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COMM

Subcommittee on Communications

 

Proceedings of the Subcommittee on
Communications

Issue 9 - Evidence


OTTAWA, Wednesday, October 27, 1998

The Subcommittee on Communications of the Standing Senate Committee on Transport and Communications met this day at 4:55 p.m. to study Canada's international competitive position in communications generally, including a review of the economic, social and cultural importance of communications for Canada.

Senator Marie-P. Poulin (Chairman) in the Chair.

[English]

The Chairman: Colleagues, our witnesses today are from the Independent Film & Video Alliance.

Welcome to our subcommittee. We look forward to hearing your presentation and then we will have the opportunity to ask you a few questions.

Please proceed.

Mr. Peter Sandmark, Coordinator, Independent Film and Video Alliance: I want to start by thanking you for the opportunity to present our views to your committee. I would like to give you a little bit of background on our organization.

Founded in 1981, the Independent Film & Video Alliance is a non-profit association of 42 film production and distribution cooperatives, non-profit video production and distribution centres, and independent film and video exhibitors. We estimate the total number of individual members belonging to our 42 member centres to be approximately 7,000 people across Canada. Every province has film co-ops and video art centres, as does, I would say, every major city, although we have nothing in the Northwest Territories or the Yukon. There are 10 centres in Quebec with over 1,000 individuals in those centres.

We are principally funded by our membership fees, the Canada Council for the Arts and the National Film Board, along with project grants and job-creation grants -- anything we can get. Our mandate is to coordinate independent film and video efforts. The IFVA works -- this is from our official constitution -- for the improvement of means and access for independents at every stage of production and distribution.

In 1993, the membership voted to add electronic media to our mandate. Since 1995, I have run a Web site for the alliance, on which we publish our biweekly newsletter. I should add we have links to many other media art Web sites on the Internet. Since they say that two months on the Internet equals a year in normal business cycles, we have been in the Web site business for 18 Internet years. That is actually a long time. A lot of our ideas have come from the experience I have had running that Web site and connecting and linking.

Each month, about 1,000 people read our Web site, compared with the 200 subscribers who receive our newsletter by e-mail, fax or regular mail. I should mention our newsletters go to our centres, which then distribute the information to their membership. We do not send out newsletters to 7,000 people.

We have encouraged our membership to get wired, and in the past three years, we have gone from one centre having e-mail to all the centres but one, on Prince Edward Island. I do not know why, but it is the only centre which does not have e-mail now. It has become our official method of communication for our board of directors and for most of our discussions and dissemination of information.

As for the impact of new technologies on production, two years ago we were debating which computer-based editing systems artist-run centres should be investing in. Now I would say the majority of our member centres own a non-linear computer-based editing system. A few years ago, these systems cost upwards of $50,000 each and were used only by the large, professional production companies. I am referring to things like the Avid production editing systems. Now, just to give you an example, I have a computer at home with a video editing software package from Corel that I am told is worth $79. It is not broadcast quality, but I can certainly make videos with it that I could put on the Internet.

While we agree with the point in the executive summary that the globalization of culture via the Internet and other technology is significant, we feel there is another side to this revolution, which is the public's low-cost access to these powerful communication tools. In one sense, that is a driving motivation for our member centres, the film co-ops which collectively manage film equipment so that co-op members have cheap access to cameras and recorders that would otherwise cost thousands of dollars a day to rent. The original goal of the film co-op movement was to make those tools accessible to artists in Canada. Anyone who wanted to make a film could join a film co-op and use the equipment. Now this is happening everywhere with home video equipment and desktop PC video editing.

In the independent film milieu, we are already seeing the effect of this. We are seeing a lot of younger people coming up who have already produced their own feature film on their parents' home video camera. They are getting a lot of experience making their own films for nothing. I teach a workshop in grant writing and had a student who wanted to make a feature film for $5,000, because he was using video equipment. I told him to try to make it for $20,000 and pay people.

I want to make the point in a different way, just to give you another perspective on this.

Disney owns ABC TV in the United States. In Canada, there is not even an independent film channel of any sort. Disney also has a Web site, and our alliance, the Independent Film & Video Alliance, has a Web site. In fact, I personally have a Web site, and it is the same size on my screen as the Disney Web site. There is a certain equivalency when you get onto the Internet that brings the giants down to the same size in some respects.

What does that mean? We feel that, in that way, the technology favours the little guy. It favours people working out of their homes, on computers, and distributing what they do on the computers. The big difference is that Disney has a promotional budget and they can advertise everything they do on their Web site. The point is, I do not think the Internet will function as a mass medium in the same way as television does.

You do see a huge number of hits on a Web site when there is something hot, but it tends to be transitory, aside from the search engines, which regularly draw a lot of traffic. You have to remember that when sites receive a lot of traffic, their bills go up. They pay according to the bandwidth they consume.

Any large, multinational company trying to set up a multimedia site from which to broadcast like a television network will pay. Actually, you cannot do it right now. There is not the backbone. Any time there is a big event, like the Olympics, the Web site suffers from a logjam. You cannot get through. You cannot get through to the Superbowl's Web site during Superbowl day, because the Internet does not function that way. It is pay-as-you-go. For smaller things, it functions well. There is no extra charge if you have just a small but steady stream of visitors.

I have noticed in my research that a lot of corporations that initially jumped into investing a great deal into developing Web sites have scaled back. They have not yet figured out if they can make money. Time Warner invested millions in their Pathfinder Web site. Already, a lot of people who were working on these Web sites have jumped back out of the new media. They know they have to be there. They felt they did not want to miss the boat and so they jumped in and invested, but it is not turning into an obvious money-maker.

It seems that only pornographers are making money on the Internet. I should note that in the video rental industry, the pornographers were the first to make money also, and now pornography represents only a fraction of the money made from video rentals.

I feel that as more content is available on the Internet, the audience will continue to be split into smaller niche markets, which again makes it difficult for TV companies used to large-scale, mass-media operations. You need a broad audience to draw the advertising dollars that pay for the high salaries and big-time production values. Already, if you compare the roughly 75 channels on most urban cable packages with the thousands upon thousands of sites offering content, there is no comparison in terms of how the audiences are splintered.

I want to go back a few years. When we were first researching this, we did a paper for the CRTC's hearings on the Information Highway, and there was a current of thought that the Internet would be squeezed out by proprietary networks like America Online and Microsoft Network, but we have seen that the Internet won out. There is a big distinction there because the Internet is an open system. It is not proprietary. I think you might have had something like a television system if Microsoft or AOL had succeeded in developing a closed system that you had to pay to access.

It did not work and now Microsoft's MSN is a Web site. It draws a lot of people. It is the automated Web site your browser goes to. They can sell some advertising, but it is really nothing more than a Web site.

America Online is becoming more and more another Internet service provider. People use it to get an e-mail account and to have access to the Web.

The Internet really did win, and as a result, we have this open system in which I do not think any kind of television model will function.

Advertising is functioning as a source of revenue and the majority of the advertising dollars are going to the top search engines. It will probably increase, and in a more focused way, because we can track exactly who has visited a site. We are thinking of eventually soliciting advertising for film and video equipment because we attract a very specialized audience to our Web site. They are predominantly filmmakers, so we can probably sell some advertising for film video equipment. I believe that that kind of specialization in advertising will grow.

I think that the audience for the Internet is qualitatively different from that of the TV, rather than just quantitatively. TV statistics are measured in a passive way. If a TV is on and is being monitored by Neilson, it counts. I know that I and many people I know often have the TV on in a sort of ambient fashion. We just leave it on although we are not really looking at it. However, that counts in the number of households that have the TV on.

However, looking at a Web site is an active gesture. You have to seek it out. This is why I do not think the Internet should be regulated in the same sense as broadcasting. It was mentioned in the report that it has a transactional nature. It is a communications tool, a research tool. We are not just sitting watching a show.

I wish to discuss pornography, which is one of the issues with regard to regulating the Internet. In two minutes, I could surf through all the channels in my cable package and stumble upon a porn channel, assuming I subscribe to one, which I do not. My point is that it is easy to see. TV is very accessible. A child can easily change the channels and see a porn channel. That is not the case on the Internet. It is easy for a child to find a news video with images of war and disasters on the TV also. Using a computer is a little more complicated. To a certain extent, you have to search out what you are looking for.

In terms of regulating the Internet for pornography, I believe that the onus should be on the parents. It is incumbent on them to monitor what their children are doing on the computer. Programs do exist to block access to sites that contain pornography.

The main reason for my position is the Internet's transactional nature. I see it as a combination of a phone and a library. Many of the Web sites I look at I learn about because someone e-mailed me the link to it. There is a communications element. It is almost like a reference. Someone refers you to a site and you look at it. I would not necessarily have found that site on my own.

I work on the computer every day and I work on the Internet for part of the day, because I am doing research, but half of that is communications work. It is all bundled up. It is not like sitting and watching television. I am actively seeking things out.

For that reason, I do not think the Internet will replace TV. It may be somewhat more like reading a book. It is more of an individual activity. You do not tend to sit with a group of people and look at Web sites. It would be frustrating to do that. Who would be in charge of clicking?

I think that it will develop its own content, and this is what we are coming to with the new media. Although people may put television shows on the Internet, that is not the heart of it. That is not its defining character.

I hope you will hear from a technical expert who will explain the technical aspects to you, but I do not think that technically you could regulate the Internet in the same way you can regulate broadcasting, simply because of the interconnected nature of the network.

I have a Web site for my own creative projects, but it is on a server in the United States. I create the work from my home here in Canada, but I host it on a Web site in the United States. Where is the jurisdiction? Should it be regulated as a Canadian Web site since it has Canadian content? Yet how could it be if it is on an American server? Web sites can be run from almost any source and updated from different computers. You could not even trace the origins of Web sites.

I suspect that we were invited to make a presentation to you because we are a cultural group that is not calling for regulating the Net to protect Canadian content. I read with interest many of the previous presentations on your Web site. I took note of the remarks of Keith Kelly of the Canadian Conference of the Arts. He said that there must be some regulation, or the broadcasters would make an end run around Canadian content by moving their broadcasting to the Internet.

I want to go on record as saying that the Independent Film and Video Alliance totally supports efforts to encourage the production and dissemination of Canadian content. However, we do not believe it would be technically feasible to police Canadian content quotas on Canadian-based Web servers.

To quote a famous Canadian, the medium is the message. It is short-sighted to think of the Internet as only a disseminator of television or electronic commerce. It is not television, nor is it the written word.

I have here a text I received from a group called Renaissance 2001. They are undertaking a project to create the world's biggest ever art festival on the Internet for the year 2001, and then move that festival into actual galleries, museums and exhibition spaces. They are based in New York city. They have defined what Web art is and what makes it distinct from video, painting, a text, or anything else. Therefore, there is a whole medium that is springing up, but it is almost a combination of all other media.

We have some other concerns. We believe that the government has a role to play. We believe that the Internet should retain a public, commercial-free component, preferring the exchange of information over the exchange of commerce. This is how it began through the universities. Just as the Canadian government established the Canadian Broadcasting Corporation to ensure public access to broadcasting, the government should actively support universal access to the Internet, possibly through the establishment of a Crown agency dedicated to that purpose.

In addition, government funding should be made available for not-for-profit Internet service providers, examples being Freenet providers or alternative servers, the creation of aboriginal language Web sites, public libraries, or any effort to provide comprehensive, low-cost access to the Internet. This would be in the public interest.

I am not certain to what extent the government supports freenet. It would seem to me to be an obvious first step for the government, in terms of assuring Canadian content on the Internet, to assure public access to the Internet. It is not just an upper-middle-class phenomenon for people who can afford it.

The issue is no longer scarcity of the spectrum, as it is with broadcasting, but access to the system or to the network. In that respect, another issue that is very important is training for people to learn how to use the technologies. That would be vital for ensuring that Canadian content also gets on the Internet. It seems to me the important thing in terms of Canada's cultural objectives is to ensure that Canadians have a chance to create their own new media and distribute it on the Internet.

As I hinted at earlier, we do not feel the Internet necessarily privileges the large companies. There is something we like to call the "pyjama revolution" going on, where people can produce new media on computers out of their homes and never need to get out of their pyjamas. We feel that any government policy aimed at developing new Canadian media content should strive to assist individuals, artists, small and medium-sized companies, and not simply throw tons of money at the large companies, as we have seen recently with Discreet Logic receiving $9 million to set up computer animation equipment. I consider that a form of corporate welfare. To be a bit blunt, it helps them reflect a healthy profit margin in their next shareholders' report.

With respect, I will admit, of course, I understand it is probably part of an industrial development policy and not necessarily the same thing as we are talking about today. However, we are concerned that there should be an understanding that a great deal of what is driving the Internet, in terms of the innovation, development of software, or even hardware, comes from small groups and small companies, or even in some cases from individuals, and that the role of individual creators in the development of new media should be recognized.

We need to look at the success of the Internet to understand what the future will hold. I like to ask: Why does this medium hold so much interest for people, compared to television, when things like computer crashes, long download waits, difficulty hooking up to the Internet are common occurrences? In any other industry, this would be intolerable. If our television programs were dropping out every third time we turned it on, we would not accept it. Yet people take this as somewhat standard with computers, with Internet usage growing and television viewership dropping. The question is why? What is the attraction? Television has fantastic sound and great pictures. PCs have terrible images, jerky or grainy photos, and intermittent sound, unless you have direct access to the fibre optic cable.

I believe the reason is the content. People are naturally curious and they are hungry for information and enjoy connecting with other people in other countries. Why are people looking at other people's personal home pages? It is human nature. There is a kind of basic interest. This interactivity is one of the fundamental changes brought by the Internet.

Again, it makes it impossible to compare it to television. It is not the same thing. People are not looking at ABC TV news feeds on the Internet, because they can turn on the TV to get ABC news, but they will look at things they cannot get on television.

In that sense, communication over the Internet seems to me to be a freedom-of-speech issue. Our Charter of Rights specifically protects the freedom to communicate over any medium. I took note of that when I was reading the Charter of Rights. It is not just freedom of speech in the press, it is freedom of speech in any medium. As an international phenomenon, I believe the Internet should eventually be protected, if it is not already, by the UN Declaration of Human Rights.

The protection of Canadian cultural interests must be done, in our opinion, by developing and promoting Canadian creators. In order to find the funds to do this, we feel we must simply follow the money. There is money being made on the Internet now. With monthly subscription fees going to Internet service providers, and with those companies paying in turn for the use of the backbones owned by the phone companies, someone is making money on the Internet. We need to find the area most profitable and add a levy at that point.

The Independent Film and Video Alliance agrees with the Canadian Conference for the Arts' recommendation that Internet carriers, and ISPs and IPs, which have gross revenues of above $750,000, be required to contribute 5 per cent of their revenues to a new media fund. We suggest you create a fund like the Canada television fund for new media and we can catch the world's attention with the quality of the content that Canadians can offer.

The Chairman: Your presentation was extremely interesting, Mr. Sandmark, and we appreciate knowing how your members feel about this emergence of new technology.

I should like to lead off with a question. As you know, our subcommittee is currently focusing on technology and culture. Can you give me two concrete examples of how your members are really benefiting from this, over and above what you have said to us in your presentation? How are your members really benefiting from the new technology and the direction in which it is going?

Ms Penny McCann, President, Independent Film and Video Alliance: Our members have historically been largely excluded from television. Our members make work that is often difficult, challenging, controversial. The work varies. It could be meant more for a gallery than for television. It is multi-use. Our members make feature films, they do make television, but we also make alternative work.

In that light, the opportunities for our members provided by the Internet is greatly increased. The presence on the Web of Canadian new media artists and distributors is increasing. It has resulted in more international exposure. We are a niche, and a niche within the micro media as opposed to mass media of the Internet. That is where we are beginning to find our home.

The Chairman: Since the Internet is accessible to everyone, and since it is not like going to the cinema where you pay your entrance fee, what are the sources of funds for your members?

Mr. Sandmark: Many people in our milieu are making films out of passion and do not make a living necessarily that way.

The Chairman: We do take it for granted that they all have mortgages to pay.

Mr. Sandmark: Mortgages or rent to pay. People scrape together money to do their productions and hopefully live off their production while they can. There is a variety of sources of funding. Many people go to the Canada Council for the Arts, the National Film Board of Canada. There is some money that comes from television stations that do give funds for developing film projects. Some people have provincial funding agencies, provincial arts councils or municipal arts councils. There is a wide range. There is family investment.

In a word, these people are not making much money from their films. That is not much different from the larger productions that Telefilm funds, because they are not making money either. They will sell the film but they will not make back the money invested. This year, Atom Egoyan's film, The Sweet Hereafter, was the first to make money in quite a few years.

You asked if we were getting any revenue over the Internet. No one is setting up a credit card.

The Chairman: Many arts groups who have appeared as witnesses have suggested an increase in funding. That is why I am asking you where you see these sources of funds coming from. We know there is an earmarked 5 per cent tax on cable for Canadian programming production. Do you feel that this tax should be widened? Should it also be applied to distributors of Internet service?

Mr. Sandmark: As it increases, there will be more money. It is a growing medium. As I said before, I do not know exactly where to apply the levy. That is, perhaps, a contentious issue. A lot of Internet service providers have narrow profit margins because they are providing support. They must hire people to provide technical support, pay rent, cover their overhead, and so on. Where is the profit -- that is, the gravy? I suspect it is with the phone companies. Perhaps that is not true now because they are laying fibre optic cable, but 10 years down the road, when the fibre optic network is substantially installed, I suspect that they will be handling enormous amounts of traffic in data and will be sitting back to count their revenue.

Senator Johnson: I was interested in the "pyjama revolution." You say that in developing new Canadian media content, we should strive to assist individuals and small and medium-sized companies and not simply throw tons of money at the large companies.

Have they thrown any money at the small and medium-sized companies, or is Discreet Logic a general example of where the money goes?

Mr. Sandmark: We helped push for the creation of a new media fund at the Canada Council for the Arts, which they did not have before. However, that is a small fund.

Senator Johnson: What is that fund called?

Mr. Sandmark: It is in the media arts section of the Canada Council for the Arts. It is for new media projects. That is to say, it is for artists.

Senator Johnson: How much money is in that fund? Do you recall?

Mr. Sandmark: A few hundred thousand dollars. On the other hand, there is this Stentor multi-media fund.

Ms McCann: There are two: The Bell fund and the Stentor fund. The Bell fund seems to have been largely aimed at providing promotion and Web presence for Canadian television producers, whereas the Stentor fund focuses on large national projects -- that is, projects with large volume and a significant Web presence.

The Banff Centre for the Arts recently received a significant Stentor grant specifically aimed at Web-based projects or Internet-based projects where artists produce creatively driven projects. Slowly, a bit more artistic funding is becoming available. It is late, however, because artists have been working in digital media for a long time.

I wish to make one point. Perhaps the notion of Canadian content on the Web is problematic. A different way of looking at it is to think of it as Canadian presence. How do we find things that are Canadian, be it television, Web sites, the CBC, or the Senate? How do we find it? It is a morass; it is impossible.

Senator Johnson: You cannot regulate the Net in terms of Canadian content.

Ms McCann: We are suggesting the creation of an agency to help stimulate Canadian presence on the Web, so that if you are a Canadian, you can find the information you want. Perhaps you will not have to rely on an American server that gives you 14 million hits for something you are looking for. It is a discouraging thing.

One of our board members is a digital media artist and she just recently did a Web site called "Positive." It is about being HIV positive. Alta Vista was the only American search engine that her site came up on because it contained words like "HIV positive." It contained problematic words that were automatically censored. That is interesting.

What do we need? We need search engines that will quickly identify Canadian artists and Canadians -- not one that will identify them 14,000 hits down the line because we are buried in this morass of information that is largely dominated by Americans. That is something to think about.

Senator Maheu: You talked about censoring a few minutes ago. What do you mean? From what you said, I understood that it is just about impossible to censor anything. I have a problem with that.

I have a 10-year-old grandson who, in spite of what Mr. Sandmark said, can find anything anywhere on the computer. It is the same thing for his eight-year-old sister and the other child, who is five. They are starting very young. Children are involved with computers the minute there is one in the house. Most homes with children attending school have computers now.

I do not know about censorship. You spoke about HIV supposedly being censored. There must be something going on in the States that I am not aware of.

Ms McCann: It becomes a matter of the consumer -- that is, the user -- knowing that Alta Vista is a more progressive search engine than Excite.

Mr. Sandmark: There are Web spiders, which are little software programs that use the virus technology. They view Web sites and check the contents. Some only check the titles or the header, which is what you want to put in to draw people to your site; others will go through the entire site looking for references. The search engine cannot censor it per se, but it can decide to block sites containing words they do not want included. It could be anything. They could have images. The same thing can be done on a home computer. Software is available to do that -- for example, Net Nanny and CYBERsitter. They will block Web sites based on key words. There is a possibility to do that. It is like the V-chip for television.

The Chairman: Could you go a step further in your suggestion that we should have a "Canadian search engine"? What do you mean exactly? How do you see that working technologically?

Mr. Sandmark: It is more of a human resource issue. It would mean people putting up a site that would promote access to other sites that have Canadian content. Technical research could establish a database of words that would refer to Canada, for example, "canoe" -- that is, a site that makes an effort to promote access. I think Sympatico tried privileged sites of interest to Canadians.

The Chairman: Free of charge?

Mr. Sandmark: It would be a big job. You would have to hire a lot of people to search.

The Chairman: Let us compare it to the evolution of broadcasting in our country. In the early 1930s, when the government of the day decided to establish a public broadcaster, it was with the intention of competing with the American radio stations, which were everywhere in Canada. It was a Canadian content approach to radio broadcasting. With modern technology, how do you see a Canadian search engine working? Fast-forward to the year 2000.

Ms McCann: It would be a very large phone book for Canadian sites. People would have to subscribe to it and state that their site is Canadian. How would you know at the end of the day?

The CCA new media report talked about the CBC as a potential site. It is a content "aggregator." It is a potential site. That is one way to have a Canadian presence that the average Canadian would recognize. I am not saying they should be the search engine.

Canadian search engines exist, but they are small and almost invisible compared to the American search engines. Incentives could be put in place to enable them to take the necessary risks to get the support base needed to bring in advertising and to function in ways similar to the larger search engines.

Mr. Sandmark: Perhaps it should part of the CBC's mandate They founded broadcasting in Canada. It would be an evolution of what they are already doing.

Ms McCann: A commercial-free search engine would be highly popular. Commercial sites are very annoying right now, and will get worse. It would be a great idea if the CBC were to start up a commercial-free search engine that enabled people to find out what else was going on.

The Chairman: It would be available not only to Canadians in Canada but across the world?

Ms McCann: Of course. We go back to the notion of a Canadian presence.

Mr. Sandmark: The Independent Film and Video Alliance has a Web site, and probably one-third to one-half of the people who look at our site are from outside Canada. It varies month to month. The point is that we were promoting Canadian independent film and video work internationally. I have all kinds of keywords in our Web site, so that when people search for independent film in Canada, for example, they can access our site.

I get mail constantly from Australia or Britain. People ask to be directed to such and such a person, or they may say they are doing a report on the Australian film industry and are curious about how the industry is functioning in Canada. That is important. We can be a portal. We link to all of our members, so anyone who finds our site can then discover other Canadian centres that are producing films.

Senator Maheu: If regulation ever become a reality, how do you see words like "porn," "porno," "naked" or anything that touches on pornography being regulated?

Mr. Sandmark: We could use the existing laws on child pornography. I do not think we need more regulation to prosecute people trafficking in child pornography on the Internet.

Senator Maheu: It is almost impossible to find them.

Mr. Sandmark: I think the sheer number of sites makes it difficult to monitor the way the CRTC monitors television for Canadian content and quotas.

In terms of police investigation, I think it is the opposite. Traffic on the Internet leaves traces. One has to be a highly skilled hacker to cover one's traces. If anything, they leave traces left, right and centre as they send things around the Internet. If we could only get the hackers working for the police.

I just read about a large ring of child pornographers who were arrested in Europe. We can use existing legislation on pornography and simply apply it to the Internet.

If there is a point where it crosses borders, we have to go to Interpol and work out an international agreement so police action on that level can work. I think that is already happening. I believe there are agreements in that respect.

Senator Johnson: This is a fascinating discussion. We will all have our own Web sites. I liked your statement that I can feel as good as Walt Disney with a Web site of the same size. How big will you get? What is your forecast? How many people can you represent? What do you think your organization will do in the next few years, given the way things are moving so quickly? You get some government funding now, but you are calling for the creation of a Canadian television fund at the end of your submission. What do you want? How much can it all contain?

Ms McCann: We have hopes of launching an independent film and video Web magazine similar to one in the United States put out by the people who run the independent film channel. We can just keep going with our Web site and keep focusing and branching out. It becomes Canadian, American, and international. Helping Canadian independent film video and new media producers exchange ideas, in an effort to have a greater presence, is exciting for us because we have always been on the fringe.

Senator Johnson: Even with globalization, you feel this is the tool that will promote a Canadian presence, as you call it, as opposed to content.

Ms McCann: Yes.

Mr. Sandmark: The problem we have with getting independent film on Canadian television is that certain works do not have a large enough audience. You need a mass audience to justify putting these works on television because television has such a large market. However, many works are made with a special focus and would appeal to a niche audience.

The Internet allows us to seek out that audience internationally. You will find perhaps 100 people in this city and 100 people in that city, but the sum of all these people constitutes a large enough audience to pay for the work. We are trying to find another level of economics.

The economics of film production is based on its mass media approach. Its roots are in the technological structure. It can project a film to a large audience. In distributing films, it can reach a mass audience. The same is especially true of television. They can broadcast to millions of people at once, and that dictated the kind of product they were making.

We have a medium that allows for the opposite. It allows us to produce something for a very specific audience.

You find your audience and if you are giving them what they want, they will support it. We have not found a financial solution. I imagine it is a question of technical solutions. People will finally become comfortable with giving out their credit card number over the Internet, for example.

That deals partly with encryption. It is a matter of faith. Money is a faith issue. People use money because they believe in it. This is the same thing. Once Internet commerce becomes acceptable and enough people are engaged in it, we will cross the threshold of acceptance. People will begin paying for things in this way. That will support low-cost production that is oriented towards a specialized market. That market can be anywhere in the world.

I believe that this favours the kind of independent production coming from our milieu. It will grow. The independent media art production will only increase.

Senator Johnson: It is fascinating.

Ms McCann: I want to answer the last part of your question. We are also talking about the creation of a Canadian new media fund. We are media artists and we are also producers. We exist in both worlds. We create documentaries and feature films and CD-ROMs. We have an industrial side to our membership as well.

The notion of presence is more than Canadian search engines. It is the content itself. More work must be done to foster the expertise of Canadian producers of new media content. We need to compete in terms of interface and graphics and ability to attract viewers, or perhaps users, although viewing is involved too. We need to encourage interaction with these sites.

That work needs to be done by all sizes of companies and by independent producers as well. That would be the purpose of a Canadian new media fund, to bolster that Canadian presence.

Mr. Sandmark: It seems that this is the crux of the matter. If we accept that the Internet will blow apart the notion of a limited spectrum which defines broadcasting and broadcasting regulation, then the big question is how to promote cultural policy objectives if one cannot use quota or Canadian content.

The same issue is being confronted elsewhere. There are national objectives in terms of culture everywhere. How does one support national culture if one cannot control the medium? The only solution we can offer is to promote the development and creation of culture.

The discussions around the MAI are crucial here. If the MAI goes through and allows nationals to access funds, as I understand it anyway, borders would be opened up. As it was explained to us, potentially American producers could access money from Telefilm. It would tear down borders.

Senator Johnson: Canada has answered that with the environment and culture policy but the talks have broken down. Everyone has left the table.

Mr. Sandmark: It would seem all the more important then that the exemption for cultural funding be kept or built into the MAI. If we do not have that as a tool to promote our culture, what do we have? What is left?

There is a link. We can use funding or investment to stimulate the production of culture, but only if we can protect it.

Senator Johnson: Yes, it is all linked. Thank you.

The Chairman: If we have additional questions, witnesses, can we come back to you for more feedback?

Mr. Sandmark: It would be our pleasure to help.

The Chairman: We appreciate your enthusiasm about the whole new media.

The committee adjourned.


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