TORONTO – Cineflix Media on July 25 surprised the production industry by saying it was restructuring as it pulls back from Canada to focus on the U.S. and U.K. markets. The reason given for the pivot was an "in-depth evaluation of our operations and our broadcasting client requirements."
Translation: Cineflix Media's business model on the factual side to create original series and intellectual property (IP) and sell those shows worldwide is being undermined by localized format adaptations like Big Brother Canada and Amazing Race Canada both of which have been hits for their Canadian broadcasters. "The general consensus in the Canadian production community is that the Canadian networks are commissioning fewer shows in unscripted, preferring to put big dollars into a few, high rating, big international formats," Cineflix Media founder and CEO Glen Salzman (right) told Cartt.ca.
That investment shift is benefiting some indie producers like Insight Productions and Proper Television, which are early pioneers in Canadian format adaptations and are now reaping the rewards of being service producers for format-hungry networks. Their adaptations are done on a fee-for-work basis, and help producers keep their costly production machines humming.
But besides reducing original series commissions, those big formats are also reducing the ability of Canadian producers to retain rights in the Canadian market as networks look for new ways to boost revenues and capture a bigger share of the back end for themselves. "This means Canadian independent producers will have reduced backend revenue and could in effect become service producers to the Canadian networks, more like the American system, but with government subsidies," Salzman argued.
Increased consolidation and competition, and downwards pressure on commissioning budgets explains, at least in part, the flight to format adaptations for greater eyeballs by Canadian broadcasters. "What's the easiest way not to develop a show? Buy a format," says Mark Bishop, co-CEO and executive producer of indie producer marblemedia, of risk-averse broadcasters looking for more bang from their Cancon bucks.
Another contributor is the popularity of U.S. series like The Bachelor, Big Brother or Amazing Race that were on air here for umpteen seasons before broadcasters launched Canadian versions.
Also a factor in this, however, is the CRTC's 2011 group-based licensing regime which allows broadcasters the flexibility to concentrate Cancon production dollars into adapting and retooling big-budget foreign shows for their demanding audiences and advertisers. Basically, the broadcasters’ Cancon spend is no longer split channel to channel, but calculated as a spend for the entire cluster of channels, so "because of the group based licensing, you are seeing dollars that would have been spent over many channels being focused on bigger formats," Bishop observed.
So, the most agile indie producers are aiming to strike a balance between original factual series and formats as they evolve along with the Canadian market. "You should have a balance between formats – they pay the overheads – and your own IP to make revenues and build your own company," argued Ira Levy, executive producer and partner at Breakthrough Entertainment.
Of course, Canadian broadcasters point to their vast commissions of original series to feed their growing stable of channels after industry consolidation to suggest the case for the flight to formats has been exaggerated. "The producers are seeing these big formats, and are worried if that means their livelihoods are going away," Christine Shipton (left), vice-president of content at Shaw Media, which airs Big Brother Canada, said.
"The number of originals we're doing, especially in the lifestyle world, outweighs the formats," Shipton argued.
She adds Shaw Media has reduced the number of original series it commissions only slightly, but that’s due more to escalating production costs as the network aims to make slick series that stack up well against American and other foreign content on Canadian TV schedules. "If you want a primetime hit on specialty, you have to make sure those shows look good," Shipton argued.
The bottom line is format adaptations that succeed, like Big Brother Canada and Amazing Race Canada, mean more production dollars down the road for indie producers, and they welcome that. Conversely, loss-making format adaptations like Rogers Media's Canada's Got Talent shrink the pot of Cancon dollars for indie producers to tap.
And, as with the Canadian networks' traditional reliance on renting U.S. series for their primetime schedules, content and profits are generated, but perhaps less of a domestic TV industry that survives and thrives over time. "These are tentpole shows that do big numbers on a short term basis. But they don't create long-term jobs for the industry," Bishop said of big budget formats now overshadowing Canadian primetime.
For long-term viability, the industry needs indie producers to continue developing and producing original Canadian drama. And from that pipeline can also come Canadian formats to be exported abroad.
"We’d like to see broadcasters, producers and regulators working together to encourage a system which allows for strong formats to be developed in Canada and exported around the world," Cineflix's Salzman argued. "There are a few examples over the past few years where Canadian-developed IP has done well internationally and we should be building on these. A strong sector, developing and exporting IP benefits everyone," he argued.
