Last week, broadcasting in Canada grabbed a lot of headlines, in a very good way, given the radical changes and predictions of impending crisis facing the industry.
At the Banff World Media Festival #banff2013 last week, CRTC Chair Jean-Pierre Blais signaled a planned dialogue with Canadians this Fall on what they want from their broadcasting system. While it was initially reported as the beginning of a process to dismantle the broadcasting system, I suspect that some pundits misread the Chair’s message. It is more about how to enable consumer choice and still build a strong foundation for creative industries in an international and on-demand market-place. In the latter case I think Mr. Blais was calling on the industry to build bridges to the world rather than lay down the tools. We can happily report bridge construction is well underway.
In L.A. Tatiana Maslany grabbed the Best Actress in a dramatic series at the Critics Choice Awards for her role in the Canadian hit series Orphan Black. Just how good is that? Considering that she was up against competition like Claire Danes for Homeland, it’s nothing short of awesome. But then so is this Temple Street produced show (see it on Space) which is also now the #2 rated show on the BBC America after U.K. favorite Dr. Who. And both of these shows represent the increasing internationalization of content, in particular on U.S. screens. That spells opportunity for Canadians and consequently higher quality productions for Canadian audiences.
Last year 29 shows financed by the Canadian Media Fund (CMF) found a home on U.S. TV channels and that was only the tip of the iceberg in terms of series made in Canada that are now playing in the US.
Canada’s regime of incentives from tax credits to CMF funding has made Canada a very competitive jurisdiction to do business. Total TV and film production in Canada resulted in $6 billion in expenditures and 132,000 jobs in 2012. That’s just the production side and does not include revenues generated by broadcasters, cable and satellite providers as well film and TV distributors like E One.
The recent successes of Canadian shows and talent abroad have not been lost on international broadcast execs who increasingly look to Canada for partnerships and creative talent. That means more investment and trade. In fact foreign location shooting and service work for foreign studios sat at $1.68b in 2012 and accounted for 37,0 full-time jobs. And now those studios are increasingly licensing domestic productions as well.
In Banff last week the crowd was heavy on international credentials and the discussions focused often on co-productions and co-ventures including, increasingly with the U.S.. Canada is no longer just a market to sell into but is increasingly a country to buy shows from and to invest and produce in.
Canadian broadcasting, which was once viewed primarily as a part of our cultural fabric and in need of protection is now recognized as a growing industry, not just within our borders but increasingly into global markets. The importance of screen-based entertainment to the economy in terms of trade and job creation was highlighted by Ontario Culture Minister Michael Chan last week in an interview in Toronto. Minister Chan rejected calls from other provinces to arbitrarily lower tax credits to reduce inter-provincial competition for jobs and business because of the important contributions the industry is making to the economy of Ontario. As Minister Chan noted ‘Ontario, like other jurisdictions including B.C., is “competing with the world” and has to act appropriately.’’
This economic support has helped make Ontario the number three production centre in North America.
But back to the CRTC process. While a dialogue with Canadians is a great idea, the big issue is no longer determining what consumers want so much as serving consumer demand in a way that keeps the economic engine humming at the same time. In my view it is pretty clear what Canadians want from their broadcasting system. First, Canadian audiences want to be able to watch what they want to see, at the time they want and on the platform that is most convenient. Second, consumers want to pay only for the channels and increasingly only shows they most want to watch rather than pay substantially more for channels they don’t want or need.
Now I am sure that these two points are not the only points that will be raised in this “dialogue” (the role of the CBC and Super Bowl ads are sure to arise) but I will bet that the former two will be the most predominant points raised. And make no mistake this shift to more pick and pay programming is already occurring, irrespective of regulation, and will only increase both from within the system (TV Anywhere,VOD,PVR) and outside of it (Netflix,Apple TV). And so regardless of concerns about the impact of such changes on all aspects of the system, as businesses we would be wise to take this shift as a given and work from that as a starting point to growing our opportunities across all platforms both within and beyond our borders.
It is a debatable point as to whether more channels a la carte or more shows on-demand actually result in significant savings for consumers (see my blog Is a la carte really the best thing since sliced bread? ). But this model will clearly result in more control in the hands of consumers and that is equally important. From the perspective of the Canadian production industry these changes present a daunting challenge, because of potential impacts on traditional sources of revenues to support original programming, but perhaps not an insurmountable one, assuming that Canadian broadcasters don’t simply use change as an excuse to abandon most obligations they took on in exchange for the licenses they hold.
Clearly there will also be debate around the need for less regulation due to the lack of “contribution” to the domestic system by Netflix and others. However there are upsides to changes that are occurring and the opening of international markets and co-ventures and co-licensing will provide opportunities to grow the business in the face of increasing competition. And we are encouraged by comments by Bell Media Head Kevin Crull on the effort they have been putting into promoting homegrown shows like Motive and Orphan Black. Creating domestic IP and supporting homegrown product is not only essential to creating economic value; it has proven to work when the product is heavily promoted.
This, I believe, was where Chairman Blais was heading when he summed up his speech as follows
“There are all kinds of new and exciting digital platforms to showcase your creative content, opening doors to niche markets unimaginable even a decade ago.
And audiences in a globally connected world are on the lookout for new and exciting content. In 2011-2012, the Canada Media Fund backed 25 programs that attracted average audiences of over 1 million in Canada. Canadian-made productions also appeal to viewers in the U.S., Europe and hundreds of other countries.
It all adds up to outstanding opportunities to put Canada on the world map as a producer of quality content. The time has come to define ourselves in terms of who we are—in all our diversity—with self-confidence and audacity.”
We agree with the Chair. Canadian productions are seeing increasing success in markets not just a home but around the world. And the world includes the U.S. market to the south. Canadian shows are increasingly playing well on that big stage not just in lifestyle, format and children’s programming but increasingly on drama series on conventional channels (Motive, Flashpoint, Rookie Blue) and cable channels (Orphan Black, Continuum, Lost Girl).
And it’s not just our shows that are playing well it’s the talent from Tatania Maslany to the directors, writers, producers, editors and camera operators that have earned professional respect around the world. And it’s that combination of creative talent along with economic incentives like tax credits that have made Canada a place to do business, which I believe was Minister Chan’s point. More inward investment in Canadian productions and in co-productions means more skilled jobs and more export opportunities. And it is this economic reality that has to form part of the dialogue.
One other piece of news that was very timely was the announcement by the CMF and Telefilm of a brand for the many promotional strategies underway to highlight the success of the industry. The brand, Eye On Canada, is quite apt given the increased focus of other countries on Canada as a place to invest in and to do business. Already a group of us, representing some 35 businesses and Associations, have picked up on the hashtag #eyeoncanada as a way to link our own efforts to highlight successes across the industry and create a dialogue. But #eyeoncanada is not just for industry. It is also open to all fans of Canadian films, TV and digital. Check it out next time you are on Twitter and use it to tell your own stories or start conversations.
Historically Canadian content has been seen as important to support for cultural reasons as a matter of public policy and many of those reasons remain valid. But content has to be relevant to an audience or it has little value in a digital world. Audience has to be the priority and as the Chair signaled the audiences for our stories need to be seen as global. I would also submit that the economic rather than cultural arguments for supporting the industry have become more relevant and important in terms of investment, jobs and trade; particularly in the current fiscal climate.
The creation of and trade in content is an important element of any digital economy. We are competing globally and our system is poised to make Canada an important part of the market for entertainment and information. This is important very much from an economic point of view. Because in a digital economy intellectual property is currency, and the value of our currency is rising as entertainment industries around the world have recognized Canada is a place to co-produce and do business with. And audiences around the world are taking note.
Let’s start talking about it more at home too. #eyeoncanada ,eh!