CBC execs say Canadian players will lose out under current system

The Path Forward: the pubcaster also addressed the "ripple effect" its $40 million programming budget cut will have on the indie sector at the CRTC hearings.

Representatives of CBC/Radio-Canada said there is an urgent need for new funds into the system during final week of Canadian Radio-television and Telecommunications Commission’s (CRTC) Path Forward hearings.

“I would simply say that if you don’t act quickly, you will lose Canadian players in this system,” said Dany Meloul, interim EVP at Radio-Canada.

The pubcaster was also represented by CBC EVP Barbara Williams, Bev Kirshenblatt, executive director, corporate and regulatory affairs at CBC/Radio-Canada, and Jon Medline, executive director, policy and international affairs, CBC/Radio-Canada at the hearing.

The comments came one day after CBC/Radio-Canada announced that it will cut 600 jobs and 200 vacant roles, and also reduce its English and French programming budgets by $40 million to tackle a $125 million budget shortfall in the 2024-25 fiscal year.

Williams said the pubcaster has acknowledged the move to cut the programming budget, which includes commissions and acquisitions, will have a “ripple effect” on the independent production sector.

“It’s a cut of the license fees that we won’t be giving to those production companies,” added Williams, noting that the move would impact every aspect of independent production from crews and craft services to the marketing operations. “And so the impact is far greater than the $40 million.”

The CBC reps said, under the current financial environment, traditional broadcasters are limited in their ability to invest in new shows and new creators, particularly from equity-deserving communities.

“We are limited in the number of opportunities to invest in both time and money with new creators to build capacity in communities that haven’t had as much access to the system as we all know they should have,” said Williams. “And so more money does all those things. More money is more development, more money is more marketing and promotion to ensure that great content can be discovered, which I think we all acknowledge in this cluttered marketplace is an increasingly big challenge for us at CBC/Radio-Canada.”

On the topic of contributions from foreign streamers,  Williams said the digital giants had an “enormous amount of flexibility to play in this market” and needed to contribute to the system they are “benefitting” from.

“When the digital giants come and say, ‘well, we don’t want to make a contribution. And if we make a contribution, we want to be able to decide how we’re going to make the contribution.’ Well, that already indicates that they’re really not interested in our cultural system. They’re here for economic reasons,” added Meloul.

The CBC reps said domestic stakeholders, instead, need the flexibility to decide how best to use these contributions to support the objectives that local players are obliged to fulfill, including news.

In its submission to the CRTC, CBC/Radio-Canada has proposed that new contributions should flow to existing funds under the current rules to implement the initial base contribution in an urgent manner, noting that “on the video side, we recommend that funds go to the CMF [Canada Media Fund] and to CIPFs [Canadian Independent Production Funds], using the existing 80/20 rule.”

It also backed proposals by the Independent Broadcast Group, which appeared the same day, to have the initial base contributions of foreign online broadcasters in place by Sept. 1, 2024, and excluded traditional Canadian broadcasters from initial base contributions “since they already make significant contributions to the system in accordance with their regulatory obligation.”

CBC/Radio-Canada also proposed an interim base contribution based on contributions to the system by licensed Canadian broadcasting undertakings, adding that the “final basic contributions will be set once all the other elements of the contribution framework have been clarified.”

“In 2022, traditional broadcasting undertakings made $3.6 billion in direct contributions to the system. As a result, we believe the approach we’ve taken to establishing the interim based contributions is fair and equitable,” said Meloul.

The pubcaster also recommended that contributions be mandated to support the Broadcasting Participation Fund and the Broadcasting Accessibility Fund.

Representatives from private sector union Unifor and Fox-owned ad-supported streamer Tubi also appeared at the hearing earlier.

Unifor proposed that the CRTC increase initial base contribution levels from 5% to 7%, with the additional 2% going directly to a proposed local news media fund. It said under the proposal the Independent Local News Fund could be merged with this proposed news fund.

Unifor also recommended that the CRTC maintain current Canadian programming expenditure (CPE) requirements, and extend this obligation to online undertakings.

Tubi’s EVP and general counsel Carolyn Forrest, meanwhile, said free, ad-supported, video-on-demand (AVOD) services such as Tubi were not “well-positioned to absorb costly new regulatory obligations such as financial contributions” and compete with the bigger streaming services.

Forrest said Tubi is still making a “proportionately larger investment in domestic content for Canada than our current viewership level in Canada might suggest.”

“Although Canadians make up only 4% of Tubi’s worldwide viewership, for our FY24 budget, we will spend 10% of our worldwide content budget to license content for, and produce content in, Canada,” said Forrest, adding that services with Canadian revenue of less than $100 million dollars should be exempt from the new regulatory regime.

The Path Forward hearings are scheduled to continue until Friday (Dec. 8).