April 11, 2003 One Eglinton Avenue East, Suite
Toronto, Ontario Canada M4P
BY FACSIMILE – (819) 994-0218 Tel (416) 482 6640
Fax (416) 482 6639
Alberta District Council
Ms. Diane Rhéaume Atlantic Regional Council
Secretary General British Columbia District Council
Canadian Radio-television and Manitoba District Council
Ontario District Council
Quebec District Council
Ottawa, Ontario Saskatchewan District Council
Dear Ms. Rhéaume,
Re: Public Notice 2003-12; Application Numbers 2002-0779-7 and 2002-
0780-5 by Superchannel Ltd. and MovieMax! Ltd. to amend the
licences of the pay television programming undertakings known as
SuperChannel and MovieMax! (the “Applications”)
1. This is the intervention of the Directors Guild of Canada (the "DGC") with
respect to the issues raised in the Applications. The DGC is a national
labour organisation that represents key creative and logistical personnel in
the film and television industries. It was created in 1962 as an association
of Canada’s film and television directors. Today, it has over 3,800
members drawn from 47 different craft and occupational categories
covering all areas of direction, production, editing and design of film and
television programming in Canada. The DGC opposes the changes as
proposed unless stringent safeguards are put in place to prevent potential
abuses by the applicants.
2. The Pay Television Regulations, 1990 prohibit the distribution of
programming, other than filler programming, produced by either the
licensee or a person related to the licensee. The possible exception to
this rule by way of condition of licence is currently not in place for any
other pay television licensee and, in the DGC’s view, such a variation
should only be granted sparingly.
3. In this case, the key point made by the applicants in the Applications is
that Corus also owns Nelvana and it should not be penalized or prevented
from airing programming that is produced by Nelvana. To the best of
DGC’s knowledge, an appropriate estimate of the percentage of
theatrically produced feature length Canadian films that is produced by
Nelvana and which would be aired by Movie Central in one year would be
lucky to reach 5%. There is no need for a 25% cap. It is important that
Movie Central does not become a destination for the Nelvana library.
Only if Nelvana produces a theatrically-released feature-length film that is
the type of program that Movie Central has traditionally aired (rather than
the programs contained in its library), could a theoretical case be made for
even a very low percentage of self produced films to be permitted to find a
home on Movie Central.
4. That is not the end of the question, however. A key condition of licence
relating to the pay services is that relating to the expenditures on
Canadian programming. In Decisions CRTC 2001-736 and 2001-731,
Movie Central and MovieMax! had their licences renewed with the new
expenditure conditions contained in them. The pay services are important
elements of the financing of Canadian feature films. The DGC urges the
Commission to ensure that any flexibility granted with respect to airing
programming produced by these licensees does not result in excess
amounts of money being redirected back to the applicants.
5. In particular, one concern is that the services could “overpay” themselves
for their own productions as it is really just coming from one pocket into
the other. The pay licensees are not subject to the same rules as other
licensees in terms of the calculation of their Canadian content
expenditures. If the Commission wished to ensure fairness in this regard,
there are various ways in which to do it. Perhaps the most effective is to
say that whatever percentage of self-produced films can be aired in a year
must attract no greater than the same percentage of expenditures on
Canadian programming that year. And, of course, if a license fee is paid
in respect of a program in which the licensee invested, it can not claim
both the investment expense and the licence fee it pays to itself.
6. Whatever method is chosen by the Commission, it should ensure that the
Canadian programming expenditures of the pay companies are not just
being recycled within the Corus family.
7. There is an additional future concern which is that if the Commission were
to grant the relief from the Regulations sought by Corus, Astral would in all
likelihood apply to do the same thing and seek the same result. The
upshot, if both were to be approved at 25%, is potentially unpalatable.
The Commission has historically encouraged cross-licensing between the
eastern and western pay licensees to ensure national distribution of new
Canadian productions. It does not take a vivid imagination, if these
applications were to be approved at the 25% level each, to contemplate a
scenario where 50% of the Canadian programming exhibited on Canada’s
pay licensees emanates from Astral and Corus. It is even more alarming
to consider the result if no brake is put on the percentage of spending on
Canadian programming that could move back and forth between these
8. Finally, there is no need for MovieMax! to have its licence amended at this
time and the DGC recommends that the Commission refrain from
amending that licence until such time as it has seen what transpires with
respect to Movie Central, on both the spending and the exhibition, if any
relaxation is allowed there.
9. In summary, the DGC does not support the Applications. If the
Commission wishes to offer any relief to Corus at this time, the DGC
recommends that it be limited to Movie Central, that it be limited to 5% of
its Canadian overall programming schedule rather than the 25%
requested, and that it be matched by an equivalent 5% cap on the amount
of spending that can be paid to itself or a related company.
10. All of which is respectfully submitted.
11. A copy has been sent to the licensee at the address shown below.
DIRECTORS GUILD OF CANADA
c.c. Corus Entertainment Inc.
BCE Place, Bay Wellington Tower
181 Bay Street, Suite 1630
Fax: (416) 642-3779