|
Broadcasting Public Notice CRTC 2004-38
|
|
Ottawa, 8 June 2004 |
|
Proposed measures to ensure that French-language Canadian drama remains a
key component of peak time viewing – Call for comments
|
|
The Commission seeks comments on proposed
incentives to ensure that quality, original, French-language Canadian drama
remains a key component of peak time broadcasting by French-language
television licensees. |
|
In Proposed incentives for
English-language Canadian television drama – Call for comments,
Broadcasting Public Notice CRTC 2004-32, 6 May
2004, the Commission sought comment on a proposed package of incentives
designed to increase the expenditures on, and the production of, high
quality, original, Canadian drama broadcast by English-language television
licensees, and to encourage increased viewing to such programming. |
|
Background
|
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 sought comment
on the steps it might take to encourage the production and broadcast of more
high quality, original, English-language Canadian drama capable of attracting
larger audiences. The Commission also sought comment on possible measures to
ensure that high quality, original, French-language Canadian drama remains a
key component of peak time viewing. Specifically, the Commission asked the
following questions: |
|
1. What are the most important elements necessary to ensure an
appropriate quantity of original Canadian drama on English-language
television, and to attract larger audiences to such programming?
|
|
2. How effective are regulatory requirements, or regulatory incentives,
in achieving the objectives of increasing the amount of original,
English-language drama programming and attracting larger audiences to that
programming?
|
|
3. If regulatory requirements, or incentives, can be effective tools in
fulfilling the Commission’s objectives, what specific proposals should the
Commission adopt?
|
|
4. While it is generally considered that the most pressing problems
concern English-language drama, there are concerns that French-language
drama may not remain as healthy in the future. How can the Commission help
to ensure the continued production of popular, original, French-language
drama? What specific requirements, or incentives, designed to support
English-language drama, may affect French-language drama? Should the
Commission develop separate and distinct regulatory regimes, or incentive
programs, for the two linguistic markets?
|
2. |
In addition to the above questions, the
Commission indicated in the public notice that it was prepared to consider
the following specific matters: |
|
- possible changes to the CRTC definition of drama where such changes
could further the objectives of this proceeding;
|
|
- measures that may encourage specialty services to play a greater role
in the creation and presentation of Canadian drama;
|
|
- the Nordicity Report’s1 analysis
of certain incentives; and
|
|
- the choice of the fairest and most effective audience measurement tools
that might be used to determine the success of individual Canadian drama
programs.
|
3. |
In that public notice, the Commission further
sought: |
|
- details concerning the financing of Canadian drama that would assist
the Commission better understand what can reasonably be expected of
Canadian broadcasters, given their own resources and the resources
available in the rest of the system; and
|
|
- data and comments on the problems related to the future of
French-language Canadian drama.
|
4. |
In Public Notice
2003-54, the Commission noted that it might call for further submissions
if it considered that additional information was necessary. |
5. |
In the present public notice, the Commission
reviews the comments that it received in response to Public Notice
2003-54 addressing French-language
Canadian drama and seeks comment on the incentives designed to fulfil the
following objective: |
|
to maintain, within the programming broadcast during peak time by
French-language television licensees, a proper balance of original
French-language drama, including a minimum number of high-cost programs or
series.
|
6. |
The proposals set out in this public notice
apply only to French-language Canadian drama. The Commission issued another
public notice, Proposed incentives for English-language Canadian
television drama – Call for comments, Broadcasting Public Notice CRTC
2004-32, 6 May 2004 (Public Notice
2004-32) to examine the submissions addressed to
the first three questions contained in Public Notice
2003-54, announcing a set of proposed
incentives specifically designed to fulfil its objectives with respect to
English-language Canadian television drama. |
|
Review of the comments received in response to Public Notice
2003-54
|
7. |
The Commission received a total of 301
submissions in response to Public Notice
2003-54. The majority of these addressed issues related to
English-language drama and expressed agreement with the importance the
Commission places on Canadian drama. Many suggested specific actions that
could be taken to support the production and broadcast of such programming. A
few comments argued that market forces should be permitted to play a greater
role in broadcasting policy. |
8. |
A dozen submissions focused mainly or
exclusively on issues related to French-language drama. These submissions
were filed mainly by broadcasters, producers, associations and unions. Their
comments are examined in the following sections. |
|
Summary of interventions – French-language Canadian drama
|
9. |
The Commission notes that there was a broad
consensus in the interventions addressing Canadian French-language drama.
These interveners submitted that a different approach is required for the
French- and English-language markets, given the differences in their
respective dynamics. |
10. |
Some interveners asked the Commission to be
prudent and ensure that any potential incentive directed at French-language
drama not disrupt the overall balance (diversity in programming categories)
of Canadian programming offered by the French-language broadcasting system.
|
11. |
A summary of the other key elements of the
submissions to the Commission is set out below: |
|
Groupe TVA inc. |
|
- Conventional private French-language broadcasters already make an
exceptional contribution to the success of Canadian programs. As a result,
rather than increasing their regulatory burden, they should be given
greater flexibility.
|
|
- The definition of prime time should be revised by expanding the peak
viewing period in order to offer a broader range of quality Canadian
programs in the evening.
|
|
- The Canadian government should pay the Canadian Broadcasting
Corporation (CBC) the appropriate monies directly, and the Canadian
Television Fund (CTF) should support the efforts of private broadcasters in
fulfilling their obligations and achieving the objectives set by the
Commission with regard to the creation, broadcasting and promotion of
priority Canadian programs.
|
|
TQS inc. |
|
- The definition of drama programming in Category 7 should be reviewed
and made more flexible to include new television genres, particularly
hybrid genres.
|
|
- The 150% credit system for dramas, which applies only to the larger
groups, should be reviewed and corrected to ensure that the time credit for
dramas applies equally to all television broadcasters.
|
|
- The peak viewing period, which is currently between 7:00 p.m. and 11:00
p.m., should be extended to start sooner and end later.
|
|
CBC |
|
- The CBC may no longer be able to produce so-called high-cost dramas.
Private broadcasters will think twice before taking a financial risk, and
Francophone viewers could therefore be deprived of this type of production.
Maintaining a competitive funding environment that will continue to be
available within the industry poses a long-term problem.
|
|
- New funding sources should be identified for high-cost productions by
reviewing private production funds that would support the production of
distinctive programs.
|
|
- The distinctive role of the CBC should be recognized by granting it a
separate budget allocation with its own set of specific rules.
|
|
- Reality programming should not receive public funding. Granting public
funding to reality programming would deprive drama productions of that
funding, which would only make matters worse for authentic Canadian drama
that is already short of funding.
|
|
Télé-Québec |
|
- In order to ensure that reality programming does not take up too much
of the program schedule, it should not be categorized as priority
programming.
|
|
TVOntario (TFO) |
|
- The Commission should implement mechanisms and incentives that would
encourage the production and broadcasting of high quality drama programs.
|
|
- The CTF should amend its funding procedure to reflect the regional
distribution of Canada’s Francophone population. Since 15% of Francophone
Canadians live outside Quebec, not less than 15% of the French-language
funding envelope should be allocated to Francophone producers and
broadcasters in minority markets.
|
|
Astral Media inc. (Astral) |
|
- Astral is not convinced that the Commission needs to amend its
definitions and policies to solve a "problem," the existence of which has
yet to be proven.
|
|
- If incentives for creating and broadcasting French-language drama are
introduced, they should be designed to apply fairly to all programming
services. It would be inappropriate to immediately allow all specialty
services to air dramas in the peak viewing period, because that could
increase pressure on the various funds and public support programs and
dilute resources.
|
|
The Association des producteurs de films et de
télévision du Québec (APFTQ) requested that the Commission: |
|
- introduce incentives for creating and broadcasting Canadian drama aimed
at youth, in order to create conditions that will induce tomorrow’s
Canadian adult viewers to develop a taste for made-in-Canada drama
programming;
|
|
- require that conventional private French-language networks comply with
the policy regarding weekly prime time broadcasting of Canadian priority
programming and ensure that at least 60% of priority programming is drama
programming;
|
|
- publish each year data on Canadian drama expenditures by the CBC’s
French- and English-language networks. The CBC French-language network
should be required to meet the objectives it set in the financial forecasts
submitted at its last licence renewal;
|
|
- ensure that specialty services that operate within a fiction/drama
niche be required to devote to original Canadian drama a percentage of
their total spending on Canadian programming that is proportional to the
percentage of drama in their programming;
|
|
- explore the question of theatrical feature films and the role that pay
and pay-per-view television, as well as general interest television, should
play to encourage their creation and broadcast; and
|
|
- encourage the growth co-productions within Canada, the use of "double
shooting of programs," participation in the funding, and the acquisition of
rights by conventional broadcasters in both language markets, such as
sharing windows among services.
|
|
The Société des auteurs de radio, télévision et
cinéma (SARTEC) requested that the Commission: |
|
- require that all larger television groups be treated equitably;
|
|
- ensure that reality programs be excluded from priority programming;
|
|
- focus efforts on the small number that specialize in Canadian drama,
even if the obligation to present original drama continues to fall almost
exclusively on conventional television;
|
|
- create specific drama-related requirements for conventional television
and specialty services by requiring that conventional television services
air a minimum of five hours of drama per week and by imposing specific
conditions on specialty services;
|
|
- consider TQS as a larger group within the meaning of the television
policy. This new requirement should be imposed by regulation. However, the
Commission could reach an agreement with TQS requiring it to broadcast an
increasing volume of Canadian drama up to 1 September 2008; and
|
|
- ensure that CBC stations comply with the commitment to broadcast 7
hours of drama programming each week, including 5.5 hours in the peak
viewing period.
|
|
The Union des artistes (UDA) requested that the
Commission: |
|
- impose the same requirements on TQS as are imposed on TVA. TQS should
be required to broadcast an increasing volume of Canadian drama up to 1
September 2008;
|
|
- require TVA to return to broadcasting an average of 5 hours of drama
programming each week, 80% of which should be original programming;
|
|
- ensure that the CBC complies with its existing requirement to broadcast
7 hours of drama each week, including 5.5 hours in the peak viewing period,
taking into account the level of drama drawn from category 7(a);
|
|
- exclude reality programming from the definition of long-form
documentary and ensure that it does not benefit from financial incentives;
|
|
- provide assistance for the creation of drama programs aimed at youth;
and
|
|
- require the CBC to maintain its presence in the production of quality
drama programming and further re-balance its offerings, in view of the fact
that the decline in public television viewing threatens to disrupt the
balance of the broadcasting system.
|
|
The Mouvement des artistes de la scène de la
Capitale (MASC). |
|
- MASC stated that, in order to create more drama, drama production must
be decentralized and diversified, and must be particularly encouraged in
the city of Québec.
|
|
Commission’s preliminary view
|
12. |
The Commission recognizes the need for an
approach for the French-language market that takes into account the
particular realities of this market by developing measures aimed at
maintaining a proper balance of original Canadian French-language drama. Such
an approach need not preclude consistency between the measures proposed to
meet the needs and objectives of the French-language market and those
proposed to meet the needs of the English-language market. |
13. |
The Commission also recognizes the important
role of public funding in the production of Canadian drama. Public support,
whether in the form of tax credits, equity investment or grants from federal
and provincial governments, makes possible the production and broadcast of
drama programs that the market simply cannot support on its own.
Consequently, the Commission is in favour of the new approach taken by the
CTF and Telefilm Canada, which establishes the budget envelopes for
French-language broadcasters based on their past performance. The Commission
encourages the CTF and Telefilm Canada to maintain the necessary distinctions
among programming genres and thus maintain a proper balance of peak time
original drama broadcasts by Canadian French-language broadcasters. In the
Commission’s view, a public policy supporting Canadian television programs
must also, wherever possible, seek to attract the maximum number of viewers.
|
14. |
Although the government, not the Commission,
determines the level of public funding that is set aside for Canadian drama,
the Commission is cognizant of the role it plays in the creation of private
production funds and of the important contribution that broadcast
distribution undertakings make to the CTF as a result of the Commission’s
regulatory requirements. |
15. |
The Commission appreciates the comments
submitted during the first phase of this proceeding. The submissions have
been helpful in assisting the Commission in the development of the policy
proposals that it now sets out for further public comment. In the following
sections, the Commission announces its preliminary determinations on those
issues that were central to the Commission’s analysis, including: |
|
- the importance of drama programming
|
|
|
|
- defining "original" hours
|
|
- drama directed to children
|
|
- drama earning less than 10 Canadian content points
|
|
- the effectiveness of regulatory requirements
|
|
- the effectiveness of regulatory incentives
|
16. |
The Commission has reviewed the following
incentives aimed at maintaining a proper balance of original French-language
drama programming during peak time, including a minimum of high-cost programs
or series: |
|
- extending the peak viewing period
|
|
- granting time credits for Canadian content
|
|
- permitting additional advertising minutes
|
|
The importance of Canadian drama programming
|
17. |
As noted in Public Notice
2003-54, drama is the most popular
programming on television. Peak time French-language drama programs regularly
attract a million viewers, and the top shows often attract two to three
million viewers. English-language producers and broadcasters rarely reach
these numbers, despite their access to a much larger audience. |
18. |
As indicated in Table 4 set out in Appendix A,
according to Fall 2002 Bureau of Broadcast Measurement (BBM) data, viewing to
Canadian drama accounted for 52% of all viewing to drama on French-language
services. In contrast, in the fall of 2002, viewing to Canadian drama
accounted for only 11% of all viewing to drama broadcast by English-language
services. |
19. |
The production of quality drama programs
requires more creative, technical and financial resources than any other
genre of television programming. Drama production trains, develops and
employs Canadian writers, actors, directors, editors, technicians and other
key creative individuals. In 2003, the total value of Canadian drama
production exceeded one billion dollars. |
20. |
The Commission notes that, as indicated in Table
1 set out in Appendix A, the percentage of total revenues spent on
French-language drama programming increased by 7.8% between 1998 and 2002,
and increased significantly in 2003. Contributing to the significant increase
in 2003 was $10 million that came from the CBC and $5 million in tangible
benefits flowing from the transfers of ownership of TVA and TQS. An
examination of the increase in expenditures on drama in relation to total
revenues reveals an increase of 3.2% in drama expenditures between 1998 and
2003. Given these figures and the viewer data for French-language drama, the
Commission’s objective is not to solve a problem, but to ensure that
conventional French-language broadcasters continue to make a significant
contribution to the production of original drama. |
21. |
In the last two years, with the introduction of
new types of television programming that, like drama, are capable of
attracting large audiences, the peak time programming schedules of
conventional private broadcasters have changed. In his May 2003 report to the
Commission, Guy Fournier stated [translation] "Though reality TV is nothing
new, in recent years, it has begun to take off, and since the start of the
2002-2003 season, it has become a shattering reality in Quebec." |
22. |
Despite this phenomenon, Canadian drama programs
are still one of the key scheduling drivers for conventional French-language
broadcasters. However, an analysis of commitments by conventional
French-language broadcasters for the production of original Canadian
French-language drama, as indicated in Tables 2 and 3 set out in Appendix A,
reveals that the number of series and number of hours produced has been
declining since 2000. As indicated in Public Notice 2003-54,
in the four years following 1998-1999, and despite high audience numbers,
Canadian drama broadcast by the CBC French-language services (CBFT-TV
Montréal) and by TVA (CFTM-TV Montréal) has decreased by approximately 51
hours. This downward trend in production could result in a decrease in the
broadcast of original peak time television drama during upcoming seasons. |
|
Defining Canadian drama
|
23. |
In Public Notice
2003-54, the Commission set out its definition of drama (Category 7) and
indicated that it would consider proposals to change the current definition
if such changes could further the objectives of the proceeding. |
24. |
Almost all of those who commented on the current
definition said that it should be retained. The CFTPA, however, considered
that the definition has become too broad and recommended the elimination of
subcategories 7(f) Comedy sketches, improvisation, unscripted works, stand-up
comedy, and 7(g) Other drama. In the CFTPA’s view, these subcategories lack
certain essential components of traditional drama programming, "…such as
scripted storyline, characterization, dialogue and action, gesture, costume
and scenery." In addition, the CBC submitted that the definition of a drama
program must "explicitly exclude programs such as reality television
productions." |
25. |
TQS proposed that the definition of drama
provided in Category 7 should be reviewed in order to allow for more
flexibility, particularly for new genres of television programs such as
hybrid genres. |
|
Commission’s preliminary view
|
26. |
Based upon the widespread support in the
comments received for retention of the current definition of drama, the
Commission does not propose to make any change. With respect to the CFTPA’s
comments, however, the Commission notes that subcategories 7(f) and 7(g) do
not qualify for the dramatic time credit incentive set out in
Implementation of TV Policy, Public Notice CRTC
1999-206, 23 December 1999 (Public Notice
1999-206). In the Commission’s view, any
other incentives designed to support Canadian drama should continue to apply
only to those programs in subcategories 7(a) to 7(e). |
27. |
The CBC and several other interveners that
addressed French-language drama recommended that "reality television
productions" should be excluded from the definition of drama. In this regard,
the Commission notes that reality TV is included in the description for
Category 11 General entertainment and human interest. While reality
television may raise questions of overlap with other program categories, it
has never been considered as Category 7 Drama. |
28. |
With respect to the TQS proposal, the Commission
is of the view that it does not have sufficient information on these new
television genres and hybrid genres, in particular, to analyse this issue. |
|
Defining "original hours"
|
29. |
One of the Commission’s objectives identified in
Public Notice 2003-54 is to increase the
amount of original hours of English-language Canadian drama. The Commission
also sought comments on measures for ensuring that original, quality Canadian
French-language drama remains a key component of peak time viewing. The
Commission tracks original programs and repeats through its logging
requirements. Licensees must identify whether a given program is: |
|
|
|
- a recording of a live program (first play);
|
|
- other recorded program (first play); or
|
|
- a repeat broadcast of one of the three types of programs noted above.
|
30. |
For the last decade, most licensees have not
been required, either by regulation or by condition of licence, to broadcast
specific quantities of "original" or "first run" programming. The regulatory
requirements for Canadian content and current conditions of licence with
respect to priority programming make no distinction between original and
repeat hours. With respect to Canadian drama, the Commission has taken the
view in recent years that broadcasters are best positioned to determine the
appropriate balance between original and repeat programs. |
31. |
A number of comments, addressed to both
linguistic markets, proposed that the Commission return to the practice of
regulating original hours. One request by the UDA asked the Commission to
review specific requirements regarding the number of hours of drama broadcast
by TVA. The UDA stated that 80% of those hours should be original. |
|
Commission’s preliminary view
|
32. |
The Commission is of the view that there should
be an increased emphasis on original hours of Canadian drama. However, it
considers that there is a need for greater clarity in the definition of
"original." In "First Run" Television Programming, Public Notice CRTC
1988-197, 30 November 1988, an original,
first run program was defined as a "program which has never before been
distributed by any licensee of a broadcasting undertaking and which will be
distributed for the first time by the licensee." |
33. |
The Commission seeks comment on whether the
above definition is appropriate in the context of regulatory action to
support the production of more original, English-language drama, and to
maintain the level of original French-language drama productions. Parties may
wish to propose alternative definitions and should provide reasons for any
different approach. |
|
Drama directed to children
|
34. |
A number of comments focused on the need for the
Commission to provide support for Canadian drama that is directed to children
(i.e., those aged 2 to 12). Some noted that, prior to the publication of
Building on Success – A Policy Framework for Canadian Television, Public
Notice CRTC 1999-97, 11 June 1999 (the 1999
TV Policy), children’s drama broadcast during children’s viewing hours could
claim a 150% time credit. In 1999, the policy changed so that only qualifying
drama programs broadcast between 7:00 p.m. and 11:00 p.m. were entitled to
the new credit. As a result, most children’s drama programs were no longer
eligible for the time credit. |
35. |
For the French-language market, the APFTQ and
UDA suggested that the Commission consider incentives for creating and
broadcasting Canadian drama programming for youth. |
|
Commission’s preliminary view
|
36. |
The Commission recognizes that drama directed
towards children continues to be an important and successful genre of
Canadian programming. High quality children’s drama contributes as much to
the fulfilment of the Act’s objectives as any other type of drama. If
children are exposed to attractive television drama programs that reflect
their own values and realities, it is reasonable to expect that they will be
more likely to continue as viewers of adult Canadian drama. The Commission
also recognizes that animation, an area in which Canadians have excelled, is
a sub-genre of drama with particular appeal to children. |
37. |
In light of the above, the Commission proposes
to include, as part of any incentive to support Canadian drama overall,
original Canadian drama directed towards children in subcategories 7(a) to
7(e) when such programs are broadcast at times appropriate for children. |
|
Drama earning less than 10 Canadian content points
|
38. |
In Certification for Canadian Programs – A
revised approach, Public Notice CRTC
2000-42, 17 March 2000, the Commission announced that it had revised the
point system it uses for the certification of Canadian programs. Conditions
of licence with respect to Canadian drama programs are not limited to
programs that achieve the full 10 Canadian content points. Licensees are able
to fulfil conditions of licence by broadcasting Canadian drama programs that
earn a minimum of 6 points. The 150% time credit for Canadian drama, however,
is limited to 10-point drama programs. |
39. |
Most of those who commented on this subject, and
particularly those who addressed English-language Canadian drama, proposed
that incentives should apply only to 10-point drama programs. Global proposed
that, if an incentive based upon extra advertising minutes were to be
considered, dramas earning a lower number of points should be included,
although with a reduced benefit, such as 30 seconds of additional advertising
rather than a full minute. Global noted that these dramas, "… provide
valuable experience and international track records for Canadian creative and
craftspeople without creating additional pressure on public funding
mechanisms." |
40. |
This issue was not specifically covered by the
interveners addressing the French-language market. |
|
Commission’s preliminary view
|
41. |
In the Commission’s view, the primary focus of
any action to support Canadian drama should be on those programs achieving 10
points. It is these programs that are most likely to tell Canadian stories
and reflect Canadian values and realities. Nevertheless, the Commission
recognizes that there is merit in supporting the production of some lower
point count dramas. Further, the Commission considers that any regulatory
incentives should minimize pressure on public funding mechanisms.
Accordingly, in Public Notice 2004-32, which addresses English-language
drama, the Commission proposes providing modest support for 8- and 9-point
dramas, as a means of offering producers an alternative to CTF funding. |
42. |
With respect to 8- or 9-point Canadian
French-language dramas, the Commission does not have enough information to
conclude that incentives for these programs would be appropriate. |
|
Effectiveness of regulatory requirements
|
43. |
In Public Notice
2003-54, the Commission asked interested parties to comment on the
effectiveness of regulatory requirements, such as regulations or conditions
of licence, and on regulatory incentives, in achieving the Commission’s
objectives with respect to Canadian drama. |
44. |
Broadcasters opposed any return to the
regulation of drama hours or expenditures. The CAB noted that the 1999 TV
policy, which removed requirements for drama hours and expenditures, was
established following an extensive public process. In the CAB’s words, "…
this policy framework is still relatively new, and should therefore be given
more time to have an impact before substantive evaluation is undertaken."
With respect to the effectiveness of regulatory requirements, the CAB noted
that a volume-centred approach is "unlikely to succeed in building audiences
for English Canadian drama." |
|
Commission’s preliminary view
|
45. |
The Commission notes that regulatory measures
are effective in ensuring minimum performance levels by licensees. The
Commission’s Canadian content regulation is an example of a necessary and
effective quantitative requirement. These measures work best when the
regulatory requirement is clear, measurable and within the direct control of
the licensee. Prior to the 1999 TV policy, conditions of licence have been
used to require major conventional television licensees to broadcast minimum
hours of Canadian drama during peak time and to spend minimum amounts on
Canadian programs. |
46. |
The Commission has reviewed its past experience
regulating both hours and expenditures on Canadian programming, including
drama, through conditions of licence. While this approach provided a minimum
"floor" that licensees must achieve, it did not necessarily motivate
licensees to invest in the success of that programming. However, the
implementation of the 1999 TV policy has not resulted in any significant
change in viewing to Canadian drama, in expenditures on Canadian drama, or in
the total hours of Canadian drama broadcast in peak time. |
47. |
The Commission recently issued licences, which
will expire in 2008, to French-language private conventional broadcasters.
Under the Broadcasting Act (the Act), the Commission could not, on its
own initiative, amend their conditions of licence before 2006. While the
Commission could introduce amendments to the Television Regulations, 1987
(the Regulations) in order to require minimum hours of drama, the Commission
is of the view that imposing regulatory requirements at this time would be
inappropriate and would not necessarily be the best means to achieve the
objective of increasing the quantity of and viewing to Canadian drama
programs. In the Commission’s view, it would be appropriate to consider
alternative mechanisms. |
48. |
The Commission is of the view that interest in
Canadian drama could be stimulated more effectively and efficiently by
creating an environment based on commitment, collaboration and the belief
that Canadian French-language drama can remain financially and culturally
viable. Although certain regulatory requirements are needed, another type of
mechanism may be required to maintain the production of high-quality Canadian
drama that will appeal to a wider audience. The Commission therefore
considers that imposing regulatory requirements at this time would be
inappropriate or unlikely to fulfil the objective of increasing viewing to
Canadian drama. |
|
Effectiveness of regulatory incentives
|
49. |
Public Notice
2003-54 sought comments on the effectiveness of regulatory incentives in
general, and in the case of English-language drama, on the specific incentive
proposed by Trina McQueen in her report, Dramatic Choices (the McQueen
report). The Commission also made public the Nordicity Report, which set out
a model to assess the financial impact of Trina McQueen’s major proposals.
These proposals were to reinstate the 150% time credit against Canadian
content requirements, to permit an additional minute of advertising time for
qualifying drama hours, and to introduce a 200% credit for drama programs
that achieve "hit" audience levels. |
50. |
With respect to French-language broadcasters,
TQS and TVA, in their interventions, proposed an incentive that would extend
the peak viewing period in order to encourage a broader range of quality
Canadian programs in the evening. |
|
Commission’s preliminary view
|
51. |
Incentives, by definition, act as an
encouragement for licensees to take specific action. They are flexible
regulatory tools that permit an individual broadcaster first to determine
whether to utilize the incentives proposed and, second, to do so in a manner
tailored to the broadcaster’s own programming strategy. Incentives, if
properly calibrated, would encourage broadcasters to work cooperatively with
producers in order to ensure the production of high quality programming that
is promoted and scheduled in a manner that attracts and retains the largest
possible audience. The Commission considers that existing regulatory
requirements, coupled with new regulatory incentives, adapted to the
realities of the two linguistic markets should fulfil the Commission’s
objective. It has therefore determined that additional regulatory
requirements would be inappropriate at this time. |
52. |
With respect to extending the peak viewing
period, the Commission has analyzed broadcasters’ priority programming
responsibilities and their historical performance, and is of the view that
the peak viewing period does not have to be extended to enable licensees to
offer a wider range of priority programs in the evening. The Commission is
not convinced that this proposal would result in more diversity of priority
programs, as suggested by TVA and TQS. Rather, the Commission considers that
extending the peak viewing period could have a negative impact on the
established objective. Based on the analysis of viewing, broadcasters could
decide to move certain drama programs into these extended time slots rather
than new program genres, which are not recognized as priority programming.
The Commission is therefore of the view that it would not be appropriate at
this time to consider extending the peak viewing period to achieve the drama
programming objective. |
|
Incentive rewards
|
53. |
In the interventions addressing English-language
drama, two main incentive rewards were proposed in the submissions of
interested parties. The first of these, time credits, would permit licensees
to air an additional amount of non-Canadian programming. The second, extra
advertising minutes, would permit licensees to broadcast more than 12 minutes
of advertising in a given hour. In addition, a few parties proposed that
another reward could be a reduction in the Part II licence fees payable
pursuant to the Broadcasting Licence Fee Regulations, 1997. The
Commission has analyzed each of these potential incentive rewards. |
|
Time credits against Canadian content
|
54. |
The 150% drama time credit noted above
effectively permitted licensees to replace Canadian programs with more
profitable non-Canadian programs. As part of the 1999 TV Policy, the
Commission removed the application of the 150% time credit from all
programming other than the eight hours per week of priority programming
required by condition of licence. Accordingly, since 1999, while licensees
have been able to reduce the minimum amount of priority programming they
broadcast through the use of dramatic time credits, they have not been able
to use such time credits to reduce their Canadian content below the minimum
levels set out in the Regulations. |
|
Commission’s preliminary view>
|
55. |
In the Commission’s view, an incentive that
would permit the use of drama time credits to reduce required Canadian
content levels raises a number of serious concerns. First, there is the
fundamental contradiction that, by granting a time credit to encourage more
Canadian drama, the Commission would be permitting licensees to broadcast
less Canadian programming overall. Second, the Commission considers that the
likely result of a time credit for drama would be to encourage licensees to
broadcast Canadian programs at off-peak times or in low viewing periods of
the year. |
|
Additional advertising minutes
|
56. |
The proposal to use additional advertising
minutes as an incentive was first raised in the McQueen report. As noted
above, the concept received broad support from those who submitted comments,
with only a few parties expressing concern. Section 11 of the Regulations
sets a limit of 12 minutes of advertising material in any clock hour in a
broadcast day, except as provided in the Regulations or by a condition of
licence. Where a program occupies two or more consecutive hours, the minutes
may be averaged over the length of the program. Promotions for Canadian
programs and for Canadian feature films do not count as advertising material.
|
57. |
For the French-language market, the issue of
additional advertising minutes in peak time was also raised in TVA’s licence
renewal. TVA stated in its application at that time that it wished to be
exempted from the Regulations prohibiting it from broadcasting more than 12
minutes of advertising material in any clock hour. TVA wanted to benefit from
greater flexibility in managing its commercial inventory during peak time,
but did not intend to exceed 14 minutes of interruption for advertising, all
breaks combined. TVA did not specify the program genres that might benefit
from the requested flexibility. The Commission denied TVA’s request.2
|
|
Commission’s preliminary view
|
58. |
In contemplating an incentive based upon extra
advertising minutes, the Commission’s first concern is the impact that this
may have on the viewing public. In this regard, the Commission notes that the
most valuable advertising time for English-language broadcasters is that
placed in popular U.S. programs – particularly those with extraordinarily
high ratings such as the Super Bowl, the Academy Awards, great drama programs
of yesterday and today, and reality programs. U.S. broadcasters have no
regulated limits on advertising. Typically, the U.S. programs that Canadian
licensees acquire have between 14 and 16 minutes of commercial breaks in each
hour. Canadian broadcasters can only use 12 minutes of these breaks for
advertising material and, therefore, fill the remaining two to four minutes
with promotions for Canadian programs, public service announcements or
newsbreaks. This means that viewers are already experiencing program breaks
that cumulatively exceed 12 minutes per hour. If Canadian broadcasters were
permitted to sell a limited amount of additional minutes, there would still
be time available for the promotion of Canadian programs without increasing
the number of minutes of program interruptions per hour. |
59. |
The context for French-language broadcasters
differs from that of English-language broadcasters. French-language
broadcasters have the advantage of not being subject to the simulcasts of
U.S. programs and, as a result, to the length of advertising breaks for these
programs. |
60. |
The sale of advertising time is, of course, the
life blood of commercial broadcasters. Advertising minutes, particularly
those placed in the most popular programs, have significant value. In the
French-language market, one minute of advertising in peak time can generate
average revenues in the order of $10,000, depending on the broadcaster and
the anticipated audience size. |
61. |
Unlike the English-language market, where
Canadian drama programs rarely achieve commercial success, French-language
dramas are still one of the main scheduling drivers for conventional
French-language broadcasters, despite the advent of new program genres. The
series Fortier, Les Bougons and La vie la vie are
current examples of that commercial success, but French-language drama has
been successful since the inception of French-language television. As Guy
Fournier stated in his report, [translation] "From its earliest days, Quebec
television drama has reflected Quebec and its society. Viewers have
recognized themselves in these dramas and identified with them… Original
French-language drama programs drive the entire program schedule for the
major French-language networks and are the means by which they have been able
to maintain audience loyalty." |
62. |
The Commission’s analysis shows that with the
arrival of new programming genres, such as reality programs, French-language
private broadcasters now have a programming solution that is generally less
costly than producing drama and that can attract the same number of or more
viewers than drama programs. This new programming genre also generates higher
revenues from fees and tie-in products for broadcasters and affiliates, thus
contributing to their commercial success. |
63. |
To maximize the profitability of these new
programming genres, French-language broadcasters will no doubt need to extend
peak time, which is mainly occupied by drama programming. |
64. |
For a number of reasons, additional advertising
time may be an effective incentive for maintaining broadcaster interest in
committing to original drama production and for maintaining a proper balance
of peak time French-language drama programming. In addition, the amount of
the reward can easily be adjusted to take into account the nature of the
dramas broadcast, the size of the audience attracted or the financing
structure and/or licence fees. |
65. |
The Commission acknowledges the concerns raised
by certain specialty broadcasters and smaller conventional television
licensees. These concerns related to the possible negative effects of
increasing advertising inventory, particularly in the most popular programs.
In formulating its proposals, the Commission has attempted to balance the
concerns expressed by smaller broadcasters against the benefits that it
expects would result from an effective incentive to broadcast more original
Canadian drama and to attract larger audiences to these programs. On this
basis, the Commission has decided to propose incentives that would permit the
broadcast of extra advertising minutes as the reward. |
|
Reduction in Part II Fees
|
|
Commission’s preliminary view
|
66. |
The Commission notes that section 11(2)(b) of
the Act gives the Commission the ability to provide for lower fees if, for
example, licensees fulfil certain programming objectives set by the
Commission. However, any such proposal would require a change to Commission
regulations and approval by the Treasury Board of Canada Secretariat.
Further, the Commission notes that the Standing Joint Committee on the
Scrutiny of Regulations reported on the matter of Part II licence fees on 27
October 2003. This Committee and the Standing Committee on Canadian Heritage
both made recommendations with respect to Part II fees. |
67. |
On 25 March 2004, the government provided a
preliminary response to the Standing Joint Committee on the Scrutiny of
Regulations. The government stated that it was continuing its examination of
this issue and noted that, because of ongoing litigation, it was premature to
comment further. |
68. |
In the Commission’s view, it would be
inappropriate to propose an incentive reward based upon a reduction of Part
II fees in the absence of an announcement of government policy in this area.
|
|
The Commission’s Canadian drama programming objectives
|
69. |
The Commission, in Public Notice
2003-54, sought comments on measures for
ensuring that high quality, original French-language Canadian drama remains a
key component of peak time viewing, with the following objective: |
|
maintaining, during peak viewing hours, a proper balance of
French-language drama programming by broadcasters in this market and a
minimum of high-cost programs or series.
|
70. |
Tables 2 and 3 set out in Appendix A indicate
that the number of dramatic series and the number of hours produced in French
have decreased, particularly since 2002. In its intervention, the CBC
indicated that it may no longer be able to produce so-called high-cost
dramas, that private broadcasters will think twice before taking a financial
risk and that, as a result, Francophone viewers could be deprived of this
type of production. The Commission is of the view that high-cost dramas are
one of the key elements in the television/film dynamics of the Canadian
French-language market. The Commission shares the concern raised by the CBC,
especially in light of the limited size of the Canadian French-language
market and the increasing production costs. |
71. |
In developing the proposed incentives for the
French-language market, the Commission has examined production budget types
and values and the licence fee percentages used by the CTF. The production
budget for a high-cost drama series is $800,000 per hour or more, plus
minimum licence fees set by the CTF. |
|
Incentives for original hours
|
|
Commission’s preliminary determination
|
72. |
As discussed earlier in this notice, the
Commission considers that the focus of any drama incentive program should be
on the broadcast of original hours only. Encouraging licensees to broadcast
more original hours of Canadian drama on English-language television, and
maintaining a proper balance of peak time drama programming on
French-language television, would have a direct and positive impact on the
independent production sector and the employment of Canadian creative talent
and crafts persons. |
|
High-cost drama
|
73. |
The first part of the incentive model would
apply to original Canadian French-language 10-point drama programs broadcast
in peak time (7:00 p.m. to 11:00 p.m.) with production budgets of at least
$800,000 per hour, plus a licence fee consistent with CTF standards. |
74. |
As an incentive, the Commission proposes to
allow three minutes of additional advertising for each hour of original
high-cost 10-point drama broadcast in peak time. According to CTF data on the
number of hours of high-cost drama produced for conventional French-language
broadcasters in 2003-2004, had this incentive been in place, it could have
generated additional revenues in the order of $380,000 to $525,000, depending
on the broadcaster. |
75. |
The Commission reiterates that high-cost drama
programs regularly attract one million viewers and, generally, are still
profitable for conventional French-language broadcasters. The purpose of this
incentive is to add value to the broadcaster’s programming decision, not to
make high-cost drama as profitable as other programming genres that may be
broadcast in peak time. |
|
Other French-language drama funded by the CTF
|
76. |
The second part applies to any other original
French-language drama with a production budget under $800,000 per hour, and a
licence fee consistent with CTF standards. |
77. |
The incentive proposed by the Commission is to
allow two additional minutes of advertising for each hour of original
10-point drama broadcast during peak time. According to CTF data on the
number of hours of drama of this type that were produced for conventional
French-language broadcasters in 2003-2004, had this incentive been in place,
it could have generated additional revenues of $200,000 to over $2,500,000,
depending on the broadcaster. |
|
Original French-language drama produced without CTF assistance
|
78. |
Few original French-language drama programs are
currently produced without CTF assistance. However, as English-language
broadcasters do, a French-language broadcaster may, for various reasons,
decide to initiate a certain production project. In such a case, the
Commission proposes to allow four minutes of advertising in addition to the
three or the two minutes, indicated previously, to productions that do not
receive funding by the CTF. |
79. |
The Commission expects broadcasters to work
creatively with producers to ensure that the advertising revenue that
broadcasters receive from the additional four minutes of advertising flows
through to the production. The intent of the proposal is that the revenues
associated with the four additional advertising minutes be used to compensate
a producer for the absence of CTF funding. Revenues earned under this
provision and passed on to producers would not be counted as Canadian
programming expenditures on CRTC annual returns. |
|
Utilizing additional advertising minutes
|
80. |
The Commission believes that two factors should
be considered in utilizing additional advertising minutes. The first relates
to the fact that French-language viewers are not accustomed to the 14 to 16
minutes of advertising breaks resulting from the simulcast of U.S. programs
by Canadian English-language stations. The second is the impact of the
incentives on the advertising inventory in the French-language market. The
Commission is therefore of the view that the utilization of additional
advertising minutes must, at all times, be limited to a maximum of 14 minutes
per hour. |
81. |
The Commission proposes that, under the
incentive model for the four types of drama productions described above, the
additional advertising minutes would be available for each conventional
French-language station that broadcasts the original drama production. The
Commission proposes that there would be no carry-over of advertising minutes
from one broadcast year to the next. |
82. |
The incentives for the broadcast of original
Canadian drama productions would also be available to individual specialty
services. The additional minutes could be aired in any program broadcast by
the specialty service that has broadcast the qualifying original drama
program (provided that the extra minutes of advertising material are aired in
the same broadcast year as the qualifying drama). The Commission recognizes
that this incentive model is generally based on the economics of the
conventional television networks, particularly in the French-language market.
Nevertheless, the Commission considers that some French-language specialty
services may be able to take advantage of the incentives available for drama
productions, particularly for medium- or low-cost productions. An example of
such a production is the series Laura Cadieux that was broadcast by
Séries +. The licensees of educational television stations that broadcast
advertising may also be able to take advantage of the incentives. |
83. |
No additional advertising minutes would be
available for original drama productions that received funding as part of a
benefits package arising from a transfer of ownership or a commitment made in
the context of the issuance of a new licence. |
84. |
In determining production budgets, the
Commission expects parties to follow the business policies of the CTF, in
particular, the Accounting and Reporting Requirements and the Producer’s Fees
and Corporate Overhead Policy. |
|
Audience for Canadian English-language drama
|
85. |
Increased viewing to Canadian English-language
drama programs is one of the key objectives identified by the Commission in
Public Notice 2003-54. An incentive
trigger based upon viewing received strong support in principle in the
comments received, although most parties considered that more work was
required to develop an appropriate trigger point that would take into account
the varying reach of individual licensees. In the view of the CAB, a
demanding but attainable objective would be to increase viewing by
Anglophones to Canadian drama, as a percentage of viewing to all drama, from
the present 11% to 15%, over a period of five years. |
|
Audience for Canadian French-language drama
|
86. |
As indicated in Table 4 set out in Appendix A,
viewing to Canadian drama accounts for 52% of all viewing to drama on
French-language services. |
|
Commission’s preliminary view
|
87. |
For Canadian English-language services, the
Commission sees merit in establishing a specific goal for the industry
regarding viewing of Canadian drama and adding an incentive aimed
specifically at meeting that goal. In the Commission’s view, it would be more
appropriate to base an incentive on the viewing to Canadian drama as a
percentage of viewing to all drama on Canadian services. This would give
licensees a greater degree of control than they would have if the viewing to
non-Canadian services were included in the base. BBM data for 2002 shows that
viewing to Canadian drama, as a percentage of viewing to all drama on
Canadian English-language services, was approximately 14%. For example, using
the BBM statistics to explain the model, the Commission could establish an
objective for an increase in the viewing to Canadian drama on Canadian
English-language services over a five-year period, from the current industry
average of 14% to 20%. |
88. |
Canadian French-language services already
account for 52% of viewing to Canadian drama, significantly exceeding the
proposed five-year goal of 20% for English-language services. Given the
exceptional performance over the years of French-language broadcasters, the
Commission does not find it necessary to consider incentives for increasing
viewing to Canadian French-language drama. |
|
Incentives for increased expenditures on Canadian drama by
English-language broadcasters
|
|
Commission’s preliminary view
|
89. |
A number of parties, including the CFTPA and the
Coalition of Canadian Audio-visual Unions (CCAU), proposed a return to
expenditure regulation. For the reasons noted earlier, the Commission does
not consider it appropriate to regulate expenditures at this time. However,
it does consider that, in order for its objectives to be fulfilled, spending
on Canadian drama must be maintained and should be increased. Accordingly,
the Commission proposes an incentive for English-language broadcasters that
would be triggered by an increase in spending on Canadian drama. |
90. |
As an example, in each of 2002 and 2003,
English-language private conventional television licensees expended a
combined average of 4% (excluding the CTF top-up) of their total revenues on
Canadian drama. The Commission proposes to establish an overall objective for
expenditures on Canadian drama that would represent 6% of the total revenues
earned by the Canadian private television industry, to be achieved over a
five-year period. Each ownership group would be encouraged, through the
incentive of additional advertising minutes, to increase its Canadian drama
expenditures, as a percentage of revenue earned by its conventional
television services, by an amount equal to the difference between the current
industry average and the 6% industry objective. |
|
Expenditures on Canadian drama by French-language broadcasters
|
91. |
In 2002 and 2003, licensees of conventional
French-language television stations spent a combined average of 15% of their
total revenues on Canadian drama (excluding the CTF contribution). |
|
Commission’s preliminary view
|
92. |
Given the results that have already been
achieved by conventional French-language stations, the Commission is of the
view that an additional incentive is not required, and encourages these
private stations to maintain their current levels of spending on Canadian
drama. |
93. |
The Commission is currently reviewing the annual
returns for specialty services with a view to determining how best to monitor
their spending on individual program categories, as is now done in the case
of the annual returns filed by the licensees of conventional television
services. At this time, the Commission does not collect information with
regard to expenditures by program category for specialty services. The
potential qualification of specialty services for the drama expenditure
incentive model will be reviewed at a later date. |
|
Implementation and monitoring
|
94. |
The Commission proposes that any incentives
based upon additional advertising time would be implemented by way of
condition of licence. Conventional television licensees that wish to
participate in the incentive program must therefore file an application
requesting a condition of licence that would authorize them to broadcast
additional minutes of advertising material, as set out in the Commission’s
Public Notice, in addition to the 12 minutes per hour permitted by section 11
of the Regulations. Specialty licensees must file an application requesting
an amendment to their conditions of licence in order to change their
established advertising limits. |
95. |
The Commission expects that applications seeking
the conditions of licence necessary to implement the new incentives could be
approved early in 2005. Licensees would be able to accumulate advertising
credits from the beginning of the 2004/05 broadcast year. However, licensees
would not be permitted to broadcast the additional advertising minutes until
the appropriate conditions of licence have been approved. |
96. |
The Commission would monitor the performance of
those licensees participating in the incentive program through a combination
of the annual returns and annual reports submitted by the participating
licensees, and the Commission’s logs. The details of the monitoring plan are
set out below. |
|
Evaluation of the incentive package
|
97. |
The Commission intends to evaluate progress in
both language markets regarding the respective incentive packages. The
results of this evaluation would be made public in the Commission’s Broadcast
Policy Monitoring Report. If the annual results do not demonstrate sufficient
progress towards the targets, the Commission could introduce necessary
changes to its policy at any time. |
98. |
Given the past significant contribution by
conventional French-language broadcasters to original Canadian drama, the
Commission is of the view that the additional incentives will be sufficient
to maintain a proper balance of original drama in peak time. The Commission
will analyze the progress made by the licensees at their network licence
renewals in 2008. |
|
Summary of the proposed incentive package
|
99. |
Based upon the comments received in response to
Public Notice 2003-54 and on the
available economic data, the Commission proposes, for comment, the following
package of incentives designed to maintain, during peak time, a proper
balance of French-language drama programming offered by broadcasters in the
French-language market, including a minimum of high-cost programs or series. |
|
Incentives to broadcast original hours of Canadian drama
|
100. |
The Commission proposes four different triggers,
each with a different reward. |
|
- Trigger: the broadcast of 10-point, original, CTF-funded
Canadian French-language 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.
|
|
Reward: three minutes of additional advertising for each original hour
broadcast.
|
|
- Trigger: the broadcast, in peak time, of 10-point, original, CTF-funded
Canadian French-language drama having a production budget of less than
$800,000 per hour, and a minimum licence fee as established by the CTF.
|
|
Reward: two minutes of additional advertising for each original
hour broadcast.
|
|
- Trigger: the broadcast, in peak time, of 10-point, original, Canadian
French-language drama having a production budget of at least $800,000 per
hour, but without having CTF funding.
|
|
Reward: A total of seven minutes of additional advertising time
for each original hour broadcast – i.e., the three minutes earned under the
first trigger described above, plus four minutes for not accessing CTF
funding.
|
|
- Trigger: the broadcast, in peak time, of 10-point, original, Canadian
French-language drama having a production budget of less than $800,000 per
hour, but without having CTF funding.
|
|
Reward: a total of six minutes of additional advertising (the two
minutes under the first trigger, plus four minutes for not accessing CTF
funding).
|
101. |
The conditions relating to peak time broadcast
are not applicable to original Canadian drama directed toward children in
subcategories 7(a) to 7(e). These programs will be eligible for the
incentives if they are broadcast during hours of the day considered
appropriate for viewing by children. |
102. |
In the case of each trigger, hourly production
budgets would be determined on the basis of CTF business policies.
Implementation of the triggers and rewards would be by condition of licence.
|
103. |
Licensees would be required to submit a report
to the Commission at the end of each broadcast year, specifying the
following: |
|
- the number of qualifying hours broadcast, including titles, episode
number and date and time of broadcast on each conventional television or
specialty service;
|
|
- 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
|
|
- The name, time and date of broadcast of the programs in which the extra
advertising minutes were placed.
|
104. |
The Commission will cross-check a licensee’s
reports against the Commission’s logs data. |
|
The regulatory framework
|
105. |
The Commission considers that, if the proposed
incentive package is implemented, the regulatory framework with respect to
Canadian content and priority programming requirements should remain
unchanged until there has been sufficient opportunity to evaluate the effect
of the new incentives. The licensees will be required to continue to fulfil
conditions of licence relating to priority programming. The existing 150% and
125% dramatic time credits against priority programming will remain in
effect. There will be no change to the Canadian content regulations. |
106. |
The proposed package of incentives would apply
to the licensees of all conventional, private, French-language television
stations, as well as to the licensees of those French-language specialty
television services that are permitted by condition of licence to broadcast
Category 7 programs. The proposed incentive package would also apply to the
French-language television services of the CBC and to all French-language
educational television services airing advertising. |
107. |
The Commission recognizes the vital role that
the CBC has played in developing French-language drama. The Commission notes
that, when the CBC released its new strategic positioning in February 2003,
it indicated its commitment to ensuring that drama continues to play an
important role in that positioning. The CBC also expressed its intention to
maintain the quality of its drama programming, continue broadcasting
téléromans, series and plays, and further support new authors, more
innovative approaches and bolder objectives. The Commission considers that
the incentives aimed at high-cost drama will assist in achieving the CBC’s
objectives. |
|
Licence fee top-ups
|
108. |
A number of parties submitted that the practice
of allowing money received from the CTF to count towards Canadian program
expenditure (CPE) obligations for specialty services lowers the amount of
money a service must invest in Canadian programming. Parties also argued that
the practice puts pressure on the CTF as it gives licensees an additional
incentive to seek CTF funding. In this regard, it was suggested that services
are often willing to pay higher licence fees in order to increase the
likelihood of receiving CTF funding. |
109. |
The Commission notes that the existing CPE
requirements were partly based on the projected CTF licence fee top-ups for
each service. If the licence fee top-up were deemed to be ineligible,
fairness would require that a public process be held to re-calculate the CPE
requirements for each service. The end result would likely be a similar
amount of money spent on Canadian programming, only calculated differently.
Accordingly, the Commission does not propose any change to the way in which
licence fee top-ups are claimed at this time. |
|
At risk equity
|
110. |
At risk equity refers to equity investments in
drama productions that have no guarantee of a return. Currently, licensees of
specialty services may only claim the losses on equity investments as
Canadian program expenditures. Conversely, pay services are authorized to use
equity investments to fulfil their CPE obligations. |
111. |
In recent years very few equity investments in
Canadian programming have been undertaken by Canadian specialty services. In
contrast, pay services have traditionally financed Canadian feature films by
way of equity investments. The Commission considers that permitting specialty
services to count at risk equity against CPE requirements could result in the
increased willingness and ability of those few specialty services that
commission original Canadian drama to make equity investments. |
112. |
The Commission agrees with the positions of
Telefilm Canada and the CCAU who submitted that an equity investment is not
truly at risk if it has some return that is guaranteed. In these cases, it is
more akin to a loan or advance. In allowing equity investments to count
against CPE requirements, the Commission would require that the investment be
demonstrably "at risk." The Commission seeks comment on the most appropriate
means to ensure that broadcaster investments are truly at risk and do not
replace appropriate licence fees. |
|
Reflecting Canada’s diversity
|
113. |
Drama is an important way to reflect and share
culture. Public Notice 2003-54 emphasized
that "drama can and should reflect Canadians of every background and culture
to each other." While few comments raised the issue of diversity in Canadian
drama programming, the Commission considers that it is a crucial element that
must be taken into account by producers and broadcasters alike in the
development of new drama projects. |
114. |
The Commission has taken a number of measures to
meet cultural diversity objectives. In the 1999 TV policy, emphasis was
placed on the role and responsibility of television licensees to accurately
reflect the cultural diversity of Canadians in their programming. To aid this
objective, the Commission, in the same public notice, indicated its support
for an industry and community task force to examine the issue of cultural
diversity. The creation of the Task Force on Cultural Diversity was announced
in Representation of cultural diversity on television – Creation of an
industry/community task force, Public Notice CRTC
2001-88, 2 August 2001. The task force is
expected to publish its report shortly. In addition, most licensees are
required to file annual cultural diversity plans which describe how each is
meeting the cultural diversity objectives within its corporate organization
and in its programming. These reports are available for public consultation.
|
115. |
In the Commission’s view, the mechanisms are in
place to encourage licensees to ensure that the original Canadian drama they
broadcast reflects Canada’s diversity. |
|
Call for comments
|
116. |
The Commission seeks comment on its proposals
for the incentives described in this public notice. Specifically, the
Commission seeks comment on the following questions: |
|
1. For the purpose of the proposed incentives, please comment on the
following definition for an original program:
|
|
An original program is 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.
|
|
2. The Commission proposes incentives for Canadian drama programs
directed to children when such programs are broadcast at times of the day
that are 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?
|
|
3. Is three minutes of additional advertising for each original hour of
high-cost, 10-point Canadian French-language drama broadcast in peak time
an appropriate incentive reward? If not, what would be the appropriate
incentive?
|
|
4. Is two minutes of additional advertising in peak time for original
Canadian French-language 10-point drama with a budget of less than $800,000
per hour an appropriate incentive reward? If not, what would be the
appropriate incentive?
|
|
5. Should the proposed incentive of four additional minutes of
advertising for drama not funded by the CTF apply to the French-language
market?
|
|
6. 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 CTF flow through to Canadian drama production?
|
|
7. 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?
|
|
8. How should the Commission ensure that broadcaster equity investments
are demonstrably at risk investments? Should the Commission consider other
measures in order to provide safeguards?
|
117. |
The Commission will accept comments that it
receives on or before 23 July 2004. |
118. |
The Commission will not formally acknowledge
comments. It will, however, fully consider all comments and they will form
part of the public record of the proceeding, provided that the procedures for
filing set out below have been followed. |
|
Procedures for filing comments
|
119. |
Interested parties can file their comments to
the Secretary General of the Commission by using ONE of the following
formats: |
|
-
Intervention/Comments form
available from the Commission’s web site by indicating and selecting the
public notice number under the Decisions, Notices and Orders section
|
|
OR
|
|
|
|
OR
|
|
- by mail to
CRTC, Ottawa, Ontario K1A 0N2
|
|
OR
|
|
|
120. |
Submissions longer than five pages should
include a summary. |
121. |
Please number each paragraph of your submission.
In addition, please enter the line ***End of document*** following the last
paragraph. This will help the Commission verify that the document has not
been damaged during transmission. |
122. |
The Commission will make comments filed in
electronic form available on its web site at
www.crtc.gc.ca but only in the official language and format in which they
are submitted. Such comments may be accessed in the Public Proceedings
section of the CRTC web site. Copies of all comments, whether filed on paper
or in electronic form, will also be placed on the public examination file. |
123. |
The Commission encourages interested parties to
monitor the public examination file and the Commission’s web site for
additional information that they may find useful when preparing their
comments. |
|
Examination of public comments and related documents at the following
Commission offices during normal business hours
|
|
Central Building
Les Terrasses de la Chaudière
1 Promenade du Portage, Room G-5
Gatineau, Quebec K1A 0N2
Tel: (819) 997-2429 - TDD: 994-0423
Fax: (819) 994-0218 |
|
Metropolitan Place
99 Wyse Road
Suite 1410
Dartmouth, Nova Scotia B3A 4S5
Tel: (902) 426-7997 - TDD: 426-6997
Fax: (902) 426-2721 |
|
405 de Maisonneuve Blvd. East
2nd Floor, Suite B2300
Montréal, Quebec H2L 4J5
Tel: (514) 283-6607
Fax: (514) 283-3689 |
|
55 St. Clair Avenue East
Suite 624
Toronto, Ontario M4T 1M2
Tel: (416) 952-9096
Fax: (416) 954-6343 |
|
Kensington Building
275 Portage Avenue
Suite 1810
Winnipeg, Manitoba R3B 2B3
Tel: (204) 983-6306 - TDD: 983-8274
Fax: (204) 983-6317 |
|
Cornwall Professional Building
2125 - 11th Avenue
Room 103
Regina, Saskatchewan S4P 3X3
Tel: (306) 780-3422
Fax: (306) 780-3319 |
|
10405 Jasper Avenue
Suite 520
Edmonton, Alberta T5J 3N4
Tel: (780) 495-3224
Fax: (780) 495-3214 |
|
530-580 Hornby Street
Vancouver, British Columbia V6C 3B6
Tel: (604) 666-2111 - TDD: 666-0778
Fax: (604) 666-8322 |
|
Secretary General |
|
This document is available in alternate
format upon request and may also be examined at the following Internet site:
http://www.crtc.gc.ca |