While Y2K turned out to be a record year for the Canadian film and TV industry, with a tally of $4.4 billion in production, a much deflated figure is sure to characterize 2001, a year in which various events south of the border had a jolting impact locally.

In 2000, $1.5 billion of the production dollars spent came from foreign (principally Hollywood) location shooting. At one point last year, Toronto could boast more than 50 productions rolling simultaneously, while B.C. experienced a 49% increase in foreign location shooting. 2001 was far quieter, with some companies that rely heavily on U.S. business, such as in the post-production sector, being hit so hard they laid off staff for the first time ever.

The first direct cause of the production slowdown was threatened strikes from the Writers Guild of America, the Screen Actors Guild and the American Federation of Television and Radio Artists. Anticipating walkouts, Hollywood brought many features, MOWs and series to camera ahead of schedule, ready or not. The WGA negotiated its new contract May 4, with SAG and AFTRA following suit on July 3, which meant that after a deluge of activity at the beginning of the year and many projects already in the can, a slower-than-usual summer followed.

Despite the decline in service business, Canadian productions nonetheless benefited from fewer U.S. prods, with top crews and studios freed up and gear and services available at more competitive prices.

But internal strike threats had an effect as well. The $92-million 20th Century Fox/New Regency Marvel superhero flick Daredevil pulled out of Montreal to get outside the jurisdiction of ACTRA, whose members can embark on a walkout by mid-January 2002. An amendment to ACTRA’s master collective agreement, whereby its members can continue working on productions underway at the time a strike is called, came too late for Daredevil.

Sept. 11

The impact of the terrorist attacks in the U.S. was certainly felt on the local front. An uncertain political climate always curbs the entrepreneurial spirit, and led to declining ad revenue, causing North American broadcasters to cut back on a number of projects, especially on the MOW front. Many U.S. productions scheduled to come to Canada stayed put for a variety of reasons, including patriotism, perceived border hassles, fear of flying and the desire to remain close to home. Other productions were cancelled due to touchy subject matter. At least $30 million in lost Canadian business can be directly attributed to the events of Sept. 11.

On the convergence front, the general economic slowdown in the wake of the 2000 dot-com stock crash caused Internet companies to cut back staff or disappear off the radar altogether. But the digital world is here to stay, and it will necessarily continue to play a part in broadcasters’ programming plans, whether in the form of true interactive TV or promotional Web initiatives.

The OFDC dropped the ‘F’ for ‘film’ from its moniker to relaunch as the more cross-platform Ontario Media Development Corporation, with a $30-million commitment from the provincial government over the next five years. It also hosted Six Degrees of Integration, a conference where government’s role in the shifting digital landscape was debated. Some successful Internet start-ups argued that government funds were not necessary to their survival, while others argued that it is the government’s responsibility to promote Canadian content in the border-less world of the Internet.

The ‘dot-bomb’ did not stop Alliance Atlantis Communications from launching a convergence project of unprecedented scope in U8TV, at an estimated cost of $17 million. The media giant launched what it dubbed the first-ever network on the Web, which keeps it outside the jurisdiction of the CRTC, to which it had applied for a digital specialty licence for the project. U8TV tracks the goings-on in a downtown Toronto loft inhabited by eight 19-to-29-year-olds who host three hours of daily online programming, a half-hour version of which ends up nightly on AAC’s Life Network.

AAC also acquired Halifax-based Salter Street Films in mid-April for $84 million, effectively cornering the Canadian distribution market and gaining ownership of The Independent Film Channel licence. The two companies bid against one another for the Category 1 licence for a digital specialty running independent films, which Salter unexpectedly won. Months later, AAC bought Salter, inheriting the $6.4-million IFCC licence, which necessitated further CRTC review regarding the diversity of ownership in the Canadian specialty industry and AAC’s vertical integration in programming production and services.

Digital launch interrupted

Early September marked the launch of more than 40 new digital networks available to the 2.2 million Canadians who have access to the technology. The forecast for the biggest channel launch in Canadian history was mixed from the onset, with Jim Shaw, chairman of the Canadian Cable Television Association and CEO of Shaw Communications, predicting half the new diginets would fail.

The initial diginet ratings were indeed disappointing on the whole – with some channels drawing average primetime audiences in the hundreds – but in part due to viewers’ attention being diverted to news programming about Sept. 11. The resultant economic downturn, in addition to the new networks’ limited time to pitch media buyers, has led to channels selling commercial windows for what Strategy magazine reports as ‘$6 or $10 or even for free.’

But with people generally returning to their pre-Sept. 11 viewing habits, it is hoped the diginets will start gaining momentum. At the Canadian Association of Broadcasters convention in Ottawa, the consensus was that the industry had to do more to help consumers understand the functionality of digital and promote the value of the distinct channels. Meanwhile, the carriers have extended the free preview period for digital subscribers into the new year.

According to research from the Discovery Channel, owned by CTV, the winners among the diginets in the first six weeks are CTV’s Animal Planet (with an average minute audience of 5,900), Global Television’s retro-episodic Deja View and CHUM’s Sex TV: The Channel (each with 4,100).

The CAB convention also highlighted private broadcasters’ demand that a loophole in Section 31 of the Copyright Act be closed to permanently stop anyone akin to iCraveTV and JumpTV.com from retransmitting broadcast signals on the Internet without permission. Meanwhile, broadcasters are just as adamant that there be no tightening of foreign ownership restrictions in the Broadcasting Act, which went under mass review this year. 2002 is expected to bring the government’s response and a whole new set of paradigms, innovations, themes and challenges.