ARCHIVED - Transcript, Hearing 11 December 2012
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Volume 1, 11 December 2012
TRANSCRIPTION OF PROCEEDINGS BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-560, 2012-560-1, 2012-560-2 and 2012-560-3
140 Promenade du Portage
11 December 2012
In order to meet the requirements of the Official Languages Act, transcripts of proceedings before the Commission will be bilingual as to their covers, the listing of the CRTC members and staff attending the public hearings, and the Table of Contents.
However, the aforementioned publication is the recorded verbatim transcript and, as such, is taped and transcribed in either of the official languages, depending on the language spoken by the participant at the public hearing.
Canadian Radio-television and Telecommunications Commission
To consider the broadcasting applications listed in Broadcasting Notice of Consultation CRTC 2012-560, 2012-560-1, 2012-560-2 and 2012-560-3
Moira LetourneauLegal Counsel
Tracy SpeigelHearing Manager
140 Promenade du Portage
11 December 2012
- iv -
TABLE OF CONTENTS
PAGE / PARA
OWN Inc.6 / 35
Make Believe Media Inc.191 / 1127
PANEL OF INTERVENERS
Mountain Road Productions194 / 1144
Sondhi Productions Inc.198 / 1158
Pyramid Productions Inc.203 / 1181
OWN Inc.223 / 1320
- v -
PAGE / PARA
Undertaking223 / 1320
--- Upon commencing on Tuesday, December 11, 2012 at 0859
1 LE PRÉSIDENT : Bonjour, mesdames et messieurs, et bienvenue a cette audience publique.
2 Aujourd'hui, nous allons examiner une série de questions liées à the Oprah Winfrey Network, dirigé par Corus Entertainment.
3 OWN holds a licence to operate a national English-language specialty television service that provides educational programming and learning opportunities for adults. This licence provides certain privileges, one of which is genre protection.
4 This means that no other specialty service can broadcast the same type of educational programming, the same way there can only be one Food Network Canada and one History Television.
5 Each service's unique role is outlined in its nature of service, which is a condition of licence. In addition, cable and satellite companies must give their customers the option of subscribing to these services.
6 The Commission grants such licences to encourage diversity of programming in the Canadian broadcasting system. It is therefore important for specialty services to broadcast programming that is consistent with their nature of service to ensure that they do not compete directly with another service.
7 It should also be noted that specialty services that obtain such a licence must spend more to create and broadcast higher amounts of Canadian content.
8 In 2011 the Commission renewed the licences of Corus' Specialty Television Services. At the time the Commission found that OWN was not complying with the nature of service as defined by its condition of licence. OWN was directed to either file a report detailing the measures it had taken to come into compliance or submit another proposal.
9 Corus subsequently filed two applications on behalf of OWN, neither of which was consistent with our directions, and as a result the Commission did not process those applications.
10 Consequently, the Commission has called Corus to this public hearing to discuss its apparent ongoing noncompliance in further detail. We expect Corus to show cause as to why a mandatory order should not be issued requiring the licensee to comply with its conditions of licence or that its licence should not be suspended or revoked.
11 We will also consider two new applications by Corus. The first application is seeking to amend OWN's licence, while the second is for a new licence to operate a national English-language specialty Category B service.
12 Before we go much further, we will remind Corus that we intend to measure very carefully every point that you bring forward to us and as the case with all proceedings our goal is to ensure that the integrity of the Broadcasting Act and the Commission's regulations are respected, and this will certainly be reflected in our decision.
13 Maintenant, je vous présente les membres du comité d'audition :
14 - Suzanne Lamarre, conseillère régionale du Québec; and
15 - Peter Menzies, conseiller régional de l'Alberta et des Territoires du Nord-Ouest; et
16 - moi-même, Marc Patrone, conseiller national du CRTC, et je vais présider cette audience.
17 The Commission team assisting us today consists of:
18 - Tracy Speigel, Hearing Manager and Broadcasting Analyst;
19 - Moira Letourneau and Leigh-Anna Gates, Legal Counsel; and
20 - Linda Roy, Hearing Secretary and Supervisor of Public Hearings.
21 I would now invite the Hearing Secretary Linda Roy to explain the procedures.
22 Madame la Secrétaire.
23 THE SECRETARY: Thank you, Mr. Chairman. Merci, Monsieur le Président.
24 I would like to go over a few housekeeping matters before we start to ensure the proper conduct of the hearing.
25 When you are in the hearing room we would ask that you please turn off your smartphones and beepers as they are unwelcome distractions and they cause interference on the internal communication systems used by our translators.
26 You can examine all documents on the public record of this proceeding in the examination room, which is located in the Papineau Room.
27 We would like to remind participants that during their oral presentation they should provide for a reasonable delay for the interpretation, while respecting their allocated presentation time.
28 There is a verbatim transcript of this hearing being taken by the court reporter sitting at the table to my right, which will be posted tomorrow on the Commission's website. If you have any questions on how to obtain all or part of this transcript, please approach the court reporter during a break.
29 Please note that the Commission will also be tweeting the documents during the hearing at @crtchearings using the hashtag #CRTC.
30 Just a reminder that pursuant to section 41 of the Rules of Practice and Procedures, you must not submit evidence at the hearing unless it supports statements already on the public record. If you wish to introduce new evidence as an exception to this rule, you must ask permission of the panel of the hearing before you do so.
31 Now, before we start with OWN's presentation, Mr. Chairman, I would like to introduce a document, which I will distribute right away to the OWN panel, and it is Exhibit CRTC-1, for the record.
32 This exhibit is a working staff document consisting of staff analysis. The document is intended to facilitate discussion and has not been adopted by the panel. So I will give you a copy.
33 THE SECRETARY: So, Mr. Chairman, we will now proceed with OWN's presentation. Appearing for OWN is Mr. John Cassaday.
34 Mr. Cassaday, I would ask that you please introduce your panel for the record and you will then have 30 minutes for your presentation.
35 MR. CASSADAY: Thank you. Good morning.
36 Before we begin this morning, we all lost a special friend this weekend in Alain Gourd. I first met Alain when he was the Deputy Minister in 1990. When I first joined this industry, he was extremely warm to me and he told me about his family's longstanding involvement in broadcasting.
37 Over the years he has done just about everything you can imagine. He has been a great friend of our industry and we would just like to begin this morning by offering our condolences to his family and remembering what a great colleague, friend and ambassador to our industry we lost this weekend.
38 Good morning, Mr. Chair, Commissioners and Commission staff. My name is John Cassaday and I am the President and CEO of Corus Entertainment.
39 With me today, on my left, are:
40 - Doug Murphy, Executive Vice President of Corus Entertainment and President of Corus Television; and
41 - Karen Phillips, Vice President, Network Program Operations.
42 On my right are:
43 - Sylvie Courtemanche, Vice President, Government Relations for Corus; and
44 - John MacDonald, Vice President, Television and Head of Programming and Production.
45 I would like to add a brief word about John, who has recently joined our team at Corus and who is appearing before the Commission for the first time. John has just recently returned to Canada following a successful 25-year career in the United States in the Media and Entertainment Industry. Most recently, he was the Chief Operating Officer and Executive Vice President for the Oprah Winfrey Network in the United States. In that capacity he worked closely with Corus on the Canadian launch of OWN.
46 At the table behind me, from my left, are:
47 - Kit Redmond, who is the Chief Executive Officer and Executive Producer of RTR Media Inc.;
48 - Vibika Bianchi, Vice President, Original Programming, Lifestyle, Reality and Factual Entertainment; and
49 - Gary Maavara, our Executive Vice President and General Counsel for Corus.
50 So why are we here?
51 The Commission has called us to this hearing to discuss OWN's adherence to its nature of service definition. This type of hearing is always daunting but we appear before you today engaged and enthusiastic about Oprah Winfrey Network Canada and our programming plans.
52 When we purchased Canadian Learning Television in 2008, it was struggling to find an audience and it did not have a sustainable or viable business plan.
53 The coincidental introduction of the Commission's digital migration rules meant that we needed to take action. In a television environment of almost unlimited viewer choice, Canadians were voting no to CLT.
54 We set out to preserve the viability of the service and give it the best opportunity for growth that we could. We built on the program schedule that had prevailed for almost a decade, all in accordance with the terms of the licence, which had undergone 11 different Commission processes prior to our acquisition of CLT in 2008.
55 Since the Commission's finding regarding OWN Canada's compliance with its nature of service in the group-based licensing decision, we have made every attempt to address these concerns.
56 We, in fact, have made numerous proposals to resolve the Commission's concerns; however, these have clearly not met with your expectations. The Commission believes that we have not sufficiently embraced our educational mandate, which is the basis for our Category A licence.
57 We are here today to better describe the initiatives we have taken and to describe proposed changes to our programming schedule. We hope to demonstrate that through our revised programming approach we will deliver on our commitment to provide a Category A educational service in compliance with the nature of service definition.
58 MS COURTEMANCHE: CLT was first licensed in 1996 as part of what was the last major licensing round of analog specialty services.
59 Following the month-long 1996 specialty and pay licensing hearing, the Commission licensed 25 different English, French and third-language pay and specialty television services.
60 The terms of operation for these 25 new services were set out in individual conditions of licence since such conditions were not standardized at that time.
61 The Commission licensed CLT with a mandate to provide educational programming that was to be of high value to adults. In fact, the Commission said in its decision that the educational programming was to be:
"...designed to interest and engage the viewer and contribute to a 'learning culture'."
62 CLT had proposed to achieve this goal through a variety of methods, including accredited courses in basic adult education, which would include programming shared between CLT and ACCESS TV - Alberta, now operating as CTV Two, a co-owner of the service at the time. The schedule would be in programming blocks of two to five hours repeated throughout the broadcast day.
63 However, CLT always struggled as an analog specialty service. There are a number of reasons for this and no doubt many of those reasons relate to how the service was first licensed.
64 CLT's nature of service was revised slightly in its 2004 licence renewal decision. It was at that time that the notion of having Category 5(a) programming with clear learning objectives was first introduced.
65 MR. MURPHY: One of the many questions we have asked ourselves about Oprah Winfrey Network Canada is whether this service actually meets the original licensing expectations and more specifically whether it interests and engages viewers and contributes to a learning culture. Our answer is an unqualified yes.
66 We submit that OWN Canada contributes far more to providing interesting content and engaging viewers and contributing to a learning culture than it has at any time in the past.
67 Oprah Winfrey Network Canada represents a brand that is devoted to education and self-improvement. OWN Canada's mission is to educate its viewers through formal and informal programming, and we believe that the revised programming schedule we filed on November 30th, and which is attached, will be a catalyst to ensure OWN Canada more fully delivers on this mission.
68 We have placed a large volume of material on the record that supports this view. Certainly this is how our audiences feel about OWN.
--- Video presentation
69 MR. MURPHY: As you can see, the educational and life-enhancing programs broadcast on Oprah Winfrey Network Canada have resonated with our audiences. And we want to build on the $10.3 million investments OWN Canada has made in Canadian programming since our launch in March 2011.
70 Our message to you today is that we are not only embracing proposed changes to OWN Canada's programming schedule but that these changes excite us.
71 The changes that we propose to make to OWN Canada's programming schedule have real and substantial costs associated with them. They include new proposed series concepts that represent additional investments for English-language certified Category 5(a) programming directed to adult audiences.
72 Our relationship with OWN in the U.S. provides Canadian independent producers with an opportunity in the United States and around the world for programming they have produced for Oprah Winfrey Network Canada. In fact, our agreement with the Oprah Winfrey Network in the U.S. anticipates that the two networks will co-develop programming for broadcast on both our networks. Such international exposure has resulted in significant financial benefits for independent producers, over and above the licence fees paid by OWN Canada.
73 Karen Phillips will now outline how we intend to change the Oprah Winfrey Network Canada's programming schedule.
74 MS PHILLIPS: So how do we plan to address the outstanding compliance issues?
75 We have developed a plan to continue the operation of OWN Canada under its current Category A licence and based on its existing nature of service and conditions of licence.
76 To do this we propose to do two things.
77 First, we recommend redefining our broadcast day from an 18-hour day to a 24-hour day. We have filed a Part I application on November 8th to this end and the Commission included it as a hearing item on November 28th. This will increase the Canadian Content and Category 5(a) programming on the Oprah Winfrey Network Canada.
78 Second, we have revamped the program schedule to ensure that OWN Canada's programming complies in all respects with the current nature of service definition as interpreted by the Commission. We filed our detailed revised program schedule with the Commission on November 30th.
79 Before we detail the specific changes we propose to make, we would like to make the following general observation.
80 It is important to understand that in our efforts to comply with the Commission's conditions for OWN Canada, we found that subjective regulatory rules and policies have made our objective of dealing effectively with the compliance concerns a difficult challenge. This is because what is acceptable to the Commission as a certified Category 5(a) program or series is not entirely clear to us. We have prepared a short video as a demonstration of this fact.
--- Video presentation
81 MS PHILLIPS: When you look at these videos the question becomes which program should qualify as Category 5(a) content? We believe all four should but it is not clear given the existing framework that they would since some of these series have not received Category 5(a) certification.
82 But more importantly, the reason we believe they qualify is because each one reflects the three key elements that we believe should be present in certified Category 5(a) programming:
83 - first, the detailed information provided in the program can relate to a wide variety of topics and is used by the viewer primarily to acquire knowledge. This is consistent with the existing definition of Category 5(a) programming;
84 - second, the program involves a qualified individual and/or subject-matter expert; and
85 - third, the program demonstrates clear learning objectives through discussion, counselling, visuals, graphics, practical examples and/or presentation of research, which would be consistent with the requirement in OWN Canada's licence to have Category 5(a) programming with clear learning objectives.
86 Last year, Corus participated in an initiative with broadcasters, the production community and Commission staff to obtain greater clarity as to what would qualify as observational documentaries for Category 2(b). In a rules-based system, this type of guidance is crucial.
87 This initiative was successful in developing criteria that have helped broadcasters, independent production community and Commission staff with its work on what type of CRTC certification these Canadian programs should receive.
88 We would like to develop with these parties criteria that will assist us in the future in relation to the development and creation of new Category 5(a) programming. The three elements we have described reflect our effort to begin the discussion.
89 MR. MacDONALD: As explained earlier, the issues regarding OWN Canada's programming schedule relate to the Category 5(a) programming offered on the service.
90 To meet the Commission's definition of Category 5(a) programming, our nature of service definition and the requirement that this programming have clear learning objectives, we developed the following guidelines and parameters in the construction of the proposed programming schedule which we detailed in our November 30th letter:
91 1. Non-accredited Category 5(a) programming will be limited to basic or skills-related formal educational programming for adults. Any life enhancing programming that is identified as Category 5(a) programming must either have received certification as Category 5(a) programming or must be associated with a course offered by an accredited learning institution.
92 Second, OWN Canada will construct its programming schedule with these four types of Category 5(a) programs.
93 Third, there must also be reasonable variety as to the type of basic and credit-based programs offered on the service.
94 We estimate that over a period of one year there could be between six to fifteen Category 5(a) credit-based courses tied to the programs on our schedule.
95 In the proposed programming schedule that we submitted, there are twelve courses to which programs are accredited.
96 We also included in our November 30th letter a number of other specifications related to our proposed programming schedule, which we would be happy to discuss with you during the question phase of this hearing.
97 The most exciting change to Oprah Winfrey Network Canada's schedule is, without a doubt, the two new series that we intend to develop and broadcast on the service. We provided some initial concepts in our November 30th submission, and there is no doubt that these concepts not only have clear learning objectives, but they also represent significant new investments in a category of programming that has seen little, if any, such investment by anyone else in the last two decades.
98 We will start with a $500,000 investment for Fiscal 2013, and $750,000 for Fiscal 2014. We believe that this level of investment should provide for approximately 30 new half-hour episodes in 2013, increasing to 50 episodes in 2014.
99 We are enthusiastic about these new program concepts, as they are not restricted to just on-air opportunities for viewers. Each concept is supported by an online component that will provide clear learning and instructional opportunities for the viewers.
100 Subject experts in their fields will provide viewers with concrete opportunities to acquire useful and relevant knowledge.
101 MR. CASSADAY: Canadian audiences have spoken. Oprah fans are dedicated and loyal viewers. You have ample evidence of this in the over 200 supporting interventions that we have received. They believe in Oprah's learning culture. People who wish to learn will, and do, gravitate to Oprah Winfrey Network Canada.
102 Independent producers also believe in OWN Canada's learning values, as you will see in our next short video.
--- Video presentation
103 MR. CASSADAY: You can see that the system clearly benefits from the continued presence of OWN Canada.
104 Mr. Chair and Commissioners, we are here today with a solution that serves the interests of our viewers, who have attached great value to OWN Canada. And, more importantly, it serves the objectives of the Broadcasting Act.
105 You have our unequivocal commitment that, with greater clarity of the parameters of Category 5(a) programming, Corus will ensure that Oprah Winfrey Network Canada is 100 percent compliant with its Nature of Service.
106 We believe that Canadian viewers support this choice as the most appropriate solution for all concerned.
107 For all of the reasons that we have provided today, we urge the Commission not to suspend or revoke the licence of Oprah Winfrey Network Canada or to issue a mandatory order relating to Oprah Winfrey Network Canada's adherence to its Nature of Service definition.
108 This completes our presentation. Thank you for your attention. We would now be pleased to answer your questions.
109 THE CHAIRPERSON: Thank you very much for your presentation, and thank you, Mr. Cassaday, for paying tribute to Alain Gourd. He was a real gentleman, and we extend our sympathies to his family.
110 I have to say that it's a little daunting having Oprah looking at us right now from a life-size poster, but as long as we can keep her smiling, I guess it will be okay.
111 THE CHAIRPERSON: In the interests of clarity, and just so we are all on the same page, I want to spend a few minutes breaking down some of the key requirements that form the basis of your Nature of Service definition.
112 These are the key obligations that were imposed on you, the licensee, at the time of licensing, and they formed part of the rationale for the awarding of a Category A licence.
113 As I mentioned earlier in my opening comments, that privileged status carries with it a level of responsibility, as you know, relative to the programming offered.
114 These were the commitments that were made to this Regulator by you, and to the public at large.
115 First, OWN must provide formal and informal educational programming and learning opportunities which generally focus on adult education.
116 Second, OWN's educational programming must come from a full spectrum of basic, credit-based, skills-related and life-enhancing programs. Many of OWN's educational programs will be undertaken in cooperation with colleges, universities and training institutions.
117 And, third, not less than 55 percent of OWN's programming during the broadcast day shall be drawn from Category 5(a), which is formal education, and shall have clear learning objectives.
118 Just to recap, in terms of how we got here today, on July 27th, 2011, the Commission found that OWN was out of compliance with its conditions of licence related to its Nature of Service definition.
119 Since that decision, have you made any programming changes aimed at addressing -- specifically addressing -- the concerns set out in that decision?
120 MR. CASSADAY: Thank you. I note in your opening remarks that you carefully used the word "assumed" -- I can't find my actual note on that now, but the point is that you indicated a willingness to consider the possibility that we simply had a difference of opinion here.
121 It is true that in July you pointed out to us that you believed we were out of compliance, and since that time we have had, I think, quite fulsome discussions describing why we believed we were in compliance. Those discussions summarily came to a close, much to our surprise, before we had an opportunity, really, to, I think, get a full understanding of precisely the definitions that we were looking for in Category 5(a).
122 So the first thing that I would like to say is that we want to put on the record that at no time had we ever considered that we were out of compliance or that we were even pushing the envelope. We really and truly do believe that we have been in compliance.
123 Chairman Patrone, you will probably recall from your previous life at CTV a major conflict that the owners had at that time, and in an attempt to resolve that, as the CEO of CTV at the time, I found myself in the situation where I was listening to quite disparate views, but at no time did I ever assume that any of the parties were wrong-spirited or obstinate. I really believed that they honestly had the view that they were right.
124 We brought in a gentleman by the name of Roger Fisher, who ran the Conflict Management Group out of Harvard and had been dealing with a dispute with native tribes in Africa, and had been involved in the Camp David Accord, and wrote the book "Getting to Yes". He reminded us that in disputes such as the one we were having at that time, a lot depends on what he called the view from your village bell tower. He said that you could be looking east and see sunny skies and looking to the west and see storm clouds coming in. One person might say it's a bad day, another might say it's a great day.
125 What he encouraged us to do was to not focus on our positions, but to focus on our interests.
126 And the position here might be that Corus has knowingly been out of compliance, that they have pushed the envelope and they deserve to be punished. Our view is that we believe we are in compliance -- our position, rather, is that we believe to have been in compliance and we are surprised that we find ourselves in this position today.
127 But I think the interest of everybody is to try to find a way to preserve this service, which was, effectively, going out of business until we took it over. It had no audience. In our business, when you are generating hash marks, you cannot survive.
128 We have grown that audience by 400 percent since we acquired it. We have a schedule that we are extremely proud of. But, most importantly, we are here today to talk about even broadening the definition of 5(a) to ensure that we meet the requirements and desires of the Commission to provide a more full spectrum of service than the one we offer today, one which, as I said, we are quite proud of.
129 THE CHAIRPERSON: I certainly respect the fact that there are many challenges in trying to turn around a business that was generating hash marks, as you stated. However, I find myself wondering, based on what you just said, that you didn't really accept the verdict of the Commission back in July of last year, when it rendered Decision 2011-446. That was a decision by the Regulator. It came to you, and then, a year and a half later, we are kind of at the same point that we were back then.
130 MR. CASSADAY: We accepted the burden of responsibility to explain why we believed we were in compliance.
131 The words "full spectrum", in our view, should not be viewed as limiting, but rather as expansive.
132 In other words, to be in compliance, the service should be allowed to use any educational formats that are at its disposal, and I think we did.
133 It was our view that, effectively, the condition was amended by interpreting the word "will" to "must". As a result, it ended up making, in our view, the definition of educational programming more narrow than we interpreted it.
134 But, as I said, our belief is that we have saved the service, that we are doing a tremendous job in helping enrich the lives of Canadians, that we are doing a tremendous job in opening up windows of opportunity for independent producers, and we are very much interested in hearing what we can do in addition to that to meet your needs, including the proposal that we have on the table today to introduce two additional formal education programs, representing a significant investment in a category of programming that for the last ten years has seen almost no investment.
135 So, again, Mr. Chair, our view is that we are here to learn, we are here to build this service, and we are here to ensure that it is a service that we can all be proud of, and that we are all convinced is in absolute compliance with its Nature of Service.
136 THE CHAIRPERSON: And I don't know anybody who is questioning the popularity of the service.
137 I'm sorry, you have your finger on the trigger, did you want to add something?
138 MS PHILLIPS: Yes, I just wanted to add that while we filed our response feeling that we were compliant with the Nature of Service, and we explained all of those reasons, we tried to get further clarification on just what it was that the Commission felt was non-compliant, and the answer to that question seemed to be the lack of the number of courses that we used against what we referred to as our accredited programming, the courses from the colleges, the universities, the institutions.
139 So, with that knowledge, what we did was to build on that, and the schedule that we submitted recently looks at courses that involve television, cuisine, journalism, health, crime and social studies, organization.
140 Throughout this process we felt that we had listened to what the Commission said about what that full spectrum meant and that we had complied with that by introducing more courses that we would associate to our programming.
141 THE CHAIRPERSON: Commissioner Lamarre will be asking more questions headed in that direction --
142 MR. CASSADAY: Mr. Chair, could I just add one addendum?
143 THE CHAIRPERSON: Please, go ahead.
144 MR. CASSADAY: My colleague Ms Courtemanche would like to address, specifically, your question about why haven't we seen anything new up until this particular point.
145 THE CHAIRPERSON: Well, you bring forward measures -- and you have stated in your recent submissions, the ones dated November 8th and 30th -- which go on to detail concrete actions and investments aimed at increasing the variety of programming and so forth. So I find myself wondering whether or not these options were open to you, say, shortly after the 2011 decision, sometime last year or --
146 MR. CASSADAY: Are you thinking about the option of, say, a Category B licence, for example?
147 THE CHAIRPERSON: I was thinking more specifically about the programming --
148 MR. CASSADAY: Programming --
149 THE CHAIRPERSON: -- the programming end of it, yes.
150 MS COURTEMANCHE: If I could just sort of digress a little bit and go back, and then come forward.
151 When we first got the Commission's decision, the first thing we did was that we sat down internally within Corus, with all of the programmers and everyone, and said: What are our options?
152 One option was: Do we change something in the schedule of the Category A licence in order to make it compliant, or do we do things that we think will address your concerns?
153 Do we try for a Category C licence, or do we go for a Category B licence?
154 In our reflection we realized that Category C was not an option. I can go into why that is, but I'm sure that you have read the record.
155 And when we spoke with Commission Staff on whether there was really an option on Category A, we were told at the time that we would have a very, very high hill to climb, and we took that as an indication that perhaps the better solution would be to -- you know, because of the issues we were having with the Category 5(a) programming -- because you have to understand, that is really at the heart of what we are talking about.
156 These definitions are over 20 years old, and the world of education has changed tremendously since that time, and the way people want to learn, because, quite frankly, people want to learn today without having the feeling -- you know, knowing they are learning. You know, they really want to be entertained. That's what the television medium is all about.
157 So when we looked at that, we said: Okay, perhaps the best thing is to go to the Category B.
158 Going to the Category B meant that we were going to change the Nature of Service to remove the requirement to have 55 percent of formal educational programming.
159 At that point there was no need for us to change OWN, or to change what we were doing, until the Commission had ruled on it.
160 So we filed the first application, and the Commission said that it wasn't acceptable because it was conditional on a third party application.
161 Understood. We went back to it and we said: All right, we will try for another Category B that is not conditional. It is one that requires, sort of, a novel legal way of licensing, but it's a way that the Commission had done re-designations in the past.
162 I certainly spoke with Commission Counsel as to whether this was an option, and I was told that I needed to make the legal arguments, which I did.
163 That application was gazetted and we expected that it would go through a fulsome process, because normally the Commission dismisses an application before it runs the process if it is found to be incomplete. But, in this instance, we were never told that the application was incomplete. The Commission decided, without even running the process, and there were no interventions, nothing.
164 So that's why we were quite surprised, and that also explains why we didn't change the schedule, because we thought that there would be a process and, at that point, we would have a discussion about the schedule and all of those things.
165 So, after being turned down twice for Category B, then we decided: Okay, now maybe it's time to just do what we can to fix the schedule.
166 And we are here today for the reason that we have not done changes before. It goes back to the issue of: What is the correct interpretation of Category 5(a).
167 We think that Category 5(a) programming -- there is nothing in there -- when it talks about, you know, full spectrum or adult education, we see nothing in there that says it shouldn't be entertaining, that it shouldn't be compelling.
168 That's where we have an issue. We are trying to figure out how to achieve those objectives but still create compelling programming.
169 So that's why, today, we have not made those changes, because we are not exactly sure where the line in the sand is. So before we started investing and before we committed to a schedule, we wanted to have the discussion today, so that we are all clear on what everybody considers appropriate Category 5(a) programming.
170 If we had been sure of our interpretation, we could have changed the schedule before, but that's why we haven't done that.
171 I just wanted to be clear, thanks.
172 THE CHAIRPERSON: And you understand that OWN is required to be in compliance at all times.
173 Okay. On that note, before I get to my genre exclusivity questions, I would ask Commissioner Lamarre to ask her questions.
174 COMMISSIONER LAMARRE: Thank you, Mr. Chairman.
175 Just a couple of warnings, a couple of disclaimers before I start. Keep your headsets nearby in case Madam Courtemanche and I decide to get into an argument.
176 COMMISSIONER LAMARRE: It could be French, it could go fast.
177 Secondly, I will be discussing with you exactly what I think you want to discuss, the question of the Nature of Service, but in order to do that, I need to unleash the lawyer in me. So the questions may be challenging. They are meant to be, because I find that by being challenging, they help you get your point across, also.
178 From the get-go, and from your discussion with Mr. Patrone just now, I am going to tell you that I am going to set up my questions so that they seem organized. There is definitely a break in time here, I think, as Madam Courtemanche said. Basically I see, you know, what was done in the past, and the discussion we are having today is to see what needs to be done in the future.
179 First, let's talk quickly about the past. Reading through your documents and the Commission's record, what you tabled, and what you are again saying this morning, I note that you are proposing changes to your programming and you say that you are going to go forward with these changes to your programming, and you also asked for a modification in the definition of the broadcast day, which I will come back to later. And you need to make those changes in order to meet your Nature of Service obligations.
180 So, with these two proposals in mind, are we looking at an admission from Corus that currently it is not in full compliance with its Nature of Service with the OWN service?
181 MR. CASSADAY: No, absolutely not. We believe that we are in complete compliance, but we are very open to discussing broadening the definition of "education" for this network, and including a broader array of educational programs to the Oprah Winfrey Network.
182 COMMISSIONER LAMARRE: Okay. I understand that, from your perspective, broadening it may be the best option. From the Commission's perspective, the best option may be to clarify it, which may lead to broadening it, but it may not necessarily lead to that.
183 MR. CASSADAY: No. We think that we can enhance the service from the standpoint of the CRTC's view of education by broadening the array of educational options that we include, including more certified shows, some more formal education, more formal adult education, but we really look at those as enhancements to a effective program schedule as opposed to any admission that we are not in compliance today.
184 And again, obviously we are all interested in putting on programs on the television network that are going to attract audiences, but we think we can do formal education in and entertaining environment and attract audiences.
185 But again, this is, in our view, an enhancement as opposed to any admission that we have not been living up to our obligations.
186 COMMISSIONER LAMARRE: I want to go back to a couple of statements you made, Mr. Cassaday, and earlier in your presentation and answering question with Mr. Petrone.
187 And in order to do that, because I feel there is a discrepancy in something you have said and something I've read and I want to clarify it, but, let me get something straight first.
188 The July 23rd 2012 letter, do you still stand by it? Or do you feel that this morning you've brought clarification to what was said in that letter?
189 MR. CASSADAY: There have been a lot of letters on this file.
190 COMMISSIONER LAMARRE: I know, I know.
191 MR CASSADAY: And I would just like to remind myself what specifically was in that letter.
192 COMMISSIONER LAMARRE: Okay. So, let me direct you to --
193 MS COURTEMANCHE: What is the -- yes. Could you refer us to the comment in the letter that you want us to want us to confirm or just --
194 COMMISSIONER LAMARRE: Well, I -- So, okay, let's go directly to a specific section of it. From Section 42 to Section 43 because I have noted down a question and I think you've answered it, but I am not sure if you've answered it exactly how I wanted -- how I felt it should be answered.
195 In paragraph 43 -- well, 42 you do state in the second paragraph of your nature of service and in paragraph 43 you've said that you feel there is no reference to having a variety of educational programming in that subject.
196 And this morning, you actually brought up, Mr. Cassaday, you've said that, you know, within that nature of service, we are talking about full spectrum of basic credit base, et cetera, et cetera, and you feel that full spectrum, it's not limited. It should be encompassing. So, to me, that synonym to variety, so --
197 MR. CASSADAY: I think within the new answer we are trying to say is that if you can choose from the full spectrum, then there is lots of things you can choose from. To try to say you have to have the full spectrum is like how deep is the ocean. I mean, there is just -- there is just unlimited options.
198 So, our view is that we have got a broad array. We may not have every fish in the sea, but we have lots of them and if there was a particular variety of fish that is going to help move this process along and satisfy the interests of the Commission, then we are willing to look at that particular griddle as well.
199 COMMISSIONER LAMARRE: Okay. And you also said, and I thought it was also referring to "full spectrum" that somehow the will became a must and I am not sure if that's what you referred to because if it is, then you know, looking back at the way the nature of service is written, it says the licensee shall provide, tatata... that will come from a full spectrum.
200 So, the full spectrum, I will agree with you that, you know, you cannot get everything for everybody all the time, but there is an obligation there to have a full spectrum.
201 MR. CASSADAY: Yes. There is an obligation to have a fuller spectrum and we believe that -- I believe we have covered maybe six or seven specific genres where Karen can assist me in that and there are many more where we proposed here today is that broaden this to include more formal adult education.
202 Perhaps, Karen, you might just offer a few specific comments on our nature of service.
203 MS PHILLIPS: When you look at the full spectrum, first of all that what I mentioned earlier was with reference to the schedule that we have just recently submitted with regards to this hearing where we have 16 accredited programs on the schedule, and for those 16 programs we have 14 different accredited courses associated to them.
204 So, that's almost one course for every program and that's a pretty close spectrum.
205 When we go back to even what we are doing right now currently through the current broadcast year, looking at all the programs that have been on-the-air so far, we have had 29 shows and those have been related to 13 different courses.
206 One of the things that we have to look at when we look at a close spectrum, and this goes a little bit to what John was saying, is that the schedule is also fluid, programs are going to come in and out.
207 We are working on trends of what viewers are watching at any time. We are also working with colleges and universities and professors and learning institutions and talking to them with what their needs are for their courses.
208 So, it's all very fluid and it's going to change from time to time. So, to get that close spectrum again is not going to have everything at all times, but it will have a variety of different times.
209 COMMISSIONER LAMARRE: Yes. Which is why we license four, five to seven years, so we can look over entirely licence term.
210 Talking about the programming, you've said that of the shows that you have on, they do refer to 13 different courses. Well, 13 different courses is one thing; 13 different subjects is something else. I mean,I had like 25 different courses when I did engineering at least as many as 31 when I did law and those were different courses, but quite frankly, it was the same subject.
211 So, how do you distinguish between different courses and different subjects because I must say that, you know, from my perspective at this point when we talk about full spectrum and if you use, you know, the current definition of what that expression should mean, it would mean different subjects, not necessarily just different courses.
212 MS PHILLIPS: That's some of the clarity that we want to seek through this discussion today.
213 COMMISSIONER LAMARRE: Okay.
214 MS PHILLIPS: But as I've said earlier, when we look at the new schedule that we have submitted, I think that we have moved towards there, where we have cuisine production, journalism, radio, health, crimes and social justice, professional organizations of Canada which is actually a certified course, believe it or not.
215 So, we are moving towards that variety. We actually have an employee whose job is devoted to working with the institutions to try and extend on that list.
216 COMMISSIONER LAMARRE: Okay. And when you mention -- when you use the expression "13 different courses", did you mean that they were all accredited by an education institution?
217 MS PHILLIPS: They are all accredited through colleges, universities, they may be through professional organizations.
218 We go back to the definition that was used in 2004 with TLT on the clear learning objectives where it says that they could be connected to programs of courses of study offered by educational institutions as well as training in professional development organizations.
219 So, for example, Alison Griffiths, who works on one of our financial shows does workshops to help people and to teach them and it may not be a college or a university.
220 COMMISSIONER LAMARRE: But it's a professional skill?
221 MS PHILLIPS: It's a professional skill that she is teaching.
222 COMMISSIONER LAMARRE: Okay.
223 MME COURTEMANCHE : Madame Lamarre?
224 CONSEILLÈRE LAMARRE : Oui?
225 MME COURTEMANCHE : Un point légal.
226 CONSEILLÈRE LAMARRE : Oui.
227 MS PHILLIPS: When you said that the nature of service is required -- shall that you use as the term, I just note that that's in the first sentence.
228 COMMISSIONER LAMARRE: Yes.
229 MS PHILLIPS: So, "shall provide" and I believe that the "shall" is sort of a general categorization as that of we're supposed to be providing what is an English language educational service that's going to have learning opportunities.
230 When it comes to the educational programming, I would argue that that says: the qualifier on the educational programming -- sorry, that will come from.
231 COMMISSIONER LAMARRE: That will come from.
232 MS PHILLIPS: So, that's how we interpret it legally. Thank you.
233 COMMISSIONER LAMARRE: Okay. Duly noted. Now, moving forward, in your presentation this morning, you did an excellent job of putting on one page what I had on two or four different pages, so that's good, and when you talked about what you believe should be present in certified 5(a) programming.
234 Now, when we look at the definition that we now have and granted, it comes from the 1999 document, define the different types of priority programming, you do -- you do provide a list that is consistent with that definition, you know, prima facie, but that's short at least one element and when you say that, you know, it involves qualifying individual or a subject matter expert, that the program demonstrate clear learning objectives through discussions, counselling, visual, graphic particular examples and so that's Category 5(a) programming as clear learning objective,
235 But when you look at the definition from 1999, 205, it says: "Programs presenting detailed information related to a wide variety of topics and used by the viewer primarily to acquire knowledge." And this is absent from what you're presenting today as being how we should interpret Category 5(a).
236 Now, obviously, it's either one of two things: either on one hand -- sorry, I'll go back. Let me back up a little bit here.
237 I also note that on page 5 of your presentation this morning you are confident that you meet the original licensing expectations. Yet, and we're -- original -- and yet, when you're looking at pages 8 or 9 of your presentation this morning, in relation to the 1999 definition, you're obviously asking us to change the interpretation.
238 So, are you actually asking us to redo the definition, which would be a policy issue, or are you asking us that we adapt our interpretation to the changing context in which learning television operates?
239 MR. CASSADAY: We are asking you to work with us on tightening the criteria. We are not asking you to change the definition.
240 The point that we have been making is that we really and truly believe that we have offered a service that is in complete compliance with our nature of service and adheres to the definition of 5(a), again the issue that we are having and we have tried to show this in the video, is that something like -- I think we showed four or five shows, I think two were clearly certified and the rest were not and we would like to just come to some definition as to that. And I am wondering whether any of my colleagues would like to --
241 MS COURTEMANCHE: Thanks, John. I would just like to add that on page 9 of our Opening Presentation, the first point is basically the definition of Category 5(a) programming, right. That's essentially where that comes from.
242 COMMISSIONER LAMARRE: Uh-huh. Yes.
243 MS COURTEMANCHE: So, we are not attempting to change 5(a). We are just attempting to, as you have said, look for interpretation guidelines that will help us because, you know, I think that and as the producers will tell you that today that, you know, if they are trying to pitch an idea to us and we say, we need Category 5(a) programming, if they come to us and we say: Well, here is the definition, it can relate to a variety of topics and it can be used by viewer primarily to acquire knowledge. That's huge. That's very very very very broad.
244 And so, in order to circumscribe that together, that's why we have said, okay, there should be interpretation guidelines that are associated with that. That's why we've thought that, okay, if it is formal, that's why we felt we should introduce the notion that there is a qualified individual and/or expert on the subject that --
245 COMMISSIONER LAMARRE: So, that's how you would define "formal"?
246 MS COURTEMANCHE: Yes.
247 COMMISSIONER LAMARRE: Okay.
248 MS COURTEMANCHE: And then, in addition, we thought that as an interpretation guideline to interpret, you know, somebody who views primarily to acquire knowledge, because you understand that's very broad, is we thought that we would bring in the notion of clear learning objectives, which is also part of our licence, but we think that makes sense for formal educational programming.
249 And that's where we say that, well, the way you demonstrate clear learning objectives is by using discussion, counselling, visual graphics, presentations of research, that kind of thing. We are really really trying to figure out where, what is the stand-box.
250 That's what we are trying to understand because the definition in of itself doesn't create a very clear and established sandbox.
251 COMMISSIONER LAMARRE: Okay. And so, how do you suggest then because to be a 5(a) you to be certified a 5(a), as a programming.
252 So, basically, how do you propose that you, as a broadcaster, and we as the Commission, we come to the conclusion that these requirements -- that there are clear learning objectives?
253 The second criteria is actually, me, that's what I find at least to be able to establish, you know, whether there is a qualified individual or, you know, a subject matter expert, and that you can argue with the expert on the show and so would your producer and that's something that's easily defined.
254 Now, clear learning objectives, how will you go internally about making sure that there are clear learning objectives?
255 MS COURTEMANCHE: I would say, and perhaps in second, now that we are having this discussion, perhaps the way we do that is to say because there is a qualified individual expert, we can say that the programming demonstrates clear learning objectives through the subject matter of which the qualified or expert will be discussing.
256 So, you know, whatever the expert is talking about, that will be the subject matter, you know, that will be involved so that's how you get the clear learning objectives.
257 So, I guess what we forgot to include now on second reading is to incorporate two within three and then on page 9 of our Opening Statement, and that way it will clearly demonstrate that our clear learning objectives are tied to the subject matter in which the expert is associated with.
258 COMMISSIONER LAMARRE: Okay. So that's you know, what's happening in three is actually tied for the expert. Okay.
259 MS COURTEMANCHE: Exactly. And so, that's why and now it's a very good discussion and that's why we wanted to have a discussion with the producers and the Commission because, you know, there is a great example where this is how we are going to demonstrate the learning objectives. So, I think that should address your concern. I hope it does.
260 COMMISSIONER LAMARRE: Okay. Now, let me go back again. We have not beaten it to death yet, the nature of service.
261 And I need to draw your attention to actually a discrepancy we created ourselves between the French and the English version. Okay. Because I want to make sure that we are seeing on the same picture.
262 When you look at the English version of the nature of service, the first paragraph, the last sentence it says: "Educational programs will come from a full spectrum of basic for the base skills related in live enhancing programs, many of which -- underline many of which -- will be undertaken in cooperation with colleges and university in training.
263 In the French version, we say: « Plusieurs de ces émissions seront élaborées en collaboration avec les collèges et les universités et des établissements de formation. »
264 Now to me, many of which is not plusieurs... plusieurs is several, and many of which is more than several. So, even that we need to actually reconcile both versions and given that the original licence nature of service for your licence was proposed in English by the licensee, would you agree that this is what you have been looking at and that's what you are trying to achieve?
265 MR. CASSADAY: Yes. That definition is certainly the one that we have been using and I think that even from the discussion so far this morning one thing that's I think becoming very clear is that this is an interpretative definition and our interpretation of many of which will be undertaken in cooperation with colleges, universities and training institution says that, yes, you know, make sure that many of them do, not necessarily all of them.
266 COMMISSIONER LAMARRE: No. Many is not all of them.
267 MR. CASSADAY: And so, clearly in our view, we continue to put forth the position or the view that we have done our best to comply with the conditions of licence set out for us and hopefully the examples that we have given you will demonstrate that.
268 COMMISSIONER LAMARRE: Okay. Now, turning to the last paragraph of the nature of service definition, it says that no less than 55 percent of the programming during the broadcasting -- and we will come back to the broadcasting -- shall be drawn from Category 5(a) and shall have clear learning objectives.
269 So, in the proposed interpretation that you put forward in your documents and also this morning, you basically have incorporated clear learning objectives as being part of 5(a) whatever.
270 MR. CASSADAY: Uh-huh.
271 COMMISSIONER LAMARRE: So, you, in your own interpretation, that sentence is actually redundant, because there are two requirements in that sentence. Is that -- well, there is 55 of the programs being the broadcast day that shall be drawn by from Category 5(a) and on top of that, shall have clear learning objectives. What you are saying this morning is that it cannot be 5(a) if you don't have clear learning objectives.
272 MS COURTEMANCHE: For our particular service.
273 COMMISSIONER LAMARRE: For your particular service, oh! yes.
274 MS COURTEMANCHE: Yes. Just I wanted to make that point because somebody else could create and they would not have that requirement.
275 COMMISSIONER LAMARRE: Okay.
276 MS COURTEMANCHE: So, just to make that distinction.
277 COMMISSIONER LAMARRE: Duly noted. Now, the very nature of your service is to be focused on adult education, generally, generally, and different of -- definitely not for pre-school. Now, can you -- give us an insight on how you either define adult education or how you make sure that's how you address it. And don't tell me it's by the rating of PG-13 or plus.
278 MR. CASSADAY: Yes. I know Ms Phillips will have some specific comments on this, but perhaps if I could make a general comment about how we think about our portfolio or brands.
279 So, we have as a company decided to focus on two verticals and we try to do a great job in both of them: one is children and the other is women. To be successful in marketing those brands, they have to be significantly different one from the other. And what we have at CORUS is a spectrum of women services that appeal to women at various ages and stages of their life.
280 Our cosmopolitan television is really targeted to younger women, it's very hip, very lifestyle-oriented, much more drama than would appear in, say, the Oprah Winfrey Network.
281 W is really targeted at women 25 to 54; Oprah Winfrey Network clearly targeted at a different audience, and older women generally.
282 COMMISSIONER LAMARRE: You should actually say she is targeting her own age women.
283 MR. CASSADAY: Yes, generally targeting essentially women 35 to 64 that's clearly differentiated from COSMO and W, it's in terms of the demographic profile that we are seeking out and the kinds of programs that we select and also the nature of those programs that we put on-the-air all have an educational or learning sort of experience behind them.
284 Karen, if you want to talk a little bit more about the philosophy or John a little bit more about the philosophy of actually selecting the schedule. John.
285 MR. MacDONALD: To answer your question directly, Commissioner, I think our general assumption of sort of what constitutes adults versus pre-school secondly and that would be sort of target age group that you would certainly --
286 COMMISSIONER LAMARRE: I'm sorry, I did not understand that.
287 MR. MacDONALD: I'm sorry, after your formal education after Grade 12.
288 COMMISSIONER LAMARRE: Okay.
289 MR. MacDONALD: Okay?
290 COMMISSIONER LAMARRE: Okay.
291 MR. MacDONALD: And then, as John was saying, you know, we focused -- we've organized our company to deliver quality programming to a range of demographics and the children's programs are serviced by our children's networks and we cater to the female demographic primarily across our several women's networks for a different demographic altogether. So it's not children.
292 COMMISSIONER LAMARRE: Okay, but I'm not sure that exactly cuts it. I'm going to tell you why.
293 MR. MacDONALD: Okay.
294 COMMISSIONER LAMARRE: Basically you are saying your service is targeting adults and your service is providing educational programming. Well, that's different from saying that you are doing adult education.
295 MR. MacDONALD: Fair enough. I think the OWN nature of service requires, as it's been described, is to provide both formal and informal education targeted at an adult audience. So that is what we endeavour to provide through OWN.
296 COMMISSIONER LAMARRE: Okay.
297 MS COURTEMANCHE: Just to be clear, the manner in which we provide the adult education is through educational programs and then that ties you back to what your definitions are. So it's a bit of a circuitous thing. So I'm not sure that adult education in of itself is not a category of programming, right?
298 COMMISSIONER LAMARRE: No, you are correct, it is not a category of programming, but in order to make sure that not just the letter of the condition of licence is met but also its spirit, and I have an extract here from the group licensing renewal that obviously tells me that's important to you, Mr. Cassaday, and to Corus as a whole, to not just stick with the words but stick also with the intent.
299 I was just trying to get into the inside of whether or not you have given more specific thought as to what adult education in Canadian society today really means.
300 MR. CASSADAY: I think what we have been saying here is that we believe that we have properly defined adult education in the context of this service and this nature of service description, but we are willing to recognize that there is even a broader definition which may involve more formal adult education.
301 In light of that we've proposed two additional shows and if there are other ideas or specific applications of formal adult education that the Commission would like to discuss with us, we are very receptive to your ideas.
302 But again, we believe that the service that we offer is providing an educational opportunity for adults across the country and is in complete compliance with the definition of 5(a).
303 COMMISSIONER LAMARRE: Okay. Let me just give you food for thought here.
304 Here is a definition that I did find of adult education and it's provided by a 1996 recommendation from UNESCO following the Nairobi conference. Here is how they defined it and maybe you can tell me just how close you think you are sticking to -- not that you have to, but just, you know as a reference. It says:
"...'adult education' denotes the entire body of organized educational processes, whatever the content, level and method, whether formal or otherwise, whether they prolong or replace initial education in schools, colleges and universities as well as in apprenticeship, whereby persons regarded as adults [after grade 12] by the society to which they belong develop their abilities, enrich their knowledge, improve their technical or professional qualifications or turn them in a new direction and bring about changes in their attitudes and behaviours..."
305 And it goes on with, you know, developing countries.
306 We will be able to give you the exact reference to that, but maybe by the time you -- you would like to comment right away, Mr. Cassaday?
307 MR. CASSADAY: Well, just a reaction. I'm sure there are many definitions as to what would constitute education. The thing that we need to keep in mind is we are not a formal educational institution, we are a programming service whose survival depends on attracting audiences and having them educated, enlightened and informed enough to come back and watch us again.
308 So what I'm hoping we can come up with is that fine balance here that allows us to continue to offer the service that we offer without putting us in the position where we are competing against Athabasca University or the Toronto school of plumbing. We are not that. We are a programming service and I think we are doing an extraordinary good job of that as evidenced by the fact that audiences are up over 400 percent since we acquired the service.
309 COMMISSIONER LAMARRE: So maybe within that definition you do fit in whatever method --
310 MME COURTEMANCHE : Madame Lamarre, est-ce que je pourrais faire une suggestion?
311 CONSEILLÈRE LAMARRE : Oui.
312 MME COURTEMANCHE : Est-ce qu'il serait possible d'avoir la définition...
313 CONSEILLÈRE LAMARRE : Oui.
314 MME COURTEMANCHE : ...et puis on pourrait revenir en réplique et puis...
315 CONSEILLÈRE LAMARRE : Oui.
316 MME COURTEMANCHE : Parce que si je comprends bien ce que vous me dites, c'est que vous voulez encadrer la notion de qu'est-ce qui pourrait être...
317 CONSEILLÈRE LAMARRE : L'éducation aux adultes.
318 MME COURTEMANCHE : ...l'éducation, et je comprends ce que vous voulez faire.
319 Alors, moi, ce que j'aimerais faire, c'est que j'aimerais bien regarder et voir si c'est suffisamment flexible pour opérer dans notre... en conformité là avec notre condition de licence, et, à ce moment-là, on pourrait vous le confirmer lors de la réplique. Est-ce que ça serait acceptable?
320 CONSEILLÈRE LAMARRE : Oui, ça serait acceptable.
321 Et pour clarifier là, ce n'est pas une définition que je propose que le Conseil adopte. C'est juste que c'est une définition qui peut amener à une réflexion pour qu'on comprenne dans quel sens Corus envisage l'éducation aux adultes. Ce n'est pas juste une question d'éducation, c'est vraiment éducation aux adultes. C'est une expression particulière et c'est une expression qui se retrouve dans votre nature de service.
322 MME COURTEMANCHE : Oui, et puis moi, je pense que... Je regarde ça, Madame Lamarre, dans la même façon que ce que j'ai exprimé ce matin dans notre allocution. Lorsque je parle en 1996, quand on a dit que l'objectif, le mandat du service quand il était autorisé en 1996, c'était qu'il était censé d'être --puis là, je n'ai pas la version française, malheureusement -- mais designed to interest and engage the viewer and contribute to a learning culture. C'était ça le fondement, la mission, si vous voulez dire.
323 CONSEILLÈRE LAMARRE : La mission fondamentale du service initialement.
324 MME COURTEMANCHE : Alors, pour moi, ça serait une autre façon pour concrétiser le mandat du service. Alors, à ce moment-là, j'aimerais pouvoir le regarder et vous revenir durant la réplique. Et je comprends très bien ce que vous... Vous ne proposez pas là qu'on...
325 CONSEILLÈRE LAMARRE : Non, je ne propose pas qu'on... C'est juste que je veux aussi que vous sentiez...
326 MME COURTEMANCHE : C'est réellement là...
327 CONSEILLÈRE LAMARRE : ...d'où vient ma réflexion sur le sujet pour répondre plus facilement à mes préoccupations.
328 MME COURTEMANCHE : Oui, oui. Et c'est effectivement pourquoi on est ici aujourd'hui, parce qu'on veut bien baliser ce qui est correct, ce qui va être acceptable, et c'est la raison pourquoi on est ici. Alors, pour moi, je vois ça de bien baliser les choses. Alors, on vous revient. Une fois que j'ai le définition, on regarde ça sans faute.
329 CONSEILLÈRE LAMARRE : Merci.
330 Et Monsieur Maavara sur la banquette arrière me fait des signes qu'il aimerait bien ajouter quelque chose.
331 MR. MAAVARA: Just in the context of this exchange, we look forward to seeing that language.
332 I just wanted to make the point that when John talked about expanding we really welcome this kind of language because what we're trying to get at here, one of the problems that we have had when we look at the evolution of this service is that it's obvious through the discussion that it is not really clear as to what it is that we are talking about.
333 And going to the -- Mr. Chairman, going to your point about the Commission's finding as part of the group licensing, the Commission said that it had strayed so far from its original mandate. There really is no expansion on that and, as Ms Courtemanche said, we met with staff but there really is nothing on the record that says, okay, if the Commission is finding us noncompliant, what is it that we are not compliant with?
334 When we look at the record, the CLT, before we even showed up, had been through 11 processes before the Commission, including a licence renewal and some corporate restructuring and that sort of thing, and the program schedule, we would submit, that we are presenting now is far more educational than it was then. Then, it had one accredited institution associated with it. We have more than five now.
335 So all of which is to say when the Commission says what are we complying with, we start by looking at what has been done in the past. We look at the language and what we are really here to do today is to try to add more flesh to that description of what is it that we are talking up. So your submission, certainly we look forward to looking at that in detail and seeing how it helps us.
336 COMMISSIONER LAMARRE: Okay.
337 And, Mr. Cassaday, I do take your point that you are a broadcasting business and just because people are educated and informed and enlightened doesn't mean that they cannot be entertained at the same time.
338 MR. CASSADAY: Thank you. And thank you for trying to be helpful here. I appreciate that.
339 COMMISSIONER LAMARRE: Just hold on a second.
340 THE CHAIRPERSON: We are going to take a break. Let's make it 15 minutes. Does that work for you? So we will come back at 25 to 11:00.
341 COMMISSIONER LAMARRE: And we are not exactly done.
342 THE CHAIRPERSON: Yes, Commissioner Lamarre will be continuing her onslaught after the break.
--- Upon recessing at 1023
--- Upon resuming at 1038
343 THE CHAIRPERSON: Okay, we are back and Commissioner Lamarre was going to continue her questioning.
344 CONSEILLÈRE LAMARRE : Merci, Monsieur le Président.
345 Okay. Now let's go back to the mention you have made about the initial intent of the initial licensing and the clear learning objectives.
346 Now, initially when it was licensed, the initial applicant committed to provide courses in basic adult education such as math and literacy skills. Well, okay, granted, there's no calculus classes so far and I don't think you would be meeting the entertainment objective of your service if you did provide that, except for a few of us.
347 So the initial applicant committed to providing courses in basic adult education such as math, literacy skills, programs providing job skills and professional development and enhancement programming designed to interest and engage viewers and contribute to the learning culture.
348 You have referred a couple of times to that learning culture even this morning. Now, at licence renewal in 2004 the licensee's nature of service was amended to add precision regarding the requirements that its programming have a clear learning objective.
349 Now, we do recognize that professional job skills and professional development is not a COL, is not part of COL per se, but there has been a departure from providing that type of programming from the original licensee commitment. So would you care to explain how that came about?
350 MS COURTEMANCHE: Just to be clear, you are absolutely correct. In 2004 that was the first introduction of the clear learning objectives and at that time CLT, which was -- you know, we didn't start operating until the latter part of November 2008 -- it said that clear learning objective amendment could include connecting the programs -- could -- connecting the programs to Corus as a study offered by educational institutions as well as training and personal development organization, ensuring that the programs fulfill the definition of educational programming.
351 So as far as training opportunities I believe right now, Karen, if I'm not mistaken, we have one on organization. Do you have the list?
352 MS PHILLIPS: Yes. Again, it goes back to the organization, crime and social justice, there is health, there is journalism, there is radio, there is cooking.
353 MS COURTEMANCHE: But as far as training and going back to previously, I can tell you that CLT itself had a limited amount of sort of pure training type. So we basically, I don't think expanded on it, but it is pretty consistent with what had been done previously.
354 So that component of the pure training or that kind of job skill development has consistently been not predominant, if we can put it that way. It has been available over time, and right now, as I say, it's an organizational skill one that is available, but it has been interspersed in the schedule over time.
355 COMMISSIONER LAMARRE: Okay. Let me refer you to a specific that was said on the record at the group-based renewal with respect to the programming on the service when it was still branded as VIVA.
356 Mr. Cassaday, you said -- and that was in paragraph 2337 of the transcript -- you said:
"Virtually every show was curriculum-based and virtually every show was preceded by an interstitial with an educator linking the content of the show to the curriculum. It was clumsy [your own words] but it was our effort to make sure that we were living up to not only the word but the spirit of these COLs and I think quite frankly we did a good job."
357 So I was just wondering, are you still doing that? Did you cease the practice? Do you see still any use for that?
358 MR. CASSADAY: Commissioner Lamarre, yes, we still do that on our dramas.
359 Karen, I think there are half a dozen shows approximately where we are still doing the interstitial elements?
360 MS PHILLIPS: It's only on the drama and there's about maybe four dramas in our schedule that we consider also include our movie slots.
361 COMMISSIONER LAMARRE: Four in the schedule per week?
362 MS PHILLIPS: Yes.
363 COMMISSIONER LAMARRE: Okay.
364 MR. CASSADAY: This is a judgment call on really my part. We do a lot of educational programming for kids. "Franklin" is an educational show. At the end of the show, after we have demonstrated about the importance of playing well with others or cleaning up after you have made a mess, we don't really feel any need to come on and say here is what we just told you, young lady or young man.
365 It just felt that a lot of the interstitials were forced as opposed to contributing to the flow of the programming. So, as Karen said, we are now doing it where we felt it was important to perhaps reinforce the point.
366 But where it was intuitively obvious it was -- again, my judgment -- again, if this was something that the Commission felt was intrinsically important, we would certainly consider that once again. But we do do it, but on a more limited basis than we did previously simply because of -- call it a design change as opposed to any fundamental difference in how we viewed the service.
367 COMMISSIONER LAMARRE: Okay. Would it be fair or unfair to say then that you are still doing it for shows where the educational qualification is not obvious?
368 MS PHILLIPS: The reason that we chose to still do it on the Category 7 programming as opposed to other categories is because Category 7 is not one of the program categories within our nature of service.
369 The other programs that we run though, we see them as 5(a) programming. They may have been categorized as a 5(b), which is within our current nature of service. We accredit it, we therefore don't run the intro.
370 We felt that because of Category 7 not being part of the current nature of service, although we are accrediting it to allow us to call it 5(a), that that justified continuing on with those segments, similar to what had been done in the past.
371 COMMISSIONER LAMARRE: Okay. Okay.
372 Now let's go back to the past, to what is at stake here. One thing we need to decide is whether or not you are indeed in noncompliance.
373 So let's use the Exhibit 1 that we tabled, which is -- and I am repeating it, you know, it is a staff working document. It has not been adopted by the panel, but for the purpose of the exercise I think it's going to make our life easier.
374 Now, you do mention the need to have clarity and to know whether or not a program fits within the 5(a) category because the 5(a) category is important to your nature of service, you need to have 55 percent of your schedule of your broadcast day within that category.
375 So, first off, it may seem like a point of detail, but do we agree that when we talk about 55 percent we talk about 55 percent of the time within the schedule?
376 MS PHILLIPS: Yes.
377 COMMISSIONER LAMARRE: Okay. Not 50 percent of the number of shows?
378 MS PHILLIPS: No. It's 55 percent of the time.
379 COMMISSIONER LAMARRE: Fifty-five percent of the time. Okay. Okay.
380 Now, let's take the schedule from 6:00 in the morning. You have two shows there which the Commission has certified as 5(b), yet you claim as 5(a) in order to determine whether you are compliant or not. But those shows have been certified, it's not something that we are waiting for. So how do you explain that?
381 MR. MacDONALD: I can take that, Karen.
382 This does go to the broader question we have of clarifying, but for example a show like "Maxed Out," so "Maxed Out" we have accredited to these financial seminars we have referred to previously in our session here this morning, taught by Alison Griffiths, who is a financial services expert and by virtue of the feedback we received in 2004 that we were allowed to include programming as 5(a) programs that come from accredited institutions or seminars, et cetera. I am probably butchering the language a little bit, but that would be an example on why "Maxed Out" we consider it to be 5(a).
383 I think it is fair to say that there are a couple of shows in there, "The Right Fit" and "The Shopping Bags," which we believe, on their merit -- based on our interpretation of what a 5(a) program is under our current system, that we believe they stand on their own merits and fulfill -- they have clear learning objectives and so therefore we would classify them as such.
384 COMMISSIONER LAMARRE: So basically in order or not to determine if you are compliant you basically have already incorporated into your own interpretation the clarification you seek to get from the Commission?
385 MR. MacDONALD: No. Let me be -- I'm sorry if I haven't been clear.
386 In the process of trying to determine whether or not programs are considered 5(a), we believe that if we can get those -- if those programs are accredited with an existing course, and we have done that with several programs on this grid and others, that that falls under the qualifications for 5(a) by being associated with a credit-based learning course.
387 COMMISSIONER LAMARRE: But you know what I think -- let's assume that indeed if it's accredited-based, let's assume we accept that reasoning, if it is accredited-based it gets into 5(a). Let's assume we accept that.
388 It's not the case for those two, "The Right Fit," "Maxed Out," yet you are claiming it as 5(a). It's not the same either for the "The Shopping Bags."
389 MS PHILLIPS: Commissioner Lamarre, if I might. Yes, to some degree the criteria that we have suggested is clarification or expansion of what we believe the definition of 5(a) is because the definition is so broad which is used by the viewer primarily to acquire knowledge.
390 We believe that these shows, if they are not accredited, such as "The Right Fit," that by the merits of its show the viewer is using it primarily to acquire knowledge.
391 And also, this is a procedure that has been used by CLT in the past, going back to the beginning. This has always been the process used. Either it was accredited or on the merits of the show it was thought to be primarily to acquire knowledge. So we have continued with that process.
392 COMMISSIONER LAMARRE: But it's not an "or." You know, when you look at the definition that we have for 5(a) it says:
"...programs presenting detailed information related to a variety of topics and used by the user primarily to acquire knowledge."
393 Now, you may think it's a wide definition. I don't think I would agree. There is a subjective element in that definition, that I would agree, but primarily using a program to acquire knowledge, I think it is a very specific issue.
394 MS PHILLIPS: Well, I think that if we look at it as not an "or" statement, then the program -- every 5(a) program would have to cover more than one topic and primarily be used for the viewer.
395 So we look at that as saying there is a wide variety of topics, it might be cooking, it might be exercise, it might be medical, and as long as it is used by the viewer primarily to acquire knowledge it can fall under the category of 5(a).
396 As an example of that, when you saw the video --
397 COMMISSIONER LAMARRE: If I may interrupt?
398 MS PHILLIPS: Yes.
399 COMMISSIONER LAMARRE: Despite the fact that the title, which is not anecdotal, is formal education, because, you know, you can use a lot of things to acquire knowledge --
400 MS PHILLIPS: Sure.
401 COMMISSIONER LAMARRE: -- them not being formal education. So here, we chose that definition and we are talking about detailed information related to a wide variety of topics.
402 I think you have the interpretation right there, that it's not one show having all the topics, it's over the schedule. But "and used by the viewer primarily to acquire," you are saying that you are using this, you are interpreting this as an "and/or," not just as an "and"?
403 MS PHILLIPS: I think that one of the other differences that we see when we determine which programs would fall under 5(a) as formal education is how the show is handled.
404 So there may be a show about cooking for example that really the viewer primarily is viewing primarily to obtain knowledge and it may be entertaining. There may, on the other hand, be a cooking show which isn't really so much about cooking, there is some cooking in it, but really the viewer is there to be entertained.
405 So when we saw on our video today, for example, a show like "School of Chef," which is a certified CRTC 5(a) program, it is a cooking show that is instructional, the main reason for the viewer watching it is to get that formal instruction, whereas a show like "Iron Chef," it has cooking, you may see chefs doing some, but the main reason for the viewer watching that show is actually to be entertained, not to acquire knowledge.
406 COMMISSIONER LAMARRE: Okay. Well, you did indeed choose very well what you showed us in the video today, but to your point on what is being a 5(a) or not or formal education depends on how the show is handled.
407 Let's look at "The Shopping Bags" here where you are claiming it as a 5(a), which was certified as a 2(a). I acknowledge that just looking at the show's description on your website doesn't tell the whole story, but here is how you pitch it and that's to your point of how the show is being handled.
"The Shopping Bags. Fun, fast-paced and entertaining. The Shopping Bags hosts Anna Wallner and Kristina Matisic show you what you need to know before you buy."
408 So I mean how do you make the leap from a 2(a) to a 5(a) with that show?
409 MS PHILLIPS: The show is -- that's a good example of a show actually where the viewer really is watching that show to acquire knowledge. They actually research products, they show demonstrations of comparing one product to another. It's a lot like reading Consumers Reports magazine that is put into -- again, the primary function is to get the knowledge, but it doesn't mean that it can't be --
410 COMMISSIONER LAMARRE: It has to be boring, I agree. I agree.
411 MS PHILLIPS: So the description obviously written to entice a viewer as well that it is an entertaining show, but anybody watching that show is walking away with knowledge about a product group and the things that they should be looking at when they are making a decision on which product to buy in that group. So it's all about education and research.
412 COMMISSIONER LAMARRE: Okay. Let's move to another topic.
413 In the frame of this hearing we also have to look at the requests for amendment you have made at the broadcast day and we also have to look at an application you have made for Cat B.
414 Now, I must admit that when I read your application for a Cat B it's not clear to me whether or not you want to (a) convince us that OWN is in compliance, that we should not suspend or revoke the licence or issue a mandatory order, that you want clarification for the future on how to interpret the 5(a) category and your nature of service, and at the same time you also want a Cat A service or whether or not if we do come to the conclusion that the way you are handling the programming on OWN is not acceptable to the Commission then you would actually transform that service into a Cat B.
415 MR. CASSADAY: Clearly, it is our hope that coming out of this hearing we will have convinced you that while the definition of education is quite large that we have been in compliance with our licence and deserve to continue to operate a Category A licence. That is our absolute "A" priority.
416 It is true that we also offered up the possibility of a Category B licence at one time to help perhaps ameliorate some of the concerns that the Commission had about this particular situation.
417 Having said that, we have concluded for a number of reasons, not the least of which is that on two separate occasions our interests or our application for Cat Bs was pushed back at us, that we need to really encourage you to continue to look at us as a Category A licensee.
418 The Category B classification for us is very problematic for a number of reasons.
419 One, over the last couple of months as we have been involved in lengthy negotiations with our distribution partners, we have come to realize how challenging it is to be a Category B service and not a Category A service without that leverage that we have, and we have very little leverage without sports networks and other things to enforce our views. Without that Category A leverage we would be very, very vulnerable and I think the risk would be that many Canadians would lose access to this service as a result of repackaging.
420 The second thing that we have come to realize is that the linkage rules which apply to us because of our affiliation with Shaw Communications are also very problematic. If Shaw Communications, through their cable company and their satellite company, was forced to introduce three non-affiliated services to support the continued carriage of Oprah but as a Cat B, I suspect that we may lose a substantial amount of the 1.8 million subscribers that we have with Shaw.
421 And the third thing that we would like to bring to the Commission's attention is that we think that one of the unintended consequences of us being pushed to a Category B licence is a substantial tax on consumers in Western Canada. Tax would be associated with the cost of the additional three unaffiliated services that they are not having to pay for today. If you were to assume a 20 percent subscriber fee per service per subscriber, you could be looking at an incremental cost of approximately $20 to $30 million for Western Canadian -- or for Shaw subscribers as a result of their requirement to carry three services and to treat them appropriately under the terms of the VI rule.
422 So for all those reasons we, as you suggest, would certainly accept a Category B as a last step fallback position to this hearing. But it is far from being our first choice, which is to continue with our Category A licence.
423 COMMISSIONER LAMARRE: So not only is it not your first choice to move OWN from a Cat A to a Cat B, it's neither your intent to have after this hearing not only OWN as a Cat A but an additional service of Category B?
424 MR. CASSADAY: That is not our intent. Our intent is to have exclusively a Category A licence for Oprah Winfrey Network.
425 COMMISSIONER LAMARRE: Okay. Then why are you making it a point in your application -- and that's what got me thinking that maybe what you were looking for is an additional service on top of OWN as a Cat A. You try to make a compelling point that it would not be, that Cat B application you are making, competitive with OWN.
426 MS COURTEMANCHE: Well, as you know, when you apply for a Category B you have to justify the fact that, you know, it is licensable and that it will not compete with -- so we were just conforming to the Commission's requirements to say that.
427 COMMISSIONER LAMARRE: Oh, so you were just answering a question?
428 MS COURTEMANCHE: Yes.
429 COMMISSIONER LAMARRE: Okay.
430 MS COURTEMANCHE: It was not an argument, it was just that's what the application form requires you to do. So that's the only reason we did that.
431 COMMISSIONER LAMARRE: Okay. So basically I was overthinking this, okay.
432 Now, if we were to come to the conclusion that indeed OWN is not a Category A anymore and that there is no way to fix it for the future and so that you should be a Category B, how do you see the transition going forward? Do you see one day you are a Cat A and the next day you are Cat B? Do you see a silence radio between the launch of the Cat B and the extinguishing of the Cat A? How do you -- I know you are trying not to think about it, but --
433 MR. CASSADAY: Mr. Murphy may have some additional comments, but it would be a most difficult transition.
434 The single biggest issue that we face in dealing with our distribution partners is their objective of reducing their cost of product, their cost of goods.
435 I think the relegation of Oprah Winfrey Network to a Category B would create the opportunity for another discussion about rate and packaging, which would be problematic. That is with all distribution partners.
436 The discussion with Shaw is much more complicated because of their affiliation with us and the requirement for linkage.
437 Having said that, it is an incredibly powerful brand and the strength of the Oprah Winfrey brand we think would give us a lot more leverage than if this was to happen to any of our other services, but clearly it is not an event that we would relish.
438 MR. MURPHY: Commissioner Lamarre, I would just add that we firmly believe that OWN is an educational service and that it provides a learning culture as we have seen today from testimonials, and that we really would like, as John said -- I echo the point that we want to work with the Commission to secure and retain the Category A licence.
439 The Category B scenario is truly challenging. It would cause some significant economic implications for the service. Revenue from the affiliate side would be substantially impacted. We would lose audiences of probably 1 million OWN fans, maybe 2 million. Millions of OWN fans would lose their service potentially because of the Shaw system and that would cause both a revenue impact on the advertising and affiliate, and that flows through the entire broadcasting system for the monies we can spend on Canadian content as such.
440 So that's why we come today committed to working with the Commission seeking clarity on definitions of programming so we can maintain our current status.
441 COMMISSIONER LAMARRE: Okay. Duly noted. But you understand also that within the scope of this hearing I have to examine with you all the possibilities, be they the ones you like and the ones you dislike.
442 Now, looking at the interventions that were filed recently, given your request -- well, more specifically I'm moving on now to your request for amendment on the definition of broadcast day, which you would like to see even if you do remain as a Cat A for OWN, you would like to see it being moved from 18 hours to 24 hours.
443 Are you aware of any other Category A -- I said A, I did not say C or B -- any other Category A services who currently are using the broadcast day defined as 24 hours and not 18 hours?
444 MS COURTEMANCHE: Sorry, Category A's?
445 COMMISSIONER LAMARRE: Category A's. Because right now -- let's be clear. Your request to change the broadcast day stands with OWN as a Cat A, doesn't it?
446 MS COURTEMANCHE: M'hmm. I'm sorry. Repeat the question, sorry.
447 COMMISSIONER LAMARRE: You have requested to amend the definition of broadcast day --
448 MS COURTEMANCHE: Yes.
449 COMMISSIONER LAMARRE: -- for your service from 18 to 24 hours --
450 MS COURTEMANCHE: Yes.
451 COMMISSIONER LAMARRE: -- and that's for OWN as a Cat A?
452 MS COURTEMANCHE: Yes.
453 COMMISSIONER LAMARRE: Are there any other Cat A's, to your knowledge, that do operate on a 24-hour broadcast day?
454 MS COURTEMANCHE: There used to be. Right now it's limited to Category C's and Category B's, but that used to be the case, that Category A's could operate under 18 to 24.
455 We think that in this particular circumstance it is not a hard and fast rule. I mean I don't think there is a clear Commission policy, at least that I don't know of, that prohibits --
456 COMMISSIONER LAMARRE: And even if it were policy there are exceptions to policies.
457 MS COURTEMANCHE: Exactly. So I don't -- there is nothing that I have found that says nearly a Category A is precluded from making that selection. It's not the practice right now.
458 Having said that, we are hoping to convince you that there are merits to going to the 24-hour schedule and that is what we were trying to convince you of today.
459 COMMISSIONER LAMARRE: Okay. Before we go to the merits let's go to the dark side of that request or the less compelling side of that request.
460 You do mention that it's going to help you provide the programming changes you want to make and you have detailed some of the new programming -- excuse me.
461 COMMISSIONER LAMARRE: Oprah at work.
462 COMMISSIONER LAMARRE: -- that you hope would be --
463 COMMISIONER LAMARRE: So you are prepared to commission new programs, you have given the detail of this, and at the same time you say, well, in order to accommodate them within the schedule and also, you know, meet the requirement of 55 percent of 5(a) programming within the broadcasting day it's going to be much easier if our broadcast day is 24 hours.
464 Now, you know, I am good at math and basically what that tells me is that within the original 18 hours there is going to be less than 55 percent of 5(a) and within the remaining six hours during the night time there is going to be more than 55 percent. Otherwise, you don't need to make that point.
465 Mr. Hennessy from CMPA put it in a much less polite way. He said that you would be dumping related Canadian broadcasting into the midnight to 6:00 a.m. overnight period. So would you like to comment on that?
466 MR. CASSADAY: Yes, we would.
467 First of all, we think the comment is based on viewing patterns that are no longer in play. The advent of the PVR has made it possible to appeal to audiences on demand at a time that's convenient for them. Historically, I think that comment was relevant. Today, not so much so.
468 Last night I looked at the schedule for CTV post-midnight. There was Jon Stewart, Stephen Colbert and Conan O'Brien all after midnight, between midnight and after 2:00. I know a lot of people that talk to me about watching Jon Stewart. I know nobody that actually stays up and watches Jon Stewart. So the point that this is a graveyard for dumping shows to me no longer reflects the way that people view television.
469 If anybody finds our new shows or any of our programming appealing they are going to record it for a later date and of course what we are doing with virtually all of our distribution partners now is making as much content as possible available for them on demand. So all the linear channels should be looked at is as it a placeholder for a show that can be viewed at any time that is convenient to the viewer.
470 COMMISSIONER LAMARRE: Okay. Now, let me ask you this. The schedule that you currently have -- and when we talk about broadcasting, we talk about the 6:00 a.m. to midnight, we talk about Eastern time, don't we? Yes, we do, okay.
471 Now, with OWN, whatever I can watch at 9:00 p.m., Mr. Menzies has to watch at 7:00 p.m., correct, if he's in Calgary?
472 MR. CASSADAY: Yes. He has a two-hour difference in Alberta.
473 COMMISSIONER LAMARRE: Okay. So would you think that by changing the definition, the use of broadcast day the way you are doing it, do you feel it's going to be to the advantage of people out West to a degree or not? Have you actually looked into that?
474 MR. CASSADAY: There is no question that as a result of time-shifting it is available to them at a different time. Whether it's an advantage or not, that's a point that I really couldn't comment on because it would sort of defeat my argument that, quite frankly, everything that is available on television is available to be watched at a time that is most convenient for the individual. But it is true that a show that comes on the air at 1:00 a.m. in Toronto is going to be seen at 8:00 p.m. in Vancouver.
475 There is a colleague of mine that used to say about television today and that is that there is no place to hide, there is always something great to watch. If you see more than one thing stacked up in an individual time period, you are now going to be able to make yourself -- you are going to be able to avail yourself to new technologies that allow you to watch it whenever it is most convenient for you.
476 We believe that most of the formal education programs that we develop -- and I'm sure we will get a chance to talk about how excited we are about some of the concepts that we have under development -- will be PVR'd so that the viewer can watch them and interrupt them and take full advantage of the learning opportunity that is created, and the linear scheduling I think is a relatively minor part of our suggestion.
477 MR. MURPHY: If I could just echo a couple of important points that John said.
478 We are striving very diligently to make sure that all of our programming is available on a catch-up basis so that, you know, once it's broadcast the BDUs carry it the next day. So this is why we don't think that this is an issue for our audience.
479 You know, there are so many people that use VOD. The PVR penetration in Canada is approximately 50 percent. So with those two tools, PVRs and VOD, we think that our audiences that are looking for the educational programming will be able to find it whenever they want it.
480 COMMISSIONER LAMARRE: Monsieur Maavara, I would just ask you this question.
481 People will find the programming if they know it exists, and they won't know it exists if the initial timeframe/schedule that you are putting it on is a timeframe that they never have an opportunity, themselves, to watch.
482 Are you going to address that?
483 MR. MURPHY: I mentioned in my opening comments that we are truly excited and enthused about future programming investments for OWN, once we get clarity from the Commission.
484 When we make an investment in Canadian programming, it is incumbent upon us to market that in a very smart way. We want to bring audiences to our network. In fact, our Canadian programming is driving significant audiences in the schedule, as it stands today.
485 So, Madam Commissioner, we would make an effort through Web-based marketing strategies, on-air promotions, all of the best practices we use, to drive audiences to that scheduled programming, whenever it is on the schedule.
486 COMMISSIONER LAMARRE: Mr. Maavara, do you want to add something?
487 MR. MAAVARA: No, I broke my hand a few years ago and I was just stretching my fingers.
488 I feel like I'm at an auction.
489 COMMISSIONER LAMARRE: Once again I was over-thinking something.
490 MR. MAAVARA: Sorry.
491 COMMISSIONER LAMARRE: I have a short note here that was sent to me by Staff.
492 We were talking about "School of Chef". You referred to the show a couple of times during the presentation. Indeed, I know why confit de canard tastes so good. I didn't realize initially that it was to keep it healthy.
493 We don't seem to find it on your schedule right now. Is it already on the air?
494 MS PHILLIPS: "School of Chef" isn't on our schedule. It was used for display, to help you understand what we are saying about not understanding why one cooking show would fit as a Category 5(a) and another would not.
495 COMMISSIONER LAMARRE: Maybe you could let me know, at some point, when it is scheduled during the week.
496 MS PHILLIPS: No, I'm sorry, "School of Chef" isn't in the schedule, it was used as an example of what --
497 COMMISSIONER LAMARRE: Oh, it's not in the schedule.
498 MS PHILLIPS: It's not in the schedule. It was used as an example of what is a certified 5(a) program versus some other shows that are considered not certified, but of the same nature.
499 COMMISSIONER LAMARRE: Do you have any plans to put it in your schedule?
500 MS PHILLIPS: It has been in our schedule in the past.
501 COMMISSIONER LAMARRE: Oh, it has been in your schedule in the past. That's what it was, okay.
502 As you mentioned, it's evolving, you need to go with the trends, what people want to see and want to watch.
503 Thank you.
504 I think those are my questions for now, Mr. Chairman. Thank you.
505 THE CHAIRPERSON: Thank you very much for your questions.
506 I just have a couple of quick follow-ups before we have Peter ask his questions, and they have to do with the impact of moving to Category B.
507 I believe that Mr. Murphy referenced the potential loss of 1 million subs.
508 Is that correct?
509 MR. MURPHY: That is correct.
510 THE CHAIRPERSON: And the subsequent loss of revenues.
511 I am wondering, in terms of leverage -- you referenced the popularity of this service throughout your presentation, and the fact that so many people enjoy the service. Isn't that substantial leverage in terms of being able to apply it to any negotiations with distributors going forward?
512 Who would drop the service when there are so many people who like it?
513 MR. CASSADAY: I think that the biggest single issue for us is going to be with the Shaw organization, as a result of our status as an affiliated company. The linkage rules are extremely onerous.
514 One has to recognize, as well, that while we are affiliated with Shaw, we are not a subsidiary of Shaw. They have their own media company. So to have to accommodate a Category B service from Oprah, and initiate the introduction of three non-affiliated services, that would severely limit the ability of their media company to grow their business, as well.
515 I think you can see just how complicated a web this becomes.
516 I think your point is valid. With the others, without the linkage rule, it is really just a question of how strong we feel our position is in negotiating with them, when they bring up the fact that we have a different status and, therefore, we need to have a different conversation about rate.
517 But the big carriage issue with Shaw is related to linkage.
518 MR. MURPHY: If I could just make a correction for the record, the distribution with Shaw Cable and Shaw Direct is about 1.7 million households, not 1 million.
519 THE CHAIRPERSON: And you were saying that those 1.7 million subscribers could potentially end up not having access to your network if you were a Category B service.
520 Is that correct?
521 MR. MURPHY: Yes, that's correct.
522 THE CHAIRPERSON: Considering the popularity of the service, though, what flexibility and negotiating power would you have as far as establishing rates going forward, Mr. Cassaday?
523 Wouldn't you be kind of in the driver's seat, potentially, to be able to offset any potential loss of revenues with increasing rates or demanding more from those who -- you know, those who like it, like it a lot, kind of thing, and potentially would be prepared to pay a premium for the service.
524 MR. CASSADAY: The single most challenging part of our job right now is rate negotiations with our distribution partners. So I think the answer to your question is, unequivocally, no, we would not have leverage. The pressure is all downward.
525 The other thing to keep in mind is that we just completed a long-term negotiation with Bell and their related distribution services, and we are in the final hours of negotiations with Rogers. Those deals are set for three to five years out into the future.
526 But, quite frankly, in this environment, the opportunity for us to be able to offset a loss of distribution from Shaw with increases from the other ones, I would probably think it would be close to zero.
527 The other thing that we have to keep in mind is the impact on the consumer, and that is the loss of service of Oprah and her content, which is only now available on the Oprah Winfrey Network, it is not available from any other source in Canada.
528 THE CHAIRPERSON: Without asking you to divulge any confidential aspects of your negotiations with Rogers and Bell, would those agreements be contingent on carriage?
529 In other words, are there provisos, contractual aspects that would kick in were you to lose Category A status?
530 MR. CASSADAY: We did not contemplate, nor did they raise the issue of us having our status changed. I think the going-in assumption was that we would be able to satisfy the interests of the Commission in these discussions today.
531 THE CHAIRPERSON: Thank you very much.
532 Commissioner Menzies...
533 COMMISSIONER MENZIES: Thank you.
534 I want to start by clarifying a couple of things.
535 We are here to address ongoing non-compliance and to decide what we do about it. And I know that you are entitled to make your argument that you have never -- I understand the argument that you are making to be that you never have been non-compliant, and aren't now, so that's contentious, and I am trying to understand that argument.
536 Going back to your March 1st, 2012 letter, which was a follow-up from the original decision in July of 2011, we asked you to get back to us and to report on what you were doing to become compliant, and in that letter you talk about a Category B service, but it is conditional on allowing the carriage of OWN on Shaw-owned cable systems by authorizing an exception.
537 So the first part is Category B, but you want an exception to the rule.
538 Then, in the event that the Commission were not prepared to grandfather the distribution of OWN on all Shaw and BDUs, Corus would request that it be given the opportunity to withdraw this application, and, in such an eventuality, "it would be our intention to submit a new application within 60 days to amend the Nature of Service of OWN's existing Category A licence".
539 Both of those efforts -- I am not sure what your intention was, but do you understand that it would be possible for people to read those as saying that the real problem here is the rules, not our breaking them?
540 The solutions that you proposed were regulatory solutions, not programming solutions, and that's how that may have been interpreted.
541 MR. CASSADAY: We recognize that if things were being interpreted identically by everybody, we wouldn't be here. So, yes, Commissioner, we accept the fact that people may come to those conclusions.
542 I think the discussion that we have had over the last ten minutes about carriage status certainly underscores why, specifically, we were asking for the carve-out or the grandfathering of the distribution situation with Shaw.
543 As it relates to the whole question around are we in compliance, again, we have argued strongly today that we are in compliance. I think what we were looking for was "a regulatory solution" to the problem, as opposed to --
544 COMMISSIONER MENZIES: So we are agreed on that, that the solution you are looking at is from us, not from you.
545 MR. CASSADAY: Well, what we have come to you with today is a modified schedule, with a significant investment in a broader array of educational programming.
546 COMMISSIONER MENZIES: We will get to that, I just wanted to be clear on that.
547 And I wanted to be clear, too, because I didn't understand --
548 Maybe I didn't understand when you talked earlier, Mr. Cassaday, about broadening the definition of 5(a).
549 Here is what is confusing about that. If we broaden the definition of 5(a), lots of programming becomes 5(a) -- lots of programming without contention, lots of programming on OWN, lots of programming on just about everything out there. Right?
550 So how do we give you genre exclusivity based on 5(a), and all the benefits that you have talked about that come with a Category A licence, which are considerable and very important to you.
551 How do we broaden the definition of 5(a)?
552 We essentially have, I don't know, 15, 20, 25, 30 operators out there who are doing 5(a), right?
553 The whole purpose of a Category A licence is that you are doing something unique, and you are being protected from competition in order to protect your revenues and make a contribution.
554 So I don't understand where this broadening thing is going.
555 MR. CASSADAY: I know that Sylvie has some thoughts to add to this, and perhaps Karen does, as well.
556 Again, I may well have used the word "broadening", but I would like to really talk about us working together to clarify, specifically, what we thought was missing and could add value to this.
557 We feel that we have quite a broad array.
558 I would also mention that there have been a number of educational services licensed in Category B, such as Cookie Jar Educational TV, Academy TV, Positive Insight Network, Bub TV, Work TV -- TLC was allowed into the country.
559 So I think that there are a number of educational opportunities in addition to the Oprah Winfrey Network, none of which we have objected to.
560 Sylvie, perhaps you might --
561 COMMISSIONER MENZIES: That was my point, that you have a protected status to do this exclusively, and your revenues and your carriage, et cetera, is protected.
562 We don't have to go through the whole thing, we understand the regulatory bargain that takes place, you fill a niche and you get protected to do it.
563 MS COURTEMANCHE: Yes, we understand. What comfort can we give you to demonstrate that we are going to be operating in accordance with our mandate, but, more importantly, that whatever we are doing is not going to be opening the door to everybody else to do.
564 That is essentially what you are looking for, I think, and I had hoped that on page 9 of our opening statement today, by defining Category 5(a) -- because our protected status really derives from the formal educational programming, the 55 percent. That is the foundation of what we are --
565 COMMISSIONER MENZIES: Yes, I think we agree with you, and I have some questions on that, as to how we might -- to use another phrase from Mr. Cassaday -- tightening the criteria, or defining the criteria very specifically on a go-forward basis, if we are to go forward.
566 I think that is clearly necessary, and we can talk about that, but I am just trying to clarify my confusion, because the letter from March seemed to indicate that you recognized that there was non-compliance, and your position today is that you don't recognize that, and I am trying to figure out whether we are talking about defining -- in terms of defining, whether we are talking about being more specific, or whether your position is that you want less specificity and you want a broadening, so that we can basically --
567 I get the impression that if we could just lighten up a little -- right -- stop --
568 MS COURTEMANCHE: Yes, I understand the confusion.
569 COMMISSIONER MENZIES: If the Commission could just lighten up a little, everything would be okay.
570 MS COURTEMANCHE: Yes, I can understand the confusion.
571 To go back to the March 1st record, because that is where we started the conversation, as I said earlier to the Chair, we went through quite a process, but the notion of amending the Nature of Service for OWN didn't start in the March 1st application. That actually came up at the group-based licensing hearing. At that point we had a discussion with the panel, and there were some issues that were raised, and we said that we thought we were compliant at the time, but if the Commission felt that it would be useful to amend our licence, we would, and we actually proposed an amendment to our Nature of Service. We did that in the reply stage.
572 In your decision, your group-based licensing decision, you said: We can't really entertain that application at this point in time because it's too late.
573 So what we were trying to do in our March 1st application was to say: We understand that the Commission is not comfortable with what we are doing, so maybe the solution that is better for everybody is that we move to a Category B.
574 But, having said that, we are prepared to go back to what we said at the hearing in April of 2011.
575 It was just a commentary, following up what we had originally said at group-based licensing. But I can understand where you would see some confusion.
576 We are, today, saying to you, notwithstanding where we have been -- what we put forward to you today is, we think that, with greater clarity, you don't need to amend the Nature of Service. We are not looking to broaden 5(a), we are really looking for greater clarity as to what is the sandbox, but we are not looking to expand.
577 We think that we can find a solution that doesn't require a change to the Nature of Service of the Category A or having to move to a Category B. We think that, with clarity, we can achieve a practical and useful solution for everybody.
578 COMMISSIONER MENZIES: I just want to make sure you understand that part of the issue -- one of the issues, among many, for us is, so long as you remain protected in the genre, it suppresses innovation elsewhere.
579 If you were finding that the original TLC format -- and I don't think anybody would argue that there is nothing that says education can't be entertaining, or learning can't be entertaining, but if we keep this protected status -- the status was intended for something quite specific, and if times change and that is not commercially viable, and we are going to protect something new, perhaps that should be a different type of process.
580 From our point of view, somebody might be out there who really wants to put on 18 hours a day of economics lectures. Right? They can't do that.
581 I know it doesn't sound very exciting commercially, but they can't do that as long as we are protecting you.
582 MR. MAAVARA: Commissioner Menzies, one of the problems with policymakers and legislators and lawyers is that we get hung up on words. I think, in a nutshell, what we are saying is that, in fact, we agree with you.
583 If we think of a genre as a corral, what we are talking about with the addition of the words that we set out in the speaker's notes is that, actually, we are making the corral -- we are expanding the definition, but we are actually narrowing the ambit of the genre by increasing the specificity of what is defined for the purposes of the Nature of Service.
584 As Sylvie said, we are not asking for a change from a policy perspective, we are really just looking at it from the perspective of a definitional tool, which would be that you have to have these criteria in order to fit in with that.
585 So what we are saying, actually, is that the 18 hours of economics -- I would venture to say that you would already, probably, license that anyway, because you have in the past, as John pointed out with that list of channels.
586 Secondly, under our definition, what we are doing is, we are actually making the corral smaller.
587 As you are aware, the Commission in recent times, with the imposition of the 10 percent rule, has in fact expanded the corral for genres by saying: You have to kind of do this, but, by the way, you can do this, this, this and this, as long as you don't go past the 10 percent level -- and in some cases it has been 15.
588 What we are saying with respect to this channel is: We have the Nature of Service. We are tightening that definition by adding these words -- expanding the words, but tightening the application -- and we are not changing any of the other four categories that we are allowed to do.
589 So we are making the genre tighter.
590 MR. CASSADAY: There are two other things that I would add, one gets to Commissioner Lamarre's question about marketing, and the other gets to the question of why do we deserve this privilege.
591 We have invested a significant amount of money in acquiring access to the Oprah Winfrey brand and that programming, which, by virtue of the magnet that it creates for consumers, is going to draw people's attention to the particular categories of interest that we come out of this hearing having agreed are worth bringing to our service.
592 Think about the Category A status as being beneficial to the system, because, obviously, our obligations are significantly greater as a Category A than they are as a Category B. So there is going to be more value added as a result of what we bring to the table with a Category A.
593 Secondly, think about the investment, which, we can assure you, very few others in this country would have been willing to step up to do, to bring the Oprah Winfrey brand name and create a spotlight on the shows that we develop in Canada that are furthering the educational mandate we have.
594 COMMISSIONER MENZIES: Sure, I think we understand that, and this isn't about Oprah, in that sense, it is about what you do that isn't Oprah.
595 It is a very difficult position to put the CRTC in to say that our job is to look to the availability of American programming.
596 MR. CASSADAY: I think we all understand that the Canadian system depends significantly on imported programs and brands. That is how we have been traditionally able to develop such a strong broadcasting organization.
597 COMMISSIONER MENZIES: I was just trying to say that this conversation is not about Oprah, it's about 55 percent 5(a). The other 45 percent --
598 I'm sorry, go ahead.
599 MS PHILLIPS: I just wanted to say, to the point of the 55 percent 5(a), that the current definition, and the fact that we seek some clarity by expanding the wording of that definition -- as we went through this process, we went to the CRTC website to try to understand what would be certified as a 5(a) program --
600 COMMISSIONER MENZIES: Just to be clear, are you talking about expanding the definition or getting a more precise definition?
601 MS PHILLIPS: Clarifying it.
602 COMMISSIONER MENZIES: Okay. "Expanding", as you can tell, is not working with me.
603 MS PHILLIPS: No, I mean clarifying it through its definition.
604 COMMISSIONER MENZIES: Okay, thank you.
605 MS PHILLIPS: We went back, and going back to 2000 to the present, we could find approximately five English adult series that had actually been certified as 5(a) programming -- "School of Chef", "Alternative Medicine Show", "Sociology of Crime", "Data Café".
606 So, when we look at all of the programming that has been produced, and what our viewers, our producers, all of us would consider educational programming, in basically two decades, there is nothing that has been certified. Is that because that definition is so blank and needs to be clarified?
607 And if we were to clarify that further and you had raised the question of would we be concerned of how do we keep you separate from any other broadcaster is because there might be more shows that fall into Category 5(a), I think you have to further also look at the nature of service because, sure, if we say cooking shows might fall into 5(a), all of a sudden food network might have a plaster of 5(a), but their 5(a) would be specific food whereas ours would be on a wide variety of topics.
608 COMMISSIONER MENZIES: Yes, then we would -- yes, that's the concern. We would have Mr. Cassaday out earlier talked about the CORUS array of women's networks, right, which is interesting that that's where we're at because we have a women's network that protects as the owner protection, right.
609 And, obviously, all kinds of operators are going to try to appeal to the female demographic because it's the one that makes all the economic decisions, but we will get there.
610 I just have one more question regarding your video presentation today just for clarity sake.
611 One of the shows was "Dotto Tech", can't find that on your Website and I would just like to clarify because it was used there, where that show comes from and whether you use it or not or --
612 MS PHILLIPS: The first two shows that were on there, which was "Dotto Tech" and "School of Chef" --
613 COMMISSIONER MENZIES: Right.
614 MS PHILLIPS: -- were used as demonstrations of programming that have been certified 5(a). The following two programs were programs out of our current schedule that we felt met the criteria of a 5(a) program.
615 Both "Dotto Tech" and "School of Chef" have previously been on CLT. They are not currently on OWN. They were used as a demonstration.
616 COMMISSIONER MENZIES: And so those are like -- those shows that were on --
617 MS PHILLIPS: These are old programs.
618 COMMISSIONER MENZIES: -- five, six years ago.
619 MS PHILLIPS: Yes. That we are using clearly to demonstrate what is a certified 5(a) program.
620 COMMISSIONER MENZIES: And the one in the bedroom with Laura where some former woman had some terrible dysfunction, that's an American show; right?
621 MS PHILLIPS: Yes, it is.
622 COMMISSIONER MENZIES: O.k. Thanks. Okay. If we are going to move forward like we do need to understand and get some input from you on a little bit of what we have been doing and what we might do.
623 So, as a bit of background, what process do you follow now to have programming accredited by post-secondary institutions?
624 MR. MacDONALD: As I think we mentioned earlier in our presentation, we have a full time employee who actively goes out speaking with institutions of our education and talk to them about our programming to see if any of our programming is suitable for incorporation association with their courses of education.
625 COMMISSIONER MENZIES: Yes. And what happens? That's the accreditation process? They say yes or they say no?
626 MR. MacDONALD: No. That's the outbound process and then, it doesn't -- we don't in every case succeed in finding a course that we can associate with a program, but when we find a course for which the instructor agrees that it's a valuable part or addition to their program, then they will sign and I don't know if affidavit is the term, but they will -- they will incorporate the program formally into their program and then the students will use that television show as part of the education process.
627 And so, we go out on a regular basis to try and find programs that do that.
628 COMMISSIONER MENZIES: So, you create the programming and then you --
629 MR. MacDONALD: Correct.
630 COMMISSIONER MENZIES: -- look for a fit with a -- Do you have a defined list of post-secondary, say, you work with or learning institutions or just this person's job to find the network and find the fit and --
631 MR. MacDONALD: Gary, do you want to talk to that one?
632 MR. MAAVARA: I think on this, Mr.Commissioner, one of the things that's important to understand is that -- and this is something that I didn't realize until just recently -- I was involved with launching a new campus to the University of Waterloo in Stratford.
633 All university and college programs have to be accredited by the Ministry of Education applicable to that institution. So, when we go to an instructor and say we are going to link something together, the instructor has to go through the accreditation process first within the institution and then, within whatever Ministry applies. And we don't really play a role in that.
634 COMMISSIONER MENZIES: And so, just so I'm clear, your employee goes to an instructor?
635 MR. MAAVARA: Well, or it could be to the school. For example, in our discussions with George Brown, for example, that discussion was with the President of the Institution.
636 COMMISSIONER MENZIES: Right. So, you go there and -- but what happens inside the institution to get accredited? Is the process right now where somebody says, yes, this would be useful, I can use this program. I can use this program as an instructional tool in my lectures or outside of my lectures and that's it?
637 Or is there a process that takes place deeper within the institution where he then has to get permission to get that accreditation?
638 MR. MAAVARA: Yes. Vibika has something to add to that, but the program has to be written up literally almost on a class by class basis and there have to be elements within the presentation that's made for accreditation such as how is it tested, you know, or how do you determine whether the student has done whatever it is within the course.
639 COMMISSIONER MENZIES: Right.
640 MR. MAAVARA: And that goes through the system. I have to admit I don't understand deeply how that works, but my point simply is that that accreditation happens outside of course. That's a certification that happens elsewhere.
641 COMMISSIONER MENZIES: Yes. I am just trying to understand. The more we can learn about what the process is, the more fully equipped we will be to be useful then defining what would be a helpful process going forward.
642 MS BIANCHI: If I could speak to the original shows and when we commissioned them. What we are talking about now previously were shows where either we acquired them after a certification, so the process of accreditation came after that or they were foreign programming or whatever.
643 In the case of original programming, and these things that we commission for OWN or prior to that, for VIVA, we would take into consideration how it might qualify and in most cases, we are, you know, using something close to the criteria, the elements that were introduced in the Opening Statement about detailed information and qualified experts and such.
644 So, we wouldn't even commission a program if it's intended for a 5(a) status unless we felt it could deliver on that in some capacity.
645 COMMISSIONER MENZIES: Okay. So, all right. Yes, once I have the -- a follow-up question that once a program is certified, does it have a "best before" date on it? I have something certified in 1997 that was useful then, is it still certified or does it get re-certified or -- like if it was useful for one year and this year, would it still be?
646 MS BIANCHI: Well, I mean, as far as I know, a certification, you know, stays with the program unless it becomes decertified for whatever reason.
647 COMMISSIONER MENZIES: Yes. It stays with it. Right. There is no decertification process?
648 MS BIANCHI: Well, not to my knowledge but --
649 COMMISSIONER MENZIES: O.k. Thank you.
650 MS BIANCHI: -- Daniel Vinet who is here will tell you. He says no. Okay.
651 COMMISSIONER MENZIES: So, do you follow up to find out whether to what extent post-secondaries do use the program? Like do they sort of assign people to watch the program or they just take a DVD and they show it in the classroom
652 and --
653 MS BIANCHI: It depends on the program, in each case. And again I am speaking more from the original shows than anything that is acquired because that's my area, but it depends on what the instructor or the professor of the course feels is the material they need. And in some cases it might be materials that are used in planning the show before it's made. Sometimes it's video.
654 So, it might be excerpts of the show. It can be different things. It depends on what they feel is required.
655 COMMISSIONER MENZIES: So, do you get feedback on that or do they follow up, they say: well, you know, I thought it was going to be useful but -- or, this is what I think is the most useful?
656 MS BIANCHI: I can't say for sure, but I am not -- I am not aware of that, no.
657 COMMISSIONER MENZIES: O.k. Thank you. Now, the institutions that I took note of, Ryerson, Mohawk College, Athabaska, you -- Mount Royal University, I think a couple others -- are those formal relationships at a high level or the relationships that are managed by your certification employee, I guess we won't call that person for whatever. Do they just -- how do they decide which institutions to work with?
658 MR. MAAVARA: Well, we have contractual relationship with each --
659 COMMISSIONER MENZIES: You do, okay.
660 MR. MAAVARA: With each institution, yes.
661 COMMISSIONER MENZIES: O.k. Now, you touched on this a bit earlier, but it would be useful to talk about it a little bit more, I think The range of programming that's offered through these institutions appears very media centric. For example, writing for TV, show business business, media careers, cinematography, journals and law and ethics, et cetera. And there is one regarding health and there is one I think that I looked at regarding how to organize, how to get organized which is generally useful.
662 But there is a sort of a heavy -- it indicated a heavy bias towards media and I didn't see a lot or really anything to say on things like, say, astronomy or biology or mathematics or things that can be useful, not that the others aren't, but in that regard. So, can you help us understand why that exists?
663 MR. CASSADAY: Well, I think the fundamental thing is you talk about process and the process is not education institution back, but rather viewer forward. So, we are trying to identify concepts that we think would be within the nature of service and appeal to our viewers and are consistent with our positioning in the marketplace.
664 So, again, perhaps we have been too narrow. We, I think, talked about numerous examples of programs that were, you know, were further afield than media, but the bottom line is we very much start from the viewer.
665 The other thing that's important to note is that since this service was first licensed, where I am sure it played a very important role in formal education, we've had broadband become a reality.
666 Education via broadband where people can watch on-demand and stop and start and there are institutions like the Coan Academy and other things that have emerged, I think largely supplanted the role of television as being an adjoint to institutions like Mount Royal College or Ryerson University.
667 So, what we are trying to do is find a place to stand within a very very roll bust educational environment, multi-platform educational environment, where we can do good and do good things. And again, we think we have done a very good job.
668 If there are areas that we come out of this hearing agreeing should be supplementing our schedule, and then, you know, we are open to that, but it has been very much a viewer driven approach to developing our formats.
669 COMMISSIONER MENZIES: And just because you mentioned it a little earlier, I wasn't originally going to ask, but because you mentioned it a little earlier, that you consider OWN to be a part of the collection of women's channels, are these programs then designed primarily for women? If it is to be re-driven if most of your audience, your target audience is women, is the education portion then designed primarily to meet women's needs as opposed to men's needs, and women in that age demographic as opposed to women not?
670 MR. CASSADAY: Like newspapers are predominantly targeted to male readers, there is a significant amount of female readers -- TSN has a significant number of female viewers -- our positioning really just talks about the fundamental position in the viewer's mind about what that network stands for.
671 So, unquestionably, Oprah Winfrey Network is positioned predominantly as a service about women and making better lives and allowing them to reach their full potential. But we certainly have a lot of male viewers, but our primary focus is on educating, entertaining and informing female viewers.
672 COMMISSIONER MENZIES: Okay. So, yes, in other words, to my -- Thanks.
673 So, you don't -- it's basically you look to what your audience, in terms of the educational program, what your audience wants and that sort of stuff, in terms of driving that. And then, you take that -- those potential pictures to the academic institutions and to get them certified.
674 So, it's very viewer driven, the market is defined as women of a certain demographic and what they want is key -- a key factor -- I am not saying it's the only factor, but a key factor in your decision-making regarding what sort of educational or Cat.5(a) programming.
675 MR. CASSADAY: You are going to hear from a number of independent producers in this hearing and they are going to talk to you about what kinds of conversations they have with our programmers when they come to see CORUS. They understand precisely what the role and positioning of this network is and the kind of shows that are going to appeal. And if you have got a great new procedural cop drama, you are not bringing it to us.
676 If you have a show like grocery bags, that's going to educate and inform viewers about consumer issues, we are the place to go and then we make the decision about whether or not we think it's as an appealing of an idea for our audiences as the independent producer does.
677 But again, Vibika, and then the producers that we have here to talk to you today, that are here rather to talk to you today can embellish on that.
678 COMMISSIONER MENZIES: Okay. So, that would be more like "Cup Cake Girls" or -- anyway, it doesn't matter for now. I'll get back to them.
679 So, is it your position that once a program is accredited, that that is all that's required to be certified as 5(a)?
680 MS COURTEMANCHE: Yes, because that's what has been consistent throughout the licence, sir.
681 COMMISSIONER MENZIES: O.k. And just to clarify on the other point, I am just -- so that I am trying to have a modern view on this as sort of educational programming, that in today's day and age, we would pretty much have to write off the idea that somebody would be doing, for instance, a remedial mat course for Aboriginal children or something like that -- that needed to get a grade 10 mat or get into trade school or something like that.
682 MR. CASSADAY: I think there are people and platforms that can deliver that kind of programming in a far superior fashion to what we can.
683 COMMISSIONER MENZIES: Actually, is this programming category really relevant at all any more in terms of -- I mean, this was created not prior to the Internet, but certainly prior to the availability of video on the Internet and that sort of thing and I am trying to imagine some of the university professors using some of this programming and telling their students to watch it on television when they are sitting there with iPads and downloading you to clips and that they are more likely to find it that way.
684 As we go forward, should we be looking basically to -- there is the question: Should TV be getting out of that education business?
685 MR. CASSADAY: I don't think so. I think it's relevant. I think just what works has to be discussed. I have had the opportunity to meet Presidents, Prime Ministers, major athletes, Hall of famers, I have never met anyone that had the influence on people's lives that Oprah Winfrey had. We hosted her in Toronto a few week ago, I had senior ministers of government. I mean, people could not wait to tell their story about how she changed their lives.
686 And I think that the message that I got from there is that education is -- particularly for adults, is not just about maths skills and not just about jobs skills, but about helping you deal with the stuff that we deal with every day in our lives and Commissioner Menzies, like I've said I have just never seen people react like they do to this woman and her message is all about and John had the opportunity to work hand and glove with her for years.
687 So, to me, I felt even more sure that we had something incredibly valuable here after that day we spent with her and she did a show called "Master Class". There were two shows completely sold out at the Toronto Convention Centre, line-ups around the block to get in. It's just an incredible incredible impact that she has on people's lives and I think if we can do a little bit of that in television, then we are doing a lot of good.
688 So, to your point about, yes, the world has changed since this service was licensed, the CLT a hundred percent agree, I think like everything else in this business, we have to evolve to meet the role that we can play effectively and I think this service is evolving nicely to meet that role and I think the role that we are providing is invaluable.
689 COMMISSIONER MENZIES: True. Your admiration for Oprah is noted. But just to be clear, are you suggesting that Oprah should be 5(a)?
690 MR CASSADAY: Our service is required to be 55 percent 5(a) and I am not at all suggesting Oprah should be 5(a). I suspect that probably it would be possible, Karen, to define it and in many respects what she does is being 5(a), but that's not our intent.
691 COMMISSIONER MENZIES: Thank you. On feature films; if we are to accept that feature films 7 through to 70 should be allowed as 5(a), what do you think would be the most appropriate structure to place around that in terms of recognition of it as a -- within an educational setting.
692 I note that like it was not the real reason, but within recent memory, you showed "Fried Green Tomatoes" and it had an introduction by an academic that lasted about 20 seconds and didn't seem -- as I recall, didn't really mention the film or even the genre or talked very vaguely about genre and that sort of stock and I am having a -- you know, these things always have to have a sort of reasonableness test as to, you know, what would the average person on the street think.
693 And I am trying to figure out what percentage of people watching "Fried Green Tomatoes" did that primarily for the acquisition of knowledge. And if we are going to create a knowledge framework around that, what that might look like?
694 MS COURTEMANCHE: We would -- I am not going to pretend to tell you today that I know how many people watched, you know, "Fried Green Tomatoes".
695 COMMISSIONER MENZIES: No. So, you know --
696 MS COURTEMANCHE: I would be -- I would be remiss if I tried to do that.
697 COMMISSIONER MENZIES: It's another question to make a point.
698 MS COURTEMANCHE: But I think to your particular point, as Gary explained earlier, the Commission has allowed different categories to be included in various services up to a certain amount, so perhaps the solution here is just to say that when it comes to Category 7 programming, you know you would have the traditional limitation, if that's what the concern is.
699 MR. MAAVARA: I think Commissioner Menzies, the issue of "Fried Green Tomatoes" is not that the film entrancingly -- I mean, it may be educational of rightly ways, but it's not sitting on the schedule accredit -- because of anything that's inside the show per se, it's because it's part of a course where the students are learning how to make fried green tomatoes.
700 COMMISSIONER MENZIES: I think it's lugged as 5(a), right.
701 MS COURTEMANCHE: Yes, this is 5(a).
702 MR. MAAVARA: So, the discussion in the class -- and I haven't been in the class -- is, you know, here is you -- this script was developed or how it's shot, I don't -- I am not familiar with the course itself, but that's -- that's the point of that.
703 COMMISSIONER MENZIES: We have a request for a quick five minute or ten minute you want? Great. And then, we will continue, pick up where we left off.
704 THE CHAIRPERSON: A brief bathroom break and then we'll continue with Peter's questions and then, I guess a break for lunch.
705 THE SECRETARY: All right. So, you want to break for five minutes for now.
706 THE CHAIRPERSON: We are going to break five minutes.
707 THE SECRETARY: Ten minutes?
708 THE CHAIRPERSON: Ten minutes.
709 THE SECRETARY: All right.
710 THE CHAIRPERSON: Well, whatever you need.
711 THE SECRETARY: Ten minutes, Mr.Chairman.
712 THE CHAIRPERSON: Ten minutes and then we will return with --
713 COMMISSIONER MENZIES: We'll pick up with "Fried Green Tomatoes".
714 THE CHAIRPERSON: We'll pick up with -- yeah, back to the movie after this break.
--- Upon recessing at 1200
--- Upon resuming at 1208
715 LE PRÉSIDENT : On va commencer.
716 Okay, Commissioner Menzies.
717 COMMISSIONER MENZIES: Thanks. Just to pick up where we left off, what I was -- really the purpose of the question was what do you think would be an appropriate structure to place around a film so that when somebody was viewing it they felt that it was being presented as an educational project?
718 I'm reminded of -- I don't know how many years ago it was when I was thinking about this. Ann Medina used to do presentations on the History Channel when they started showing films for instance. I'm not saying do you agree with that, but I am throwing that out to try to give it some framework to my question.
719 MR. MacDONALD: I think we would like to come back in reply.
720 COMMISSIONER MENZIES: Okay.
721 MR. MacDONALD: I am not familiar with Ann Medina.
722 COMMISSIONER MENZIES: Sure. Good. That will get us to lunch quicker, too.
723 In terms of the documentation from --
724 MS COURTEMANCHE: Can I just get one clarification though?
725 COMMISSIONER MENZIES: Sure.
726 MS COURTEMANCHE: You said "movies." Are you restricting your comment to movies or --
727 COMMISSIONER MENZIES: Feature films.
728 MS COURTEMANCHE: Just feature films.
729 COMMISSIONER MENZIES: Feature films.
730 MS COURTEMANCHE: So that wouldn't include series you are talking about?
731 COMMISSIONER MENZIES: Well, you know, because I have a further question on it, to make this more efficient we might throw in the 2(b) long-form doc.
732 MS COURTEMANCHE: So framework around feature films and 2(b) documentaries?
733 COMMISSIONER MENZIES: Yes.
734 MS COURTEMANCHE: Okay.
735 COMMISSIONER MENZIES: Do you think it would be useful in terms of the certification process with post-secondary if they were to file that information with the Commission so that we had clarity on the system that would work?
736 MS COURTEMANCHE: Would you want -- you would want something directly from the university that explains to you the process? I just want to understand.
737 COMMISSIONER MENZIES: In the future if we were -- in terms of certification of programming --
738 MS COURTEMANCHE: For accreditation purposes.
739 COMMISSIONER MENZIES: Accreditation, sorry. I misspoke.
740 MS COURTEMANCHE: Yes.
741 COMMISSIONER MENZIES: For accreditation purposes that they would file something with us. Would that -- I just want your point of view as to whether you think that is necessary or useful in providing further clarity to the 5(a) issue.
742 MS COURTEMANCHE: I'm not saying it wouldn't be helpful, but I would like to know what you expect the university to file.
743 So would it be something in the nature of saying that we have agreed to accredit this particular movie for the following reasons? Is that what you are looking for or are you looking how the accreditation process is conducted? I just want to get --
744 COMMISSIONER MENZIES: I'm not defining it.
745 MS COURTEMANCHE: Okay.
746 COMMISSIONER MENZIES: I'm just posing the question as would such a process -- details to be determined later -- be useful to make that conversation a three-way conversation rather than just a two-way conversation in terms -- perhaps you might consider that that might give a bit more regulatory certainty to the process and clarity.
747 MS COURTEMANCHE: At first blush I don't see a problem, but if we can come back --
748 COMMISSIONER MENZIES: Sure, we can come back on that, too.
749 MS COURTEMANCHE: -- that would be another item for reply.
750 COMMISSIONER MENZIES: Yes.
751 MS COURTEMANCHE: So at first blush I don't think it causes a huge problem.
752 COMMISSIONER MENZIES: Yes, you can take time to think about it --
753 MS COURTEMANCHE: Yes.
754 COMMISSIONER MENZIES: -- but I'm just trying to find areas where things can be clarified.
755 MS COURTEMANCHE: Okay.
756 COMMISSIONER MENZIES: Do you think it would be appropriate for us to indicate -- because there has been discussion about full spectrum and fuller spectrum and diversity of the type of education programming.
757 Do you think -- and again, you can come back if you wish -- but that we might talk about or have conditions regarding a range of balance between, for instance, but not limited to, but just in terms of example, science-based programs, arts-based programs, instructional-based programs, so that there would be again some certainty regarding compliance with the nature of service?
758 MS COURTEMANCHE: We will come back in reply as well.
759 COMMISSIONER MENZIES: Okay. Thank you.
760 MS COURTEMANCHE: And just to understand, we would define how to achieve that balance, just to be clear, because working within the constructs of a programming schedule, it is obvious that you can't do everything every day.
761 COMMISSIONER MENZIES: Yes, understood.
762 MS COURTEMANCHE: So we would construct some kind of a notion as to how that balance would be achieved.
763 COMMISSIONER MENZIES: Understood, yes.
764 MS COURTEMANCHE: Yes.
765 COMMISSIONER MENZIES: But if we do consider --
766 MS COURTEMANCHE: If you were to go there, yes.
767 COMMISSIONER MENZIES: -- it would be important to have that sort of feedback from you.
768 MS COURTEMANCHE: Okay. Will do.
769 COMMISSIONER MENZIES: The next one is how do you suggest we handle the categorization of non-Canadian programming that has been assigned a CAVCO categorization?
770 MS PHILLIPS: Could you repeat that, please?
771 COMMISSIONER MENZIES: I'm sorry? Repeat the question?
772 MS PHILLIPS: Could you repeat that?
773 COMMISSIONER MENZIES: How do you suggest we handle the categorization of non-Canadian programming, i.e. American programming, that has been assigned a CAVCO --
774 MS GATES: (Off microphone).
775 COMMISSIONER MENZIES: Hang on a second. Sorry, Moira, I didn't hear.
776 COMMISSIONER MENZIES: -- that has been assigned an American categorization and the same question for something that has been assigned a CAVCO categorization?
777 MS COURTEMANCHE: We will get back to you as well.
778 COMMISSIONER MENZIES: Okay.
779 MR. MAAVARA: I'm sorry, I'm not sure I understand the question. Maybe you could flesh it out a little bit.
780 COMMISSIONER MENZIES: We want to know what your suggestion is on how we handle verification or categorization of programming that's certified outside our process, that's been certified in the U.S. as a certain category.
781 Should we recognize that automatically or should we have a separate process if it has a CAVCO certification? Whether we have or haven't in the past automatically recognized that, should we have a separate process for handling those?
782 MR. MAAVARA: Thank you.
783 COMMISSIONER MENZIES: Thanks.
784 I just have a follow-up, just a couple of points on programming because I touched on the long-form doc. We had, in terms of the nature of -- two questions really.
785 Mr. Cassaday, you mentioned earlier that producers have a very clear view of what you are looking for and so they wouldn't bring you a crime show or something like that and I was a little confused by that.
786 I wanted to give you the opportunity to clarify because some of the programs that are offered on OWN are "True CSI," "Psychic Investigators," "Snapped" and "Cold Blood." So I'm trying to -- are those not crime shows or what are they?
787 MS BIANCHI: I can answer that. I think what John was referring to earlier was a scripted dramatic procedural versus a documentary approach to true crime.
788 MR. CASSADAY: It's not "Law and Order." It's not -- these are documentary productions around crime as opposed to a weekly series, a weekly show around solving crimes.
789 COMMISSIONER MENZIES: Okay. But it's the category as opposed to the topic. I understand the difference between categories. One is a documentary and one is fact or fiction, et cetera, et cetera.
790 MR. CASSADAY: Yes. Not the topic, it is the genre of programming.
791 Go ahead.
792 MS COURTEMANCHE: Sorry. Well, I guess --
793 COMMISSIONER MENZIES: I mean, Ms McLellan for instance has quite a bit of history and she will speak to us later regarding, you know, crime research and true life stories, et cetera, et cetera, et cetera. Those would be the fit that you would see.
794 So crime is still good, but instructional crime. That didn't sound right.
795 MR. CASSADAY: The distinction we are making is between big budget procedural scripted crime, like "Rookie Blue" and that kind of stuff.
796 COMMISSIONER MENZIES: Yes.
797 MR. CASSADAY: We are not going to receive those pictures --
798 COMMISSIONER MENZIES: Between drama and doc.
799 MR. CASSADAY: Yes. Doc, reality-based investigative kind of crime content works.
800 COMMISSIONER MENZIES: So what was intended was they know which category to bring to you, not so much which subject they bring to you?
801 MS BIANCHI: I would say they know both for the most part. I mean we are pretty clear when we speak to the community about what we are looking for and not currently but we have in the past said we were looking for documentary crime programming.
802 So they are responding to -- I mean if the original question is how do they know what we are looking for, we communicate that to them regularly and then they come to what their interpretation of that might be and sometimes they are right and sometimes they are not.
803 COMMISSIONER MENZIES: Okay. And just again for clarity because I think I missed -- having heard you today I think I may have misunderstood this when I was reading.
804 You indicated, not today but in previous correspondence, that there has been a lack of 5(a) programming available. Is that correct?
805 One of the issues, again to get back to the genre exclusivity and one of the dilemmas these regulatory creatures presents is when you have genre exclusivity essentially for 5(a), I mean if you don't make it, who else is going to?
806 That's what I didn't understand, is how could the people who have exclusivity on the genre have a problem with there not being enough available in the genre when only they are allowed to make it essentially, or are allowed to broadcast it?
807 MS PHILLIPS: I would say, first of all, that we don't have exclusivity on 5(a) programming. There are many other broadcasters in Canada who are entitled to run 5(a) programming.
808 COMMISSIONER MENZIES: Yes, but you have exclusivity on the genre that is 55 percent 5(a).
809 MS PHILLIPS: And again, when we talk about the amount of 5(a) programming that is available, again we are referring to paint a picture of what has been certified as 5(a) in the past versus what we believe should be 5(a) programming.
810 COMMISSIONER MENZIES: Just to answer the broader question though, how much do you invest in it, in the creation of it?
811 MS PHILLIPS: In the creation of 5(a)?
812 COMMISSIONER MENZIES: Yes.
813 MS PHILLIPS: You mean certified 5(a)?
814 COMMISSIONER MENZIES: Yes.
815 MS PHILLIPS: Currently very little.
816 COMMISSIONER MENZIES: Okay. Thank you.
817 MS PHILLIPS: Currently nothing gets certified as 5(a). However, we do produce programming that we believe is 5(a).
818 COMMISSIONER MENZIES: I know there's lots of -- and I don't really want to go back.
819 My questions here have been trying to focus on what sort of framework, how and if we move forward, in terms of building a definition around there. Because I think if we go back there's no -- we could have a long, long conversation about what gets logged as 5(a) and what doesn't and that sort of stuff, but I don't see any point in that.
820 I think the point that you and we both need if we are to move forward on this is structure in what has been a relatively unstructured environment in terms of that.
821 MS PHILLIPS: Yes. I would just say that if we were to look at 5(a) as we have discussed today, we do contribute a significant dollar value to the production of that programming.
822 COMMISSIONER MENZIES: Okay, thank you. Hopefully those questions, at least the last batch since the break, were intended primarily to help give us some feedback from you on what sort of an arc we might build to go forward.
823 Thanks very much. Those are my questions.
824 THE CHAIRPERSON: Thank you, Commissioner.
825 That's it for the time being. I think we are going to take a break. Let's come back at 1:45 and at that point I will have some questions about the genre exclusivity before we hopefully get to interveners later.
826 Thank you and we will see you at 1:45.
--- Upon recessing at 1222
--- Upon resuming at 1346
827 THE CHAIRPERSON: Okay, everybody is back, having had lunch and refreshed themselves.
828 We are going to look at the issue of genre exclusivity for the next probably hour, specifically the issue that OWN and W Network, as you know, should not be in competition with one another because they have different natures of service that they are both required to adhere to.
829 Now, last year in Broadcast Decision 2011-446 the Commission essentially put you on notice that we had concerns in this regard and while the Commission did not make a finding specifically that OWN was competitive with Corus' W service, we did make it clear that we had concerns at that time.
830 I will refer you to paragraph 34 of the decision which can be found on page 332 of the hearing record. I will read verbatim from it.
"...OWN and W Network both explore themes of beauty and style, relationships, money, food and health and offer similar programs. ... While OWN does not brand itself as a service intended for women..."
831 Remember I'm reading verbatim from the decision a year and a half ago:
"...its programming schedule and programming strategy indicate that it operates within this genre, which would arguably make it similar to and possibly competitive with W Network. This decreases programming diversity in the system and puts into question their Category A licence."
832 Now, I recognize that in response to that decision OWN did take steps last year to eliminate much of the shared W programming from OWN's schedule; is that correct?
833 MR. CASSADAY: That's correct. I believe there are four shows or less that are shared on the service today.
834 THE CHAIRPERSON: Just for clarity's sake -- and I note the number for programs there. I'm going to read this question: How much of OWN's programming, either series or movies, is currently offered on both W and OWN? So I guess what they are looking for is overlap currently, that is currently in effect right now.
835 MR. CASSADAY: I believe that number is four shows.
836 MR. MacDONALD: That's correct, John.
837 THE CHAIRPERSON: Now, in your November 8th submission, as you said, there are only four series shared between OWN and W Network and some of those programs are only occasionally shared between the two services. Can you elaborate on what you meant by occasionally?
838 MR. MacDONALD: Sure. From time to time programs move in and out of the various services and so only on very rare occasions would you see the same series on the same -- on the two networks at the same time. So more frequently -- more often it is the case that if in those limited cases where we do have some sharing it's just they are not coincident within the same timeframe.
839 THE CHAIRPERSON: Oh, so you mean on at exactly the same time?
840 MR. MacDONALD: Or even on at the same time of year. For example, I'm not suggesting that they are both on at 8 o'clock, but rather it might be on in January, it might be on in September on the other network.
841 MR. CASSADAY: We would never on any occasion run -- we do not -- I shouldn't say we would never, we do not run shows concurrently on the two networks.
842 THE CHAIRPERSON: Not even by accident?
843 MR. CASSADAY: It's not a strategy of hours to try to aggregate audience by double pumping them at the same time on two different services.
844 THE CHAIRPERSON: Also, on page 35 of your letter dated November the 8th you state:
"With regards to movies we share some of our movie inventory across some of our services: OWN, W Network, W Movies and CosmoTV. OWN titles tend toward adaptations from literature and more critically acclaimed mysteries. Therefore, there is a very small amount of movie crossover between W Network and OWN."
845 Are any of the movies aired on OWN unique to that service? I'm speaking exclusively among Corus-owned properties.
846 MR. CASSADAY: Well, generally the way movies are bought, they are bought in packages and the way we would think about scheduling movies is a series of concentric circles where there would be movies, take a "Lorax" which might be part of a package from a particular studio that would clearly have application only on a YTV, there may be another movie since we talked about "Fried Green Tomatoes" that might have application only on a W, and then there might be a few movies that are -- call them multifunctional, if you will, that would play well.
847 But again, because of the high cost of acquiring movies it is the practice of all broadcasters to try to amortize those costs over multiple stations or multiple networks.
848 THE CHAIRPERSON: Yes, I understand that and the Commission has a position on that and it does not oppose a certain amount of overlap. It understands that -- it's on record as saying that it understands there are economic reasons that make sense, that there would be a certain amount of shared programming.
849 I guess the problem, however, is where do you draw the line in terms of how much sharing and at what point that sharing begins to blur the lines between services.
850 For instance, on the issue of movies, how many movies are aired on both OWN and W? A couple of nights back you featured a film by the name of "Mrs. Brown," I believe. I mean would that have been aired on W as well?
851 MR. CASSADAY: Well, I will ask my programming colleagues to talk about specifics.
852 The overarching principle that we would abide by is that the positioning of each network has to be clear and distinguishable. So, as a result, that's why I described this use of concentric circles. So there would be certain movies that would clearly not be appropriate for other services and we wouldn't put them on.
854 MR. MacDONALD: Yes. I don't know the specific answer on that particular title. John is correct, though, that we endeavour to try and keep the services separate in identity and so we try and limit where we can the overlap to the extent we can.
855 We could certainly get back to you if you are interested in a deeper sort of analysis on sort of the level of overlap, but we don't think it's a large number.
856 THE CHAIRPERSON: Yes, I would appreciate that and I ask legal to make a note that that could be a future undertaking in terms of providing some details and specifically we would be referring to how many movies are aired on both W and OWN.
857 I would be interested to know that answer, say, over the last 12 months because, as you mentioned, Mr. Cassaday, you buy these movies with a mind towards a certain amount of -- I mean you have to rationalize these movies. You are paying X number of dollars, so you have to make the most. You have to get the biggest bang for your buck as far as being able to monetize these properties, the rights.
858 MR. CASSADAY: That's right. The way movies are bought is we would obviously like to buy only what we want, what we know what will rate and what we need.
859 The way the studios work is they have -- they represent a large number of producers and directors and they have to satisfy all of them. So they bundle the good, the bad and the ugly and we take that and then we figure out how to best allocate it, but we know the ones that we really desire in a movie package and that's where the programming creativity and talent comes into play.
860 THE CHAIRPERSON: Yes. And I can imagine that there would be a certain tug-of-war and a balancing act in deciding, you know, in terms of getting the biggest bang for your buck from a certain movie and be able to rationalize that amongst different services and yet being able to do -- I'm sorry, I missed your name there for a second.
861 MR. MacDONALD: MacDonald.
862 THE CHAIRPERSON: Doug. I'm sorry.
863 MR. MacDONALD: No, John MacDonald.
864 THE CHAIRPERSON: Sorry, John.
865 MR. MacDONALD: Yes.
866 THE CHAIRPERSON: -- what you said, which is you have to be able to maintain the identity of the service and you have to make sure that that brand is not confused with another brand, and so if you have too much overlap then that begins to become more and more of a problem.
867 So I guess where I'm going with this is where do you -- where and how do you draw the line between trying to maximize revenues from a particular title and trying to maintain the distinct quality of each of your services?
868 MR. CASSADAY: Well, a lot -- to a large degree the line is drawn by the demographic that our advertising clients are buying. So when they are buying the Oprah Winfrey Network they may be buying adults 35 to 64 or women 35 to 64. When they are buying YTV they are buying kids 6 to 11 and to an increasingly large degree parents of kids 6 to 11. When they are buying Cosmo they are buying 18 to 34.
869 So a movie that clearly doesn't appeal to that audience is not going to be acceptable to the advertiser who has bought into a run of service schedule. They expect that the programming that they are buying on a Cosmo TV or on Oprah or W or YTV is going to attract the audience that they have paid us for. So that is also a governor.
870 So our positioning to the viewer and our promise to the advertiser are two very strong dictates in terms of determining where these films end up going, and putting the wrong film on the wrong location is not only inconsistent with positioning but incompatible with the interests of our advertisers.
871 MR. MURPHY: I would like just to add, Mr. Chair, that we also are very clear to be distinct with our BDU partners. They have the same expectation that there is clarity around the positioning of the services.
872 So we spend an inordinate amount of time making sure that we focus on what plays on what service because there is a positioning distinction and there is also the expectation from our distributors that the services are unique.
873 THE CHAIRPERSON: Would it be appropriate to establish limits on the amount of programming shared between W and OWN? I guess we are talking about regulatory fencing, you know. Do you think something like that would be appropriate?
874 MR. MAAVARA: Mr. Chairman, if I could just jump in.
875 One important attribute of film, before we answer the question, is that in terms of the film rights market a lot of the films that we are talking about, for example "Fried Green Tomatoes," it may be appearing on a Corus channel, but that film is also being sold into the market on other channels.
876 The exclusivity rights by customer and by platform erode as the film gets further along from its release date. So, you know, we could be talking about films that are not necessarily exclusive to Corus and you might be able to see "Fried Green Tomatoes" for example on six channels on a given night.
877 MS COURTEMANCHE: I just wanted to add that when CLT was originally licensed there was a condition of licence that basically said -- because there were co-owners at the time and therefore the co-owners each had their programming services. So they said that between the two they couldn't overlap more than 20 percent. So that was apart of the original licence, just to make that point.
878 THE CHAIRPERSON: And as far as you know, that is what it is now?
879 MS COURTEMANCHE: Well, that condition of licence went away over time, but I'm just saying that we are not doing -- just to put things in perspective, that is the way this service was originally licensed.
880 We are not doing anywhere near 20 percent, so I just wanted to reassure you, but if you are looking for some kind of an undertaking we could certainly come back in reply and give that some thought.
881 THE CHAIRPERSON: Thank you. Thanks again for addressing that.
882 I want to talk a little bit about programs that originated on W but now are on OWN.
883 It is my understanding, and I'm using the term -- I'm wording this in a very legalistic way, that a not insignificant amount of OWN's current program schedule originated on W, and looking at your schedule, is it true that the following programs, which I note some of them appear several times throughout the broadcast day, originated on W : "Shopping Bags," "The Right Fit," "Maxed Out," "Cupcake Girls"?
884 MR. CASSADAY: Karen can probably give you the detail on that.
885 The history, though, is that when we acquired CLT from CTV it had not been a priority brand for them, they had other things that they were focused on. There had been virtually nothing spent on programming in many years.
886 So, as a result, we really had to reconstruct the schedule and economics dictated to some degree the amount of overlap and it was more than we would have liked but it was the best we could do. What we have been doing, as you noted in your earlier comment, is weaning off all that content and making sure that what we have is distinctive as it relates to OWN.
887 MS PHILLIPS: What I will add to that is that yes, there are programs that originated on W and have subsequently moved over to OWN Canada.
888 We also recently took W Network and reinvented the type of programming that we put on that network and as a result of that some of the programming that better fit the OWN nature of service migrated over to OWN.
889 And I would actually ask Vibika if she could comment a bit on the differences that we see between W Network and OWN and why some of that programming went away from W and over to OWN.
890 MS BIANCHI: Sure. So one of the -- I mean definitely when OWN came into being for us it was really important to distinguish between W and OWN and programming is obviously one way of doing that, and in doing so we have been pushing W Network in the direction of being much more entertainment-focused and less informational.
891 So programs that were originally commissioned for W at one time that had more of an informational position or offering no longer play on W and have migrated completely over to OWN, where it's a better fit today.
892 THE CHAIRPERSON: Now, these shows -- thank you for that -- for example, "The Shopping Bags," "The Right Fit," "Maxed Out," "Cupcake Girls," they are being logged as Category 5(a) programming by OWN; is that correct?
893 MS PHILLIPS: Yes, they are.
894 THE CHAIRPERSON: Could you tell us how -- and I understand if you don't have this information available -- but could you tell us how they were logged by W?
895 MS PHILLIPS: On W they would have been logged with the certified category code. So if it was a 5(b) program from the CRTC's certification it would have been logged as a 5(b), whereas it may have been logged as a 5(a) on OWN because it was attached -- it had an accredited course attached to it.
896 THE CHAIRPERSON: They had different -- you didn't log them as 5(a) on W, in other words?
897 MS PHILLIPS: No.
898 THE CHAIRPERSON: And could you provide us with a breakdown of exactly how much of OWN's current program offerings originated on W? Specifically, we would like to know exactly which shows and how many times on average they were offered.
899 MS COURTEMANCHE: Could you just repeat that last section, please? So which --
900 THE CHAIRPERSON: I'm going to read it verbatim here.
901 MS COURTEMANCHE: Okay.
902 THE CHAIRPERSON: We would like to know exactly which shows and how many times on average they were offered.
903 MS COURTEMANCHE: Okay. Thank you.
904 THE CHAIRPERSON: I want to refer you to the letter of November 8th, paragraph 34, and it says:
"This move of programs from W Network was only a start to a building of a stable of programs specific to OWN."
905 Two of you have actually addressed that. Mr. Cassaday, I believe you referenced this earlier on as to the rationale behind why it was that you had to essentially migrate programs.
906 And it goes on to say:
"Now that we have been able to establish the brand, OWN has its own commissioning and acquisition filters and list of programs in development."
907 So the question is why would you think you could build the brand of an education network by moving programs over from W Network, which is a women's lifestyle service? By taking that approach, would you be running the risk that, at least in the eyes of viewers, rather than establishing a distinct brand for OWN that the programming from W would only confuse one service with the other?
908 MR. CASSADAY: While it's true that W was a lifestyle brand, as Karen said, over time we started to see W ratings waiver, weaken. We conducted a massive study internally and redefined the positioning of W and particular programs that had more of an educational versus an entertainment focus were considered to be no longer appropriate for the channel, so they became excellent candidates to migrate into a new and differentiated service.
909 THE CHAIRPERSON: Mr. MacDonald?
910 MR. MacDONALD: I would just add that we were relying obviously very heavily on the programming provided to us by the OWN Network in the States to drive a lot of the brand positioning for the OWN Network, and so while there was some risk by moving some W programming over we believed that we could rely on sort of the strength of the programming from OWN in the States as well to help us with the brand positioning.
911 THE CHAIRPERSON: In paragraph 40, once again of your November 8th submission, you note that:
"Corus has spent countless hours of research, branding and effort to distinguish each of these services as non-competitive."
912 On OWN you run a show called "Divine Design" in which Candice offers home redecoration advice. Now, W runs a show called "Candice Tells All" in which Candice offers advice on home redecoration. So two shows, two different titles on two different networks in which the same Candice appears to be offering very similar advice and yet one is on an entertainment network.
913 I understand that there is a certain amount of flexibility as far as the non-education-related programming but, you know, was that -- were those two shows among the list of overlapped programs that you offer or are they not on the list? Because I don't believe it is, but maybe --
914 MR. CASSADAY: I'm sure Vibika can comment on this more specifically.
915 The answer to the question from my perspective is I doubt it because they are two different shows with the same personality. Candice Olson is a very bankable personality and her program offering has evolved. She had been on W for quite some time and is doing programs for us on OWN as well.
916 MS BIANCHI: We did eight seasons of "Divine Design" and around the time or prior to the time that we wanted to, you know, not quite rethink but refresh W and take it to a different place, we decided it was time to create a new vehicle for Candice, one that fit W better, because "Divine Design" no longer did. "Divine Design" has now migrated to OWN.
917 "Candice Tells All" is much more of a reality entertainment approach to what she does. While at the heart of it, it is about her design, the approach to it is much more of an entertainment focus.
918 THE CHAIRPERSON: So you are saying that they are two different shows?
919 MS BIANCHI: They are two different shows and I think someone who may not be as familiar with the genre might not see a huge difference, but someone who is can see that there is quite a huge difference.
920 THE CHAIRPERSON: Would the average person see the difference?
921 MS BIANCHI: I believe so.
922 MS REDMOND: I think where the audience sees the difference is when W was originally doing that more traditional lifestyle how-to programming the audience was fairly narrow and it was a very specific specialty audience looking for that type of lifestyle information.
923 Now, when the audience goes to W they are definitely a much broader co-viewing audience of men and women and I know as a producer we are not putting the same information into shows that we used to for W. It is purely character and story, whereas a show like "Maxed Out" had tons of walk-away information backed up with that information on the Web. So I would never pitch a show like that to W anymore, where I would to OWN.
924 THE CHAIRPERSON: On paragraph 21 of that letter, the November 8th submission, you say:
"OWN was delivering greater audience shares through massive increases in viewing, a 400 percent increase total average audience from when the service operated as CLT."
925 Is that correct?
926 MR. CASSADAY: That's correct.
927 THE CHAIRPERSON: Has there been a demographic shift in terms of the audience commensurate with the audience numbers enjoyed by W Network? In other words, are the same people basically, in your view, watching both networks?
928 MR. CASSADAY: There is certainly some overlap, but W is growing again despite the effort that we are putting into -- and the success that we are enjoying in growing the Oprah Winfrey audience.
929 THE CHAIRPERSON: Why despite? I mean aren't they supposed to be different services?
930 MR. CASSADAY: Well, we took a service that had almost no viewers and now we have lots of viewers. They had to come from somewhere and essentially what happens in television is that audience ends up getting shared.
931 So W's growth has come at a time when Oprah Winfrey is also growing and, parenthetically, so is Cosmo. So we think that that is because of the distinct positioning of these services and the unique appeal that each of them has.
932 MR. MURPHY: And I would just add that W is up 16 percent year-over-year in prime time, so we are just delighted with the performance of W Network.
933 I would also add that that's principally happening in the Monday to Thursday weeknight prime and it's driven by our Canadian programming, and so it has been a great success story for W, which has been part of this new strategy that we were been talking about for the rethinking of the positioning of W Network.
934 THE CHAIRPERSON: In the decision dated last year, the 446, it was stated that you hadn't -- at that time you didn't describe OWN as a women's network; is that fair? At that time, a year and a half ago, that that kind of evolved.
935 MR. CASSADAY: If we did not it would only be because we certainly believed that the appeal of Oprah, I think, is pretty much known ubiquitously. So I think everybody is aware that a branded network kind of headed by Oprah Winfrey is going to appeal predominantly to women, as did the service that it replaced, VIVA.
936 So I'm not sure what we said or didn't say at that particular time, but certainly we have always thought of these networks as appealing predominantly to women and not at the exclusion of men, but that you have to stand for something and Oprah stands -- the Oprah Winfrey Network stands for an educational enriching network for women.
937 THE CHAIRPERSON: And I understand that, but the services are supposed to be distinct from one another. They are both CAT A's.
938 MR. CASSADAY: Yes.
939 THE CHAIRPERSON: You understand that they are not supposed to be in competition with each other. So when I see your website -- and I don't know if you have it with you or not, but you talk about Corus television assets include kids' services and it goes on to name them and then it says the women's services, W Network, Cosmopolitan TV, OWN, Oprah Winfrey Network and W Movies.
940 So it appears that from a branding standpoint that you are lumping that service, the OWN service, with W Network. So should we be --
941 MR. CASSADAY: What we have is a vertical that appeals to a broad range of interests for women. They are not directly competitive. They are separate, just as Treehouse is separate from YTV and just like Home and Garden is separate from Food and just like Slice is separate from Food and Home and Garden.
942 The bottom line is that what we are talking about here is a series of concentric circles. That is the nature of the entire broadcasting industry. CTV and Global both offer news products, as does CBC, but they are differentiated in terms of their presentation style, editorial approach. That is all part of the diversity of the system within a relatively narrow defined framework.
943 News is a good example. I think we would all agree that you could easily distinguish between a CBC newscast and a CTV or Global newscast. In fact, I would say I can distinguish between a CTV and a Global newscast.
944 I would suggest, and over 200 interventions would sort of support my view, that women clearly see the difference between Oprah, Cosmo, W, Slice, Food, HGTV. They are networks that you go to for different things that are all part of their lives.
945 THE CHAIRPERSON: You mentioned the new services and those services are allowed to compete with each other under our rules. They are not Category A services, whereas this is.
946 So being that you have the status as a must carry or must offer, you know, the Commission has expressed concerns in the past that it may be a little too close for comfort. You have offered some assurance in that regard that they are distinct. I am going to invite you to go as far as you can in convincing this panel that in fact the two services are not in competition with one another.
947 MR. MAAVARA: Mr. Chairman, if I might?
948 THE CHAIRPERSON: Yes, Mr. Maavara.
949 MR. MAAVARA: To put your question in context, because it's a good question, we looked at the incidence of Category 5(a) and 5(b) on Category A specialty channels and we came up with a list.
950 There are 47 channels which are licensed to carry Category 5 and all of them, with the exception of six, are entitled to run unlimited amounts of Category 5(a).
951 And then of course there are the seven provincial educational channels and there is at least one section 9(1)(h) channel, APTN, which also has the ability to run category 5(a) programming.
952 We started to look at the Category Bs and we got to at least seven that you have licensed that allow for Category 5, and I think what it means is --
953 And then when you look at the list of the various Category A's that are allowed to do 5(a), for example, it would be very similar to an educational mandate. You have channels such as Discovery Channel, Book Channel, History. All of these have an educational element to them.
954 As Mr. Cassidy said, I think the history of licensing of the Commission is in fact to license these concentric circles and that in fact is what has fostered the innovation in the system and the reason why we have probably about 100 great Canadian channels is that. If you didn't do that, we wouldn't be where we are today.
955 So we have quite an intersection of not only regulatory categories but also subject matters sort of generally that exist in different brands across the system.
956 THE CHAIRPERSON: M'hmm. And you being an experienced regulatory person, Mr. Maavara, you know why we have genre exclusivity. You know that there are good reasons for it.
957 And so when I look at the fullness of what you offer, of the message you are sending your viewers, which is if you like W you will also like OWN, from a regulator's point of view I find myself needing to dig a little deeper as to how these services can be directed from a promotional vantage point to the same people, the same audience, and on the other hand to come to some kind of determination that the two services are not competing with one another.
958 MR. CASSADAY: But I would argue that we crossed this bridge a long time ago because, to use your argument, I would say if you like food then you are going to like W, and if you like HGTV then you're going to like OWN, because typically you are a woman and you like to see a lot of things and women like the same things that men want, which is a lot of variety in their lives, and that doesn't mean they are directly competitive. It doesn't mean that, you know, skirts are competitive with slacks. You buy them and wear them for different occasions.
959 These brands are different and that is very clear to our viewers and certainly very clear to us and certainly very clear to our advertisers.
960 THE CHAIRPERSON: Are there any further steps that you think you can take to assure us that OWN is meeting its educational mandate as opposed to operating as a women's service in competition with W?
961 Now, I understand in your presentation today and in numerous answers and responses to questions that you have addressed that question to some degree, but I will give you another opportunity as it is on my list of questions to ask as to whether there is anything that comes to mind and if you want to think about it you can --
962 MR. CASSADAY: Well, Commissioner Menzies asked us a similar question before the break, so we have had some time to think about that, and, Sylvie, I guess now is as good a time as any to suggest some additional elements of comfort that we can provide to make sure that this distinction is clear.
963 MS COURTEMANCHE: Sure. I was going to do it as part of reply, but we worked at lunch, so I will do it now if that is acceptable.
964 THE CHAIRPERSON: Absolutely.
965 MS COURTEMANCHE: Okay.
966 Commissioner Lamarre had suggested that we look at the UNESCO definition of adult education. So I was able to secure a copy of that and in particular I'm looking at paragraph 1, the first paragraph where it goes on to give some context to what the term "adult education" -- so I'm just -- sorry, I am just restricting to the first paragraph, not the additional paragraph.
967 COMMISSIONER LAMARRE: And so did I.
968 MS COURTEMANCHE: Okay. I just wanted to be clear. Okay, thank you.
969 COMMISSIONER LAMARRE: First paragraph for section 1 of the recommendation.
970 MS COURTEMANCHE: Right. And I know that you said that you weren't looking for a condition of licence but what you were looking for as far as our nature of service, where it says -- I'm sorry, I just have to get my piece of paper with our conditions of licence here -- where it says that "generally focus on adult education."
971 COMMISSIONER LAMARRE: Adult education, yes.
972 MS COURTEMANCHE: Right. So the framework that we would follow is our guideline for the framework of adult education. We think that that is a good framework within which to work.
973 COMMISSIONER LAMARRE: Okay. So you think that's a reasonable definition of what adult education is?
974 MS COURTEMANCHE: Of what adult education would be, yes.
975 COMMISSIONER LAMARRE: Okay.
976 MS COURTEMANCHE: So I think that that is the first thing.
977 The second thing that -- and I'm sorry, I may not have it in the correct order, but I will just do it in the order that I worked on today. So it might not be in the order that was requested, but --
978 THE CHAIRPERSON: Sure. Yes.
979 MS COURTEMANCHE: Then the other question that was raised before lunch is do we have any proposals to put with respect to a framework around feature films and some particular, I guess, 2(b), Category 2(b) documentaries.
980 So before I begin, I just wanted to clarify that currently, under the terms of our licence, we are allowed to air Category 2(b), and sometimes we just log it because it's just meant to be 2(b), so we are not talking about those particular shows.
981 What we are talking about is, in the case of feature films and 2(b) content that we would log as Category 5(a), that Category 2(b) programming would be feature film length and a one-off. At that point we would provide a suitable intro that would provide more of an educational introduction to that particular program.
982 So that would be a framework that we would suggest would help toward defining the services clearly in the educational service.
983 The other question that we were asked was about full spectrum. That was an issue and a concern. I guess the answer that we want to put on the record right off the top is: Yes, we agree that we need to expand the range of educational content.
984 That is why we are commissioning new Category 5(a) content. So, obviously, we need to move in that direction.
985 But we also understand that you are looking for a commitment on how we are going to achieve that variety. In order to achieve that variety, or what we would categorize as full spectrum in the Nature of Service, we would commit to having a minimum of six different genres of courses during every broadcast year, with a refresh rate of at least 50 percent of those genres from the previous broadcast year.
986 So every year you would have a minimum -- and this is just a minimum, this is not the maximum. This would be the absolute minimum, and there is a minimum refresh rate of 50 percent.
987 With respect to the accreditation process, there was a question asked about that, and we would be happy to file with our annual returns every year a letter that demonstrates that each of these programs is accredited, and the letter would come either from the instructor or the learning institution. But there would be a certification that says that this is associated with an accredited course, and that would certify the use of the program as class material associated with the particular course. So that would demonstrate it.
988 We would also file as part of our annual returns a detailed rationale for each program logged as Category 5(a) and that is associated with an accredited program, so that you would understand the description of the course and why it is legitimately categorized as such.
989 That would be filed every year with our annual returns for all of those shows that were logged as such during the course of the year.
990 Turning to the non-Canadian and CAVCO, as part of our annual return, again, we would file a list of all the U.S. programs and/or CAVCO-certified programs that have been logged as Category 5(a), with a detailed description as to how these particular shows would meet Category 5(a) criteria, and that is where we would justify it in the manner that we have proposed at page 9 of our opening statement.
991 So it would have to meet the three tests, and I would revise it, as I did this morning, on the third one. The subject matter would have to tie to the expert that is included in the show.
992 That would be another way of ensuring that this is educational and fulfilling its mandate.
993 Then, we have undertaken to provide you with more information with respect to the duplication and what is going on, and to get back to you in reply. I haven't had a chance to talk about the restrictions that we would have on overlapping content, which I think goes more to genre than anything else, but I would just echo what John said earlier, that the way the system has created -- and you said: Why do we have genre exclusivity?
994 We do want to ensure diversity, yes, but diversity has also meant that there is some overlap to ensure innovation and variety. Therefore, many subject matters -- you know, a woman may be interested by all of these channels, but when she tunes into OWN, she is tuning to OWN for a very different reason than she is to W. On one she is going to learn something, and on the other she is going to be entertained. So that's how your genres are more clearly established.
995 Anyway, I will be quite happy to come back with --
--- Off-record discussion
996 MS COURTEMANCHE: Previously, as I mentioned, Mr. Chair, the CLT was originally licensed with a 20 percent overlap. We would be prepared to accept that as a condition of licence, that there would be no more than a maximum of 20 percent, which was originally the manner in which it was licensed. So it would go back to what it originally was.
997 THE CHAIRPERSON: I think you said that you weren't even at that level.
998 MS COURTEMANCHE: We are not at that level now, but, you know -- certainly the way it was originally licensed -- but if you want to --
999 Right now, Mr. Chair, everybody can play in everybody's backyard up to 10 percent. I know that originally it was 20 percent, right now it's 10 percent for everybody.
1000 I haven't talked to the programming people. Do you think that 10 percent is okay?
1001 THE CHAIRPERSON: I believe that Ms Bianchi --
1002 MS COURTEMANCHE: I gather that 10 percent would also be okay through our current licence term.
1003 THE CHAIRPERSON: Ms Bianchi, did you have something that you wanted to add?
1004 MS BIANCHI: I only wanted to add, without getting into too much detail, because it's quite lengthy, what we have done.
1005 We have quite a detailed filtering process for what kind of shows would work -- we would commission for W versus OWN, and that applies to acquisitions as well. But I can tell you that there are certain genres, for example, finance and health, that we would only put on OWN.
1006 We could provide more detail, if that is the right thing to do, but I am just letting you know that there is some distinction there that is very clear to us.
1007 THE CHAIRPERSON: Are you serving men on the OWN service, as far as education is concerned, to the same extent?
1008 MS COURTEMANCHE: Unfortunately, you didn't see the video this morning from the audience testimonials, but the last one was from Sean Proulx, who is just a huge fan.
1009 If you look back to some of the letters that we got, we got many letters from men who believe in Oprah. As John said, she inspires men as much as she inspires women. She is just inspirational.
1010 So, yes, we have men watching the show, and they are big fans of OWN Canada.
1011 THE CHAIRPERSON: Madam Lamarre, did you have any other questions?
1012 COMMISSIONER LAMARRE: I have a few questions.
1013 I am going to pick up on the last comment you made, Madam Courtemanche, about being willing to accept a condition of licence of no more than 20 percent overlap between W and OWN.
1014 You are not within the last two years of your licence, so the Commission cannot, at its leisure, modify your conditions of licence. So what are you telling me here?
1015 MS COURTEMANCHE: Well, you can if we ask it.
1016 COMMISSIONER LAMARRE: Okay. So you are saying that if we ask you to ask it, you would ask it.
1017 MS COURTEMANCHE: Yes, we are asking.
1018 The answer is: Yes, we are asking, please and thank you.
1019 COMMISSIONER LAMARRE: Okay. Now, I want to go back to the issue of compliance, and it is also a bit around 5(a), but let's start with Decision 2011-446.
1020 Just as a reminder, in paragraph 33 of the decision, the Commission specifically said:
"After reviewing the material provided at the hearing, the Commission notes that the majority of formal educational programs listed on the sample programming schedule are associated with television, media, or cultural studies courses. More specifically, eight programs are associated with a single scriptwriting course, and two programs are associated with three different courses in cinematography, story development, and video production techniques. The Commission considers that the service curriculum of educational programs does not achieve the variety of educational programming described in the Nature of Service definition..."
1021 Now, that was a finding of the Commission. It was a finding of non-compliance. The decision was not challenged, so it stands.
1022 When we look at the October 23rd, 2012 schedule, we still see much of your programming which still displays a concentration of media-related courses. Yet, you maintain today that you feel you are still in compliance, given the Commission's finding in 2011-446.
1023 How can I reasonably rationalize that?
1024 MR. MACDONALD: What I would suggest is, in the interest of looking forward, one of the commitments that we had suggested in our comments --
1025 COMMISSIONER LAMARRE: I am not looking forward here, I am looking at compliance as we speak today.
1026 MR. MACDONALD: Okay.
1027 COMMISSIONER LAMARRE: We have been through the entire discussion of going forward, and I am comfortable with what we discussed and that I have what I need on the record.
1028 But we were talking about compliance today, and again, this morning, you mentioned that you felt that you were indeed in compliance.
1029 MR. MAAVARA: Madam Lamarre, I guess that one of the aspects of that -- and you made the observation that the decision, or the finding of the Commission, was not challenged at the time. I assume what you are talking about there would be a Federal Court challenge, or some form of return back to the Commission to say that you were incorrect.
1030 I guess that is correct, we missed the deadline, but it is still our position that, in fact -- for example, on the question of breadth, our submission would be that, in fact, that was an addition by the Commission that did not exist on a plain reading of the Nature of Service. The Nature of Service is permissive, it's not prescriptive, and it doesn't require us to have a breadth.
1031 What the Commission brought up in that decision was adding, in fact, an element to the Nature of Service.
1032 In terms of the process, I think the Commission made an error of finding of fact, which goes to jurisdiction. Also, that fact was not brought up at the group licensing hearing. At least, it's not in the transcript and it is not reflected in any of the materials that the Commission asked us about. As such, again, I would respectfully submit that the Commission misdirected itself and made an error, which goes to your jurisdiction.
1033 Having said that, when we looked at the application as a whole -- and it was a group licensing decision that related to all of what we had -- and I think the thing that saves all of this for both sides of the table is that, in fact, you asked us to come back, and we did. We came back more than twice. Unfortunately, we weren't able to find a solution, and we are here again today really to say that we are looking for a solution.
1034 COMMISSIONER LAMARRE: Okay. On a very specific point, Mr. Maavara, did I hear you say in your explanation that you feel that the expression within the Nature of Service which says that educational programs will come from a full spectrum of basic, credit-based, skills-related and life-enhancing programs -- you feel that is not prescriptive?
1035 MR. MAAVARA: It's interesting, because we haven't really discussed what genre exclusivity is yet, and if I might -- genre exclusivity -- what you are basically saying to each licensee is that we want you to operate within this -- again I will call it a corral, and the Commission said that two things establish what that corral looks like. One is the Nature of Service, and the second is the specific program categories.
1036 As Ms Courtemanche mentioned, and as has been the case -- and it has been talked about a little bit -- the Commission has started to expand that by saying that if one wants to apply -- basically everybody can do 10 percent of all -- what is it now -- 16 categories.
1037 In other words, there are going to be concentric corrals, as it were.
1038 In terms of that specific language, our view is that it is not to be read restrictively for two reasons. One is that the plain meaning of the words doesn't give that meaning, and secondly, as Mr. Cassaday said this morning, from a practical standpoint, a television channel can't do it all, all the time.
1039 We can only do certain things at certain times, and if you look at the history of this channel since it was licensed, it has done language courses, it has done all kinds of stuff.
1040 What it means is, this is --
1041 COMMISSIONER LAMARRE: The key word there is "courses".
1042 MR. MAAVARA: Right. But what the language says is: This is what you are allowed to do.
1043 In other words, you can go looking from a full spectrum of services, it doesn't mean that you must look from a full spectrum.
1044 I think what we are saying to you today, as well, though, is that we get it. We are prepared to add some diversity.
1045 In effect, to get back to the point, we are expanding the definition in order to narrow its meaning, and the narrowness of the meaning says that we are going to have to do more different kinds of programming.
1046 In other words, we are restricting ourselves in terms of how big we make the corral.
1047 COMMISSIONER LAMARRE: Would you agree that the first part of the first paragraph of your Nature of Service is prescriptive, when we say that the licensee shall provide a national English-language Category A service which provides formal and informal educational programming?
1048 MR. MAAVARA: Yes.
1049 MS PHILLIPS: May I add to that?
1050 There has been more variety outside of media that has already been added. So where it may have been that there were a lot of television courses, there was a variety in those courses.
1051 In addition, there has been finance, training in professional organizations and professional organizations of Canada, health services, law and ethics, cuisine, crime and social justice.
1052 So we have already advanced significantly from a variety of media courses.
1053 COMMISSIONER LAMARRE: On the logging issues, in your written submissions you have details on the difficulties you have had with the logging system. In particular, you note that you have in the past logged programs as 5(a) that had not been officially categorized by the Commission under that category.
1054 That brings up three issues. The first one is that there is no way of identifying that an otherwise categorized program is accredited, and therefore meets the definition of 5(a).
1055 Now, some of your Canadian programming receives a CAVCO designation, and it may not have received a designation under the Commission's category.
1056 And, three, your American programming has not received a designation under the Commission's program categories.
1057 I will get back to your suggestion about annual returns, but I want to get to the point of categorizing and identifying properly what is a 5(a).
1058 Now, I understand your argument respecting the accredited programming. Let's assume I accept it, that once the program has been accredited, it should, de facto, become a 5(a).
1059 I am not saying that we agree with it, but let's assume for the time being that we do.
1060 But for programming that was not accredited, why would you log as a 5(a) something that we have categorized as something else, which has not been accredited?
1061 For the sake of examples, look at Exhibit 1 that we provided you. Everything that is in black -- "The Right Fit", "Maxed Out", "Shopping Bags", "Struck" -- these have not been accredited. We certified them as 5(b), yet you insist they are 5(a).
1062 Now, has anybody, for those programs, actually sent us a request to have them accredited under 5(a)?
1063 MS PHILLIPS: I don't believe so, no.
1064 COMMISSIONER LAMARRE: Okay. Let's take for granted that you have something that is accredited, and you strongly feel that if it's accredited, it should automatically be a 5(a). But for something that we certified under 5(b), or another category for that matter -- I mean, there are some categories that -- and you do get --
1065 In pink on that schedule, what you see are those that are accredited, that you filed as 5(a), and some of them we didn't even categorize as 5. We categorized them as 2, or something else.
1066 But let's assume that we are letting that go because it has been accredited. How do we rationalize doing it for something that was not even accredited in the first place, and for which you did not -- nobody, neither you nor the producer, or whoever, filed with the Commission to have it accredited under 5(a)?
1067 MS PHILLIPS: We were following a longstanding practice that dated back to the inception of CLT, where they have always done the same thing, and --
1068 COMMISSIONER LAMARRE: Okay, and I have been driving at 110 kilometres per hour on the 417 for the past 20 years, and I really don't think it's going to cut it as a defence if I get pulled over when I go back home at the end of the week.
1069 MS PHILLIPS: Where I was going to take it was that, having done so, and filed those logs every year, we have received back compliance reports from the Commission stating that we are in full compliance, despite the fact that the on-air reports that come back from the Logging Commission have indicated: You have called this show 5(a), while the Commission has called it 2(a).
1070 We had no reason to believe that we were offside in doing so, it had been accepted. It had been accepted through several licence renewals.
1071 If the Commission would like us to start resubmitting those programs, based on the discussions we have had today about clarification on 5(a), perhaps that is something we should look into.
1072 COMMISSIONER LAMARRE: Okay. Now, going back to your suggestion, Madam Courtemanche, that you provide us, in your annual returns, with additional information on what was accredited, what you claim to be 5(a), a detailed description of U.S. programming or CAVCO-accredited programs that you think should qualify under 5(a), the annual return is after the fact, and it brings us to the situation that your colleague just brought up, that you are led to believe that it is going to be okay, and it's after the fact.
1073 Is there any way that we can try to ensure before the fact, or would that be too cumbersome?
1074 MS COURTEMANCHE: We think that it would be cumbersome. The Commission used to do pre-clearances, and it stopped doing it because of that fact.
1075 I am not saying that it's out of the question, I'm just saying that you used to do it and you stopped that practice because it was cumbersome.
1076 With the clarification that we are going to have, or that we hope to have coming out of this proceeding, on what is acceptable 5(a) programming, we don't think that this should be an issue in the future. But having said that, we are not saying no, we are just saying that we think it would be cumbersome. You used to do it and you stopped doing it because of that very reason.
1077 We think that your concerns would be better addressed through very clear guidelines on how to interpret it, and that will be the solution. Then we know where the line is; not only will we know, but the producers will know where the line is in the sand.
1078 COMMISSIONER LAMARRE: So you feel that if you got better interpretation guidelines with regard to your Nature of Service, and on top of that you provided us with annual returns with more details on what qualifies as 5(a) and what doesn't, that you're confident that would be enough to keep OWN within it's current nature of service?
1079 MS COURTEMANCHE: Correct.
1080 COMMISSIONER LAMARRE: Now, let's go back to the broadcasting day. I asked you earlier if you knew of other Cat A that had a 24-hour broadcast day and, well, we have people also who did some work in the background. So, I want to let you know what the results are out and the list we have come up with of Cat Category services that have a 24-hour broadcast day. They're mostly French, but there are English ones. Those are Canal D, Canal Vie, Z Télé, Séries+, Historia, MusiMax, Movie Pix, MusiquePlus, addikTV, Family Channel, Super Écran, Talentvision, Telelatino, the Movie Network and Travel. So, I thought I would let you know since I asked the question.
1081 MS COURTEMANCHE: Thank you for doing my homework for me.
1082 COMMISSIONER LAMARRE: Well, there is no point duplicating the work. Now, so, it leads me to another question here.
1083 What happens if we provide you with clarification on the interpretation of your nature of service, confirm that the proposed new programs listed in your November 30th submission would meet that requirement, the requirements of the nature of service, but at the same time, we turned down your application for a 24-hour broadcast Day. That's a possibility.
1084 MR. CASSADAY: Of all the things on our wish list, that would be a lower ranked one.
1085 COMMISSIONER LAMARRE: So, you would rather have a Cat. B?
1086 MR. CASSADAY: I would rather a Cat A and an 18-hour schedule.
1087 COMMISSIONER LAMARRE: Okay. But between a Cat A and a 24-hour -- or you would rather have a Cat A and an 18-hour schedule. I get that.
1088 MR. CASSADAY: That's correct.
1089 COMMISSIONER LAMARRE: No, I don't get that, sorry. But you made the application to have a Cat A
1090 MR. CASSADAY: Yes.
1091 COMMISSIONER LAMARRE: But with a 24-hour day schedule
1092 MR. CASSADAY: Yes.
1093 COMMISSIONER LAMARRE: What if we leave you with the Cat A, but we also leave you with the 18-hour schedule
1094 MR. CASSADAY: That would be fine.
1095 COMMISSIONER LAMARRE: That would be fine
1096 MR. CASSADAY: That would not be our preference. We believe as we've said, that there is a significant change in the broadcast environment that is not "go get-a-wise" a term that has been used by others to describe that time period. We think that educational programming, formal educational programming in particular that's appealing will be PVR, regardless of what time it airs and it gives us significantly more flexibility to serve our broad audience.
1097 So, our preference would be as requested for a Cat A with a 24-hour schedule, our fallback position would be a Cat A with the 18-hour schedule
1098 COMMISSIONER LAMARRE: So, you would adapt?
1099 MR. CASSADAY: Yes, we would.
1100 COMMISSIONER LAMARRE: You would adapt, okay. Thank you.
1101 So, I just like to make sure I have nothing else. Okay, no. Those are all my questions.
1102 Merci beaucoup.
1103 THE CHAIRPERSON: Thank you, Commissioner Lamarre. I know the Legal has some questions, but they want a break between now and the point at which they are prepared to ask them So, we are going to take five... cinq?
1104 THE SECRETARY: Ten.
1105 THE CHAIRPERSON: Let's take 10 minutes. Thank you.
--- Upon recessing at 1452
--- Upon resuming at 1506
1106 THE CHAIRPERSON: Okay. Madame Lamarre has one more question for you.
1107 COMMISSIONER LAMARRE: One more question, yes. It's not to beat a dead horse, but just to make sure we got this crystal clear on the record.
1108 MR. CASSADAY: Which dead horse are you referring to?
1109 COMMISSIONER LAMARRE: The Cat B. The Cat B. Is it your position that you would want approval of your application for a Cat B only if the Commission were to revoke your Category A licence?
1110 MR. CASSADAY: Only if we were to lose our licence would we want a Cat B; under no other circumstances would we trade off our Cat A for a Cat B.
1111 COMMISSIONER LAMARRE: Thank you. That was the question.
1112 Merci, monsieur le président.
1113 LE PRÉSIDENT: Merci. Legal has a number of questions/undertakings. I am going to invite them at this point to proceed.
1114 MS GATES: Hi! So, I just have three questions with undertakes. First, to confirm the new programming that you're looking into having produced would official 5(a) certification be saught for this programming?
1115 MS COURTEMANCHE: Correct.
1116 MS GATES: Okay. With respect to the amendment that you proposed with respect to your condition of licence, the 20 percent limit on shared programming between OWN and W. This would require an application to be made available for public comments, so are we to understand that an application will be forthcoming?
1117 MS COURTEMANCHE: Very shortly.
1118 MS GATES: Okay. And finally, I would just like to address the solution related to your -- that you proposed with respect to your Annual Reports? And I take your point about the pre-creance not being feasible. This reporting would be in part aimed at rectifying the fact that there is no way in the logging system of recognizing accredited programming; correct?
1119 So, given that logging is a monthly requirement, could you comment on the appropriateness of monthly as opposed to your annual reporting?
1120 MS COURTEMANCHE: We think we could do monthly and I'll ask Karen to explain to you how we would do it.
1121 MS PHILLIPS: I would suggest that we would send the PDF copies of the documents attached to the Attestation Letter that we file each month when we file our logs.
1122 THE CHAIRPERSON: Okay. Those are our questions. I know it's fairly grilling and I thank you for your thoughtful responses.
1123 Madame la Secrétaire, I believe that wraps up that section. Is that correct?
1124 THE SECRETARY: It does wraps up Phase I. I would now invite all interveners to take place whenever OWN is ready.
1125 THE SECRETARY: So, I believe we are ready to start with Phase II, Mr. Chairman, and we'll hear all interveners. We'll start with the presentation by Make Believe Inc. who will be appearing individually, which will be followed by the panel forming Mountain Road Productions, Sondhi Productions Inc. and Pyramid Productions Inc.
1126 So, we will start with you, Ms. Booth, Lyne Booth for the record and you may now proceed with your presentation.
1127 MS BOOTH: Thank you. Good afternoon, Mr. Chair and Commissioners. My name is Lyne Booth. I am the CEO and Executive Producer of Make Believe Media. It's a factual and documentary company based in Vancouver and we have been making educational documentary and factual for the past 13 years.
1128 More recently, over the past few years, we have been working very closely with CORUS to produce programming for OWN Canada. And fortunately for us, CORUS invests heavily in original Canadian production and we are proud to be able to contribute to their success.
1129 For example, over the past three seasons and now entering its fourth, we have created and produced the popular documentary series, "The Devil you know".
1130 The Devil you know is a true crime series and that would not have found its place on any other service in Canada.
1131 OWN Canada provides small companies like mine with something we don't otherwise achieve easily, a chance to reach a worldwide audience with a repeating series of high production values.
1132 The high quality of the programming that CORUS commissions, combined with a strong OWN brand, has opened doors for us with participants and viewers inside Canada and with broadcasters around the world. It has made it possible for us to sell internationally providing new revenues that have been critical to our success.
1133 Based on our experience over the past few years with CORUS, we believe that OWN Canada is a terrific brand providing independent producers with an outstanding opportunity to reach a National Canadian audience with programming that not only informs and educates viewers, but also inspires and entertains.
1134 We believe that OWN Canada is, in fact, a unique Canadian service in this regard and we fully support the continuation of the OWN Canadian service, OWN Canada Service.
1135 We have taken note of the fact that OWN Canada would like to develop more new adult education and skills related programming. Having greater clarity on what will meet the Commission's expectations in this regard will be invaluable to ourselves, the independent production community as we develop and make new pitches to CORUS going forward.
1136 So, we support CORUS' request to work with the Commission staff on an ongoing basis along with the production community to develop greater clarity on the parameters of Category 5(a) programming.
1137 All programming evolves just as viewers' expectations evolve and we think it's critical that to capture audiences with educational programming we need to meet these audiences evolving needs while working within the framework established by the Commission.
1138 We believe that OWN Canada benefits viewers, independent Canadian producers and the Canadian Broadcasting System as a whole. We are delighted that CORUS has made a strong commitment to continue with OWN Canada, which provides us for a place for our programming at Make Believe Media and we look forward to learning more about programming changes that have been talked about today and seeing how the new schedule develops.
1139 We hope that these represent real and new tangible opportunities for the independent productions sector.
1140 The changes proposed by CORUS will enhance the ability of OWN Canada to inform, educate and entertain its viewers. They will also provide even greater opportunities for independent producers in the future and we hope the Commission agrees.
1141 Mr. Chair and Commissioners, that concludes my remarks. I urge you to allow OWN Canada to continue broadcasting in Canada and thank you for your attention.
1142 THE SECRETARY: Thank you very much for your presentation.
1143 We will now hear the panel of interveners and we will start with Mr. Tim Alp from Mountain Road Productions. You may now proceed with your presentation.
1144 MR. ALP: Thank you. I actually wrote "good morning", but it's much later now.
1145 Good afternoon Mr Chair and Commissioners. Thank you. My name is Tim Alp and I am the CEO and Executive Producer of Mountain Road Productions. We are now an auto based independent production company with a history of producing high quality information on life stuff action and scrappy content for both broadcast and the Web.
1146 We are here today to offer full support for OWN Canada and its continued presence in the Canadian Broadcasting System. Mountain Road Productions has had a long standing relationship with CORUS. We are currently finishing production on the second season of a real estate renovation series called "Dufferin" I think, which begins airing on OWN in January, January 7th.
1147 The series provides a strong learning environment by showing homeonwers how to renovate and resell their homes for a larger profit that they might not otherwise attain without proper real estate knowledge and education. It informs, educates and entertains in the realistic career life manner, to me a perfect way to engage viewers in to entertain and enlighten them at the same time.
1148 Mountain Road Productions has been an active contributor to the Canadian Television industry for over 15 years and we have got a working relation with CORUS for over nine years. CORUS has been an avid supporter of Canadian-made television and excellent business partner to us as an independent production company.
1149 In particular, the establishment of OWN Canada has undeniably been a positive force in the Canadian Broadcasting landscape by offering a popular branded service that is available to all Canadians. OWN creates a significant opportunity for independent producers to create and produce Canadian content at a world class level.
1150 The original Canadian programming for OWN Canada has received top ratings and is often distributed on OWN in the United States as well as other International markets. This provides a significant additional benefit for independent producers.
1151 Since its inception OWN Canada has proven to offer superior programming and broad appeal and its continued success domestically will undoubtedly propel content to succeed in other markets.
1152 OWN provides independent producers with an opportunity to develop a branded program that will not only be entertaining to Canadian viewers, but also include educational information based objectives. This content spends a great variety of topics and themes with a limited opportunity here in Canada for original Canadian content of this nature.
1153 This service is an important contributor to the health of the Canadian independent production community while at the same time providing top quality highly recognizable educational Canadian content for viewers to watch and appreciate.
1154 The brand recognition of OWN Canada alone has provided independent productions with an accreditation that would otherwise not be afforded and has translated into greater viewing of domestic content. As the number of Canadians viewing Canadian content increases, profit and investment into the industry becomes greater and will ensure additional content being generated.
1155 In turn, this becomes an important opportunity to stimulate the growth of content with learning objectives. Without a Canadian version of the service many Canadian concerns would seek out on American alternatives. That's fulfilling viable opportunities for the Canadian production community.
1156 It is broadcasters such as OWN Canada in particular that will ensure a prosperous and healthy Canadian television industry, it is a great result that we offer our support to OWN Canada as it continues to develop their identity and further cultivate Canadian content with learning objectives. Thank you.
1157 THE SECRETARY: Thank you very much. We will now hear Ms Geeta Sondhi from Sondhi Productions. We may now proceed with your presentation. Please turn your mike on.
1158 MS SONDHI: There. Mr. Chair, Commissioners and Commission staff, my name is Geeta Sondhi. I own Sondhi Productions Inc. I am a factual producer with knowledge based programming. I began my career with the National Film Board of Canada. I have produced social issue documentaries. I ran the non-theatrical Fund at the Ontario Media Development Corporation and was on the board of its Federal counterpart, the Canadian Independent Film and Video Fund.
1159 I am here today because I believe that OWN Canada as envisioned and run by the CORUS team offers a rare opportunity to create thought provoking, learning based programming with mainstream appeal, programming that speaks to Canadian and that makes business sense in a highly competitive global environment.
1160 My experience in educational media is why I am so passionate in my belief that OWN Canada presents a unique viable and relevant opportunity for independent producers to reach audiences with meaningful content that promotes learning in a contemporary framework.
1161 The word "contemporary" is critical here. OWN Canada is an ideal pipeline to the educational end user or learner that the OMDC non-theatrical Fund and the CIFES aimed to reach. As I am sure you are aware, both funds were discontinued due to changing realities in the non-theatrical markets and media industries. And that is where OWN Canada comes in today.
1162 In a multi channel universe, there is a lot of choice out there. As viewers, we expect to be entertained. If learning comes with that entertainment, then we need to be pre-disposed to giving it a chance. The profile that Oprah Winfrey brings to the branding of OWN Canada is unique. OWN viewers expect to be introduced to new ideas and to having their ideas challenged.
1163 They know that education and personal growth about OPRAH is all about.
1164 Yes, OPRAH is known for interviewing Justin Bieber and Rihana and Celine Dion and for having Tom Cruise jumping up on her furniture from time to time, but she is also known for her Book Club.
1165 One of the first shows on the OWN Network was "What would you do?" It's a show about ethics that's framed in an accessible way. Similarly "Million Dollar Neighbourhood" is about community, using and entertaining in compelling frame, it propels us to reevaluate our values as Canadian citizens and as citizens of the world.
1166 The fact that Oprah is Oprah relaxes us. When viewers come to an OWN branded network, they are receptive to watching content that promotes learning, content that they wouldn't necessarily watch elsewhere. In other words, the OWN brand towards receptive viewers to the 55 percent of educational content that I think we have been discussing here today.
1167 I am currently a Board Member of Women in View, an organization created to address gender and racial inequity at top decision-making roles in the media industries.
1168 We are well aware that Oprah is the only woman and the only woman of colour in fact, who has truly made it to the very top of the media industries. Her perspective, her approach and her appeal translate in a multi cultural Canada and in a trans-national world.
1169 OWN reaches an under-served segment of the female demographic and it has international appeal and that makes economic sense.
1170 I would like to add a few words about my personal experience with the CORUS team. I approached them with a documentary series about female comics competing to make it in a male dominated industry. It was a risky idea given the current programming climate, but I am used to taking risks. I am an independent producer.
1171 What I wasn't expecting was the extraordinary nurturing and support that I received from the OWN Canada team. When OWN has showed interest in potentially participating in the show that there could be an effect to a programming, took the red eye flag to L.A. for a one-hour meeting making it her personal mission to strengthen the case for OWN US to collaborate on a Canadian originated show.
1172 She and her staff continue to help shape the program with a vision of a high profile show that will speak to Canadian viewers and to sell around the world. Having worked very hard to produce and sell an internationally successful series in the past, I know that it's literally priceless to have the kind of connections and support that the combination of the OWN brand and the expertise and commitment of the CORUS team offers to Canadian producers.
1173 As much as I am a knowledge base producer, I am an entrepreneur. I have to be able to reach audiences and I have to be able to make sales and contacts beyond Canada for the business equation to work.
1174 I have absolute faith in the Corus team to support independent Canadian producers, to nurture them, to respect their creative visions and to truly collaborate with them to create popular meaningful programming that instructs as it entertains.
1175 This is programming that Canadians will not only watch but it's programming that they will see themselves reflected in, programming that has the potential to do business around the world.
1176 That is why I urge you to allow OWN Canada to continue broadcasting in Canada in the spirit of a focused, contemporary, relevant and meaningful interpretation of the educational mandate at its foundation.
1177 Thank you.
1178 THE SECRETARY: Thank you very much for your presentation.
1179 We will now hear our last intervener, Mrs. Kristie McLellan Day from Pyramid Productions Inc.
1180 You may now proceed with your presentation.
1181 MS McLELLAN DAY: Good afternoon, Mr. Chair and Commissioners and Commission staff. My name is Kirstie McLellan Day. I am the CEO of Pyramid Productions Inc., a privately held television production company located in Calgary, Alberta.
1182 Pyramid is a 30-year-old company that currently employs more than 65 staff. These are full-time positions. We do not just hire sporadically one project at a time.
1183 Pyramid provides programming that includes documentary, educational, reality, scripted drama and entertainment series to networks in both Canada and the U.S., and they include the Biography Channel, CBC, City, OMNI, CTV, Shaw, Global, CMT, Rogers, Book TV, Cosmo, HBO and Bravo! in Canada, and A&E's Biography Channel, PBS, TuffTv and TV Guide in the U.S.
1184 Thanks to the CRTC and Canadian networks, we have contributed to making a television industry in Alberta. Sixty-five families are supported by the work provided in part by Corus.
1185 OWN Canada is of particular value to a company like ours. By creating shows for OWN Canada, Canadian companies like ours are able to demonstrate our expertise and create an appetite for Canadian programs throughout the world.
1186 In our opinion, OWN Canada is a much stronger platform for the programs we produce now than it was as the former CLT. OWN Canada is a bigger brand that resonates with Canadian audiences. It elevates the profile of the production companies it works with and allows us better potential international sales opportunities.
1187 Canada has so few opportunities like this in the independent community. We are grateful that Corus continues to support companies like ours.
1188 We made a show for CLT. It was called "The Criminal Mind." The licence fees were very low due to CLT's limited audience.
1189 OWN Canada provides a much higher viewership and thus higher licence fees. As a result, OWN Canada provides greater benefit, both to the producer and to the audience. It's apples and oranges.
1190 OWN Canada is highly informative, providing educational content with clear learning objectives. It airs programs that you will not likely see on other channels. With OWN Canada we can make life-enriching, formal and informal educational product that is much higher quality and more interactive and engaging.
1191 If you want to see a professor at a podium, you can watch Harvard lectures on YouTube. OWN Canada is encouraging the same end result, adult learning, but if we as producers want to make shows that get an audience, they have to be entertaining. OWN Canada has made it clear they are commissioning and looking for such programs, educational and engaging.
1192 With shows like "Million Dollar Neighbourhood," OWN Canada has demonstrated that we can establish an international presence. In fact, we are trying to do that with a Corus-licensed show we are making right now called "Burger Wars" for CMT. The series is unique and quintessentially Canadian in tone. We have great confidence that with Corus' support this series will translate into a Canadian hit and an international format success.
1193 Broadcast partnerships with services like CMT and OWN Canada help position our shows for such international success and give us a very powerful international sales calling card.? We are excited at the prospect of OWN continuing in Canada and giving us the opportunity to create original Canadian formats for networks.
1194 OWN has opened its doors to producers like us by offering us the chance to pitch. There are many promising opportunities and they are genuinely interested in finding and commissioning high-quality shows that can resonate not only in Canada but also internationally.
1195 But the critical point is that Corus is a company that will listen to ideas from producers from all over the country and they buy programming based on the validity of the idea. They have always been open to program ideas from our Western Canadian company, whether for Movie Central, OWN Canada, CMT or W. That's the beauty of Corus for a company like ours. We may go and pitch an idea for W or for OWN, but it may end up on CMT. Their breadth of networks helps our idea find the right home for the right audience.
1196 Corus has shown commitment to Canadian producers by commissioning programming from us even for their smaller networks like Cosmo, whereas this is not the case with all broadcast families.
1197 For years the work we have done for Corus has sustained our growth at Pyramid. If Corus had not grown with networks such as OWN Canada, we as independent producers would not have grown.
1198 From our point of view, it's essential to continue to license to networks like OWN Canada. There are fewer buyers in the market now and many of them are only looking for big budget, American-cloned programming. The smaller series that reflect and forward Canadian culture and values that OWN Canada is positioned to license provide the bread and butter for most of us.
1199 Corus has always demonstrated its support of the Canadian independent production community and it has a great track record of growing Canadian audiences.
1200 This is why I believe that OWN Canada is a strong, life-enriching network for Canadian audiences and the Canadian independent production community and we strongly support the continuation of the OWN Canada licence.
1201 Thank you.
1202 THE CHAIRPERSON: Thank you very much, all four of you, for your interesting presentations this afternoon.
1203 Ms Booth, thank you for mentioning the fact that this proceeding will help you tailor your productions to your potential clients like OWN and Corus and whoever you deal with. So if you have been able to get something through our inquiries and through their presentation to help you, then that's good to hear.
1204 Mr. Alp, thank you for your continued success with the particular show that you mentioned --now I can't read my own writing -- "All For Nothing," continued success with "All for Nothing."
1205 Ms Sondhi, thank you for your ongoing efforts on behalf of knowledge-based programming. I also particularly appreciate your anecdote about dealing with Corus that one time. That is very helpful.
1206 And Ms McLellan Day, I wish you continued success in your production work as well and in seeing your ideas materialize into productions. That must be very gratifying for you.
1207 So, thank you, and Commissioner Menzies has some further questions.
1208 COMMISSIONER MENZIES: Thank you all and thank you particularly for bringing some energy into this windowless, airless room where we spend too much time.
1209 Ms Booth, I will start with you. Just tell me, just from what I have looked up about the TV program, it's about people who are bad who don't look bad, you know, the secret life that you can't see through people's public lives or private lives. Is that what it's about?
1210 MS BOOTH: It's really about the experience of people who encounter those people.
1211 COMMISSIONER MENZIES: Okay.
1212 MS BOOTH: So it's really the points of view of people who have known the devil. So it's the "You" in the title. It's their story.
1213 COMMISSIONER MENZIES: Right.
1214 MS BOOTH: And it's about their -- it's like a moral fable, how people encounter very bad things in very bad people but how they come to terms with it and overcome. It is a crime story. There's like two or three threads typically.
1215 COMMISSIONER MENZIES: Right.
1216 MS BOOTH: It's a complex one hour uncovering -- this is probably longer than you want to hear, uncovering how these individuals encounter -- not evil because that's not -- I don't believe in evil, but encounter --
1217 COMMISSIONER MENZIES: It's okay, I do.
1218 MS BOOTH: -- terrible things.
1219 MS BOOTH: They are stories. They are complex human stories, ultimately triumphant and redemptive stories.
1220 COMMISSIONER MENZIES: So what's the hook? What's the hook for the viewer?
1221 MS BOOTH: Intense access to our subjects who are -- we have outstanding storytelling power. I mean our interviews are very deep with people who open up their lives and their stories. They take us deep into their experience. That's the hook to the viewer.
1222 COMMISSIONER MENZIES: So what I'm getting is a sort of --
1223 MS BOOTH: They are well-told stories of human experience.
1224 COMMISSIONER MENZIES: Tragedy and then redemption --
1225 MS BOOTH: Yes, tragedy and redemption.
1226 COMMISSIONER MENZIES: -- of the spirit sort of thing, right? How often is it on?
1227 MS BOOTH: Well, I think they play it several times a week. It has a prime-time slot. It is on several times a week, I would think.
1228 COMMISSIONER MENZIES: A lot.
1229 MS BOOTH: I don't know how many times. You would have to ask one of the programmers at Corus.
1230 COMMISSIONER MENZIES: Where else do you -- I believe it is the Investigation Discovery Channel in the States?
1231 MS BOOTH: It also plays on ID USA, it plays on -- I read in Playback recently that it was the top-selling CMF documentary series, just behind "The Borgias" and "The Cat in the Hat" last year.
1232 COMMISSIONER MENZIES: Okay. So you must have a sense of how much --
1233 MS BOOTH: So many, many territories.
1234 COMMISSIONER MENZIES: -- that improves your bottom line on things. And I don't --
1235 MS BOOTH: I do. I have a very good idea.
1236 COMMISSIONER MENZIES: I'm not asking you to reveal your bank account, but what sort of percentage does it add to your work to be able to work -- I'm taking from your submission that if it wasn't for OWN it would be much more difficult, if not impossible, for you to have access to international markets, and how much -- what sort of a percentage does that --
1237 MS BOOTH: Without OWN Canada the series would not have been made.
1238 COMMISSIONER MENZIES: Right.
1239 MS BOOTH: There just wasn't another place for it. It wasn't on W. It was -- this is an OWN Canada original production and there was no other network that would do this kind of anthology series of personal stories of this type. This is a very specific OWN program.
1240 COMMISSIONER MENZIES: Okay.
1241 MS BOOTH: So if I didn't have OWN's licence, I wouldn't be making this series. So that's --
1242 COMMISSIONER MENZIES: Okay, that's interesting. Because it sounds like something that could fit in a lot of places but obviously doesn't.
1243 MS BOOTH: It often sounds like that I think to outsiders, or people who aren't programmers or users. It sounds like something that -- but they are very, very specific. I mean I know because I pitch shows all the time --
1244 COMMISSIONER MENZIES: Right.
1245 MS BOOTH: -- and this would not find its home elsewhere.
1246 COMMISSIONER MENZIES: So it would be very specific in terms of what sort of show fits for their audience?
1247 MS BOOTH: Very much so.
1248 COMMISSIONER MENZIES: Right. Okay. Thank you.
1249 Mr. Alp, what do I learn from your program that I don't learn from "Love It or List It" or "Holmes on Homes" or any one of the -- I shouldn't say several but any one of -- there are similar programs from what I know on the surface about your program and I confess I don't know much beyond the surface.
1250 MR. ALP: Well, I think it gets very in depth into --
1251 COMMISSIONER MENZIES: I'm not OWN's target audience.
1252 MR. ALP: It gets very in depth to teach homeowners how to increase the value of their home. So there is a real estate that deals with them directly and it's very hands-on and it's very instructional on how they can do the work that will actually increase the value of their home.
1253 And they do the work themselves to do that. So it's a very direct input with the homeowner so that they have a strong understanding of what to do and how to do it and then they have to go about doing it and they see the results of that at the end of the show.
1254 COMMISSIONER MENZIES: So I don't learn just that I need a new deck and fence and this is how to hire somebody and get it built and this is how much money it costs and if I have a new deck and fence it will -- I will be able to ask another $20,000 for my house.
1255 MR. ALP: I mean there's --
1256 COMMISSIONER MENZIES: I will learn how to build the deck?
1257 MR. ALP: You would get all of that really and more. Really it focuses on where you put your -- where the value is in a home, where you put your money to increase the value. Is that deck going to actually do anything for the value of your home when you go to sell it? Maybe it will, maybe it won't.
1258 A lot of homeowners, you know, they are often mistaken where they think the value is and the real estate agent tries to put them on the right track so they put the money and the work into the effort into the right places that will increase the value of the home.
1259 And over the course of this series we have increased cumulatively -- and this show is produced in Ottawa here -- we have increased the value of homes over $2 million cumulatively of all the homes we've worked on. So that's an estimate.
1260 COMMISSIONER MENZIES: Right. How much did it cost to make the changes?
1261 MR. ALP: Well, it varies. It varies. Some put a little -- some put a few thousand, some put many dollars in.
1262 COMMISSIONER MENZIES: Thanks. I will get off on that side because it's easy.
1263 Ms Sondhi, what is the main appeal to viewers of "Million Dollar Neighborhood"?
1264 MS SONDHI: That's not my show.
1265 COMMISSIONER MENZIES: Oh, it's not your show, sorry.
1266 MS SONDHI: That's okay.
1267 COMMISSIONER MENZIES: I thought you were referring to it.
1268 MS SONDHI: I can tell you as a viewer.
1269 COMMISSIONER MENZIES: Yes. Go ahead, tell me as a viewer.
1270 MS SONDHI: As a viewer?
1271 COMMISSIONER MENZIES: Yes.
1272 MS SONDHI: The format is entertaining, it takes you along. At the same time it makes you think about who your neighbors are, it makes you think of the contribution you are making, it makes you think about the kinds of financial decisions you make. It makes you reassess, I think, what citizenship is, citizenship in a community, citizenship in your country and citizenship of the world, really. What's valuable is at the heart of that and also what is value in relation to community.
1273 COMMISSIONER MENZIES: Okay, thanks.
1274 There is a little bit of a sort of structural, institutional -- not necessarily, that's probably the wrong word, but there is a dilemma with this in terms of the Oprah thing. Obviously, if Oprah wasn't being made available through OWN in the way it does, there's a good chance it would be made available through a foreign feed and that sort of stuff, and there is no doubt that high-profile American programming has provided a financial backbone for the production of a lot of Canadian programming in that.
1275 At the same time, part of our instructions are to make sure that there is a healthy Canadian broadcasting system that includes independent producers and that sort of stuff. So I'm not -- I just say that to put in context that I'm not dismissing the importance of Oprah, but I can only care about Oprah as a feeding tube for Canadian production.
1276 What is your -- of all the things you have said about Oprah and the show and everything --
1277 MS SONDHI: Yes.
1278 COMMISSIONER MENZIES: -- it does, how can you help me understand why that makes Canadian business and culture richer?
1279 MS SONDHI: Because I think it would be dangerous to underestimate the value of that feeding tube. I really meant what I said when I said that I think that people who are into Oprah, who watch Oprah -- that's why I mentioned Tom Cruise jumping about on the furniture, that is part of the equation, that is part of the feeding tube.
1280 I think that people when they come to an Oprah channel they expect to learn something, they expect to be challenged, they expect something provocative, and as a producer what that does for me, especially in an environment where now I can create Canadian content and develop Canadian ideas within that framework, is that I have now a receptive audience for educational programming.
1281 Do you see what I mean or do you want me to elaborate on that more?
1282 COMMISSIONER MENZIES: Yes. I mean she is the --
1283 MS SONDHI: It's such a particular draw. Like somebody else --
1284 COMMISSIONER MENZIES: If Oprah comes to Walmart I can sell more popcorn.
1285 MS SONDHI: I'm sorry, if you what?
1286 COMMISSIONER MENZIES: I'm saying like if Oprah comes to Walmart, you get more people in Walmart, you sell more stuff --
1287 MS SONDHI: Yes, but it's not -- yes. And here what's different about this and, you know, I was at the CIF, I was at the OMDC non-theatrical fund, and it was a real struggle towards the end to be pushing forward educational content and, you know, we went through that exercise of, oh, you must show educational demand and all of that stuff.
1288 Here is an opportunity where you have -- it really is those end users and those learners that we were trying to reach. They are there sitting on their couches, ready to watch something. We put it now -- our challenge now is to find an esthetic and a framework that feels like other television programming and yet has the learning-based objectives and has that educational foundation.
1289 Do you -- it's -- television is tough to get people to watch it and this is, in my opinion, a golden opportunity.
1290 COMMISSIONER MENZIES: Thank you.
1291 MS SONDHI: Sure.
1292 COMMISSIONER MENZIES: Ms McLellan Day, I would just like comments, if you could, I mean you probably -- I don't know after spending the day here with us whether you are better informed or just distressed --
1293 COMMISSIONER MENZIES: -- but one of the issues we are facing here, which you may have picked up, is the combination of OWN's programming with its protected status.
1294 You spoke about what a good operator it is and how good it is for you to have a connection with a successful operator where you can make more money and have better opportunities for programming and so can others. So while OWN is a really good opportunity for you, its status is also protected so that nobody else can compete.
1295 Wouldn't it be better for you and others if there was more than one OWN, because when we -- if and when we reinforce Category A statuses for operators that immediately somebody is going to apply for it. Sometime in the next couple of years chances are somebody is going to apply for a Category B licence somewhere down the road and the Commission will say no because it's deemed to be competitive with OWN. Your thoughts?
1296 MS McLELLAN DAY: I'm sorry, Commissioner Menzies, so you are asking wouldn't it be better to have --
1297 COMMISSIONER MENZIES: Is it better for you to have one single protected operation like OWN with that type of programming or would it be better to still have OWN and have room within our regulations to have something else that was similar and competitive with it? Are you better off with one or would you be better off with two?
1298 MS McLELLAN DAY: Well, I guess I'm arguing we are better off with Corus.
1299 COMMISSIONER MENZIES: Yes.
1300 MS McLELLAN DAY: You know, we have worked with a lot of networks and, you know, a lot are very good, but it is Corus that I am trying to, I guess, emphasize. They are very friendly to Canadian producers.
1301 And I want to make it clear that the amount of opportunity to sell programming by Canadians to Canadians is drying up and so companies like ours will no longer be viable or they will have to relocate to the U.S. and Corus is -- with OWN and with its networks it keeps that opportunity open for us.
1302 I mean there are lots of other networks but they aren't as friendly as Corus is to operations like ours. So I think it's crucial.
1303 And what would be in their interest if you commissioned a ton of other 5(a)'s why would they -- you know, the regulations would relax and right now they are and always have been -- but they are very receptive to buying programs from us for OWN and for its networks. So I guess it is a good position for us right now when they do have OWN.
1304 COMMISSIONER MENZIES: Okay, thanks. Were you referring in a way there to the consolidations in the business in recent years?
1305 MS McLELLAN DAY: Yes. I think consolidation as far as Corus is concerned is a good thing, because when we go we pitch to Corus and they find a place for our shows.
1306 COMMISSIONER MENZIES: Okay.
1307 MS McLELLAN DAY: Like we can go make a pitch to Vibika and she is very open to finding a home for that show on different networks for us. So it's an advantage.
1308 COMMISSIONER MENZIES: One-stop shopping.
1309 Thank you very much. My colleagues may have some questions for you.
1310 THE CHAIRPERSON: Madame Lamarre? No questions. And none for me.
1311 Madame la Secrétaire?
1312 THE SECRETARY: If you have no more questions, this would conclude Phase II, Mr. Chairman. I thank you very much. Have a good flight back.
1313 THE CHAIRPERSON: Thank you very much.
1314 We are going to take 5 minutes to give Corus a chance to regroup and re-enter the fray.
--- Upon recessing at 1548
--- Upon resuming at 1558
1315 THE CHAIRPERSON: Welcome back as we head into the home stretch.
1316 Madame la Secrétaire.
1317 LA SECRÉTAIRE : Merci, Monsieur le Président.
1318 We will now proceed with Phase III, in which OWN may reply to all interventions received for items 1, 2 and 3 of the Agenda.
1319 Can you please reintroduce yourselves for the record and you have 10 minutes for your reply.
1320 MR. CASSADAY: Thank you.
1321 My name is John Cassaday. I am the CEO of Corus Entertainment.
1322 Thank you for your time and patience today and we appreciate the opportunity that we have had to appear before you.
1323 I would also like to thank my team from Corus Entertainment, both here at the hearing and those back at Corus Quay.
1324 I hope you got the sense that we worked very hard in preparation for this hearing and out of respect for this process. We hope as a result of this hearing your impression of Corus as a broadcaster deserving of your trust has been enhanced.
1325 We believe we are excellent stewards of brands. We have been successful in growing our business and as a result we have created new opportunities for independent producers like those that appeared before moments ago and we take great pride in that.
1326 We are a values-driven company and we believe it is this values-driven approach that has resulted in us achieving the reputation that we have had, particularly our reputation of doing what we say we will do.
1327 We are drawing to the end of a long day and there are two closing comments that we would like to make.
1328 The first is our Oprah Winfrey Network and W are distinct services and therefore justify the continued privilege of a Cat A licence for both of those services.
1329 In closing, we would argue that they are different. W has a much greater movie rotation than Oprah Winfrey Network. OWN has significantly less drama than W. So like making the choice of whether you are going to go to a comedy or an action adventure on a Friday night for a film, they are two distinct viewing opportunities and we are providing our viewers and Canadians with two very distinct program services, one with a much greater emphasis on movies and drama than the other.
1330 We also would point out that W skews significantly younger than OWN, which is a key differentiator in how we approach our advertisers.
1331 At the expense of sounding like a marketer citing a bunch of psychobabble, I would share with you one of the selling lines that we provide to our customers when they are making that distinction as to whether or not they are in fact buying something different when they buy W and when they buy OWN.
1332 What we say to them is that when you are buying W you are buying a night with your best friend and when you're buying OWN you are buying the opportunity to be a better you. That distinction has served us well. We have had tremendous success in building both of those businesses amongst an audience, our advertisers, that are certainly not easy to fool.
1333 The second issue that we wanted to talk about today was the issue of compliance.
1334 When we opened the hearing this morning we used the word "daunting" and you wouldn't be surprised to know that we debated the use of the word "daunting," but it is a daunting process, and, Chairman, as you said to me earlier this morning, this I think is the first time that there has been a hearing such as this, so we did not underestimate the importance of this hearing and we did approach it as a daunting event.
1335 To return to my metaphor this morning of the village bell tower, it's clearer after a day of discussion that we did see a different view of the world when we looked out of our respective vantage points, which is understandable, but we understand after our conversation today that you are not, despite our best efforts, comfortable with our belief that we have always been and remain compliant with our conditions of licence.
1336 So in the spirit of moving forward --and as we said this morning, what we are here today is to try to focus on interests and our interest is to ensure that Canadians continue to have access to this service -- in the spirit of moving forward in finding a solution that serves the public interest and ensures that OWN Canada continues as a compliant Cat A service, we want to concede today that we recognize your findings of noncompliance contained in Decision 2011-446.
1337 Once again, Mr. Chair, Commissioners, we thank you for the opportunity you provided us today and I hope, as I said earlier, that we leave here with a better understanding of each other and we look forward to a positive outcome for these proceedings.
1338 Thank you.
1339 THE CHAIRPERSON: Thank you very much for your comments, Mr. Cassaday. I know this is a gruelling process, a daunting one, but you have been forthcoming with your answers and I also very much appreciate your comments just now, accepting the verdict that was spelled out in 2011-446.
1340 I'm going to ask my colleagues if they have any more questions.
1341 Just hearing the answer no, I'm going to say thanks once again and over to you, Madame la Secrétaire.
1342 THE SECRETARY: Thank you very much.
1343 Just a few things for the record, Mr. Chairman.
1344 I would like, first of all, to indicate that paragraph 1 of the UNESCO definition that was discussed this morning will be filed as Exhibit 2 and will be on the Commission website probably by tomorrow morning.
1345 Secondly, I would like to remind the licensee that the Commission expects all undertakings to be filed by December 14, end of the day. It's a Friday, December 14.
1346 Finally, there are five non-appearing applications on the agenda for this public hearing. Some interventions were received on some of these applications. The panel will consider these interventions along with the applications and decisions will be rendered at a later date.
1347 Thank you very much. This concludes the agenda of this public hearing, Mr. Chairman.
1348 THE CHAIRPERSON: Thank you.
--- Whereupon the hearing concluded at 1604
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