Mandate IPF contributions for new VOD service: CFTPA

Câblevision du Nord de Québec Inc. (CNQ) recently requested a licence to add a new VOD service to complement its Fleximo digital cable offering. However, the cableco also asked the CRTC for permission to divert the 5% of gross revenues it must pay to independent Canadian production funds to its community channel instead. Below is an edited version of the Canadian Film and Television Production Association’s objection to CNQ’s request. The applicant states...that it is seeking this exception under a provision of paragraph (5) of Section 29 of the Broadcasting Distribution Regulations which permits Class 1 licensees with fewer than 20,000 subscribers that distribute their own community programming on the community channel to allocate the complete 5% Canadian programming contribution to the community channel. In doing so, the applicant appears to consider that the VOD licence it is seeking is merely an extension of its cable operations, rather than a separate and distinct broadcast undertaking, subject to different provisions and obligations. However, there is no provision in the CRTC’s licensing framework for video-on-demand programming undertakings (Public Notice CRTC 1997-83) to reallocate the 5% of annual gross revenues earned by a VOD programming undertaking to the community channel of a related broadcast distribution undertaking. CFTPA recommends that if the application is approved, the CRTC deny the requested exemption and the decision should clearly state that CNQ is required to remit the entire 5% of gross revenues from the VOD undertaking to an independently-administered production fund… CNQ has also requested to be exempt from the requirement that it remit to rights holders 100% of revenues earned from the exhibition of Canadian films. Instead, it proposes to negotiate with film distributors the amount of revenues it will remit. It argues that imposing the standard condition of licence would make it impossible to recoup the cost of broadcasting Canadian films and would thus be a disincentive to broadcast them. As rationale for this request, CNQ states that it operates in an area that is 95% francophone, where Quebec feature films are increasingly popular and in high demand. It cites some statistics published by the provincial government indicating that the proportion of American films screened in the province declined from 84% in 2000 to 72% in 2004, while Quebec-based films increased from 2% to 14% over the same time. It also asserts that of the top 25 films exhibited in Quebec, just two of these were of Quebec origin in 2002, while there were nine in the first six months of 2005. This argument seems to suggest that because Quebec films are attracting larger audiences, CNQ would have to remit more funds to the rightsholders and would thus have less revenue to retain for itself. Surely, a Quebec-based programming undertaking whose primary business is the exhibition of films and events, should be proud to support the creation of more Canadian feature films originating in the province it serves. The applicant has provided no justification for redirecting for other corporate purposes money that the CRTC has mandated to support quality Canadian programming. In addition, CFTPA is concerned that should the CRTC approve this request, it would set an unfortunate precedent that would have implications across the system.

Mandate IPF contributions for new VOD service: CFTPA

Broadcast | August 29, 2006

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