CFTPA seeks spending cap on foreign programs & new rules to make Canadian shows more profitable

The Canadian Film and Television Production Association (CFTPA) wants the CRTC to cap the amount of money domestic broadcasters can spend on foreign programming, saying the savings will improve the industry’s bottom line and allow them to boost their investments in profitable Canadian shows. Appearing before the regulator on day four of its group-based licensing hearing, CFTPA CEO Norm Bolen said a spending cap would compel broadcasters to treat Canadian programming as an avenue for cash generation, rather than a liability. In the long run, he predicted that a CRTC-mandated Canadian Programming Expenditure (CPE) regime on English-language conventional broadcasters would result in profits for the industry. “When done properly, CPE obligations can be good public policy and good business,” he said. In its written submission to the commission, the CFTPA supported a group-based CPE model. But at the hearing, the association said it was no longer in favour of the idea because it would undermine the uniqueness of pay and specialty services and erode diversity in the system. Instead, it is suggesting that the existing system, which spells out individual CPE requirements for each specialty and pay service, be maintained on the basis that these services are profitable. However, the CFTPA also called for an “overall” CPE regime for English-language over-the-air broadcasters. Commissioners were quick to query Bolen on whether he thinks foreign programming isn’t profitable, to which he replied: “Some of it, but I would submit not all of it.” Commissioners also wondered if a CPE regime would make broadcasters back down from calling for a fee-for-carriage but Bolen said that is a hard question to answer. “The question is, will they still need money from value for signal. I don’t know, that’s a good question,” he said. Bolen told regulators the CFTPA is not entirely opposed to putting a value on TV signals if it will improve the financial fortunes of the broadcast industry. But he decried the public battle between BDUs and broadcasters on the issue as “divisive” and not helpful. Calculating the CPE regime would be pegged to expenditures spent over a period of time. “We believe the simplest way is to examine the Canadian programming expenditures actually made by conventional broadcasters over an appropriate number of years as a proportion of that broadcasters’ total over-the-air television revenues,” said Mario Mota, VP, broadcasting policy and regulatory affairs at the CFTPA. Tom Cox, president, Seven24 Films, who participated on the CFTPA panel today, said a CPE regime is desirable but is not the only way to boost broadcasters’ bottom lines. He recommended that the CRTC “tighten up” the categories that qualify as priority programming. At minimum, Cox said eliminating entertainment magazine programs, would be of help to the industry. The CFTPA also reiterated its call for an equitable terms of trade regime between broadcasters and the CFTPA, saying licences should not be renewed unless such an agreement is in place. “Without this incentive, broadcasters will not be willing to engage in meaningful Terms of Trade negotiations,” said John Barrack, the CFTPA’s national executive VP and counsel. The hearing continues on Friday with testimony from Shaw Communications Inc., Canadian Media Guild, FreeHD, Brag Communications Inc., and Association des producteurs de films et de television du Quebec (APFTQ).

CFTPA seeks spending cap on foreign programs & new rules to make Canadian shows more profitable

Broadcast | November 19, 2009

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