The Standing Committee on Canadian Heritage recently released its report on its study on the Canadian Feature Film Industry. Over the spring a number of feature film stakeholders had appeared before the Committee or sent in submissions and this report is the result.
First a little context. Standing Committee reviews can be useful to study a sector within their jurisdiction, raise issues and make recommendations to the government. There is no obligation for the government to act on these recommendations or to even comment on them. These are the dying days of this Parliament and it is unlikely that the government will even notice this Report. However, it can also educate and inform Department of Canadian Heritage staff and help them to develop policies that could be implemented in the future. As well, given that we are leading up to an election, this kind of a study could inform party platforms or future government proposals.
I recommend reading this report for a couple of reasons. If you are new to Canadian feature film policy it is a fairly accurate (not always the case) overview of the current state of the industry. A wide selection of stakeholders appeared before the Committee and many topical issues and proposed solutions were presented. If this is your field then it is also interesting to see which issues the Committee as a whole, and the Opposition parties in supplementary proposals, felt worth recommending.
I found a couple of the recommendations of particular interest. A few of their recommendations went beyond government to other bodies, which technically speaking are outside the Committee and the government’s jurisdiction. In Recommendation 5 and 6 the Committee recommended that the CRTC include feature films as a separate category within PNI and that it review its PNI policy to specifically support feature film. As the CRTC is an arm’s length body this recommendation is like the Canadian government making a recommendation to the U.S. State Department on foreign policy. Further, there is a policy development process at the CRTC that is a great deal more rigorous than a Parliamentary Committee review. We might not like the current result of the process but the government cannot step in and make specific changes (there is a policy direction process but that’s more general).
Recommendation 10 is a recommendation asking the CBC to enhance its support of Canadian feature films, including on digital platforms but without a recommendation to increase the CBC’s budget to enable it to do so (which is in the government’s jurisdiction). The NDP expressed in their supplement the belief that the CBC should have sufficient resources to fulfill its mandate without a specific recommendation about what was needed to do that.
There were a couple of very specific recommendations related to the tax credits which could make a huge difference to feature film producers. For years the CMPA has been lobbying to eliminate the ‘grind’, where tax credits are reduced by the amount of assistance received from other levels of government (e.g. provincial tax credits). The Committee did not go so far as to recommend its elimination but that the problem should be studied. The Liberals in their supplement also supported the recommendation from witnesses that 75 – 85% of tax credit payments should be moved up to reduce the interim financing costs. This would be a great measure that would not cost the government anything but would create significant budget savings. I would only add that it should not be limited to feature film tax credits.
The final recommendation that interests me comes from both the NDP and Liberal supplements and was ignored by the main recommendations. Both parties recommended that OTT services should provide data to Heritage (or Heritage and the CRTC in the case of the Liberals) on consumer habits, Canadian films available, revenues and costs in order to assist policy development. So this is a recommendation that the government MAKE Netflix and Google do what the CRTC was unable to make them do during the CRTC hearing. Nice thought but given that they deny that the CRTC has jurisdiction, I doubt that they would agree that the Canadian government has jurisdiction. I think it’s a lovely idea and yes it is data that the policy makers absolutely need to have for accurate policy development but it isn’t terribly realistic.
I’m talking OTT and SVOD in Canada here so I’m not going to finish the quote. As mentioned earlier, I played around with Shomi during the free 30 day trial that I was entitled to as a Rogers subscriber. Then Bell Media was nice enough to give me a 30 day guest pass to the mobile version of CraveTV (since I’m not a Bell subscriber that’s all I could get). So I’ve played around a little, to the extent possible.
Here’s my problem. What I would really like to have is impossible either because of outdated business models, Canadian broadcast regulation or a lack of Canadian OTT regulation. I’m stuck.
I would like to have a service that flows seamlessly between my television and my iPad (my kid would also like it to work on her shiny new Nexus phone) so that I could switch platforms in mid-episode or at least keep track of which episode I’m on in mid-binge. This is possible with Netflix but not possible with Shomi and CraveTV because they are licensed separately (OTT being exempt from regulation and SVOD being fully regulated).
I would like a Canadian service that supports Canadian programming on all of its platforms. Shomi and CraveTV have to make a contribution to Canadian programming and provide a quota on their SVOD platforms according to VOD regulation, but have no such obligation for their OTT platforms. Netflix has no requirement at all.
I would like to watch the Golden Globes and know that I have access to the cool new shows like “Transparent” (Shomi announced during the awards that they will be carrying it, it is on OTT Amazon Studios in the U.S.) and “House of Cards” (on Netflix) without having to pay separate OTT subscriptions for each one. Exclusivity is a model that only frustrates the consumer in the Internet world.
I would like to be able to be a Rogers cable, internet and wireless subscriber (well, maybe not but I am anyway) and subscribe to CraveTV. CraveTV is only available to Bell, Telus and a few smaller BDUs and is unlikely to be available to subscribers of their competition. While Shomi and CraveTV are very similar in how they work, and both have lovely interfaces on the mobile platforms (though both were buggy on their web platforms), I would like to have the option to subscribe to CraveTV if I want to and not be locked in to Shomi because of my cable provider.
So, as a Canadian and a lover of television, CRTC regulation and the BDU business models are not working for me right now.
If you follow my twitter feed then you know that I’ve been very puzzled by the regulation around the new Shomi service. Shomi is a partnership of Shaw and Rogers, which provides film and television programming through laptop, tablet and set top cable box. I think I’ve figured it out.
The Rogers FAQ states that most Rogers customers will access Shomi through the set top box and then online through authenticated access. For those customers, it says, Shomi is subscription video-on-demand. For Internet-only customers, Shomi operates under the Digital Media Exemption Order (“DMEO”) as an OTT service.
Setting aside the fact that regulation isn’t based on customer billing, I couldn’t figure out how one service could be both OTT and exempt and SVOD and regulated at the same time. Was it not one service that is either regulated or exempt (though I admit exemption is regulation, I do mean by that subject to the significantly lesser regulation under the DMEO)?
It was suggested to me that I was looking at this wrong. It’s not one service but two. There is the SVOD service that is subject to VOD regulation and the OTT service that is exempt under the DMEO. They have different catalogues because of rights issues and regulatory obligations. And they are definitely different experiences. I had difficulty authenticating on my laptop (problems with it recognizing that I wasn’t blocking cookies, which I understand others have experienced) but was able to download the app and log on, on my tablet. The tablet experience is quite similar to Netflix. However, unlike Netflix the two services are not linked so I cannot flip back and forth while watching a program or even keep track on VOD of where I am in a series I’m watching on the tablet. Two services.
Now I wonder how the contribution to Canadian programming will be calculated for revenues generated by customers who access both the SVOD and the OTT services. Rogers and Shaw know just how many hours are spent on each platform so that should be easily and fairly allocated if they release that data to the CRTC.
So there’s work still to do but I at least have a grasp of the regulation now and that makes me happy. Will I keep subscribing to Shomi after my free trial? Honestly, if I could get the interface experience of OTT on VOD, I would be willing to pay the additional fee. But then I’d be back to being confused.