GATINEAU – Rogers Communications and Corus Entertainment have told the CRTC that it must reconsider the usefulness of Terms of Trade (ToT) agreement between broadcasters and independent producers in creating independent Canadian programming. On the other hand, the Canadian Media Production Association (CMPA) argues that in a new broadcast environment with greater pick and pay options ToT will become increasingly important.
In their respective interventions to the Commission’s Let’s Talk TV Conversation with Canadians, Rogers and Corus claim that ToT (a deal hard-fought for by the CMPA and others which was developed and demanded over a number of years) is acting as impediment to the development of independent Canadian productions. Rogers acknowledges that funding and promoting Canadian programming isn’t easy, but says ToT “has posed significant challenges” to its ability to invest in new, high-quality Canadian productions that are popular, profitable and satisfy consumers. (The submissions of Bell Canada and Shaw Media were essentially silent on the ToT issue.)
“Broadcasters play a key role in triggering financing for Canadian programming and bear considerable financial risk in the production but are very restricted in how much they can participate in the financial structure and reward of the productions they support,” says Rogers. Basically, the home broadcasters generally make very little from international sales of a hit show made by an independent producer.
“Broadcasters need to be engaged at all levels including the back end of productions if we expect them to be a partner in promotion and innovation both domestically and internationally.” – Corus Entertainment
Corus adds that the symbiotic relationship shared between independent producers and the broadcasters has been derailed by the current arrangement. The company would prefer a ToT that mirrored the one it has with the Association québécoise de production médiatique. The media company says broadcasters need more flexibility to be able to participate across the various aspects of program development, not just those prescribed by the ToT.
“Broadcasters need to be engaged at all levels including the back end of productions if we expect them to be a partner in promotion and innovation both domestically and internationally,” argues Corus. “In sum, what we need to do is to encourage the production of high quality compelling Canadian content. This will be accomplished by providing greater flexibility on how to direct the monies and to which productions.”
Besides, Rogers adds, the independent production community and its relations with the broadcasters has reached a level of maturity that is now well suited to commercial negotiations.
“Under a free market approach to commercial negotiation, broadcasters and producers are both economically and creatively incented to work together to create high quality programming that meets Canadian audiences’ expectations and achieves commercial success,” says the company.
“Those safeguards would take on even greater importance in a PnP world to ensure that broadcasters would be unable to use their market power to obtain unfair contractual concessions from producers.” – CMPA
The CMPA counters that ToT will be an important tool to ensure that independent Canadian productions continue to get made and aired. It notes that a pick and pay (PnP) environment may result in a reduction in the number of TV channels available to consumers – which will then force the broadcasters to cut costs so they can maintain their margins. One way they may do this is by trying to reopen the ToT debate, arguing that it only serves to increase their costs.
“Instead, we would submit that those safeguards would take on even greater importance in a PnP world to ensure that broadcasters would be unable to use their market power to obtain unfair contractual concessions from producers, and that producers would retain their hard-fought-for ability to exploit their intellectual property in the productions they develop and deliver to broadcasters and sell to the world in analog and digital formats,” states the CMPA.
ACRTA weighed in on the ToT issue in its intervention, too. It notes that these types of agreements “provide stability and clarity” for both independent producers and the broadcasters and “are in the broadcasting industry’s interest as a whole.”
They “are a suitable check for maintaining some measure of balance in negotiating power between independent producers and vertically integrated media conglomerates, by establishing minimum commercial terms for development and broadcast licence agreements,” the association adds.
The two-week long hearing — with 117 parties now slated to appear — starts September 8 with Google slated to appear on day one. The agenda was recently altered moving Netflix, which was scheduled on the first day to the last day, and removing Amazon altogether. Amazon's appearance on the agenda was somewhat of a surprise to begin with, since they did not file a written submission.
ED NOTE: This is the 14th story of our ongoing, summer-long breakdown of the official submissions made to the CRTC for it's Let's Talk TV, TV Policy Review. The first 13 are linked below. Please let us know what you think of the series at editorial@cartt.ca. We'll keep it confidential if you like.
Does the industry fear what the set-top box data might say?
What’s the value of individual services – and how can consumers complain?
The CRTC must act to save local television
Different rules for different language markets
Genres have long been monkeyed around with. Do they still need protection?
Is basic bloated? Does it need a diet?
Pick and pay in Canada strikes out with U.S. media heavyweights
U.S. border stations want to use Let's Talk TV to wrest cash from Canadian BDUs
Should Yankee go home? The changing role of U.S. channels in the Canadian broadcasting system
No “Netflix Tax”, company warns CRTC
Snap Judgements: Everyone wants more choice – tied to a lot of ifs, ands, buts…
Original artwork for Cartt.ca by artist Paul Lachine, Chatham, Ont.
