IT’S STARTING TO LOOK like this year could be the final one for the Canadian Television Fund in its current form.
With two of its four largest contributors (#1 Shaw Communications and #4 Videotron) adamant that they will forward $0 to the CTF – and with a Heritage Minister in Bev Oda who may be sympathetic towards their complaints – at the very least, upheaval is a certainty.
Oda, who on Monday renewed her government’s $100 million annual commitment to the fund, met with representatives of the four primary private sector contributors: Rogers Communications’ vice-chair Phil Lind, Bell Video president Gary Smith, Quebecor Media executive vice-president Luc Lavoie and Shaw Communications senior vice-president of corporate and regulatory Ken Stein on Tuesday afternoon to hear their complaints.
"For the first time in 10 years, we actually had a minister listen to our concerns," Stein told Cartt.ca late Wednesday of the meeting.
While only Shaw and Videotron have suspended payment, most distributors agree that the funding formula for Canadian television production can no longer be supported.
The $150 million they give now produces precious few hits, say the BDUs, who like to point at the top-20 highest rated shows in Canada – a list that often has no Canadian shows on it at all. As well, the CTF doesn’t acknowledge additional platforms like wireless and video on demand – and those who pay the most amount of money into it have the least amount of say in how it is spent, said Stein.
"Videotron and ourselves told (Minister Oda) it can’t be fixed," Stein told Cartt.ca late Wednesday. "It’s dead. Done. Gone." Broadcast distribution undertakings must, according to CRTC regulations, contribute 5% percent of their revenues to the fund. That percentage can dip to 3% if the BDU runs a community channel.
Videotron wants to take the roughly $14 million a year it contributes and make its own exclusive content. Shaw wants to give the $60 million or so it pays (from Shaw Cable and Star Choice) and give it back to its customers (about 20 bucks each this year). The CTF issued a statement Wednesday that said 2006/07 productions will go ahead by borrowing and using up reserves.
In response to the stopped cheques, the CTF has threatened legal action. Stein, however, says he feels like he’s on pretty solid legal ground. "The CTF is a third party group that’s not a Crown Corporation that has no legislative or regulatory standing at all," he said. And that means it doesn’t have the power to extract fees from anyone.
While Bell Canada and Cogeco have offered their tacit approval of the fund in certain statements, the silence from Rogers so far has been deafening. The company has not yet made a public statement on its plans or what it thinks of the fund.
Stein, however, said that in the meeting, Lind agreed with Shaw and Videotron "that the fund has failed," said Stein, adding the Rogers vice-chair didn’t go as far as saying it should be scrapped altogether.
But what about the fact that it is a rather expensive thing to produce good television and that it’s thought financial help is required to make it? "That’s the broadcasters’ responsibility," insisted Stein. "That’s what they get a license for… There’s this thinking that U.S. programming dominates the world – but it doesn’t. It’s just easier for (Canadian broadcasters) to buy it than for them to develop their own shows here.
"The fund was created so that we would have a strong Canadian production industry, but it’s smaller now than it was," added Stein. "And while that’s happened, spending on foreign programming is 2.5 to three times higher.
"Over the past 10 years, the broadcasters have been over-protected, over regulated, and subsidized," he continued. "They’re so protected that they’ve been weakened."
The BDUs also rightly point to a number of incongruous elements of the CTF that leave a bitter taste in their collective mouths. For example, despite the fact the cable companies pay much of the freight for the production of Canadian content, Canadian producers and broadcasters have been very reluctant to grant video on demand rights to the MSOs.
And in the case of Bell ExpressVu, if cable VOD rights are granted for a certain show, that means the satellite company has helped pay for Canadian content that it won’t get to present to its customers because of exclusive arrangements between another distributor and the producer.
And if a producer wants to make shows that might go right to wireless or broadband or video on demand? Those projects are not eligible for CTF dollars. The companies also object to the stipulation in the CTF’s rules that say at least a third of the money must go to programs earmarked for the CBC.
Also, said Stein, citing other examples, $5 million goes to TV Ontario, even though almost none of Shaw Cable’s customers see the Ontario provincial education channel. "And, eight million a year goes to Bravo!, for example," he said. "Why is that, when CHUM (Bravo’s owner), is worth ($1.7 billion)?"
While the minister made no promises as to what she’ll do, when asked if he hoped Oda will alter the regulations or issue a policy directive, like her counterpart, Industry Minister Maxime Bernier, has done twice in the past year on the telecom file, forcing CRTC policy to change, Stein added: "I hope so. Absolutely.
"(Oda) was stuck with something created by (former Liberal Heritage Minister) Sheila Copps and made worse by (Liza) Frulla (the last Liberal Heritage Minister)," said Stein. "It’s like the Gun Registry or the Sponsorship Scandal for her. She’s got to sort it out."
The Minister herself issued a statement after Tuesday’s meeting which said, essentially, nothing, other than the fact she will meet with CTF principals on Thursday and bring the cable concerns to them.
Opposition parties attacked Oda over her actions on the matter. “There is a vacuum of leadership at the Heritage Department," said NDP Heritage Critic Charlie Angus. "And now we have the cable giants taking it upon themselves to dictate to the Minister the terms by which they will, or will not, live up to their obligations to the CTF. The fact is, these corporations have no business dictating the terms of their license."
In fact, Angus dug up a nugget from a dissenting opinion Oda wrote when she was a CRTC commissioner.
In a dissenting opinion, written in 1993, she wrote: “We are prepared to recognize the cable industry’s voluntary offer to provide funding for Canadian program production. In accepting this latter point, we note the Commission has not determined that the cable industry has any inherent responsibility to provide direct support for the production industry.”
In the end, though, is this a first push towards deregulating the broadcast and cable sector altogether? Stein wouldn’t go that far. "It’s a push to make this business more efficient," he said.
