A new study confirms that licence fees paid by English-Canadian broadcasters are among the lowest in the world.

Through the Looking Glass, an independent study authored by research consultant Kirwan Cox, compares Canadian broadcast licence fees to those in Australia, the U.S. and the U.K. – previously unavailable statistical information. It focuses on data from 2001 and was completed with funding from the Ontario branch of the Directors Guild of Canada,

the CFTPA, CRTC, National Film Board, the Department of Foreign Affairs and International Trade and the Documentary Organization of Canada.

‘The licence fee is the key element of the entire funding process, and there was a lot of anecdotal evidence that the fees in Canada are unusually low, but nobody seemed to have any precise information [until now],’ says Cox.

The study found that English-Canadian broadcasters pay the lowest average fees among countries surveyed, and spend the most on foreign programs.

On average, English-Canadian broadcast fees cover 18.4% of production costs, while fees in the U.S. typically cover 81%, those in the U.K. cover between 70% and 115%, and in Australia between 30% and 85%. Licence fees in French Canada are higher, covering an average 38.8% of production budgets.

To determine why licence fees in English Canada are disproportionately low when compared with other countries, the study also compared per capita ad revenues, expenditure on foreign programming and audiences for domestic programs.

‘There is a kind of formula that factors in the popularity of the program with audiences, the cost of the programming and the subsidies available. The broadcaster then makes adjustments for all those things and comes up with the licence fee,’ explains Cox. ‘We have a broadcasting system in Canada where the formula is not working to our benefit.’

According to the study, Canadian broadcasters spend more of their programming budgets on foreign content than any other country surveyed, and have fewer indigenous programs among their top shows.

American, British and Australian broadcasters spend an average 4%, 5% and 9%, respectively, of their total program budgets on acquiring foreign programming. Broadcasters in English Canada spend 32% on programs produced outside the country, leaving less money in the system for indigenous productions.

According to the study, Canadian broadcasters also have the lowest per capita TV ad revenues, which means less money in the system overall. In Canada, advertisers spend an average of $82 per capita, compared to $103 in Australia, $112 in the U.K. and $246 in the U.S.

Among the countries included in the study, Cox explains that the broadcast industries in Australia and Canada share certain key characteristics, in that they both have public funding bodies. There are no public funders in the U.S. or the U.K., which does have public broadcaster BBC, but does not have anything comparable to Telefilm or the CTF.

Yet commercial Australian broadcasters on average pay almost double the licence fees paid in English Canada. In 2001, total revenue from Canadian broadcasters was $1.9 billion, whereas in Australia it was $2.6 billion. Out of Australia’s $806 million spent on programming in ’01, $565 million went to indigenous productions and $240 million to acquiring foreign shows. In Canada, broadcasters spent $1.1 billion on programming in ’01, with $466 million going to foreign programming and $528 million to indigenous productions.

Part of the reason Aussie casters can afford higher fees is that Australian audiences watch more of their own programming.

In Australia, 16 of the top 20 shows in 2000 were produced in Australia. In Canada, however, only six of the top 20 shows in 2002/03 were indigenous. Four of those were NHL hockey games, one was the Grey Cup broadcast and the remaining top-rated show was the Trudeau miniseries. Out of the top 100 shows in the U.S. in 2000/01, 100% were American-produced, while 95 of the top 100 shows in the U.K. in 2001 were British.

Another factor that distinguishes Australia from Canada is the production of inexpensive soap-operas that get high ratings with Australian audiences. Soaps are not eligible for public funding in Australia, but broadcasters pay up to 85% licence fees because of the shows’ popularity. This type of inexpensive drama also exists in the U.K. and in French Canada. While there is no counterpart in English-Canadian drama, broadcasters are willing to pay higher licence fees for popular magazine shows, which are also not eligible for public funds.