Experts urge CBC to sell more programming internationally to help deal with cuts

CBC/Radio-Canada should expand its negotiations covering international distribution deals for TV programs to reduce the cost of creating original shows and provide more support for its independent production partners, industry experts say. “If they can get the shows to sell internationally, it helps them to deal with the financial problems,” Richard Stursberg, head of CBC’s English services from 2004 to 2010, said in a telephone interview in December. “If you’re getting a lot of foreign sales, you can say to the producer, ‘I don’t have to put in such a big licence fee.'” CBC is looking to cut costs and find new sources of revenue after the Conservative government's spending cutting budget last year indicated the public broadcaster’s annual parliamentary appropriations will be reduced by $115 million starting in 2014-2015. Stursberg and other broadcasting industry people said in interviews that the public broadcaster should leverage the cost savings it can achieve through foreign distribution deals for Canadian programs, which increase the money flowing to the producers of the programs and reduce the need for CBC contributions. “It means there are more sources of revenue out of which to finance the show than if it was only being sold inside Canada,” Stursberg said. Once committed to a project, either CBC or the producer can negotiate foreign distribution deals, Stursberg said. If those deals are signed while the show is under production, they can mean a financial windfall for the show and reduce the amount CBC contributes. “In either case, what it does is it means there are more sources of revenue out of which to finance the show than if it was only being sold inside Canada,” he said. “It can bring down the costs for the CBC in terms of the size of the licence fees it has to pay.” CBC struck international distribution deals with Being Erica, which ran from January 2009 to December 2011 and went on to run in 160 countries. Similar, international success happened more recently with Republic of Doyle, which in November passed distribution in more than 100 countries. Kirstine Stewart, executive vice-president of CBC English services, said in an interview with The Wire Report in November that CBC is “most effective” when it helps Canadian producers by commissioning and funding their programming. “We have agreements with producers that give us all-Canadian rights, so we can make sure that we maximize that Canadian content to our viewers and our listeners,” she said. The agreements allow producers “the opportunity to sell the program worldwide,” she said. “The best-produced shows are the ones that sell the most worldwide, and I think our understanding of not just a Canadian audience but the producers’ understanding of what they need for a worldwide audience is an incredibly powerful combination,” Stewart told CRTC commissioners in November during the commission's two-week hearing into CBC’s licence renewals. Stewart said the partnerships allow CBC to get the most revenues out of the Canadian rights before the producer takes the content internationally. CBC is now negotiating with the Canadian Media Production Association (CMPA) on a new “terms of trade” deal to govern production agreements with the public broadcaster. Those negotiations will cover, in part, the terms of international distribution. Right now, when foreign distributor commitments, also known as distribution advances, are made before a show’s production, the funding reduces the necessary contributions from CBC and other Canadian investors. As more international funding commitments come in during this “pre-sales” period, CBC’s contributions are lowered. Foreign financing commitments made after the show has launched go to the producer of the show, not CBC, Chuck Thompson, a spokesman for the public broadcaster, said in an emailed response to questions. Pierre Karl Peladeau, president and CEO of Quebecor Media Inc., said in a speech in October that Canada’s entertainment industry must better reach international audiences outside its borders in part to help compete with online services. Stewart said in a follow-up email that, while producers benefit from a larger production budget, revenues and more exposure, “we benefit because the money from international sales guarantees goes into financing the show.” The benefit for CBC, Stursberg said, depends on how well the show does and in how many countries CBC can secure distribution advances before production. If there are “more than just Canadians financing the show, it can bring down the costs for the CBC in terms of the size of the licence fees it has to pay,” he said. Internationally successful productions are important to CBC at a time of budget cuts. “If they can get the shows to sell internationally, it helps them to deal with the financial problems,” he said. The more successful a show is, the more CBC can charge advertisers or distributors to deliver it on multiple platforms. Canadian broadcasters secure the rights related to content in Canada, including broadband and wireless distribution rights, while the producer maintains international rights to then sell the content to various markets, he said. “If they can get them distributed more widely within Canada on all these different platforms, then obviously, the dollars that they spend go further and Canadians have a better chance to see the shows that they’re in part paying for,” Stursberg said. In an effort to deal with its budget cuts, CBC said last spring that it would cut 650 full-time positions, shut down its 607 analog transmitters, move Radio-Canada International (RCI) online and apply to place advertising on CBC Radio 2 and the French-language Espace Musique. Brian Schecter, a media consultant and president of consulting firm Puddle Duck Productions in Vancouver, said in an email that selling productions internationally is a “good idea” for CBC as long as there is a market for it. As a public broadcaster, CBC should ensure that program content and funding keep to the broadcaster's original objective, which is “to inform and entertain Canadians, and not get subverted to focus on international sales as the driving force,” he said. Valerie Creighton, president and CEO of the Canada Media Fund (CMF), said in a phone interview that everybody benefits when a Canadian program sells to international markets. She said it’s good news for the broadcaster, the producer, and the CMF. “When we have a really strong, compelling piece of content that’s developed, written, financed, produced here in Canada, and has an international appeal and market, it’s demonstrative evidence that our content stands up with the best of the world,” Creighton said. “If sales are high on a show like that, it benefits everybody.” High pre-sales indicate strong market interest in the program, helping the producer to later sell the content in other countries, she said, and when international distribution agreements can be made before production, it helps CBC. “They don’t have to cover that additional piece of money, and the financing structure will be some from pre-sales, some from tax credits, some from the CBC licence fees, and some from the Canada Media Fund,” she said. John Young, managing director at Toronto-based Temple Street Productions, which produced Being Erica, said in a phone interview that he believes CBC enters into these types of productions as often as it can. “It really is a partnership of broadcaster and producer working together, with the financing available to create the best piece of content that we all can,” he said. —With reporting by Danika Grenier at dgrenier@thewirereport.ca and editing by Simon Doyle at sdoyle@thewirereport.ca

Experts urge CBC to sell more programming internationally to help deal with cuts

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Experts urge CBC to sell more programming internationally to help deal with cuts

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