Good morning, Mr. Schellenberger and honourable members of the committee. I am pleased to be here. Joining me today is Dave Forget.
Our cultural industries are undergoing one of the most important transformations since the invention of the printing press. The study you are conducting is critical to understanding our future as creators, producers, and cultural administrators in Canada and on the world stage. We are happy to be participating in this process and contributing to your work.
Telefilm Canada's mandate is to foster and promote the growth of the audiovisual industries. For over 40 years, Telefilm has helped develop the growth of a robust and sophisticated independent production sector in Canada. Led by passionate, highly skilled entrepreneurs, our industry is highly valued and appreciated around the world. Today this industry is part of a bigger engine. As Minister Moore often says, Canada's creative economy contributes $46 billion to our GDP.
Two of the most powerful drivers of growth in the cultural sector are digital technologies and expanding Internet use.
Today Telefilm manages programs worth approximately $450 million, of which $350 million is on behalf of the Canada Media Fund, and the rest is through the Canada Feature Film Fund and international activities.
This is my first appearance before this committee and I would like to leave you with three observations.
First of all, I am privileged to be the head of this agency at a pivotal time in the industry's evolution—a time of great upheaval, but which I prefer to think of as a time for inspired innovation.
In the words of British writer and former film and television executive John Newbigin, “with every passed cultural shift we may feel that we are in a state of anarchy and uncertainty about where all this is going. But we ought to draw some comfort from the fact that actually in the course of human history we have been in this situation many times before”.
And the constant has been our appetite for a good story. What changes is the form in which we want them to be told. In each of the cultural industries, established business models have unravelled at lighting speed—and just as the music industry was transformed by MP3 delivery so now the audiovisual industry is facing extraordinary challenges. Surprisingly, some of the largest players have seen their revenues tumble and entirely new companies have sprung up to redefine the playing field. YouTube, Netflix, iTunes and Hulu—are some of the new players in this space. Will they still be around five years from now?
Data's infinite mobility and the Internet's capacity for perfect and instantaneous reproduction without marginal costs have provoked cultural industries around the world to think differently about what they are selling. Is it the song, the book or the movie? Or is it the community experience, the live performance or access on demand? Companies must now consider what consumers want in a “people-driven economy” and learn to create new business opportunities out of disruption. Mobile Internet will only accelerate these trends.
In one month last year, 25% of Americans reported viewing a short video on their phone. Mobile reading has also taken off, with Kindle books making up 35% of sales at Amazon. Apple recently announced that it sold one million iPads in 28 days. It took 74 days to sell the same number of iPhones.
An feature film is not immune to these changes. Fifteen per cent of the world's modern cinema screens are now digitized, and 55% of those digital screens are also equipped with digital 3D.
Perhaps even more profound is the recent proliferation of downloadable movie sales. Today iTunes is the single largest seller of digital movie downloads in the world and Canadian films are among them. One Week, for example, made iTunes Canada's top ten. Will iPads be to movies what iPods were to music?
My second observation is that now more than ever we—the government, funding agencies, broadcasters and the industry—have to work together to ensure that Canadian culture thrives in the multiplatform reality.
Telefilm Canada has always worked closely with the industry anticipating change and helping the industry adapt. Twelve years ago, Telefilm had the foresight to launch a pilot program for interactive media, a precursor to the Canada New Media Fund. Just like we did then, we are pleased today to be administering the Canada Media Fund, a forward-looking initiative which will drive further innovation for the benefit of Canadian audiences. Telefilm's role is to ensure that Canadian producers are able to innovate and experiment in every way possible in order to reach and build audiences for their products—wherever those audiences may be.
It took radio broadcasters 38 years to reach an audience of 50 million, television 13 years, and the Internet just 4. And in less than 8 months last year, 100 million people joined Facebook. Ironically, it is easier than ever to access a large audience, but harder than ever to connect.
That's why we at Telefilm are focused on supporting Canadian companies to innovate in digital marketing and distribution. Earlier this year, Telefilm launched Web-Ciné 360 in Quebec, a pilot initiative that supports innovative web-based promotion of Canadian feature films in advance of their theatrical release. We want to help distributors develop Twitter, Facebook and other social media tools to build as much buzz around a film while it is still in production and right up to its release date.
Many questions remain with respect to how to construct deals so that creative projects have the greatest opportunities to connect with audiences at multiple points. There is no magic bullet but one thing is certain: Telefilm plays a critical role in helping producers navigate an increasingly complex environment.
We are also helping the industry leverage the power and reach of Canadian broadcast platforms. Canadian broadcasters continue to play a key role in aggregating audiences for Canadian feature films despite audience fragmentation. To this end, Telefilm has embarked on a series of partnerships with Canadian broadcasters including the CBC, Rogers, CTV and APTN. We are also committed to ensure that Canadian feature films are available on all exhibition platforms, including the broadcasting platforms regulated by the CRTC.
We cannot lose sight of the eventuality that gradually all content will probably be available online and on demand. We are encouraged by initiatives such as Quebecor's Éléphant: mémoire du cinéma québécois, Radio-Canada's TOU.TV and of course the NFB's online screening room. These initiatives make a treasure-trove of Canadian programs and films accessible to Canadians.
My third and final observation is that while digital technology has made the world smaller, more than ever, international relationships are critical for the financing and distribution of audiovisual products and the survival of our companies.
Telefilm Canada has a long and impressive track record assisting Canadian companies to exploit film and television markets internationally. Even in the online environment, Canadian companies must have access to foreign partners to leverage opportunities afforded by convergent markets abroad. There are many additional factors that need to be taken into account, and these include the basic economic costs of producing, pre-sales, film rights, and distribution.
Telefilm, along with our departmental and industry colleagues, is working to align the existing international co-production certification guidelines with current global realities. Furthermore, we are also undertaking a strategic review of our international programs and initiatives to ensure that we maximize the opportunities for Canadian companies to attract foreign partners, to penetrate new markets, and to exploit opportunities in an increasingly convergent digital marketplace.
In conclusion, we recognize that we are no longer in a world that is simply about the power of narratives at the cinema or on television; we are in a world of powerful interactive environments accessible on every conceivable and convenient device possible. In this dynamic environment, the variables are constantly changing. What we know for sure is that the power of great storytelling will not be enough by itself to sustain a vibrant, productive audiovisual sector. Hopefully, we have learned from the experience of the music industry and are ready to capitalize on the many digital media opportunities to connect with Canadians.
Thank you.