OTTAWA – A press release yesterday touting how broadcasters are getting rich and TV producers are not, isn’t supported by the study it cites, says the Canadian Association of Broadcasters.
In releasing its Nordicity Group Ltd.’s Study on Broadcaster Profitability and Programming Expenditures, the Canadian Film and Television Produces Association (CFTPA), as reported by www.cartt.ca, claims that private broadcasters have increased their profitability and reduced their Canadian program expenditures, at the expense of the Canadian program production industry. Data taken from their own study demonstrates that this could not be further from the truth, says the CAB.
“Canada’s private broadcasters continue to be independent production’s strongest partner. Canadian program expenditures by private broadcasters increased at a compound annual rate of 6% over the years covered by the CFTPA study (2000 to 2004),” said Glenn O’Farrell, the CAB’s president and CEO, in a statement.
“However, their figures demonstrate that contributions from some traditional business partners of the Canadian independent production sector, specifically from the international markets, are in decline.”
Contrary to the CFTPA conclusions, private conventional television has not increased its profitability as a result of the CRTC 1999 Television Policy. The sector’s Profit Before Interest and Tax (PBIT) was 11.1% in 2003/2004, compared to 13.8% in 1999/2000 when the Policy was introduced. Moreover, English-language private conventional television PBIT was at 10.8% in 2003/04, compared to 14.2% in 1999/2000.
The Nordicity study also shows and acknowledges that in the key area of drama programming, expenditures on Canadian independently-produced drama by large broadcasters increased by 15%, compared to only a 9% increase in spending on foreign drama, says the CAB release.
Although the CFTPA’s arguments relate to the CRTC 1999 Television Policy which affects only the conventional television sector, figures in the Nordicity report sometimes include the specialty sector as well, leading to some confusion. The CAB notes however that both sectors are strong contributors to Canadian television programming. Taken together the two private sectors increased their contribution to CAVCO-Certified Canadian television production over the period 1998/99 to 2002/03, both as a percentage of the total production budget and in absolute dollars. Data from the most recent CFTPA annual report show a further increase in absolute dollars for private television broadcasters, from $302 million in 2002/03 to $310 million in 2003/04 and an increase as a percentage of total production budgets from 20% to 22%, explains the CAB.
At the same time, there have been significant decreases in production funding from foreign sources and from Canadian distributors. Funding from foreign sources fell from a high of $504 million in 1999/00 to $243 million in 2002/03, and decreased again in 2003/04 to $195.5 million.
Funding from Canadian distributors fell from a high $250 million in 2000/01 to $91 million in 2002/03 and increased somewhat to $135 million in 2003/04. While private broadcasters have significantly increased their share of the financing structure of Canadian productions, foreign sales and investments have declined, says the release.
“Private broadcasters have always recognized that success of Canadian productions rests on a strong domestic industry and increased viewing of Canadian productions. The difficulties faced by the independent production sector in Canada are complex and due largely to difficulty of reaching foreign markets, the value of the Canadian dollar, and an aggressive strategy put in place by various US States to keep US television productions at home,” said O’Farrell.
