Replace those tax-credit applications on your desk with maps of Atlanta and San Francisco if you want to survive and thrive in the emerging digital content world, Canadian producers attending the ICE08 conference were told Thursday.

‘There’s no sustainable Canadian content industry. It’s only sustainable if you have an American audience,’ Raja Khanna, co-CEO of startup GlassBOX Television, told a panel on Canadian content, as he steered producers towards advertising dollars that increasingly land on the Internet and other digital platforms these days.

‘Get rid of this bullshit about Canadian content, and think about Canadian creators and a Canadian industry,’ said Michael Hennessy, VP of wireless and broadband at Telus, when asked whether Internet service providers should be compelled to subsidize the production of Canadian content.

‘Accept that with the mobile space, your market is 300 million people in North America,’ he added.

Hennessy said Canadian producers could still do ‘local stuff,’ but need to forgo subsidies and notions about ‘Canadian stories’ and focus on the creation of Canadian storytellers and sustainable markets.

News that the Ontario government included $9 million in new subsidies for local digital content creation in its latest budget barely caused a ripple at ICE08, as producers considered the need for global content to appeal to footloose advertisers in the U.S. market and elsewhere.

Delegates at the Interactive Content Exchange, a three-day meet organized by Interactive Ontario that wrapped Friday in Toronto, were told that conquering the Internet with homegrown content was no child’s play, considering that 19 out of 20 of the most popular portals and websites are American and they get the bulk of advertising dollars and venture capital investment coursing through the industry.

But David U.K., managing director of Heavy.com Canada, said producers could be successful without subsidies on the Internet if they created homegrown content uniquely suited to advertisers.

He pointed to Molson’s Knob Hockey channel on Heavy.com, where battling NHL hockey players are portrayed as mini knob hockey stick figures. The video vignettes aired last year during the NHL playoffs, and will return this spring with backing from Virgin Mobile Canada.

‘We won’t create new programming if we don’t have advertising to support it,’ U.K. said.

Creating truly global content for new distribution channels remains a challenge for Canadian broadcasters and producers still bound up in a subsidy-driven business model, however.

‘We have a dual responsibility,’ Pary Bell, VP of content at Canwest Digital Media, told ICE08 delegates.

‘There’s the pressures of being the ancillary part of the business, shoveling the content onto a different platform that has an audience. But to really engage new users, we need to separate ourselves from the broadcast platform, and have commissioning heads doing content strictly for the different mediums,’ he argued.

John Barrack, EVP of the CFTPA, agreed that many indie producers he represents have a hand in the old broadcast world as they attempt to find new audiences and advertising revenues in the digital frontier.

‘We’re not of the view that Telus will get away without making a contribution to the system,’ Barrack said, with a nod to Hennessy’s earlier disavowal of ISP dollars for homegrown digital content.

But he insisted CFTPA members would have to adapt or die on the Internet.

‘What is important is that there has to be a new entrepreneurial approach. How we look at Cancon has to change. The difficulty is, if we try to take the old definitions and structures, we’ll fail,’ Barrack warned.