Production

A Tsunami of change is sweeping across the media landscape. Many observers agree that, in the current environment, the regulations governing television production in Canada are woefully outdated. Our cumbersome and exceedingly complicated regulatory framework dates back to a time when the Internet did not exist, when telecommunications and the distribution of television signals were two separate worlds. Today, Canada must face up to the important challenge of streamlining the regulations and placing greater trust in the ability of the market to produce quality Canadian content.

Did you know...

• Canada's independent production industry was born some 20 years ago, when public authorities wanted to create a counterweight to the U.S. majors. It was thought that independent Canadian producers would do a better job of boosting the popularity of Canadian content at home and abroad.

• The creation of this system enabled independent producers to lay claim to a status, a role, a mission, and on this basis they were able to demand protection in their negotiations with broadcasters, win guarantees of public funding to support their capitalisation, and obtain requirements for broadcasters to reserve a significant share of their programming for independent productions, particularly for programs deemed to be high priority.
• As a result, private entrepreneurs no longer have any incentive to invest in the content of their choice, with the partners of their choice, since the investors do not retain the intellectual property rights. In fact, Canada's outdated regulations are now stifling productivity and investment. Since the manna from the public purse starts falling again every year on the expected date, regardless of a business's financial results, why take risks?
• In 2006-2007, the Canadian Television Fund (CTF) received $250 million in contributions from the distributors (cable and satellite operators) and Canadian Heritage. Of this total, $164.8 million went to English-language production and $84.2 million to French-language production.
• The CTF is run by a group of beneficiaries who make no investment in Canadian production and retain all the rights in perpetuity. Even though they are spending public funds, the managers of the CTF are not accountable to anyone.
• Although Canada devotes proportionately more money to funding domestic production than any other G8 country and has the most protectionist regulation, Canadian content is spurned internationally and domestically. It has no audience in English Canada, has produced no original concepts, and has failed to sustain a production industry that is capable of attracting foreign investment or exporting its products.
• It is ironic that some of Canada's greatest success stories are— American! Noteworthy examples include 24 and CSI.
• Finally, it should be pointed out that even if a production company does not receive public funding, it still has to follow all of the CRTC's rules.

The new digital environment

Conventional media are facing unprecedented competition today. One of the first lessons that can be drawn from the digital revolution is that the Internet generates its own content. For example, podcasts produced on a shoestring budget by individuals or specialized businesses have proven formidable competition for big-budget productions from conventional media outlets.

While regulation was able to guarantee a high level of Canadian production for a time, Canadian content must now stand and fall on its quality and its relevance. Its ability to do so will be a key factor in Canada's success in the new media environment.

With digitization and content portability, a growing number of productions are circumventing the conventional media system. Tighter regulation won't stop that; it will only further isolate Canada on the international production scene.

Building a new world

There are many things Parliament and the CRTC can do to foster the growth of an exciting and dynamic new media industry and enable this country to tackle the challenges of the digital age. Most notably, they can create conducive conditions for the creation of content Canadian will watch:

• The government should continue providing financial support for Canadian production. However, to avoid intervening in the choice of programs and modes of exploitation, it should shift towards using tax measures, which are more incentive-based, closer to the laws of the market, and less interventionist;
• To maintain Canadian ownership, broadcasters should be given incentives to reinvest a portion of their revenues in Canadian production, using a calculation method that is fair to all players. That should be the only restrictive rule. It would be up to broadcasters to decide in which productions to invest this money and how to schedule the content in their program line-up or on other media.