Monthly Archives: November 2013

How the IIC Canada Conference Was Relevant for a Content Policy Wonk

As I usually do, I’m going to organize my thoughts and tell you what I got out of the conference that I just attended. I’m writing on my iPad in my fave lounge with my fave brown drink so apologies in advance if there are any typos.

IIC Canada conferences tend to have themes, often more than one (last year there was a day on promoting CanCon and then the second day was so,pure Telecomm we went lobbying on the Hill instead). This year there was one clear message – the state of the wireless market in Canada. Well, every Tom, Dick and Harry’s particular vision of the state of the wireless market in Canada. This meant competing charts and analysis that frankly left me unsure what to believe. We may or may not pay more than most countries for wireless but if we do it’s because our network is so great and we’re heavy users. But it might also be because of high profits being earned by Bell, Rogers and Telus.

This was a very timely discussion because of the recent worries that Verizon was going to enter the market and eat every one’s lunch resulting in the wireless ad campaign which prompted a government attack ad and Telus buying Public Mobile but the government preventing them from buying Mobilicity. A number of speakers were arguing that the current government animosity to the wireless sector was not good for anyone, and definitely not consumers (but might be the wireless sector’s own fault since they started it).

If you’re a content person you may be asking – why should I care? Think for a minute about how your content is being watched. Is it all on broadcast? I doubt it. The audience is increasingly seeing no difference between watching a show on their tablet, their phone or their tv. Though Marc Séguin of the CMPA and Chris Guttman-McCabe of CTIA (a US wireless trade association) had an argument about whether CMPA members were focused on TV and not therefore paying attention to digital content, I think that was a red herring. Guttman-MCabe was talking about his kids viewing content on their iPads and I’m pretty sure at least some of it was TV. We are moving to a world where mobile or broadcast are just delivery platforms and not different forms of content (though admittedly our funding mechanisms aren’t there yet). So the the state of the mobile industry, how much it costs, fighting between the government and the industry all are relevant to us. A dysfunctional industry will not help us figure out how to rejig the funding mechanisms the way we need. Wireless needs to be our partners in the same way that broadcast does, but they and the government need to get their act together first.

The other directly applicable issue was the conversation about consumers. What is the difference between consumers and citizens and what impact does that have on us? CRTC chair JP Blais has said that his job is to look at issues from the perspective of consumers, citizens and creators. He appointed a Chief Consumer Officer – Barbra Motzney. The consumer angle has been a new filter for those of us who deal with the CRTC. It was very useful to hear discussions of the difference between consumer and citizen.

The rest of the benefit that I got from IIC Canada was less tangible. I chatted with other policy wonks at Heritage, CRTC and cultural organizations. I let people know what I’m doing. I told them about the fundraising that we’re doing for the Alan Sawyer Memorial Award (more on that in the next post). I wore heels and a jacket for the first time in months (can’t get totally out of the habit of that!).

Not for everyone but a good couple of wonky days for me. And it was great to touch base with the Ottawa chapter of the Canadian media policy wonks for a little wonktacular.

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What’s the Significance of a S. 15 Study?

You may have missed this in the Rob Ford scandal of the day, but today the Government announced that it was calling on the CRTC to report on ‘television channel choice’ under s. 15 of the Broadcasting Act.  Specifically Minister of Heritage Shelly Glover said:

“our Government believes Canadian families should be able to choose the combination of television channels they want . . . This decision is an important step in defending Canadian consumers, who want choice and flexibility in their television services.  Our request will ensure that the CRTC develops a more complete roadmap to unbundle TV channels.”

You may be scratching your head on this.  Yes, the CRTC did just launch its Talk TV consultation and among the many questions being asked are:  “If you subscribe to cable TV or satellite TV, how satisfied are you with the way your channels are packaged?”.  Why does the government need to do this and what is the significance of a s. 15 report?

First, the CRTC decides on its own what it is going to study and what public hearings it will hold.  The one exception is if, under s. 15 of the Broadcasting Act, the Governor in Council asks the CRTC to hold a hearing or make a report on any matter under the CRTC’s jurisidiction.  So the significance of the s.15 request is that the CRTC must now report on that narrow issue to the government rather than its usually reporting which is just to the public.  But is that all?

We have to ask ourselves why the government would ask for a report on one question when it is going to get a report (we all will) on the many questions which are part of the Talk TV consultation. This appears to me to be a political response to a very complex issue that the CRTC is trying to look at in its entirety.  It speaks to voters without having to actually implement any changes.

The government has done this before.   I’m sure that you remember the very public fight that went on between the broadcasters and cable companies over Fee For Carriage (which then morphed into Value for Signal).  September 16, 2009 the government requested under s. 15 a report on the implications of a value for signal regime.  The issue had come up time and time again during public hearings and most recently under the April 2009 hearing on the renewal of licences for the private conventional stations (i.e. Global, CTV etc.).  As part of the licence renewal decision, the Commission decided that it would hold a hearing in the Fall of 2009 on, among other things, a value for signal regime.  That hearing was pre-empted by the s. 15 notice which effectively hived off the issue from the other outstanding issues and resulted in its own public consultation.

Did the outcome change because it was a s.15 report and not a regular hearing?  I don’t think so.  There was more of a public consultation than had probably been planned. From the perspective of an industry stakeholder we had the same submission process and public hearing.  The broadcasters and BDUs had the same fight in the media and in the hearing room that they would have otherwise.  There was no legislative response from the government.  And the whole issue became moot when Shaw bought Global and Bell bought CTV.   However, there might have been a political win from the government being seen as a champion of the consumer who was being caught between the broadcasters and the BDUs but little practical impact.

In this case, the CRTC could decide to hold a separate consultation on unbundling or just report specifically on the topic from the existing hearings.  They were given the deadline of April 30 to deliver the report to the government so it is expected that they will prepare it as they are preparing the report on the public consultation. The s. 15 request adds a political layer to the consultation and but it may not have any practical impact beyond the extra workload on CRTC staff.

Update:  Cartt.ca (subscription) has a link the the actual s.15 order as well as a description of the relevant parts of the order and its relevance.

What’s all this about data?

Warning – this is a wonky post.

In last week’s Corus CRTC hearing there was one recurring line of questioning that I thought deserved its own blog post because I suspect that most of you are not aware of its full significance and might need some context.

Commissioner Raj Shoan asked each of the English creator groups (ACTRA, CMPA, WGC and DGC) if they could identify any impact that the new Group Licensing Policy (frequently referred to as GLP and now an entry in my Acronym Decoder) had had on their sector.   Jay Thomson of CMPA and Peter Murphy of the DGC responded that the creators do not have access to the spending data to assess how spending on a group basis and through PNI compares with the previous regulatory framework.  (CMPA para 1615, DGC para 2033-2035).

In the Reply phase of the hearing Gary Maavara responded that the creators had enough information from the CRTC Pay and Specialty Financial Summaries to determine what impact GLP was having on the pay and specialty sector.  (para 2386)

In my opinion, this is wrong.

Back in the summer of 2012, I was a part of the creators’ group that went to the CRTC and asked for detailed reporting that reflected the new GLP framework (Disclaimer – because of that involvement I do feel some ownership of this issue, still).  Existing reporting provides stakeholders with OTA aggregated reports on spending by program category, pay and specialty aggregated reports on spending by program category, individual pay and specialty service revenue and total program spending reports, aggregated conventional spending by corporate group and by program category and benefits spending by corporate group.

Seems like a lot of reports, right?  Yes, but there are no reports by the entire group and corporate groups are now able to allocate their CPEs across the group, with certain conditions.  There are also no PNI reports (by group or service or licence category) and the regulatory framework allows groups to allocate their PNI CPE across a group, with certain conditions.

Why are these reports necessary?  The GLP was put in place to provide broadcasters with flexibility in their programming and expense allocation across their corporate group without letting them decrease their Canadian programming obligations and specifically protecting more expensive Programs of National Interest.  After many years it had been proven, through extensive data, that the previous priority programming policy framework had allowed broadcasters to meet their obligations through low cost programming, resulting in a significant drop in spending on Canadian drama and documentaries.  The creative community hopes that GLP works and reverses the trend in spending but wants to see the data to ensure that it works.   If it isn’t working – well it’s better to learn that earlier and try to deal with any problems promptly rather than have the system fail Canadian programming for 11 years (that’s not an exaggeration sadly).   If it is working – well I’d love a good news story!

I understand from the creator’s group that while the CRTC is working on the question of reporting, no decisions have been made and the requested reports from the first year of the GLP (2011-12) are not available.  It is a tricky issue dealing with what legally can be provided, what the CRTC’s obligations are and pushback everyone knows will come from the broadcasters.   I’m not sure why Commissioner Shoan asked the question that he did, unless it was to see if the creative groups had other ways of measuring impact.  Production is up.  CMPA’s Profile says that (2012 had a 21.3% increase over 2011), there are more Canadian shows in the Top 30 than in previous years, there are production crews all over Toronto streets (and other cities but I live in an area of Toronto where crews love to shoot so let me tell you – I’ve noticed an increase!).  The real issue is whether the increase in production is because of benefits (and will drop when they expire) or because of the GLP or some combination.  There are other questions like whether PNI is being appropriately allocated amongst drama, documentaries and award shows or all being spent on the more expensive drama shows.  None of these questions can be answered with the existing reports.

Hopefully the issue will be resolved soon.  In the meantime, the existing reports only tell half the story.

Corus Acquisition of Teletoon, Historia and Séries+

The Corus hearing for these transactions, and the licence renewal of the services, was November 5-6, 2013.  There wasn’t a lot of traffic on social media so it looks like few people were paying attention (I did the buik of the tweeting when I wasn’t restarting my computer and downloading plugins – the CRTC doesn’t like Macs and I’d lost the plugins that worked when I updated to Mavericks – argh!), but there were a few issues raised that are worthy of mention.

As a reminder, Corus is buying these services because the Commission told Bell Media that they needed to divest of them in order to prevent dominance in the marketplace.  English creator stakeholders (CMPA, DGC, WGC, On Screen Manitoba) expressed concern that the resulting company will dominate the children’s market because Corus already has YTV and Treehouse.  Conflicting stats were submitted to show Corus dominated the children’s market (CMPA’s stats as also used by DGC and WGC) or did not (Corus’ stats).  Methodology wasn’t clear – was CMPA talking about percentage of programming or audience?  If audience, is it a percentage of all viewing by children or just of viewing on children’s services.  Corus kept saying that they had not included children’s viewing of Netflix.  While Netflix Kids is definitely competition it is exempt from the regulated system so clearly does not apply.  But what is the right measurement?  I hope that the CRTC addresses this in their decision as it can come up again when dealing with market dominance in a genre.

Fear of market dominance also led some stakeholders to recommend safeguards against programming being spread across all Corus stations to the detriment of each service.  The Commission pointed out that there were nature of service definitions that should prevent that as well as existing overlap limits between YTV and Treehouse but stakeholders looked for more.  In its reply phase Corus agreed to a limit of 10% overlap between Teletoon and YTV, the two services with the greatest potential of overlap given their respective natures of service.

An allocation of the benefits package to an Export Initiative was quite controversial.  It got a lot of air time at the hearing because both Corus and the CRTC seemed genuinely puzzled that the creative community in both languages was not interested in the program.  On the surface the objection was that as described (funding things like attendance at markets in order to solicit foreign sales) the program would not directly fund new production.  Stakeholders were repeatedly asked how they would amend the program so that it would be an onscreen benefit but they refused to respond.  They wanted the money allocated to production (or in the case of the WGC – development) instead.  Discussion got a little heated between the Chair and Michael Hennessy of the CMPA on this topic.  Hennessy kept saying that promotion was a broadcaster’s job and benefits should go to production so that there is something to promote.  That’s a fine argument except right now there are a lot of benefits monies in the system so it’s a bit harder to argue need (let’s revisit this in 2017 when benefits have been spent and BDU contributions to the CMF have plummeted due to OTT).  It also fails to take into account that the producer (and often the talent) share responsibility with the broadcaster to promote the show.  This isn’t service work where you just produce it and walk away.  Remember that Blais has said that under his watch the Commission would not be protectionist but ‘promotionist’ so this kind of a program that would promote Canadian programs outside the country and leverage foreign financing for domestic production is the sort of thing that he is looking to do.

Commissioner Raj Shoan asked Corus if they would consider tweaking the Export  fund so that it would finance presales or subsequent season sales to directly link to production (and be more clearly an onscreen benefit) and Corus was fine with that.  We’ll see where this one goes.

Part of the transaction involves Corus buying Shaw’s half of Historia and Séries+ along with Astral’s half.  Corus does not want to pay benefits on the Shaw half because they are related companies and Corus says no control is being transferred.  There was a fair bit of discussion of this as this transaction could be nothing more than a litmus test to see if the argument flies before Shaw purchases Corus and consolidates operations.  It prompted a reference to St. Augustine from JP Blais and I have to say that’s the first time I’ve heard such a reference at the CRTC and definitely the first time that I’ve ever heard Shaw-Corus compared to the Holy Trinity.  It’s a tricky issue indeed though as Shaw and Corus want to be treated as the same company for some purposes but not for others.  I’m looking forward to the decision on this one.

After Corus submitted their application for these transactions, and before the hearing, the CRTC released its proposal for a new benefits policy for comment.  It is open for comment till December 5, 2013.  Part of the proposed new benefits policy is that 80% of benefits would be allocated to third party funds (80% to CMF and 20% to the independent funds).  While the proposed benefits do not comply with this proposal they do not have to as there is no policy yet.  The Commission clearly telegraphed its interest in going down that route though so Corus advised that if the Export Initiative does not comply as an onscreen benefit, rather than wrap it in with self-administered programming benefits, it would transfer them to Telefilm or CMF and it would be up to one of those parties to figure out how to arrange a program that supported export and was still an onscreen benefit.

There were other issues but these are my favourite.  There is one other point to mention though.  In his opening speech, Blais reminded everyone of the Commission’s Talk TV public consultation and specifically encouraged content creators to participate.  Many of us think of public consultations as something that our non-industry friends and neighbours participate in but Blais is specifically asking us industry types to get involved too so that the CRTC has “access to the broadest diversity of views possible”.  [which can be read as ‘we don’t want to hear from just the trolls’ – reading the online forum can be painful!] So go to the online forum, join a Flash! Conference, send in your views.  Start by checking out my previous blog post.  If you are member of an organization, ask if they will be running a Flash! Conference.  [The Academy of Canadian CInema and Television is running one November 21, 2013].  This is your chance.

Update:  The CRTC’s twitter account has informed me that the stream for their next hearing will be Mac-friendly.  Yay!!!