Independent producers should be compensated for each platform: CFTPA

In response to the CRTC’s Public Notice 2006-72, which called for comments on technological change and the future of broadcasting in Canada, the Canadian Film and Television Production Association noted a dearth of Canadian content on new digital platforms. Its submission, excerpts from which appear below, calls for more Canadian content on these platforms, as well as increased cooperation between independent producers and television broadcasters. One of the fundamental principles of the Canadian broadcasting system is the requirement for a predominance of Canadian services. This principle must hold true across all platforms, new and old. Independent producers are concerned, however, that both regulated and unregulated new digital platforms will increasingly be filled by foreign (namely US) content if adequate funding is not made available for the production of Canadian content for new digital platforms. There are already examples of this happening. For example, only a very small percentage of the channels offered by Canada’s two licensed and operating satellite radio providers are Canadian, as approved by the CRTC. Also, only one of the 60 radio channels offered by satellite radio provider XM Canada’s newly launched XM Radio Online service is Canadian. In addition, of the 20 stations available in the newly launched TELUS Mobile Radio service, only 1 is Canadian. Moreover, according to information on MobiTV’s Web site, until the addition of four CHUM Television channels to MobiTV’s Canadian channel lineup on July 31, 2006, the majority of the channels were US programmed. Even after the launch of the CHUM channels, Canadian channels make up a slim majority of the MobiTV Canadian channel lineup (12 Canadian channels out of a total of 22 channels). In light of these disturbing trends, the CFTPA urges the federal government and CRTC to take steps to stimulate the production of high-quality Canadian content for new digital platforms. Moreover, the CRTC should closely monitor developments on new digital platforms and take appropriate actions to ensure a preponderance of Canadian services on these platforms. The System Needs to be RebalancedThe CFTPA submits that all segments of the Canadian television broadcasting industry must be healthy in order for the industry to grow and prosper. This requires a rebalancing of the relationship between Canadian independent producers and television broadcasters. We have demonstrated in this submission that Canadian television broadcasters’ financial health and corporate capacity are much stronger than that of Canadian independent producers. Canadian television broadcasters must recognize that independent producers own the rights in the programs they produce and they must be fairly remunerated for such rights and have the ability to ensure that these rights are fully exploited. Producers in turn recognize television broadcasters’ need to acquire sufficient exclusivity across a variety of platforms so as to ensure they continue to deliver distinctive programming to large audiences. To achieve these objectives, it is imperative that broadcasters negotiate and license separately the rights to each exhibition window and delivery platform. Over the past several years, television broadcasters have pressured independent producers to provide them with additional rights to a variety of new platforms, including VOD, online distribution (downloading), and mobile broadcasting, with little or no additional compensation. Notwithstanding amendments made to the CTF guidelines for 2006/2007, several CFTPA members have been faced with the following situations that we believe are contrary to both the spirit and the letter of the CTF Guidelines:producers of drama, and in particular drama series, have been advised by broadcasters that the granting of some or all of the additional rights referenced above are a conditional precedent to the grant of a broadcast licence; producers have been advised that the broadcaster is not willing to provide any additional compensation beyond the threshold licence fee for these rights, be it in the form of profitsharing or otherwise; and producers are being pressured into non-voluntary concurrent negotiations respecting broadcast licences as well as the negotiation of additional rights. The CRTC stated in Broadcasting Public Notice CRTC 2006-47 that mobile television broadcasting services can offer additional benefits to Canadian producers by expanding the opportunities to create and license new content. The CFTPA agrees that mobile television broadcasting services, and other new digital platforms, provide new opportunities for producers and broadcasters alike. In our view, however, producers must be properly compensated for this further exploitation of the content we have created. Failure to do so would stifle innovation and the creation of unique Canadian content for new digital platforms. Contrary to arguments made by broadcasters and telcos, broadcasters cannot authorize the further exploitation of their signals on a mobile distribution platform unless they have been granted such authority by rightsholders. In this regard, we agree with one of the conclusions of the Green Paper prepared by Nordicity Group for the 2006 Banff World Television Festival cited previously in this submission: that Canadian television broadcasters and independent producers need new terms of trade. As Nordicity put it: "Broadcasters face the paradox of competing vigorously in the mature markets of conventional advertising, while trying to gain entry into new platforms which lack proven business models. Equally, producers struggle with limited funding available for TV productions, while also trying to scrape together funds to experiment with new platforms as well as produce in the more expensive HD format. The key issue is how to develop, monetize and share new platform rights – both sides want ownership and striking the middle-ground where business models are in flux is high art. Until mutually beneficial terms of trade are established, neither side will maximize its benefit from the digital future." The CFTPA submits that there is enormous disparity in the relationship between Canadian corporate broadcast groups and small- and medium-sized independent production companies that create the content that broadcasters need to meet their Canadian priority programming requirements. The UK recognized this disparity and re-regulated its broadcasting system by requiring effective terms of trade between television broadcasters and independent producers, complete with stringent rules and penalties for non-compliance. This has resulted in a rapid capitalization of the independent production sector in the UK, from both private and public equity markets, within the past year. The CFTPA urges the government, through the CRTC, to become more active in helping to rebalance the inequitable relationship that has developed between Canadian television broadcasters and independent producers. The future of the Canadian television broadcasting system depends on it.

Independent producers should be compensated for each platform: CFTPA

News | 09/20/2006 4:00 am EDT

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