Tussling over the tube

JOHN GEDDES October 5 1998

Tussling over the tube

JOHN GEDDES October 5 1998

Tussling over the tube


Broadcasters and producers square off over Canadian content


It was the sort of Bay Street brusqueness that might have worked as a line of dialogue for one of the tough-talking stock promoters on the TV series Traders. On the opening day of the Canadian Radio-television and Telecommunications Commission hearings on the future of Canadian TV last week, Scott Cuthbertson, a broadcasting industry analyst for TD Securities Inc., lost patience with the polite debate going on between CRTC officials and TV executives. Canadian shows, he interjected, have a record of “dismal performance” in the intensely competitive entertainment marketplace. He doubted that private networks would bother airing homegrown drama at all if they were not forced to by CRTC regulations. “To put it bluntly, from a financial standpoint, Canadian programming is a cost of doing business,” Cuthbertson said, as faces reddened around the windowless government hearing room in Hull, Que.

Later, in the drab corridor outside, his remarks had the TV and film production industry’s heaviest heavyweight fuming. “Scott Cuthbertson was hilarious at best,” railed Michael MacMillan, chairman and chief executive of newly merged Alliance Atlantis Communications, the Toronto-based maker of Traders, Due South and Cold Squad. “If our programs are no good, then why are we able to export them around the world?” The clash of viewpoints dominated the first week of CRTC hearings, which are scheduled to run until the middle of next month. In one camp, the broadcasters, who brought along Cuthbertson for his hard-nosed assessment of their sector, urged the CRTC to look closely at what attracts audiences and makes money. In the other, the producers touted their recent successes and appealed to the CRTC’s traditional preoccupation with promoting Canadian culture. Some time early next year, the CRTC is expected to sort out the conflicting messages and issue a report updating—perhaps even overhauling—its approach to regulating what Canadians watch on the tube.

If MacMillan was boasting about the international appetite for his shows, he was also pressing for the CRTC to impose much tougher rules to put those programs in front of domestic audiences. The Canadian Film and Television Production Association—of which Alliance Atlantis is by far the biggest member—asked the CRTC to force

• Cost per episode: about $20 million • Cost for CTV to buy: between $75,000 and $100,000 per episode 13 per cent of 18-to-49-year-old Canadians watching TV in that time slot (Thursdays, 10 p.m.) • Rough estimate of ad revenues per episode: $200,000

• Audience: a “13 share,” or

private broadcasters to air Canadian shows as fully 50 per cent of the entertainment programming in the peak evening viewing hours, up from the current 12-per-cent Canadian slice of primetime drama and variety. “Canadians deserve to regain their own prime time,” said Elizabeth McDonald, president of the association.

Production companies may have more in mind than contributing to Canada’s identity. To reach their target for Canadian content in prime time, McDonald proposed that broadcasters should be required by the CRTC to spend 10 per cent of their revenues buying Canadian entertainment programs, up from less than four per cent now. That would amount to an additional $70 million a year flowing from broadcasters to Alliance Atlantis and many smaller production companies.

That sort of calculation had the network executives attending the hearings squirming in their seats. Their lobby group, the Canadian Association of Broadcasters, argued in its submission to the

CRTC for a radically different approach.

Instead of compelling the private networks to spend more on Canadian content and air more of it in prime time, the broadcasters called for an entirely new CRTC emphasis on counting up how many viewers the shows attract. “We believe we are essentially stalled if we do not now pay attention to how many Canadians are watching us,” said association president Michael McCabe.

McCabe maintained that broadcasters now lose, on average, 40 cents for every dollar they spend to put Canadian shows on the air. “The problem is the programming we have to work with,” he declared. “What we’re saying is, help us make the Canadian programs work better. Do not force it into programming slots where it can’t work.” The broadcasters urged the CRTC to set overall viewing goals—not the prime-time quotas urged by the producers. McCabe said a reasonable target would be to raise viewing of English-Canadian programming modestly over five years to 35 per cent of all the television Canadians watch, up from about 32 per cent now. For entertainment programs—as opposed to the generally more successful Canadian sports, news and current affairs shows—the broadcasters’ association suggested a target of boosting viewership of Canadian shows to 10 per cent from 7.5 per cent now. (On French television, Canadian content already accounts for 69 per cent of all viewing, so the CRTC’s deliberations on TV in Quebec are on a separate track.)

But there were signs last week that the CRTC regards the broadcasters’ emphasis on luring big audiences as a doubtful objective for federal regulation. In a revealing exchange, the commission’s vice-chairwoman for broadcasting, Andrée Wylie, asked whether aiming for popularity would mean lowering program quality. “Clearly, n a society like ours, what people choose has to ?uide us broadly in what we call quality,” McSabe told her. But, Wylie responded, “if you say,

Let the people decide what they want to watch,’

Even the best Canadian-made TV dramas almost never win in head-to-head competition with U.S. rivals. Last year, the critically acclaimed Traders, for example, won a respectable three per cent of 18-to-49-year-old viewers for Global in its Thursday evening time slot. But running opposite it on CTV is the U.S. hit ER, which attracted a stellar 13 per cent of 18-to-49-year-olds. And while Global pays about $200,000 an episode to buy Traders from Alliance Atlantis, industry sources estimate CTV picks up each hour of ER from its U.S. producer for less than half that amount (CTV would not disclose exactly how much it pays). MacMillan argues that as long as Canadian networks can make much more money by shopping for surefire U.S. hits than they can by cultivating unproven Canadian drama, government regulation is essential. “At times of the day when Canadians are watching TV, there have to be Canadian programs available,” he told Maclean’s. “I’m talking about prime time.”


• Cost per episode: about $1.2 million

• Cost for Global to buy: $200,000 per episode

• Audience: a “3 share,” or three per cent of 18-to-49-year-old Canadians watching TV in that time slot (Thursdays, 10 p.m.)

• Rough estimate of ad revenues per episode: $125,000

that means that the largest number of people decide for the smaller number of people.” Broadcasters and producers did not see eye to eye on much, but they did agree that Canadians’ demand for programs made in their own country is not growing. In their statistic-laden presentations, both sides noted that during the past 10 years—despite the proliferation of Canadian specialty channels and increased federal funding for production—Canadians have continued to devote only about a third of their time in front of the tube to domestic shows. The two camps point fingers at each other when asked why that number is frozen. The producers argue that broadcasters, who can readily acquire American TV fare for less money, have little economic incentive to buy and promote Canadian alternatives. The broadcasters counter that producers, with government subsidies available even if the programs they create fail commercially, are not being pushed to appeal to big audiences.

At least one key player will not be testifying at the hearings: the United States government. Canadian broadcasting industry sources said they have been alerted privately by U.S. trade officials that Canada’s television policies are expected to be a future source of friction between Ottawa and Washington. And with the federal government already locked in a trade dispute with the United States over federal subsidies and protections for the magazine industry, broadcasters take seriously the threat of the battle spreading into TV policy. Contacted by Maclean’s, U.S. trade policy officials would not discuss their specific concerns, but said they were monitoring the CRTC hearings. By the time the CRTC gets around to changing the rules, the players in the Canadian TV industry, now squaring off over the way they are regulated, could find themselves united by a powerful outside threat. □