You may be wondering what the problem exactly is between producers and broadcasters. Simply put, we're now reduced to three large, integrated, private broadcast corporate groups in English Canada. As such, there are effectively few selling opportunities in the television market for our members.
More specifically, those three broadcast groups are now using--I would even say abusing--their dominant position in the market to secure unreasonable terms from independent producers. They're demanding more rights, including all digital rights, and often for very little additional fees, if any.
Broadcaster consolidation has virtually eliminated competition in the Canadian programming rights market, resulting in fewer incentives for broadcasters to experiment with multiplatform content production and distribution; untenable and unsustainable rights deals for independent producers; and the virtual elimination of any return on investment for investors and funders, including the Canada Media Fund.
The equation is simple: where broadcasters control all of the rights, they will reap all of the benefits. This leaves other key partners--independent producers, the Canada Media Fund, federal and provincial funding agencies, and independent production funds--with little or nothing to show for their investment in Canadian programming.
The situation for independent producers has also become progressively worse over time. Ten years ago broadcasters were taking three-year licence deals on programming. Today, for very little additional compensation, they demand as many as 12 years. This virtually eliminates any possibility for a producer to sell in second or third markets.
Ten years ago broadcasters negotiated for only one conventional station and maybe three to five plays or broadcasts of the program over the three-year licence term. Today, with little additional compensation, they demand the rights for that same conventional station; all of their other owned and controlled broadcast platforms, such as pay or specialty; unlimited plays on all their platforms; Internet rights; all rights for all media; merchandising rights; and very often rights for foreign territories.
Let's consider this last point for a second. A Canadian broadcaster whose sole raison d'être is the Canadian market is using its considerable clout to scoop up the rights for foreign territories. This is going way too far.
You may be asking yourselves why producers do not simply refuse these harsh business terms that are so damaging to their businesses. There's a simple answer to that question. For most independent producers, turning down these terrible terms effectively means putting their businesses on hold, or even closing their doors permanently. I would highlight that a broadcaster is also the only trigger to access a large majority of the financing available under the Canada Media Fund, and one of the key triggers to access the Canadian film or video production tax credit.
This puts broadcasters in a very strong bargaining position. Without a broadcast deal, our members have no access to most of the CMF and likely no access to the tax credit. Without access to these crucial sources of funding, there would be far fewer Canadian content productions in underrepresented genres, like drama, documentary, and children's programming. Thousands of key creative and technical craftspeople from coast to coast would also lose their jobs.
Ultimately, Canada's diversity would be significantly lessened, and independent producers would fall considerably short of being able to effectively contribute to Canada's growing digital economy. This is why we have been pushing so aggressively for the implementation of an equitable and enforceable terms of trade framework between independent producers and broadcasters.
This would provide a common-sense solution related to the ownership and exploitation of all rights, including digital rights, thereby maximizing the distribution of content across all platforms. This is a key government policy objective that can be achieved at no cost to taxpayers and with minimal, if any, direct regulatory intervention.