THE CANADIAN CREATIVE community (by which I mean writers, actors, directors and other makers of television) is up in arms over the CRTC’s recent decision to harmonize a floor for spending by Canadian broadcasters on programming of national interest at 5%.
Historically speaking, the guilds, unions and associations have every right to fear any reduction in the Cancon spend mandated by the CRTC. Our broadcasters do not exactly have a stellar record of treating the production and airing of Canadian content (except for news and sports) as anything but a tax on their operations that they were forced to spend, despite their protestations over the years.
We won’t go into the history of average to horrible Canadian television content, along with some gems, scheduled at dreadful times – or against impossibly popular U.S. fare on other channels – which all but ensured ridicule and failure. For a long time Cancon was made because broadcasters here were forced to make it and air it – when they didn’t really want to.
It also means that there are still too many Canadians who laugh derisively at the mere mention of Canadian television. Stored in our collective memory are too many cut-rate productions and it harms the industry, still – despite how it has improved of late, and in a stark way – even if some don’t recognize it.
The history of Cancon, though, is what feeds the vitriol and fear packed into the various complaints being made about the CRTC’s license renewals of the big broadcasters, in which the PNI decision was contained. The Commission, as many are aware, standardized the minimum spend on programs of national interest (PNI, or home-made dramas, comedies, documentaries and award shows) at 5% of broadcaster revenues. Before this, the numbers ranged from 5% to 16%, depending on the ownership group or former ownership group, and this simply harmonizes it across all broadcasters.
It lets them choose how they are going to spend as a company and on which channels the shows will air. Given the fact genre protection has been killed off and the two biggest broadcasters (Bell Media and Corus Entertainment) are in the early stages of deciding how and when to cull the number of channels they offer, the harmonized floor seems like a good idea to us – and it must be deemed a floor if the broadcasters want to survive.
"Broadcasters must give their viewers a reason to pick and pay for them, which means original content."
The world is moving towards more of a transactional, pick-and-pay media marketplace and so broadcasters must give their viewers a reason to pick and pay for them, which means original content. Not just exclusives for Canada purchased somewhere else (and inevitably available for viewing on other channels or platforms), but more actual, original, content of their own.
Netflix and Amazon know this is the formula for success and are spending billions of dollars making their own shows. In fact, they were far less interested in studio and broadcaster-made shows at the L.A. screenings two weeks ago compared to just last year, reports Corus CEO Doug Murphy.
“Amazon and Netflix are making their own shows and aren’t really bidding as much as they were last year on network shows,” he told the Scotiabank Telecom, Media and Technology conference last week. “What they’re doing, which is more interesting for us, is co-productions with broadcasters. In that example, we would keep the first window of broadcast and they could take the show after the first window and monetize it in Canada and globally.
“They are more focused on owning content – as are we, that’s one of our strategies,” he added.
Co-productions with other, better funded, international entities, are already happening here, most prominently with the CBC. In an interview with Cartt.ca last week at its fall 2017 upfront presentation, the CBC’s Sally Catto, GM for English Television, said that in order to compete against the likes of House of Cards or Game of Thrones, the budgets of top tier shows are rocketing skyward, beyond what Canadian broadcasters can afford alone.
The aspirations of the creators of Anne and of Alias Grace, both partnerships with Netflix, “were such that they required budgets that were bigger than we could support,” said Catto. CBC is also partnering with Comedy Central on Crawford, a new company from the creators of Trailer Park Boys (a Canadian show which is now exclusive to Netflix). They are all original, Canadian, stories, noted Catto, but the international partners are going to share them with the world and give them the production budgets they need to have the best chance at success.
Plus, Canadian viewers expect so much more now because they are not constrained to viewing only what the system in Canada shows them. Canadian broadcasters can’t just slap together something for an audience fenced into Canada because the fences are now so full of holes. Shows need big production budgets to pay for the best talent in order to stand along side the best of the world.
“Audiences are so sophisticated and are expecting that,” said Catto, who added the budget for the first two seasons of House of Cards “is equivalent to our whole programing budget for our scripted and unscripted content.”
This new world will require continued new thinking and will also see Canadian programming dollars spread less thinly than in the past in order to concentrate on “bigger” things. Right now, Corus has 36 English language specialty channels, Murphy told that conference. “Will we have 36 in five years? Not likely.
“It’s in our best interests, as it is with the distributors, to redistribute some of those monies into the bigger services so we can invest in more programming in those big services to help improve the overall value equation,” he explained.
“I think if you’re the middle person, the intermediary, that’s a tough place to be." – Joe Natale, Rogers Communications
Corus is already talking with the carriers, looking two to three years from now for what its ultimate portfolio will be. It’s telling the cable/IPTV/satellite companies it won’t accept less money in terms of total wholesale fees, but that it would be prudent to cull some channel brands in order to spend more on tentpole original content on its main channels. Murphy predicted in that time, “you’ll start to see material benefits of the strategy of owning more content come forward.”
He then cited Corus’ classic TV channel DejaView as an example of the company’s thinking. “We like our little channel DejaView, but the original condition of license was showing television properties that are more than 10 years old. That was a neat idea 20 years ago, but it’s hard to imagine it’s going to have legs in five years.”
New Rogers Communications CEO, Joe Natale, who has never run a content company until taking the helm of the wireless, cable, broadband, TV, radio and publishing giant last month, realizes that original, not rented, content is the best route to success.
“The real opportunity is when we have specific rights to content and actually own the rights,” he told the Scotiabank conference. “I think if you’re the middle person, the intermediary, that’s a tough place to be, because the minute you buy the content and start to monetize it, the rights owner is coming back for a premium on that content and you kind of are chasing that cycle.”
The only way to survive – and thrive – in a world with so much competition for attention (there are 500 English language TV dramas in production around the world right now, said Murphy) is to produce or air shows which are yours and yours alone. HBO learned this years ago when it went from a movies pay channel to the home of some of the best content anywhere, a shift that most acknowlege began with The Sopranos.
Canadian programmers know all of this. They see it. They live it. They can’t treat a 5% PNI condition of license as a ceiling.
If they do, they’re dead.
