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Broadcasting Decision CRTC 2003-398
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Ottawa, 13 August 2003
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Canadian Broadcasting Corporation
Across Canada
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Applications 2003-0353-7 and 2003-0354-5
Broadcasting Public Notice CRTC 2003-26
15 May 2003
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Licence amendments for the French- and English-language television networks of the Canadian Broadcasting Corporation
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The Commission approves the applications requesting the removal of the conditions of licence restricting the broadcast of non-Canadian feature films during peak viewing hours.
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Background
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1.
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In Licences for CBC English-language television and radio renewed for a seven-year term, Decision CRTC 2000-1, and Licences for CBC French-language television and radio renewed for a seven-year term, Decision CRTC 2000-2, both dated 6 January 2000 (Decisions 2000-1 and 2000-2), the Commission imposed conditions of licence on the Canadian Broadcasting Corporation (CBC) that placed restrictions on the broadcast of non-Canadian feature films on its English- and French-language television networks. In the case of both network licences, condition of licence 2 reads as follows:
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2. (a) Subject to (b) below, the licensee shall not broadcast in the peak viewing period (7 p.m. to 11 p.m.) any non-Canadian feature film from Category 7d that was:
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- Theatrically released in Canada within two years from the date the film is broadcast by the licensee or,
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- Listed within the top 100 films of Variety magazine's list of top grossing films in the United States and Canada, within the 10-year period preceding the date the film is broadcast by the licensee.
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(b) The CBC may broadcast for a maximum of 36 months from the beginning of the licence term feature films referred to in a) for which the CBC already holds the broadcast rights at the time of this decision.
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2.
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The 36-month period referred to in paragraph 2(b) above was set to terminate on 1 September 2003. This delay in the introduction of the full condition of licence requirements was to allow the CBC sufficient time to broadcast non-Canadian feature films for which it had already purchased broadcast rights. The Commission's decisions required the CBC to file annual reports on its performance in meeting its commitments and the Commission's requirements.
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3.
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On 18 March 2003, the CBC filed applications requesting that the Commission amend each of the two television network licences by deleting the above condition of licence 2. The Commission announced receipt of the applications in Broadcasting Public Notice CRTC 2003-26, 15 May 2003, and invited interested parties to submit written interventions by no later than 13 June 2003. Forty-eight interventions were filed in respect of one or other or both of the CBC's applications, and thirty-six of these were in support. Twelve parties either opposed the applications in their interventions or submitted comments outlining certain concerns. The CBC responded to interventions in a letter dated 23 June 2003.
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4.
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In the following section of this decision, the Commission summarizes the CBC's arguments in support of its applications, and the views expressed in the interventions.
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Positions of the parties
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CBC
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5.
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In support of its request that the Commission delete the condition of licence restrictions on the broadcast of popular non-Canadian films during peak viewing hours, the CBC submitted that it must be permitted to provide its audiences with programs representing the best the world has to offer if it is to fulfil its mandate as Canada's national public broadcaster. The CBC noted in this regard the statement contained in section 3(1)(l) of the Broadcasting Act (the Act), as part of the broadcasting policy for Canada, that the CBC, "as the national public broadcaster, should provide radio and television services incorporating a wide range of programming that informs, enlightens and entertains."
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6.
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The CBC also noted that 29% of the total viewing hours that its programming attracts is attributable to viewers who receive the CBC television network signals off air, and who thus tend to depend heavily on the CBC, not just for Canadian programming, but also for non-Canadian films. It added that an open and orderly marketplace for both French- and English-language feature films has developed in Canada, and that this stability has been unaffected in any negative fashion by its presence as part of that market. The CBC further contended that its strategic direction does not rely on non-Canadian feature films, and that the CBC's strength is demonstrated in its Canadian programming schedules, wherein Canadian cinema receives pride of place.
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Interveners
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7.
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La Société des auteurs de radio, télévision et cinéma and Union des artistes intervened in support of the CBC's application for an amendment to the licence for its French-language television network, noting in particular the CBC's support of Canadian cinema. A number of Canadian independent producers, and Friends of Canadian Broadcasting, were among others who also supported one or other or both of the applications. The Canadian Film and Television Production Association, however, proposed an approach under which the conditions of licence for both networks would remain in place, but with a further delay of one year in their implementation. It suggested that this one-year grace period would provide the Commission sufficient time to undertake a larger review of Canadian drama programming on television.
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8.
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Television broadcasters such as Bell Globemedia Inc. (CTV), CHUM Limited (CHUM), Craig Media Inc., Newfoundland Broadcasting Company Limited and TVA Group Inc. (TVA) opposed the applications, as did the Canadian Association of Broadcasters. L'Association des professionnelles et professionnels de la vidéo du Québec also stated that it was strongly opposed to the deletion of the condition of licence requirements. According to the opposing interveners, there has been no change in the broadcasting environment to justify removal of the conditions of licence imposed by the Commission in its January 2000 decisions. Among other things, they argued that the scheduling of popular non-Canadian films during peak evening viewing hours was inconsistent with the role and mandate of the CBC. They expressed concern that, by competing with other Canadian television licensees for broadcasting rights, the CBC has inflated the cost of such programming. They stated further that viewers have easy access to foreign films through services provided by broadcasters other than the CBC and through video rentals. Certain of these views were also expressed in the comments filed by TQS inc. (TQS).
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9.
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Concerns regarding the CBC's request, and its implications for the French-language television network in particular, focused on the relatively low number of non-Canadian feature films aired on that network in the recent past that have had French as their original language of production, and the fact that a large number of such non-Canadian films have had the U.S. as their source. Specifically, interveners noted that 96% of the 53 non-Canadian films broadcast on the network during the 2001 broadcast year were English-language productions, and that 85% were produced in the U.S. The opposing interveners added that 37 of the non-Canadian feature films aired that year, or almost 70%, qualified as "blockbusters", e.g. films that the CBC, as of 1 September 2003, would be prohibited from broadcasting during peak viewing hours under paragraph 2(a) of its conditions of licence (absent paragraph 2(b)), and that only two of these films were originally produced in French. This number contrasted with the number of non-Canadian blockbusters, eleven films in all, that aired on the English-language television network during the same period.
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10.
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According to these interveners, condition of licence 2 does not prevent the CBC from offering its audiences a variety of high-quality, internationally-acclaimed non-Canadian feature films. They suggested that there is ample creative, innovative film fare available that would serve to distinguish the CBC's French-language network service from those of privately-owned television broadcasters. Interveners noted, however, that it is the CBC's practice to purchase broadcasting rights to feature films only from Canadian distributors. They added that, although the number of feature films produced in France, for example, has been steadily increasing, the number of these films that find distribution in Quebec has been decreasing. The interveners stated that this is because Canadian distributors are reluctant to acquire rights to such films without the assurance that the rights can then be sold to a conventional television broadcaster, whether publicly or privately owned.
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CBC's reply to interventions
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11.
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In its reply, the CBC argued that none of the private broadcasting groups who opposed its applications provided evidence demonstrating that the CBC's mandate "precludes the broadcast of best-of-the-world foreign feature films." The CBC dismissed CTV's suggestion that the broadcast of such programming was at odds with the Act's requirements, or most particularly with that of section 3(1)(m)(i), which states that the CBC's programming should be "predominantly and distinctively Canadian". The CBC noted that its English- and French-language networks, respectively, achieved levels of 86% and 87% Canadian content during peak viewing hours in the 2001 broadcast year and that, for both networks, the figure rose to 93% in that year over the fall-winter-spring period. The CBC stated:
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We are quite confident that.our programming meets and exceeds the "predominantly and distinctively Canadian" requirements of the Act, and that we are able to do so without compromising our ability and freedom to offer Canadians a view of the best-of-the-world films that they might not otherwise see.
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12.
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The CBC also questioned CHUM's suggestion that removal of condition of licence 2 would allow the CBC to compete head-to-head with private broadcasters, and challenged the intervener's contention that this would be inconsistent with the CBC's mandate. The CBC argued that the intervener offered no evidence that this mandate precluded the CBC either from competing with private broadcasters or from broadcasting feature films. As noted by the CBC, sections 46(1)(c) and (d) of the Act, respectively, specifically permit it to "originate programs, secure programs from within or outside Canada, by purchase, exchange or otherwise and make arrangements necessary for their transmission", and "make contracts with any person, within or outside Canada, in connection with the production or presentation of programs originated or secured by the Corporation." The CBC added:
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Given our commitment to Canadian programs, in terms of the broadcasting of foreign feature films, it is in fact impossible for CBC/Radio Canada to go "head-to-head" with a broadcaster such as CHUM with its airing of over 20 feature films per week. Indeed, at 93% Canadian content in prime time between September and April, the CBC/SRC would be hard pressed to offer even one non-Canadian movie per week. [emphasis added by the CBC]
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13.
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The CBC noted the further argument advanced by both CTV and CHUM, as well as by TVA and TQS, that the CBC's activities in the marketplace "have caused prices for foreign feature films to rise in Canada." In this connection, the CBC stated that the number of non-Canadian blockbusters aired during peak viewing hours in the 2001 broadcast year on the French- and English-language television networks, respectively, represented only 3.7% and 1.1% of the total inventory of 1,000 films that it would have been precluded from broadcasting under condition of licence 2 (a). The CBC characterized as difficult to comprehend ".the suggestion that a licensee who acquires just 3.7% or 1.1% of an inventory of 1000 titles in the market can have an influence on the overall level of prices."
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The Commission's determination
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14.
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The Commission has considered the record of this proceeding, and accepts the CBC's arguments, as presented in its application and in its response to interventions. Specifically, the Commission considers that the broadcast of popular non-Canadian films in peak viewing hours is not inconsistent with the CBC's mandate under the Act. While the Act clearly requires the CBC to focus on Canadian programming, it contemplates that a certain amount of such non-Canadian programming could be included in the CBC's schedules. In the Commission's view, it is also reasonable that some portion of that could be aired during peak viewing hours, particularly programs representing the best that the world has to offer.
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15.
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The Commission is also persuaded by the CBC's arguments that the number of non-Canadian blockbusters aired on the English-language television network during peak viewing hours has not been excessive. More specifically, it finds that the numbers fall short of the levels that might be considered as upsetting the balance between programming genres that is appropriate for the national public broadcaster, as discussed in Decisions 2000-1 and 2000-2.
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16.
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The Commission has considered this matter bearing in mind, among other things, the high levels of Canadian content that have characterized the schedules of both networks for many years. As mentioned, and consistent with the CBC's mandate as the national public broadcaster, fully 86% and 87% of the programming aired on its English- and French-language networks, respectively, during the peak viewing hours of 7 p.m. to 11 p.m. in the 2001 broadcast year, was Canadian content. Moreover, as the CBC pointed out, although the thirty-seven non-Canadian blockbusters broadcast during peak viewing hours on the French-language network exceeded the number aired during that period on the English-language network, the larger number represented less than 1.5% of the total number of peak viewing hours.
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17.
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The Commission would be concerned if, in the future, the number of non-Canadian blockbuster films were permitted to erode the high levels of Canadian content that viewers have traditionally expected of their national public broadcaster, and that the Act and the CBC's own policies and strategies clearly dictate, particularly during peak viewing hours. The Commission is satisfied, however, that this concern, and any potential for upsetting the balance between programming genres on the two networks, are effectively dispelled by the CBC's past record and continuing commitments to the scheduling of a large preponderance of Canadian content during peak viewing hours. The Commission is also confident that the CBC will make every effort to ensure that the non-Canadian element of the programming aired on its two television networks continues to expose Canadians to programming from a broad and diverse range of countries and cultures. As stated by the CBC in its applications:
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It is of utmost importance that the national public broadcaster should be able to continue presenting a window on the world, not only in terms of reporting, but also in terms of cultural programming. Our Canadian culture is greatly enriched by contact with the best products created by others outside our borders, and by exposure to the best they have to offer.
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18.
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The Commission, in light of all of the above, considers that there is no need to restrict the CBC's acquisition and broadcast of popular non-Canadian feature films during peak viewing hours, and that condition of licence 2 contained in Decisions 2000-1 and 2000-2 is no longer necessary. It therefore approves the CBC's applications for licence amendments by removing that condition from the licence of each of the CBC's English- and French-language television networks.
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Other matters - the language of production and sourcing of non-Canadian films on the French-language television network
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19.
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Several interveners noted that the large majority of the non-Canadian films aired by the CBC's French-language network in the 2001 broadcast year were English-language productions. Only two of the thirty-seven blockbusters broadcast that year had French as their language of production. As noted by these interveners and confirmed by the applicant, the CBC purchases broadcast rights to non-Canadian films exclusively from Canadian distributors. The CBC noted that films are among the most highly appreciated program categories among francophone viewers, and acknowledged that the selection of film titles it purchases relates in part to their box office success.
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20.
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Although not directly relevant to the CBC's applications to delete condition of licence 2, the Commission considers that the matter of the original language of films is an important issue. In this regard, the Commission notes that in February of this year, the CBC announced a new mission and strategic positioning statement for its French-language television network service. According to that statement:
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[TRANSLATION] The CBC's French-language television network differs from its English-language counterpart. For francophones, who are a minority in this country and on the North American continent, the French-language service is an essential and fundamental institution. The public broadcaster's French-language service ranks second in the world only to that of France [and] plays a crucial role among francophones worldwide.
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21.
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Consistent with the spirit of the above statement, the Commission considers that the CBC should place significant emphasis on the broadcast of original, French-language, non-Canadian feature films for its francophone audiences, films that would not generally be available to these viewers from other broadcast sources. The Commission intends to review the CBC's performance in this regard at the time of next licence renewal. To this end, the Commission continues to require both networks of the CBC to report annually on their broadcast of non-Canadian feature films during peak viewing hours, as stipulated in Appendix 1 to Public Notice 2000-1.
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Secretary General
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This document is to be appended to each licence. It is available in alternative format upon request and may also be examined at the following Internet site: http://www.crtc.gc.ca
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Date Modified: 2003-08-13