‘We’re simply not going to walk away’ from feature films, Corus argues

Corus Entertainment Inc. defended the inclusion of its pay channels within the group licensing framework Friday, arguing that producing Canadian feature films and drama is “at the heart” of its operations and that pay TV benefits the system. “Limiting this spending flexibility would prevent Corus from investing in new Canadian productions,” Sylvie Courtemanche, Corus’ vice-president of government relations, told the CRTC in her opening remarks at the final day of the commission’s group-based licensing hearings. “We fail to see how this serves the public interest.” The commission’s new group-based licensing policy gives broadcasters more flexibility and the ability to meet Canadian content obligations across a variety of broadcasting assets. Friday marked the final day of two weeks of hearings on the licence renewals. The Canadian Media Production Association (CMPA) and the Directors Guild of Canada (DGC) had requested that Corus’ pay TV channels be excluded from the group licensing framework based on concerns that it would negatively impacts on Canada’s feature film industry. “You have heard the movie people say, ‘If you do this, if you include pay, then this is another nail in the coffin for Canadian feature films, because this is one way in which we have a guaranteed showing of our films,’” von Finckenstein said. But Corus executive vice-president Gary Maavara responded that those worries are unfounded. “I think the concerns the interveners have had is based on a false premise,” he said. “The premise is simply that we could move all of our costs out of one particular channel into another under the flexibility. Practically speaking, that’s impossible.” Maavara said the CRTC has structures in place to prohibit such actions, and that Corus has four channels that rely on movies. “We’re simply not going to walk away from that type of content,” he said. “It’s in fact really at the heart of our pay TV operations.” Removing pay channels from the equation would complicate things, Maavara said, because the broadcaster determines plans based on its entire spectrum of channels. The group licensing framework requires large broadcasting groups to meet Canadian programming expenditures (CPE) of 30 per cent and five per cent spending on programs of national interest (PNI)—which cover Canadian dramas, documentaries and award shows. Since Corus’ three over-the-air channels are affiliated with the CBC, limiting its programming options, Corus requested re-allocating its internal CPE spending. The company calculated that the 30 per cent requirement for Canadian programming expenditures in the first year of its licence would amount to $670 million. Corus proposed reallocating spending for its specialty, pay and over-the-air services to different percentages that would still amount to $670 million but less than an overall 30 per cent. Corus also requested amendments to its conditions of licence but said it would commit to an eight per cent minimum spending on programs of national interest, a level that would lead to a contribution of at least $182 million over its licence term. “We asked you to sharpen your pencils. You certainly did, and I do appreciate that,” von Finckenstein said. But the CRTC chair appeared to have a hard time with Corus’ nature of service agreement for its Oprah Winfrey Network (OWN), which launched on Corus’ licence for the former service known as VIVA. The channel licence calls for a “focus on adult education” and formal and informal educational programming, but von Finckenstein said he looked at the channel schedule and found “cooking shows, physical training, exercise shows, how to be sexy, go to the bedroom with Dr. So-and-So and God knows what else.” He said the VIVA service was primarily showing movies. “Isn’t this really going beyond the pale?” he asked. “This is no longer education. This is movies and you just put a little frame around it to sell it as education.” Maavara responded that the world of education is changing, referring to the Stratford Institute’s initiative to bring together mathematicians, scientists and artists to study together. He said there is a plan under way to establish six of the schools across Canada, “where you’re going to have hard science and drama being discussed in a classroom setting.” Maavara suggested that there are new ways of learning. “And I think the Oprah Winfrey Network is an illustration of that,” he said. But von Finckenstein didn’t appear to be buying it. “Showing Steel Magnolia and having some reference to a film course given at some university and having some professor comment doesn’t change the nature of the beast,” von Finckenstein said. “You’re showing a movie.” Maavara said he does not want the channel to be a barrier to other educational programming and encouraged the commission to licence other applicants in the genre. Shaw Media Inc. also appeared before the commission Friday, urging the commissioners to “resist repeated attempts to turn back the clock and reinstate micro-regulation that no longer serves a purpose in the new digital media world.” Shaw said that Netflix had aggressively entered the marketplace, competing for viewers, dollars and programming. “We’ve demonstrated that Canadian programming overall continues to lose money,” Shaw president Paul Robertson told commissioners. “If new unregulated entrants can simply bypass the regulated system and take the programming that actually helps subsidize our Canadian content, then we risk destabilizing the regulatory bargain.” This month, a CRTC working group of industry insiders called on the commission to open a public consultation on the role of Netflix Inc. in the Canadian broadcasting system. Commissioner Tom Pentefountas expressed disappointment with Shaw’s proposed five per cent spending on programs of national interest, which he compared unfavourably to Corus’ proposal for eight per cent. “The idea was to get to the heart of CPE, which is PNI, to try to increase that. And you’re coming below your traditional spend,” he said. “Why are you coming to us with five? We gave you everything—the house, the barn, the kitchen sink, the whole thing. And you’re coming with less than what you were offering beforehand.” Shaw said it would increase its Cancon spending to meet the 30 per cent Canadian programming requirement but added the company is concerned that increasing spending on programs of national interest would lead to content that doesn’t meet its quality standards. Shaw added that Corus has a different asset and spending mix, making comparisons between the two unfair. Shaw finished its presentation Friday in camera. The CRTC also announced Friday that applicants in the group-based licence renewal hearings have until April 20 to submit final written responses for proceeding. Interveners have until April 29 to submit comments, the CRTC said. The applicants can then file final replies by May 6. mburgess@thewirereport.ca

‘We’re simply not going to walk away’ from feature films, Corus argues

Broadcast | April 15, 2011

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