Evidence of meeting #31 for Canadian Heritage in the 40th Parliament, 3rd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
President and Chief Executive officer, Canada Media Fund
We've just finished the first round, which was highly oversubscribed, and the second round just closed. We're just at the analysis stage to put that whole.... You're referring to the experimental stream.
President and Chief Executive officer, Canada Media Fund
We're just at the analysis stage. We're putting all of that information together in terms of demand and success rate, as well as in terms of the types of projects that have come up. I think Stéphane.... We had a few of the numbers in there. It's about triple what we can support in terms of available resources.
Vice-President, Strategic Policy Planning and Stakeholder Relations, Canadian Television Fund
In the first round we received requests for over $80 million in funding. We had $16.2 million available. In the end we supported 27 projects in production. Included in there were online games, console games, applications for mobile phones, websites, web portals, a few web series, and some software applications.
We've just opened up the second round. This time we have again received about 160 applications requesting about $60 million.
Conservative
Dean Del Mastro Conservative Peterborough, ON
That's pretty exciting stuff. I suppose we should expect that the approvals on this are all pretty high-quality approvals. Based on the number of applications you're getting, there's obviously quite a bit of interest in it.
President and Chief Executive officer, Canada Media Fund
Because the criteria for innovation were at the highest in that program, one of the things that we implemented this year was to bring together a jury of Canadian and international experts to assist us in evaluating the innovation criteria, because it was such an important piece. We felt that the innovation program in particular is under a lot of scrutiny this year and we want to have some good success stories from it, so we thought we should bring the best expertise in the world to bear on the decision-making process, and I think that's been beneficial to the process.
Conservative
Dean Del Mastro Conservative Peterborough, ON
That's great. I wish you well with it. I look forward to seeing some of the end results of these investments.
Mr. Bolen, I am interested in this issue of rights for producers. I've heard this a number of times. The CRTC spoke about it briefly the other day. It was interesting that Telus also mentioned it when they talked about vertical integration.
I'm interested in knowing what proposals you would put on the table. Personally, I'd love to see an industry-based solution. I really don't like a regulation-based solution, because I think it tends to hamper investment and hurts the industry overall. What would you suggest we could do? Are there adjustments within the Canada Media Fund? What would you suggest we do as legislators to balance things out, if they are indeed unbalanced?
President and Chief Executive Officer, Canadian Media Production Association
Thank you for the question.
I want Reynolds to give you specifics, but I would say that we too want an industry-based solution. Currently we're in negotiations with the broadcasters, but those negotiations wouldn't be happening if the commission hadn't insisted on some kind of framework being negotiated. The question is, what happens if we aren't able to reach a negotiated agreement? In that case, the commission has said they will determine what terms should be put in place.
I'd like Reynolds to speak briefly to some of the things that we would specifically look for.
Counsel, Canadian Media Production Association
Thank you, Norm.
I won't get into too much detail, because we're about to go right back into the negotiations with the broadcasters.
Essentially what we're putting on the table is a model that we think will provide broadcasters with a vehicle to acquire multiplatform rights. We certainly recognize that they need a bundle of rights in the domestic Canadian market in order to be successful; at the same time, we want to have some kind of arrangement in place to ensure that producers will have a share in the success of the distribution of that content on all those various platforms.
Whether we can find some kind of equitable arrangement on that question really is the key issue in the whole terms of trade discussion. Of course, broadcasters have different views on this, but that's something that will be front and centre in our terms of trade negotiations.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Mastin, and thank you very much, Mr. Del Mastro.
We'll go to Mr. Wilfert.
Liberal
Bryon Wilfert Liberal Richmond Hill, ON
Thank you, Mr. Chairman.
I'm not a regular member of this committee.
I just wanted to ask you two questions. One is on the distribution platforms for supporting Canadian content. You talk about the issue of non-regulatory viewing platforms and obviously the implications for Canadian funding mechanisms. Can you elaborate on that? There seems to be a gulf there. How far apart are you, and what do you see is needed to bring both sides together?
President and Chief Executive officer, Canada Media Fund
Will I try that?
Do you mean the gulf in terms of who provides the money?
President and Chief Executive officer, Canada Media Fund
For us, the regulatory system provides the cable direct-to-home and satellite revenue, since a percentage of the company's revenue goes to Canadian content. Of that, it's 5%, and of that 5%, 20% can go to the private funds and 80% comes to the Canada Media Fund.
On the policy question, if it is the case that people are cutting the wire, as they say, or unhooking from their cable service and viewing their content in other ways, and certainly trends are starting to demonstrate that, then the requirement for that vertically integrated company, to us, is only on the cable direct-to-home and satellite side. They have no requirement to provide revenue to the fund on any of their other operational sides.
Liberal
Bryon Wilfert Liberal Richmond Hill, ON
So the migration of interest toward the Internet is not covered.
President and Chief Executive officer, Canada Media Fund
That's correct.
Liberal
President and Chief Executive officer, Canada Media Fund
It can. As we pointed out, we normally relish the revenue coming from the BDU side, because we budget very conservatively. As their fortunes gain, so do ours. That additional revenue has been from 7% to 10%. It dropped to 6% last year--
President and Chief Executive officer, Canada Media Fund
--and to 2% this year. So there's a clear trend line.
Liberal
Bryon Wilfert Liberal Richmond Hill, ON
Either from a policy standpoint or a regulatory standpoint, how would you suggest this committee look at trying to reverse this?
President and Chief Executive officer, Canada Media Fund
Our envelope system used to be called “broadcaster envelope system”. We dropped the word “broadcaster”, because we really feel that if there are other content distributors, such as the telcos or the ISPs, that actually want to provide support to content, they should be able to earn an envelope with us, along with the broadcasters.
I guess the next question is whether they should also contribute to the system. I'm sure you've heard lots of arguments on both sides of that question. For us, it's a question of logical expansion. If media content is moving into those other platforms, and there are players that want to distribute, we're happy to work with them to make sure they earn an envelope to continue exercising that responsibility of producing the content and getting the money back out.
Again, we're not in the regulatory or policy position. We take our orders from the Department of Canadian Heritage and the BDUs in terms of how the policy unfolds. Those regulatory issues are somewhat above us. All we're trying to point out to everyone is that the trend is happening. It's happening more quickly than I think we anticipated, certainly, and it's likely to have an impact, at the end of the day, on how much money there is in the system for content production.
November 23rd, 2010 / 4:15 p.m.
Liberal
Bryon Wilfert Liberal Richmond Hill, ON
Through you, Mr. Chairman, it's always nice when industry comes to a solution among themselves. But obviously if that is not available, one of our jobs, I think, as members of Parliament, and certainly as government, is first to ensure Canadian content and second to ensure that Canadian voices are being heard. And if they're not going to be heard, if they're going to be squeezed out, then there have to be mechanisms in place, I would think, to bring in these other elements you've talked about to ensure that in fact the funding is there. Also, from a regulation standpoint or a policy standpoint, it must be very clearly said that these are the objectives we've set and here are the instruments we need to achieve those objectives.
Are there any other instruments you would suggest to the committee that might be helpful in their study?