Canadian Heritage Committee on Nov. 27th, 2012

[The Chair, Conservative, Rob Moore]

Welcome to the Standing Committee on Canadian Heritage.

We are pleased to have here representatives from the Canada Media Fund, Nathalie Clermont, director, program management, and Sandra Collins, vice-president of operations and chief financial officer.

You were both here previously and have already made an opening statement, so we'll go right into our round of questions and answers.

For everyone's information, we will wrap up this part of the committee by 4:25 p.m. and go into the next half of our meeting at 4:30 p.m.

To begin the seven-minute round of questions and answers is Mr. Calandra.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Thank you, Mr. Chair.

Thank you for coming back. We appreciate that. Since we are not getting opening statements from you, I will ask you to explain how the Canada Media Fund was created and simply touch on the fund's mandate.

[Sandra Collins, Vice-President of Operations and Chief Financial Officer, Canada Media Fund]

The fund was created in March 2009 and was a combination of re-branding and revision of the Canadian Television Fund and the Canada New Media Fund. That was the birth of the Canada Media Fund.

The mandate is to champion the creation and promotion of successful innovative Canadian content and software applications for current and emerging digital platforms. In essence, we fund through two streams, the experimental stream and the convergent stream.

Nathalie, did you want to talk a little bit about the two streams?

[Nathalie Clermont, Director, Program Management, Canada Media Fund]

Yes.

In the convergent stream in which we are spending almost $340 million this year, we finance both television components that are related to the digital media component, so components that are related to the television IP. Every program that comes to us in this convergent stream needs to be presented on at least two platforms.

On the experimental stream, it is a bit different. We are financing projects that are not related to television or to the film industry. They are projects that are created only for other platforms, that are interactive, audiovisual, innovative projects in digital media. In this experimental stream, this year we are spending $36 million, compared to the other stream.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

As you can imagine, we have heard from a number of witnesses who have talked about the experimental stream. Could you elaborate on that with respect to who's applying, the success or failure thereof that you might be having, and the resources that are being allocated to the experimental stream? Are you consulting with stakeholders? How are those consultations taking place and what are you hearing from them?

As I said, we have heard from a lot of companies and individuals who have come before us and said how important that stream is. We have heard how successful this industry has been. They said that you have had a good role to play in that, so what more can we do?

I will leave that with you.

[Nathalie Clermont]

As I said, in the experimental stream, Canadian companies can apply to this fund. In fact, we are financing three or four types of different projects. We are financing interactive content, such as websites and interactive web series. We are financing games; a large part of this is comprised of games. We also are financing mobile applications and software. We are financing four types of products.

Producers can come to us at different stages. They can come to us at the development stage or in production, when they are ready to design their project and to be market ready, and they also can come to us for promotion and marketing. We usually spend 70% of our money on production, 20% on development, and 10% on marketing.

We receive applications for many more projects than we can support. I think we are financing 30% of the projects for which we receive applications. It's a very popular fund.

We finance approximately 40 or 50 productions per year. We select them on the basis of four different criteria. We look at the production team and at the innovation, which is really the key for this program. We really need to see how projects are innovative and how they differentiate themselves from what has been done elsewhere in Canada but also around the world. Innovation is the main criteria in the three different types of activities. We also look at the business plan and at the distribution strategy. In production, we ask for an international jury of experts to help us choose the most innovative projects and, along with our own assessment of the other criteria, we select the projects that we will finance.

We are starting to see some success in this program. It's still a young program. We launched it in 2010, in July, I think. By the time we sign contracts with projects and they produce and go to market, it takes many months, if not years. We are starting to see results. Some are very successful. I think we named some last time, such as Big Win Soccer, or X-Agora in Montreal.

We've seen some that don't seem to work well, but at the same time, it's an experimental fund, so we don't expect that everything we finance will be successful. I think it's part of our mandate to take risks on projects that are innovative. We don't know if the innovation they are going to develop will be successful or not, or will work or not. Some projects were not as successful as expected, but still, it is an experience for the producers.

In the coming months, we will have more reports on activities and revenues in the projects we financed in the first year. In the months to come, we will have a better idea of the scope of the successes we have, but we hear and we see in the press and on the revenue side that some are getting a lot of attention for sure.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

I'll leave it at that, because I know that time is running out.

Did you want to add something?

[Sandra Collins]

I was just going to add something. You asked about the consultation with the industry which is a very important piece for us. When the fund was first announced, we did a number of cross-country tours, landing in every province and territory and meeting with members of the industry to get their feedback on our programs. We have targeted industry working groups and invite members of the industries, associations, etc., to participate. That really helps us to shape our policy and programs.

As well, through our various events and the partnerships that we sponsor, we have staff who are often speaking with the industry and are available to meet with on those occasions.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Thank you.

[The Chair, Conservative, Rob Moore]

Thank you, Mr. Calandra.

We'll now go to Mr. Nantel.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Chair.

Ladies, thank you for joining us. I am pleased to hear your comments on the Canada Media Fund.

I have a question for you about this environment that is constantly evolving. It is constantly changing. Based on various contacts with industry stakeholders, we feel there is a lot of confusion on three aspects related to the Internet: promotion, accessibility through streaming and the acquisition of material, the use of the Internet as a conveyer for the acquisition of cultural goods or goods for rights holders.

It is quite a tall order for people like you. Were you with Telefilm Canada previously? What is your background? What did you do before you started working for the Canada Media Fund?

[Nathalie Clermont]

Actually, both Sandra and I were at the Canadian Television Fund. I was with the Société de développement des entreprises culturelles, SODEC, for 15 years. SODEC is the provincial funding agency from Quebec. Our experience prior to the Canada Media Fund was very focused on television and cinema, mainly feature films. So our expertise came from those organizations.

Two years before the Canada Media Fund was created, we had set up a pilot program to finance digital media convergent with television. So we have gained experience and knowledge about this sector through the two-year pilot program. When the media fund was set up, we had a good idea of what it was all about, without being experts. We are still not experts.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

I don’t think there are any experts who master the market perfectly.

[Nathalie Clermont]

We are learning from everything we do, at any rate.

We are beginning to have a really good idea about the issue as a result of the consultations we are conducting, the events we are participating in and the issues we are dealing with. We are dealing with hundreds of files every year. We are really starting to build this type of expertise and knowledge.

We are supporting studies on the industry. We have funded a number of them this year. They are providing us with a better understanding. We are making these studies public to help the industry understand how things work. There are a lot of new producers in this universe, and a number of them are more traditional television producers who want to break into this field. The studies that we publish and the various workshops and conferences that we sometimes organize and that they attend also help them gain this experience.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

We often see the logo of the Canada Media Fund at the end of the credits of shows we watch.

Is it basically to make content available and to promote it on the websites of shows? Or are you contributing to something else? I am thinking of the TV series Trauma, for example.

[Nathalie Clermont]

As a matter of fact, it is for both. Unfortunately, I don’t remember the year when Trauma was funded and whether it was funded through the Canadian Television Fund or the Canada Media Fund.

However, as part of the convergent component, as I said, we are funding the two sides: the TV show itself and, if applicable, a website, game or phone application related to the show. However, those projects are not in the experimental component, since projects are not supposed to be convergent with television.

When you see our logo on television, it means that we funded the actual show, and, if we funded the website, for instance, our logo would also be displayed. So visibility is part of all the components we are funding.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Do you think that you might be commissioning a study on Canadians’ viewing habits?

Actually, I am sure that Mr. Cash will want to talk to you about that. The other day, he was telling me how shocking it was to see the audience migrate toward the Internet. Clearly, it means competing with a medium that has always been there, conventional television. But the Internet is increasingly becoming the place where things are happening.

Have you commissioned a study on that issue, a study that could be shared with the producers that do business with you?

[Nathalie Clermont]

Actually, we have recently funded a study on the viewing habits of young Canadians, pre-teens—from 9 to 12 years of age, I believe—which is available on our website. The study entitled “Are the Kids All Right” assessed television viewing habits—which is actually exactly what you are asking—against viewing habits on the Internet or other digital media.

Contrary to what we might have expected, oddly enough, those kids still watch television a great deal. Television is still the primary tool, but there is in fact a migration towards other platforms. For the time being, I don’t think we are planning to extend that study, but we could certainly do so.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

The link to games is actually part of our study on video games. Are you hoping to establish some kind of relationship between video game creators or developers and the television industry?

[Nathalie Clermont]

Of course, one of the goals of the experimental component, where we finance a lot of games, is to incorporate the new technology into the more traditional television industry. We are also trying to draw people whose first experience was with platforms other than television. So yes, that is one of our concerns.

The convergent component is further proof. We require that the content be available on at least two platforms. That is another way to make sure that the content travels as much as possible and that it reaches the public on the platform they want to use to see Canadian content.

As you said, I think that people are slowly migrating to other platforms. They want to see the content when and where it suits them. That is what we are trying to promote with our program

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Ms. Clermont.

[The Chair, Conservative, Rob Moore]

Next we have Mr. Simms.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Thank you, Chair, and thank you to our guests. I've been a fan of your organization for a while. Your moniker appears on a lot of good things.

I've always wondered what it must be like to set up the criteria for what to fund and whatnot. Whenever I see your moniker now, I think to myself that it must be one challenging position to be in, given the parameters you have and the subjectivity of what it is you're funding. That being said, that's in the general sense. As far as the experimental stream is concerned, it must be even worse because of what you have to consider.

Quite simply, that's my question. What do you consider to be experimental? Once you've gone that far, what are the criteria you use to place one above the other in areas of importance?

[Sandra Collins]

The primary criterion in the experimental stream is innovation. As Nathalie mentioned before, that's where we engage an international jury to assist us in going through and evaluating all the projects to assess and rank them and determine which ones are deemed eligible for funding.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Are we talking about the experimental stream as well?