CCR Short Takes

Budget could create imbalance in production industry: McDonaldElizabeth McDonald, president and CEO of the Canadian Film and Television Production Association, says that it’s time to move on ensuring that the different pillars of the Canadian film and TV production industry are adequately balanced. Her comments follow the government’s decision to cut $25 million per year in the two-year funding renewal it granted the Canadian Television Fund (CCR Update, Feb. 19/03), while increasing the production services tax credit that encourages foreign production in Canada in its budget. "I’m very unhappy about it (the cut in the CTF), but I want to solve this issue. I think that we all have to look at the financing paradigm," she tells Canadian Communications Reports. "Everyone is trying to figure out what went wrong. But let’s move forward, let’s resolve it, let’s make sure that none of the pillars of the production stool is wobbling by this time next year. I want to make sure that the balance is maintained in our sector." The cut in the CTF will hurt the homegrown production industry, while the tax credit break should fuel foreign location shooting north of the 49th parallel. "We welcome Finance minister John Manley’s increase to the tax credit for Canadian workers on foreign productions choosing to locate in Canada," Stephen Waddell, national executive director of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA), said in a media release. "The tax credit helps create jobs – both on screen and behind-the-scenes." But he added that he was dismayed by the cuts to the CTF at a time when Canadian drama series are already disappearing. Glenn O’Farrell, president and CEO of the Canadian Association of Broadcasters (CAB), said the budget measures indicate a shift in government priorities away from indigenous programming in favour of more foreign productions. "This reduction amounts to a significant change in the dynamics of the programming production equation. With a decrease in government funding, the CTF will only become more over-subscribed than it currently is, which will mean that more Canadian programming will sit on the shelf, instead of being on television screens for Canadians to watch," he said in a media release. The CAB estimates that the 25% reduction in CTF funding will eliminate 500 to 600 hours of distinctly Canadian programming. CRTC rules that Craig’s youth channel is not in complianceThe CRTC has given Craig Broadcast Systems Inc. 90 days to report on the steps it has taken to ensure that its digital youth channel is operating in compliance with the terms and conditions of its licence (Broadcasting Decision 2003-65). The countdown began on February 21, the date the CRTC ruled that Craig’s youth channel, originally called Connect, put too much focus on music programming after being rebranded as MTV Canada. In a decision that took more than a year to release, the CRTC found that music related programming represented just over 100 hours, or 63.4% of a broadcast week examined by the commission. It also found that over 20% of MTV Canada’s schedule during the broadcast week of Jan. 20, 2002 was music video clips. The youth channel is restricted by condition of licence to 10% music videos. In its ruling, the commission noted that in applying for a youth channel, Craig’s application "emphasized a broad array of unique, informative programming with almost no reference to music." "The commission considers the high number of music video clips broadcast by MTV Canada ... makes the service competitive with other specialty services oriented to the presentation of music video clips," it stated in the decision. The CRTC also found that the programming on the youth channel is "not consistent with that proposed in the original application regarding educational programming." In a complaint filed with the CRTC early last year, CHUM Ltd. accused Craig of so radically changing the nature of its digital channel that it became competitive with its music specialty channel MuchMusic in violation of CRTC policy (CCR, Feb. 15/02). Craig responded that the way shows were logged was the only issue at stake (CCR, March 1, 2002). On the issue of logging, the commission ruled that commercials should be excluded in evaluating whether a program is a music video. If over 50% of a music program contains music videos, it is to be logged as a music video. Craig was including commercial time to eliminate some programming from reaching the 50% threshold. CHUM also complained that Craig’s Category 2 music channel MTV2 was not a pop channel but a direct competitor to MuchMusic. The CRTC has asked Craig to file for a licence amendment stating that pop videos must make up no less than 95% of the music video clips aired, and include a definition of "pop." Film, video post-production losing steam: Stats CanadaStatistics Canada figures confirm that production is taking a hit in Canada, with the film, video and audio-visual post-production industry losing steam between 1999 and 2001. Revenues increased just 5.4% over this two-year period compared with 45.3% from 1997 to 1999, states a StatsCan report. "This reflects an industry-wide slowdown, including the economic fallout since the events of September 11, 2001, increased competition from other countries to attract U.S. film dollars, efforts in the United States to curb foreign location shooting, and a rise in low-cost reality programming and game shows," says the report released February 25. Producers at the annual conference of the Canadian Film and Television Production Association heard the overall production industry was stagnating. Film and television production in the 12 months ended March 2002 froze at $5.1 billion from the previous year, StatsCan reported."Expense growth, particularly salaries and wages, has outstripped that of revenues," the report noted. Fewer full-time employees were working in the industry in 2001 than in 1999. Provincially, Ontario film laboratories dominated the post-production industry in 2001, earning two-thirds of operating revenue. Quebec’s share was 27% and B.C.’s was 5%. CDTV eyes Vancouver for test transmitter for broadcastersCanadian Digital Television (CDTV) president Michael McEwen says the organization is looking at setting up a third digital television test transmitter – this time in Vancouver. There are currently test transmitters in Toronto and Montreal for broadcasters, and one in Ottawa that is used by researchers. He tells Canadian Communications Reports that the plan for the B.C. test transmitter is in the organizing stage. "It’s not a commercial transmitter, and we aren’t testing the technology. The transmitter will give broadcasters an operational experience," he explains. "This is a big country, and in theory at least, you don’t do everything in central Canada. Vancouver is a big production centre, and it’s a competitive market." The test transmitter will be paid for through donations by participating partners as was the case in Toronto and Montreal (CCR, June 21/02, Aug. 30/01, Nov. 9/00). Shaw unloads cable holdings in U.S. to pay down debtShaw Communications Inc. has reached a deal to sell its U.S. cable operations in Florida and Texas for $300 million (US$197 million). The cableco will use the proceeds to pay down some of the almost $3.5 billion debt owed by the company and its subsidiaries. Twean Subsidiary LLC will buy the Florida system and Cequell II will purchase the Texas system. Shaw acquired control of the two U.S. cable systems when it bought Moffat Communications Ltd. of Winnipeg (CCR, March 29/01). CRTC grants Food Network licence change on ownership The CRTC has granted a licence amendment to the Food Network Canada Inc. that eliminates the requirement that Corus Entertainment Inc. or any of its affiliates obtain CRTC approval prior to owning 10% of voting shares in it (Broadcasting Decision 2003-75). The request came following the elimination in 2001 of the CRTC policy that restricted cable-affiliated ownership of analog channels to 10% of voting shares (CCR Update, Jan. 8/03). Corus increased its voting interest in the specialty television channel to 22.59% from 10% with CRTC permission (Broadcasting Decision 2002-465). Alliance Atlantis Broadcasting Inc. remains the majority owner of the channel.

CCR Short Takes

Broadcast | February 28, 2003

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