CMPA, WGC react to Let’s Talk

The producers association calls Thursday's decisions regarding Canadian content "patently unfair" to indie producers while the WGC renews its call for a so-called "Netflix tax."

The Canadian Media Producers Association (CMPA) has come out strongly against the CRTC’s latest Let’s Talk decisions this week, with association president and CEO Michael Hennessy calling them “patently unfair with respect to the treatment of independent producers.” 

The CMPA specifically targeted the CRTC’s view on the industry’s terms of trade agreement. 

In its report, the CRTC said that, in its view, “is no longer necessary for the Commission to intervene in this relationship by requiring adherence to terms of trade agreements….As such, the Commission will allow programming services to apply to remove requirements to adhere to a terms of trade agreement, effective 29 April 2016.”

Hennessy said removing required adherence to the agreement goes against the commission’s stated objective. 

“On the one hand, the commission has suggested we need larger more sustainable production companies to compete,” he said. “I think you need both large and small production companies to compete because not every category of service is big-budget. You cannot have larger and more sustainable companies if that’s your objective, and at the same time, remove all the protections that were put in place to limit the market power of the vertically integrated broadcasters particularly with respect to licensing and greenlighting projects and the treatment of IP. To us, the commission’s findings with respect to this and its decisions are somewhat stunning.”

The CMPA topper criticized the CRTC for not raising terms of trade (the producer-broadcaster agreement that addresses the issue of IP ownership) during the Let’s Talk TV hearing last fall: “That issue was never identified by the Commission as one of the issues of Let’s Talk TV initially and absolutely not when they boiled down the issues they wanted to discuss at the hearing.”

Although he emphasized that the association is still absorbing the sweeping changes introduced in Thursday’s announcement, he said the CMPA expects its impact to be great.

“Fundamentally, I think what it’s going to do is lead to a significant reduction in the number of independent companies, which is maybe what the CRTC seems to want, and force most of the remaining companies to become service producers for the broadcasters,” Hennessy said.

The Writers Guild of Canada also expressed surprise at the inclusion of Canadian content certification changes in CRTC Chairman Jean-Pierre Blais’s speech to the Canadian Club of Ottawa yesterday, although it praised the inclusion of screenwriters as part of the pilot programs.

“The WGC was surprised that the certification process, and the undermining of the terms of trade agreement for producers and broadcasters, were part of this announcement. Both decisions were made without notice or meaningful discussion in the preceding hearing.”

Of top priority to the union, however, was the renewal of its call for Netflix Canada and other local streamers to subsidize local Canadian content production.

“Of greatest concern in today’s decision is the continuation of a two-tier broadcasting model, with ‘over-the-top’ services like Netflix, CraveTV and Shomi remaining almost entirely outside of the regulatory sphere,” the guild said in a statement Thursday.

The CRTC in the past has decided against taxing Netflix and other video streaming players to subsidize Canadian TV series as they do business in Canada.

The regulator on Thursday said CraveTV and Shomi can be exempted from subsidizing Canadian TV if their content is made available to Canadians without cable or satellite TV packages.

“If more and more viewing migrates to unlicensed platforms, and those services have no requirements to make Canadian shows, the WGC questions how such an approach is sustainable in the medium to long term,” the WGC added in its response to the regulator’s latest decisions on the future of Canadian TV.

The guild also questioned CRTC chairman Jean-Pierre Blais reference to “quality over quantity” as a guiding principle when setting how Canadian content will be made and promoted in the future.

“The WGC maintains that quantity and quality are linked concepts, as there is no one recipe to create a hit show, and creating fewer shows may serve to reduce the chances of a single show’s success,” the guild said.

with files from Katie Bailey and Etan Vlessing

Correction: The second paragraph of this story originally indicated that Mr. Hennessey’s comment referred to the Canadian content pilot programs announced March 12; in fact the comment was made in reference to terms of trade. The article has been amended with regard to that error and updated with reference to the CRTC’s report.