Corus urges CRTC move on children’s programming
By Ahmad Hathout
If the CRTC used current foreign streamer investments to the Canadian system as a baseline to determine obligations, then it would put the commission offside of the new Broadcasting Act and the policy direction from cabinet by forcing more contributions from them relative to traditional Canadian broadcasters, said representatives of a trade group representing the major foreign streamers Friday.
“If you were to establish the existing investment obligations as a floor, I think you would end up with foreign streaming services contributing a disproportionate amount to the Canadian broadcasting system when you compare it to the Canadian broadcasting undertakings,” said Monique McAlister, legal counsel for the Motion Picture Association in Canada (MPA), which represents the interests of streamers including Netflix, Paramount, Warner Bros. Discovery, Amazon, and Walt Disney Company.
“That would be a discriminatory result that we don’t think is consistent with the scope of the Act, the intent of the Act,” she added, addressing a question from vice chair of telecommunications Adam Scott about what type of baseline to use to ensure streamer investments in the country.
The association has argued that the commission should take into consideration direct spending on productions and not force its members to pay into Canadian content funds.
Traditional Canadian broadcasters have been pushing the commission to hasten the implementation of the Online Streaming Act, which amends the Broadcasting Act to bring online streamers, including those foreign players, under regulation so they can start putting money into said content funds.
Part of that exercise is determining what makes the content “Canadian,” which is the focus of this hearing. Last fall, the regulator proposed a new expanded points system that added more personnel for a production to meet the definition.
But McAlister and Wendy Moss, president of the MPA – which holds the position that the streamers already contribute significantly to Canada – suggested that the points system being proposed is a relic of the past and urged the commission to be careful with how it thinks of imposing these kinds of obligations on its members.
Key to their argument is what they describe as a clear bifurcation of responsibility that Parliament intended for both traditional Canadian broadcasters and foreign streamers.
“Parliament deliberately adopted a lower standard that requires foreign online undertakings only make the ‘greatest practicable use’ of Canadian ‘creative and other human resources’ in the production of Canadian Programs,” the MPA said in its submission.
“The contribution standard applied to Canadian broadcasters is much greater and reflects their existing obligations — to ‘make maximum use, and in no case less than predominant use,’” it added. “This difference was intentional as Parliament rejected calls to impose the same standard because ‘it is just not realistic’ to expect foreign online undertakings operating in a global market to contribute in the same way as Canadian broadcasters.”
The MPA suggests that the commission not impose mandatory positions, functions or elements of a Canadian program because it would conflict with the statutory language of “greatest practicable us;” that the CRTC apply “reasonable quantitative standards” on what’s practicable for these global streaming services that they say operate differently than what is being pitched here; and that, ultimately, the commission should incent the use of cultural elements, instead of being fixated on the old rigid framework.
“A contemporary framework should encourage hiring key Canadian creative talent whose contributions are recognized by industry peers, professional academies, and guilds,” MPA suggests.
Unsolicited, McAlister also addressed commentary surrounding how news should be supported. The CRTC has already imposed an obligation on foreign streamers to contribute five per cent of their previous year’s Canadian revenues to Canadian content funds, including the Independent Local News Fund (ILNF). The decision is currently on appeal at the Federal Court of Appeal.
On the first day, the president of the Canadian Association of Broadcasters, which represents the major private players in Canada, said that the association would not like to see the foreign streamers dip into any news fund and would not want to see them produce news.
McAlister said that was a nonstarter anyway because they have no interest or intention of making news and they are barred from it by the commission’s rules. In fact, the MPA will argue before the Federal Court of Appeal that its members shouldn’t have to contribute to the news fund from which their members derive no benefit or make use of.
On the news piece, Corus representatives, also appearing before the commission on Friday, suggested a minimum spending obligation on news from licensed conventional television undertakings.
Corus had a difficult 2024, with the loss of certain American television rights that were gobbled up by Rogers, which then sought to remove several Corus channels – mainly children’s programming – from its rotation for underperformance. Corus and Rogers are currently before the Federal Court of Appeal on the CRTC’s use of the standstill rule on that matter.
“Kids channels are under heavy pressure from distributors for removal,” Corus co-CEO Troy Reeb told the commission Friday.
He noted WildBrain’s failure to renegotiate a carriage agreement with Bell to carry its children’s programming after the CRTC dismissed its undue preference application against the big broadcaster.
“The business case for children’s programming has become exceedingly difficult over the last number of years,” Reeb said. “Not only are the distributors pressuring the children’s channels, but increasingly restrictive rules on what advertising can be put on those channels have led to tremendous difficulty around monetization in the commercial environment.
Matt Thompson, Corus’s vice president and associate general counsel, noted the commission cannot just look at the supply of kids programming without also looking at the distribution environment (the CRTC is reviewing the market dynamics between program creators and broadcasters).
“You can’t just focus on the supply side as it relates to kids’ programming, forcing broadcasters with limited distribution opportunities to make a programming that may not be distributed is not a tenable proposition.”
Reeb added that, “if the Commission wants to truly address the demand side, that it should reconsider a proposal that this company, Corus, made many years ago, and that is to ensure mandatory distribution of children’s channels in the cable ecosystem and potentially in the virtual BDU ecosystem as well.
“Not everyone wants to pay for the distribution of children’s services, but they are very important to the cultural fabric and to the entertainment of kids going for.”
Corus is also urging the commission to de-prioritze PNI program requirements to remove – as Reeb put it – “those kinds of overly prescriptive handcuffs.”
The company’s submission argues for a streamlining of Canadian programming expenditure (CPE) requirements, and the dissolution of PNI program spending requirements altogether. The broadcaster is also calling for obligations imposed on traditional broadcasters and standalone streaming services to be comparable, taking into consideration the varied contributions each type of provider makes to the system.
“We’re not talking about getting out of the scripted programming business whatsoever…what we’re talking about is gaining more flexibility to make decisions for our company to allocate our resources as we need,” Matt Thompson, vice president and associate general counsel of regulatory, privacy and public policy, told the commission. “We’re a private enterprise, a publicly-traded one, and this is absolutely necessary on a going forward basis.
“I think there is a lot of focus…on the supply side, ensuring a certain amount of production is consistent in specific genres. I would maybe redirect the commission’s attention to the question of capacity. The capacity of the system to continue to deliver production at those levels,” he continued, citing the decline in operating income and margins for conventional and discretionary television in English Canada of 50 per cent over the last five years, alongside fiction genre financial shortfalls in the $300-$400 million a year range, according to the commission’s own Harnessing Change report.
“We’re here to make as clear as we can, we don’t have the capacity to continue to shoulder prescriptive PNI requirements and prescriptive requirements for news,” said Thomas.
Reeb closed the Corus presentation by reaffirming that the lifestyle genre is “no less deserving or meaningful of support than other genres in the system.
“We are at a time when our cultural sovereignty and our very sovereignty is under attack from south of the border,” said Reeb. “And it has never been more important to have a system that supports Canadians being able to tell their own stories and ensure that those stories receive pride of place on not just Canadian companies, but on companies that travel the world.”
With a file from Connie Thiessen. Screenshot of MPA – Canada President Wendy Moss
