Must-carry TV: putting viewers last in the US and Canada (3)



“Canadians have told us they want to see Canadian films on TV so we’re filling a gap that’s been created in recent years.”

— Starlight CEO Norm Bolen, January 23, 2013


starlight-logoThe Starlight campaign to be declared a mandatory TV service is nothing if not slick. Just check out their website. It’s clean and beautifully designed, and features model schedules, along with testimonials from members of Canada’s filmic pantheon. They pop up on rotating video clips: Denys Arcand, Atom Egoyan, David Cronenberg, Patricia Rozema and others, making the case for an all-Canadian movie channel. The whole campaign is designed to be music to the ears of the CRTC commissioners who will decide this summer which services get greenlighted.

Industrial policy masquerading as cultural policy

What do the Deciders of Gatineau like? In my previous post, I outlined the official criteria the CRTC will use in assessing the 22 candidates for mandatory carriage. Today let’s look at the process from a slightly different angle. Before I get into the survey research I alluded to last time, consider yesterday’s announcement from the CRTC’s number-crunchers. It concerns the release of its 2012 financial results for specialty, pay, pay-per-view and video-on-demand TV services (Web page here). This is the overview:

Revenues for these television services have climbed by 35.4% over the past five years to reach nearly $4 billion in 2012. During the past year, a significant portion of these revenues, close to $1.4 billion, was invested in the creation of a variety of Canadian programming, resulting in thousands of jobs in the Canadian production sector and new television programs for Canadians. In 2012, Canadian specialty, pay, PPV and VOD television services created 226 new jobs, directly employed 6,176 people and paid $487 million in salaries.

By contrast with its abject inattention to the consumer perspective, the Commission tends to wax enthusiastic about two kinds of reporting results: new programs getting made “for Canadians” and economic prosperity in the sectors it regulates. The first of these has become self-justifying. We can never have enough Cancon, no matter who’s footing the bill. Occasionally we hear the rationale that Canadian programs are good for us because they allow us to “tell our own stories.” Apart from their citizenship, I fail to see how a Cronenberg or an Egoyan is telling “our” stories and not their own, but let’s not quibble.

The Commission’s real problem in chalking up results is that, when it comes time to show what purely cultural benefits flow from program production, it can’t. Instead it falls back on distinctively non-cultural benefits, like rising revenues and job creation. In other words, industrial policy is invoked to defend cultural expenditures – including the fees collected from millions of Canadian TV subscribers who might wish to do something else with their money. As I said two years ago in connection with the abortive discussions about “regulating” OVDs like Netflix:

If consumer or taxpayer money supports the creation of Canadian content, digital or otherwise, this money is ipso facto well spent. But what is the demonstrated benefit of such expenditures? Who decides how much to collect, how much to spend and on what? Clearly those who make content benefit. What about the rest of us?

Therein lies one of the greatest obstacles to the CRTC becoming a consumer-oriented regulator, as the current chair has promised. The new CRTC may keep throwing out anti-consumer transactions like Bell/Astral or lower wholesale tariffs for Internet capacity. But what’s still missing is a recognition that the production of Canadian programs and the creation of the jobs that go with them are not perceived by ordinary Canadians as being of benefit to them as well.

sun-newsNaturally that won’t stop the usual suspects from taking sides on particular applications in the runup to the must-carry public hearing. The absurdity of this whole exercise is nicely captured in the debate raging over whether the Sun News channel deserves the CRTC nod, having been much demonized for its right-wing, Fox-News-like screen presence. Friends of Canadian Broadcasting, which never met a cultural tax it didn’t like, concludes summarily in its submission to the CRTC that Starlight meets all the criteria for must-carry and Sun News doesn’t, period. Calling out certain applicants because you don’t like their politics simply proves why the current system, with regulatory criteria as subjective as those in newspaper editorials, will never be perceived as fair by either the must-carry applicants or the hapless subs who may have to finance them.

TV licensing and the advocacy research game

As anyone who’s every won a specialty licence knows, Canadians often say in attitudinal surveys they love Canadian content. That many of those same survey respondents then vote with their remotes for non-Canadian programming is just one of the cruel facts of life in the distorted market that is Canadian broadcasting. (Unless otherwise noted, my comments about Canadian TV apply to the English market only.) But in the established tradition, applicants postpone bad news about actual audience behavior, in favor of demand research that’s designed to paint an optimistic picture for the regulator of what a new service will do to promote domestic content. It’s not an evil plot; it’s just how the game has always been played.

pch-logoTrue to form, the Starlight application incorporates both a survey sponsored by the federal Department of Canadian Heritage (one of the great bureaucratic coinages for the digital era), and a special research study commissioned by the applicants on potential demand for their movie channel. A brief excerpt from the Heritage survey findings is included as a presentation (uploaded here in PowerPoint, dated October 29, 2012). The survey had the following objectives:

  • To assess Canadians’ awareness and discovery of, and access to, Canadian cultural products.
  • To understand Canadians’ views and opinions about Canadian cultural products.
  • To understand the impact of cultural consumption on Canadians’ emotional well-being and sense of belonging.

This is pretty touchy-feely stuff: not just awareness and opinions, but emotional well-being and sense of belonging. There is, however, a quasi-behavioral component to the results as well. It’s tucked away in a series of questions about how Canadians consume movies and another about how well Canadians recognize Canadian films as being Canadian.

The putative conclusion of this research is that Canadians want more Canadian movies, especially on television. No less than 73% of (non-Quebec) respondents strongly agree or somewhat agree that Canadian broadcasters should show more Canadian movies on TV. We’re also reminded “regular” TV is still overwhelmingly the most popular platform for watching movies. Meanwhile, the Internet comes out looking marginal at best. Only one respondent in three (or less) downloads or streams movies from the Internet, including on mobile devices, or watches through a PPV service at a hotel.

Although it wasn’t the job of this general survey to test price points for a new movie channel, the Starlight applicants have included it because it lends credence to the idea that Canadians feel under-supplied in the Canuck movie space. This is, of course, the oldest trick in the book. Respondents to this survey had nothing to lose and everything to gain from saying yes, we’d like more Canadian movies. There’s no trade-off like having to pay your local cable operator for your patriotism (which is covered in the Starlight survey). There’s also a halo effect at work here: some people simply don’t want to sound unpatriotic, even to a stranger on the phone.



Some items that didn’t make it into Heritage Canada’s 2012 survey on Canadian culture

Indicate your response to each of the following statements as Strongly agree, Somewhat agree, Neither agree nor disagree, Somewhat disagree or Strongly disagree…

  • Some Canadian TV channels are so culturally valuable that all Canadians should be required to subscribe to them, even if it means an increase in monthly fees.
  • If Canada’s film production industry is in economic trouble, the government should apply a levy on all TV subscribers to bail it out.
  • Even if my cable-TV rates have been going up faster than inflation, it’s okay to raise them some more for the sake of Canada’s cultural sovereignty.
  • I don’t mind not being able to get some American networks as long as that helps strengthen Canada’s broadcasting system.
  • The federal government has been cutting the budgets of cultural agencies like the CBC and Telefilm Canada. The best way to make up the shortfall is to ask Canadian TV viewers to make a monthly financial contribution.


Two other factors play a role in the advocacy research practised by PCH. One is assessing hypotheticals; the other is the alleged problem of lack of supply. Researchers often ask respondents to venture an opinion on hypotheticals, i.e. goods or services they’ve never experienced – like movies they’ve never seen because they’ve never been made. It’s a problem that applies to lots of would-be products, which is one reason they invented qualitative research methods like focus groups.

But conducting marketing research to develop and sell a new smartphone is not at all like doing consumer research to make policy. Policymakers are not good at forecasting, because they like to cling to the status quo. Moreover, public policy has a habit of sticking around, especially in the regulated industries – not least because big licensees get really petulant over what they perceive as unprincipled shifts in policies that may affect their bottom line or competitive position. Thus, what sounds good for the public interest today almost always gets stuck in a rut that’s difficult to escape tomorrow.

Then there’s the argument from lack of supply. If you want to run a movie service with a guaranteed monthly revenue stream, the lack of supply argument is great. It’s very easy to say there’s not enough supply, especially since that proposition is so hard to disprove. That’s where consumer testimonials come in handy. In the case of the Heritage survey, it appears that few Canadians believe a) they can easily find Canadian films to watch (only 51% say yes); or b) that Canadian films are well promoted and advertised (a mere 36% say yes).

Is there a Canadian movie “gap” – and if so, whose problem is it?

The Heritage researchers – and Starlight applicants – want us to conclude from this outcome that there’s a “gap” in the TV market for Canadian films that needs to be fixed. This leap in logic has several problems.

First, are randomly selected gen-pop respondents to a government survey in any position to judge whether Canadian cultural products are sufficiently well promoted and advertised? I don’t think so. These findings may, in fact, prove just the opposite of what Ottawa’s cultural officials would like us to take away from their survey: namely, that most respondents simply aren’t motivated or interested enough to look for Canadian movies on their TV schedule.

Second, there is in fact a good reason why many Canadians might sense there’s a lack of promotion for Canadian programming, especially when compared to American programming. In places like the Toronto subway system, the vast majority of promotional material is for American programs and movies, to the obvious detriment of the Canadian competition. Why does that happen? Because private commercial broadcasters are running a business and their real business is the resale of US content to Canadian audiences. It was always thus.

But if marketing is a problem, then why doesn’t the CRTC step in and mitigate the damage by insisting that Canadian broadcasters devote more money and space to promoting domestic material? For over 30 years, the Commission has told its TV licensees in excruciating detail how much Canadian content to air, how much to spend on it, what program categories to concentrate on and so forth. It’s not as if beefing up the broadcasting regs and individual conditions of licence even more would be a shocking departure from past practice.

HarperThird and last, even if there really is some gap in production, exhibition or promotion, why should it be on the captive audience of TV subscribers to provide the bailout? Because it’s what Canadian cuture needs? Well, if that’s the argument, you would think the government that gave us these survey results would put its own money where its mouth is, and chip in from general tax revenues. Instead of a regressive levy on all TV subscribers, the Harper officials at Heritage could arrange to give more money to Telefilm Canada, which is in the business of financing and marketing Canadian films.

Unfortunately, the Harper government isn’t setting the example the Starlight applicants would like, because it has been cutting not expanding the budgets of Canada’s cultural agencies. Nearly a year ago, the CBC reported this dismal news about the film industry:

Telefilm Canada will cut $1.7 million from its film-funding programs in 2012 in an effort to make up a cost savings of $2.7 million imposed in the federal budget. That cut includes $700,000 designated towards development financing for films and $500,000 from a fund that helps train emerging filmmakers. The agency will also cut by half its $1 million production fund for theatrical documentaries.

And there was more slashing to come for fiscal 2013 as part of Harper’s budget austerity blitz. In other words, plenty of people in the arts have been feeling the pain. I’m passing no judgment on the cuts one way or the other.

But please don’t tell me it’s now the duty of patriotic TV subs to make up this shortfall through a regressive levy that will keep several highly successful film executives in a job until they retire. They don’t get the marbles just for waving the flag and alleging most Canadians “are telling us” to make more movies. Canadians have also “told us” they wanted Stephen Harper as their prime minister when they voted at the ballot box, the poll that really counts. And what we got was a PM who isn’t exactly famous for his support of consumer welfare or the welfare of our nation’s culture workers. If our own federal government refuses to kick in a few more million a year to show just how important Canadian movies are, then why should the rest of us?