Broadcasters need to own Canadian programming in the digital era: McCabe

A new business model focused on Canadian content is crucial for the survival of Canadian broadcasting in the digital age, according to the president and CEO of the Canadian Association of Broadcasters (CAB). Speaking at the National Press Club in Ottawa on October 24, Michael McCabe said broadcasters must be able to produce, own and distribute Canadian programming to survive in the digital environment because the current model whereby broadcasters acquire money-making U.S. content and use it to subsidize money-losing Canadian content "is a recipe for extinction." McCabe’s breakfast speech was an overview of the CAB’s strategy for the broadcasting system outlined in the association’s submission to the House of Commons Standing Committee on Canadian Heritage. The committee, studying whether the 1991 Broadcasting Act needs to be updated to deal with the changing broadcast environment, begins hearings in a few weeks (CCR, May 24/01). The CAB submission will not be made public until the association appears before the committee. McCabe, who will step down as CAB leader at the end of the year, told the press club audience that within five to ten years, viewers will be able to go directly to a producer or program’s web site and download any episode into their personal video recorder upon payment of a fee – seven days a week, 24 hours a day. "As a result, an American broadcaster would not have to sell the rights to such money-making shows as Friends or The West Wing to a Canadian broadcaster in order to reach Canadian consumers," he said in his speech. That development will make it essential for Canada’s private broadcasters to "take full ownership of their programming, either producing it themselves or entering into alliances with Canadian producers to do so," he added. McCabe’s comments came a day after one of private broadcasting’s harshest critics released a report showing that although more taxpayer money is being pumped into the broadcasting system, less is being spent on Canadian programming on conventional networks. On October 23, Friends of Canadian Broadcasting released Follow the Money: Who Paid for Canadian Television, 1990-2000? The report indicates that conventional broadcasters have increased their spending on foreign programming by 50% since 1994, while decreasing what they spent on Canadian programs during the same period. "These data suggest that non-Canadian programming expenditures of Canada’s private conventional television broadcasters will soon exceed their Canadian spending," says Friends spokesperson Ian Morrison. "It’s hard to imagine that this is what politicians intended when they authorized increased public investments to promote Canadian shows on television." The report was produced using data in the public domain, from such sources as the CRTC, the Canadian Film and Television Production Association, Canadian Audio-Visual Certification Office and others, as well as CBC Research. Friends’ report formed the basis of the organization’s submission to the standing committee. But McCabe said Friends’ argument actually supports the CAB’s strategy. Canadian broadcasters can no longer afford increasingly expensive American programming, and need to develop a model of creating more and better Canadian content that can be shown across multiple platforms, McCabe said in a question-and-answer session following his speech. McCabe also took issue with the figures used by Friends, saying the group concentrated only on conventional broadcasting and did not include specialty channels, which air a high amount of Canadian programming. McCabe said private broadcasters are playing an increasingly greater role in the cultural policy objectives of the government. He noted that between 1984 and 1999, English-language private television’s audience share for Canadian programming jumped to 74 per cent from 52 per cent. The new model put forward by the CAB would be contingent upon government support "until we build up our capacity to compete without protection" and then the incentives "will eventually be taken away," McCabe said. Specifically, the CAB recommends: Overpayments by broadcasters to the CRTC should stop, and instead most of that money should go toward Canadian programming. Last year, broadcasters paid $80 million more in CRTC licence fees than was needed to regulate the industry, according to McCabe. As advertising declines, conventional broadcasters need to have access to growing subscription and new interactive revenues connected to their digital channels. The Canadian Television Fund should become permanent, and broadcasters should be able to use the fund to produce Canadian programming they would own. Regulations should be redesigned to provide incentives for more and better Canadian programming. Audience access should be rewarded with viewing performance incentives. Regulation should change its outdated focus on prime time drama. Government policy should support vertically integrated Canadian production/distribution/broadcasting companies. Canadian trade policies should support Canadian programming objectives; a new cultural trade instrument should be developed. Copyright laws, particularly the Section 31 retransmission clause, should be amended to stop ‘rogue’ Internet players.

Broadcasters need to own Canadian programming in the digital era: McCabe

Broadcast | October 26, 2001

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Broadcasters need to own Canadian programming in the digital era: McCabe

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