Digital platforms, global recession threaten Canadian production industry: CFTPA report

The challenge of reaching audiences through digital platforms and the global economic downturn pose considerable threats for the Canadian film production industry, warns a report released yesterday in Ottawa. The 83-page 09 Profile report examines the economic state of the film and television production industry in Canada. Unveiled at the Canadian Film and Television Production Association's annual convention, the report notes that video distribution on online platforms continues to grow rapidly, chipping away at the market share enjoyed by traditional distribution formats. "New digital platforms-online and mobile-are quickly gaining traction with Canadian households; yet, the industry still has no clear sense of how Canadian content will reach audiences over these new digital platforms," the report says. Despite this growth, it appears television, movie theatres, and DVDs still hold the lion's share for the consumption of video. "That dominance will likely continue for some time," it states. The global recession is also hammering the production industry, particularly television advertising revenues, which has contributed to a 7% decline-about $2.3 billion-in production activity for the 2007-08 fiscal year. Although the Canadian dollar has decreased in value compared to the U.S dollar, the report warns that it is still unstable. Protectionist trade measures, if taken by the U.S, pose another threat to Canada's film and television production industry. The good news is that overall the industry is still relatively strong, with domestic production, foreign location and service production and broadcaster in-house production all reporting a 4% growth, or $5.2 billion in the past year. However, it still represents a 7% decline in production activity - or a loss of $2.3 billion - compared to the previous year. The other bright spot is foreign financing for film and television production which grew $17% in 2007-08, generating about $2 billion in new revenue. The downside, however, is international co-production treaties, traditionally an important driver for the industry. Last year, it registered a 48% drop-about $298 million-which is its lowest level in a decade. The report attributes this decline to a steep reduction in joint production ventures with Canada's traditional leading partners, Britain and France. As well, it notes that with a strengthened European Union, other European partners have shifted towards cooperating among themselves because of protectionist measures, shutting Canada out. The report contends that without new policies that promote access for foreign production partners, the figure will continue to drop in the coming years, a point echoed by Wayne Clarkson, Telefilm Canada's executive director, who warned yesterday that Canada's international co-production treaties need to be updated to attract foreign investment. The report specifically calls for flexible co-production treaties and "small adjustments" to existing ones. Innovative new media is a potential growth market-and likely the future-for Canadian producers. But for it to yield dividends, the report says major investments are needed to help the industry pursue multiple markets and new platforms. "The investment trigger lies in the policy and regulatory framework that is put in place to maximize the industry's ability to create innovative Canadian content," it states. Public funding for the Canadian Television Fund, the CBC, the Canadian Feature Film Fund and tax credits are identified as important conduits that will contribute to growth in the industry. While reaching audiences through digital platforms is still a challenge, copyright infringement through online avenues also poses a threat to the industry and may erode its competitiveness on the international market, the report warns. The recommendations call for copyright reform to ensure rights holders get their due and to promote innovation. In light of what it calls the "significant amount of corporate consolidation" in the broadcast market, the report also recommends the creation of a "a level playing field to balance the risk and rewards faced by producers." It notes that the current situation "tilts leverage in the industry towards broadcasters." Additionally, the report suggests that long-term sustainability be woven into the industry's plans, through stable financing for writers, performers, and producers. It calls for a balanced approach to international financing that "will not be sacrificed at the expense of overly rigid domestic content rules." Lastly the report recommends a balanced approach to licensing content that will protect the interests of producers and broadcasters.

Digital platforms, global recession threaten Canadian production industry: CFTPA report

Broadcast | February 20, 2009

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