Tag Archives: Corus

Dueling Industry Conferences

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It’s hard not to compare industry forums when they are back to back.  Thursday the Banff Media Festival held its “Content Industries Connect” conference at the Ritz Carlton.  Swanky.  It was a paid event.  In the past it had been part of the Academy’s Screen Week but this year while during Screen Week it wasn’t affiliated with the Academy (there’s a story there somewhere but I don’t know it).  Friday the official Industry Forum took place, hosted by the Academy, CMPA and DGC.  It was free for members of those three associations and took place at the TIFF Lightbox.  Not quite as swanky but the seats were more comfortable.

I don’t know if anyone went to all of both.  I was signed up for both but came late to Banff and skipped out of one of the Industry Forum panels.  It’s just too much of a time commitment to do both.  Most people seemed to pick one or the other.  The topics were quite similar but Banff was the only one with a Media Leaders panel so my impression is that the senior executives chose to pop in to the end of the Banff day to attend the Media Leaders panel and bypassed the Industry Forum.  The Industry Forum was more grassroots given the free admission for members of those organizations.  The speakers seemed to be aware of that and targeted the production community rather than the executives with their discussion.    So while the topics were the same, they ended up being quite different days (I’m not going to compare the cocktail parties though for me the food at the Industry Forum won – quinoa battered shrimp and lamb chops!).

As someone who attends a lot of conferences I didn’t think I’d miss much by skipping the Banff panel on The Future of Content in a Multiplatform World and based on the tweets and what I heard, it was the same talk we’ve been hearing for the past year from Vice, Shomi, Blue Ant and CBC. I don’t know anyone who attended the panel on brand engagement with speakers from Hyundai, Microsoft and Kraft and the tweets don’t tell me much either.  Honestly, it seemed an odd choice for the content crowd.  I finally made it to the conference in time for the “Letterkenny” panel.  Full disclosure – I haven’t seen it all (I don’t have CraveTV) but every second of “Letterkenny” that I’ve seen makes me laugh.  I enjoyed the clips, hearing about the process, learning about its success (more views on CraveTV than any other show in its catalogue including Seinfeld and South Park) and its renewal announced during the panel.

Then there was the Media Leaders panel.  Banff has it every year that they have done this event.  This year there were only two leaders after consolidation (and CBC cancelled) – Mary Ann Turcke from Bell Media and Doug Murphy from Corus.  Talking to people afterwards there was one word that seemed to sum up the panel and it’s not a polite word.  It starts with a b.  There was a very negative reaction to Doug Murphy’s discussion of the CRTC’s decision to not require Terms of Trade as part of broadcast licences – they’re now free to treat every deal like a snowflake.  Yes, a snowflake.  Which ignores the very real imbalance in bargaining power between the mega-broadcasters and most independent producers.  There was a marked contrast between this Media Leaders panel and the one last month at Prime Time – this one was channeling ‘sunny ways’.  Everything is going to be great.  Netflix isn’t a threat as they’re now starting to partner with it, get high profile casting because of its involvement and negotiate windows.  It’ll be interesting to see if they go back to ‘Netflix is heralding the end of the world as we know it if you don’t deregulate us’ mantra next time they’re in front of the CRTC.    They were also pretty positive about pick and pay.  Sure a few of their services will die but producers shouldn’t worry because the remaining ones will only be bigger and better.  Since the jury is still out on this big shift in consumer behaviour due to pick and pay that has been predicted by some, this could mean that pick and pay is going to be used as an excuse to close up some of the underperformers. Again – we’ll have to wait and see what happens in front of the CRTC.

Now off to the Industry Forum.  The first panel was on discoverability.  I’m still not sure we’re all talking about the same thing (push vs. pull) but this panel was a lot more about new techniques to find audiences and provide them with what they want than the discoverability panel at Prime Time which talked more about traditional marketing using digital platforms (and I believe that it was also programmed by the CMPA since it was branded Prime Time Any Time).  In particular, it was useful to hear about Richard Kanee (CBC) and Ramona Pringle (interactive digital media producer) experimenting in finding and engaging audiences.  I appreciated Kanee’s admission that the CBC had missed social media engagement opportunities in promoting “Strange Empire” (you can’t expect him to take responsibility for the whole marketing mess) and his admonition that producers and broadcasters shouldn’t always chase the latest new thing.  Some of the tried and true engagement methods, like email newsletters, still work and should remain part of your strategy instead of running after all the riskier new methods.  Final favourite bit of wisdom from the panel was that the studios (and broadcasters and producers) should be learning audience engagement from the YouTubers who have learned how to find, support and grow their audiences.  Casting them in a mainstream television show isn’t enough to migrate their audience, but if the YouTubers develop their own television show their audience will recognize the authenticity and watch.

The next panel was on co-production featuring three Canadian majority copros:  “Book of Negroes”, “Born to be Blue” and “Room”.  There was a good discussion of why go copro – the added money allowed them all to afford higher profile talent which generated more sales.  It also allowed them to access government funding rather than distributor advances which meant casting the best person for the part rather than for international sales.  Unfortunately, that government funding helped those stars become international hits and now it’s unlikely that anyone in Canada can afford them so for me there is a flaw in that system.

I have to admit that I stepped out and missed the “Orphan Black” panel not because I don’t love the show (I do!) but because I’ve seen a few “Orphan Black” panels over the years.  I ran into a few others doing the same thing so we did our own networking.  We went back in for the keynote speech from Colin Brown, who among other things is a professor of film and economics at NYU.  He gave a very insightful presentation on the international markets for feature films and how they differ between markets and between films and the business case for investing in a mid-size studio producing a slate of mid-range budget films.  His add-on bit about Canada was less insightful as the audience did not need to be told who are the Canadians in Hollywood or that we should be prouder of all the great talent who have left.  As someone who has spent their entire career in the domestic film and television industry I was not impressed.   But I am thinking about what Canadian stories might be naturals for the Chinese and Egyptian markets.  Hmm.

So did we need two such conferences in two days?  Nope.  They could have been merged and been one great day – as long as they kept the quinoa-battered shrimp.

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CRTC’s Corus Decisions – A Few Lumps of Coal In With The Presents

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C’mon – I had to go with a holiday themed subject line on the last real working day before the holiday break.

Yes, the CRTC decided that it was in the public interest to allow Corus to buy the Teletoon services and Historia and Séries+.  The interesting stuff (for a CRTC watcher like myself) is in the detail.  A lot of detail.  Don’t worry, I do have holiday baking to do so I’m only going to touch on what are for me the most interesting points.

A lot of people were watching the Historia and Séries+ part of the hearing to see whether the CRTC would agree that benefits would only be payable on the half that Corus was buying from Bell and not on the half that they were buying from Shaw.  There has been a lot of confusion on whether Shaw and Corus are related or not (even at Shaw and Corus).  There have been long rumoured plans for Shaw to take over Corus fully but a requirement to pay benefits would make that a costly reorganization.  Well, it looks like they can go ahead.  In both the Historia and Séries+ decision and the Teletoon services decision, the CRTC made a clear statement on how they see Shaw and Corus.  Are they one or two?  Depends.

For the purposes of determining effective control, Shaw and Corus are considered part of the same ownership group as they are both controlled by JR Shaw.  But when applying the group-based licensing policy, Shaw and Corus are two designated licence renewal groups. [para 14 in Teletoon and 18 in Historia and Séries+].  So – no benefits are triggered by the acquisition of the Shaw ownership of Historia and Séries+ and none will be triggered when Shaw buys Corus.  I’m not sure that I agree but the clear statement is helpful.

The decision clears up what has been a very odd situation with Terms of Trade and Teletoon.  While Teletoon’s owners Bell and Astral had both signed a Terms of Trade agreement with the CMPA, Teletoon said that it was not a signatory so took the position that the Terms of Trade didn’t apply.  Well, it does now and it is a condition of licence for all Corus properties.  The CRTC took it further and requires Corus to enter into a Terms of Trade agreement with the AQPM (the French producers in Quebec) within one year and to start negotiations with APFC (the French producers outside Quebec).

The benefits payable under both decisions have been increased.  For Teletoon they were increased from $24.9 million to $26.02 million to reflect leases and cash on hand.  For Historia and Séries+ the increase was from $13.86 million to $14.48 million to reflect cash on hand.  The one thing we can always count on is that the valuation will go up because the CRTC found one or more ways that the purchaser tried to reduce the benefits payable.

Most of the benefits proposed have been accepted.  What interesting is the additional requirements.  The self-administered benefits cannot be spent on production just for Corus properties (generally the benefit of self-administering benefits).  ‘Benefits should be used to create and acquire the best possible Canadian programming to be made available on whatever services Canadians choose.  As such, the benefits resulting from this transaction should be made available to a wide range of producers for broadcast on a variety of services so that they do not exclusively benefit the Teletoon services’.  [para 73.  The same line is in the Historia and Séries+ decision at para 72.]  Corus might as well give the money to the CMF or other independent funds if it can’t be run out of their commissioning department.  Combine this with the proposed benefits policy that has 80% of benefits going to independent funds and we have a clear signal of the impending death of the self-administered benefits fund.

Corus had proposed that 75% of production benefits would go to independent production.  This was of concern for many as Corus owns Nelvana and that 25% would therefore go to its own productions.  The CRTC agreed and Nelvana was cut out of benefits.  They will go 100% to independent production.   Yup, that’s definitely a piece of coal.

In the Bell-Astral decision we had what I believe was the first allocation of a portion of benefits to OLMCs.  Keeping in mind that the Chair of the CRTC and the Vice-Chair of Broadcasting both grew up in OLMC communities, it is not that surprising that there is a renewed interest in supporting OLMC communities.  [and I will add OLMC to the Acronym Decoder].  Both decisions require 10% of the programming benefits to go to OLMCs, consistent with the Bell-Astral decision.

There are two funds that still need to be finalized in both decisions, the Script and Concept Development Fund and the Export Fund.  Stakeholders had objected to the Export Fund as not being an onscreen benefit (Corus had been very vague in its application and at times described it both as a fund to promote programs internationally and as a way to help producers find international financing) but to ensure that it will be an onscreen benefit the CRTC has required that any funds will result in the production of new programs and that those programs are broadcast on a Canadian service.  Effectively it is a ‘foreign presale’ fund rather than an after market distribution fund.  Corus has until January 30, 2014 to file an agreement with either Telefilm or CMF for these two funds.  If Corus can’t come to an agreement with either Telefilm or CMF then the funds will go to the self-administered (but not for Corus’ benefit) funds.

The filter that benefits must be of a benefit to the entire broadcasting system has also been applied to the offscreen or social benefits.  Frequently in the past there have been tenuous connections between the recipients of social benefits and the broadcasting system (I remember an allocation to the Girl Guides of Canada that didn’t make much sense).  The CRTC is being very clear that Corus will have to report on how the funds were used to the benefit of the broadcasting system and hinted that a proper use would be script development, pitching events, professional development and the opportunities to meet OLMCs.  One social benefit, the Corus Inner City Childhood Obesity Research Initiative, was denied for not being clearly of benefit to the broadcasting system (and being very vaguely described in general).

There were a few changes to the licence terms of the Teletoon services that will be of interest.  Corus requested a CPE for Teletoon of 31% but the CRTC set it at 34% with an allocation of 9% specifically to French language programming to allay concerns that collapsing Teletoon into the Corus group could swamp French programming.  Teletoon’s PNI is set at 26% and Teletoon Retro’s at 4%.  That effectively increases Corus’ group PNI from 9% to 12%.  This is all good news so hopefully when the benefits expire Corus will still be spending healthy money on Canadian programming.

The CMPA had requested a condition of licence that Teletoon air 90 hours of Canadian programming as well as the expenditure requirement.  The CRTC did not approve it on the basis that they are leaning towards regulation that focuses on creation rather than exhibition in order to keep pace with changing audience behaviour and provide broadcasters with greater flexibility.  This was also a theme in the Group Licensing Policy, though that policy did not completely get rid of exhibition requirements.  What I find interesting though is that the Commission also denied Corus’ request to remove the requirement to air one hour of Canadian programming during prime time on Teletoon Retro.  That was on the basis that the Commission didn’t want Teletoon Retro to have a completely foreign prime time broadcast.  So exhibition requirements are still sometimes necessary.

There is more nitty gritty in the decisions but my holiday baking calls.  Happy holidays to you all!  Hopefully you can take a proper break and I will see you in the new year.

Corus Acquisition of Teletoon, Historia and Séries+

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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!!!

OWN and its Fried Green Tomatoes

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There was a moment for me when Corus’ defence of its OWN programming made me wonder if I’d somehow slipped into an alternative universe where the laws of logic no longer applied.  Commissioner Peter Menzies asked Corus to defend the feature film “Fried Green Tomatoes” as educational and Corus Executive Vice-President Gary Maavara said that the film was part of a course that taught people how to fry green tomatoes.  Fry.  Green.  Tomatoes.

Well, it looks like the Commission thought that was as ludicrous as I did (and I know I wasn’t alone).  Not only did the Commission direct Corus to comply with OWN’s nature of service definition (formal and informal adult education programming) and comply with strict reporting and monitoring requirements to ensure that it is done, the Commission took the rare step of issuing a mandatory order:

In light of the licensee’s longstanding non-compliance and to ensure its future compliance with its nature of service definition, the Commission considers it appropriate to issue a mandatory order under section 12(2) of the Act requiring OWN Inc. to comply at all times with the nature of service definition for OWN.

The Commission was fed up.  You could hear it in the questions and the tone of the Commissioners and Chair.  If you read the decision you can read about the many times that Corus was told to comply but didn’t.  Keep in mind, OWN was originally licensed as the Canadian Learning Television service and in its most recent incarnation became the Oprah Winfrey Network Canada.  BIG difference in programming.  As many broadcasters have done over the past few years (see CBC and Bold), Corus ignored the rules and waited for the CRTC to come after them.  The CRTC does not have a lot of penalties available to them but the mandatory order is one of them.

What is a mandatory order?  Unlike a regular compliance order from the CRTC, this one is filed with the Federal Court.  The significance is that if the mandatory order is not complied with then the penalties of the Federal Court come into play rather than the CRTC and that includes options like seizing goods of the corporation or an officer or director of the corporation.  Much more serious.

If the broadcasters haven’t all woken up to this Commission being tougher about the rules and regulations of the system – they’re going to learn the hard way, like Corus just did.