Canadian Heritage Committee on Nov. 2nd, 2010

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Pardon me, but I hadn't understood we were going to do two rounds.

[Roger Pomerleau, Bloc, Drummond, QC]

Thank you very much, Mr. Chairman. Thanks to both of you.

I'm going to continue in the same vein as Mr. Angus. He was saying that some services seemed to be better in Kigali than here. I come from the Drummondville area, which is surrounded by 20 small villages. The government has decided to invest money in order to accelerate access to high-speed Internet in those villages.

That's the decision. I'm telling you what's going on, even though that may not may under your jurisdiction. In spite of everything, I would like you to be aware of this state of affairs and to give me your opinion. When we request money to obtain Internet service, we're told that they can't give us money because we're already being served.

In some villages, there are indeed towers, but they don't reach everyone for all kinds of physical or geographical reasons. There are mountains, obstacles, etc.

Consequently, despite the towers, nearly 40% to 50% of the population cannot be served by high-speed Internet and is not entitled to funding to obtain the service because the village is already served. Is there any way to solve this problem?

[John Traversy]

As I was saying, to date we've relied really on the marketplace to extend broadband as far as possible. In addition to that there have been a number of targeted subsidy programs introduced by both the provinces, the federal government, and in some cases municipalities, to try to roll out broadband to specific areas.

I've heard different concerns along the same lines as what you've just described: that certain communities are looking for broadband and are getting no cooperation from the service providers to roll it out. I think that's part of the rationale as to why, as I was saying, both the federal government in the national digital economic strategy it initiated in May is looking at ways whereby we can maybe bridge the divide and get broadband rolled out in a more efficient manner in Canada, and the commission decided to include broadband in its review of basic telecommunication services, to take a look at options and just what we can do to ensure that communities like yours have broadband going forward.

[Roger Pomerleau, Bloc, Drummond, QC]

So you're advising me to speak to those people, despite all the problems we're experiencing back home.

[John Traversy]

Well, the first point of contact is with your service providers to get a full understanding of what their point of view is. And of course, yes.... I think the government's consultation closed, and ours is closed also right now, but we have received many submissions along the same lines as what you've just described that we'll be taking into consideration.

[The Chair, Conservative, Michael Chong]

Merci.

Madame Lavallée, il vous reste une minute.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

The matter of surveys is raised on page 2 of your presentation. It states that 96% of Canadians can access the Internet using a mobile device. I'd simply like you to send us the results of the survey in question, through the office of the Chair, and the methodology that you used.

[John Traversy]

It's all available in the CRTC's monitoring report, and I'll ensure you get a copy.

[The Chair, Conservative, Michael Chong]

Merci.

Mr. Richards.

[Blake Richards, Conservative, Wild Rose, AB]

Thank you.

It looks as though I don't have a lot of time, so I'll get right to the question as quickly as possible.

I think we've sort of touched around the edges of this at least a couple of times in the questioning you've already had. With regard to the vertical integration in the industry, obviously changes are happening very quickly in the broadcasting industry and in the industry. I just want to hear a little bit more from you about what the CRTC is doing to modernize itself and to deal with all the changes that are happening very quickly in the industry. Also, where do you see the future taking us in regard to the technological advances and developments that are happening very quickly in the industries, and what are you doing to prepare yourself for that?

[Namir Anani]

This is part of the research we do internally and in consultation with the industry, academia, and others. We actually published a report called “Navigating Convergence” approximately a year ago, which reflects this changing environment, this dynamic environment, and it reflects the fact that while there is fragmentation as audiences go to new platforms, there's also consolidation. The ink wasn't dry on the report before we could see more and more consultations taking place in that environment.

We are monitoring this environment. We're following all the progress that is happening in different countries in terms of the modern tools that are needed, and obviously we're seeing advertising dollars shifting and we're seeing audiences moving into new platforms. It remains complementary for the time being.

However, on the issue of the consolidation and vertical integration, as you know, there will be a hearing in May on that, as a result of the previous hearing on Shaw-CanWest, at which several interveners raised this issue. We look forward to hearing all the input there so the commission can make a decision on that.

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Richards and Mr. Anani. Thank you very much, Mr. Traversy.

We' are going to continue with our second panel. We have 45 minutes for the second panel.

In front of us today we have representatives of CBC/Radio-Canada. We have Madame Rossier, who is the executive director of Internet and digital services, and Mr. Mattocks, who is the general manager of media operations and technology.

Welcome to you both.

We'll have a five-minute opening statement from CBC/Radio-Canada.

[Fred Mattocks, General Manager, Media Operations and Technology, CBC/Radio-Canada]

Thank you, Mr. Chairman, members of the committee. On behalf of CBC/Radio-Canada, Genevieve Rossier and I would like to thank you for the opportunity to participate in your study on emerging and digital media.

I'd like to start with the words of the president of CBC/Radio-Canada, Hubert Lacroix. In our recent 2010 public meeting, he spoke of our responsibility to Canadians. He said:

We are a creator and protector of a public space where Canadians come to share their ideas, their culture and their experiences, where Canadians come to debate, in a safe environment, the issues they care about. A public space that brings an increasingly diverse nation together and reflects a diversity of voices. Our programs and services enrich this space.

Today that space is increasingly a digital one. Digital media is not just part of life in this country; it is becoming part of the fabric of life. It supports unprecedented levels of dialogue and discourse in all aspects of Canadian life. As Canada's public broadcaster, the media company with the interest of Canadians as our raison d'être, we continue to play a leading role in strengthening that fabric.

We were the first broadcaster in Canada to stream audio online and the first to stream video on mobile devices. Our iPhone applications are among the most advanced in the world and among the most popular in Canada. The Hockey Night in Canada app alone has been installed close to half a million times, the CBC Radio app more than 360,000 times.

Our content is the most downloaded on iTunes Canada. On Twitter, CBC Radio's Q has more than 17,000 followers. On Facebook, CBC Sports boasts more than 60,000 fans, Dragon's Den more than 35,000. On YouTube, George Stroumboulopoulos Tonight has more than 36 million total upload views, more people than we could ever reach on television alone.

We're also a leader in user-generated content. More than 300,000 comments are published about our stories on cbc.ca each month. During the G-20 in Toronto this past summer, thousands submitted photos and contributed comments on the developing story throughout the week.

This interaction with our audiences has changed the way we operate. Our users and audiences are now part of our content creation process, not only consuming media but also contributing, in ways that just weren't possible even ten years ago. Ensuring Canadians can do this is the new responsibility of a public broadcaster, and one that we're proud of.

You've heard from others who are working to carve out a digital space. In fact, CBC operates in one of the most competitive media markets in the world. We're competing not just with other Canadian media companies, but with global companies such as CNN and the BBC. But CBC is a creator, protector, and animator for the conversation about life in this country, and I believe our unique role in that respect gives us the edge.

I'd like to talk more about what we're doing, but I'm conscious of our time, so I'll now ask Genevieve Rossier to say a few words about the digital environment at Radio-Canada.

Geneviève.

[Genevieve Rossier, Executive Director, Internet and Digital Services, CBC/Radio-Canada]

Thank you.

As Mr. Mattocks said, since 1996, CBC/Radio-Canada has become the first broadcaster in the world to make its radio available live on the Internet. Today, Radio-Canada has the most elaborate media site in the francophone market. There you can find strong new offerings on the economy, international news, science and health, as well as technology. It also includes seventeen regional news feeds that cover current affairs across the country in real time.

Some 1,800 individuals put comments on the site, the address of which is www.radio-canada.ca. We attach a lot of value to the constant exchange we have with our audience. The Radio-Canada site attracts 1.7 million Internet users a month, 20% of Canada's francophone population.

One of the challenges in the francophone market is to retain enough room for diversity. That's why, since January, Radio-Canada has been offering a completely new service that has very quickly become the first francophone Web television in North America. It is called TOU.TV and, in partnership with eight broadcasters and tens of content producers, it offers an open platform accessible to everyone across Canada, and we offer approximately 3,000 hours of French-language television on demand on the Internet.

Since this past January, there have been more than 18 million hits on the new TOU.TV platform. Its success was immediate and its reputation has quickly exceeded our expectations.

TOU.TV attracts a younger audience than the conventional networks, and that audience tends to stay longer than on the conventional Internet. TOU.TV enables francophones across the country to watch programs produced by francophones from coast to coast. For example, a program like Volt, which is produced by TFO, which was hitherto available only in Ontario, is now available everywhere. It's also the ideal platform for launching Web series produced by Radio-Canada, the best known of which are undoubtedly Les chroniques d'une mère indigne, En audition avec Simon, RemYx and Temps mort.

CBC/Radio-Canada wants to continue to distinguish itself as a leader in the digital universe. Direct competition is increasingly strong and forces us to improve constantly. Consequently, competition on the Internet really knows no borders; the BBC, CNN, France 24, all those sites can be competitors for Radio-Canada. In this context, we are concerned about our ability to continue forcefully asserting our francophone identity in an increasingly English-language digital universe.

We are absolutely convinced that Radio-Canada has a leading role to play in the future expression of culture and democracy in the digital universe and that we will be able to be a force for assertiveness and innovation in that area.

Thank you for your attention, and I hope we can answer your questions.

[The Chair, Conservative, Michael Chong]

Thank you, Ms. Rossier.

Now we have 40 minutes for questions and comments. We'll begin with Ms. Dhalla.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Thank you very much for coming. And congratulations for a lot of great work that you've done in reaching out to many young Canadians with some of your new and emerging media applications.

There are all these new and emerging technologies--you have these iPhone apps, and people like George Stroumboulopoulos have a huge following, along with many other of your CBC Radio personalities. Do you think the budget you have currently allows you to be able to meet the demands of some of the new and emerging technologies that you are in the process of delivering?

[Fred Mattocks]

The simple answer is that there's never enough money for all the things you'd like to do. We have to make choices. We have to make smart choices.

The imperative here is where Canadians are going: the devices they're using, the technologies they're using to connect with life in this country, to connect with stories, to connect with characters. Young people in particular have been leaders in digital space, for sure. We find ways of dealing with these, and we find ways of dealing with them successfully.

Part of that is around making smart choices. For a number of years the CBC has invested in CBC Radio 3, for instance. While not specifically aimed at a young audience, it attracts a young audience in a very real way, and it enjoys astounding success in that space.

We also look at leveraging the things we're already doing in terms of digital exposure and digital connection with audiences. One of the great things about digital technology is that it opens up a whole new potential for program content, in the sense of having a conversation with an audience, of engaging them, of actually having them be part of the dialogue. So whether that's voting in Battle of the Blades or ideas around Dragon's Den, we connect in a whole variety of different ways with people. We make it work.

I think our concerns are similar to other people who come to talk to you about this space, which is that we have a healthy industry.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

Going on to the Canadian media fund, we know that it was launched to support the creation of Canadian content for television and for other digital platforms that were available, and I know that you're doing a tremendous amount of work. I believe approximately $27 million was earmarked for the development of some of these interactive media. Has CBC been able to access any portion of that?

[Fred Mattocks]

We have been able to use some portion of it. We had a recent award under the experimental fund for a project that involves an augmented reality learning tool for very young children, and that's good.

It's the first year of this construct, but I think it's fair to say that we're having some difficulties, and that all parties are having some difficulties, in terms of aligning the intent of this with the realities of the business.

[Geneviève Rossier]

We also have been able to get some of the money, although the money goes to the producers in a lot of cases. Still, it is contributing to some content on Radio-Canada.ca. However, we also have, as Fred mentioned, some questions about the criteria and whether the way the funds are allocated for the various types of productions is really going to where young people are, and to the kinds of content that people want to see on the web and that are particularly popular on the web.

[Ruby Dhalla, Liberal, Brampton—Springdale, ON]

To gain a better understanding, Mr. Mattocks, could you perhaps elaborate on some of the difficulties that you think are there? I think that would provide the committee with a sense of some of the areas that need to be addressed.

[Fred Mattocks]

I think it really comes around to the division of the fund, the three separate sub-funds, and the definitions and rules that are attached to those. I believe they're still actually evolving. I think that in terms of the convergence fund, for instance, the rules are actually still evolving.

Sometimes the amount of money that's available and the kind of criteria required don't line up with the business realities, the audience opportunity, or the engagement opportunity for a particular property, so in order to qualify for the fund, you end up having to build a website. The website may in fact be for that particular kind of content, and not an appropriate part of an offer, but if you want funding out of this particular envelope, then you have to do that.

I think that the balance between experimental and convergent projects and the other projects that qualify for the fund is something that we have views about as a company. I know that we're participating at the CMF board and making those views known, and we're trying to come up with a balance, I think, that better reflects the opportunities and the intent.

[The Chair, Conservative, Michael Chong]

Thank you very much, Madame Dhalla and Mr. Mattocks.

Go ahead, Madame Lavallée.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

CBC/Radio-Canada's business plan states that the corporation intends to increase its investment in new platforms, that is to say the content that can be watched or listened to on the Internet or on mobile devices such as cellular telephones, Walkmans, IPods, MP3 players and video, by 8% in 2009 and 2010.

We've already seen that with TOU.TV. That's really what Internet television is about. We even wonder how you have managed to make a thing like that profitable, if it is profitable.

I'd like to talk to you about a problem that has been brought to my attention in my constituency. It could have happened anywhere else. In fact, it probably has happened in all constituencies. This is the case of a woman who watched the first season of the series Les Invincibles on line, on TOU.TV. It's an excellent television series, and I understand why she didn't want to stop before the end of the first season. She watched the entire thing and thoroughly enjoyed herself. She did not download it; she merely watched it on line.

When she received her Videotron bill—I say Videotron because 66% of Quebeckers subscribe to it—she was surprised to see an increase of $47 on her bill . As you will understand, if she had gone to Archambault or Renaud-Bray—to mention two Quebec business—she would probably have paid $40 or $45 for the entire series and she could have watched it ad nauseam, if you can become nauseous watching it.

Ultimately, the problem is not that she paid $47 without receiving any material product in exchange. That's not the problem. It is one, but it's not really the problem. The problem is that revenue was misappropriated. The $47 that she paid to an Internet service provider didn't go into the pockets of the producer or of Radio-Canada—I don't know whether Radio-Canada produced the series—or into those of the artists or artisans. No one made a cent from that, except perhaps Videotron, which took in $47 and, as we say in Monopoly, "passed Go".

That makes no sense because that's a misappropriation of revenue. The digital system and TOU.TV, which Radio-Canada has made available, currently make this misappropriation possible. And yet we've seen no attempt by Radio-Canada to knock on the doors of Internet service providers, either in person or virtually, to ask them if they might perhaps share their immense profits, negotiate a better share and especially to see how artists can be remunerated in a situation such as this.

I wanted to know whether this misappropriation of revenue is a concern for you as much as it is for me and whether you're going to try to do something to "render onto Caesar what is Caesar's."

[Genevieve Rossier]

I'm not sure I can answer all of your question because, as you'll understand, in large part, it is not aimed directly at the people of Radio-Canada.

I would nevertheless like to reassure you that the producers, artists, the people who wrote the music, and all those who make the programs and a series called Les Invincibles possible, all those people were paid. Once you pick up a series to make it available on the Internet, those people receive what has been negotiated with the rights holders' representatives of each of the corporations with which we do business.

First I would like to reassure you on this point because Radio-Canada would not put products on line without recognizing the copyright of the people who make the series.

The other thing is that TOU.TV—it's true—experienced an instant success, as I told you, that has exceeded our expectations. Some people use it to see an episode they missed; that's one way of using it from time to time, when you've missed the program on television. Others watch the entire series. The capacity limits on the various ISP services aren't the same everywhere, and I believe Videotron recently increased—