Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 2 - Evidence, January 29, 2014
OTTAWA, Wednesday, January 29, 2014
The Standing Senate Committee on Transport and Communications met this day, at 6:45 p.m., to examine the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.
Senator Dennis Dawson (Chair) in the chair.
[Translation]
The Chair: Honourable senators, tonight we begin our examination of the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communications.
[English]
Before we begin this evening, we have an item of housekeeping. Senator Merchant has made a written declaration of private interest regarding the study on CBC. In accordance with rule 15-7 of the Rules of the Senate, the declaration shall be recorded in the minutes of the proceedings. So she will not be sitting on this study over the next few weeks, although she will participate in committee work on other issues.
Today's witnesses from Canadian Media Production Association are Michael Hennessy, President and Chief Executive Officer; Marc Séguin, Senior Vice-President, Policy; Jay Thomson, Vice-President, Broadcasting Policy and Regulatory Affairs; Brian Goodman, Director, Government Relations and Policy; and Marla Boltman, General Counsel. I invite the witnesses to make their presentation, after which we will proceed to questions.
Michael Hennessy, President and CEO, Canadian Media Production Association: Thank you to all members of the committee for inviting CMPA to share how the independent production sector's business has changed over the past 10 years, specifically in light of technology and the emerging digital world over the Internet.
Of course, we're also appearing here today against the backdrop of the committee's study on the challenges faced by the Canadian Broadcasting Corporation in relation to this changing environment. Without a doubt, there have been massive shifts in technology that are enabling consumer access to content from around the globe and over a variety of new platforms. That said, traditional television still remains the core economic engine driving the broadcasting industry. It is still control of the rights to content in Canada that makes the business of broadcasting viable for all stakeholders, from producers to broadcasters to cable and satellite companies.
That may be the most important aspect of what we see about the future.
We're pleased to be here on behalf of our almost 350 members — English language producers across Canada. Just as a rough estimate, the independent production sector, English and French, spends about $6 billion a year on primarily television and film; and we are responsible for the creation of about 127,000 jobs.
Let me get into the gist of what we want to talk about. Over the past 30 years, I've worked in both the public and the private sectors in telecommunications and broadcasting. We've addressed a lot of complex issues over that time arising from the intersection of competition, convergence and consumer choice through the Internet and digital networks. Importantly, I am also a product of the first generation to grow up with television.
One of my first memories as a four-year-old growing up in Kingston was our neighbours across the street getting a television. The kids used to sneak across just to peak in the window at the television. In those early days, there really was not much content to go with this amazing technology, but it did not matter much.
As a kid, my choice was limited to the CBC/Radio-Canada. While more content arrived through the commercial broadcaster, CTV, in the 1960s, it was access to the news, sports and entertainment on CBC that really defined the space we lived in and talked about the future we were entering.
As more content crossed the border from the U.S. and as technologies increased, competitive alternatives to both the public broadcaster and indigenous content creation in general raised issues for policy-makers. These go back to the issues that started in the 1930s when the CBC was first created: how to create a national identity in a culture that's defined by another state.
This challenge ultimately led, in the late 1960s, to the creation of the Broadcasting Act and the CRTC. In my view, the result of that has been the growth of a vibrant and competitive media sector in Canada. Initially, under the regulator, entry and choice were limited in order to protect the Canadian industries. Over time, this focus shifted to balancing domestic initiatives with open markets and choice. We think that stands for a good approach to the future.
Again, in my view, the system works in favour of Canadians only if the rights to create, produce, distribute and exhibit content in Canada are respected in terms of geography, the prevention of unauthorized use over the Internet and rules to ensure fair commercial practices. It is on these issues that the future of broadcasting rests.
I think we ultimately got it right in this country by embracing choice and competition even as we continued to embrace policies like public broadcasting, tax credits and regulation to ensure a Canadian place in the media world. Incentives attracted investment, while competition and choice forced our content to become world-class. Because of this balance, today the Canadian industry generates significant benefits, including a contribution of some $7.6 billion to the GDP.
More information on these statistics, along with a video that provides highlights, can be viewed on memory sticks that have been distributed to the committee. It is fresh material. This information was released only today.
We have moved in this country from an industry that survived only because of regulation to one that is increasingly export-driven and is exporting our entertainment and cultural products around the globe. But, again, that global trade in content can occur only if the rights to broadcast and exhibit content are respected and creators are fairly compensated.
Twenty years ago we were focused on telling our stories to each other. Today we tell our stories to the world. The CBC, in my view, has played an important role in achieving this success, as have our independent producers, which the CBC helps to support.
But we can't be lulled by this growing success. The industry and the public broadcaster are at tipping points due to the restructuring of media in the world by digital technologies, the Internet and increasingly more à la carte consumption.
What is the plan for tomorrow? Forty-five years after peeking through that window in Kingston, I had a similar experience watching video on demand in its infancy, video over the Internet, while working for the cable industry as it started to transition from being a pure cable provider to a broadband Internet provider.
Both times, when it started, it was the technology that really dazzled, and the content came later. But when it came, it changed our world view and led to the creation of multi-billion-dollar industries around the world, including right here at home. For my generation, that content included a Canadian perspective that informed as much as it entertained.
It's unthinkable to me that this may not be the case for the next generation. The exclusion of a Canadian perspective would likely not affect the future of media globally, but it would deprive a generation of Canadian creators, innovators and entrepreneurs, our youth, of both the economic and the cultural opportunities that are presented by the Internet revolution.
Without regulation to promote diversity and to protect intellectual property, and without a public broadcaster, I don't think we would have a Canadian broadcasting system today. In an Internet world where choice "seems" abundant, I still believe, as much as I still believe in the market and consumer choice, that such regulation and a renewed CBC must be part of the framework going forward if consumers, as audiences, are going to fully benefit from a broadcasting system that includes Canadian perspectives.
I also believe, however, that without the opportunity for both independent producers and independent broadcasters to have access to the broadcast and cable networks — and indeed commercial opportunities to control and exploit rights in the content they create — diversity of voices will disappear. This is increasingly a threat when our networks are controlled by giant, vertically integrated corporations, and when multinational corporations can effectively compete in Canada without any requirement to operate within the system.
To be clear, the CMPA believes in choice and competition. But we need to be careful when someone says rely solely on the market or solely on consumers to drive the future. These are critical and essential elements, but consumer choice, to me, is a shallow thing without diversity; and the market is a glass half empty if the marketplace cannot contain Canadian goods and services. What is wrong with having the best of both worlds?
We should never forget, to begin with, that our system is unique in that it has increasingly been open to the best content in the world but has still been able to juggle public policy and competition and always adapt to technological change. This ensures Canadians get the best content from Canada without sacrificing access to the best content in the world.
As a business, we need to support the export of our cultural and entertainment products as enthusiastically as Hollywood did in the last century. But we need a healthy Canadian rights marketplace to be that exporter. In an increasingly market-driven environment, a lot of valuable and diverse content will survive only if there is at least one platform for it that is not solely dependent on return on investment. That platform today is the CBC. But access to that network also has to be on fair and commercial terms to ensure the production of high-quality content, exactly because it may be the only network where diverse voices may be guaranteed a place.
What is our recipe for achieving objectives of choice, diversity and growth in a more open marketplace?
First, we need to ensure that we are creating content that resonates with audiences both in Canada and globally. That, to us, requires the inclusion of independent producers and creators in the system in order to enable diversity and the opportunity to create.
Second, we need to ensure the consumer has more flexibility to choose so that she stays in the system. But there also needs to be recognition that while à la carte is a critical component, it can also, wrongly applied, hobble the opportunity to continue to create high-quality content for niche markets, from documentaries to feature films to children's programming.
Third, we need to take measures to ensure that Canadian broadcasters and broadcaster distributors — the cable and satellite companies — can exploit the program rights they acquired for Canada and to ensure there is a level playing field when it comes to broadcasting in Canada, just as we have done for over 40 years.
That begins with requiring that foreign-based content companies like Netflix, which now take millions of dollars out of Canada every month, also put some of those dollars back into our country to contribute to our system, as Canadian broadcasters and distributors must. The government needs to ensure that foreign companies providing broadcasting services to Canadians — and I think they should be allowed to — do not benefit from unfair competitive advantages, whether it is an absence of regulation or benefits that favour foreign companies when it comes to taxation. That is the state today.
It also means requiring that, in return for providing broadcast services online to Canadians through an open Internet where there is no blockage, Netflix and others ensure that Canadians cannot use false IP addresses to access content in the U.S. that Canadian companies have already bought the rights to distribute in Canada.
Fourth, we must ensure that our public broadcaster has the tools to support diversity in critical categories, from feature films to documentaries, which cannot survive based on consumer demand alone.
Finally, we need to put measures in place to ensure that the public broadcaster and the vertically integrated private broadcasters do not use their power as gatekeepers to squeeze independent producers to the point where there is no return on our investment in the creation of intellectual property. Producers need creative control over the programs they make because that's what leads to diversity; and creative control derives from controlling the rights in those programs.
In summary, if we cannot prevent unauthorized services from operating in Canada — and I would suggest we shouldn't try — and if we cannot preventing them from infringing on the territorial rights of the broadcasters to the content they paid for, then, ultimately, we will have no broadcasting industry of any importance because it is those rights that have always paid for the creation of indigenous content.
But equally important, if broadcasters are now highly concentrated gatekeepers and wrest control of those rights from producers who do not fairly compensate them for the content that they created as partners, then we will have no diversity of voices.
In that regard, I'd like to say that we often fear the power of the broadcasters, public or private, as gatekeepers as much as we worry about the ability of the Internet to redefine markets by undermining territorial rights. Without regulatory protections to ensure that broadcasters and vertically integrated carriers don't discriminate against independent voices, whether it's an independent producer, an independent broadcaster or an independent cable company, we will have fewer voices in our system and less Canadian content creation, and exhibition of that consent will ultimately fall under the control of a very small number of corporations.
Not only would this have negative consequences for our broadcasting system as a whole, but I think it would be contrary to Canada's Broadcasting Act, which requires that our system include a significant contribution from Canadian independent production. It is concerns like this that ultimately led the U.K. to entrench independent producer rights in legislation. Perhaps we need similar rights in Canada.
I thank you once again for inviting us, and we are open to your questions.
The Chair: Thank you very much Mr. Hennessy. As you know, you are our first witness. This is the first presentation we've had, and if it is a sign of the quality and the pertinence of the presentations we will be getting over the next period on this subject, I think it will be a very interesting study. I want to congratulate you on your presentation.
Senator Mercer: Thank you, lady and gentlemen, for being here. I concur with the chair about the quality of the presentations. The CMPA believes in choice and competition but goes on to support the CBC. You go on to say, "the market is a glass half empty if our marketplace cannot include Canadian goods and services." Do you think that last phrase, that the glass is half empty if the marketplace cannot include Canadian goods and services, can happen without the CBC?
Mr. Hennessy: I think so. I think that the commercial marketplace can continue to create dramas, whether it's Republic of Doyle or The Listener or Heartland or things that often draw an audience of over a million in Canada, which is a very high number.
When you come to niche markets — the children's sector, documentaries and feature films are the three that immediately come to mind — that is less the case because we're moving into a an à la carte world. Consumers have spoken, and they have made it clear that they want more choice from their cable and broadcasting systems. That's right. If you are going to run a good business you have to respond to what the consumers are asking you to do.
In an à la carte world, where consumers get to choose more — and I think there will always be options, but where they choose more — you can say that the penetration, the number of subscribers for every specialty channel today, will go down. It's simple math because they are packaged for high penetration, and people choose. Even sports, which is the most popular thing, is really only attractive, if you are going to subscribe, to perhaps 60 per cent of Canadians.
If the prescription revenues go down, you will raise your price, but if you have a much lower audience, you will never get the advertising revenues that you once had. You will have less money to produce, and you will move to try to create programming that is most popular to drive up your audience. There is a lot of programming, as I said, in niche markets that is good, that is high-quality, but that reflects minorities, so perhaps that programming, if left on its own, wouldn't survive. I use kids a lot as a good example. We were looking at some numbers today in the reports I gave you. The amount spent year over year is down about $250 million in the independent production sector, and the biggest drop is children's programming. CBC has begun to move out of children's programming. It has become concentrated on one or two channels. There is value in things like children's programming and film that transcends certain market-driven assumptions. It has to be good. That's my initial point. It has to resonate with audiences. If it's just bad, too bad. That is what we have concluded as an industry, and that may be different from the philosophy we had 10 years ago. You really do have to satisfy audiences, but unless you have a public broadcaster or regulation to force commercial broadcasters to fill that void, you will have a problem.
Senator Mercer: So, even though you said that maybe you could survive without CBC, as you went on, you talked about the fact that we need to have some protection. You also said, earlier in your presentation, that as more content crosses the border and as technology increases competitive alternatives both to the public broadcaster and to indigenous content creation in general, the challenge facing policy-makers was how to create a national identity in a culture defined by another state.
I think you would probably agree that we're still in that situation where our national identity and culture are being defined by another state because of the high concentration of American content on all of our networks.
You also talked about the niche markets and niche products like children's programs and documentaries and said that we need to be able to do this. You can't do that in a competitive market if you are appealing only to that small marketplace. Is that where the CBC should be going, just to niche markets, news production and the production of children's programs and documentaries?
Mr. Hennessy: I would start from probably a simple economic premise. It may be a little simplistic, but it is a good starting point. If you want to have a definable role for the CBC that differentiates it from the private sector, the best place to start is exactly what you expressed. You ensure that CBC is filling the gap of critical programming in the public interest that the private sector may not deliver.
Senator Plett: First of all, let me apologize for being a little late this evening. I certainly enjoyed the part of the presentation that I did get, and I have every intention of reading the rest of it because it was a great presentation and I appreciate it.
Let me start by saying that I watch a lot on CBC Newsworld. I believe CBC is one of the better networks that we have for news. I enjoy watching sports and the Fifth Estate. One of my favourite shows on CBC is Dragons' Den. I don't believe that CBC needs to put out programs. We spent a bit of time here talking about children's programs and so on. I think CBC is a professional enough organization that they can compete with anybody and should try to do that.
In your presentation you used a few terms that I want to ask you to explain. One is "fair and commercial terms." What do you mean by "fair and commercial terms"?
Mr. Hennessy: In the circumstances I'm talking about, if you have a level of concentration in the market where there is a limited number of buyers, then you're unlikely to have market outcomes because the buyer, rather than negotiate, dictates what the price of something will be, what they will pay you for your product because you're limited in the doors you can knock on to sell. Over the last 10 years or so, that has been the trajectory of the Canadian broadcasting system.
In English Canada, 90 per cent of broadcasting is controlled by Rogers, Shaw and Bell. In Quebec, there's actually a degree of competition, but there's still significant market power with Quebecor.
As a result of that, it is very difficult for our producers to negotiate a fair price so that they can actually own enough intellectual property, because, in my mind, the intellectual property, the ownership of the content you create is what is exportable. To me the ownership of intellectual property, in an Internet age, in an information age, is currency.
Now back to your point. If you don't have a fully functioning marketplace, you have a limited number of buyers. There are valid reasons why we have had so much concentration, because we lack scale in this country, and the only reason that many broadcasters exist in the commercial sector is because they were bought by Rogers and Shaw and Bell. So it is not all a bad thing, but along with that goes an exercise of market power that I think often lies at the root of a lot of consumer discontent.
About three years ago the CRTC created terms of trade where they said to the broadcasters, "If you are going to continue to buy things, if we're going to give you more and more deregulation, more and more flexibility to operate in your marketplace, you have to be able to negotiate in a commercial setting with the independent producers and come to the table before we give you your licence with an agreement."
The licences at that point were so important to the broadcaster that we had leverage. We had balance. We had fairness in the commercial negotiations. We gave up things, but they had to give up things, and we have now a deal that they tend to scream about every year.
But we have actually been able to hold on to content and have become major exporters of that content because we were not forced by the buyer to either take what they were offering or not put the program together at all.
I guess another way to flip it around, in a much shorter answer, is to say that you really don't want, in a perfect market, to have the government deciding what is fair and reasonable. You want the marketplace to discover commercial things, because there's a balance. But there isn't a balance.
If there was not as much concentration as we have today, people wouldn't be yelling that their cable rates are too high and they're forced to buy content they don't want. That can occur only because one side has more power than the other — in this case, companies versus consumers — and is able to raise prices without worrying that competition is going to occur that forces them to bring the prices down.
If you told me the marketplace was fully open and there were all kinds of doors to knock on, which there were — 10 years ago, there were three or four times the number of broadcasters to sell to as there are today then you are in a much better place, because if X says no to you, you know that you can go to Y.
You can't even do that when you have three, because some of them focus on sports, some of them like Corus. Shaw would be focused on children; Bell is film and drama. That's really all I meant. I said it a little long. I will try to be shorter next time.
Senator Plett: No, I appreciate that. I guess maybe the term that you used, "unfair competitive advantage," would be somewhat similar.
Mr. Hennessy: We are talking about Netflix?
Senator Plett: Yes.
Mr. Hennessy: Here is why I think there's an unfair competitive advantage. As I said, I absolutely disagree with anybody who says you should try to block that. It's politically bad. It is bad for consumers; it is bad for competition. You don't do that.
Speaking on behalf of Canadian producers, or speaking on behalf of myself as a consumer, I'm a subscriber to Netflix.
Senator Plett: So am I.
Mr. Hennessy: And Apple TV.
Senator Plett: Only a month, but I am a subscriber.
The Chair: Three months.
Mr. Hennessy: Netflix, for instance, has 4 million subscribers in Canada but has no requirement to follow any of the rules and is considered to be so outside the system that it doesn't even have to pay retail tax.
Think about that. You have a broadcaster that is competing in Canada, no matter how you define it. When you have 4 million customers, and you have a Canadianized service, you are competing in Canada. You start out with an advantage right at the beginning of probably more than 10 per cent over Canadian players because you don't even have to pay PST or GST.
To me, that's fundamentally wrong. I understand why these things arose, because you wanted innovation, you wanted competition from the Internet. When you talk about Apple and Google and Netflix, we're not talking about little innovative, in-the-garage kinds of businesses anymore. These are businesses that, in scale, dwarf the Canadian industry in many respects, when you look at their global reach.
I just think that perhaps, a little like the French government, if you're going to do business in our country, do business the same way that the businesses in our country do business.
Senator Plett: I will ask one more question, if I could, chair, and then I will go on a second round.
I will ask the question only so that maybe I can be the first one on record to ask this. I'm sure this will be asked of many of our witnesses here. You have referred to sports, you have referred to Rogers, and I'm sure TSN is part of that. So let me ask you: What will the deal that Rogers made with the National Hockey League do to CBC, in your opinion?
Mr. Hennessy: Yes. A tough question. I will put speculative on it, but then I will opine away anyways.
It is a $4-billion deal. The interesting thing is that it is not necessarily a broadcast deal, all right? When I came out of Telus, 80 per cent of our share price was defined by how we did in the wireless business. It is very much the same with Rogers.
Rogers has been declining in that business. They could make up in market capitalization, if they were to claw back, say, 5 per cent from Telus and Bell; the deal would almost pay for itself, without ever thinking about what you do with the content.
We're in a vertically integrated world. We are dealing with corporate interests that may no longer be like the old family-owned broadcast entities that actually thought of broadcasting as the core business. But that's an aside.
The president of the CBC has said — and I don't have the number, but we can get it for you; or you may already have it — they paid an enormous amount for hockey and they received an enormous amount of revenue in terms of advertising. I mean, for my whole life, Saturday night hockey, in the playoffs, they have transcended the market. It is very much a meeting place for Canadians, although I'm sure that won't escape Rogers' attention.
You might say, "Well, maybe they're no worse off." There will be issues that I think you should ask them: What is going to happen to your advertising?
First of all, what are you going to fill that space with? Because now we have hundreds of hours of empty space on CBC, which, in our view, potentially is a wonderful thing. Hockey is still over; it is just over on Rogers. But in four years it is gone from CBC.
All of a sudden, going back to my thing, fill the niches that the commercial sector doesn't fill. You have suddenly got room for children's programming; you've got room for film; you've got room for documentaries. You could go back to running double features of Canadian movies on Saturday night.
Senator Plett: You would be hard-pressed to watch that rather than a hockey game.
Mr. Hennessy: You would be hard-pressed to watch that rather than hockey, but there are a few people, like my wife, who might. So we know that that's going to be their challenge.
Then the question is what is the programming going to be now that you have this opportunity. And how much is this really going to cost you? Because that's the big question. Hockey takes in big advertising revenues, but it costs a lot.
If you're doing different kinds of niche programming, will it cost less? Recognize the fact that your advertising revenues are going to be less.
One of the unknowns, and we've seen this for our business and the business of TV shows, is that when there's a hockey strike, which is a frequent occurrence, the viewership of CBC goes down. One of the benefits CBC got from Hockey Night in Canada, particularly with the playoffs, is that it got to tell you about all the shows that it offered.
At this point that is intangible, but it may be a very important thing to do. But, at the same time, today CBC has so many competing mandates that it's forced, in its view, to get a return on investment from taxpayer money. And it tries to demonstrate that through audience. That means that it increasingly has to shrink the monies it pays for things that commercials don't do. It's a very ugly circle.
I think there is an opportunity, in all of this, to rethink the CBC. They've got to be sitting around at the table doing exactly that: What are we going to do? And it's not even in four years.
Senator Plett: I hope so.
Mr. Hennessy: Because it can take a couple of years or longer to develop content and to start producing it, to get it up and running. So it's a big challenge. They're thinking about it today. But I would ask some of those questions.
The Chair: Senator Plett, as you know, I'm always generous on the first questions. So I was generous to you and to Senator Mercer. I'm actually generous to Mr. Hennessy in his answers because he's been in front of the committee before. I will ask everybody from now on to shorten their questions, and I ask the answers to be short.
Senator Housakos: Could you tell us who some of the members of your association are? You can give us maybe some idea. I don't know if you can provide us a list of your membership.
Mr. Hennessy: We can certainly provide you with that material. Some of our bigger companies would be eOne, which is both a Canadian producer and an international distributor; Breakthrough Entertainment, which does a lot of children's shows out of Toronto; SEVEN24, which has the show Heartland out of Calgary.
Senator Housakos: Those are producers of content mainly, right?
Mr. Hennessy: They are, primarily. There are people who join the association because they're service providers, but really the vast majority of people we represent make programming, film or TV.
Senator Housakos: I have a bunch of questions, and I'll try to bundle them up because I know the chair is rigid.
Are there differences in dealing with public broadcasters and private broadcasters in Canada, from the perspective of the content producers, and what would those differences be?
Mr. Hennessy: I would say it goes back to my point about how right now we have terms of trade with the broadcasters that deal with things like producer fees, retention of tax credits, Internet rights, which they hold for Canada and we hold internationally. We have no terms of trade with the CBC. We've negotiated for many years, and they make the point that they're different. The CRTC has accepted that, and there are differences. I will accept that there are differences.
But we're in a dispute. The CRTC has really given us to the end of May to come up with some kind of agreement or they will take us to arbitration. Really, those are the terms and conditions.
Senator Housakos: I would like to get your perspective on this: When it comes to Canadian content, how far behind the private broadcasters are compared to the CBC? In your opinion, is the difference between the two significant enough to justify the mandate which the CBC has received from the government over the last 40, 45 or 50 years? In your opinion, in the last two decades, the last decade, do you feel that CBC's mandate fits in with the needs of the marketplace in Canada today? Or maybe we have to revisit that mandate. That's one of the questions.
The other question I have is, in your opinion, what is more important to the CBC: Is it the production of the content or is it the distribution of the content? Is it the platforms it has or doesn't have in comparison to their competitors?
I'm asking a bunch of questions here wrapped up in one.
Mr. Hennessy: Let me answer the last one. I would say that it's the distribution, the exhibition of the content. I think our role as producers, and the hundreds of producers across the country — we have 350 members but we don't represent the Quebec producers, although we partner with them on many things.
That's where the diversity comes from. Because if you do all your production in-house, you really have three or four people in the country that are making all the creative decisions. And if they make the bad decisions then the whole industry suddenly becomes uncompetitive.
So I would say CBC's role is not to spend money risking the whole shot on producing stuff in-house, although there are some good things they do — Dragons' Den, some awesome stuff that's not high-end drama.
Senator Housakos: What percentage of their current production is in-house?
Marc Séguin, Senior Vice-President, Policy, Canadian Media Production Association: One thing I would point out about certain kinds of data in our sector is that it's not readily available to us, because this aggregated, granular data that you are asking about is considered confidential, private, corporate information. It is often shared with the commission but not released publicly, so some of that data is not available to us.
Jay Thomson, Vice-President, Broadcasting Policy and Regulatory Affairs, Canadian Media Production Association: In terms of the amount of in-house programming they do versus the amount of independent production they do, the latest number we have is from 2011, and other than news and sports and public affairs, about half the programming was produced in-house and half was independently produced.
That number has dropped over recent years. In 2005, I believe 80 per cent of their programming was independently produced. As of 2011, that's down to 50 per cent.
Senator Housakos: What would the comparative numbers be in the private broadcasting sector?
Mr. Hennessy: The big ones are required to spend about 30 per cent of their revenues on that.
If you were looking at the schedule, the CBC far exceeds any of the private broadcasters in putting up Canadian content. With the exception of occasionally a show like Orphan Black, which Bell put a lot of energy into and partnered with BBC America, for the most part they're still only going as far as they have to.
One of the problems in the industry is that they don't embrace the idea. It's still a lot cheaper to buy content off the shelf from the U.S., and CBC, just attitudinally, buys into the idea of creating content in the country. I think that's very important. That's why I said we're down about $250 million in expenditure on independent production. Even though the CBC spent a little more money, the private broadcasters basically ramped down to the minimum that they had to deliver.
If we're going to do a show, increasingly they would like us to go out and find a U.S. partner first, get their approval to license some of the stuff so we cover the costs of the deal, and then they will pay the rest.
Senator Housakos: Is it fair to say from your testimony that the CBC has spent more money on production than they have on development of platforms and technologies and distribution of their programming?
Mr. Hennessy: That's a tough question. I don't know. They probably wouldn't know the data. The reason I say that is because they've had to, over time, build all these towers, local radio stations. They've had to put in an immense amount of infrastructure.
Now, in terms of their production facilities, maybe not as much. But part of what they were doing for a long time in all the communities was producing — producing local news, for instance. I would suspect their investment is big.
Senator McInnis: Thank you very much, and thank you for coming. A number of the questions I had have been asked. I just wanted to pick up a couple of things. One was with Netflix. You said earlier that on competition, we did it right and we permitted competition to take place in the country, but what effect has competition had on the CBC? Second, and this is slightly connected, it seems to me it would be a real challenge to regulate Netflix. Is there any way that it could be controlled? Obviously it must be having some injurious effect.
Mr. Hennessy: Impact of competition on the CBC, from Netflix or just competition in general?
Senator McInnis: In general.
Mr. Hennessy: Competition in general. The decline in the CBC's audience has been massive. As I said, when I was growing up in the 1960s, they were the game in town, and then they were splitting audience share with CTV. Global was never a huge force in a lot of the country. Now, their market share in TV is probably in the 10 or 11 per cent zone. I may be a little off. In terms of share, competition has been very tough on them.
Senator McInnis: That brings me to what has already been mentioned here. Obviously the CRTC must have had this in mind when they renewed their licences recently because they said:
. . . CBC/Radio-Canada will have to continue to demonstrate to those who support it financially — Canadians — that it is still a relevant and essential part of Canada's cultural landscape.
It must be on the minds of many. If it's down to 10 per cent, how relevant is it? I recall the debate that took place probably 10 or 15 years ago where there was the question, is CBC television relevant? I know Dragons' Den has been mentioned several times tonight. CBC radio is very relevant and picks up all parts of the country. With what we have now, if I want to watch the Canadian news, I can watch CTV and others, Global. So I'm wondering, is TV really as relevant as it perhaps was when we had maybe two or three networks in this country?
Mr. Hennessy: It's very interesting. You would think, looking at all the choice you can get on the Internet, that the answer should be no, but if you actually looked at the number of the top five or six TV shows that are stolen on line, no one is stealing that stuff on the Internet. They are stealing Game of Thrones and all the big ones. TV shows may be on a whole bunch of different platforms today, but if we're talking about dramas, it's those shows that you spent $2 million or more an episode on that are still the things people gravitate to. They want the opportunity to gravitate to them using all kinds of technologies. TV and that kind of content are far from dead.
I think when CBC shifted too much to trying to be a commercial broadcaster, to act as if it had to follow the dictates of the market as opposed to defining a mandate — and maybe that's impossible to do for yourself, and your report may recommend other options. When they went that way, I think they may have lost their way. If we look at some of the top shows in Canada, from Shaftesbury, you have Murdoch, which was dumped by the commercial broadcasters and is now the number one show in the country, at least in English language TV; Republic of Doyle out of Newfoundland; and Heartland out of Calgary. These are all big shows that exist because the CBC pays more attention to regional production than the commercial broadcasters do. That to me is an important thing that would be gone. We would see more and more activity in English language programming centred in Toronto and looking to Hollywood for direction.
Senator Greene: Thank you very much for being here. In your presentation, you alluded to some very interesting history, which I believe is true, such that the CBC or an organization like the CBC or some network with a mandate has always been needed in Canada in order to provide a platform for minority voices and to provide a platform for diverse content where stories can be told from Canadians to other Canadians and around the world. But my question is that surely today the production of content has become cheaper and cheaper. You can produce a program now on your laptop and get it up on the Internet or on YouTube or anything like that very easily, and pretty soon I imagine you will be able to do it on your phone. In that regard, it seems to me that the protection of the ability of minorities and people in all corners of the country to tell their stories has never been as strong as it is today. Because technology is becoming more diverse and is penetrating all walks of life and all age groups, it's getting easier and easier to tell your own stories. Therefore, why is the CBC needed to do that?
Mr. Hennessy: Ms. Boltman can help me here because she was deep in the production business. You can easily produce something today and put it on the Internet, and two things may happen. It may be totally bizarre and you have 1 million people look at it, or nobody will know it's there. People still particularly want to gravitate to things that often cost a lot of money to produce, and the cost of producing those things has not gone down.
If you're thinking about inclusion, if you say to a particular group, "Well, you don't need a space on television because the Internet is out there; just throw it on," I'm not sure that's a great thing to say to somebody. I don't think at this point that the Internet is fulfilling the needs of minorities in terms of the kind of high-quality programming that people are still consuming at the same rate. To do that, you need infrastructure. You need people who will put money into development. You need people who will pay the guilds and the unions where all the talent comes from. You need a place to exhibit to a mass audience, and you need to promote. That is still big money, whether we are dealing with Hollywood or Canada.
Senator Greene: I tend to think, though, that you can tell a very compelling story that would matter to a lot of people without really a big worry about production values and things like that. Anyway, that's just my view.
I have another question. How should the CBC in future deal with revenue generation? At present, it receives revenue from the Government of Canada, from commercials and from the programs it creates and is able to sell around the world.
With regard to commercial revenue, hockey aside entirely, it seems to me that over time that has got to be becoming less and less as consumers watch less and less commercial television and instead watch Netflix or HBO or anything like that which has fewer commercials or no commercials in it.
In an instance like that where you've got commercial revenue for the CBC in decline, where else do you think the corporation is able to receive income? How can it generate income in the future?
Mr. Hennessy: I agree with you on the point about a decline in advertising revenue. The first question is this: Politically, does the government want to support a public broadcaster with taxpayer money? Even if you answer the first question in the positive, it's very likely that you will say, and collectively just as government did, what is recommended or who implements — I don't know. I think that the answer will be that whatever it is, we don't want to spend as much taxpayer money as we're spending today. How do you exist? If you're not ready to commit taxpayer money anymore, then it's done. There is no hybrid you can create.
Let's say I was talking to someone before I came in about privatizing the CBC. I don't know who that buyer would be for the CBC today. You might say that a private corporation could buy the CBC but, by the way, it would still have to do A, B, C and D and meet the mandates that probably have been choking it to death forever. No reasonable shareholder-driven company would want it. It's much easier to create an independent broadcaster, but many of them don't make money anymore. The fundamental question is twofold: First, you decide you want a public broadcaster and you are willing to allocate X number of taxpayer dollars as everybody said historically over a multi-year period so that there's stability in the funding. Second, as policy-makers, if you've gone down that path, you have to determine what its mandate will be. It can't be everything to everybody because it can't afford to be and never could afford to be.
When it tried to close all those gaps, things started to collapse because it always had that political pressure. Go back to when the CBC was created in the 1930s under R.B. Bennett and the history. There have been task forces ever since, and almost all of them have talked about the need for stable funding, multi-year, predictability and a clear mandate. The past is prologue, but a lot of the recipe is there. If you don't have the money anymore to make big commercial productions, then focus on what it is that you think the market won't deliver; and that's the mandate. I would certainly give the CBC team a chance to explain how they can finance through advertising, but it's a tough challenge as long as there are multiple mandates.
Senator Greene: Are you advocating stripping a few mandates away from the CBC?
Mr. Hennessy: I want to be a little careful with those words because they're a bit loaded on the record. I would advocate having a real debate about how we want to serve voices we're not sure the commercial broadcasters will serve and that we think are important to allow access to the system in the way that they can be heard. Everybody has access, but most people are not heard through the noise. The fundamental question is this: What can the commercial sector not deliver that we believe is important for a nation? If we can answer that question, which is tough enough, then at least you can say, okay, maybe that's the mandate. It's difficult to try to strip away things that are costing too much money because you'd be back into the game of pulling it apart before you've decided what you want it to be. Some people may want it dead, while other people may want it focused; and that is a different political debate.
The Chair: For people following us on the Internet or who will be listening to this on the web on a Saturday night, this evening we are commencing a review of the challenges faced by the Canadian Broadcasting Corporation in relation to the changing environment of broadcasting and communication. The witnesses are from the Canadian Media Production Association.
Senator Demers: First, I have absolutely nothing against CBC. I worked for Hockey Night in Canada in English and French for many years, and I still have friends there. What has been said about CBC is don't compete with the others. I will give an example. Tout le monde en parle was one that nobody could touch before. TVA came out with Le Banquier, and then there is La Voix. It seems that CBC does not have what people want. You have so much competition, and you know that. I'm certainly not telling you anything. Except for Hockey Night in Canada and Don Cherry, who says things and people listen to him, I don't see CBC producing what people want. The news is good, but there are a lot of things that other TV stations — different companies — show. We have a new generation that wants certain things, and CBC does not seem to provide them with that. Am I correct or am I out in left field?
Mr. Hennessy: Let me focus first, and you raised a good point when you talked about some of the shows.
In general, there is an identity issue. That identity issue is much more germane to the English-speaking parts of Canada. I don't think that as a country and as a people we ever really knew what differentiated us from the Americans. The country I grew up in is long gone. We are in a country that is being redefined in a great way by its openness and inclusiveness. Again, there is no identity. It's very hard to tell somebody to go and promote our identity when most of us could not define it, other than we're sort of different from the United States except we like the same shows and we like to shop in the same places. It's different in Quebec, where the television sector as a whole is much more successful because it has been able to reflect and to be part of a dialogue and part of culture that I don't think since there was competition that CBC has been in English Canada.
It's a tough one to answer beyond that.
Mr. Séguin: It's critical to point out that the acquisition of programs at the conceptual stage, which is where broadcasters are first exposed to programs, and the financing and creation of those programs are an incredibly risky business. If we had a crystal ball that could predict a project and development and how it would do when it was produced a year and a half later and resonate with audiences, we'd all be stinky loaded; believe me. It is a high-risk business. That's as true for CBC as it is for the privates.
There's one thing, in terms of the core ingredients to the recipe, that we should not lose sight of about the CBC specifically: The CMPA has long held the belief that there is a place for the CBC in our broadcasting system. We can talk about where that is exactly, but there is a role for the CBC to play in our system. That is number one. Number two, for it to be truly effective, particularly in English television, it needs to be financed properly in order to take the risks that it takes to hit a ball out of the park. Or perhaps a more relevant analogy would be to just put the puck in the net. It is a high-risk business. If it's not financed properly, if they don't take the risks and work with the people we represent, it will never succeed.
Mr. Hennessy: I think Mr. Séguin hit on a really good point, for anybody who reads John Doyle in The Globe and Mail about television. One of the things they often say about the golden age of television in the U.S., the new cable shows that are edgy, is that they are there because there is a degree of risk taking in the private sector that you don't see in Canada. Think about the opportunity in drama. Some of these shows are much smaller budget and smaller series than the kinds of things that the commercial broadcasters are doing. Rather than walking away from drama, to fill the gap where the risk in doing something really different and really interesting, which is riveting, I think there is an opportunity there.
Thanks, Marc. That is a critical thing they could do.
Senator Demers: Thank you very much, Mr. Séguin and Mr. Hennessy.
Senator MacDonald: I apologize to our guests for being a little late. I read through the presentation. I have two questions, one from the presentation and a separate one.
Mr. Hennessy, in your concluding remarks, you raised the point that Canada's Broadcasting Act requires that our system includes a significant contribution from the Canadian independent production sector. I think most Canadians have sympathy for that position.
You mentioned earlier that we tell our stories to the world and CBC has played an important role in achieving this success, as have our independent producers, which the CBC helps to support.
Should the CBC be picking winners and losers with regard to independent producers? Is there a better conduit for providing funding and support from the government to independent producers as opposed to the CBC deciding what they will support and what they will not support?
Mr. Hennessy: Again, "conduits" in these kinds of discussions often involve money, but certainly if you had increased tax credits and increased incentives — first of all, you have to recognize production as an industry, and it's an industry that creates jobs and is now selling goods and services overseas. The bigger the tax credits and export incentives that often go to other businesses, the more you can develop a product outside of the system, bake it and demonstrate why the risk is worth it.
Still, at the end of day, there are only so many buyers. If you can't sell a TV show to a TV network — and this is as true in the United States and Europe as it is in Canada — then you will not be able to make the kind of TV show you are talking about.
We would love that opportunity, because if we were able to develop things from the creative end earlier than waiting for somebody in a corporation to tell us what they think consumers want — and it is a hit-and-miss business — then that would be good, because the whole point of having independent producers in the first place is that you have multiple points of view, multiple types of risk takers, people who are interested in all kinds of genres. Without that, you have only two or three people making the choice of what will go on TV.
Yes, it would be tax credits and export incentives. One of the tests for success for our industry today should be not only the ability not only to sell things in Canada but also the ability to sell — which is happening — around the world. Different countries may not pay you a lot, but they are willing to take your programming.
For us, one of the big tests is that increasingly the Americans are willing to take our programming. I grew up in an age when the threat was that the Americans would pay for their programming here, sell it for incremental costs, and you'd never be able to compete.
John Doyle wrote in the paper the other day that Canadian stuff is not so great and that the U.S. guys are picking it up because it's cheap. Exactly the same story but an attitudinal difference: That's the critical thing. We should celebrate that we are able to do things made for Canada, but now we look at the world as the place to story tell.
Things that look at export support and promotion, things that incent going to trade markets, the same things that any other business might be supported by the government to gain advantages in the export market, absolutely, that would be a great thing.
Senator MacDonald: My second question is more of a practical money question. The CBC spends a lot of money on human resources and HR costs, probably much more than the average in the industry. Other broadcasters that focus on acquiring content, such as Netflix, don't have to worry about these costs. Their corporate model seems to be expensive from a human resources point of view.
Can the CBC keep its commitments to its mandate while at the same time address the problems with the cost of human resources?
Mr. Hennessy: I think it would be very difficult. There are a lot of issues in terms of unions and in terms of obligations to have certain facilities and infrastructure in place all over the country as opposed to centralized. It would be very tough. I go back to my point that you have to focus the mandate and then work backwards from that.
[Translation]
Senator Verner: In 2011, your association concluded a commercial agreement with private broadcasters, which includes a dispute settlement mechanism, among several other things. Have you had to use that dispute settlement mechanism since the conclusion of the agreement?
[English]
Marla Boltman, General Counsel, Canadian Media Production Association: There is a dispute resolution clause in the terms of trade agreement with the private broadcasters, which we were hoping we wouldn't have to use. There is an unwritten agreement between the parties that we would try to settle matters informally. A terms of trade committee was formed between certain staff at the CMPA and the broadcasters. Each had a designate.
Over the course of the year, we tried to resolve matters that way. We resolved several — each side made some concessions — but there are a couple of issues we have been unable to resolve. As a result, we have been trying to move forward with the dispute resolution policy that both parties agreed to in the terms of trade agreement.
This process started in September, so it has only been a few months. There have been issues with agreeing to the terms of the dispute resolution provision, which we're in the process of also trying to work out.
Mr. Hennessy: The critical point in terms of the process, in the simplest terms, is that it's based not on the regulator resolving disputes but in terms of, like any other business, taking it to non-binding mediation and, if you can't get there, to binding commercial arbitration. We have never completed that cycle, but I think issues will arise as we go into the next round of renewing those kinds of agreements.
[Translation]
Senator Verner: Without going into all of the details, what are the factors, if you had to summarize them simply, that explain why it was easier to conclude an agreement with private broadcasters rather than with CBC/Radio-Canada?
[English]
Mr. Hennessy: Again, it was pretty simple. Around 2010-11, the big broadcasters collectively wanted the ability to no longer have to meet their program spending commitments by channel. They wanted to say if you're Bell or you're Shaw or whatever, I have commitments as a broadcaster that are based on revenues, and I would like to spend them on whatever I want, based on the premise that I'm a commercial broadcaster; let me produce programming. If people aren't paying enough to watch children or there's not enough people watching children, let me move the money over to drama.
It was a very contentious thing. They were also being beaten up by independent cable companies in front of the CRTC just in terms of abuse of market power on the carriage side. We took the opportunity to go to the CRTC; if they're going to have flexibility where they could actually cut out complete genres, you have to have some sort of commercial arrangement, or the independent production sector is going to die.
The chairman of the day basically signalled to them, "If you want a licence, you had better sit down with these guys and you had better show up with a signed agreement, or you might not get what you want."
We talked about this earlier; it put a balance in place. There were things they wanted, and they were willing to give to us in order to get something bigger over there. Now they have it so we're hearing today from Rogers that all these commercial arrangements are stupid and we should just get rid of them. I suppose if I was still in that sector of the industry, I might make that argument, but it is not a very good one. But that was why, because there was leverage. Right now, there doesn't seem to be any leverage to quite close the deal with the CBC, and there hasn't been for years.
[Translation]
Senator Verner: But May 2014 was set as the deadline to arrive at an agreement. We will see then what happens next. Do you think that that deadline having been set, you will be able to arrive at an agreement, or will the CRTC have to get involved?
[English]
Mr. Hennessy: It is very possible that the CRTC will get involved. Because you don't have an agreement today, you don't have that commercial arbitration, mediation thing to fall back on. Any negotiation I have ever been involved in has often gone up to the last minute, and you ultimately have to get to the point where you scare the other party enough — not in a threatening way, but you convince them that they have more to lose by doing X than if you agree to share something doing Y. The closer you get to depending on the regulator to make that decision, often the more at the last minute you decide to come to some agreement.
I'm being hopelessly optimistic at this point on that, but what my job will be over the next couple of months is making those arguments understandable for them so they see the wisdom of us partnering.
Senator Plett: Thank you. My intervention will be as much a comment as a question, but I certainly welcome a response.
Mr. Hennessy, I don't want to date you; I think you did that when you said you were watching CBC in the 1960s, so I look at you and me as possibly close to being from the same generation. We probably watch CBC a lot. Our children and grandchildren are watching Netflix and HBO and other programs. I think it is the older generation that is actually sitting down and tuning in to CBC, maybe even CTV and some of these, but the younger generation are on the Internet; they're watching, like I say, the Netflixes and the HBOs.
What does that say about the relevance of CBC and other producers like CBC in the future? And I don't think there's anything you or I can do about that. I don't think it is competition. I don't think that we can simply subsidize more. This generation wants to watch something else, and they are doing something else. What does that say about the future of CBC?
Mr. Hennessy: I totally agree with you. I don't have the data, but I bet as that is produced, you will see exactly that we are the demographic. I may be a bit older than you are.
Senator Plett: I doubt that.
Mr. Hennessy: We will check it out afterwards.
It is incumbent on them to be relevant, and that's why maybe you have to take the bet on risky drama because there's not a lot left to lose. If you can start demonstrating you have some winners, you can turn things around pretty quickly, but people are going to walk away from you.
To be clear, watching a lot of the younger generation and their consumption habits, there are two things going on. They are still consuming a lot of those same TV shows that are being measured in the old Nielsen-BBM way. They likely don't have cable; they're often watching TV on the Internet, perhaps without necessarily having compensated the rights holders in Canada for the privilege, and I would think that that is going to be a fundamental challenge not just for the Canadian industry — but more for the Canadian industry — that if there's no willingness to pay to get your content, then there's an ever-decreasing pot of money to make good content with. It is the best content when you look at the list that is being stolen.
It is not so much that they're not watching TV anymore; they're watching it differently, and they're no longer part of the economic model, which is what I was talking about when it comes to rights.
Senator Plett: Let me throw one last curve at you, then. PVRs are obviously hurting any television station that has commercials. People are recording and they are fast-forwarding through all of the commercials. What impact is that going to have on television producers such as CBC when my kids say, "Well, I'm going to watch that show later; I'm recording it because then I can fast-forward through all the commercials"?
Mr. Hennessy: Yes. There are a couple of upsides to what is going on. One of them is that we're starting to develop the technology to actually monitor Canadians or Americans who are watching a television show a week or a month later, and that actually still has value to advertisers. It seems kind of strange because you are talking about whipping through, but I have the latest all-in house Netbox from Rogers. They have tweaked the speeds so much that you can't jump commercials as well as you used to.
They have started to change the speed of these things, and they have narrowed the length of time in a commercial so it is actually hitting you even though you're not totally focused on it. But as a result of that, they're actually discovering that as you do this and the more there are different platforms, you say, "Wait a minute, so and so didn't watch that show." So let's say Republic of Doyle had only 800,000 subscribers — except I often watch Republic of Doyle on my PVR — that's still important to count because in the new world, you want shows that are very popular, even if maybe they don't draw as much advertising revenues, because that means that the cable companies will carry your brands on television, and brand starts to become important. So the industry is very smart. It is adapting.
What is amazing through all of this is that you are seeing the broadcast revenues of, say, Bell or Shaw going down, but the profits of the people that own the Internet, cable systems and the broadcasters, when you look at that and realize that all of them are moving their content around as well, it is just no longer in the box that's measured, but it is still creating value.
That's why I said you have to make stuff that resonates with an audience. If you are doing a niche product, you have to have a budget that suits the size of that audience.
A lot of things are going to disappear, which is what pick and pay and a la carte are all about, the policy.
There are channels today we're all paying for that nobody watches. Take TV that shows you episodes of One Day at a Time, if you remember the 1970s. We don't sell anything to it. It just sits there and sucks up money, and that's dead.
Channels like that are going to die. I would say, you know, who cares? If the worst channels in the system die, and you don't reward people for making bad programming, that's good, because that means that you have addressed a consumer frustration.
If you then start to do the list of why consumers are leaving, they want access to a full season of programming. They want to say "I missed an episode, I want to see it from the start," and find that they can get only two episodes in Canada. I think Rogers is about to change that.
If you went down the list and did all the things that annoy consumers, and just said, well, maybe we should do that, maybe that should be part of our system, maybe we should take risks, which is where we're talking about with the CBC, then you are okay. Then you are back in the game.
I will go back to the point of why I think there's a need for a public broadcaster, because there will always be niche important public interest programming that cannot be met by the commercial market.
As Mr. Séguin pointed out, there's probably high-risk drama that if they do it right, it suddenly becomes exportable to other countries. Look at BBC America and BBC Worldwide. They have reinvented their model by starting from the fundamental premise that if I make stuff that sells around the world because people like it, I'm going to be successful. You can pretty well follow that model in any market and see some success.
I still believe there's a future for public broadcasting.
The Chair: If you want to know his age, there's a website, senate.parl.gc.ca, you put in "Plett," and you will see that he's six months younger than I am, and I'm 64; so that gives you just an idea.
Speaking of my vice-chair of the committee, Senator Housakos, you have the last question.
Senator Housakos: Thank you. I will go back and ask a question from a perspective. I would like to know what your membership would say to us if they were asked the question from a Canadian content producer in this country, is the CBC fulfilling, to the best of its capacity, its role to promote Canadian content?
You mentioned earlier how in 2014 it is a lot more difficult to identify what that Canadian content and Canadian culture is. In the past we always tried to distinguish ourselves from American culture, American content. And the CBC had a very clear mandate to promote Canadian culture and Canadian content.
You represent Canadian producers of content, and my question to your membership is this: Is the CBC the best vehicle available to them right now to promote that content? And if it isn't, what are some suggestions for what would be a better vehicle or what government can do to support Canadian producers of Canadian content in the broadcasting industry?
Mr. Hennessy: I would say first the CBC does do a fairly good job of promoting Canadian content, within the network that it has, but as its reach diminishes, that's a problem.
They do more Canadian content and things that you can call still identifiably Canadian content that maximize the use of Canadian resources, from the actors to the directors to the technicians and everything; they do a good job of that when they do it. The issue we have with them is that given the economic terms of doing that, there tends to be a squeeze; so there's business unhappiness in terms of the relationship, but a respect for their intent.
At the same time, I go back to Mr. Séguin's point that their job is they will make identifiably Canadian content, or more of it, than anybody else will, on a relative basis. Even the CBC needs to think about how this programming will sell.
Does it have to be identifiably Canadian? Do we need to be slapped in the head and reminded where we are and where we live, although we like when we see things?
When we go to Cannes or Berlin or trade shows now around the world, the respect that Canada is starting to get is important. Some of it comes from support of the CBC, and a lot of it comes from support of commercial broadcasters.
I think the question came up that they have to get outside of the box, too. The box is broken, or — I don't know quite what the analogy is, but it is leaking. I will leave it at that.
The Chair: I want to reiterate, Mr. Hennessy, that you are setting a tone for the next few weeks, and we really appreciate the tone not only of the presentation but also of the dialogue with the members.
I would like to take two seconds for housekeeping. Next week, on Tuesday, the Friends of Canadian Broadcasting will be appearing on Tuesday morning. On Wednesday we will have the Privacy Commissioner participating on the practice of collecting and analyzing consumer data from telecom companies; that is outside of this study. That's on Wednesday night.
The following week we will have Konrad von Finckenstein, who used to be chair of the CRTC, appearing on the February 11. Florian Sauvageau and Daniel Giroux, who are specialists on broadcasting, will be appearing on February 12. And still to be confirmed, the CRTC on February 25 and the CBC on February 26.
Senator Plett: Is it possible, chair, to have a short steering committee meeting after? I'm not sure whether our clerk asked you.
The Chair: Yes, if the deputy chair is available.
Mr. Hennessy, once again, thank you, and honourable friends, glad to have seen you, and see you on Tuesday morning.
(The committee adjourned.)