Canadian Heritage Committee on May 1st, 2007

[Ted East, President, Canadian Association of Film Distributors & Exporters]

Yes. I should say that we only became aware of this in the last couple of weeks, so we didn't submit a written submission before this.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Go ahead, sir.

[Ted East]

Thank you for the opportunity to appear here.

My name is Ted East. I am president of the Canadian Association of Film Distributors & Exporters, or CAFDE, as we are known. CAFDE is a non-profit trade association that represents the interests of Canadian-owned and -controlled feature film distributors and exporters. Members include Alliance Atlantis Distribution, Christal Films, Equinox Films, Maple Pictures, Mongrel Media, Séville Pictures, and TVA Films.

CAFDE members distribute over 90% of the non-studio and Canadian films released theatrically in Canada each year. CAFDE members distribute films in Canada from all over the world, in the widest range of genre and budgets. While this committee's work here is involved in looking at the role of the public broadcaster in a wide range of activities, I'm going to restrict my comments to what CAFDE feels is the need and the role of the public broadcaster in the area of feature films.

Although CAFDE members distribute a wide variety of programming and all media, feature films are their main business focus and the foundation upon which their companies are built.

Theatrical films follow a consistent value chain or a series of windows. For a typical film, the sequence is theatrical, home video and DVD, pay-per-view, pay television, network television, and then cable television. Although most of the media focus and government expectation are on the theatrical release, most of the audience and revenue come from the post-theatrical or ancillary markets.

In the 1930s, the average Canadian would go to the cinema between 40 and 50 times a year. Today that figure is four to five times a year. However, we have not lost our appetite for feature films, and it's as strong as ever. But we are watching them at home far more than we watch them in the cinema. I believe, as do most of my members, this number is going to grow as the presentation at home becomes better than it is today.

The cost of marketing a film theatrically has grown considerably in the past ten years. It is very rare that a film will recoup its theatrical release costs from theatrical revenues alone. As such, the strength of the ancillary markets is critical in determining not only what films a distributor will buy, but how much will be offered for the rights and how much will be spent on marketing.

As a consequence, strong programming support for feature films in the broadcast sector transcends simple economics on individual titles. It is critical in building a wider appreciation of cinema and a greater awareness of actors and directors.

Despite the growth of the subscriber base of the pay-TV services over the past five years and the licensing of a number digital channels with high levels of feature film programming, a traditional over-the-air, OTA, broadcast remains the most lucrative television window for feature films, both in terms of revenue and audience.

Support for feature films by over-the-air broadcasters in English-speaking Canada has generally been weak and inconsistent. This has no doubt played a role in the failure of English-speaking Canadian films to reach a wider audience. Of the major over-the-air broadcasters, only CHUMCity has made a consistent and significant commitment to broadcasting Canadian films. Neither CTV nor Global have made commitments to feature films, and they do not have the conditions for program licensing requirements.

Support for feature films from over-the-air broadcasters in French-speaking Canada has been much stronger, particularly from Radio-Canada. This support has been an important cornerstone in the extraordinary success of French-language Canadian films over the past five years. For the success to continue, it is critical that the over-the-air broadcasters in French Canada continue their support, particularly Radio-Canada.

It is interesting to note that in the United Kingdom, where the indigenous film industry is much more successful than in English-speaking Canada, there is strong support for feature films from all five over-the-air broadcasters.

In data supplied by the U.K. Film Council, we discovered that in the years 2002, 2003, and 2004, over 2000 films per year were broadcast by the five over-the-air broadcasters. On average, each year over 475 were indigenous productions. The support for feature films was fairly evenly divided among the five broadcasters: BBC One, BBC Two, ITV1, Channel 4, and Channel 5. This suggests a healthy competition that could only benefit distributors and producers.

We believe it is critical for the public broadcaster to play an important role in the development, promotion, and broadcast of feature films. This will be necessary if we are to build on the success we have had with French-language Canadian films and achieve the success in English Canada that we have long sought and deserved.

In its 2000 licence renewal, the CBC committed to invest $30 million over five years in the production, acquisition, and promotion of Canadian feature films. However, this was not a condition of licence. While we could not find exact figures, it is clear that the CBC's investment fell considerably short of that mark.

So I am here today to strongly recommend that support for feature film be mandated as a condition of licence going forward for both the CBC and Radio-Canada.

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

Ms. Keeper.

[Tina Keeper, Liberal, Churchill, MB]

Thank you.

Thank you very much for your presentation, Mr. East.

I would like to ask you about the relationship between Radio-Canada and French-language films. How is it that it is working so well? What is the difference between that relationship and English films and the CBC? What is the difference in terms of the French and the English sides of the CBC, and the filmmakers?

[Ted East]

There are a number of differences. First of all, the volume of films that they get involved with is considerably higher.

[Tina Keeper, Liberal, Churchill, MB]

For clarity, is this from an initial financial commitment?

[Ted East]

Yes, a lot of it is an initial financial commitment. A lot of it goes into the actual financial structure of the film. When a broadcaster, particularly one like Radio-Canada, gets involved, they're involved in the development of the film quite often, and they're involved in the financing of the film, so they're very much part of the family, as it were. They're very invested in how it does theatrically, and they're there to promote it at the theatrical side, and then when they broadcast it, they do a lot of on-air promotion as well.

I would have to say that they understand the theatrical business. They understand and respect the windows, which I have to say is not always the case with the CBC.

[Tina Keeper, Liberal, Churchill, MB]

I was just going to ask you that question, because there are the windows that you talk about. So when you're talking about a theatrical release, would that be the initial window?

[Ted East]

Yes, the theatrical release is the initial window.

[Tina Keeper, Liberal, Churchill, MB]

Then Radio-Canada broadcasting of it would be a second or third window?

[Ted East]

It's a third window. It would certainly be after DVD, home video.

[Tina Keeper, Liberal, Churchill, MB]

Oh, it would be after DVD.

[Ted East]

It's mostly after pay-television as well, unless they have pre-empted it by a condition of their licence by putting up more money.

[Tina Keeper, Liberal, Churchill, MB]

Then on the flip side, if we look at English filmmaking in Canada, typically, I understood that a broadcaster would not get involved, would not be so invested, if they wouldn't have that first window.

[Ted East]

That has been the CBC's position a number of times—certainly, most recently, dealing with them in the documentary project that Telefilm and the CBC put together to do theatrical documentaries. The CBC was initially insisting on a first television window coming on the heels of the theatrical release, which really, in some cases, would have pre-empted the exploitation in the home video market, though I understand that as this project has been renewed the CBC has understood that an orderly window is necessary for it to be considered a theatrical film and to maximize the revenues.

[Tina Keeper, Liberal, Churchill, MB]

Does that maximize the revenues, then? If you're going to invest in feature film, for Canadian filmmakers, the optimum is then looking at theatrical release—I'm just talking about the optimum here—and then DVD and pay-per-view, and the broadcaster window would come later.

I don't know this process in terms of production, but I think it's really important information for us, because one of the things I'm really concerned about is the declining commitment we have to Canadian filmmakers and Canadian content makers. I think we're in a bit of a crisis as a country, and this type of information is really important for us to understand at this committee table.

Then, for filmmakers, this would be one of the real challenges, or almost an obstacle. Is that correct?

[Ted East]

Having a national broadcast?

[Tina Keeper, Liberal, Churchill, MB]

Yes, for broadcasters to insist on a first window. Or are there different types of films we could be investing in that the broadcaster could have first window on?

[Ted East]

I don't want to overstate that. I don't think it's a serious problem. I think it has been a problem in the past.

I know about ten years ago when I was working for Alliance Atlantis I was working with the CBC on a number of feature films, and I would say I was a little bit frustrated with their view. They were seeing it as really a movie of the week for their purposes and not fully appreciating that it was a feature film for world exploitation. Their window was limited to their broadcast, and they really needed to appreciate that it was going to go out theatrically, not just in Canada, but hopefully around the world as well, and that certain aspects of that in terms of the script and the casting needed to be different, perhaps, from what they might have wanted if they had been positioning it as a movie of the week. But again, that's ten years ago.

What we would like to see is for the CBC to become a real partner with the independent producers and the distributors in pre-licensing feature films, helping to develop them, and gaining a sort of keen appreciation of what distinguishes a feature film from a television movie.

[Tina Keeper, Liberal, Churchill, MB]

Thank you.

[The Chair, Conservative, Gary Schellenberger]

Mr. Kotto.

[Maka Kotto, Bloc, Saint-Lambert, QC]

Thank you, Mr. Chairman.

Good day, Mr. East.

The culture of partnership at French-language Radio-Canada is such that the company gets involved at an early stage in feature film productions, and we are talking about feature films here. And this works because alongside this culture there is a star system which really serves the actors, producers, and screenwriters involved in these projects well. These people are generally held in high regard by the public, and the Quebec public is faithful to all these groups of people.

Does an equivalent model exist at the English-language CBC?

[Ted East]

I think there could be. I don't think we will ever, in English-speaking Canada, achieve the star system that we have now in Quebec, for lots of reasons.

To get back to what Tina Keeper was saying earlier, the optimum sequence for a film is to have a national broadcast, which it doesn't always have. Because that is the largest audience you're possibly going to get for your films, sometimes exceeding the theatrical release. The larger your audience, the more the public becomes interested in and aware of the actors.

We have a film opening this Friday called Away From Her, Sarah Polley's first film, which has Julie Christie, who's a well-known British actor, and Gordon Pinsent, who's a national treasure and a fairly well-known actor in English Canada. I think the theatrical release is going to make people aware of him again. But having a national broadcast of this film—and they may have one, I'm not aware that it does or doesn't—will add to the star value of Mr. Pinsent the next time he's in a movie. It will make it easier to market the film, particularly if the film is a success, which I believe it will be.

But the star system in English is a difficult nut to crack because the most famous English Canadian actors are working in Hollywood. Sometimes they come back here, but mostly they don't.

[Maka Kotto, Bloc, Saint-Lambert, QC]

I see. I was getting to that.

I'm not really familiar with the particular phenomenon you're describing, but isn't this one of the things preventing CBC from modeling itself on the SRC when it comes to partnerships or "co-productions"?