November 30, 2016 2 months 3 weeks ago

Licence Renewals: Why broadcasters Cancon spend plans are inadequate and negotiating tactics, questionable

GATINEAU – The large broadcasters’ current Canadian Programming Expenditure (CPE) and Programs of National Interest (PNI) proposals are wholly inadequate, according to the creatives representing actors, performers, writers and directors.

The Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) said in its appearance before the CRTC’s large English-language broadcasters’ licence renewal hearing on Wednesday the impact of the proposals would be “devastating” on Canadian programming and the Canadian broadcasting system because they would result in a reduction of nearly $100 million in spending over the next licence term.

“In our view, this would be regressive, contrary to the Commission’s objective to provide stable and secure funding for the creation of Canadian programming, and contrary to the objectives of the Broadcasting Act,” said Stephen Waddell, national executive director at ACTRA.

Aside (from left to right) Canadian actors Yannick Bisson of Murdoch Mysteries, and Jean Yoon and Paul Sun-Hyung Lee of Kim’s Convenience (curiously, all CBC shows as the panel had no actors from a Bell, Corus or Rogers show), the creative group’s president Stephen Waddell argued for a standard 30% CPE level to be applied to all of the big broadcasters. Without this, the great programming that has been developed since 2010 and as a result of the Let’s Talk TV decisions could be in jeopardy.

The Directors Guild of Canada (DGC) agreed with ACTRA that CPE must remain at 30%. In its appearance, the group suggested losses to Canadian programs could range from $440 million to $500 million over five years without that backstop.

“The broadcaster proposals to reduce CPE should be denied.” – Dave Forget, DGC

“This is a significant loss for the creation of unique and original Canadian programs for Canadian audiences to enjoy. The broadcaster proposals to reduce CPE should be denied,” said Dave Forget, director of policy at the Directors Guild.

PNI spending would be also see significant reductions, noted the group, if the broadcasters’ proposals are granted. It could hit $42 million annually or approximately $210 million over five years.

ACTRA agreed that the Commission must address the significant PNI declines by imposing a higher rate. It suggested 8%, which is slightly below Corus Entertainment’s current level and higher than the 5% all three big broadcasters are requesting.

While the creatives were particularly concerned about the proposed CPE and PNI commitments, the small subscription TV carriers fear the vertically integrated (VI) companies are attempting to skirt provisions set out in the brand new Wholesale TV Code. The Canadian Cable Systems Alliance (CCSA) noted in its appearance on Tuesday that it has to rely on the Commission’s dispute resolution mechanism in almost every negotiation for multi-platform rights with the broadcasters.

Chris Edwards, VP of regulatory affairs at the CCSA, noted that the association is looking more and more at going straight to final offer arbitration because it at least has established deadlines to handle disputes.

“The VI companies cannot be permitted to act as gatekeepers to such products.” – Chris Edwards, CCSA

The CCSA argued their consumers are demanding to view content anytime and on any device, the same as any others, which means “access to multi-platform rights is essential to the independent BDU’s ability to offer innovative, competitive products to their customers. The VI companies cannot be permitted to act as gatekeepers to such products.

“CCSA has experienced stalling and delays by the VI companies that greatly diminish the effectiveness of those mechanisms. That is a growing problem for CCSA: it has become the norm in contract renewals with the VI companies,” added Edwards.

“For example, even though the Commission has made it mandatory for parties to activate the Dispute Resolution processes 120 days before contract expiry, CCSA once again finds itself in a position of being over a year past its Bell Media contract expiry with no resolution in sight. Once again, retroactive payment has become a major obstacle to fair resolution of the contract dispute.”

Just as the CCSA raised concerns about VI practices, so too did Telus Corp. The company argued that the big broadcasters are choosing to favour their affiliated services on local advertising availabilities.

Ann Mainville-Neeson, VP of broadcasting policy and regulatory affairs at Telus said based on an analysis by Cossette, Bell is under-reporting advertising spend while giving itself ad placement on its own channels. This “flooding” of local avails, she said, is anti-competitive.

A solution to this problem would be to require the VI companies to provide more information on ads on local avails. With a greater level of information, Telus and others would be able to more effectively determine if they are being disadvantaged.

Telus also suggested that the VI entities are giving themselves preferential access to newscasts during “soft news” items, while disadvantaging competitors. The company said even some of its sponsored charities have been asked to remove their branding when being interviewed on a Bell Media news outlet.

The licence renewal hearing continues tomorrow with additional interveners as well as the replies from Bell, Corus and Rogers.