Although we have a strong, well-established production community, one that can be seen as a microcosm of our national community, Manitoba's industry is one of the most vulnerable to the current trends towards centralization and consolidation. We are, if you like, the canary in the mine shaft.
When the broadcasters pull back economically, we feel it first. They stop travelling to see us as travel funds get tight; they object to regional spending as being a restriction on them; they consolidate positions such that there's no one in the local stations who has anything to do with programming or commissioning.
Historically, Manitoba was home to a number of family-run broadcast ventures, including the Moffat family's CKY, now a CTV station; the pioneering Women's Television Network, WTN, which is now a Corus station; the Thiessens' Trinity Television, which is now an S-VOX station; the Craigs' A-Channel franchise, also owned by CTV at the moment, and the Aspers' CKND, owned by Global Network. All of these except CKND have been swallowed up by bigger owners, and all of the programming decision-makers have been moved to larger centres.
Independent producers are an entrepreneurial lot, and we've been out there on the frontier for some time now, creating for new media, using digital technology, delivering our productions in high definition, and tapping into international financing to pay for them, and to international markets to sell them.
We recognize that a perfect storm of social, cultural, technological, and economic change is causing the rapid evolution of our industry, in fact of our society and our world. We are very busy trying to find our place and the place of our Canadian programs in that world. Ideally, we see the Canadian broadcasters as partners for us in this venture.
The producer's job is to find or create the idea for a show, then interest a Canadian broadcaster in licensing it for broadcast in Canada. The Canadian Television Fund stipulates that the minimum license fee for a prime time, one-hour Canadian drama series per hour is $315,000. That means that $4,095,000 is what a Canadian broadcaster would pay for a standard 13-episode series order.
The total cost of that hour is $1.5 million or $2 million, and the total cost of that series is $19.5 million to $26 million. The producer has to find the rest of the financing after the $4 million. So the producer is left to find $15 million to $22 million. We don't object to that, but we need it to be recognized that we're doing an awful lot of work getting that content made. The producer has to take out a bank loan to finance the contracts and tax credits that will not be paid until after the show is made, and the producer is liable for that bank loan and for any budget overages, and he has to hold back his fee until all other costs and risks are covered. The producer takes the insurance, the producer protects the employees, the producer is the owner of the product. The broadcaster licenses it or rents it for five or seven years—whatever the term is—to show it on Canadian television. The producer has to go to France, Germany, Italy, or wherever else in the world to raise the rest of the money and to make sales to pay back the investors.
The broadcaster's job is to attract an audience to the show in Canada. This is done by scheduling—making sure it's aired at a time when its audience is watching—and promotion and advertising, so that the audience knows it's there. Often on Canadian private broadcasters, American shows are scheduled first, so that they can be simulcast with the U.S. networks, and Canadian shows are given the time slots that are left. Canadian shows seldom receive the promotion that U.S. shows get; then, if the Canadian show gets disappointing ratings, the conclusion is that Canadian shows do not attract audiences and do not make money. Both these statements have been recently made in support of the idea of “relieving the broadcasters” of their obligations to air Canadian shows. Yet when the Canadian series Flashpoint is given the budget, the time slot, and the promotion normally given to a U.S. show, it is a hit, of which we're all very proud.
In this digital world, when the audience can get American shows on the web, Canadian broadcasters' unique brand will be built around their Canadian shows. We do not think Canadian productions are the problem; we think they are the solution.