Newly launched Canada Media Fund to meet 50 to 60 per cent of demand

Despite a $350 million budget, the new Canada Media Fund (CMF) will meet the demands of only 50 to 60 per cent of the market, CMF chief executive Valerie Creighton says. The CMF released its guidelines at a launch in Toronto last week, and Creighton spoke to The Wire Report by telephone Monday about the new fund. On April 1, the Canadian Television Fund (CTF) and the Canada New Media Fund (CNMF) will officially cease to exist. Out of their ashes will emerge the CMF. The fund will be divided into two branches: the experimental steam and the convergent stream. The experimental stream aims to fund Canadian interactive, digital media content and software applications. In order to qualify for the convergent stream, projects must have two broadcast platforms: one television and at least one digital media. The CBC, CTV and Global Television will also receive funding envelopes. The following is an edited transcript of the interview. You held consultations with industry players to help shape and focus the CMF. Now you are planning another consultation process to review the fund’s initial implementation. How important has the consultation process been in launching and running this project? The consultation process was critical. We would not have been able to launch as balanced a program, because it’s a big country with a lot of divergent interests. Our intent was to always try to make sure we understood the impact of what we might land on in terms of the policy and program direction. The consultations coming up will take on a couple of different forms. Early in April and throughout the month, the program staff from both the CMF and from Telefilm Canada will be meeting with people across the country. They will go into the guidelines and details of the program in a much deeper way. Simultaneously with that, in April and May, we’ll be looking at some larger policy questions on which we’re expecting some closure by June. Primarily these will be all the factor weights that are involved in the calculation of the performance envelopes. We’ll be announcing those in June and we’ll want to have some consultation with industry before that. Following the summer, we will again launch broad, cross-country consultations with industry. We haven’t quite determined exactly what that would look like yet, but that’s something we need to talk to industry about. The CMF is much larger than the CTF and the CNMF combined. Do you expect the CMF to have enough to meet industry demands? There’s never enough money in the fund. Even if you add up the CTF and the CNMF, the demand out there is growing and there’s only enough money in our system to meet about 50 or 60 per cent of the demand. That’s not unusual. There will never be enough money to meet all of the demand, but in that way it's historical. A report released by the C.D. Howe Institute in January suggested the government should eliminate Canadian content quotas and replace them with direct subsidies for Canadian content. “The transition from a push network, where entertainment choices were limited to that available at a given time, to a ‘pull’ network, where content is available on demand, will render many current tools obsolete,” the report said. Since there is no regulation for online content, do you think programs like yours are becoming more important to encourage and promote Canadian content? The question of deregulation is always going to be on the table. It’s about how much, when, where, how. But in terms of the making of the actual content, I think that as long as you live in this country, it’s pretty evident that we just don’t have the population base to have the market entirely support itself. Are we getting better? Absolutely. The CMF is going to encourage the creation of interactive, digital Canadian content. Do you think the fund is taking a top-down approach, where incentives encourage innovation, or do you think it’s more a response to demands, the state and the direction of the industry? It’s a mix. Clearly all the statistics indicate that media is migrating. Younger generations are especially looking to access content on platforms other than television. Incentivizing is important, but the market is also moving that way. Our challenge is that it’s a big world out there and we really have to be smart in making sure that Canadian content is part of the offerings in that world. But you can’t count on that to happen naturally or organically. It’s a fight to get your content out there, to get it available and to get audiences from all over the world, including Canadian audiences, to access it and watch it. In its first year the CMF will consider video on demand, and websites that support television programming, as digital platforms within the convergent stream—but there has been talk of phasing them out. What is the motivation for moving away from video on demand? We still haven’t landed on what will happen year-over-year. Video on demand is an important access point. It is certainly one of the platforms available to us that does allow for Canadian content to be accessed by any audience, anywhere, anytime, and that is one of the important driving factors behind that policy imperative. It is certainly our intent to any video on demand service that contributes to the license fee of the project. We will start looking at audiences for video on demand and how we might measure those in terms of the ongoing process year-over-year. On Friday, when you released the CMF guidelines, the CBC expressed concern that the elimination of their 37 per cent envelope would lead to a reduction in Canadian programming during prime time. Does the CBC have reason to be concerned? They will have an envelope the same as always. What has been eliminated is their guaranteed 37 per cent. Every year in June we announce "factor weights" of how broadcasters’ envelopes will be calculated. Then in March, we calculate the envelopes based on those factor weights. The CBC would be well aware of all of those factor weights. The only criteria they haven’t been measured on in the past is audience success. So the CBC would look to the other factors weights, like threshold and regional content, and make programming decisions based on those factor weights to get an increase in their envelope. That’s no different than any other broadcaster in the country. This year, we will be calculating the envelopes and it’s likely there will be a slight reduction in the CBC’s envelope, but there is also a policy imperative, or a factor weight, for prime time, first-run programming. We will be building in that factor weight when we’ll be announcing what the factors are for the envelopes in June. Then we’ll go through the whole cycle again. In the long run, it is true that the CBC does a high volume of compelling Canadian content in prime time, and that factor weight will certainly be a great benefit to that broadcaster down the road. So was the CBC premature in expressing these concerns? It’s a concern when any broadcaster’s envelope goes down, including the CBC’s, but our process is a competitive process. It’s not just about volume and how much content you produce; there are other factors that come into play, like audience success, regional access and thresholds. We’re concerned about everyone’s envelope going down. It all comes down to there’s only so much money in the pie and only so many ways to cut it. I think that when the prime time factor weight kicks in —if the CBC is accurate in its projections about what kinds of content they do—it will be a great benefit to them. Any losses they may have incurred this year they are likely to gain back in the prime time factor weight. kfournier@thewirereport.ca

Newly launched Canada Media Fund to meet 50 to 60 per cent of demand

Broadcast | March 29, 2010

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