Category Archives: Digital

Creative Canada – Sounds Good So Far

You can see my summary of the relevant (to primarily tv) parts of the Creative Canada strategy at TV, Eh here.

For my interactive digital media people there are a couple of other interesting points to make.

If the s. 15 report from the CRTC triggers a public consultation, the terms of reference give producers the opportunity to explain how affiliated digital media are essential for discoverability of television programs.  That could potentially lead to changes in the Certified Independent Production Fund framework.  It’s a long shot but if the door is open you might as well try.  [more to follow in a future blog post about the new Bell Fund programs]

Heritage created a Creative Industries Council to be run jointly by Heritage and ISED, which will advise both departments on how to enhance collaboration between industries and allow the creative industries to grow.  IDM is all about collaboration and often straddles culture and innovation so there are opportunities there to influence policy to support IDM industries, depending on who is appointed to the Creative Industries Council and what it’s specific mandate is.

Creative Hubs will receive funding to support creative startups to help them create, collaborate and innovate.  There’s a lot of potential here for hubs that will support IDM startups.

As IDM could not access the old PromArts and Trade Routes programs, IDM producers should be eagerly waiting to see the details of the new Creative Export Strategy Fund to ensure that it covers IDM and the kinds of export activities that will enhance their success.

I guess we’ll just have to stay tuned.

P.S. Oh and a rant is required.  Phrases like ‘many of Canada’s federal cultural institutions and funding programs will have implemented concrete measures to make our creative industries more inclusive, by increasing opportunities for women’ drive me mental.  Diversity and inclusion is not synonymous with gender parity.  Could the government please get working on programs that encourage a wider diversity of talent, stories and decision makers so that our media is more reflective of our audience?

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The CIPFs and Digital Media

In my last post I went over the ‘permissions’ and ‘requirements’ of the CRTC’s new regulatory framework for Certified Independent Production Funds (“CIPFs”).  Since then you have heard a lot about the decision to reduce eligibility for Canadian productions from 8 points to 6 points. However, there is another issue that has been quietly bubbling away and now is generating a great deal of concern.

First, a little context.  In CRTC 2010-833, the CRTC amended the existing regulatory framework for CIPFs to formally allow CIPFs to fund digital media associated with television programming and to allow funding of standalone digital media provided that it was limited by a cap of 10% of the revenues received by a CIPF from a BDU.

“the Commission is of the view that there is little cause for concern over permitting the funding of new media projects linked to television programs as any new media content created as a result of such funding would still serve to support traditional television production. The Commission also concludes that the existence of a link to a television program will create a self-limiting process in that the producers and broadcasters will want to ensure that sufficient amounts remain for television production and development and will therefore make decisions in their own best interest. It will also be at the discretion of the funds whether they choose to fund program-related new media projects. As such, the Commission considers that a cap on such new media projects is not necessary.” [para 17]

So it was very confusing to read the new framework and see the phrase “the Commission will maintain a 10% limit on funding that can be allocated to non-programming digital content” [para 45] when there had been no cap on associated ‘new media’ to maintain.  Now, the definitions have been updated so that digital no longer includes digital-first linear video, but the result of the new wording is that all other digital media associated with a television program is now limited to 10% of BDU revenues.

Given the seriousness of this change, various organizations have been in touch with the CRTC to confirm that indeed this interpretation is correct. The potential consequence is significant as it would mean that most of the CIPF funding for digital media that both digital media and television producers have relied on will have to be re-allocated to  only television programming.  At a time when digital media is an essential element in discoverability this is a puzzling development.  Affiliated digital media drives audiences to the television, extends their experience with the television program and the broadcaster, builds both brands, and helps to sell the television show internationally.  Digital media can help documentaries extend their reach and their impact.  In some genres, most notably children’s, international buyers rarely license the television program unless there is associated digital media.

A few years ago I authored a study on co-production opportunities in digital media and in that study I learned that few countries around the world have any funding for digital media associated with television programming.  With the funding that we have, Canadians have become leaders in the field and are sought after for co-productions not just for their potential access to funding but also for the expertise that they have now developed.  Companies like Shaftesbury, Breakthrough, Secret Location, DEEP, DHX Media and Xenophile have developed international reputations as talented television and digital media producers and been able to compete in international markets because of the early and consistent support of the Bell Fund.  Is this not what the CRTC said it wanted?

Moreover, at a time when Minister Mélanie Joly is in the middle of the #digicancon consultation, the timing of limiting the ability of the Canadian broadcast system to leverage digital media to drive audiences to the broadcast platforms and to make foreign sales is hard to understand.  The CRTC seems to be taking two steps back while Heritage is trying to take one step forward.

The Bell Fund has asked for a transition period to be able to react to the new rules, as the decision was effective September 1, 2016.  They have also asked for an increase to the 10% cap, given the significant potential damage of such a small cap.  The CRTC has said that it cannot make amendments to an existing decision but instead it turned the request into a Part 1 application which is now a public consultation.  If you wish to comment on the Bell Fund’s request you can do so through the link on that page.  The deadline is November 28, 2016.   There is no guarantee that any changes will be made but at least there is a forum for industry feedback.

Full disclosure – I have a working relationship with both the Bell Fund and Interactive Ontario, the trade association representing interactive digital media producers in Ontario.  I am not speaking for either of them with this post but trying to explain for you guys what is going on – as I do.  If you would like more information you can reach out to either of those organizations.

The CRTC’s Wireline Wholesale Decision and the ISP Levy

I bet you didn’t think those two were related. If you’re primarily interested in broadcast policy (as I am) you probably didn’t even read the CRTC’s Wireline Wholesale Decision. I will freely admit that telecomm feels like another world and another language to me so I don’t tend to read the decisions and rely instead on the summaries in the news. Then Sasha Boersma pointed out to me Mark Goldberg’s tweet about Commissioner Raj Shoan’s dissent to the decision and I got excited and I just need to share that.

First, the decision. Wholesale wireline services are the part of their network that major telecommunications companies (e.g. Rogers, Bell) have to make available to small independent services (e.g. TekSavvy, VMedia) at a regulated fee to allow the independents to provide competitive voice, broadcast and internet services to their customers. The hearing was to review the policy framework to ensure that it contributed to competition and choice. You can read the press release here for a brief summary – the major issues are expanding the network that must be made available to include fibre and disaggregating the services so that an independent doesn’t have to take all services if they only want, for example, Internet.

Commissioner Shoan’s dissent wasn’t about those two main points but about the decision’s narrow focus on the Internet as a provider of alpha-numeric data and the missed opportunity to revamp policy, or take a first step towards revamping policy in recognition that broadcasting and telecommunications are no longer separate silos. Shoan’s position is that so much evidence was provided by intervenors that broadcasting is now part of the services that the independent providers offer to customers that the Broadcasting Act should have also applied. The world is rapidly evolving to one where there is only one pipe to the home providing all of our communications services and that is not reflected in the policy framework:

“In essence, under the current legislative framework, the Internet, through market forces, consumer use, and industry development, is evolving from a telecommunications service into a broadcasting service. The implications of this evolution are profound for not only the Commission’s regulatory frameworks, but all Canadians and the public interest.”

Commissioner Shoan breaks down Internet services into really three types of services:

  • licensed or exempt IPTV broadcasting (television channels delivered over the Internet by companies like VMedia and Zazeen)
  • exempt broadcasting delivered over the Internet (OTT services like Netflix)
  • non-broadcast Internet (websites, email etc.)

IPTV was a hot topic at the hearing with many independents looking for access to fibre to be able to provide customers with an IPTV offering. They need the bandwidth and speed. IPTV is broadcasting. Shoan’s analysis is that the Commission cannot use the Telecommunications Act to provide access to broadcasting. The Broadcasting Act must apply, specifically s. 9(1)(f):

s.9(1) Subject to this Part, the Commission may, in furtherance of its objects,

(f) require any licensee to obtain the approval of the Commission before entering into any contract with a telecommunications common carrier for the distribution of programming directly to the public using the facilities of that common carrier;

The exempt broadcasting services are exempted by the Broadcasting Act under the Digital Media Exemption Order. S. 28 of the Telecommunications Act provides an obligation on the Commission to regulate the transmission of programming over telecommunications services to guard against undue preference or unjust discrimination (i.e. incumbents favouring their services over the independents). Shoan sees a missed opportunity here to identify what would be undue preference or unjust discrimination “as high-speed networks rapidly transition to becoming predominantly video distribution platforms”. This was an opportunity to create a framework to address problems before they occur rather than after.

Now back to the ISP levy. When the CRTC reviewed the New Media Exemption Order (as it was then called) in 2009 there was a call from creator groups for the CRTC to impose an ‘ISP levy’ on ISPs who were increasingly providing consumers with access to programming without making any contribution to the creation of that programming. The levy would go to fund more programming and replace lost BDU revenues to the CMF and the other independent production funds as consumers increasingly cut or shave the cord. During the hearing the BDUs challenged the CRTC’s jurisdiction to impose such a levy and the CRTC referred the question of jurisdiction to the Federal Court of Appeal.

The Federal Court of Appeal decided in 2010 that ISPs were not broadcasters and therefore the CRTC did not have jurisdiction under the Broadcasting Act over the ISPs (and could therefore not impose a levy under that Act). The decision was appealed by the creator groups (ACTRA, CMPA, DGC, and WGC) to the Supreme Court of Canada, who agreed in 2012 based on their interpretation of the facts that ISPs were not broadcast distribution undertakings [EDIT: earlier version said ‘broadcasting’ but it is more accurate to say broadcast distribution undertakings – sorry for any confusion]. They are merely passive conduits that ‘take no part in the selection, origination, or packaging of content’.  You can find the history of the Digital Media Exemption Order and the Federal Court of Appeal decision here and the Supreme Court decision here.

Now we have a CRTC hearing where independent ISPs looked for access to fibre so that they could provide BROADCASTING services. Shoan’s dissent makes a very good case for applying the Broadcasting Act to ISPs.  [EDIT:  It has also been pointed out to me that there have been some changes in how ISPs operate including how they promote the video content they carry that could justify a re-examination of the case and to what extent they really are only passive conduits.  As well, the growth of IPTV renders the question of whether ISPs are broadcast distribution undertakings moot at least for those services.]  I’m not a telecomm lawyer so there could be flaws in the argument that I can’t see. Perhaps telecomm and broadcast people should have a conversation because Shoan’s analysis undermines the factual underpinning of the Supreme Court’s decision. If anyone is up to the cost of another reference, it could be time to challenge the Supreme Court decision or (and this is less expensive) encourage the CRTC to take a bold step toward creating a regulatory framework that better reflects the services being offered to Canadians and ensures that Canadians will continue to have the choice to watch Canadian programming on those services.

Digital Canada 150 2.0 – Have They Gotten It Right Yet? Not so much.

I was going to break down the differences between Digital Canada 150 (released April 4, 2014) and Digital Canada 150 2.0 (released today) but it’s kind of ridiculous. Very little has changed in the past year. It is still more of a ‘look what we did including a bunch of stuff that has nothing to do with a national digital strategy but sounds good’ than a plan for ensuring that Canada and all Canadians are digitally literate, part of the digital economy, using the tools and enjoying the content.

Yay – the government connected more rural Canadians to broadband but still no mention of ensuring affordable access to broadband for Canadians regardless of where they live. Increasingly, digital literacy and access are essential elements to exercise of Canadian citizenship and this continued omission supports the digital divide between those who can exercise their citizenship and those who cannot.  [Note – contrast that with the Digital Argentina law of 2014 that, among other things, is aimed at ensuring fair access of all citizens to telecommunications including the Internet.  Under that law the government of Argentina can set the rates for Internet access to ensure affordable access for all.  Just saying.]

Yay – the CRTC (which is an arm’s length tribunal so can’t really be part of the government’s strategy unless it isn’t that arm’s length) has instituted unbundling like the government said it would. No mention of the fact that we really won’t know the consequences of that decision for consumers and for broadcasters until it is implemented in 2016 or explanation of how that relates to a digital strategy.

Yay – the @Canada twitter handle exercises digital diplomacy. I dare you – go check out that twitter handle.

Screenshot 2015-07-15 14.22.22

Yay – the government created digital content through the NFB, funding the Canada Book Fund and the Canada Music Fund and digitizing publications for Library and Archives Canada. They actually have funded a great deal of digital content through the Canada Media Fund and their budget cuts have forced the CBC to be more innovative in using digital platforms but for some reason these are accomplishments the government does not want to brag about. I get the CBC point (it’s hard to brag about what someone has had to do when you slashed their budget) but CMF?? [They do describe Telefilm Canada as an audio-visual industry success story so I do wonder if someone at Industry Canada got confused and thinks Telefilm and the CMF are the same thing and doesn’t realize that Telefilm only funds features.]

The report does cover a number of other issues (I’m not going to even touch the reference to Bill C-51 as an example of Internet Safety) but those are of greatest relevance to an audio-visual industry. BUT. What the audio-visual industry called for in the 2010 consultations was vision and a plan to ensure that all Canadians had access to digital platforms and the choice to enjoy Canadian content when they got there. It asked for an overhaul of the various silo’d funding programs to have a coordinated strategy to fund single platform and multi-platform content in a digital world. It asked for funding mechanisms to ensure that Canadian content continued to be created even as business models and technology evolved.  It asked for training programs that ensured that emerging and more established talent had the skills needed to create and exploit content.

For a quick refresher on the agonizing pace of waiting for a National Digital Strategy that included content, see my post on the release of Digital Canada 150 on April 4, 2014 in response to the Industry Canada consultation in 2010.

So, we’re still waiting for some vision.

International Digital Media Co-Production: A Guide for Canadian Companies

Today Interactive Ontario launched the International Digital Media Co-Production Guide for Canadian Companies.  I’m rather proud of it since IO hired me to research and write this report and it consumed a great deal of my Winter 2014.  I’ve given you the link to the report on the IO website but you can also find it on CMF, OMDC and Bell Fund’s websites (as funders of the study) and CMF also has a French version.

You should check it out if you’re interested in digital media co-production.  I spoke with a number of producers and stakeholders in Canada and outside to identify the advantages and disadvantages to this kind of business structure as well as the different business models that producers are experimenting with.  The report also has tips for how to get started in the international marketplace and a section that provides specific resources for UK, France, Germany, Australia and New Zealand.    It’s both a big picture report and a handy tool for producers.

Netflix and Google – What are the Stakes at the CRTC?

There’s been a lot said in the past few days about the fireworks between the CRTC and Netflix last Friday on the last day of the TalkTV public hearing. I’m going to add my two wonky cents from a content creator’s perspective. What’s at stake here for you?

First the backstory (you can find the relevant notices here). In 1999 the CRTC had a consultation on new media and as a result issued the New Media Exemption Order. In that order they stated that they had jurisdiction over new media broadcasting, they defined it, and they exempted it from regulation on the basis that exemption would foster growth and that would contribute to the objectives of the Broadcasting Act. This was 15 years ago so I think we can give them that one.

The Internet world moved quickly and there were repeated calls for the CRTC to revisit that order over the years but they did not until 2009. At that time the definition of new media broadcasting was expanded to include mobile, an undue preference provision was included and the CRTC included a provision that new media broadcasting undertakings would provide information on its activities as requested by the CRTC to allow it to monitor the development of new media broadcasting. In 2010 the CRTC decided that it would start by requiring regular reporting of new media broadcasting undertakings affiliated with licensed broadcasters. Don’t get me started on the Working Group that was struck but was completely ineffectual because of the broadcasters’ reluctance to provide meaningful reporting – yeah, I was on that one.

Then in 2012, after the 2011 fact-finding exercise on OTT services, the CRTC finally acknowledged that new media was in fact no longer new and changed the name of the order to the Exemption Order for Digital Media Broadcasting Undertakings (more commonly known as the Digital Media Exemption Order) and amended the order with four new sections: exclusivity, anti-competitive head start, obligation during dispute and dispute resolution. This was a recognition that digital media broadcasting had become real businesses with real business issues that needed to be regulated. For example, the exclusivity clause means that CTV GO cannot be offered only to Bell customers and Rogers Anyplace TV has to offer CTV as well as City channels.

So while the general public was ranting about how the CRTC had to be prevented from ‘regulating the Internet’, it very publicly was already regulating broadcasting services being offered over the Internet and mobile. The affiliated OTT services pushed back on reporting and dragged their feet on negotiations (e.g. Shaw customers had access to Global Go long before other BDU customers) but the regulation had no impact on foreign OTT such as Netflix and YouTube. [Note – they do benefit from CRTC net neutrality regulation but that’s a post for another day.]

Until this hearing. The CRTC invited Google and Netflix to appear and asked both of them for evidence to back up their statements that there was plenty of Canadian programming on YouTube and Netflix so therefore there was no need to regulate (or rather extend regulation). As newcomers to the CRTC they can be forgiven for not knowing that Blais is a stickler for backing up your big statements with facts but Netflix had the two week advantage and still came to the hearing with unsubstantiated statements. The Commission, and Blais in particular, got very angry due to the repeated refusal of Netflix to agree to deliver requested data without a ‘guarantee’ of confidentiality.

The Twitterverse went wild with accusations that Netflix was being disrespected but primarily by those who are not regular CRTC observers and do not understand the process. Netflix in fact was disrespecting the administrative tribunal that is the CRTC and its confidentiality process. I can’t do a better job than Dwayne Winseck did in his blog post so I refer you there for an explanation of the process and why Netflix was wrong.

It appears to me that as the past 15 years of CRTC regulation of OTT had no impact on Google and Netflix they ignored it. So now the CRTC is exercising its jurisdiction by requesting data and Google and Netflix have to decide whether to acknowledge the jurisdiction or fight it. Yes, the CRTC will likely grant confidentiality (they certainly have in less sensitive situations) so that really is not the issue. Google and Netflix do not want the next step of regulation. Netflix may already be dealing with this in Europe where they have to pay a Culture Ministry tax in France (an actual tax) if their annual earnings are more than 10 million Euros and the French government has either recommended or required (Commissioner Pentefountas requested clarification from Netflix) that the Netflix recommendation engine favoured French and European content. Netherlands has similar laws about favouring domestic content.

Canada is a huge market and an easy market for Google and Netflix. They have to weigh the potential aggravation and cost of complying with CRTC regulation to the revenue that they make from the Canadian market. As of publishing this post nothing has been posted publicly but CRTC staff may be reviewing it – I will update. I doubt that they will just walk away. If they do not, we could see Canadian television shows and features showing up in the recommendation engine and not relegated to the “Canadian” category that consumers have to go hunt for. And maybe, one day, we could see foreign OTT making a financial contribution to the Canadian broadcasting system that they are participating in.

[Kudos by the way to Denis McGrath for trying to explain all this to ‘free Internet’ folks one tweet at a time. Check out his feed at @heywriterboy for an impressive attempt.]

Update 6:10pm – Financial Post reporter Claire Brownell has tweeted:

 
The ball is now in the CRTC’s court.

Self-Promotion – CMF Blog Post on CBC’s Punchline

I just wanted to let you guys know that I wrote another blog post for CMF’s Watch Squad, this one on CBC’s new online comedy channel (do not call it a portal) – Punchline.  It’s an interesting new venture that I’ll be watching both from the perspective of content creators (a new distribution channel that doesn’t require broadcast, a new way from a broadcaster to develop and test out material and talent) and as a solution to CBC’s funding woes as they move some of their content to the less expensive digital platforms.  It also plays into the CBC’s role as a public broadcaster and the constantly shifting perspective of what that means for those inside the CBC.  There are policy implications as that platform is unregulated.  That doesn’t mean much for Canadian content concerns since it is the public broadcaster and their focus is Canadian comedy but what about the other policy goals of the Broadcasting Act like accessibility, diversity and regional reflection.  What about accountability?  It may not be an issue now but it certainly should be monitored. 

I think Punchline is a great opportunity for comedy in Canada and I’ll be watching it’s development.  And I loved that I got to meet with comedy people at the CBC and pitch them on revisiting my fave CBC comedy show, “Michael Tuesdays and Thursday” – I couldn’t pass up an opportunity like that!