Canadian Heritage Committee on Nov. 23rd, 2010

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

And that share is allocated to Quebec?

[Stéphane Cardin]

More or less.

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

Have you noticed different or higher applications from Quebec than from the other provinces?

[Stéphane Cardin]

In the case of the convergent stream, no. However, in the case of the experimental stream, Quebec and British Columbia were significantly higher during first round of funding. This is the stream established for projects that have no links with television. It is aimed at innovative projects for Internet, mobile phones, console games, etc. Within that stream, the distribution was one third, two thirds, but a few projects where obviously bilingual.

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

Why do you say “bilingual“?

[Stéphane Cardin]

I mean that they do not really have an original version, for example in the case of console games.

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

They are produced in both languages.

[Stéphane Cardin]

Exactly.

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

So, Québec and British Columbia were different from the point of view of the number of applications, but were they also different on the basis of selected projects?

[Stéphane Cardin]

Absolutely.

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

In the context of your convergent stream, you always operate in the same manner: when an application is submitted by a producer wanting to create a television program, for example, you demand that there be a website, do you not?

[Stéphane Cardin]

This year, exited the measures have been implemented. Applicants must produce components for the digital media,that is to say that you added content for the web, for mobile phones or other digital platforms. Otherwise, convergence can be reflected in the distribution strategy. For example, if a television projects is distributed on a VOD platform or through web streaming, it becomes admissible

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

What part of the budget do you allocate to what I would call the digital platform, on the one hand, and to traditional television programs, on the other hand? How do you assess that?

[Stéphane Cardin]

We have rules. The budget allocated to television productions is much higher than for the digital media components. This year, for the digital media components, we could provide a maximum of 50% of the funding, up to $200,000 per digital component. On the television side, the budgets are much higher.

[The Chair, Conservative, Michael Chong]

Thank you.

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

Is my time already over?

[The Chair, Conservative, Michael Chong]

Mr. Angus.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, Mr. Chair.

And thank you for coming today.

I remember being on the committee when we had the so-called crisis in the Canadian Television Fund, when Monsieur Péladeau and Mr. Shaw decided that they didn't have to meet their obligations to their contracts, and there were no administrative monetary penalties to bring them into compliance. It came before our committee. Mr. Shaw said, “I don't like the Trailer Park Boys. That's good enough for me not to pay my share of the fund.” And Mr. Péladeau said, “Well, I don't mind paying into a fund, as long as I can use that money for my in-house production.”

The New Democratic Party had concerns at the time about how the fund would be reconstructed. We were certainly very supportive of ensuring a digital component because it seemed we had to bring our production in line with the 21st century. We were, and remain, concerned about the ability of all the players to utilize a fund, especially as we become more and more concentrated.

Now we're in a situation where Bell mobile phone is a broadcaster, and it would certainly.... And I'm not picking on Bell. It could be the same thing with Rogers. It's certainly a great deal to say you get exclusive content and exclusive access to your favourite show, or maybe you get your exclusive show for the first three weeks or the first year, and then any other service provider can pick it up once everybody's stopped watching the show.

Ms. Creighton, are you concerned, given the fact that the other partner at this table is the Canadian taxpayer, and we've put a lot of money into that Canada Media Fund.... When we pay for content, we shouldn't be subsidizing phone wars. How do we ensure that what we pay for is going to be seen by people?

[Valerie Creighton]

The first thing is that Shaw and Quebecor have continued their contributions to the fund. Some changes, which are working well, were made last year around allowances for a broadcaster affiliated in-house. Neither the alarm that was expressed at the time from the independent production community nor the need that was expressed from the broadcast sector seem have been borne out. Historically we're seeing traditional amounts of broadcaster in-house and affiliated that have been in existence at the fund for quite some time, at least on the affiliated side. I think things have calmed down quite a bit from the days when the real friction hit.

In terms of the issue of exclusivity, obviously that's out of our control. It's not something we can weigh into in terms of the fight or the debate. Our mandate is for content to be seen and accessible to Canadians anywhere, any time, anyplace. We still think that's a very important mandate, and I believe there are some protections around exclusivity in the current CRTC regulatory environment.

Sandra or Stéphane might want to add to that.

Certainly for us, any environment that allows this content to be broadly distributed among Canadians is the best environment, because our interest is in making sure that content can be seen by the most people. It's just not us who can regulate or control that.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Yes, I fully understand that.

Mr. Bolen, I'm interested in your recommendations. After your recommendations, you floated an idea that I would like to pursue, in that if we are in this digital platform...and again, there's nothing wrong with the traditional broadcasters. I'm glad the CMF is there for the traditional broadcasters--they play an important role--but it seems to me we have an enormous opportunity for independent production to go international by being able to get some funding to begin a project, to be able to get on Twitter, go on Facebook, go on YouTube, start getting some buzz without having to give away the rights of you and your children and your grandchildren in advance of a project that might never get off the drawing board.

Do you think it would be helpful if we expanded the envelope that CMF is experimenting with right now to allow for producers to try some program ideas, so they can see if they can get better terms of trade and new partners, as opposed to having to go for a broadcast licence? It seems if you don't have a broadcast licence and your project doesn't get off the ground, then it's going to be very difficult to ensure any kind of fair terms of trade.

[Norm Bolen]

That's a good question.

I think the whole industry has to look at this. As I said, we need to evolve, and we need to calibrate that evolution very carefully. The truth is the vast majority of the revenue from consuming content is currently still in the television industry. The dollars in the online world and in the digital world are much smaller, and it's a very fragmented world. It's a challenge to break through the American machine in that international market because of the marketing costs involved in doing that.

We can't have any expectation that we're going to have instant success in the digital marketplace because you need to have high-quality content. High-quality content costs money. Most of the money is still in television. But that is changing, and more and more money is starting to emerge on other platforms. I think the whole industry has to sit down with everyone and look at that very carefully. The CMF holds ongoing consultations about that, and we're looking at this very question carefully, because there's no doubt we have to change the system. We have an old system based on a different set of conditions, and it has to grow.

I don't have all the specific answers about what specific mechanisms we should put in place to do that, but we need to pay more attention to it.

If I could just speak to your other question about content exclusivity, as independent producers we believe very strongly that any content that has Canada Media Fund money or tax credit money in it, any public purse involvement, should be as widely distributed as possible and should be made accessible to as many Canadians as possible. That speaks against exclusivity on platforms. As a taxpayer, if I'm paying for content, why should I be denied an opportunity to access that content just because I happen to use a particular cellphone instead of another one, or have a particular subscription?

[The Chair, Conservative, Michael Chong]

Thank you very much, Mr. Bolen.

Briefly, Madam Creighton.

[Valerie Creighton]

If I could just add, certainly we think as this convergence moves there will come a time when the requirement for a broadcast licence cannot be the only trigger. I'll use the documentary genre as an example. There are about three places where documentary filmmakers can get a licence now, and yet much of this content, particularly coming out of the north, will have European broadcasters, digital distribution, or other sources of distribution in it. It simply doesn't qualify at the fund because we are still a bit caught by the rules of the Broadcasting Act in terms of having to have a broadcast licence in the convergent stream.

Clearly, if we're now the Canada Media Fund, that has implications in terms of who triggers the fund, who puts money into the fund, and how we evolve toward that. We hope that as the other side of the universe on the digital media and distribution side increases, content is made and revenue streams do start to develop, and as the advertising market moves more and more into that area, clearly we will have to be released from the trigger of a broadcast licence in order to support that kind of content.

As Norm said, there is a whole series of questions in there around calibration and where you move and how fast you move, because clearly people aren't moving away from TV content production. We still have to be able to compete with the American market on that front as well.

[The Chair, Conservative, Michael Chong]

Thank you very much.

Go ahead, Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Chairman.

To begin with, Valerie, I am delighted once again to hear of the success of the Canada Media Fund. Obviously it's critically important to creators in this country, and I think the value of these types of funds has been demonstrated. I also think it's a very forward-looking fund.

When last we spoke, you were preparing a report on, or working on, the allocation of the digital component of it. Have you made any progress that you could report to the committee?