Actors, producers, and directors want BDUs to share half of all ad revenues from local avails

If BDUs want to keep as much as $109 million in new revenues from ads inserted into the two minutes per hour of local avails on US programming, they should be prepared to hand over half to support Canadian programming, organizations representing actors, producers and film directors tell the CRTC. The Directors Guild of Canada (DGC), the Alliance of Canadian Cinema, Television, and Radio Artists (ACTRA) and the Canadian Film and Television Production Association (CFTPA) say BDUs have made only vague commitments to use part of this new money to support Canadian programming. If the CRTC decides to change its longstanding policy on local avails, any benefits to the broadcasting industry should be enshrined in regulation, the groups insist. The DGC, ACTRA, and CFTPA made the comments in response to the CRTC’s review of a proposed framework on commercial advertising on local avails. Specifically, the commission is exploring how a new framework would contribute to new forms of advertising on digital platforms, promotion, and creation of additional funding for Canadian programming. BDUs and broadcasters have provided varying figures, saying ads on local avails could generate anywhere from $20 million to $109 million annually. The DGC says the disparity is making it “wonder who the Commission will believe,” when making a ruling. “In the DGC’s respectful view, this wide disparity in the estimates displays the risk that the Commission would be taking if it took a chance in changing the rules in the face of this uncertainty,” writes Brian Anthony, national executive director and CEO. Apart from the disparities in the figures provided, the DGC, ACTRA, and CFTPA also argue that BDUs have fallen short of the expectations required by the CRTC to warrant a new policy on commercial advertising on local avails. “This proceeding presented BDUs with the opportunity to make the case that allowing them to access additional revenue would produce a net benefit for the broadcasting system; it is ACTRA’s view that they have failed,” writes Stephen Waddell, ACTRA’s national executive director, who echoed sentiments expressed by broadcasters. “They have not adequately answered questions about what they would do with new revenue, and they have not adequately answered questions about what they would do with new revenue, and they have not demonstrated that selling of local commercial avails would increase the ad revenue pie instead of cannibalizing it.” For its part, the DGC accuses BDUs of wanting to take the lion’s share of cash from local avails for themselves, arguing they have not committed any additional funding for Canadian programming, apart from the mandatory 5% (now 6%) contribution imposed by the CRTC. Anthony contends that unless BDUs can prove that targeted advertising will result in benefits for the whole broadcasting sector, the CRTC should refrain from changing the current policy that restricts commercial advertising on local avails. Reiterating a charge expressed by broadcasters, the DGC also says if the CRTC rules in favour of changing the current local avails framework, conventional broadcasters will pay the price. Broadcasters owned by companies that have radio, cable, and television properties, are likely to be cushioned against this impact but others will suffer, the DGC argues. ACTRA, CFTPA, and the DGC also point out that BDU profits are healthy. They view the request to change the existing local avails framework as a money grab on the part of BDUs, arguing that it is “not in the public interest" and the CRTC shouldn’t change the status quo. “They are doing well financially, such that they want to take money away from services that are doing much less well, they need to promise significant additional benefits. They have not even come close to reaching the bar,” writes Anthony. Stakeholders’ projected revenue estimates from local avails if the current policy is changed Rogers Communications Inc. $20 million for Rogers, $45 million for the whole broadcasting sector Shaw Communications Inc. $50 and $60 million annually for most parties Bell Aliant/Bell ExpresVu/Bell Canada $2 million for Bell and $20 million annually for all parties Canadian Association of Broadcasters (CAB) $64 million (figures from 2007 CTVglobemedia and Canwest $73.3 million and $81.4 million Canadian Media Director’s Council $30 million in year one of a new local avails framework Source: DGC

Actors, producers, and directors want BDUs to share half of all ad revenues from local avails

Broadcast | April 17, 2009

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