Canadian Heritage Committee on April 26th, 2007

[Guy Mayson]

The first part of your question was about feature film, is that right?

[Hedy Fry, Liberal, Vancouver Centre, BC]

Yes, feature film.

[Guy Mayson]

Again, that is a great question. There has always been a bit of a frustration with the CBC for not doing more in the feature film area. And I know there are reasons for that. I think the current CBC management is very interested in looking at film in some ways, doing more. But the current view is that they like to focus on series since these tend to be better audience builders.

While there is a stated desire to meet their current commitments in the feature film area, there has been an ongoing frustration with CBC about doing more in the film area.

It is a great example of where there could be much greater synergy between the theatrical release of a Canadian film and its broadcast date, with the broadcaster being more involved and earlier, and promoting the film.

There is some interest at CBC in doing that, but the reality is that it's very hard to get interest in a feature film from the public broadcaster.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Can you answer me why? I find this interesting: why?

When you look at the BBC, they in fact have made a name for British film, with British talent, all around the world. They have focused a lot on British productions--British film, British actors, British writers, British directors, British producers--so the world is very aware of British talent.

CBC could have a role. Why do you think they haven't? Is it purely a funding matter?

[Guy Mayson]

First and foremost, it's probably a funding issue. Typically in terms of how a film is released right now, the conventional broadcast of a film could be two or three years after the theatrical release. As you know, a film will usually get a theatrical release for some time, and then specialties, pay-per-view, and ultimately some kind of DVD release.

The conventional TV release is way down the road, which is why the commitment to this has been modest. They feel that for what they're getting out of a film, they're only willing to put in a relatively small amount of money.

What is interesting is looking at the whole formula and maybe advancing it. Maybe the conventional release could be brought up much more closely to the theatrical release. There are people looking at that and thinking about it, but it's really about where they feel they get the most value for their dollar. They feel that films, and Canadian films in particular, are difficult to schedule.

Basically it goes back to the difference between the film markets in English and French Canada. French-language films do very well in Quebec. English-language films are doing better in English Canada, but they've always been seen as kind of a high-risk investment.

Going forward, I think the public broadcaster could play a much greater role in that area in a very interesting way.

[The Vice-Chair, Bloc, Maka Kotto]

Thank you.

Ms. Bourgeois.

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

Thank you, Mr. Chairman.

Gentlemen, I would like to come back to the question I asked earlier regarding what you said about unduly lengthy licence agreements. You answered that sometimes the agreements have too many details, some of which are too lengthy.

Does this slow down the pace of negotiations and does it take longer to produce or publish a document?

[Guy Mayson]

In terms of contract agreements in particular, there can be a bit of a shorthand to contracts and the licensing of products, and it can go very quickly. What you're often looking at is a kind of short-form/long-form situation, where some of the critical details of a commitment will be done relatively quickly to enable a production to move forward to secure financing.

The long-form agreement may take months. In some cases, it's a year before things are seen. It's sort of the reality of contracting and the difference between people who are green-lighting and commissioning shows, and then having to deal with the legal affairs department that wants to secure every right and make sure everything is clear.

So there's just a basic reality to that, and I think that has almost always been the case. There are ways of expediting that. Things like terms of trade will ultimately help that too; some of the critical deal points in any negotiation should be fairly transparent and clear.

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

Please tell me who should own the residuals. It is very important for you to clarify this, because of the answer that you gave.

[Guy Mayson]

Residuals are just something that should always.... All rights that start with the producers should be subject to negotiation in terms of any licensing of those and any kind of fair split on revenues.

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

What do you think of the sharing of production costs? For instance, should the producer and the broadcaster each pay one half?

[Guy Mayson]

Normally the costs are borne by the producer. A broadcaster will be involved--to a relatively small portion of the budget, to 20% or 30% perhaps—but the costs are incurred and financed by the producer.

Sometimes broadcasters will get involved in an equity manner, where they take a share of the production. But generally they acquire a licence to exploit the show in a certain way, for a certain period of time, and for a certain fee, which is usually 20% to 30% of the budget--roughly, in a very general way.

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

This brings me to the issue of governance, which you did not raise in your brief. Do you think that the board of directors is qualified to make decisions for the Canadian Broadcasting Corporation? Do you think that it is thoroughly familiar with the various stakeholders and issues involving the CBC? Should the chief executive officer come from the board of directors, or should he be appointed by the government?

[Guy Mayson]

Without commenting on any of the board members or the current CEO, we like the kind of CTF board approach with board representation from the industry, industry players, and stakeholders, balanced by independent board members. So there is some knowledge of the industry, as well as some knowledge of other greater governance issues.

Again, the CEO in that case is sort of an appointment of the board. This is certainly a board structure that we endorse and like. Without commenting on the CBC's board or CEO, I would say that we prefer an industry voice at the table.

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

Thank you.

[The Vice-Chair, Bloc, Maka Kotto]

Thank you, Ms. Bourgeois.

Let's wrap up the meeting with one or two questions from Mr. Fast, because there is another meeting immediately after this one.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you, Mr. Chair.

Thank you, and welcome back.

You made two comments, Mr. Mayson. First, you stated that the broadcasting environment has changed considerably, implying that CBC has to adapt to changing times.

You made a second statement early on that CBC's reliance on advertising revenues has forced it to compromise its role and mandate. What I didn't hear you talk about was perhaps the next step: whether the CBC should be retreating from commercialization, or whether that's there to stay.

Obviously we've had a pretty vigorous debate around this table over this issue. There has been quite a divergence of opinion. There are some witnesses who suggested that the CBC should move away from a commercial model and not rely on advertising revenues. Others have said that, no, we need to maintain that model. It's there; it's the reality of a changing environment.

In fact, I recall the witnesses from the screenwriters guild in Winnipeg, when we were there, who certainly made a strong pitch for a strengthened CBC. They made a strong pitch for additional government funding for the CBC, but they said, we don't want to give up commercial revenues because then government funding will simply replace those, and we're no further ahead.

So those are the two divergent opinions we've had to deal with. I would like you to take that extra step and tell us whether you feel the CBC should be moving away from the advertising model.

[The Vice-Chair, Bloc, Maka Kotto]

You have one minute for your answer.

[Guy Mayson]

It's such a fundamental question, and it goes to the heart of what you're dealing with here, I realize.

What I would say about the CBC and the advertising issue is that it's been put in a bit of a box in terms of having to compete with the private sector for advertising. You're always going to be looking over your shoulder. Rather than focusing primarily on the quality of production and on building a strong Canadian schedule, you're going to be second-guessing all the time, thinking you've got to be maximizing revenues. And I totally understand why they're having to maximize their revenues; they need every cent they can get.

My point comes back to the need for us to have a hard look at what the CBC is doing now and what it could be doing in the future. We firmly believe it's incredibly important as a showcase for Canadian talent and Canadian production. To us that should be the core role.

It doesn't all have to be dramatic programming, but I think it should really be all about Canada and maximizing the dollars into Canadian production. You start with that and how you fund it. Maybe we should be focusing on that, and allowing it to step back from the idea that they need audiences because they need advertising.

[Ed Fast, Conservative, Abbotsford, BC]

Should we rely on advertising revenues? That's the question. Some people are saying we should get rid of the advertising. Some are saying not to, that it's there, and we need to rely on it, but we need to also enhance government funding.

[The Vice-Chair, Bloc, Maka Kotto]

I am interrupting you, Mr. Mayson, because there will be another meeting here right after this one. It's time for us to vacate this room. We would be happy if you could answer Mr. Fast's last question in writing as well as provide a written response to some of the other questions we put to you this morning. If you have any supplementary answers, they will help us in our deliberations.

Thank you again for reflecting on these issues with us. We hope to see you again soon in a different context. Thank you.

The meeting is adjourned.