Sean Kilpatrick
Canada's broadcast regulator is holding off on introducing new conditions that would change how the country's big television networks buy programming from Hollywood studios.
The Canadian Radio-television and Telecommunications Commission was considering a rule that would require conventional networks such as CTV, Global and CITY-TV to spend one dollar on Canadian television productions for every dollar they spend in the United States.
The regulator has grown concerned about the amount the Canadian networks are spending to buy Hollywood shows to gain a larger share of the ratings against their rivals in prime time. Last year, the conventional television industry in Canada as a whole spent a record $775-million on foreign shows, which mostly come from Hollywood.
However, with the Canadian networks heading to Los Angeles next week to screen the new slate of prime-time programming from the major U.S. studios, the regulator decided there wasn't enough time to enact the rule for the fall of 2009, since many programming spending commitments in Canada have already been made.
The one-to-one ratio, as it is called in the industry, will be considered for the following year, though.
"The commission has decided that it will not impose a condition on English-language broadcasters requiring a one-to-one ratio between Canadian and non-Canadian programming expenditures," the CRTC said in a statement Friday. "Such a condition would not be practical for the upcoming broadcast year given the sector's production timelines and the programming commitments that are already in place."
The conventional networks include CTV, CanWest Global Communications Corp.'s Global, CITY-TV, E!, A Channel, and TVA in Quebec, among others. The spending on U.S. shows comes mostly from the non-Quebec networks.
Spending on U.S. shows has become a hotly debated topic in the industry. Executives from Global and CTV have argued at recent regulatory hearings that the top-rated U.S. shows help shoulder the financial load at the Canadian networks, because they draw the highest ratings and ad dollars.
In response, a consortium of groups representing TV producers, writers and actors commissioned a study that demonstrated Canadian productions can make money for the networks, and that domestic broadcasters should not be permitted to skew their spending to foreign productions by arguing that Canadian shows are a financial risk.
The study by the Nordicity Group was commissioned by the Canadian Film and Television Production Association, the Directors Guild of Canada, the Writers Guild of Canada, and ACTRA - the union representing actors.
The CRTC plans to hold a hearing in the fall to consider several policy changes for the industry. Also on Friday, the regulator announced it would renew licences for CTV, Global, Sun TV and CITY-TV for one year in order to hold broader licence renewals in the spring of 2010.
Some of the conventional networks have argued their financial fortunes are dwindling amid a recession and competition from the Internet, which has splintered ad dollars and audiences. The regulator, which normally grants longer licence terms, wants to begin assessing the financial viability of the networks by looking at the entirety of their assets, including the more profitable cable channels CTV and Global own, rather than just focusing on their conventional channels.
"In the case of the large networks, we have opted for shorter licence terms to give these broadcasters some flexibility during the current period of economic uncertainty," CRTC chairman Konrad von Finckenstein said in the statement Friday.
Ken Englehart, vice-president of regulatory affairs at Rogers Communications Inc., which owns the CITY-TV network, said the idea of a one-to-one ratio on program spending could work, but should not have been rushed. "I think it's a really good idea, it's just given the economic turmoil that the recession has caused in the short term, it seems like a difficult thing to put in this year," he said.
The Writers Guild of Canada said it wanted to see the idea discussed more in the coming months, but acknowledged the delay was probably necessary for now.
"We appreciated the spirit of the one-to-one proposal as a recognition of the imbalance in the system between the spending on Canadian and the spending on foreign (largely American) programming," the Guild told its members in an e-mail."
We agree with the CRTC that imposing this regulation for just the upcoming year would be impractical. We hope that when the time comes to revisit the issue around the policy review ... we will be able to come to it with the data and detail such a discussion requires."
Grant Robertson