CCR Short Takes

Macerola report criticized for being too lenient on CanConThe François Macerola report on Canadian content is coming under fire for its proposed sliding scale that could potentially allow more foreigners to work on shows that receive public money and are certified as Canadian. "We require from the outset that the top three creative positions - writer, director and lead performer - be held by Canadians. That is the principle. Nevertheless the (proposed) system allows for the use of a certain number of options, depending on the genre and the public benefit that the application will be seeking," Macerola explained in a June 17 conference call with reporters. He pointed out that a foreign actor or writer could be integrated into a production team, by exercising an option. The more options that are exercised the less support would come from government. The amount of tax credits would also vary, depending upon how many options are exercised. For example, if three options were exercised the tax credit would be at a base rate. If two options are exercised, the tax credit would be the base rate plus 5%, one option would generate a tax credit of the base rate plus 10%, and no options would mean a tax credit of the base rate plus 15%. While Maureen Parker, executive director of the Writers Guild of Canada, is not opposed to a sliding scale, she tells Canadian Communications Reports that she wants it to move in the direction of a tighter, not more flexible, definition of CanCon. "Now, there is certainly a significant level of Canadian talent resident in Canada, so we should be moving toward a stricter definition, not more flexibility," she says. "Initially, the system was created so that we could develop Canadian talent, and now 20 years later we're reducing the requirements." Macerola, the former head of both the National Film Board and Telefilm Canada who was hired by Canadian Heritage to produce the report (CCR, April 12/02), recommends replacing the current points systems with one based on creative expenditures that includes categories for money spent on authors (story acquisition, writer, music acquisition, music composer, director), creative collaborators (director of photography, picture editor, sound editor), performers (principal actors, actors, off-camera performers) and technicians (construction supervisor, hair, makeup, costume design). Ontario forms public-private film and television consortium A new Ontario Film and Television Consortium (OFTC) was formed on June 26 to promote Ontario as a film and television production centre. A priority in the new organization's goal of pumping up marketing efforts to build Ontario's profile as a film and television centre is expanding a current marketing office in Los Angeles. This move will cost about $400,000 this year. The new group is a public-private partnership with membership including more than 30 companies, unions and guilds representing 25,000 industry workers, and the Ontario Media Development Corp. "In the past 10 years, people working in Ontario have been able to rely on steady growth. In the next 10, we're going to have to work more closely together to tackle some very serious issues hindering future growth - and threatening the work we've got now," OFTC co-chair Brian Topp said in a media release. Topp is also executive director of the Alliance of Canadian Cinema, Television and Radio Artists Toronto Performers. Some productions have decided against shooting in Toronto due to fears over SARS, and the rising Canadian dollar has also had a negative effect on the sector. Foreign labels capitalizing on Canadian musiciansNet sales for Canadian singers and bands reached $154 million in 1998, a 15% increase from 1995-96, according to a June 20 report by Statistics Canada. Although the report, Hitting a high note: Canadian recording artists in 1998, is focused on data from five years ago, StatsCan notes that current national and international charts confirm that this trend continues today. But the report also points out that "foreign-controlled firms were very successful at attracting and signing our established Canadian talent. Although these firms reported only 20% of the new releases by Canadian artists, they accumulated 49% of the net sales by Canadian singers and bands." CAB declines to challenge music reproduction tariffThe Canadian Association of Broadcasters has decided not to appeal a tariff on music reproduction that was announced on March 28. The Copyright Board of Canada ruled that radio stations had to pay for making reproductions of music for broadcast purposes, such as from a CD to the radio station's computer system (CCR, April 10/03). CAB opposes CBC request to CRTC on Hollywood filmsThe Canadian Association of Broadcasters (CAB) is opposing a request by the public broadcaster for a licence amendment that would allow it to continue to air blockbuster Hollywood movies. The CRTC imposed a condition of licence on the Canadian Broadcasting Corp. during its licence renewal in 2000 that requires it to drop all Hollywood blockbusters from its prime time schedule by Sept. 1, 2003 (CCR, May 23/03). The CAB argues that the "CBC's presence in the bidding process continues to inflate the market for Canadian broadcast rights to foreign feature films." The CAB tells the CRTC in its June 13 filing that private broadcasters already provide viewers with enough foreign films. Its submission notes that assuming an average running time of two hours, private Canadian broadcasters provided the equivalent of 31 foreign feature films every week in the English-language market, and 26 foreign features every week in the French-language market. Furthermore, the CAB says that the CBC "has failed to advance any valid policy rationale for the deletion of its existing conditions of licence pertaining to the programming of foreign feature films" and has failed to show that market conditions have changed. Shaw signs VOD content deal with major Hollywood studioShaw Communications Inc. has signed a long-term agreement with Twentieth Century Fox to provide movies and other programming content for Shaw's video-on-demand (VOD) and pay-per-view services. The deal will provide Shaw's VOD customers with far greater variety and quality of content. Rogers Cable Inc. was the first cableco in Canada to sign a VOD output deal with a major Hollywood studio (CCR Update, May 28/03). Cable Satisfaction receives protection from creditorsQuebec-based Cable Satisfaction International Inc. (Csii) has voluntarily filed for and obtained an order from Quebec Superior Court for protection under the Companies' Creditors Arrangement Act. The move will facilitate consideration and implementation of the company's proposed recapitalization and restructuring plan announced June 13. Csii's subsidiary in Portugal, Cabovisao - Televisao por Cabo, S.A., is not subject to the court order. Alliance Atlantis pumps money-losing diginetsAlliance Atlantis Communications Inc. continued to be optimistic about its digital channels in financials released June 23. "While Alliance Atlantis' new specialty channels recorded losses that are lower than anticipated in our business plan, they have also distinguished themselves with both audiences and advertisers in a competitive market," chair and CEO Michael MacMillan said in a media release. "Our new specialty channels represent just 15% of those launched in September 2001, they account for 28% of viewers, 37% of advertising revenue and almost 21% of total subscriber revenue for all new specialty channels." The company's seven developing channels (Showcase Action, Showcase Diva, IFC: The Independent Film Channel, National Geographic Channel, BBC Canada, BBC Kids, and Discovery Health Channel) generated revenues of $5.6 million in the quarter ended March 31, 2003. Revenues from the company's operating channels (Showcase, Life Network, History Television, HGTV Canada, Food Network Canada, Series+ and Historia) increased 32% to $43.8 million in the quarter. Subscriber revenue from the operating channels was up 12% and advertising revenue jumped 65%. Shaw Communications to cut another 350 positionsShaw Communications Inc. plans to cut another 350 positions over and above the hundreds eliminated in the past year or so, the company announced June 27 in its third-quarter financial results. The plan will entail severance costs of about $4 million and should result in annual savings of $15 million. On the financial side, total revenue increased by 5.9% in the quarter ended May 31, 2003 to 521,659. Shaw posted a net loss of $13.2 million in the quarter compared to a loss of $79.3 million in the same period last year. On the subscriber front, basic cable subscribers increased by 7,009 in the quarter to 2,124,853. That's a significant improvement over the 19,325 basic cable subscribers lost in the same period last year. Digital boxes in service increased by 11,678 to 547,219 and digital households increased by 6,705 to 488,279. Shaw's satellite TV subsidiary, Star Choice Communications Inc., added 8,259 subscribers in the third quarter to end the quarter with 804,516 subscribers.

CCR Short Takes

Broadcast | June 30, 2003

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