Bell-AstralFinal

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Mirko Bibic must be heaving a huge sigh of relief that the transaction has finally been approved.  Bell won’t be happy with all of the details but it’s at least done and from my perspective, the additional conditions are things that they can live with.   They might have to hire a new body to manage the new reporting requirements but that won’t cost much.

As always, my perspective on this transaction (which is my own alone) is focused on the English television side of the deal (Steve Faguy does a great job on the radio market with an emphasis on Montreal, which was so hotly contested).  There are some parts of the decision though that are noteworthy in that they signal the Commission’s thinking in the upcoming rationalization of the benefits policy (part of the Three Year Plan).

The big clear message from the top was that this transaction was still carefully reviewed for the public interest and was only approved as being in the public interest with the addition of a few new safeguards.  The revised application wasn’t a slam dunk.  “The Commission finds that but for these safeguards, it would not have been persuaded that the present transaction is in the public interest, and would not have approved it.” (para 28).

Aspects of the Vertical Integration code will now be enforceable conditions of licence, there are conditions around negotiation of non-linear programming rights, access to advertising availabilities by competitors and affiliation agreements have to be filed shortly after they are signed.  These all relate to a number of allegations that were made during both Bell-Astral1 and Bell-Astral2 that Bell was already treating smaller BDUs and independent programming services unfairly due to its size and would only get worse if it got bigger.  Rather than make any determination on the validity of these allegations (many of which were not supported at the hearing by evidence of the unfair activity) the Commission has taken the position that the new bigger Bell will have more opportunities to be anti-competitive so there’s a greater potential (whether or not they are anti-competitive now) and that potential has to be protected against.  The final piece to this is the warning that the Commission will not hesitate to act if they are presented with evidence that Bell is acting anti-competitively.

A lot of the decision was dedicated to a revised valuation.  This section will be of value to valuators of future transactions.  One of the parts that I liked was the valuation of leases related to the out-of-home business (billboards).  As those leases relate to an unregulated side of Astral, the Commission had asked for an auditor’s report of how they came to the valuation.  This is one of the ways that broadcasters artificially reduce benefits payable by increasing the value of unregulated assets that can be deducted from the calculation.  Instead of an auditor’s report, Bell filed an accountant’s report explaining how the valuation was made.  As they didn’t get an independent verification as requested, the Commission did not deduct the value of the leases related to the out-of-home business from the valuation.  Lesson – provide the Commission exactly what they ask for or it will cost you (Note – the same thing happened to Shaw when it acquired Global so they had warning).

So the value of the transaction was increased from $4.017 billion to $4.154 billion.  The Commission then changed the allocations between TV, radio and unregulated assets.  It is also worth noting that Bell tried to argue that SVOD  (i.e. TMN on Demand) services were unregulated but the Commission added them back in as extensions of regulated assets. They did not do the same for the value of digital assets such as websites related to broadcasters, which is something that I had argued for in Bell-Astral1.  The bottom line for benefits then is $175.4 for television and $71.5 for radio.  Note that radio was increased from the usual 6% to 7% of the value of the assets because of the size of the transaction.  An increase for size for radio has been done recently (Corus) but that argument hasn’t worked for the television side for years.  It is likely that the television transactions are just so large that the transactions could not support an increase in the benefits formula.

Unlike previous transactions, the Commission has not decided for Bell how they will allocate the increased benefits but instead require them to file a proposal on how they will be spent by July 29th.  I hope that the result and the final approved benefits are public.  In the past when the Commission has left the final package to later determination there have been letters that you had to know to ask for to be able to find out what exactly was agreed to.  Not good for the process.

Most of the television benefits were approved as proposed but there were some exceptions.  The proposal to allocate $3million to CAFDE for a fund for the promotion of feature film was not approved.  Bell is to come back with a new proposal for the promotion of feature film.  What is odd is that there really isn’t any direction as to what needs to be fixed.  What is clear is that the Commission didn’t buy the argument of feature film producers such as the Producers Roundtable of Ontario that the funds should go to feature film production before promotion.

OLMC’s (Official Language Minority Communities) have been a major concern of the Commission this past year at this hearing and at CBC.  After many years of making presentations about the need for specific allocations they earned an allocation as part of the CBC licence renewal and an allocation of 10% of each of the English and French envelopes of the benefits package.

An important wonky determination is that 100% of PNI not only has to be independently produced but also original.  If a program airs on TMN and then on CTV (or airs on Citytv and then TMN) it only is original for the first broadcaster unless both broadcasters participated in the financing of the production.  This is similar to the Canada Media Fund’s definition of original.

Bell proposed an allocation of $2.73 million to Consumer Education as part of the social benefits.  The Commission has found this to be too vague and is requiring more detail with a direction that it would be appropriate to fund The Broadcasting Accessibility Fund, MediaSmarts and the Centre d’études sur les medias.  Lesson – if you don’t provide detail then the Commission just might decide for you.

Social benefits will have to be reallocated on a language basis as well.  They were majority English but have to be consistent with onscreen benefits, which were allocated along the lines of the value of the services in each language – 69% French and 31% English.

Bell had proposed that a significant portion of the television benefits in English would be spent over three years starting in 2017 because of the large amount of benefits for English television currently in the system.  A number of the creator groups objected to this.  The Commission did not agree to this proposal because some of the communities (OLMCs) and some genres of programming (documentaries) are not participating in the current benefits bulge and need the funds now.  Benefits will be paid in equal installments over the next seven years.

As part of the application, Bell made a number of ‘intangible’ benefits proposals that in some ways the Commission is treating as tangible.  In particular they are asking for more detail on the new position of ‘Canadian Programming Champion’ to ensure that it’s not just BS and Bell will have to file annual reports to demonstrate what the champion did, what their budget was, who they met with and what projects were funded.  This report will be public.  As well, the commitment to regional offices has been expanded from Vancouver and Halifax to include Winnipeg and detail as to their mandate has to be filed and then reported on annually.  The regional communities have experience with regional offices that have no authority and exist only to fulfill benefits requirements (*cough* CHUM-Craig *cough*) and the Commission wants to ensure that doesn’t happen again.

I was surprised to see the Commission re-evaluate Astral’s group CPE and PNI because that issue hadn’t been aired much but it does make sense.  Bell will have to sell off a number of the Astral specialty services and several of them are low CPE and PNI services which reduced the overall historical average CPE and PNI for the group.  The Commission is asking Bell to make a proposal but their preliminary view is that CPE should increase from 30% to 32% and PNI from 16% to 18%.  Remember that Astral’s group CPE and PNI will still be calculated separately from Bell so this is important to ensure that services like TMN and Family Channel maintain their level of investment in Canadian programming.

There are quite a few details still to be worked out and proposals to be made by Bell by July 29th, so the dollars at play in each envelope are not yet certain.  Again I hope that that part of the process will also be public and we will have a clear, public decision on the final makeup of the benefits package that we don’t have to go hunt for.  Please.

Funding Application Tips – Partnerships

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I probably should have done this post on Partnerships before last week’s post on how not to screw up your funding application but there you go.  I’m doing it now.

One of the biggest ways that a project can fail (in general, not just with funding applications) is in picking the right partners to work on the project.  This is co-producers or digital media and television producers or creative partners.  The same rules/guidelines apply.

Audio-visual media is a collective work.  None of us can create (high quality commercial) film, television and digital media on our own.  We need to work with other people to bring complimentary skills together to get the end product completed.  I think that we all understand that a screenwriter, producers, director, actors and crew are needed to produce but this also applies to the producer.  Sometimes it is skills that are needed, for example when a smaller production company or series creators partner with a more experienced production company to take on a bigger challenge.  Sometimes it is financing as when a Canadian production company partners with a treaty co-production partner.  And then there are the partnerships between formats when a tv producer partners with a digital media producer to create affiliated digital media content for a television program.

Early on in my career I learned a few key rules on partnerships from a tv producer who became a broadcaster and then a winemaker and is back to being a broadcaster.  I like to sum them up as ‘can you get drunk with your intended partner?’  It may seem frivolous but bear with me.   You get drunk with people you like (most of us do anyway).  Production is hard and you should only do such hard work with people you like and trust, can talk to and feel that you can rely on.  This means spending time with people and getting to know them before signing an agreement.  Put the relationship ahead of the deal.

How do you do that?  Meet lots of people and companies before decided which one you want to work with.  Attend markets and conferences where you can meet a lot of people (and socialize with them!).  Talk to your friends and colleagues about their experiences with those companies.  Yesterday I told a story about the reactions of two different companies to an event that I was trying to set up and the person I told it to heard the story as more evidence that one company was a better potential partner for her than the other company.  It wasn’t the point of my story but it definitely informed her opinion about which one she would rather work with.

It is more than likeability and ethics though.  What you look for in a partner depends on what you need but you need to be certain that your partner has it and isn’t just BS’ing you or entertaining magical thinking about their abilities.  That’s the due diligence part that you have to do.   Can they bring that financing to the table – check out their past projects.  Can they produce the digital media component – check out their past projects.  Do they have the distribution skills or marketing skills that you lack – check out their team.  Right now possibly the biggest problem in convergent media production is tv producers partnering with digital media companies who do not have the skills and experience to produce what the tv producers are looking for.   For example, if a convergent project is going to be about developing and supporting the television audience with content then a digital media shop that has only created websites that sell products will not have the necessary skills.   The result, if it can be funded, just may be garbage.

If you don’t know the sector that you’re exploring for a partner then consider hiring a consultant who works in that area to help you find potential partners.  Yes, it does sound like hiring a matchmaker but it can work.  Some organizations are partnering with other organizations to facilitate matchmaking, for example WIFT’s Digiscape in partnership with CMPA, CWC and Interactive Ontario.   Go to funders’ websites and check out what they’ve funded and who produced it.

OK, so you’ve found your dream date, now what?  An effective partnership comes out of both parties clearly understanding the strengths that each bring to the partnership, the roles they will each perform and being completely on the same page about what is being produced.  You can do this in a co-production or services agreement but you also need one or more meetings where you can talk about the big picture and all the little details that it will take to get there.  I cannot tell you how often I have been able to see in a funding application that partners appear to have completely different ideas about what they are producing.   An effective partnership involves constant communication – which of course isn’t difficult because you do like each other, right?  [see above re getting drunk together]   You do not carve up the responsibilities and go off and do your thing, assuming that your partner is off in their corner doing their thing and somehow magically it will all get put together and end up being fantastic!

Ideally you want to have such a fantastic working relationship with your partner that you can work with them again and avoid all of this hard finding your partner work.

Project Funding Application Tips

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I have been evaluating project funding applications for various funds for many years. You may find this an odd thing for a policy wonk to do but I’ve also been a producer of websites, was active in children’s television and was the business manager for a fund so have a wide-ranging set of skills that allow me to assess creative, business and marketing potential for projects. I’ve seen a lot of applications in my day and have a few tips that I’d like to share to make my life and yours easier. They apply to applications for television and digital funding applications.

  1. Read the guidelines. Read them again. Prepare your application and then double check the guidelines again. If you’re not sure about something, call the funder. They almost always are happy to talk to you though perhaps not on the deadline date.
  2. Every application requires a synopsis. This is a brief, one paragraph description. Forget the blah blah and focus on writing a tight, accurate description of the project that will set the stage for the rest of the material in the application. A properly written synopsis will set the tone for the rest of the application and strongly influence an evaluator’s attitude as they set out to read the rest of the application. Often the synopsis is the only creative that a jury or board member will read before they make a decision based on the evaluator’s recommendation.
  3. Do a search for exclamation marks and delete same. This didn’t used to be an issue but is increasing. I blame Twitter and texting. My daughter tells me that all adults overuse exclamation marks in texts and tweets. It may be becoming a bad habit. Don’t use them in funding applications but put your emphasis in your words! Otherwise it feels like you’re shouting at us! See what I did there?
  4. Spell check. Seriously. You have no idea how often the phrase ‘and I was irritated by all the typos’ comes up in an evaluation.
  5. If you are referring to past work as being ‘landmark’ or ‘groundbreaking’ or using other such ‘never been done before’ adjectives then it better be. Describing previous work as hugely innovative when it isn’t will just undermine your current application.
  6. Make sure that your budget reflects the work proposed. If the budget preparer is fully informed of the creative then this should not be a problem but sadly often is.
  7. If you haven’t figured out your story or your project then you are not ready to apply yet. Do not rush the application and try the ‘trust us, we’ll figure it out’ argument. If the words aren’t there on paper then the funder has no idea what it is being asked to fund and won’t.
  8. You need a business model, marketing plan, distribution plan. The funder needs to know that there is audience demand and a way to make money, even if the funder doesn’t take an equity position. If there is no international market or revenue potential but there are other goals then explain that. The goal of a funding agency is to build the industry and not just fund good ideas.
  9. Try very hard to avoid buzzwords. First, a buzzword has a limited lifespan and if you are new in the sector you could easily be using a buzzword that is no longer in use (e.g. mobisode) or has negative connotations often because of overuse (e.g. transmedia). If you must use a buzzword, use it properly and only when necessary.
  10. Make sure that the bios of your team show that you can do what you propose. If your main team is new or new at what you propose, hire a consultant with relevant experience. If you partner with a company to provide more experience make sure that your partner really can do what they say they can do. Include examples of relevant past work in your bios. Do not make the evaluators use google.
  11. Describe exactly what you plan to do with social media. Mentioning Twitter, Facebook, Pinterest and Instagram are not enough. You actually need a strategy and each strategy is different depending on the program and the audience.
  12. Use pictures, sketches, illustrations and mockups. You know, they say that a picture is worth a thousand words. The evaluator knows that they are just sketches, illustrations etc. to help communicate the idea but pictures do help communicate that visual idea. That means character sketches for animation, mockups and wireframes for websites but also stock images for live action characters and photos of possible locations or sets.

Hmm. I could go on but I think 12 are a good number for you to digest and think about. Most of these points are not going to make the difference between funding or no funding but they each in their own way can influence the evaluator’s assessment.

Wonk Down

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As many of you heard, the Canadian media industry lost one of its own over the weekend when Alan Sawyer passed on after a 9 month struggle with cancer.  I won’t make any attempt to summarize his life but just wanted to share some thoughts.

I first met Alan through evaluating Bell Fund applications and meeting to review the evaluations.  After a while I started playing Scrabulous with him.  He loved his words.  Then it was running into him at digital media and television conferences and cocktail parties.  Then came Twitter.  Alan was one of my first Twitter friends (3rd in fact).  We both really took to twitter and enjoyed talking about the daily wonky events in Canadian media.  A group of like-minded tweeters started to form.  It was inevitable that we would start to drink together.

Mary Henricksen, Cam McMaster, Alan and I met for drinks in March or April 2010.  We had so much fun talking about wonky things that no one else in our ‘real’ lives enjoyed talking about – policies, hearings, politics, media developments, gossip . . . . oh and shoes but that might have just been Mary and me.  We decided that we needed to do it again and bring others.  In no time we became a monthly gathering of those who love wonky conversations about Canadian media:  Mary, Cam, Alan and I plus Joanne Deer, Sasha Boersma, Bram Abramson, Suzanne Keppler, Cynthia Lynch, Reynolds Mastin (special dispensation to attend though he doesn’t tweet), Peter Murphy and Ottawa chapter wonks: Jason Kee, Mario Mota, Jeff Lieper.   They became known as Wonktaculars and Alan was the creator of the monthly password (ostensibly to keep out wannabe wonks but really just to amuse us greatly).

Alan loved #wonktacular.  Except maybe when we talked about spas or shoes.  But other than those topics he had a wide ranging set of interests as did we all and he enjoyed talking about whatever was going on in the media world or the greater world, poking fun, being controversial, drinking craft beer.  He challenged our ideas and asked ‘but why?’  He celebrated our successes with us and we celebrated his with him – an Emmy!  He was very excited about transitioning away from wonkery and into interactive production but still loved wonky conversations.

Somehow, between drinks and giggles over NMBUs and serious work conversations that went behind and under the powers that be, we became a tight knit group of wonks.  In the past year a number of us have had challenges to deal with and turned to the others for support but nothing challenged us more as a group than Alan’s illness and nothing made us see what we had become as a group more than Alan’s illness.

We asked him what he needed, he said distraction – and we gave it to him.  We got him out to industry functions and parties and made sure he always had company.  We met for drinks as often as he wanted.  We laughed at his jokes even when they got really, really dark.  When he was tired he would just sit and listen.  We were a safe and comfortable crowd.   He was grateful for our company.  I know that because he told us.  And we were grateful that there was something that we could do for him when there was nothing that we could do about the cancer.

I really respected the way that he handled this challenge.  Alan went public very early on and kept anyone interested informed through a blog (which he wished he had the energy to fix – it just didn’t work the way that he wanted it to!).  He rediscovered his love of writing and was really good at it.   The result was a huge wave of ongoing support for him and through the blog he was able to tell us all how grateful he was for that support.  The last time that I saw Alan, in late April, we compared notes about blog writing.  He really enjoyed it, but he felt that he had run out of things to say.   His last few posts were sparse and he ended up having written his final one in early April.  I kept on top of what he was up to through his Foursquare checkins.  I’d start to worry if he hadn’t at least checked in for schnitzel once in the previous week.  Other wonks who weren’t on Foursquare would ask me if he’d checked in lately.  We had found each other through social media and we kept an eye on each other through social media.  With Alan at the centre of it.

We knew this day would come but we all thought Alan, and we, would have more time.  He was getting more and more tired whenever we saw him and started cancelling social gatherings because he just wasn’t up to it.  But still, it was a shock and we are all still processing it.

Mary has some last words that pretty much sum up how I think we all feel: “He was a good guy, a sharp wit, a curmudgeon and a friend deeply missed.”

Thank you Alan.   Kim, you are in our thoughts.

Women in TV – The Stats Please

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We have had two research reports released recently that try to shed some light on aspects of gender representation, and as well diversity, behind and in front of the camera in our television industry.  There was the Ryerson study of Canadian Screenwriters and the Women in View on TV Report.  Both reports left me wanting more – more detail, more explanation, more context.   The Ryerson report was a survey of 266 of the over 2100 Writers Guild of Canada members.  That’s just over 12% of the membership who chose to answer the survey.   It isn’t a large sample.  That being said it highlighted facts which are known to those who work in the industry – it takes time to become a successful screenwriter, they are highly educated, about a third are women and few make a full time living out of screenwriting.  It attempts to draw the connection between few women making a lot of money by screenwriting and systemic discrimination.  That may be true but I couldn’t follow the logic from the available data.

As for the Women in View on TV Report, it was more statistically significant as it researched staffing in key creative positions on 21 live action drama series with CMF funding.  It is a snapshot of a particular time and will not be able to identify trends until this study has been done year after year – which I understand is their hope.  We can see that women are not well represented behind the cameras but we cannot tell if this is a long standing problem, one that is getting better or perhaps even worse.  Also, by focusing on the statistics it again makes it difficult to extrapolate causes and therefore solutions.   It is a very good start but I would like to see the study grow in the future.

Yesterday I attended a panel discussion that Women in View had arranged as part of TIFF’s Higher Learning program to present their research and put it in context and I found what I had been looking for –  Dr. Stacy Smith of the USC Annenburg School of Communications.  Now, this is not to slight the other panelists (John Doyle, Globe and Mail columnist, Ferne Downey, ACTRA  National President, Laura Michalchyshyn Head of Sundance Productions) who had some great things to say (more on that in a minute) but just to say that Dr. Smith’s research on gender representation in the Hollywood film industry had the detail and the context that I was looking for.  She has conducted two studies that she presented to us.  One was a study of women onscreen and behind the camera in big blockbuster Hollywood films between 2007 and 2012  and the other was of Sundance Festival applicants and accepted films over the last ten years.  In addition to the statistics, they also interviewed key creators to ask them the ‘why’ questions.  The results were fascinating.   You can find more information in the links but the key for me was the reasons given for the low representation of women.  It is all about what Hollywood thinks that they need to do to make money.   It is ‘common wisdom’ that women will watch a male driven movie but men won’t watch a female driven movie.  According to Dr. Smith the statistics that she has gathered from a film distribution study proves that is not true.  Men tend to resist writing female-centric stories while vice versa is not true.  Female writers tend to write more female characters but Dr. Smith admits that she does not yet know if that is because they are advocates for women or if there is a ‘pink ghetto’.

The Sundance data showed a much higher representation of women in indie film than in the Hollywood blockbusters.  For example, 20% of the drama screenwriters are women while only 13.5% of the blockbusters were written by women.  There was a definite skew in the doc format as 32% of the docs were written by women.  The same trend is visible in the producer category where 29% of the indie dramas were produced by women, 45% of the docs were produced by women but only 20% of the blockbusters were produced by women.  Here though the reasons given were different as indie film isn’t as influenced by myths of the distribution world.  Reasons included lack of financial resources for women, male dominated networks, stereotyping on set, work/life balance and exclusionary hiring decisions.  More research needs to be done to try and identify why there are more women in documentaries (self-selected or funnelled?) and to determine if the size of the budget and risk is the only reason why there are more women in indie film than blockbusters.

I really love that Dr. Smith has done many studies and will continue to do more.  As our world in Canadian media is different than Hollywood we need to have our own studies like these.  If we can truly identify the causes for lack of representation, then we can try to come up with effective solutions.  Yes – evidence-based policies.

The rest of the panel discussion was interesting as it tried to give context and causation to the Women in View research.  Laura Michalchyshyn thinks that women have been socialized to be quieter and that does not get us the jobs – we need to grow a pair.  We need to encourage women to enter these careers in school and then mentor them along the way.  Ferne Downey offered that it isn’t enough to look at numbers but also to look at portrayal – too many female characters are stereotypes.  More women writing, producing and directing will mean more realistic portrayals of women.  “Orphan Black” was identified as a television show that is proving that men will watch a female-driven show, disproving that myth.  More successes like that (i.e. “Continuum”, “Lost Girl”, “Motive”) will breed more opportunities.  Finally, John Doyle was as provocative as he can be.  He thinks that part of the problem in Canada is that our big broadcasters are all owned by cable companies and as a result their senior executives have less creative vision than traditional broadcast executives.  They are less comfortable with risk and stick to formats that work (ahem – cop shows!).  I took down the following statement as close to verbatim as I could:

“There is a cabal of guys who look after each other, who won’t admit to blocking women from jobs.  They are mostly hacks though some are talented.  They get jobs because they are the loudest voices in the room.  They network, sit on juries, write blogs, promote themselves and their friends.  They hold grudges, organize campaigns against shows they don’t like.  You can’t ask women to say they have to also be the loud voices, that’s not fair.  Though it is incumbent on women in power to promote the work of other women.”

Personally, I don’t think that there’s a cabal with secret handshakes etc.  That sounds way too organized.  But what Mr. Doyle is talking about here is the existing network and it is hard for newcomers to break into it or to move up within it.  We each have to find our own way – whether it’s growing a pair and getting loud or just figuring out how to network better.  I have enjoyed the mentoring and support from some terrific women and I think I’ve turned around and done the same for those who have followed after me.  But I’ve been in this business for 25 years and while there has been progress (oh, the stories I sometimes tell to the younger ones), we clearly need to do something more concrete to speed up the pace of change.  Until we can say that those who create our stories are representative of our society, we need to keep shining a light on the problem and talking about solutions.

Don’t even get me started on diversity!  [actually – I will tackle that but it’ll be the subject of a later post].

The last word today goes to the brilliant (yes – I’m a fan) Joss Whedon, interviewed about his “Much Ado About Nothing”:

Why do you think there’s a lack of female superheroes in film?

Toymakers will tell you they won’t sell enough, and movie people will point to the two terrible superheroine movies that were made and say, ‘You see? It can’t be done’. It’s stupid, and I’m hoping The Hunger Games will lead to a paradigm shift. It’s frustrating to me that I don’t see anybody developing one of these movies. It actually pisses me off. My daughter watched The Avengers and was like, “My favorite characters were the Black Widow and Maria Hill,” and I thought, Yeah, of course they were. I read a beautiful thing Junot Diaz wrote: “If you want to make a human being into a monster, deny them, at the cultural level, any reflection of themselves.”

 

CBC Licence Renewal – More Than Just Ads on Radio

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The CRTC issued its CBC licence renewal decision today and I of course have a few thoughts about it.  But first – my context.  While at the WGC I spent a lot of time over two years (due to hearing postponements) working on a submission and presentation to the CRTC on CBC’s licence renewal.  My thoughts here are informed by that thought and analysis but not limited by it.  I’m also in no way representing the WGC.  Remember – it’s just my own somewhat informed personal opinion.

Renewal was never at issue but just the terms of that renewal.  The decision to allow limited ads on Espace Musique and Radio 2 for three years has received most of the attention and will be the headline in the news but there’s an awful lot more in the 124 page decision.   As an English TV content person I have very specific interests – nothing about French tv or radio and little about radio.  With that in mind, here are a few comments.

The whole CBC Licence Renewal process was very belaboured and it was what I think of now as the ‘old’ style of broadcaster application.  As broadcasters have done for years, the CBC submitted an application that asked for a great deal of deregulation and included lots of  ‘trust us’ language.  Stakeholders objected and provided evidence that trust was a questionable strategy.  The CBC countered at the hearing and during the reply stage with compromises – often as a result of clear messages from the CRTC during the hearing.  This is the  ‘public hearing by negotiation’ that the Chair, Jean-Pierre Blais, has objected to on more than one occasion.  [This may be the last time that we see this strategy as in the Bell-Astral2 hearing Bell certainly heard the warning and came to the CRTC with its bottom line rather than an opening bid.]

In the meantime though, when assessing the decision you really need to look at both the original proposal and the final proposal when looking at the decision.  In several instances the Commission seems to have felt that the CBC made enough of a concession in their final proposal that it didn’t need to push it further.   You may not agree.

The crux of the matter though was how to balance ensuring that the CBC met its regulated mandate with the clear reductions in its parliamentary appropriation.  While the government has said that the CBC has a record high appropriation, the CRTC crunched the numbers and started the decision by saying that the 2011-12 appropriation was comparable in adjusted dollars to the 2002 appropriation though $180 million higher in actual dollars.  By the end of the next term in 2019, the appropriation will actually be $160 million less than 2002 in adjusted dollars.  So how does the CBC manage to meet its mandate with fewer resources?  The CBC argued that it needed flexibility to figure out on its own how to meets its mandate with fewer resources but the Commission definitely didn’t buy the blanket ‘trust us’ argument.  The CRTC decided that there had to be a few ground rules but they are going to allow more trust than most of the content creators are going to be happy with.  Here are a few highlights from the English TV perspective.

In a number of places the CBC had expectations and they are now conditions of licence.  There is no negative consequence to not meeting an expectation.  It’s a suggestion that may or may not be met.  As part of the licence renewal application for the next term, CBC will have to report on whether it met its expectations but not before.  A condition of licence however is enforceable and the CRTC can bring  the CBC back before it in a ‘show cause’ hearing or with a mandatory order (See the OWN hearing for a recent example of a show cause hearing and the resulting decision as an example of a mandatory order).

CBC had asked for a condition of licence (“COL”) of 7 hours of PNI per week when they historically had been commissioning 10 hours.   By the end of the hearing they moved to 9 hours of PNI and the CRTC has accepted that.  That doesn’t sound like a big difference and the CRTC made the point that quota should be less than historical commitments because going forward the funding would be less than historically received (despite CBC’s very positive revenue projections in the application).   But the decision also accepted the proposal that only 75% of PNI (or 5.25 hours) would be independent and that a minimum of 2 hours would be drama and 2 hours would be documentary.  Content creators and especially DOC fear that CBC would only do the minimum of 2 hours of documentary (down from current levels of 3 hours per week) and increase the amount of in-house production that they are currently doing.  The CRTC’s argument is that these are minimums, they ‘expect’ the CBC to exceed those minimums and they believe that the CMF guidelines and the CBC’s need to build audience and generate revenues will be enough incentive that additional regulation is not necessary.

Respectfully to the CRTC, I see some holes in that argument.  CMF broadcaster envelopes are based in large part on audience success (way complicated).  The CBC is not and cannot be all about chasing large audiences to increase their CMF envelope or their ad revenues because then it stops being a public broadcaster.   Its mandate includes offering a variety of programming so that all Canadians can find programming on CBC, not the same program to each and every Canadian.  This is why even at 3 hours a week, the CBC offers more documentary programming than the private broadcasters.  Any push for larger audiences in order to increase CMF or ad revenue is likely to mean fewer documentaries as they just do not have the same level of audience as prime time dramas such as “Republic of Doyle” or “The Rick Mercer Report”.   Regulation was needed to ensure that the CBC did not ignore its mandate in search of revenue.

Then there is the issue of the CBC’s excessive use of minority co-productions (“Tudors”, “Pillars of the Earth” etc.) to meet its Canadian content obligations.   The WGC proposed excluding them from calculation of PNI as they use few Canadian resources.   The goal was to find a solution to an imbalance in broadcasting co-productions that meant fewer opportunities for Canadian talent on Canada’s broadcaster.  Well, the Chair of the CRTC is well-versed in co-production policy from his previous employment at Heritage and the decision refers to the biggest policy hurdle to addressing the imbalance – the policy of ‘national treatment’ means that were the CRTC to agree to that exclusion, there could possibly be international trade repercussions.  However, at the hearing the Chair had countered that a possible solution was requiring an overall balance of co-productions within PNI so it was disappointing not to see that in the decision.

The CBC’s previous expectation that it broadcast Canadian programming for 75% of its day and 80% of its prime time period has now been entrenched as an enforceable condition of licence.  While some parties, such as ACTRA, wanted the CBC to move to 100% Canadian programming in prime time, the CRTC agreed to what I think of as the ‘Coronation Street exception’.  There would be riots in the streets if the CBC had to get rid of it, riots in the streets.

Now for kids – a subject near and dear to my heart ever since my earlier time with Owl Television.  CBC has stated that they want to move away from school age and youth programming and concentrate on preschool programming.  They stated this made sense because these age groups were leaving broadcast television and going online, where their needs will be met by CBC.ca.  No evidence was presented to support the departure of kids and youth from tv and Youth Media Alliance presented stats to the contrary.  However, the CBC had also not presented any evidence about what it is doing and how much it is spending on CBC.ca.  Many stakeholders, and particularly the Youth Media Alliance, presented arguments and evidence to demonstrate a need and a want for quality school age and youth programming for Canadians on CBC.  The CBC revised its proposal to a condition of licence of 15 hours of programming for children up to 12 years of age and an expectation of 5 hours for youth 12 to 17.  The CRTC ‘expects’ a reasonable allocation between preschool and school age programming.  There is a new requirement of 1 hour of original programming per week.

The good news in this is that the children’s obligations have moved from expectation to COL but the bad news is that youth programming hasn’t and there is no protection of school age programming within the allocation of 0 – 12.  Given that in the last licence term there was an expectation of 5 hours of youth programming that was completely ignored I don’t understand why the CRTC thinks that an expectation is good enough for the coming licence term.  The CRTC’s logic is that 1 hour of original programming is more of a commitment to original programming than zero but that still will not prevent the CBC from meeting its commitment as it does now through airing a lot of very old repeats.  At the hearing there were many passionate arguments about the obligation of Canada’s public broadcasters to meet the needs of its youngest citizens and I am afraid that we will be hearing these arguments again in 5 years.

There was one little part that I did enjoy in the kids part of the decision.  This Commission isn’t buying the argument that the last Commission agreed with – that families should just pay for YTV, Treehouse and Family Channel if they want kids programming.   The Commission stated clearly that as private conventional broadcasters have moved out of kids programming, it is even more important that the CBC as Canada’s public broadcaster support the kids and youth audience.  We just don’t agree on how that will happen.

During the hearing the CBC committed to broadcast one Canadian feature film per month but would not commit to when they would air them.  They wanted the flexibility to air them on Saturday afternoon or late in the evening.  Really late.  As most audiences are still watching tv during prime time, there were calls for a commitment to air Canadian feature films in prime time and not let the CBC dump them in off hours.  As I recall the DGC was pretty insistent on this point.  The CRTC has instead ‘encouraged’ the CBC to air Canadian feature films in prime time and in a regular slot in the summer (ie when there is no hockey).  I think an encouragement is even less than an expectation.

A really wonky request was for more detailed reporting to be able to assess whether CBC is meeting its expectations and COLs and encouragements (is that a word?) while the CBC was arguing for less reporting.  One in particular that interests me is the call for reporting on the CBC’s digital expenditures and revenues.  On the one hand the CBC is saying that it can get out of kids and youth programming because it is doing a lot for that age group online while on the other hand they are not reporting any of that activity because there is no requirement.  The CRTC reiterated that as a Digital Media Broadcasting Undertaking (DMBU – successor to the much loved NMBU) is exempt from licensing, there is no requirement to report other than the vague reporting that is currently reported to the public in an industry aggregated way.  Any greater reporting could somehow harm developing business models.  I hope then that the CBC will not be allowed to make the claim again at the next licence renewal hearing that these unreported activities can take the place of regulated activities.

The final piece of interest to me is on terms of trade.  The Commission declined to wade into the competing stories about why no agreement had been concluded (this had taken up a lot of hearing time) but was very firm and clear about its jurisdiction to impose a terms of trade agreement if it wants to, regardless of the CBC’s legal opinion to the contrary.  While it won’t at this time impose Terms of Trade, the CRTC gave the parties one year to conclude an agreement or risk a show cause hearing or a mandatory order (see above).  Will that be enough to break the log jam?  We can only wait and see and hope that it happens.     Terms of Trade are important to provide stability and certainty in negotiations and create a level playing field between parties so we do all need the CBC and CMPA to conclude Terms of Trade.

Oh, that’s a lot of stuff.  I congratulate you if you made it to the end.  Just imagine if I was interested in French TV and radio!

How I would like you to use LinkedIn

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[Remember – this is my blog so I can muse about whatever I want.]

I think that we’ve all noticed that LinkedIn usage has jumped in recent months.  According to LinkedIn itself, membership grew by 16 million to 225 million in the first quarter of the year.  That’s a 7.6% increase in just one quarter.  It is the 22nd most visited web property in the world.

LinkedIn is an ‘old’ social network since it launched in 2003.  Many people (myself included) built a profile and then ignored it.  Many of you still are ignoring your profile because you think that you are not job-hunting so don’t need it.  I am posting today to ask you to update your profile.  Please.  For me.

There are two things that I use LinkedIn for now and neither is job hunting.  One is to publish blog posts.  Links to a blog post go out simultaneously on Twitter, Facebook and LinkedIn.  If you miss it the moment that it goes out on Twitter, you can find it more leisurely on LinkedIn or Facebook.  That is, if you are connected with me in either place (and note that I have to know you pretty well to connect on Facebook – not so much on LinkedIn).

The other thing that I use LinkedIn for is to check out people’s profiles before I meet with them.  Before in my previous job and even more now, I frequently meet with new people.  I like to check out their profile first to see what they look like (it helps when meeting for coffee in a crowded café) and get a better handle on what they are doing now and what their background is.  This is why I would like you, all of you, to post a photo and update your LinkedIn profile so that it tells me what you are doing now and the essential things that you have done in your past.

And yes, I also use LinkedIn to build a network because you have no idea where the next consulting gig is going to come from.  And when I was hiring in my last job I always checked out the applicant’s LinkedIn profile.  So for independent consultants and job hunters or engagers it is essential.

But for the rest of you – please update your profile!

The CRTC’s 2013-2016 Three-Year Plan

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The CRTC’s updated Three-Year Plan was released yesterday.  This is a useful document for stakeholders to get a general idea of when larger policy hearings are intended to be conducted.  It can help in budgeting, though there will always be more hearings than are in the plan, and in research planning.  For those who haven’t read it, from a broadcasting perspective these are the CRTC’s planned activities that I think are worth noting for stakeholders (under the CRTC’s heading ‘Create’):

–       There will be a ‘conversation with Canadians’ about television in 2013-14.  I have no idea what that means but I assume that we will hear shortly.

–       The genre protection policy was to be internally reviewed in 2013-14 but that has now been postponed to 2014-15.

–       The policy for Cat A services will be reviewed in 2015-16 to see if it is time to license more of those services.  Cat A’s have priority carriage and CanCon obligations that Cat B’s don’t have.

–       In 2013-14 there will be a written consultation on the commercial radio policy

–       The CRTC will internally research Cultural Diversity policy in 2013-14, possibly undertake a public fact-finding consultation in 2014-15 and may then have a public hearing on cultural diversity policy in 2015-16.  There already is in place a cultural diversity policy that aims at ensuring that broadcasting is cultural diverse in employment and programming and the broadcasters have reports that they have to file each year to demonstrate their activities to that end.  It will be interesting to see if this policy is working well or not.

–       The CRTC will undertake the same research, fact-finding, public consultation process for Ethnic Broadcasting, both television and radio.

–       There will be a review of Native Radio Policy in 2015-16.

–       The Tangible Benefits Policy will be reviewed by written consultation as will the valuation policy, in 2013-14.  A new policy will not be implemented until 2014-15.  The knee jerk reaction is to suggest that there will be no more major transactions by that time but every time someone says that the market turns around and presents us with another major acquisition.  It isn’t going to hurt to have greater clarity on what are acceptable benefits package allocations and on how the CRTC assesses valuation of assets for determining the amount of those benefits.  I was on a panel at the 2012 Law Society of Upper Canada’s Biennial conference on Communications Law and Policy where both stakeholders and broadcasters called for greater clarity and consistency in both valuation and tangible benefits policy.

–       Rogers’ TV licences are up for renewal in 2014-15.  They have added several new stations since they were last licensed so expect a call for a higher commitment to Canadian programming and their resistance to that.

–       In 2015-16 Bell, Shaw and Corus have their group licences up for renewal.  We have not yet seen the reports of the first year of their licence term so it is early to speculate on what the issues will be for renewal – but there will be issues.

The headings for Connect and Protect have quite a few topics as well.  Feel free to review the Plan if you’re interested in what the CRTC has planned for telecomm, pay phones, broadband performance,  wireless code of conduct, 911 services and more.

I’m going to not think about the CRTC for the rest of the day.  Next week it’s Bell-Astral2 for the whole week so I don’t know about you but I need just a little break after almost two weeks of #91h.

The Benefits Bulge*

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It might have been lost in the dropped jaws reaction to Kirstine Stewart’s sudden move from CBC to Twitter Canada, but yesterday Mario Mota released his 2013 Canadian Television Benefits Monitor. The Report, which is available in detail to subscribers and summarized in his press release, tracks each year English-language broadcasters’ reporting on their CRTC-mandated tangible benefits packages. Those are the benefits required to be spent on the Canadian broadcasting system as a condition of approval of an acquisition of Canadian broadcasting assets. The 2013 Report tracks spending for the year ending August 31, 2012. It takes this long for the broadcasters to report to the CRTC, for the CRTC to publicize the reports and for Mario to then review and analyze the reports.

We are currently enjoying substantial benefits spending on Canadian television and we now have the data to demonstrate that. Due to benefits packages primarily from Bell, Shaw and Rogers that were determined in 2011 but finally started to be spent in 2012, benefits spending jumped from $52 million in 2010-11 to $177 million in 2011-12. Not all of that was for onscreen benefits (i.e. television programming) and the Commission did allow for unprecedentedly low allocations for onscreen benefits for Bell-CTV and Shaw-Global. Even so, onscreen benefits spending increased from $44 million in 2010-2011 to $113.5 million in 2011-12. That is an increase of 158%.

Benefits are to be spent roughly equally in each year but broadcasters will not be sustaining this level of spending in each year going forward. This may in fact be a high water mark, perhaps with next year. Some packages expire in 2014, others in 2015 and the final ones in 2019. There will be smaller packages approved for Bell-Astral 2 (most of which will go to French television or radio but some for TMN), and Teletoon and Family Channel transactions are still to be determined. Currently, according to the Report the total to be spent by 2019 on onscreen programming is $355.4 million.

To give some context to these numbers, the 2011-12 budget for CMF English Performance Envelopes was $189 million. So last year’s onscreen benefits spending of $113.5 million was 60% of the full amount that was available from CMF from the performance envelopes. Additionally, benefits are to be incremental to what a broadcaster already has to spend on Canadian programming through their CPE and/or PNI CPE (see Acronym Decoder). That’s the other part of the story that we do not know yet – how much did the broadcasters spend due to the Group Licence Policy before they started spending benefits money. We need to know that before we can really get a sense of how much money is in the system for Canadian programming.

But it’s a lot! We know that much. What happens when it has all been spent? I have said this before and I am not alone – we have an opportunity here to leverage increased spending on Canadian programming to try and create permanent positive change. Last year in an article in Carrt (subscription needed) Mario Mota suggested that we leverage the increased funding in Canadian programming by implementing Non-Simultaneous Substitution (“NSS”). NSS would break English Canadian broadcasters dependence on the US schedule, give Canadian programs stable timeslots thereby increasing audiences and therefore increasing revenues. If NSS was in place, the benefits-funded “Bomb Girls” would not have been pulled off the air for a simulcast of “Survivor” and might have had a chance at a better time slot when it did return. [See Kate Taylor at the Globe and Mail].

There are technical hurdles to NSS and I am not qualified to discuss them. NSS is just one of the ways though that we can try and take advantage of the current ‘bulge’ in Canadian programming. We have audiences watching Canadian drama in higher numbers than they have in years. How do we sustain that appetite for Canadian programming and the willingness of Canadian broadcasters to keep spending money on Canadian programming when they no longer have to. I agree, getting rid of simultaneous substitution so that Canadian broadcasters have to rely on their Canadian programming is another solution. I am just not sure that the Canadian broadcasters could survive a cold turkey withdrawal of their crack cocaine. Then again, who says it would have to be cold turkey?

What else can we do? Perhaps future benefits should be put in endowments like they used to be so that they could have long term sustained investment in Canadian production as the Independent Production Fund, Cogeco Fund and others have been able to do. That is something for the Commission and broadcaster applicants to consider. Perhaps some of the benefits money yet to be approved could go to building audience demand (i.e. promotion, social engagement, sustaining a star system) so that broadcasters risk alienating their audience if they stop funding Canadian programming. [Note – in no way am I advocating a return to entertainment magazine programming, a notorious broadcaster boondoggle that was intended to build a star system but instead allowed Canadian broadcasters to spend money on promoting a lot of US programming with Canadian stars in it instead of spending it on actual Canadian programming.]

I am sure that there are other things that we could do to leverage this ‘golden opportunity’ if we put our minds to it. We need to learn from the last golden age – the mid-90s. We had so many great programs that Canadians loved to watch: “Street Legal”, “Due South”, “Da Vinci’s Inquest”, “Road to Avonlea” to name just a few. Those shows trained screenwriters, directors, actors and producers and developed a talent pool. When the money dried up with the 1999 TV Policy, which got rid of an expenditure requirement for broadcasters, a lot of the talent went south and did not return. That is what we are risking if we do not have a plan in place for post-2019. We are right now growing our talent pool but will they have careers here in a few years.

*And for the record, I was thinking more of a cow in the middle of a snake kind of bulge, nothing Jon Hamm-ish.

New Broadcasting Participation Fund

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Last Spring, as part of the CRTC’s approval of the Bell-CTV transaction in 2011, the CRTC approved Bell’s proposal to create a Canadian Broadcasting Participation Fund. The goal of the Fund is to help public interest and consumer groups participate more often and more effectively in CRTC broadcasting proceedings. The Fund will reimburse internal and external costs of lawyers, expert witnesses and consultants necessary to draft submissions and attend at hearings. There is a grid for approved costs for the lawyers, expert witnesses and consultants but also for reimbursement of travel, accommodation and meals.

The guidelines are modeled on the guidelines that support reimbursement of costs in telecommunications proceedings. Unfortunately those guidelines are drafted in a way that assumes that the reader has also read the various decisions that support the process of reimbursing costs of participation in telecommunications proceedings. So they’re not that clear. For example, an Applicant is defined as someone who applies. The goal is to support nonprofit public interest and consumer groups and individuals (though the forms are drafted as applicants are only groups and not individuals). I did confirm with the Fund that individuals could apply. Public interest is not defined but there is the suggestion that it includes ‘advocacy and service groups’. The Fund confirmed that two of the key determining factors in eligibility are that the applicant’s intervention is relevant to the proceeding and that they are non-commercial (i.e. no broadcasters).

Bell allocated $3 million of their mandatory benefits to the Fund. They have also proposed allocating another $2 million to the Fund from the upcoming Bell-Astral2 acquisition, so if approved the total Fund will be $5 million. The Fund was  launched last Friday and it is now accepting applications for reimbursement. As the Fund was initially approved March 26, 2012, it will reimburse costs from participation as of that date.

Participation in broadcasting proceedings can be expensive. A submission can be more effective when at least reviewed if not drafted by someone with experience with the rules and regulations of the CRTC, including the details of the Broadcasting Act. Hearings are fairly formal proceedings where commissioners will challenge intervenors on their position to better understand them and get information on the record. There are a number of organizations that have to pick and choose which proceedings they will participate in because they just can’t afford to weigh in on all the ones that affect them or their membership. Few individuals and small organizations attend, particularly if they are located outside Ottawa. It is hoped that this Fund can address those concerns and help the CRTC hear from more than the usual suspects.

[Yes, this post could possibly sound self-serving but honestly, I’m interested in sharing widely the availability of this Fund because I think it will increase the quality of discussion even if intervenors were to use it just to cover travel costs. My heart goes out to those passionate individuals and small groups who find the issues important enough to spend their own money to attend. I’d like to see more of them, more of the Marjorie’s, and I would like them to be able to get some help.]