Canadian Heritage Committee on April 26th, 2007

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

I took note of the second last point in your brief, where you speak of unduly lengthy licence agreements. I read that there were unnecessary details and that you asked the CBC to ensure an equitable sharing in rights exploitation.

Does this mean that current practices are not fair and equitable? Please give me your frank opinion.

[Guy Mayson]

It's a complicated issue, but what we're seeing with all broadcasters is a much more aggressive stance on the licensing and acquisition of rights, all rights, from producers.

The rights for exploitation start with the producer, but ultimately you're attempting to get your project financed. The broadcasters have huge leverage and influence at the initial stages of developing your show. What we've seen over the last two or three years in particular is that the length of licence terms is longer, and the number of runs acquired for those licences is multiplying. You're getting deals where additional ancillary and non-broadcast rights, or the new media rights, are being demanded as part of the initial licence—forever, in some cases.

I'm not saying that this is specific to the CBC; it's a general phenomenon. But the CBC is attempting to compete, and wanting to diversify its platforms and maximize the value of its rights, like all broadcasters. So generally we're running into this extremely aggressive behaviour.

We have the terms of trade agreement with CBC. It's the only proper terms of trade agreement we have. We find that it's a good accord, a good start. We finalized it in 2002, and the world has changed a great deal just in that time. So we're looking to reopen terms of trade discussions with the CBC, and we're in the middle of terms of trade discussions with CTV right now. It's a very constructive process.

But your question goes right to the heart of what that's about, which is to establish a fair framework for the negotiation of contracts.

[The Vice-Chair, Bloc, Maka Kotto]

Thank you, Ms. Bourgeois.

Ms. Priddy.

[Penny Priddy, NDP, Surrey North, BC]

Thank you, Mr. Chair.

Thank you to the witnesses for appearing.

I want to talk about stockpiling, but in a somewhat different way. I understand that it has come up in other committee meetings that there is an amazing backlog of programming at the CBC, but it's not available.

There are those of us at the table who can remember—I don't know how many decades back—what that programming looked like. When I first got married, CBC was the only television station we could receive in northern Ontario.

All those programs that people would love to see through the Internet aren't available. This was part of the discussion in the last ACTRA agreement concerning compensation for performers and so on. This was one of the things that held that back.

If you could, please talk about how we can move forward getting the CBC catalogue online—there are some amazing programs there—and what the costs might be. Can you think of a fair distribution system for doing this? I'd like to give you a chance to put this on the record.

I know that the BBC has their online catalogue now, so somehow they've been able to reach an agreement about how to do that. Perhaps you could comment on this as well.

Thank you.

[Guy Mayson]

That's an excellent question.

My understanding is that it's largely a money issue, ultimately, in terms of additional residual payments that would need to be made, so they're in the ironic situation of having the rights to a lot of their own programming, but the additional dollars involved would, in their view, be prohibitive and make it virtually impossible for them to broadcast it.

It might be a useful recommendation for this committee to have a look at this idea. Could the various parties involved actually get together and see how this could be facilitated in some way? My understanding is that it has been looked at in the past, and the results have been ultimately a bit of a gridlock situation.

You're absolutely right, I think, in terms of the changing world. It would be amazing to find an equitable way of making this programming available on multiple platforms, which is certainly the direction they've gone in the U.K. in terms of the BBC's own archives.

[Mario Mota]

It's important to point out that a lot of that back-catalogue programming is not necessarily programming that's been done by independent producers, from our members. It's been a recent trend, I guess the last five years or so, for the CBC to move aggressively into using independent production to fill its Canadian content schedule.

I would venture a guess that a lot of the programming we're talking about getting onto the Internet really has nothing to do with us. We don't have the rights to those programs. We didn't create those programs. So the issue is really the CBC discussing with the rights-holders--music-holders, or whoever it may be for those programs--to be able to get access to those rights to make it available on the Internet.

[Penny Priddy, NDP, Surrey North, BC]

Do you know how the BBC reached an agreement with people to do it?

[Guy Mayson]

To be fair, actually, no, I don't know the details. I do know it was a similar issue in terms of how that was done.

Mario's point is well taken; in many cases the BBC's programming, up until very recently, was fully commissioned programming with a producer, so to a large extent the BBC would basically retain all rights. It was really very much an issue of the BBC's having to sort out internally how they would make this programming available and how they would compensate people adequately. It wouldn't have been an issue on which they would be dealing with the independent sector to the same degree they are now.

[Penny Priddy, NDP, Surrey North, BC]

To finish this point off, I worry that it comes up at negotiation time, or it comes up when somebody asks a question, and then it gets put back in the drawer until somebody raises it again. Do you see a point to some ongoing joint commitment to move this agenda forward? I really worry that this is lost to Canadians and, as I say, only comes up when you do a review or it comes to negotiation time. There's nothing in between that's actually....

The worst time to try to do this is at negotiation, I suppose. Could there be some ongoing initiative to try to find some reconciliation, or at least to begin to do it in a partial way? I recognize that money is the primary issue. I understand that, but I don't know whether there's a way to do it in a phased-in way or a year-by-year way.

Do you have any thoughts on that, or do we just wait until the next time somebody asks the question?

[Guy Mayson]

I would just reiterate what I said earlier, that I think it's a very important issue. An interesting recommendation to come out of this committee could be to get the stakeholders together and look at how this could be done. Particularly when you look at the multi-platform world we're living in now, with so many different ways of accessing content, I can't imagine there wouldn't be some interest on the CBC's part to find a way through that.

[Penny Priddy, NDP, Surrey North, BC]

Thank you. You've answered this question as well as can be, I guess.

I worry, with the number of new Canadians we have...well, I don't worry about that; I think that's joyful. But past programming offers an insight into a large part of what our country was like when television was developing, and that's shut off to people. They don't get to see it. Some of that programming was quite amazing.

Thank you, Mr. Chair.

[The Vice-Chair, Bloc, Maka Kotto]

Thank you.

Mr. Abbott.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you.

Thank you to our witnesses.

You introduced something I'm not familiar with, the phraseology “terms of trade” agreement. Could you describe that to us? I didn't understand what you were talking about in that part of your testimony.

[Guy Mayson]

That's a great question, because “terms of trade” is thrown around quite a bit now. Probably the first question should be on what exactly it is.

Over the last decade, the CRTC has shown interest—in terms of licensing some of the new specialty channels and the licence renewals of the conventionals—in encouraging broadcasters to establish terms of trade agreements with producers. As I mentioned earlier, we have a terms of trade agreement with the CBC, which we finalized in 2002. We're working on one with CTV as we speak.

It really means establishing a kind of framework for contract negotiations between the broadcaster and the producer, and, in our view, setting some basic principles in terms of how the negotiations will proceed. It's also a framework for the licensing of rights. This is probably at the core of it, where a conventional licence will be negotiated for a certain term, a certain number of plays. It's understood that any secondary licensing of specialty channels, etc., would be a separate licence with a separate fee.

We're not saying what that fee is right now. There's interest in exploring that in greater detail, but subsequent rights--pay, DVD rights, new media rights--are sort of separate negotiations, ultimately, recognizing that those rights start with the producer and are licensed for a fair fee.

So it's a negotiating framework. It's not a master contract. If there's room for negotiation to go on within that, I think it's a way of maybe setting a certain minimum standard, both for licence fee levels and the negotiation of the rights and responsibilities of both the broadcaster and the producer within that.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Thank you very much.

[Mario Mota]

Mr. Abbott, I'd like to point out that we did a one-page summary of what we think terms of trade are, some key principles, which we filed with the CRTC about a week or two ago about the CTVglobemedia-CHUM transaction.

We would be happy to share that with the clerk. It will give you a really good summary of what we mean.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

That's excellent. It would be very helpful for our research people in putting together a final report.

The next question I have for you is are there any significant or substantial differences between your negotiations with the CBC versus your negotiations with a private broadcaster? Or is it pretty much the same thing?

[Guy Mayson]

That's another very good question. When you look at our existing agreement with the CBC, it's quite lengthy. It's a sort of comfortable accord with a lot of nice language and good intentions on both sides. Ultimately it's not that useful as a negotiation framework. Frankly, with CTV we're trying to come up with a briefer, more succinct document that's more fundamental and ultimately more useful.

Not to disparage the CBC agreement, but it's just reflecting the changing world, especially on the rights side. The whole world of rights and licensing has become so complicated that we find a need for a framework, simply to help our members in their negotiations with broadcasters.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

If we set aside for a second that consideration--the Canadiana consideration, we'll call it--does it make any difference from the point of view of the Canadian Film and Television Production Association and your subscribers, the people you answer for, where the funding, particularly public funding, may go? I'm thinking within the context of some funding being set aside and available only to the CBC, etc.

From a very myopic, very selfish perspective of your organization, does it actually make any difference?

[Guy Mayson]

I'm not sure I understand your question entirely, but we would see the CBC as having a slightly different mandate from the conventional broadcasters, and certainly the specialty broadcasters.

Our basic view on the CBC is that its production side, and in particular its acquisition side, should be properly funded to fulfill its mandate. Right now that's done through a variety of ways. CBC accesses the CTF, etc., and we support that for the moment. Our preferred view would be to look again at the CBC's role, look at what it could be doing in a changing world, and fund its programming and production capacity and its relationship with the production sector in a proper way.

So we think it comes back to the basic mandate; I think it's slightly different from the conventionals. CBC right now is in this kind of grey zone fighting for advertising and competing with the privates in that respect. Ultimately they are all competing for money at the CTF, etc.

In one way, you can say that's a healthy thing. In another way, maybe the CBC should focus more specifically on quality programming and worry a little less about audiences, worry more about quality, and then be funded properly to do it.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Your recommendations to us are more altruistic than they are mercenary.

[Guy Mayson]

It comes down to good public policy and how things are funded—and recognition that the CBC's role is somewhat different from the conventional sense.

[Jim Abbott, Conservative, Kootenay—Columbia, BC]

Good. Thank you.

[The Vice-Chair, Bloc, Maka Kotto]

Thank you.

Ms. Fry.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Thank you.

I want to follow up on something that Ms. Keeper asked you with regard to co-production and domestic production.

When we were in the west, I heard that many people felt that the CBC had made an agreement to put a portion of their money into doing Canadian productions. While the French CBC, Radio-Canada, etc., had done this very well, I heard that the English CBC has not done it very well. They haven't been putting as much money in. I think they had agreed to put in $30 million a year, and that hasn't happened.

Do you have a comment on that? Is it so? We heard it from some people. I don't know if this is true or false or whatever. Radio-Canada or the French CBC do a lot of local francophone productions out of Quebec, etc. You don't see that many Canadian films shown on English CBC.

I wonder if you agree with that statement, and if so, what do you think should be done to get the CBC to start doing this? That is the first part.

The second part of the question is do you think that the CBC should shift from trying to do in-house productions and therefore, as you suggested, work with independent productions to do the same thing better and cheaper, providing that we look at the whole issue of licensing and making sure that we have fair trade practices?