Toronto, Ontario
May 1, 2015
Tom Pentefountas, Vice-Chairman of Broadcasting
Canadian Radio-television and Telecommunications Commission
Check against delivery
Thank you for your kind introduction.
I know there’s a lot of competition for your attention. Not only do you have over 200 of the world’s best documentaries to try to see. You also have access to some of the leading film fund representatives, financiers and programming executives on the planet. So I appreciate that your time is precious.
The CRTC’s roadmap for television’s future will ensure that Canada’s television system adapts to the profound changes underway in our multimedia world. And that’s good news for the people in this room.
I will focus my remarks this morning on the Commission’s decisions that most directly affect the creators of content. My hope is that this will reassure you that the sky isn’t falling.
I also hope it will inspire you to seize the extraordinary opportunities opening up for Canadian content creators.
There’s every reason for optimism for people in Canada’s creative community.
Canada is well positioned to compete – and win – at home and abroad, and to face the future with confidence.
Canada’s documentary makers, particularly, have an enviable track record when it comes to creating award-winning programs. You need to look no further than the annual Academy of Canadian Cinema & Television, Genie and Gemini Awards for proof of that.
You also enjoy strong sales internationally, underscoring that there’s a global appetite for what you have to offer. Therein lies the key to our collective creative future.
That said, in today’s fast-changing environment, there’s no room to rest on our laurels.
Like everybody else in the content business, you need to adapt . . . do things differently . . . and be prepared for the next wave.
That’s precisely the aim of our recent announcements resulting from our Let’s Talk TV policy review.
Overview
Let me provide a quick overview of what we set out to do with Let’s Talk TV . . . the conclusions we came to . . . and what it may mean for you as documentary makers.
Much of the story you know well, since you are among the 60,000 people employed in content creation in Canada. People who share in the more than $4.1 billion invested each year in programs made by and for Canadians.
You know, better than most, that having a domestic production industry is an important public good that generates social, cultural and economic benefits. Some benefits are intangible, like the importance of telling and hearing our own stories. Others are easily quantified, such as the number of highly skilled jobs created and revenues generated.
Given the importance of telling Canada’s stories to Canadians and the world, the CRTC started the Let’s Talk TV conversation. We wanted to make sure the television system adjusts successfully to the profound changes already taking place – and those that are sure to occur over the next few years.
We are living in an interconnected global marketplace and an age of content abundance.
As you undoubtedly know from personal experience, that has direct ramifications for you and the work you do.
For instance, even though you were likely trained to make documentaries an hour and half long, it may no longer make sense given the preferences of contemporary audiences and broadcasters. They may want shorter or longer programs, or just about every other length in between.
Millennials and other digital natives likely prefer shorter fare – think YouTube. Meanwhile, analog oldies are happy with traditional viewing options on their television screens or at the movie theatre.
Broadcasters, on the other hand, may want weekly series rather than one-offs. They like hour-long blocks that they can schedule at predictable times – think of the recent six-part documentary The Jinx: The Life and Death of Robert Durst. Or the documentary series Vice has been producing for HBO.
This new reality means you need to be prepared to produce whatever viewers and broadcasters want to watch.
Scale and budgets matter, of course, but great ideas that draw eyeballs to your programs count just as much – if not more.
This was the rationale for our question “what will TV look like in the next few years?”
A time when more and more Canadians migrate to all kinds of new devices that let them watch the content they want, when they want, where and how they want it.
Consider the latest figures from the Media Technology Monitor. They indicate that Canadians spend an average of 8.2 hours each week watching online video. More than a third (37%) of Anglophones report watching full-length TV shows online.
Given the profound evolution we’ve already witnessed in the media since the introduction of broadband Internet and wireless networks, it’s a certainty that innovative platforms and approaches will continually appear. And that some traditional platforms and products will disappear over time.
That’s the nature of evolution.
As Charles Darwin wrote, "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."
Adaptability.
With that in mind – and after listening to more than 13,000 Canadians who participated in various phases of Let’s Talk TV – the Commission concluded old solutions would no longer suffice.
Today, the viewer – not the content creator or distributor – is in control. While content remains king, the viewer is emperor. And no amount of regulation can stop that.
That’s why the CRTC is reinventing its approach to content creation.
We are tearing down barriers to innovation that have hampered broadcasters and producers and throwing open the door to new ideas.
We want to nurture the necessary conditions for the creation and promotion of compelling, high-quality content that audiences at home and abroad will choose to watch. Since that’s the direction television is headed in – like it or not.
Hot Docs research
A study commissioned and released by Hot Docs last September – Learning from Documentary Audiences: A Market Research Study – provided clear evidence of the need to follow viewers’ lead.
It found that 95% of respondents reported watching documentaries at home, but not necessarily on TV. Close to half of them were watching online.
That’s not cause for alarm. In fact, it should be a source of celebration for people in your industry.
The good news is that 68% of respondents reported watching more documentaries in 2014 than three years earlier.
The even better news is that a large portion of these audiences is made up of so-called “connected super users” with a dream profile. They are young, tech savvy and more likely to be connected through iTunes and Netflix or on paid portals such as Vimeo on Demand.
At 43% of viewers, they far outnumber the 14% of traditional viewers who tend to rely on TV and theatres to see documentaries. This is precisely the kind of demographic your sector needs for future growth.
Maybe the most telling feature of the study is that a significant portion of documentary audiences – 36% – would pay for convenient access to documentaries online.
Taken together, this demonstrates that there’s an appetite, and a market, for your works. It also underlines what this festival illustrates – access to documentaries is important to Canadians.
Programs of national interest
The Broadcasting Act recognizes this. It stipulates that the Canadian broadcasting system should be varied, comprehensive and encourage the development of Canadian expression – exactly the kind of works you produce.
The Commission requires that broadcasters produce these programs of national interest, which might not otherwise be made. It also requires that programming should include a significant contribution from the Canadian independent production sector. People like yourselves.
We have upheld these requirements. We continue to put documentaries front and centre among the programs of national interest. And we have upheld the condition that at least 75% of spending on programs of national interest be allocated to independently produced programs.
In other words, we have maintained the foundations you depend on. Foundations you can use to compete beyond our borders. Canada should be seen as your launching pad.
Facing the future
This should not be confused with clinging to the status quo, however.
We have taken major steps to modernize our television system so Canadian viewers and content producers won’t be left behind as we move to the future.
Because the regulatory tools of the past – such as screen quotas and genre protection – are increasingly ineffective in an age of content abundance and the unhindered mobility of eyeballs.
The total volume of Canadian film and television production is 32% higher today than it was in 2003.
Consider that 300 hours of video are uploaded to YouTube every minute of every day of every month. That’s on top of the 1,300 hours of traditional television Canadians have access to every waking hour of the day.
Consequently, protectionism is an anachronism that doesn’t work in a borderless world.
Now, I know that that the Documentary Organization of Canada wanted us to impose exhibition requirements. But I go back to my earlier argument. You can no longer force people to view content by dictating what they should watch or the timetables and platforms on which it can be shown and seen.
Viewers are voting with their thumbs on their smartphones, with the swipe of a finger on a tablet or the click of a mouse. People are picking what they want to watch, when and how they want. Now I know it’s a cliché, but it does not make it any less true.
The Commission cannot hermetically seal off our borders any more than we can pretend it’s the 1980s. To do so would diminish and further erode the television system and the revenues that support Canadian productions.
That doesn’t mean you cannot continue to reach both longstanding and new audiences with compelling content. The statistics I cited earlier reinforce that you’re already succeeding in this regard.
But it does mean you must better target the people who want to buy what you have to sell.
You will be pleased to know the CRTC is making that a whole lot easier by giving Canadians the option to pick and pay the channels they want.
Given the growth in documentary consumption in recent years, there appears to be a strong demand for your works. This creates unprecedented opportunities to serve the needs and interests of Canadians by offering shows they will choose to subscribe to.
You will no longer be at the mercy of cable and satellite companies when it comes to the packaging of channels. You won’t be limited by rules related to genres, either. Specialty channels that could not air documentaries before will soon be able to do so.
The Commission is removing regulatory barriers in order to encourage new programming services, programming flexibility and greater domestic competition.
Programming diversity that’s governed by market forces will be better able to respond to viewers’ expectations and capitalize on creative programming strategies – the very heart of documentary making.
This scenario is tailor-made for innovators like you, who excel at creativity.
Terms of Trade
I realize, of course, that some of the Commission’s decisions were not universally welcomed by producers. Terms of trade is one example.
As the CPMA is seeking leave to appeal this aspect of our decision, I am not in a position to say much about this today. But I will remind you of our rationale for the decision.
As you know, Terms of Trade agreements between broadcasters and producers clarify digital rights. In 2006, the CRTC was asked to develop guidelines that outline acceptable terms of trade.
Their purpose was to provide stability and clarity on certain digital rights to all concerned.
The Commission did not stipulate what should be in the agreements. We only required that the major ownership groups negotiate such agreements prior to their licence renewals.
It’s an understatement to say the world has changed dramatically since 2006.
Not only has viewer interest in your productions grown in the intervening years. Digital rights and other rights issues have largely been clarified. Most licensees now have negotiated terms of trade agreements.
In the CRTC’s view, it’s no longer necessary for the Commission to intervene in this relationship. Broadcasters and producers now have the clarity and experience they need to negotiate future agreements among themselves.
That does not suggest we are sitting on the sidelines. In fact, we are leading by example.
We’ve announced that we will remove the requirement for a producer to have a broadcast licence agreement with a traditional broadcaster in order to obtain support from independent funds. They’re not tied to you and you’re not tied to them. And we’ve recommended that other funding agencies follow suit.
We also have encouraged governments to remove barriers that currently keep Canadian producers from creating online productions.
Increased investments
The other important thing to recognize is that the shift away from protectionism to promotion comes with a greater reliance on expenditure requirements.
An increased number of local TV stations and specialty channels must now reinvest a portion of their revenues into the creation of content made by Canadians.
We will require all broadcasters to financially invest in programs made by Canadians. Because we want broadcasters and distributors to focus on quality over quantity.
Investments to create better content bring more value into the television system. In turn, this generates more money to re-invest in content made by Canadians. And the virtuous cycle continues.
Pilot Projects
The CRTC’s definition of made by Canadians is expanding to include new pilot projects.
They must either have a budget of at least $2 million per hour or be based on best-selling novels written by Canadian authors, provided certain criteria are met.
I know there has been concern expressed within your community that these pilots appear to be geared solely to dramas and comedies. I can assure you, that’s not the case. In fact, that’s reinforced in paragraphs 129 and 130 of the decision we published on March 12th.
To be clear: we are open to considering any and all good pilot project proposals. You have the same access to resources as any other producers.
If you have a great idea, there’s nothing preventing you from bringing projects to the Commission’s attention. Any program that is big and grand, and which fulfills our objectives, would be eligible for these pilots.
Believe me, we are the first to endorse the idea that we need to export Canadian expertise in the arts just as we do in the natural resources or manufacturing sectors. This applies to documentaries just as much as it does to dramas and comedies.
The CRTC has made numerous recommendations to governments and agencies to enable the production sector to capitalize on export opportunities.
For example, we’ve recommended that government stakeholders develop strategies to support international co-productions and international distribution.
Measures like these will foster an environment where Canadians and global audiences will want to watch content made by our creators – not because it is forced on them, but because it is great. And it just happens to be Canadian.
And, as this week’s festival reinforces, this is an area where Canada’s documentary makers shine.
So, if you have a product that can take on the world – the world is now your oyster.
But, make no mistake, you have to be ready and able to compete with the best the world has to offer. There’s no protection from that in today’s digital borderless world.
Set-top Boxes
For all the disruptive impacts of digital innovations, technology is also providing us with solutions to some of the challenges content producers face.
And one of those is measuring just who’s watching your shows.
It’s no secret that the 500-channel universe has led to audience fragmentation. Traditional measurement systems are unable to capture these viewers. Gone are the days of the two-channel universe where you had to get up to change the channel.
Ironically, technological disruptors have also provided us with technological solutions – in this case, in the form of the modern set-top box’s return-path data. Why would we allow unmeasured viewers to be excluded when this data enables us to measure – and, consequently, monetize – viewership?
Particularly when it appears that these “connected super users” represent a growing niche audience for documentaries.
At the CRTC, we understand that the future success of the broadcasting sector will depend on the industry’s ability to use technology to tailor content to the diverse needs and tastes of Canadians.
We recognize, too, that viewer information will be essential in this targeted consumer-centric environment. We know that tools such as a set-top box data are key to the sector’s ability to compete with data-rich digital platforms.
So, we ordered the industry to set up a working group to explore a set-top box measurement system in Canada.
The working group is tasked with proposing technical standards, privacy protections and a governance structure, as well as determining how costs will be shared.
Since such a system would give all distributors and programmers access to this data, it could improve the industry’s ability to provide Canadian viewers with the information they need to make informed choices.
It could also increase revenues flowing to program creators by providing broadcasters with new opportunities to monetize formerly unmeasured viewers. Measurement equals monetization, which in turn equals revenues. Revenues we can funnel back into Canadian programming expenditures and programs of national interest.
Discoverability
Of course, making great programs and measuring their viewership is only half the battle. Making sure viewers can find these works in the first place is equally important.
For Canadian-made programming to succeed, it must be widely available . . . visible on multiple platforms . . . and easily found.
Your own research has confirmed as much. Learning from Documentary Audiences: A Market Research Study found that while 60% of respondents said having access to Canadian documentaries is important to them, only 7% reported they could find them easily. That’s a 53% gap, and we desperately need to bridge that gap.
The study revealed that, if more tools for discovery and promotion were available, respondents would increase their viewing of documentaries. This means that content creators will need to find new ways to bring their programming to viewers.
The Commission recognizes that discoverability of content will be crucial in the future media landscape. The CRTC will host a Discoverability Summit in the fall to generate new thinking about tools and methods to connect viewers with content.
For example, algorithms – such as those used by online retailers to recommend goods to consumers – may be among the tools used to connect viewers with the content they’re seeking.
In the same way that big data is now being mined to target sales of laundry detergent, the likes of Netflix, Crave and Shomi are also finding innovative ways to capitalize on viewers’ shifting tastes.
The Discoverability Summit will convene innovators and thought leaders from across the public and private sectors, from Canada and abroad.
People who employ cutting-edge techniques to underwrite the costs of production in a media-disrupted world of abundant choice.
People who understand that the roadmap to the future will not be found looking in the regulator’s rear-view mirror.
People who recognize that you can resist change, or you can embrace it. But you cannot stop it. If you’re not going forward, you are falling behind. There is no standing still.
Conclusion
I’m sure many of you here remember Denys Arcand’s 1982 documentary, Le confort et l'indifférence. The award-winning film showcased the power of documentaries to celebrate the past while impregnating it with new meaning that makes it relevant to the present day.
It explored how memory and amnesia can be transformed to suit the present – how they are less dependent on events of the past than upon the demands of the here and now.
That message underlines my primary point. And reinforces that there’s every reason for optimism as we face the future.
There’s an abundance of financial resources in the system to create and promote great programing: $4.1 billion each year can produce a lot of great content. So let’s not squander this incredible opportunity available to creators today.
We also have the necessary skills to bring high-quality programs to life. Canada has a deep talent pool. Just look at the films at this festival.
And your own research proves we have viewers both here at home and around the world who are hungry for new and interesting content.
The CRTC is introducing change in a measured and responsible way to support content producers and distributors through the transition.
In short, we have the necessary ingredients for the television system’s continued success.
Will there be challenges? That goes without saying. But the most dynamic and innovative will succeed. So, let’s embrace our digital future with a sense of renewed confidence.
It’s now up to Canada’s creative community to seize this opportunity and run with it. Let’s be the world conquerors, not the conquered. The victors, not the vanquished.
I think we need to have an outward vision. We need to leverage the infrastructure we have in Canada to seduce the world with our vision, our stories, our creative genius.
Based on the ground-breaking work on display at Hot Docs, I have every confidence that Canada’s documentary makers can successfully take on the best that the rest of the world has to offer and come out ahead.
Thank you.
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