 2004-32,
the Commission acknowledged the concerns raised by several specialty
and smaller conventional television licensees related to an increase
in advertising inventory as a result of the Commission’s proposed
program of incentive rewards in the form of additional advertising
minutes. The Commission indicated, however, that the benefits to the
system that could be expected to result from an effective program
of drama incentives outweighed these concerns. |
35. |
In response to Public Notice 2004-32,
some specialty licensees reiterated their concern that there is a
finite volume of advertising expenditures on Canadian television services
in a given period. Other licensees noted that there are limits to
television advertising growth in a highly competitive broadcasting
system. Vision TV and the CBC said that it would be reasonable to
expect that advertisers would divert money away from "niche buys"
to purchase the "premium spots" made available with the
additional minutes resulting from the Commission’s proposed incentive
program. CHUM expressed the view that the reward of additional advertising
minutes "will have less impact on specialty broadcasters given
their stronger revenue growth and the fact that most advertisers have
separate budgets for specialty buys". CHUM predicted that advertising
increases are likely to come at the expense of "non-CTV/Global
conventional broadcasters". |
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The Commission’s analysis and determination
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36. |
The Commission considers that its program
of incentives will encourage television advertisers to make additional
expenditures to reach the viewers of the most popular U.S. programs in
which the extra advertising minutes are likely to be aired. The
Commission notes, however, that competition among Canadian broadcasters
for the most popular U.S. programs has always been intense. The
Commission does not consider that the additional advertising minutes
resulting from its program of incentives will have a significant impact
on either the cost of U.S. programming or on the funding for other
categories of Canadian programming. |
37. |
With respect to the possibility of a
decrease in funding for Canadian programs in categories other than
drama, the Commission notes that DOC supports the Commission’s proposal,
albeit with a request that the impact on smaller broadcasters be
carefully monitored. |
38. |
The Commission acknowledges that an increase
in the volume of advertising minutes available for the larger conventional
television licensees resulting from its incentive program may have
some negative impact on the advertising revenues of smaller conventional
and specialty services. The Commission has, therefore, modified the
original proposal set out in Public Notice 2004-32
in order to minimize any such negative impact. In particular, as described
below, the Commission has introduced a baseline of 26 hours of qualifying
Canadian drama, per broadcast year, for the larger conventional television
licensees. The revised incentive program will only apply to original
hours of drama broadcast in excess of this baseline in each broadcast
year. In the Commission’s view, any negative impact on smaller conventional
and specialty services resulting from the revised incentive program
will be offset by the benefits of increased original hours of Canadian
drama and increased viewing to that programming. |
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d) A ceiling on advertising minutes
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39. |
In Public Notice 2004-32,
the Commission indicated that the U.S. programming purchased by Canadian
conventional television licensees makes provision for between 14 and
16 minutes of advertising material per hour. Since Canadian licensees
are limited, by regulation, to 12 minutes of advertising material
per hour, additional advertising in a given hour as a result of the
proposed incentive program would not have an impact upon the number
of program interruptions experienced by Canadian viewers as long as
the additional minutes were inserted in a U.S. program. In the proposed
incentive program, the Commission did not limit the number of additional
minutes that could be placed in a given hour. |
40. |
In its comments on the Commission’s proposed
incentive program, the ACA stated that its primary concern is the
impact the additional advertising minutes might have on the number
of interruptions, or the extent of ‘clutter’, experienced by the viewer.
However, even though its members feel that current levels of clutter
are too high, the ACA agreed with the Commission’s explanation in
Public Notice 2004-32 as to why
the proposed incentives would not contribute to clutter. Nevertheless,
the ACA suggested that there is a need to place a ceiling or cap on
the number of advertising minutes in any given hour to avoid excessive
clutter. They recommended that the ceiling be established at 14 minutes
of commercial advertising per hour. |
41. |
The DOC expressed concern that permitting
an increase of commercial advertising to 14 or 16 minutes per hour would
displace public service announcements and promotions for Canadian
programs now broadcast. The CFTPA recommended that broadcasters make
every effort to ensure that promotional messages for Canadian
productions continue to be aired throughout the heart of prime time. |
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The Commission’s analysis and determination
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42. |
The Commission agrees that a ceiling or cap
on the amount of advertising material per hour is necessary and has
determined that it should be a maximum of 14 minutes per hour. Such a
ceiling will prevent excessive clutter and, since the most popular U.S.
programs often have commercial breaks of 16 minutes or more, will ensure
that time is available to promote Canadian programs and to broadcast
public service announcements. |
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e) Incentives for incremental hours only
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43. |
In Public Notice 2004-32,
the Commission set out its proposed criteria for drama programs that
would qualify for incentive rewards. The Commission proposed that
all programs that met these criteria in a broadcast year would receive
the relevant reward, regardless of the number of hours of Canadian
drama the licensee had broadcast in past years. |
44. |
Many of the submissions recommended that
the Commission revise its proposed incentive program so that it applies
only to incremental hours of original drama programming. For example,
the CBC indicated that, according to the Commission’s proposal, no
broadcaster would be required to increase the amount of Canadian drama
in its current schedule in order to earn rewards. Several other
submissions noted that the proposed incentive program could place
greater pressure on the CTF as competition would increase for its finite
resources available for the financing of drama. Alliance Atlantis filed
a joint submission with other specialty licensees opposing any incentive
program that is available to broadcasters who simply continue to
schedule drama programs at their current levels. These interveners
failed to see how the Commission’s proposal would generate new
incremental hours of drama programming. The CFTPA recommended that the
Commission limit the rewards for original drama to drama broadcast over
and above current levels. The CFTPA concurred with the CCAU that any
drama incentives should be applied to the drama that exceeds a
licensee’s average number of hours of original drama broadcast over the
past three broadcast years, for example 2001/02 to 2003/04. |
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The Commission’s analysis and determination
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45. |
The Commission shares the view of those who
say that rewards for original hours of drama should encourage licensees
to broadcast incremental hours of drama. In the Commission’s view,
setting an appropriate baseline, beyond which the incentives would
become operative, would mitigate any negative impact on the advertising
revenues earned by the smaller conventional or specialty services. |
46. |
Establishing a baseline raises a number of
questions that are addressed by the Commission below. |
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- How should the baseline be determined?
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- What programs should qualify for inclusion in the baseline
calculation?
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- Should a baseline apply to all licensees? Should the baseline be
the same for all licensees?
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47. |
In addressing these questions, the
Commission is cognizant of the need to ensure that any baseline that is
adopted is realistic and contributes to fulfilling the Commission’s
objectives. Such a baseline is meant to encourage licensees who have not
traditionally broadcast much Canadian drama to broadcast more, without
discouraging those licensees who are already making a significant drama
contribution. |
48. |
Most of the parties commenting on this matter
proposed establishing a baseline, beyond which the incentives would
become operative for each licensee, according to its past performance.
The CFTPA and the CCAU suggested that the baseline could be the average
number of original drama hours broadcast by the licensee over the
previous three years. The Commission notes, however, that program
logs provided to the Commission do not distinguish between those programs
financed by the CTF and other Canadian 10-point drama programs. Nor
do the logs provide the specific number of Canadian content points
earned by a program or identify whether the program was funded through
ownership transfer benefits. Following the period set aside in Public
Notice 2004-32 for comment, the
Commission asked certain licensees to supplement its data base by
providing more detailed information with respect to the original drama
broadcast in 2002/03 and 2003/04. |
49. |
A number of parties submitting comments suggested
that the major beneficiaries of the incentive program proposed in
Public Notice 2004-32 are likely
to be CTV and Global. They noted that these two licensees would be
the most likely to receive a significant windfall gain if the Commission’s
initial incentive program proposal were implemented. In the case of
CFTO-TV Toronto (CTV), the Commission has noted a relatively consistent
level of 10-point, original Canadian drama broadcast over the past
two years. However, a large proportion of CTV’s total original hours
of drama has been funded through ownership transfer benefits. CIII-TV
Toronto (Global), on the other hand, has broadcast very few original
10-point drama programs, but a large volume of 8- and 9-point original
Canadian drama. In the broadcast year 2002/03, CTV and Global broadcast
similar amounts of Canadian drama that would qualify for the incentive
program. In the broadcast year 2003/04, however, Global broadcast
significantly more qualifying hours than CTV. The difference is accounted
for primarily by Global’s increasing emphasis on low-cost, 8- or 9-
point drama productions that would earn only thirty seconds per hour
of extra advertising under the incentive program. CTV, on the other
hand, broadcasts mostly 10-point Canadian dramas. Many of these hours,
however, are funded by benefits and, hence, do not qualify under the
incentive program. When these factors are taken into consideration,
the difference in the value of potential reward minutes that would
be earned by CTV and Global is not substantial. |
50. |
In light of the above, the Commission
considers that a common baseline will provide a more equitable approach
in this market. In addition, the Commission is of the view that a
baseline is not necessary for those smaller conventional television and
specialty services that, in the past, have not broadcast large amounts
of original Canadian drama. Accordingly, the Commission has determined
that, for the English-language market, the most equitable approach is to
establish a common baseline only for those English-language conventional
television licensees controlled by the largest multi-station ownership
groups as defined in paragraph 14 of the 1999 Television Policy, and set
out again the appendix to this notice. |
51. |
The Commission has also determined that
those hours of drama programming that would otherwise qualify for the
incentive program will count towards meeting a licensee’s baseline
requirements, provided they have been broadcast during the peak viewing
hours of 7 p.m. to 11 p.m. within the broadcast year. In order to
further encourage the production of high-cost, 10-point productions that
are produced without CTF financing, the broadcast of such programs will
trigger the appropriate award irrespective of whether the drama baseline
has been achieved. In other words, notwithstanding the baseline
requirements, all programs qualifying as high-cost 10-point drama that
are produced without CTF financing will be eligible for the appropriate
reward. The Commission notes that original drama hours funded through
commitments made in the context of a new licence application or as
ownership transfer benefits are not eligible for incentive rewards, and
thus will not be eligible for inclusion in the baseline calculation.
|
52. |
As noted above, the Commission has reviewed
its data with respect to licensees’ past performance in the area of
drama as well as information supplied by the CTF and individual
licensees. In establishing the appropriate number of hours for the
baseline, the Commission has taken into consideration the fact that
licensees are not generally required by regulation or condition of
licence to broadcast Canadian drama. Nevertheless, the Commission
considers that it is reasonable to expect each conventional television
licensee controlled by the largest multi-station ownership groups to
provide at least one hour per week of qualifying original Canadian drama
during the six most popular viewing months of the year. Accordingly, and
taking into consideration the volume of qualifying drama broadcast by
the major conventional television licensees in the past two years and
the reward minutes that would have been earned, the Commission has
determined that the baseline for conventional television licensees
controlled by large multi-station ownership groups will be 26 hours per
year of qualifying, original, Canadian drama broadcast in peak viewing
hours. Licensees broadcasting more than 26 hours of such drama will have
the flexibility to determine the qualifying hours of drama that will
form part of the baseline and those hours that will be eligible for
rewards under the drama incentive program. In the Commission’s view, the
baseline forms part of an appealing incentive program for the larger
television broadcasters and reduces any inappropriate windfall gain. The
Commission will monitor the appropriateness of this baseline in light of
licensees’ actual performance. |
53. |
To summarize, for conventional television
stations controlled by the largest multi-station ownership groups, the
incentive program will only apply to qualifying hours of Canadian drama
in excess of 26 original hours per broadcast year. The drama
contributing to the baseline of 26 hours must be broadcast during the
hours of 7 p.m. and 11 p.m., include only those hours that would
otherwise qualify for incentive rewards, and exclude hours funded as a
result of commitments made in the context of a new licence application
or as a result of ownership transfer benefits. Original, 10-point
Canadian dramas with a production budget of at least $800,000 per hour
and a licence fee of at least $300,000, that are produced without CTF
financing will qualify for rewards without regard to the baseline
requirement. |
|
f) The definition of "drama program" and "original program"
|
54. |
In Public Notice 2004-32,
the Commission proposed the following definition for "original
program". |
|
A program that has never before been distributed by any licensee of
a broadcasting undertaking and that will be distributed for the first
time by the licensee.
|
|
Public Notice 2004-32
did not propose a definition for "drama program". |
55. |
A number of broadcasters proposed changes
to the definition of "original program" that the Commission
had set out in Public Notice 2004-32.
In most cases, the suggested changes would permit all of the licensees
that participated in the financing of a program to claim it as an
"original program" for the purpose of the drama incentives. |
56. |
For instance, the CAB recommended "that the
definition of original programming be amended so that the first
broadcast of a program by each broadcaster who was part of the
pre-production financing be considered an original broadcast." Alliance
Atlantis proposed the following definition, "An original program shall
mean a program for which a broadcaster’s licence fees have contributed
significantly to defraying the cost of production. The licence fee paid
by such a broadcaster may be consideration for first window or
subsequent window broadcast of the program, however, such pre-licence
fees (1) must be paid during the course of production, (2) may assist in
triggering other financing and (3) must form part of the producer’s
financing plan for the production." Alliance Atlantis also recommended
that only one station or service in a corporate group be entitled to
claim a program as "original". |
57. |
Global considered that the Commission's definition
of "original" in Public Notice 2004-32
should be maintained, but argued that repeats should be included to
make the proposal more attractive. Global noted that repeats are important
to the success of drama series and that many Canadians are exposed
to Canadian drama through repeats. Specifically, Global proposed that
the Commission’s incentive program be extended to include two broadcasts
on the same station or service and one additional broadcast on a different
station or service. |
58. |
Vision TV proposed that the definition of
an original program be simplified to read, "An original program to a
licensee is a program that will be distributed for the first time by
that licensee." CHUM noted that it broadcasts a large number of Canadian
feature films and sought clarity as to whether a production would
qualify for incentive rewards if it had its first window on pay
television. The CFTPA said that it would not support specialty services
being permitted to count second window telecasts as "original programs",
even where the specialty licence fee is required to meet CTF licence fee
threshold requirements. |
|
The Commission’s analysis and determination
|
59. |
The definition of an original program proposed
by the Commission in Public Notice 2004-32
would not permit more than one broadcaster to take advantage of the
drama incentive program for the broadcast of any one program. In its
comments, the CAB noted that it is increasingly common for two or
more broadcasters to contribute to the financing of a program. Frequently,
the first broadcast window is provided by a large conventional television
broadcaster and a second broadcast window is provided by a specialty
or smaller conventional television service. In other circumstances,
two specialty services, or one specialty service and a pay television
service may acquire the rights for the same program. In the case of
Canadian feature films, a specialty or conventional service may provide
a second window following the first broadcast on a pay television
service. Alliance Atlantis noted in its comments that the licence
fees from a second window help producers to obtain financing from
the CTF. Without this contribution, some Canadian drama would not
be produced. |
60. |
The Commission notes that in situations
where an ownership group consists of both conventional and specialty
television services, rights may be acquired for the broadcast of a drama
on more than one of its services. Alliance Atlantis proposed that only
one play per corporate group be considered original. In the case of the
CAB’s recommendation, it is not clear whether the definition proposed
would permit a corporate group to claim more than one original
broadcast. The definition proposed by Vision TV would permit a licensee
to broadcast a Canadian drama that may have been first telecast by
another broadcaster years before and claim it as an "original program"
for the purpose of the drama incentives. |
61. |
In the Commission’s view, an important
objective of the incentive program is to increase the number of original
hours of Canadian drama. The Commission does not find the Vision TV
proposal would serve this objective. |
62. |
The Commission considers that broadcasters
who purchase second or subsequent windows as part of the pre-production
financing of a program are contributing to its production, and should
therefore benefit from the drama incentive program. With respect to the
CFTPA, the Commission notes that it provides no rationale for its
opposition to the inclusion of second or subsequent windows in the drama
incentive program. |
63. |
The Commission, however, is concerned that,
for those large ownership groups that hold multiple conventional or
specialty licences, a ceiling or cap on the eligibility of subsequent
windows, as suggested by Alliance Atlantis, may be necessary. Such a cap
would prevent these broadcasters from earning rewards for providing
multiple windows for the same original hour, a practice that might
otherwise reduce the production and broadcast of new hours of drama. The
Commission is particularly concerned that those large ownership groups
that control more than one network or group of conventional stations be
prevented from claiming incentive rewards for the same original program
by rebroadcasting it on a second network or group of stations. |
64. |
With respect to pay television, pay
licensees will not be able to benefit from the incentive related to
additional advertising minutes and, consequently, the Commission
considers that a prior broadcast on a pay, pay-per-view or
video-on-demand (VOD) service should be excluded from consideration in
regard to any ceiling or cap. |
65. |
The Commission is of the view that programs
dubbed from one language to another should not be considered as original
programs in the second language. However, programs for which original
versions have been produced in both official languages as a result of
double-shooting will qualify as original programs. |
66. |
In light of the above, the Commission has
determined that, for the purpose of the drama incentive program, the
definition of an "original program" is as follows: |
|
"original program" means a program that, at the time of its
broadcast by a licensee, has not been previously broadcast by the
licensee or, subject to the exceptions set out below, by any other
licensee.
|
|
A licensee may also count a program as an original program, for the
purpose of the drama incentive program, where:
|
|
a) the licensee contributed to the program’s pre-production
financing, and the program has only been previously broadcast by
another licensee that also contributed to its pre-production
financing;
|
|
b) the program has only been previously broadcast by a licensee of
a pay-television, pay-per-view or video-on-demand undertaking;
|
|
c) the licensee has contributed to the pre-production financing of
the program and the program has previously been broadcast by no more
than one conventional television service or one specialty service
within the licensee’s multi-station ownership group, except that where
a multi-station ownership group owns or controls more than one
conventional television service the program may only be counted as
original on one of those conventional television services; or
|
|
d) the program has been previously broadcast in French by a
licensee, but was produced originally in both English and French and
otherwise satisfies the definition of original program; a program that
was originally produced in French only will not qualify as an original
program even when it is broadcast with an English-language sound track
or with English-language captioning.
|
|
For the purpose of this definition, |
|
"conventional television service"
means a service composed of |
|
a) one conventional television station; or
|
|
b) more than one conventional television station in which the
programming broadcast during peak time, exclusive of commercial
messages, and any part of the service carried on a subsidiary signal,
is the same on each station at least 80% of the time, whether or not a
network licence has been issued.
|
|
"multi-station ownership group" means a group of stations
and/or services owned or controlled by the same person or entity, and
is composed of
|
|
a) more than one conventional television station;
|
|
b) one or more conventional television stations and one or more
specialty services; or
|
|
c) more than one specialty service.
|
67. |
With respect to the definition of a "drama
program", the Commission notes that in Appendix II to Definitions
for new types of priority programs; revisions to definitions of television
content categories; definitions of Canadian dramatic programs that
will qualify for time credits towards priority programming requirements,
Public Notice CRTC 1999-205,
23 December 1999, the Commission set out its definitions of drama
programs that would be eligible for the 150% time credit as follows: |
|
The Commission will award a 150% time credit against the required
hours of priority Canadian programming for each category 7a) to 7e)
dramatic program broadcast during the peak viewing period (7 to 11
p.m.) which;
|
|
a) is aired for the first time on television on or after 1
September 1998;
|
|
b) has a duration of at least one half-hour, including a reasonable
amount of time for commercial breaks;
|
|
c) is recognized as a Canadian program, qualifies for either a C
number or an SR number from the Commission and achieves 10 points
related to the key creative positions; and
|
|
d) contains a minimum of 90% dramatic content.
|
68. |
The Commission considers that the incentive
program for Canadian drama should define "drama program" in a manner
consistent with existing incentive programs. Accordingly, the Commission
considers that, for the purpose of the drama incentive program, |
|
"drama program" means a program that:
|
|
a) is described by a category from 7(a) to 7(e) as set out in
Schedule I to the Television Broadcasting Regulations, 1987;
|
|
b) has a duration of at least one half hour, including the time
devoted to permitted advertising material;
|
|
c) contains a minimum of 90% dramatic content; and
|
|
d) qualifies as a Canadian program as defined in the Television
Broadcasting Regulations, 1987.
|
|
g) The separation of viewing and expenditure rewards from original
programs
|
69. |
The proposed incentive program set out in
Public Notice 2004-32 consisted
of three parts: incentives to broadcast original hours of Canadian
drama; an incentive to increase viewing to Canadian drama; and an
incentive to increase expenditures on Canadian drama. The viewing
and expenditure rewards were linked with the number of qualifying
original hours of Canadian drama. A licensee who fulfilled the viewing
or expenditure criteria would be rewarded with an increase of 25%
in allowable advertising minutes. |
70. |
The CAB argued that broadcasters should be
rewarded for increasing their share of viewing to, and their
expenditures on, Canadian drama "regardless of whether they have
accomplished this by broadcasting original hours of drama, increasing
their licence fees, scheduling drama on multiple platforms or increasing
their spending on marketing and promotion." Accordingly, in the CAB's
view, there should be a separate incentive for broadcasters to increase
viewing and expenditures that is unrelated to the broadcast of original
Canadian drama. In other words, the second and third incentives
mentioned above, related to viewing and expenditures, should be
separated or "de-coupled" from the first incentive, related to the
broadcast of original programs. Global and Alliance Atlantis echoed the
CAB position. |
71. |
CHUM noted that the de-coupling of
incentives, would be particularly important should the Commission
exclude commitments made in the context of an application for a new
licence or as ownership transfer benefits from the calculation of the
reward in regard to expenditures on Canadian drama. CHUM also noted that
"if the Commission were to de-couple audience and expenditure
incentives, there would be a degree of equity in advertising credits for
meeting these goals. The value of additional advertising minutes for
expenditure and audience growth would likely be more proportional to the
actual cost of achieving these goals, regardless of the size of the
broadcaster." |
72. |
Both the CCAU and the CFTPA supported the
Commission’s proposed linking of viewing and expenditure rewards to
original programs, though with some proposed modifications. |
|
The Commission’s analysis and determination
|
73. |
The Commission wishes to increase the
amount of original drama programs broadcast on English-language
television, and considers that linking the rewards for meeting the
viewing and expenditure criteria to the number of original programs
broadcast will help achieve that objective. |
74. |
In the Commission’s view, de-coupling the
viewing and expenditure rewards from the broadcast of an original drama
program would have the effect of encouraging certain licensees to focus
on marketing and scheduling strategies in order to increase viewing to
existing Canadian drama rather than encouraging them to invest in
original programs. The Commission has, therefore, decided to maintain
the proposed link between original drama and the viewing and expenditure
rewards. |
|
h) Rewarding successful drama
|
75. |
In its comment pursuant to Public Notice
2004-32, CTV proposed that the
Commission consider an incentive program that would reward broadcasters
for exceeding specific audience thresholds for viewing to drama programs.
CTV suggested that "an ambitious goal" would be to reward
broadcasters that achieved a minimum audience of 1,000,000 viewers
two years of age or more (2 +) for an hour of original Canadian drama.
This audience benchmark could be adjusted for each broadcaster based
upon the broadcaster’s potential reach. CTV stated that if the Commission
felt that the benchmark of 1,000,000 viewers was too ambitious, CTV
would support a lower benchmark of 750,000 viewers aged 2 +. |
76. |
CTV pointed out that, "The industry has
recently seen what can happen when services are rewarded for endless
repeats of Canadian content rather than for their investments in
original Canadian drama." CTV pointed to difficulties experienced by
Telefilm with its new evaluation grid which includes audience
measurement as an element. As a result, according to CTV, certain
specialty services that scheduled many repeats of programs financed by
the CTF scored well, while broadcasters such as CTV, who financed and
aired original programs, scored poorly in the Telefilm evaluation. CTV
argued that the Commission should "…keep its focus firmly on original
hours and audience achievement for those original hours, supporting the
creation of drama at the risk- and resource-intensive front end." |
|
The Commission’s analysis and determination
|
77. |
The Commission has carefully reviewed CTV’s
comments and its proposal to focus rewards only on successful or "hit"
dramas. The Commission recognizes the value of those Canadian shows that
achieve "hit" status. These programs garner significant publicity that
in turn attracts more viewers to Canadian programming. As has occurred
in the French-language market, this ‘virtuous circle’ can assist in the
development of a star system by promoting television drama that grows
out of and reflects the lives of its audience. |
78. |
At the same time, the Commission considers
that an incentive focussed exclusively on such programs would penalize
those broadcasters that air original Canadian drama programs despite the
fact that such programs are unlikely to achieve the level of a "hit".
The Commission is concerned that the CTV proposal might not encourage
all licensees to acquire and broadcast more original Canadian drama or
raise overall viewing to such programs. In contrast, an approach that
rewards increases in viewing to all Canadian drama, as a percentage of
viewing to all drama, will, in the Commission’s view, encourage all
players in the system to raise viewing levels. |
79. |
In light of the above, the Commission has
determined not to introduce a separate incentive for "hit" programs at
this time. |
80. |
With respect to the Commission’s incentive
to increase viewing to Canadian drama, as noted in Public Notice 2004-32,
the Commission has been working with the CTF, Telefilm Canada, MediaStats
and other interested parties to include the country of origin and
program genre for each program captured by both BBM Canada and Nielsen
Media Research in a common metered database. The Commission will issue
a public notice, in the current broadcast year, setting out its proposed
viewing objective for the industry as a whole and seeking comments
from interested parties. Preliminary viewing targets for those ownership
groups participating in the incentive program will be made public
at the same time. The final viewing targets for each participating
ownership group will be announced subsequently. |
|
i) Modifications to the proposed "triggers" and "rewards"
|
|
i ) Expenditure triggers
|
81. |
The CAB, Global and Alliance Atlantis
supported the Commission’s proposed overall industry objective of
raising total program spending on Canadian drama, as a percentage of
total revenues, from the current 4% to 6% over a five-year period. Under
this proposal, all conventional television stations in a multi-station
ownership group would be rewarded when all of these stations demonstrate
an aggregate increase in expenditures on Canadian drama, as a percentage
of total revenues over one broadcast year, of 0.4%. |
82. |
CTV argued that, while it considered
expenditure incentives unnecessary, if the Commission implemented an
expenditure incentive program, the program should only apply to original
drama, and only cash licence fees should be included in the annual
expenditure calculation. CTV also proposed that each broadcaster should
be required to reach an industry target by increasing expenditures on
original Canadian drama each year until the target was reached. |
83. |
The CFTPA said that the overall objective
of raising total programming expenditures on Canadian drama from 4% to
6% of total industry revenues over five years was insufficient. The
CFTPA proposed that the overall objective be set between 7% and 8% of
total programming expenditures over five years. The CFTPA submitted that
the 6% threshold would be appropriate if modified to become an objective
over three years. |
84. |
The CCAU considered the Commission’s
proposal to be "a useful measure to push stations to steadily increase
their financial commitment to Canadian drama". However, it preferred an
annual increase of 0.5% rather than 0.4%. The CCAU also proposed that
the overall objective to be set at 7% rather than 6%, and that this be
implemented through specific licence requirements rather than
incentives. |
|
The Commission’s analysis and determination
|
85. |
The Commission considers that an objective
of raising expenditures on Canadian drama by English-language
conventional television licensees to 6% of their total revenues over a
five-year period strikes the right balance between what is desirable and
what is attainable. The Commission considers that it will act as an
effective incentive for conventional broadcasters to increase their
spending on such programs. In the Commission’s view, neither an
objective involving a higher percentage nor a shorter period to meet the
proposed target would strike the right balance. |
86. |
The Commission does not consider practical
CTV’s suggestion that incentive rewards be related exclusively to
the payment of cash licence fees for original drama. This is, in part,
because the Commission does not collect information at a sufficient
level of detail to fulfil all of the requirements of the CTV proposal.
The Commission also considers that the approach set out in Public
Notice 2004-32, including an industry-wide
target, is a better means of encouraging all licensees to broadcast
high quality Canadian drama than CTV's proposal that each broadcaster
be required to attain an industry target. |
87. |
The Commission has therefore decided to maintain
the expenditure incentive proposed in Public Notice 2004-32.
The objective of this incentive is an increase in the spending on
Canadian drama by the English-language conventional television industry,
as a percent of total revenues, from 4% to 6% over a five-year period.
The targets will be set out in a public notice to be issued later
in the current broadcast year. |
|
ii ) Triggers and rewards for high-cost drama
|
88. |
As noted above, in Public Notice 2004-32,
the Commission proposed a reward of two-and-a-half minutes of additional
advertising time for the broadcast of each hour of 10-point, original,
CTF-funded drama broadcast in peak time with a production budget of
at least $800,000 and a minimum licence fee as established by the
CTF. The CTF's current minimum licence fee for a drama program with
a production budget of $800,000 or more is $240,000. |
89. |
Global and a number of other parties
indicated that, although the minimum licence fee required by the CTF for
high cost drama is $240,000, in practice , in order to earn the maximum
points, a minimum licence fee of $300,000 is required. The CCAU
suggested that the Commission should use the $300,000 licence fee
threshold for both CTF and non-CTF high-cost productions and that this
threshold should be reviewed on an annual basis to reflect any further
increases that the CTF might apply. |
90. |
With respect to the two-and-a-half minute
reward for high-cost drama, the Commission noted that it established
this reward on the basis of a report prepared by Nordicity which assumed
that the average value for thirty seconds of advertising aired on the
larger conventional television stations during peak time in U.S.
programs amounted to $40,000. CTV estimated that, "based on actual
financial data … the incentive should be set at four minutes per
original hour to deliver a benefit comparable to that proposed by the
CRTC." The Commission notes, however, that CTV did not file any
financial data with the Commission to support this claim. |
91. |
The CFTPA recommended that the budget
threshold for high-cost drama should be in the $1 - $1.2 million per
hour range. The CCAU proposed a production budget threshold of $1
million per hour for all productions except children’s programs, for
which the threshold should be $750,000 per hour. |
|
The Commission’s analysis and determination
|
92. |
The Commission acknowledges that, according
to the CTF’s 2004/05 evaluation grid, maximum points are awarded for
licence fees of $300,000 per hour. In order to be consistent with the
current CTF evaluation process, the Commission considers that the
licence fee threshold should be increased to $300,000 per hour.
Accordingly, the new minimum licence fee requirement will apply to both
the CTF and non-CTF incentives for high cost drama. At the same time, to
compensate for this increase in the licence fee requirement, the
two-and-a-half minute proposed incentive for high cost drama will be
increased to three minutes. |
93. |
With respect to the minimum production
budget necessary to trigger the reward, the Commission notes that the
CTF’s 2002/03 Activity Report indicates
that the average production budget for English-language dramas increased
to $962,000, up from $800,000 the previous year. Nonetheless, the
2004/05 guidelines for the CTF maintain the $800,000 per hour threshold
between low-budget and high-budget English-language drama productions.
Since consistency with the CTF’s guidelines will make the Commission’s
incentive program easier to understand and administer, the required
minimum production budget necessary to trigger the reward will not be
altered. However, the Commission will review the incentive levels
annually in order to ensure ongoing consistency with CTF guidelines and
policies. |
94. |
To summarize, the Commission is making the
following changes to the incentives for high-cost drama proposed in
Public Notice 2004-32: |
|
- the minimum licence fee for 10-point, high-cost CTF, or non-CTF,
drama will be $300,000; and
|
|
- the reward for 10-point, high-cost CTF drama will be three minutes
per hour.
|
95. |
The minimum licence fees and production
budgets will be reviewed on an annual basis to ensure consistency with
CTF guidelines and policies. |
|
iii ) Triggers and rewards for non-CTF drama
|
96. |
As noted above, in Public Notice 2004-32,
the Commission proposed an additional reward of four minutes of advertising
for each hour of high-cost, 10-point, original Canadian drama broadcast
in peak time that was able to forgo financing from the CTF and thus
reduce the pressure on the CTF’s limited resources. The four minute
bonus incentive was additional to the incentive for each eligible
hour of Canadian drama. The Commission estimated that, at least for
the largest broadcasters, the value of the additional four minutes
of advertising time would compensate for the average contribution
that the CTF would normally have made. |
97. |
Several parties were of the view that the
non-CTF bonus incentive for high-cost productions is the only effective
means to add a significant volume of original English-language Canadian
drama to the broadcasting system. For example, the CBC proposed that, to
ensure that the incentives contribute to incremental drama programs, the
Commission should limit its incentive program to non-CTF funded drama.
In this way, broadcasters would not have to adhere to the requirements
of CTF deadlines or to the CTF’s distinctly-Canadian content criterion.
However, the CBC also noted that its proposal would involve considerably
greater financial risk for participating broadcasters than the
Commission’s approach. |
98. |
The CCAU submitted that any real impact on
the production of more original drama would be as a result of incentives
for non-CTF drama. The CCAU noted that unless additional resources
become available to the CTF, which is unlikely, it is difficult to see
how a conventional television service could commission more hours of
drama. |
99. |
Both CTV and Global claimed that the degree
of financial risk associated with non-CTF funded high cost drama would
likely result in the Commission’s proposed incentive having relatively
little impact, if any. Global did not believe that broadcasters would
avail themselves of the non-CTF incentive as it is complex and would
require the broadcaster to advance considerable financing long before it
would be able to recoup this advance through additional advertising
minutes. CTV indicated that the development window for a standard drama
project is approximately two years and entails at least five or six
written drafts of the script prior to production. |
|
The Commission’s analysis and determination
|
100. |
The Commission considers that an incentive
for licensees to invest in original, high-cost, 10-point, Canadian drama
that does not involve financing from the CTF must be attractive if it is
to help increase the volume of original Canadian drama programming. |
101. |
The Commission takes note of broadcasters’
comments that the proposal set out in Public Notice 2004-32
would involve a significant degree of financial risk for licensees.
In order to qualify for the incentive, broadcasters would have been
required to fund drama projects and in effect replace CTF financing
well in advance of any possibility of recouping this financing through
the sale of additional advertising minutes. The fact that the two
largest English-language, private sector broadcasters indicated that
they would be unlikely to use the incentive in its proposed form is
of concern to the Commission. |
102. |
The Commission considers that the most
effective way to reduce the risk associated with this incentive, and to
make the incentive more attractive, is to allow licensees to utilize the
bonus advertising minutes allocated in lieu of CTF financing at the end
of the development phase of the production rather than having to wait
until the production is broadcast. Accordingly, before a licensee may
use the bonus minutes, a drama production must have reached the same
stage in development as that which would be necessary for it to be
eligible for financing by the CTF. Specifically, all of an eligible
project’s financing must be in place and the key creative personnel
identified. The required information is set out in sections C and D of
the CTF application form. Once the project fulfils all of the CTF’s
requirements for financing, the licensee will be entitled to air the
bonus advertising minutes permitted by the incentive. In addition, and
also consistent with CTF guidelines, principal photography on the
production must commence within one year of the airing of any bonus
advertising related to the incentive reward for the production. |
103. |
The licensee will be required to report on
the status of each non-CTF project in development in the licensee’s
annual drama incentive report. This report will also indicate when the
advertising related to incentive rewards associated with non-CTF
projects has been aired. Using these reports, the Commission will
monitor each production. If it is determined that a production for which
additional advertising minutes have been aired will not, itself, be
broadcast, and absent compelling reasons why the Commission should not
do so, it will reduce the advertising minutes the licensee is permitted
to air in the future by an equivalent amount. In the Commission’s view,
this will reduce any risk that licensees may earn reward minutes for
projects that subsequently do not go to air. |
104. |
As noted above, the 2002/03 Activity Report
of the CTF indicates that the average production cost for one hour
of English-language drama in 2002/03 was $962,000. On average, the
CTF contributed 41.5% of the production budget for a drama in 2002/03,
or $399,230. The Commission’s four minute bonus incentive reward for
non-CTF drama proposed in Public Notice 2004-32
was based upon the average volume of financing required for the broadcaster
to replace CTF funding in 2001/02. In light of the more recent CTF
data, and considering that the reward for non-CTF drama is the primary
means to expand the funds available for Canadian drama, the Commission
has decided to increase the bonus incentive for non-CTF drama to five
minutes of additional advertising per hour. |
105. |
In summary, in order to increase the
effectiveness of the incentive for original high-cost, 10-point,
Canadian drama that forgoes financing from the CTF, the Commission has
made the following determinations: |
|
- Licensees investing in 10-point, original, drama broadcast in peak
time with a production budget of at least $800,000 per hour and a
minimum licence fee of $300,000, but without any financing from the
CTF, will be authorized to broadcast a total of eight minutes of
additional advertising time for each hour of such drama. The five
bonus minutes awarded in lieu of CTF funding may be broadcast after
the production's financial structure is complete and the key creative
personnel have been identified in accordance with the applicable
sections of the CTF’s application form. The remaining three minutes
may be aired once the production has been broadcast.
|
|
- Principal photography on the project must commence within one year
of the broadcast of any of the five bonus minutes awarded in lieu of
CTF funding.
|
|
- For a production financed pursuant to this incentive that is not
broadcast, the broadcaster shall reduce the volume of advertising
minutes otherwise allowed pursuant to the incentive awards by the
amount previously credited for the production unless the Commission is
satisfied that there are compelling reasons why the broadcaster should
not be required to do so.
|
106. |
For each production financed by the non-CTF
incentive, the licensee must submit to the Commission in conjunction
with the its annual drama incentive report the following information
from the producer: |
|
- a description of the financing structure of the production
prepared in accordance with Section C of the CTF Television
Application Form 2004/05, or its equivalent in future years,
separately identifying the amount paid by the licensee in regard to
the five minutes of additional advertising;
|
|
- the key creative personnel – as per section D of the CTF
Television Application Form 2004/05, or its equivalent in future
years;
|
|
- the date on which principal photography will commence; and
|
|
- the status of each project in development for which incentive
advertising minutes have been broadcast by the licensee.
|
|
iv ) Safeguards for non-CTF rewards
|
107. |
In Public Notice 2004-32
the Commission invited comments on how it could best ensure that the
revenues derived from the bonus minutes of advertising for drama programs
that are not financed by the CTF, flow through to Canadian drama production. |
108. |
The CCAU expressed the view that clear
accounting measures should be adopted in order to ensure that the
revenues generated from the sale of bonus minutes truly flow to
producers. The CCAU noted that it should be possible to provide value
equal to the average net revenue per minute that a station group derives
from the sale of advertising in programs where additional inventory is
sold under the CRTC drama incentive plan. Since this value would be an
average over a number of programs, it should be public information and
backed up by confidential worksheets submitted to the CRTC. According to
the CCAU, the number of additional minutes that fall into the non-CTF
reward category, multiplied by the average revenue per minute, should
equal the financing provided to producers by broadcasters. The CFTPA
said that the CCAU approach would be the most accurate, transparent and
fair means of assessing the value of the bonus advertising time. |
109. |
The DOC suggested that in order to ensure
that financing flows to producers in accordance with the non-CTF
incentive, the licence fee paid by the broadcaster for an eligible drama
program should be established at 60% of the production budget. In
contrast, CHUM noted that drama production simply is not possible
without adequate financing, including various advances by the
broadcaster. CHUM considered that there is no need for specific measures
to ensure that the associated advertising revenues flow directly to the
production since, if the production is insufficiently financed, it will
not be made. The CAB noted that a requirement for detailed accounting
would make this incentive less attractive to broadcasters. |
|
The Commission’s analysis and determination
|
110. |
The Commission considers that the reporting
model proposed by the CCAU would require the Commission to establish a
very detailed reporting and monitoring system for each licensee taking
advantage of the incentives. In the Commission’s view, such detailed
reporting requirements could discourage broadcasters from participating
in the incentive program and thus reduce the amount of original Canadian
drama available to Canadian audiences. |
111. |
Both the CCAU and the CFTPA indicated that
their research confirms the $40,000 per half minute estimate proposed by
the Commission as the value of additional advertising for the large
conventional ownership groups. The Commission therefore considers that,
in effect, the starting point for negotiations between broadcasters and
producers has been established. Furthermore, as part of their annual
drama incentive reports, broadcasters will be required to file with the
Commission information specifying the licence fee and the precise amount
advanced as a result of the five bonus minutes of advertising for each
eligible drama program. |
112. |
The annual drama incentive reports, which
will be subject to CRTC confidentiality guidelines, will provide the
Commission with the information required to monitor the results of the
incentives in order to ensure that non-CTF drama productions receive an
appropriate contribution from participating broadcasters. |
|
v ) Triggers and rewards for low-cost and less than 10-point
drama
|
113. |
In Public Notice 2004-32,
the Commission proposed an incentive reward of half a minute of additional
advertising for each hour of 8- to 10-point, original drama broadcast
at any time or 10-point original drama broadcast in peak time (7:00
p.m. to 11:00 p.m.) having a production budget of less than $800,000
per hour. Various parties proposed modifications to this incentive
proposal. |
114. |
The CFTPA and the CCAU recommended that
low-cost drama should be entitled to a reward only if the program had a
production budget of at least $250,000 per hour. The CCAU considered
that there should be no reward for productions earning less than
10 points or for productions, other than children’s drama, broadcast
outside peak viewing periods. |
115. |
CHUM and Global stated that 6- and 7-point
dramas add value to the broadcasting system and should be included in
the incentive program. Global pointed out that low-cost drama series,
such as Train 48, provide a large volume of original programs
broadcast over a longer season than high-cost Canadian drama series.
Vision TV pointed out that 6- to 9-point dramas also contribute to the
development of Canadian talent and that broadcasters and producers
should be encouraged to pursue new formats and methods of production due
to the increasingly competitive environment in which they operate. |
116. |
With respect to the incentive for low-cost
drama, Global proposed an increase in additional advertising from half a
minute to one minute per hour. Vision TV proposed that, "additional
incentives include credits against expenditures and exhibition
requirements at a lower level than would apply to 10-point drama." |
|
The Commission’s analysis and determination
|
117. |
The Commission’s objective in proposing a
modest incentive for low-cost drama was to help develop Canadian
creative talent and production infrastructure. Low-cost drama may also
encourage new, more experimental drama programs and different approaches
to production. |
118. |
In the Commission’s view, there is no need
to set a production budget threshold below which there would be no
incentive reward. The Commission considers that broadcasters that
acquire low-cost drama series may compensate for the low production
budget by commissioning greater numbers of episodes and employing
Canadian talent over a much longer period than a typical high-cost
series. For example, in the 2003/04 season, Global aired 65 original
hours of the low-cost Train 48, while CTV aired 13 original hours
of the high-cost The Eleventh Hour. |
119. |
With respect to the inclusion of 6- and
7-point drama programs in the incentive program, the Commission is of
the view that the incentives for Canadian drama should focus primarily
on those programs that make maximum use of Canadian creative and other
resources. Accordingly, under the Commission’s policy, the largest
incentive rewards are provided to 10-point drama, while only modest
rewards are offered for 8- or 9-point drama programs. The Commission
considers that 6- and 7-point dramas do not make sufficient use of
Canadian resources and talent to justify an incentive. |
120. |
The CCAU proposed that the Commission
remove the incentives for drama, other than children’s drama, that is
broadcast outside peak time. The Commission’s incentive program is
heavily weighted towards high-cost, 10-point drama broadcast in peak
time. In the Commission’s view, providing a modest reward of thirty
seconds of additional advertising per hour for lower-cost, experimental
dramas that may be broadcast outside peak time could benefit the
Canadian broadcasting system and will certainly not detract from the
primary objective of the incentive program. |
121. |
Global proposed increasing the reward for
low-cost drama from thirty seconds to one minute per hour. In the
Commission’s view, the thirty second reward provides an appropriate
balance between the primary objective of encouraging high-cost, 10-point
drama and the Commission’s desire to provide some encouragement to
newer, less expensive forms of Canadian drama. |
122. |
In light of the above, the Commission has
decided to maintain its proposal, as described in Public Notice 2004-32.
Accordingly, where a licensee broadcasts an 8- or 9-point original
drama program, or a 10-point original drama program not eligible for
other incentives, the licensee is eligible for thirty seconds of additional
advertising for each hour broadcast. |
|
j) Evaluating the incentive program
|
123. |
In Public Notice 2004-32,
the Commission proposed viewing and expenditure targets that it expected
would be achieved over a five-year period as a result of the incentive
program. The Commission also noted that it would evaluate annually
the industry’s progress towards these targets and that if the results
of the incentive program did not demonstrate sufficient progress towards
the targets, changes to the incentives could be introduced. |
124. |
A number of parties commented that the
five-year evaluation period may be too long. The CFTPA considered that a
three-year time frame would provide enough information to determine
whether or not the incentive program has been effective. Furthermore,
the CFTPA noted that, if the incentives are implemented in 2004/05, the
CFTPA’s proposal would permit the largest station groups to have their
commitment to the incentive program assessed prior to their licence
renewals. The CCAU expressed the view that a five-year evaluation period
would be too long and that, if the incentives are not working
adequately, changes should be made as soon as possible. Alliance
Atlantis and Vision TV also favoured a three-year evaluation period.
They expressed the concern that the incentive program may have a
negative impact on advertising revenues for specialty services and that
the Commission should deal with such unintended consequences at an early
date. |
|
The Commission’s analysis and determination
|
125. |
As mentioned earlier, CTV noted in its
comments that "A traditional development window for a standard project
is approximately two years and entails at least five or six drafts."
This is followed by the production and post-production phases resulting
in a lag of up to three or more years before a program is broadcast.
Consequently, the Commission considers that three years is an
unrealistic timeframe over which to evaluate its incentive program for
drama. If the incentive program is attractive to licensees, the
resulting drama may not be broadcast until the third or fourth year
after its implementation. |
126. |
The Commission remains of the view that a
five-year evaluation period is appropriate when combined with annual
reviews and progress reports. Should unintended consequences become
apparent during the five-year period, the Commission retains the ability
to make the necessary changes to its incentive program at any time.
Furthermore, the Commission notes that it will be able to pose questions
regarding drama production and the incentive program when licensees
appear for licence renewal. |
|
k) Reporting results and monitoring compliance
|
127. |
In Public Notice 2004-32,
the Commission proposed to monitor the performance of the licensees
participating in the incentive program through a combination of the
annual drama incentive report and the licensee’s annual returns and
program logs. |
128. |
As noted above, the CCAU proposed that
broadcasters report annually regarding the production financing
available for high-cost non-CTF funded drama as a result of the revenues
earned from the sale of the additional four minutes of advertising.
According to the CCAU, the report should also include the total volume
of eligible advertising minutes that the broadcaster sold during the
broadcast year, and the total revenues generated from the sale of
eligible advertising on those programs during the broadcast year. The
CFTPA stated that the annual drama incentive reports should be made
public no later than 31 January of each year, that is, five months after
the end of the broadcast year. |
|
The Commission’s analysis and determination
|
129. |
The Commission considers that full and
transparent annual reporting is essential to the success of its
incentive program. The annual drama incentive reports, if sufficiently
detailed and made public in a timely manner, will provide both the
Commission and interested parties with the necessary tools to evaluate
the program and to monitor compliance with its provisions. At the same
time, requesting an onerous level of detail or making public information
that would otherwise be protected by the Commission’s confidentiality
guidelines could discourage licensees from participating in the
incentive program. |
130. |
Accordingly, the Commission has determined
that each licensee that chooses to take advantage of the drama incentive
program must file an annual report on its use of the incentives in
conjunction with its annual return. |
131. |
In the report, for each qualifying program,
the licensee must provide the following information. |
|
i ) Information about the program
|
|
- The final title of the program, program format (for example pilot,
one-off, movie of the week (MOW), mini-series or series), duration of
program excluding advertising material, and number of episodes.
|
|
- The name and location of production company(ies).
|
|
- The date and time of broadcast on each conventional television
station and specialty television service owned or controlled by the
licensee.
|
|
- The production budget determined in accordance with CTF policies,
in particular, the accounting and reporting requirements, and the
producer’s fees and corporate overhead policy. This document, to be
filed by the licensee (although it may be completed by the producer at
the licensee’s request), would be accorded confidentiality, if
requested, consistent with current Commission confidentiality
guidelines.
|
|
- The amount of each broadcast licence fee. This document would be
accorded confidentiality, if requested, consistent with current
Commission confidentiality guidelines.
|
|
- The Canadian Audio-visual Certification Office (CAVCO)
certification letter identifying the number of Canadian content points
awarded the production. If certified by the Commission, the
certification number for the production.
|
|
- The identification of each incentive criterion that applies to the
program as identified in the appendix to this notice.
|
|
- For programs that are being developed in accordance with incentive
1 (b)(i), the following additional information is to be provided by
the licensee (although it may be provided by the producer at the
licensee’s request):
|
|
- a description of the financial structure of the production
prepared in accordance with section C of the CTF's Television
Application Form 2004/05, or its equivalent in future years,
separately identifying the amount paid by the licensee in regard to
the five minutes of additional advertising;
|
|
- key creative personnel – as per section D of the CTF’s
Television Application Form 2004/05, or its equivalent in future
years;
|
|
- date on which principal photography will commence; and
|
|
- status of each project in development for which incentive
advertising minutes have been broadcast by the licensee pursuant to
Incentive 1(b)(i), as set out in the appendix.
|
|
ii ) Information about the incentive advertising minutes
|
|
- A summary of the total minutes of advertising accumulated and
eligible to be broadcast in the broadcast year by each conventional
television station and specialty service, including the minutes for
viewing and program expenditures pursuant to Incentives 2 and 3, as
set out in the appendix.
|
|
- The name, time and date of broadcast of the programs in which the
additional advertising minutes were aired in the broadcast year and
the number of additional minutes aired within each of these programs
for each conventional television station and specialty service.
|
|
iii ) Information about drama expenditures:
|
|
In accordance with Incentive 3, as set out in the appendix, each
participating television ownership group must provide the calculations
used to determine whether the incentive targets have been fulfilled.
|
132. |
Commission staff is prepared to meet with
licensees during the 2004/05 broadcast year in order to ensure
consistency of format with respect to these reporting requirements. |
133. |
The annual drama incentive reports must be
filed with the Commission on or before 30 November of each year, in
conjunction with the annual returns. Subject to its confidentiality
guidelines, the Commission will make every effort to place the reports
on the CRTC’s website early in the following year. |
134. |
In order to ensure compliance with this
drama incentive program, as well as with the advertising limits set out
in the Television Broadcasting Regulations, 1987 and conditions
of licence, the Commission intends to institute a monitoring program
based upon spot checks of various licensees’ program logs. These spot
checks will compare a licensee’s logger tapes to the Commission’s
computer logs in order to determine: |
|
a) whether the logs are an accurate representation of the
programming material broadcast; and
|
|
b) whether the programming broadcast was in compliance with the
regulations respecting advertising time or the appropriate condition
of licence.
|
135. |
Should a spot check reveal possible
non-compliance, a letter will be sent to the relevant licensees
providing an opportunity for comment on the results of the spot check.
The Commission will take the action it deems appropriate to ensure
compliance. In conformity with the Commission’s procedures in monitoring
compliance, any correspondence with a licensee will be placed on the
public file. |
|
l) Drama that reflects Canada’s regional and cultural diversity
|
136. |
Drama programming can play an important
role in reflecting the regional and cultural diversity of Canada and in
fulfilling the objectives of the Act, in particular those set out in
section 3(1)(d). |
137. |
The drama incentives announced in this
public notice complement the Commission’s 1999 Television Policy.
That policy noted the importance of reflecting Canada’s regions in
peak time programming and determined that most regionally-produced
programs would qualify as priority programs. Given the importance
of the medium of television in shaping attitudes about Canada, the
Commission subsequently imposed a condition of licence on the CBC
English-language television network requiring it to broadcast specific
minimum hours per week of priority regional programming (Licences
for CBC English-language television and radio renewed for a seven-year
term, Decision CRTC 2000-1,
6 January 2001). Further, the licence renewals for the television
stations controlled by both CTV (Licence renewals for the television
stations controlled by CTV, Decision CRTC 2001-457,
2 August 2001) and Global (Licence renewals for the television
stations controlled by Global, Decision CRTC 2001-458,
2 August 2001) expected the licensees to commission their priority
programming from all regions of Canada throughout the course of their
new licence terms. Similar expectations were set out in the renewal
decisions for television stations controlled by CHUM and Craig. Each
of these licensees was required to submit an annual report outlining
its activities related to the licensing of independent production. |
138. |
The Commission considers that the drama
incentive program, and in particular, the rewards for non-CTF
productions, have the potential to result in more drama that better
reflects the regions of Canada to themselves and to all parts of the
country. Corner Gas is an example of how a drama based in a
region can be both financially successful and popular with audiences
throughout Canada. The Commission encourages licensees to look to all
parts of Canada for compelling stories that will further the objectives
of the Act by reflecting the differing Canadian attitudes and values and
drawing upon the artistic creativity found in the different regions. |
139. |
The Commission reminds licensees of its
commitment to regional reflection and, in this context, notes that the
CTF has increased its contributions to regional productions (those
outside Toronto and Montréal) from 25% of total contributions in 1998 to
37.1% in 2003. The Commission will continue to be vigilant in its review
of the annual independent production reports filed by its licensees and
will determine if further action is required. It expects those
licensee’s to commission priority programming from all regions of
Canada, throughout the course of their licence terms. |
140. |
With respect to cultural diversity, the
Commission received a large number of comments from individuals, many
working as performers in the television production industry. Many of
these comments, as well as others from broadcasters and advocacy groups,
argued that Canadian drama needs to better reflect Canada’s diverse
reality, specifically visible minorities, Aboriginal peoples and persons
with disabilities. A number of comments proposed solutions ranging from
requirements imposed as conditions of licence to incentives focussed
specifically on drama programs. |
141. |
The Commission notes that its initiatives
with respect to cultural diversity also stem from its statutory mandate
and, in particular, the objectives set out in section 3(1)(d) of the
Act. In the 1999 Television Policy, the Commission supported an industry
and community-led task force to sponsor research and develop best
practices in order to achieve a better reflection of cultural diversity
in the broadcasting system. |
142. |
The recent report of the Task Force for
Cultural Diversity on Television (the Task Force) has demonstrated that
English-language drama, as well as most other program categories, fail
to reflect visible minorities and Aboriginal peoples in proportion to
their presence in the population as a whole. Furthermore, a recent study
of employment in screen-based media, conducted by Women in Film &
Television - Toronto (WIFT - T), has demonstrated that visible
minorities, Aboriginal peoples and people with disabilities are
underrepresented in many aspects of film and television production. In
the Commission’s view, licensees have a responsibility to ensure that
all of their programming, including drama, better reflects Canadian
society. |
143. |
The Commission notes that the CAB has
endorsed the Task Force report and its recommendations for best
practices and industry initiatives. The Commission will also set out its
views on the report in the near future, but has determined that it would
be premature to propose specific incentives to encourage greater
diversity in television drama programs. |
|
m) Drama directed at children
|
144. |
In Public Notice 2004-32,
the Commission proposed to include in its incentive program Canadian
drama programs directed to children when such programs are broadcast
at times of the day that are appropriate for children. The Commission
asked for comment on whether it should define these time periods. |
145. |
A number of comments were received on this
proposal. The CFTPA stated that the hours between 6 a.m. and 9 p.m. are
appropriate viewing times for children’s programming. The CCAU suggested
that the time periods appropriate for children should be defined as from
4 p.m. to 9 p.m. The CCAU also proposed that the Commission place a
ceiling on the number of hours of children’s drama that would be
eligible for incentive rewards and that the minimum production budget
for high-cost children’s drama should be $750,000 per hour. The CAB and
Global noted that prior to the introduction of the 1999 Television
Policy, it had not been necessary to define the appropriate hours for
children’s programming and that this allowed for reasonable flexibility
for broadcasters to address different age groups. |
146. |
The Commission agrees with the CAB and
Global that, prior to the implementation of the 1999 Television Policy
there was no precise definition of appropriate children’s viewing hours
associated with the 150% dramatic time credit. Furthermore, the
Commission is not aware that this flexible approach resulted in any
concern with regard to the scheduling of children’s programs. |
147. |
Accordingly, the Commission has decided
that drama programs directed towards children will qualify for the drama
incentives if they meet all of the requirements and are broadcast at
times appropriate for children’s viewing. |
148. |
With respect to the CCAU’s proposals
regarding a ceiling on the volume of children’s drama eligible for
incentive awards, the Commission considers it unlikely that conventional
broadcasters would shift their focus from adult to children’s drama in
order to obtain such rewards. To the extent that the incentives
encourage incremental production of drama directed to children, the
Commission considers that this will benefit Canadian viewers. Similarly,
the Commission anticipates that the incentive program may encourage
specialty services that target children to invest more in original
drama. Finally, the Commission sees no need to establish a unique
production budget threshold for children’s drama, especially since the
$750,000 threshold proposed by the CCAU is so close to the $800,000
threshold proposed by the Commission. |
|
Other issues
|
149. |
A number of other issues were raised in the
comments received pursuant to Public Notice 2004-32.
In the following sections, the Commission summarizes the comments
on these issues and sets out its determinations. |
|
n) Drama funded with ownership transfer benefits
|
150. |
In Public Notice 2004-32,
the Commission proposed that drama programs that receive financing
from a licensee as part of a commitment made at the time of licensing
or an ownership transfer benefit should not be eligible for the drama
incentive program. CTV argued that all original drama, regardless
of how it is funded, whether from benefits money, initial licensing
commitments, equity investment, or other sources, should qualify for
incentives. In CTV’s view, "… it simply does not make sense to
exclude potentially exciting and popular hit shows based merely on
the source of their financing." |
151. |
The Commission notes that requirements for
expenditures on ownership transfer benefits ensure that the Commission
is presented with the best possible ownership transfer proposal, taking
into account the size and nature of the proposed transaction. As a
consequence, commitments in respect to benefit expenditures are
commitments that licensees must meet irrespective of any participation
in the Commission’s drama incentives. In the Commission’s view,
licensees should not be rewarded for something that they are already
required to do. |
152. |
The Commission has therefore determined
that drama programs funded in whole or in part with public benefits or
commitments undertaken at the time of licensing will not qualify for the
original broadcast hours incentive. In calculating the expenditure
incentive, drama expenditures related to commitments made at the time of
licensing or ownership transfer benefits will be excluded. |
|
o) Drama programs produced by licensees
|
153. |
The comments in response to the
Commission’s proposed incentive program for French-language broadcasters
raised the question of whether broadcaster-produced drama should be
eligible for incentive rewards and, in particular, the bonus rewards for
non-CTF drama. |
154. |
The Commission notes that the bonus minutes
allocated to qualifying non-CTF drama programs are intended to provide
licensees with additional resources to invest in independently-produced
drama programs. For English-language licensees, the bonus is five extra
minutes, the value of which has been calculated to be equivalent to the
amount that the CTF would have invested in such projects. Accordingly,
those drama productions that are produced internally by a licensee will
qualify for the appropriate original hours reward, but will not be
entitled to receive the five- minute bonus awarded in lieu of CTF
funding. |
|
p) Third party promotion expenses
|
155. |
In its comments, the CAB proposed that the
Commission "permit broadcasters to count third party promotional
expenses for drama against their Canadian programming spending
requirements … [and] …. as part of their drama spending in evaluating
whether they have increased their spending on drama." The CAB noted that
the McQueen Report on drama undertaken for the Commission recommended
that third party promotional expenditures on 10-point drama be
considered as program expenditures for the purposes of a drama incentive
program. |
156. |
The Commission has already put into place a
number of measures designed to encourage the promotion of Canadian
programs. Further to the 1999 Television Policy, the definition of
advertising material in the Television Broadcasting Regulations, 1987
was "amended to exempt all promotions of Canadian feature films and
other Canadian programs, whether or not such programs are to be
broadcast by the station or network in question". In addition, in the
Commission’s 1999 Television Policy, Canadian entertainment magazine
programs were identified as priority programs "for the purpose of
regulatory requirements applicable to the peak viewing period". Such
magazine programs must devote at least two-thirds of their time to the
coverage of Canadian entertainment. |
157. |
In the Commission’s view, the CAB’s
proposal would require a significant amount of monitoring on the part of
the Commission, particularly with respect to licensees who are
controlled by ownership groups that also control newspapers.
Furthermore, the Commission considers that its drama incentive program
will encourage licensees to increase the promotion of Canadian drama
programs in order to increase the viewing of such programs and qualify
for the viewing incentive reward. |
158. |
The Commission has therefore decided not to
permit inclusion of third party promotion expenses for drama in a
licensee’s calculation of its spending on Canadian drama for the
purposes of evaluating whether or not the licensee has met the
expenditure incentive criterion. |
|
q) Equity at risk
|
159. |
In Public Notice 2004-32,
the Commission suggested that permitting specialty services to include
equity at risk in the calculation of their spending on drama could
result in an increased willingness and ability of those few specialty
services that acquire original Canadian drama to make equity investments
in such drama. The Commission invited comment on the most appropriate
means to ensure that such investments are truly at risk and do not
replace licence fees. |
160. |
The CAB, CHUM and Global supported the
Commission’s proposal and agreed on the following criteria that equity
investments should meet if they are to be considered as eligible
Canadian programming expenditures for the purposes of the drama
incentives: |
|
- the equity investment cannot be an advance or a loan and must be
truly at risk; and
|
|
- the equity investment must be the result of a separate and
distinct negotiation, that is, the producer must not require equity
participation as a precondition to the licensing of the production.
|
161. |
In addition, these parties agreed that a
further minimum license fee requirement is not necessary, as drama
programs financed by the CTF already require a significant minimum
licence fee. |
162. |
The CFTPA offered conditional support for
equity investment in independent drama production. While it noted that
the ability to include equity investment as an eligible Canadian
programming expenditure would be a significant benefit to conventional
broadcasters as well, it proposed the following safeguards: |
|
- the equity investment, whether provided by a specialty service or
a conventional broadcaster must be incremental to existing licence fee
requirements. This means that the broadcaster’s equity investment must
be over and above the maximum CTF licence fee threshold and, in the
case where a broadcaster’s envelope is providing part of the
financing, must include the maximum amount of financing available from
the CTF;
|
|
- the broadcaster must be in a recoupment tier that is subordinate
to that of the producer;
|
|
- any guaranteed or effectively guaranteed revenue, such as revenue
not used in the financing but pledged to the broadcaster’s investment
position, should be deducted from the expenditure credit. Such
guarantees are essentially collateral for loans, and must not be
permitted to be counted as an equity investment for this purpose;
|
|
- the policy statement must clearly state that there can be no
bundling of rights. In keeping with normal industry practices, any
distribution or other rights must be negotiated separately from the
equity investment; and
|
|
- only arm’s length independent productions should be eligible. A
related-party or in-house production does not bear the same level of
risk as is taken by a truly independent production.
|
163. |
Telefilm agreed that the Commission should
allow specialty services to count as Canadian programming expenditures
those equity investments that are truly at risk. Telefilm emphasized its
expertise in managing equity investment and indicated that it would be
willing to work with the Commission to establish appropriate safeguards.
Telefilm further noted that it is important to emphasize that equity
investments by broadcasters do not confer rights on the broadcasters
beyond a share of copyright and of recoupment. Distribution rights and
broadcaster licence fees should be negotiated separately. |
164. |
The CCAU opposed allowing recoupable equity
investment to count as expenditures for the purpose of the drama
incentives. The CCAU believed only unrecouped equity (equity losses)
should be eligible for such consideration. Pending the development of
equitable Terms of Trade agreements, the CCAU proposed the following
eligibility conditions for equity at risk: |
|
- the broadcaster licence fee is at least $300,000 per hour or such
higher level as the CTF may prescribe or apply; and
|
|
- the terms and conditions of the equity investment are no more
favourable to the broadcaster than those that are required by Telefilm
Canada in its equity investments. In particular, no broadcaster equity
investment should be permitted to be recouped in preference to the
equity investment made by the producer, nor should the broadcaster be
permitted to recoup any of its investment in advance of the producer
recouping all deferred fees.
|
|
The Commission’s analysis and determination
|
165. |
The Commission notes that Public Notice 2004-32
specifically defined equity at risk as referring to "… equity
investments in drama productions that have no guarantee of a return."
|
166. |
The Commission agrees that appropriate
criteria are necessary in order to identify investment that is truly at
risk. As noted by the CAB, CHUM and the CFTPA, a guaranteed return on an
investment characterizes an advance or a loan and should not qualify as
an equity investment that is at risk. The Commission also endorses the
positions of the CFTPA and Telefilm to the effect that equity
investments by broadcasters must be distinct and separate from licence
fee and distribution rights negotiations. |
167. |
In light of the above, the Commission has
determined that equity investments in Canadian drama programs that are
at risk will count as an eligible Canadian program expenditure when the
following criteria have been met: |
|
- the investment is truly at risk and does not constitute the
equivalent of an advance or a loan. Any investment with guaranteed or
effectively guaranteed revenues will not be counted as an equity
investment for the purpose of this incentive; and
|
|
- in keeping with normal industry practice, distribution and other
rights must be negotiated and defined separately from any equity
investment.
|
168. |
The Commission notes that specialty
services are not currently required to file with the Commission program
expenditures broken out by genre. Therefore, the Commission is unable to
determine the annual spending by specialty services on Canadian drama
and, as a consequence, these services are not able to benefit from the
incentive to increase expenditures on Canadian drama. If, in the future,
specialty services include spending by program genre in their CRTC
annual returns, the Commission could make the necessary adjustment to
the drama incentive program. |
169. |
Licensees who wish to avail themselves of
the new flexibility with regard to Canadian program expenditure
requirements must apply for an amendment to their relevant conditions of
licence. |
|
r) Licence fee "top-ups"
|
170. |
In addition to financing for eligible Canadian
television productions, the CTF often supplements the Canadian broadcasters’
cash licence fees for the productions in the form of licence fee "top-ups".
Pursuant to Public Notice 2003-54,
the Commission received a number of requests that it change its definition
of eligible Canadian program expenditures to exclude licence fee top-ups.
In Public Notice 2004-32, the Commission
determined that changing this policy would require a public process
and would not result in an increase in spending on Canadian programs.
Accordingly, the Commission proposed no change to its current approach. |
171. |
In its comments pursuant to Public Notice
2004-32, Telefilm argued that licence
fee top-ups effectively reduce broadcasters’ Canadian program expenditure
requirements. |
172. |
The Commission notes that, in 2002, licence
fee top-ups represented less than 5% of total Canadian program
expenditures by all specialty, pay and pay-per-view services.
Furthermore, the Commission considers that, by allowing equity at risk
to count as an eligible expenditure, the concern expressed by Telefilm
will be alleviated. |
173. |
Accordingly, the Commission’s current
policy with respect to licence fee top-ups will not be altered. |
|
s) Non-simultaneous substitution
|
174. |
In its comment, the CAB requested that the
Commission initiate a proceeding to investigate whether non-simultaneous
substitution might be implemented by broadcasting distribution
undertakings (BDUs). The CAB submitted that, without the protection of
simultaneous substitution, "conventional television would not be able to
attract the revenues needed to meet their multiple regulatory
obligations." At the same time, the CAB pointed out that simultaneous
substitution presents a scheduling conundrum for licensees, i.e., how to
maximize substitution revenues and yet find the best scheduling
opportunities for Canadian programs. In the CAB’s view, non-simultaneous
substitution would provide the flexibility necessary to maximize the
revenues from U.S. programs, while providing better scheduling
opportunities for Canadian drama. The CAB noted that, "we have already
had discussions with the CFTPA on this matter and they have indicated a
willingness to work with us and the BDUs to find viable solutions." |
175. |
The Commission notes that non-simultaneous
substitution would involve changing the BDU regulations in order to
permit BDUs to replace programming on an out-of-market station with a
local broadcaster’s identical programming, even when the programming is
broadcast at different times on the two stations. |
176. |
In Options for Extending Protection of
Program Rights: Call for Comments, Public Notice CRTC 1997-7,
10 January 1997, pursuant to a proposal by the CAB, the Commission
initiated a proceeding to examine options for extending the protection
of program rights, including the option of non-simultaneous substitution.
After the Commission had received written comments, the CAB advised
the Commission that, as a result of complications relating to program
rights and the costs to program distributors, it did not wish to proceed
with the matter. Consequently, the proceeding was terminated. The
issue of non-simultaneous substitution was raised again during the
policy proceeding that led to the 1999 Television Policy. In that
policy, the Commission stated that any such change "… would be
premature given that a consensus between broadcasters and distributors
has not yet been reached on the most effective means to implement
non-simultaneous substitution." |
177. |
The Commission notes that the CAB has not
provided evidence to demonstrate that non-simultaneous substitution is a
viable option at this time. Nor is there evidence that BDUs are willing
to participate in implementing this form of substitution. The Commission
also notes that the CFTPA’s submission makes no mention of
non-simultaneous substitution or of any discussions with the CAB on the
subject. |
178. |
The Commission is of the view that, in the
absence of any evidence that non-simultaneous substitution is a viable
approach at this time, it would not be appropriate to initiate a
proceeding on this subject. |
|
Implementation of the drama incentive program
|
179. |
The drama incentive program that is
summarized in the appendix to this public notice will be implemented by
way of condition of licence. Conventional television licensees that wish
to participate in the incentive program may apply for a condition of
licence permitting them to broadcast additional minutes of advertising,
in addition to the 12 minutes per hour permitted by section 11 of the
Regulations. In the event that a conventional television licensee has a
condition of licence limiting the number of minutes of advertising, such
a licensee may also apply to amend the condition in order to be able to
participate in the drama incentive program. Similarly, specialty
television service licensees may apply to amend the limitations on
advertising set out in their conditions of licence. |
180. |
Conventional television licensees applying
for a condition of licence may use the following text: |
|
In addition to the 12 minutes of advertising material during any
clock hour in a broadcast day permitted by subsection 11(1) of
the Television Broadcasting Regulations, 1987, the licensee
may broadcast such additional minutes of advertising material
calculated in accordance with Incentives for English-language
Canadian television drama, Broadcasting Public Notice CRTC
2004-93, 29 November 2004, as may
be amended from time to time.
|
181. |
Licensees may accumulate reward minutes for
the broadcast of qualifying drama aired since 1 September 2004. However,
licensees may not utilize these reward minutes until the appropriate
condition or amendment has been approved by the Commission. The
Commission expects those licensees who wish to participate in the drama
incentive program to apply for the appropriate condition of licence or
amendment as soon as possible. |
|
Secretary General |
|
This document is available in
alternative format upon request and may also be examined at the
following Internet site:
http://www.crtc.gc.ca |
|
Appendix to Broadcasting Public Notice CRTC 2004-93
|
|
Summary of the incentive program for English-language
Canadian television drama
|
|
The following is a summary of the
Commission’s incentive program for English-language Canadian television
drama. It is intended to serve as a convenience to the reader, to be
read in conjunction with the public notice it accompanies. The
incentives summarized below will be effected by condition of licence. |
|
Objective
|
|
The objective of the Commission’s incentive
program for English-language Canadian television drama is to increase
the production and the broadcast of, the viewing to, and the
expenditures on, high quality, original, Canadian drama programming. |
|
Definitions
|
|
In addition to the definitions in
applicable regulations, the following definitions apply for the purpose
of the drama incentive program. |
|
"baseline hours" means 26 hours of
drama broadcast by a licensee during the hours of 7 p.m. and 11 p.m. in
a broadcast year that satisfy the general criteria for eligibility and
reward under Incentives 1(a), 1(b) or 1(c). |
|
"CTF" means the Canadian Television
Fund. |
|
"conventional television service"
means a service composed of |
|
a) one conventional television station; or
|
|
b) more than one conventional television station in which
the programming broadcast during peak time, exclusive of commercial
messages, and any part of the service carried on a subsidiary signal,
is the same on each station at least 80% of the time, whether or not a
network licence has been issued.
|
|
"drama program" means a program that |
|
a) is described by a category from 7(a) to 7(e) as set out in
Schedule I to the Television Broadcasting Regulations, 1987;
|
|
b) has a duration of at least one half hour, including the time
devoted to permitted advertising material;
|
|
c) contains a minimum of 90% dramatic content; and
|
|
d) qualifies as a Canadian program as defined in the Television
Broadcasting Regulations, 1987.
|
|
"largest multi-station ownership groups"
means those multi-station ownership groups with conventional television
stations licensed to operate in several provinces and with a potential
reach of more than 70% of the audience in their language of operation. |
|
"multi-station ownership group"
means a group of stations and/or services owned or controlled by the
same person or entity, and is composed of |
|
a) more than one conventional television station;
|
|
b) one or more conventional television stations and one or more
specialty services; or
|
|
c) more than one specialty service.
|
|
"original program" means a program
that, at the time of its broadcast by a licensee, has not been
previously broadcast by the licensee or, subject to the exceptions set
out below, by any other licensee. |
|
A licensee may also count a program as an
original program, for the purpose of the drama incentive program, where: |
|
a) the licensee contributed to the program’s pre-production
financing, and the program has only been previously broadcast by
another licensee that also contributed to its pre-production
financing;
|
|
b) the program has only been previously broadcast by a licensee of
a pay-television, pay-per-view or video-on-demand undertaking;
|
|
c) the licensee has contributed to the pre-production financing of
the program and the program has previously been broadcast by no more
than one conventional television service or one specialty service
within the licensee’s multi-station ownership group, except that where
a multi-station ownership group owns or controls more than one
conventional television service the program may only be counted as
original on one of those conventional television services; or
|
|
d) the program has been previously broadcast in French by a
licensee, but was produced originally in both English and French and
otherwise satisfies the definition of original program; a program that
was originally produced in French only will not qualify as an original
program even when it is broadcast with an English-language sound track
or with English-language captioning.
|
|
"peak time" means the time between 7
p.m. and 11 p.m. each broadcast day, except where it is used in relation
to a program directed to children (ages 2 to 11) where it means at any
time appropriate for children. |
|
"point", in relation to
a program, refers to the points a program has earned based on the
application of Appendices I and II to Certification for Canadian
Programs – A Revised Approach, CRTC Public Notice 2000-42,
17 March 2000. |
|
Incentives
|
|
1. Incentives to broadcast original hours of Canadian drama
|
|
These incentives have, as their objective,
an increase in the production and broadcast of original hours of
English-language, Canadian drama. Incentives are provided for the
production and broadcast of three types of original drama program, each
carrying a different reward in terms of additional minutes of
advertising permitted. |
|
Incentive 1(a)
|
|
General criteria for eligibility and reward
|
|
Where a licensee broadcasts, in peak time,
a 10-point, original, CTF-funded drama program with an hourly production
budget of at least $800,000 and a licence fee of at least $300,000, the
licensee will be permitted, subject to the additional qualifications set
out below, to broadcast three minutes of additional advertising for each
hour broadcast. |
|
Additional qualifications
|
|
- A licensee of a conventional television station controlled by one
of the largest multi-station ownership groups may only count under
Incentive 1(a) drama programs that it broadcasts in excess of the
baseline hours.
|
|
- A drama program funded in whole or in part as a result of
commitments made at the time of licensing or as a result of transfer
benefits will not qualify for Incentive 1(a).
|
|
Incentive 1(b)
|
|
General criteria for eligibility and reward
|
|
i) Where a licensee licenses a 10-point, original, non-CTF funded
drama program with an hourly production budget of at least $800,000
and a licence fee of at least $300,000, the licensee will be
permitted, subject to the additional qualifications set out below, to
broadcast five minutes of additional advertising for each hour
licensed; and
|
|
ii) where a licensee subsequently broadcasts, in peak time, the
drama referred to in (i) above, the licensee will be permitted,
subject to the additional qualifications set out below, to broadcast
three minutes of additional advertising for each hour broadcast.
|
|
Additional qualifications
|
|
- Under Incentive 1(b)(i), the five minutes of additional
advertising may be broadcast before the program has been broadcast by
the licensee, but only after the production’s financial structure is
complete and the key creative personnel have been identified in
accordance with the applicable sections of the CTF’s application form.
|
|
- If principal photography is not commenced within one year of the
licensing of a program under Incentive 1(b)(i), or if the program is
not subsequently broadcast by the licensee in peak time within three
years of the program’s licensing, absent compelling reasons why the
Commission should not so require, the licensee will be required to
reduce the advertising time otherwise permitted pursuant to the drama
incentive program by the number of minutes already broadcast by the
licensee pursuant to Incentive 1(b)(i) for that program.
|
|
- The three minutes of additional advertising that a licensee is
permitted to broadcast under Incentive 1(b)(ii) is in addition to the
five minutes under Incentive 1(b)(i), but may only be broadcast after
the drama program has been broadcast by the licensee.
|
|
- A drama program that is produced internally by a licensee will not
qualify for Incentive 1(b)(i).
|
|
- A drama program funded in whole or in part as a result of
commitments made at the time of licensing or as a result of ownership
transfer benefits will not qualify for incentives 1(b)(i) or 1(b))ii).
|
|
Incentive 1(c)
|
|
General criteria for eligibility and reward
|
|
Where a licensee broadcasts an 8- or a
9-point original drama program, or a 10-point drama program for which
the licensee is not eligible for an incentive under Incentive 1(a) or
1(b), the licensee may broadcast, subject to the additional
qualifications set out below, thirty seconds of additional advertising
for each hour broadcast. |
|
Additional qualifications
|
|
- A licensee of a conventional television station controlled by one
of the largest multi-station ownership groups may only count under
Incentive 1(c) drama programs that it broadcasts in excess of the
baseline hours.
|
|
- Drama programs funded in whole or in part as the result of
commitments given at the time of licensing or as a result of ownership
transfer benefits will not qualify for Incentive 1(c).
|
|
Notes
|
|
- Production budgets will be assessed by the Commission on the same
basis as CTF business policies.
|
|
- The Commission will review CTF guidelines and policies on an
annual basis to ensure consistency with the amounts specified in
Incentives 1(a) and 1(b) for licence fees and production budgets.
|
|
2. Incentive to increase viewing to Canadian drama
|
|
The objective of this incentive is to
increase the viewing to English-language Canadian drama on Canadian
English-language services, as a percent of all drama viewing on Canadian
English-language services. |
|
Incentive 2
|
|
General criteria for eligibility and reward
|
|
Where over a broadcast year a multi-station
ownership group attains an increase, over the previous broadcast year,
in the ratio of total viewing to all Canadian drama as a percent of the
total drama viewing on all conventional television stations and/or
specialty services within the multi-station ownership group, that meets
or exceeds the target set by the Commission, each licensee in the
ownership group will be permitted to broadcast an additional 25% of the
total advertising that it is permitted to broadcast pursuant to
Incentives 1(a), 1(b) and 1(c). This incentive will apply mutatis
mutandis to conventional television stations or specialty services
that are not part of a multi-station ownership group. |
|
Notes
|
|
- The Commission will issue a public notice, in the current
broadcast year, setting out its proposed viewing objective for the
industry as a whole and seeking comments from interested parties.
Preliminary viewing targets for those ownership groups participating
in the incentive program will be made public at the same time. The
final viewing targets for each participating ownership group will be
announced subsequently.
|
|
- Viewing will be measured using metered data.
|
|
3. Incentive to increase expenditures on Canadian drama
|
|
The objective of this incentive is to
increase expenditures on English-language Canadian drama by the
English-language conventional television industry, as a percent of total
revenues, from 4% to 6% over a five-year period. |
|
Incentive 3
|
|
General criteria for eligibility and reward
|
|
Where all of the conventional television
stations in a multi-station ownership group attain an annual increase,
over the broadcast year, in aggregate expenditures on Canadian drama, as
a percent of aggregate group revenues, that meets or exceeds the target
set by the Commission, each licensee of a station in that ownership
group will be permitted, subject to the additional qualifications set
out below, to broadcast an additional 25% of the total advertising that
it is permitted to broadcast pursuant to Incentives 1(a), 1(b) and 1(c).
|
|
Additional qualifications
|
|
- Expenditures on drama programs funded in whole or in part as a
result of commitments made at the time of licensing or as a result of
ownership transfer benefits will be excluded from the calculations for
Incentive 3.
|
|
- CTF "top-up" funding will be excluded from the calculations for
Incentive 3.
|
|
Notes
|
|
- The Commission will review the financial results for the 2003/04
broadcast year for each of the ownership groups participating in the
drama incentive program before setting the incentive targets for each
group for the broadcast years 2004/05 to 2009/10. These targets will
be made public in the current broadcast year.
|
|
- The Commission will establish the ownership group targets using
the aggregate expenditures of all stations in the group.
|
|
Broadcast of additional minutes of advertising material
|
|
- Additional advertising minutes may be broadcast in any program on
a conventional television station or specialty service that has
broadcast the drama program that led to the reward.
|
|
- Each clock hour may contain no more than 14 minutes of advertising
material. Where a program occupies time in two or more consecutive
clock hours, a licensee may exceed the maximum number of minutes
during any of those clock hours if the average number of minutes of
advertising material in the clock hours occupied by the program does
not exceed 14 minutes.
|
|
- Additional advertising time earned pursuant to Incentives 1(a),
1(b) and 1(c)(ii) may only be utilized in the broadcast year that the
drama program that led to the reward was broadcast.
|
|
- Additional advertising time earned pursuant to Incentives 2 and 3
may only be utilized in the broadcast year following the broadcast
year in which the drama program that led to the reward was broadcast.
|
|
- Any licensee found by the Commission to have exceeded the maximum
number of advertising minutes provided for under the incentive program
in a given broadcast year will be required, absent compelling reasons
why the Commission should not so require, to reduce, in subsequent
broadcast years, the number of advertising minutes otherwise permitted
by the incentive program.
|
|
Reporting requirements
|
|
Each licensee participating in the drama
incentive program must file an annual report including the information
set out below. The drama incentive report must be filed with the
Commission no later than 30 November for each broadcast year in which
the licensee has accumulated or utilized additional minutes of
advertising material. |
|
i) Information about the program
|
|
- The final title of the program, program format (for example pilot,
one-off, movie-of-the-week (MOW), mini-series or series), duration of
program excluding advertising material and number of episodes.
|
|
- The name and location of production company (ies).
|
|
- The date and time of broadcast on each conventional television
station and specialty television service owned or controlled by the
licensee.
|
|
- The production budget determined in accordance with CTF policies,
in particular, the accounting and reporting requirements, and the
producer’s fees and corporate overhead policy. This document, to be
filed by the licensee (although it may be completed by the producer at
the licensee’s request), would be accorded confidentiality, if
requested, consistent with current Commission confidentiality
guidelines.
|
|
- The amount of each broadcast licence fee. This document would be
accorded confidentiality, if requested, consistent with current
Commission confidentiality guidelines.
|
|
- The Canadian Audio-visual Certification Office (CAVCO)
certification letter identifying the number of the Canadian content
points awarded the production. If certified by the Commission, the
certification number for the production.
|
|
- The identification of each incentive criterion that applies to the
program.
|
|
- For programs that are being developed in accordance with Incentive
1(b)(i), the following additional information is to be provided by the
licensee (although it may be provided by the producer at the
licensee’s request):
|
|
- a description of the financial structure of the production
prepared in accordance with Section C of the CTF’s Television
Application Form 2004/05, or its equivalent in future years,
separately identifying the amount paid by the licensee in regard to
the five minutes of additional advertising;
|
|
- key creative personnel – as per section D of the CTF’s
Television Application Form 2004/05, or its equivalent in future
years;
|
|
- date on which principal photography will commence; and
|
|
- status of each project in development for which incentive
advertising minutes have been broadcast by the licensee pursuant to
Incentive 1(b)(i).
|
|
ii) Information about the incentive advertising minutes
|
|
- A summary of the total minutes of advertising accumulated and
eligible to be broadcast in the broadcast year by each conventional
television station and specialty service, including the minutes for
viewing and program expenditures pursuant to Incentives 2 and 3.
|
|
- The name, time and date of broadcast of the programs in which the
additional advertising minutes were aired in the broadcast year and
the number of additional minutes aired within each of these programs
for each conventional television station and specialty service.
|
|
iii) Information about drama expenditures
|
|
- In accordance with Incentive 3, each participating television
ownership group must provide the calculations used to determine
whether the incentive targets have been fulfilled.
|
|
Implementation
|
|
- Licensees who meet the criteria of the drama incentive program
will be permitted to broadcast additional minutes of advertising,
beyond the limits set out in applicable regulations or conditions of
licence. In order to avail itself of the incentive program, a licensee
must apply for a condition of licence. The condition will permit the
licensee to broadcast such additional minutes of advertising material
calculated in accordance with this public notice, as amended from time
to time.
|
|
- Licensees may apply for the appropriate condition of licence at
any time.
|
|
- Licensees may accumulate reward minutes for the broadcast of
qualifying drama programs broadcast beginning 1 September 2004.
However, licensees may not begin to broadcast these reward minutes
until the appropriate condition of licence has been approved by the
Commission.
|