Challenges await Canadian producers: Barna

Laszlo Barna, chair of the Canadian Film and Television Production (CFTPA), talked about the coming challenges for Canadian producers in the domestic and international markets on October 29 at the Film and Television Summit in Toronto. Below is an excerpt from his speech. ...Let me begin by offering just a few statistics, some of which you may know, but others that might surprise you: Canada buys more U.S. television programming than any other country in the world. 80% of Canadian homes receive nearly every conceivable U.S. television service - from NBC, CBS and ABC, to Fox, PBS, CNN and TSN (sic). Under CRTC guidelines, only eight hours, or a maximum of 35% of the 28 hours of prime time programming over seven days, has to be Canadian. Only 2% of the total box office is earned by Canadian features. The rest is earned by playing foreign - primarily American - movies. So, lots of figures, but what do they mean? Well, they tell a very interesting - and in some ways disheartening - story. A story in which 98% of our theatres run foreign films and 65% of our prime time viewing is taken up with programming other than our own…The average hour of American drama costs $3 million Canadian to put on the air. The average Canadian drama costs just $1 million Canadian…I once did some research and found out that one episode of ER cost as much as one full season of Da Vinci’s (Inquest). ...When you have less money you can’t have as many characters, you can’t have as many storylines and you’re shooting in a small studio. That makes it difficult to compete. But the fact is, we do very well with very little. We could do amazing things with more. So let’s be clear: Canadian producers do not need their hands held, but neither can they be expected to perform with their hands tied. And yet, in many ways, tied they are. You know the challenges as well as I do: Financing is needlessly complicated. Mountains of paperwork, a labyrinth of deadlines, confusing criteria and reams of regulation mean that most producers incur significant banking and legal costs just to maintain cash flow as they wait for a green light from agencies or a return from a tax credit. We lack the financial clout of our American competitors - not only to produce shows, but to promote them. …More generally because our population is small compared to the United States’, our licensing fees are proportionately smaller, meaning our producers get less. …We have witnessed tremendous consolidation among American networks and the major studios, which has increased their in-house production and decreased demand for independent production. Thanks to simulcasting, our prime time schedule - at least in English Canada - is largely determined in Los Angeles. As a result, Canadian broadcasters say they have little flexibility as to where they can place Canadian programming. …Also, we have government policies that too often hurt - not help - Canadian producers. Let me just mention three - the funding of the Canadian Television Fund (CTF), federal tax credits and licence fees. As I’m sure most of you know, the last federal budget cut funding to the CTF by $50 million over the next two years…Next, federal tax credits. As you know, these tax credits were supposed to be used to capitalize companies. Instead, they’re being used to finance underfunded productions…Finally, there is the issue of licence fees. At the moment, broadcasters pay licence fees for Canadian programming that amount to between 15% and 35% of actual production costs. In the U.K. and the United States, by contrast, broadcasters pay licence fees that add up to about 80% of production costs! The licence fees are set out by the CTF and are not competitive. …Let me just quickly mention one other challenge facing our industry and that’s technology. …New innovations, such as TiVo, which is available in the U.S. and allows people to store television shows and watch them when they like, commercial free, could have a devastating impact on advertising revenues. And as broadband expands, movies and television programs will be delivered to home computers, without regard for borders or international licences. Indeed, this technology could make the current concerns over satellite dishes look like a tempest in a teapot by comparison.

Challenges await Canadian producers: Barna

Broadcast | November 14, 2003

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