BUSINESS

Plodding toward a television revolution

Ian Anderson October 26 1981
BUSINESS

Plodding toward a television revolution

Ian Anderson October 26 1981

Plodding toward a television revolution

BUSINESS

Ian Anderson

Ask, what have they done with the airwaves when they had the opportunity? Ask, where has been the innovation and creativity in their record?—Pat Ferns, veteran Canadian film producer

Not very much, by any measure. Such has been the failure of Canadian television to be much more than an annex to the American networks that none of the saints and shysters who sweated through 15 days of John Meisel’s hearings into pay television took issue with Pat Ferns. They all took it for granted. That failure was the reason they were there this month applying for the first pay-TV licence to be issued by the Canadian Radio-television and Telecommunications Commission (CRTC).

Three-quarters of Canadian primetime television is devoted to U.S. shows. An incredible 96 per cent of drama programming is foreign. American television may have been described as a wasteland, but at least it is America’s wasteland. To the pain of Meisel and the CRTC, America’s wasteland is Canada’s, too.

In an industry devoted to the use of superlatives, it is not strange to hear pay-TV described as the “last chance” for Canadian television. “If we don’t get this in place, it’s our last chance to get our own audience,” prophesies John Eckert, president of the Canadian Association of Motion Picture Producers. “In the next few years we’ll be overwhelmed by foreign programming.” CRTC Chairman Meisel has come to agree with such apocalyptic assertions, echoed through the hearings by choirs of blue-suited lawyers and accountants, the born-again cultural nationalists who outnumbered the film-makers. Their common recipe calls for large quantities of “big ticket” movies such as Superman II to be shown on a special subscription—or pay—channel delivered by the local cable television companies for $8 to $14 a month. And out of the enormous revenues such a channel could create, large dollops would be reinvested in Canadian films. “Money doesn’t guarantee quality, but it is very difficult to achieve quality without it,” reasoned Murray Shostak, the bejeaned chief of Universal Productions of Toronto.

The source of the urgency floats 3,700 km above the equator. A row of satellites sits there spraying five-watt signals indiscriminately across North America. Most of those signals are American, and many of the people capturing them on three-metre “dish” attennae are Canadians who do not particularly care about the CRTC’s Canadian content rules. In four or five years U.S. companies will launch the first high-power direct broadcast satellite with a signal that could be trapped by a one-metre rooftop dish costing about $500. Canadian manufacturers are among the first to gear up for what they say will be a market of 50 million small dishes (see box). If Canadian television is to compete it will have to slug it out toe-to-toe with American shows and not hide behind a blizzard of CRTC content rules.

“Between the two extremes of idealism and greed we have to find a balanced alternative,” film-maker Robin Spry told the commission. Somewhere between those extremes were 27 applicants, whose directors and investors included two former secretaries of state, two former CRTC vice-chairmen, an oilrich Indian band, pension funds, life insurance companies, the Bronfmans and Eatons, Conrad Black, a fistful of oil men, a fish processing company and just about any Toronto and Montreal lawyer with political muscle. While each group competed to see how much it could estimate losing on Canadian entertainment in the first few years of its licence, most had long lines of credit from their bankers. The touchstone of their faith lay south of the border with the U.S. pay-TV companies whose revenues have tripled in the past three years. The applicants spent an estimated $7 million to make their cases before the CRTC in the hope that sometime in 1982 it would be their company giving Canada’s 4.5 million cable subscribers the pitch that Moses Znaimer, president of Canadian Premiere, envisions should his company win: “You can’t afford not to have this service if just once a month it replaces buying a movie ticket for each member of your family.”

Znaimer, for one, thinks pay-TV will reach a quarter of all Canadians within five years. Harold Wetston, counsel to the Consumers’ Association of Canada, does not quarrel with such optimism. “Whoever wins the licence,” he remarks matter-of-factly, “becomes an instant millionaire.”

Beneath the sheen of Hollywood mega-deals, a thoroughly Canadian process is under way. First you regulate the industry, then you delay dealing with pay-TV for five years after the communications minister declares its introduction “inevitable.” Then you have a preliminary hearing. Then a licence hearing. And where you once had an acknowledged leader in cable TV and satellite delivery of television, you now have Canada trying to catch up with U.S. advances. Many U.S. cable operators now offer subscribers more than 100 channels to choose from, including three dozen pay-TV channels carrying everything fronri basketball to Las Vegas shows to soft-core pornography (from Penthouse magazine’s channel). The pay signals are delivered by satellite to the cable operator, who then allocates channels for them on his system.

While the CRTC mulled for years before Meisel’s arrival in 1979 over just how to divide the spoils between cable TV and broadcasters such as CBC, frustrated cable operators flocked to the U.S. and became leaders in cable innovation. The CRTC, meanwhile, was debating the thorny question of just what Canadian content is. Is it a film in which you pretend Toronto is Minneapolis but use a Canadian star and crew? Before pay-TV it is, Eckert says, because the high cost of making films means foreign sales are imperative. “If Canada wants its own content and programming, then it is going to have to pay for it,” he continues. “We’re not talking about starting from scratch, we’re talking about reversing the flow. But we’re up against the best in the world. You’ve got to ask, how do we compete against that if our [population] base is one-tenth the American base and our operating costs are about the same?”

None of the major applicants envision Canadian content at more than about 30 per cent initially. They feel customers would balk at paying for anything less than Hollywood. A typical schedule—this one produced by Premiere—would offer a Bruce Cockburn special on Sunday night between 6 and 7 p.m., followed by such movies as The Blue Lagoon and La Cage aux Folles. The same week’s offering would include another 15 movies— Airplane, Private Benjamin, Body Heat, Love. Of the 27 applications—for national, regional and specialty channels—Premiere’s is among the slickest, most expensive and most politically acute (as the bilingual name attests). The barely concealed desire of Znaimer to dominate the country’s film industry may have led CRTC commissioner Dick Destefano to compare him to “Duddy Kravitz, in more ways than one.” But lining up behind Znaimer—along with investors from the business, political and arts communities—lurks a consortium of cable TV companies holding just over a quarter of Premiere’s stock. While Znaimer claims they could not control Premiere, the CRTC has adamantly opposed such potential cross-ownership, predicting conflicts of interest between pay-TV and cable. For this reason, few expect much from the pay-TV proposal of Standard Broadcasting and one filed jointly by the CTV and TVA networks. “What has CTV done dramatically?” scoffs Eckert. “They have 26 half hours of Littlest Hobo and two hours of Escape from Iran.”

Many of the production people are lined up behind the Performance application of microelectronics entrepreneur John Shepherd and TV veterans Jack McAndrew and Peter Pearson. “There are an awful lot of people who believe they won’t rape and pillage us like the others will,” claims producer Sam Jephcott. But Performance failed to get any Quebec stockholders except Hugh Faulkner, the onetime secretary of state and now an Alcan vice-president. Also short of French content is the application of Don MacPherson, a much travelled Toronto television executive who lined up $19 million in Bay Street seed money behind the First Choice application. Like the Performance backers, he may have fatally underestimated Meisel’s long-standing commitment to making Quebeckers “feel at home” in Canada.

Harold Greenberg did not make the same mistake. Adding to his strong political connections and a proven record as a deal-swinger (if not a quality filmmaker), Greenberg allied himself with Philippe de Gaspé Beaubien, the mayor of Expo 67 and the man who Canadianized TV Guide. By process of elimination the Astra-Tel bid appeared the strongest, and stock shot up in Greenberg’s company, Astral-Bellevue-Pathé. Yet doubts lingered about the man who was responsible for City of Fire. Other applicants suggested his two-channel approach meant Canadian shows would be “ghettoized” on the B channel, while the A channel popped out blockbuster after blockbuster. “He’s fine, he’s hopeful, but I don’t know that I want Harold as my cultural czar,” Jephcott mused. To which Greenberg calmly retorted: “CBS bought City of Fire for $2.3 million. Home Box Office bought it for pay television. If all they can criticize me for after 66 pictures is three or four, then, hey, I’m doing pretty well.”

These dollar figures do not make Greenberg the kind of beatific nationalist that the people behind the TeleCanada proposal want to see running payTV. They advocate a non-discretionary service to which every cable subscriber would have to pay an additional $2.50. “Is it really true we can pay $43 a barrel for oil but not $2.50 [for television] a month?” queried TeleCanada President Paul Audley. Znaimer is not alone in suggesting the group offered the kind of “nanny-state” proposal that would only raise the hackles of viewers, no matter how good its intentions.

While the applicants for a nationwide licence said they needed a monopoly to maximize the dollars spent on Canadian programs, it was the regional applicants who best showed the innovation Meisel had called for. They also showed the most virulent opposition to Toronto’s grip on defining what is good art and entertainment. “It is, in fact, almost impossible to do artistic business with Toronto, because there it is a foregone conclusion that only Toronto can produce material of quality,” grated University of Alberta drama professor Bill Meilin, speaking for an Alberta applicant. Regional licence proposals came from all provinces but Quebec, Manitoba and Saskatchewan. There was also a bevy of “narrowcasting” applications, specialty channels that could coexist with a national licencechannels for sports, performing arts, offbeat movies, films in languages other than French or English. No applicant ventured forth with soft-core pornography.

Through this, his biggest decision, John Meisel sat almost Solomonic above the fray. The commission was in disarray when he took over, six of the nine commissioners having left before their terms were over. It was a rather timid former academic who then spoke of the “mind-blowingly important issues” he faced as chairman.

Now his grasp of the industry is disputed by nobody. One measure of his authority was the way that any small joke from the chairman was greeted with the laughter of courtiers. In one aside, after wishing Harold Greenberg happy birthday, Meisel declared the commission’s undying impartiality and wished happy birthday to all the other applicants, too. Behind the bemused smile, though, fidgets the same mind that once concluded that Canada’s “progressively and ultimately annihilating Americanization is in part a consequence of our milquetoastian nationality.” If ever John Meisel had the chance to do anything about that “Americanization,” the pay-TV decision is it.