Canadian drama: Everyone says they want it but no one wants to fund it

A recent panel discussion on how best to reconcile the television industry’s cultural objectives with its financial capacity saw industry players passing the buck when it comes to producing more TV drama and paying for it. At the Canadian chapter of the International Institute of Communications conference in Ottawa December 2, Maureen Parker, executive director of the Writers’ Guild of Canada, pushed for a greater contribution from private broadcasters as licence fees they pay are significantly lower than those paid by their counterparts in other countries. But fellow panelist Glenn O’Farrell, Canadian Association of Broadcasters (CAB) president and CEO, argued that private broadcasters are operating under significantly different conditions than those in other countries and that increasing audience fragmentation was hurting their bottom line. He again called for a long-term plan that better marries Canadian programming demand created by CRTC requirements with how much can be affordably supplied (CCR, Oct. 16/03). Robert Morrice, managing director of Proven Concepts, noted that private funding for domestic drama has completely dried up because investors have realized that it doesn’t provide good returns on investment. "We have to do better with the (public) money in the system, and make it go further," he stated. On the issue of funding assistance, Morrice went further, saying that too much time and money is being spent on adjudicating applications submitted to the Canadian Television Fund (CTF) and other funds compared with what eventually makes its way into production. He noted that some experts were charging up to 25% of funds received for completing the paperwork and jumping through the hoops needed to secure CTF funding. Rather than having individuals combing over the applications, he suggested, it might be cheaper to employ a computer-based system using predictive models to disburse the funding - much like the systems banks have set up to determine whether small businesses should receive loans. But Telefilm Canada executive director Richard Stursberg, also a participant at the conference session, disagreed that significant savings could be had through modified application procedures. He noted that the CTF application process has already been changed radically this year, and predicted that further administrative savings would likely be capped at $4 million - equal to only eight more hours of dramatic programming. Next year, the CTF will be able to pump $85 million into English-language drama, or enough for the creation of about 170 hours. The process has been streamlined so that there will be only one application for equity and licence fee top-up funding for dramatic programming. The only agreement the panel members could reach, in fact, was a hope that the Paul Martin government - once installed in power - would restore the public money that was cut from the CTF last year. Panel sounded familiar At times the panel seemed to be following the same script as written submissions to the CRTC in its Canadian drama process. The CAB’s submission to the CRTC, for instance, stresses that spending requirements shouldn’t be re-instituted as markets continue to fragment due to a proliferation of specialty TV channels and technologies such as video-on-demand (VOD) and personal video recorders (PVRs) that decrease appointment viewing. The CAB also opposes regulatory measures that specify the number of hours of high-end drama that must be aired. Rather than spending requirements and hours (spending requirements were removed for the large television networks with the implementation of the 1999 TV policy), the CAB argues the goal to which private broadcasters are committed is a viewing target of 15% for Canadian dramatic programming. The Coalition of Canadian Audio-visual Unions (CCAU), which includes the Writers Guild, Directors Guild of Canada, the Alliance of Canadian Cinema Television and Radio Artists (ACTRA), and others, contends in its own submission that the broadcasters must ante up greater funds to produce high-end domestic drama. The union coalition and the Canadian Film and Television Production Association (CFTPA) firmly reject the CAB’s argument that drama expenditure requirements should not be imposed on expensive Canadian drama because its members receive numerous regulatory protections that allow them to profit from imported programming. The CCAU notes that private broadcasters are protected by: limits to the licensing of new competing conventional TV stations, the simultaneous substitution policy, higher degrees of consolidation and concentration in conventional TV than what’s allowed in the United States, prohibition of competing U.S. pay and specialty services, prohibition of local advertising by cable distributors on local community channels or through local avails, must-carry provisions for some channels, financial support from the CTF, and Section 19.1 of the Income Tax Act. The Income Tax Act prohibits Canadian advertisers from claiming expenses related to the placing of commercials on U.S. border stations. In return for these protections, the CCAU argues that the regulator should force private broadcasters to spend at least 7% of their gross revenues on Canadian drama. The CCAU also wants private conventional broadcasters to increase their licence fees, raise the number of hours of Canadian drama they broadcast, up production volumes, as well as put more money toward script and concept development and ensure adequate promotion and scheduling support. "…TV stations in other countries also contribute a far higher proportion of the budget by way of licence fees for local drama production than is the case for Canada," the CCAU notes. Canadian broadcasters pay licence fees for Canadian programming that amount to 15% to 35% of actual production costs, while U.S. and U.K. broadcasters fork out licence fees that add up to about 80% of production costs, the CCAU points out. The CFTPA is calling on the CRTC to require conventional TV broadcasters to commit 7% to 8% of revenues to drama, and impose a cap of 20% on in-house and affiliated producer drama expenditures. In its submission to the CRTC, the Canadian Cable Television Association (CCTA) trumpets its contribution to the production industry through its contributions to the CTF and other independent production funds, and the "significant amount of local programming that it airs on cable community channels." It doesn’t feel that any more of the production burden should be placed on its shoulders unless it is allowed to use local avails on U.S. specialty channels to sell advertising. The CCTA proposes giving 25% of any advertising revenues generated from a change in the local avails policy to the CTF. "A financially strong cable industry is better positioned to support the Canadian broadcasting industry by providing adequate shelf space," the CCTA notes in its submission.

Canadian drama: Everyone says they want it but no one wants to fund it

Broadcast | December 10, 2003

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