Introduce tax credits for advertisers in order to boost Canadian drama, Switzer suggests

Ottawa should consider implementing tax credits for advertisers that buy time during Canadian programming to help the ailing television industry, says CHUM Ltd. president and CEO Jay Switzer, though he was short on specifics. "As to what the percentage might be or what the mechanism might be, I don’t have specifics. But I wanted to table it as a legitimate idea that could be considered in a long list of five to ten ideas that everyone is looking at," he tells Canadian Communications Reports. "We tried to look at all stakeholders as opposed to government versus producers versus broadcasters to say if we’re going to look at solutions, we should look at it in the context of every stakeholder…And if you’re looking at the balancing of responsibilities and opportunities and perhaps incentives, we should look and consider the possibility of incentives involving advertisers." Switzer made the suggestion of advertising-based tax credits during his speech at the Canadian Association of Broadcasters (CAB) luncheon June 9 at the Banff Television Festival. It’s an original proposal that wasn’t among the incentives for the creation and airing of Canadian drama in Trina McQueen’s report on English-language drama (CCR, June 5/03). In his speech, Switzer noted that research showed that even mediocre U.S. programs are a preferred buy for advertisers against Canadian dramas with similar ratings points. "We need to creatively find a way to bring advertisers to the table," he said. "Obviously, increasing audience helps…but perhaps one step further outside the box…advertisers could avail themselves of a tax credit bonus for spending specifically on Canadian priority programming." He pointed out that two major effects could result. First, it could create commercial success for hit shows that would in turn allow broadcasters to make stronger investments in Canadian programming. Second, it would give private broadcasters an added incentive to invest in Canadian drama instead of buying more mediocre U.S. shows. "So while tax incentives for advertisers may be extremely unorthodox, I think we need to look to all of the players in the system to help us make it to the top of the drama summit," he commented. Delegates at the Banff festival greeted his proposal positively. "It’s not a bad idea," Richard Paradis, president of the Canadian Association of Film Distributors and Exporters, tells CCR. "When broadcasters come up with ideas like that it’s because they’ve really thought them out and it’s going to be the next thing they’re going to push." Paradis says that Canadian broadcasters are "shaking" because at some point they fear the Americans will stop selling them programming. "We know about the little Canadian content they put on the air, and the fact that they count so much on the American stuff. But at some point, the Americans are going to say, ‘Look, I’m going to make more money by keeping the rights for my product in the North American market.’ About 85% of Canadians are getting access to American product (on U.S. channels) either through cable or satellite. So the Americans are going to say, ‘Hey, I don’t need these guys (Canadian broadcasters).’" In his speech, Switzer noted that this outcome is already beginning to occur. He said that Hallmark chose not to license the movie Painted House in Canada when it was broadcast in April on CBS as a movie-of-the-week. "Hallmark bought all the advertising on CBS and ran ads promoting the movie in the U.S. and Canada, including full-page ads in Canada pushing CBS. This is a very visible next step in the creation of a North American market; controlled, programmed and sold by New York for North America," he said.

Introduce tax credits for advertisers in order to boost Canadian drama, Switzer suggests

Broadcast | June 20, 2003

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