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Family squabbles are never pretty, but they sure can be fun to watch. This week, as the Canadian TV and film community comes together to celebrate its success – the first-ever Canadian Screen Awards will air Sunday night on CBC, hosted by Martin Short – a fight broke out that might be as entertaining as some of the shows vying for the golden statuettes.

On Tuesday evening, about 100 independent producers in a ballroom of Toronto's new Four Seasons Hotel sounded as if they wanted to rustle up a posse after one of the country's most powerful broadcast executives told them the industry's economics were tilted in their favour.

Keith Pelley, the president of Rogers Media, which owns the City television network and a bunch of specialty channels such as Sportsnet, opened a panel discussion hosted by the Banff World Media Festival by declaring that the framework under which most of the private broadcasters buy rights to TV shows needs to be renegotiated, even though it was only signed two years ago.

"The industry is going through a structural change," he explained: The advertising dollars that used to support TV programming are rushing off to find targets through a myriad of other channels, many of them online. "Three billion dollars is spent on the Internet, of which 70 per cent is going to the likes of Google, Facebook, XBox – these are dollars we're not even playing in," he told the assembled producers. (Private broadcasters' advertising revenues remained essentially flat between 2007 and 2011, around $2-billion, according to the CRTC; numbers are not yet available for 2012.)

"How does that affect all of you?" He mentioned Seed , an original Halifax-based single-camera comedy now airing on City that the network believes could be a breakout hit. "The actual licence fee is considerably higher than if we were to buy an American show." In many cases, the ratings for original Canadian productions are woefully low, even when (like Seed ) they're sandwiched between big U.S. shows to help raise their profile. He argued that the broadcasters need to be able to share in the revenue that comes from international sales. Currently, that money flows back to the independent producers unless the broadcaster pays a so-called "super-licence" fee.

Paul Robertson, the president of Shaw Media, nodded in agreement. "The terms of trade do need to evolve," he said. Kevin Crull, the president of Bell Media, said he isn't looking to producers for sympathy, but is understanding of the challenges facing broadcasters. "I don't want to have an industry solution that whacks costs, because I don't think your costs of production are going down," he acknowledged. Still, "if we're not growing revenue, there's either a day of reckoning, or there's constant tension."

It was a good thing there was an open bar after the panel, because the producers looked like they needed a few drinks to dull their anger. One industry veteran told me he was astonished at Mr. Pelley's declaration. – then noted quickly that his comments had to remain off the record, since he hoped to continue doing business with the broadcasters. Another pointed out that broadcasters are required to spend a certain amount of money on original Canadian content in exchange for an extraordinary level of regulatory protection.

A third noted that he'd cancelled his cable a few years ago out of necessity: The economics of independent production in Canada are great for those at the top (say, the executives behind shows such as CTV's Flashpoint, which sold internationally) and pretty awful for everyone else. (Mr. Pelley probably didn't help their morale when he observed: "I do believe there might be too many [producers].")

The next day, I got in touch with the man who will represent the producers in any future negotiations. "I found Keith's sentiment to be as predictable as it was outrageous," said Michael Hennessy, the president of the Canadian Media Production Association. Under the deal, he explained, in exchange for a flat licence fee, broadcasters receive the right to play shows as many times as they want, on whichever platforms they want (TV, online, mobile devices, Netflix-like services, etc.) for five years. The one major right the producers retain is the ability to sell their shows internationally.

"What they're really saying is, we should go back to the [previous] status quo, where we take the scraps, and we should be happy with that," Mr. Hennessy said. "It does lead you to the question: Is there anything that will ever be enough?"

In a conversation Thursday morning, Mr. Pelley sounded conciliatory. "We want to produce as much Canadian content as we can," he said. "From the broadcasters' perspective, we just need to make sure, in this changing environment, that it's economically worthwhile."

The producers are in the business of making compelling TV. They just don't know if their own story is going to have a happy ending.

Editor's Note: Michael Hennessy, the current head of the Canadian Media Production Association, did not represent producers in 2011 negotiations; his predecessor, Norm Bolen, did so. Incorrect information appeared Friday.

Follow Simon Houpt on Twitter: @simonhouptOpens in a new window

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