1. Broadcasting Regulation in Canada: Funding Local (Canadian) Content Local Content Development Workshop Pretoria, South Africa 28 May 2014 Presentation by: Peter Foster, CRTC

2. BROADCASTING ACT - Canada Key Policy Objectives: o safeguard, enrich and strengthen the cultural, political, social and economic fabric of Canada o encourage the development of Canadian expression by providing wide range of programming that reflects Canadian attitudes, opinions, ideas, values, artistic creativity o regulated by an independent public authority: the Canadian Radio- television and Telecommunications Commission (CRTC)

3. CANADIAN RADIO-TELEVISION & TELECOMMUNICATIONS COMMISSION (CRTC) regulates all aspects of broadcasting system issues, amends, renews & suspends broadcasting licences power to develop and enforce regulations sets conditions of license holds public hearings

4. CRTC Key Requirements levels of exhibition & spending on Canadian content priority carriage of Canadian services TV provider contributions to support the production of Canadian programming (% of revenues) other conditions of licence to support cultural and economic objectives

5. Conventional (over-the-air) TV Canadian Content: Broadcast year: minimum 55 % Evening broadcast period: minimum 50 % –CBC: minimum 60%

6. Specialty (Cable) Channels Nature of service definitions – genre protection Canadian Content – average minimum: 60% Canadian Expenditures – avg minimum: 40% of revenue Maximum minutes/hour of advertising – 12 minutes/hour

7. Group-based Approach 3 large groups in English Canada: Bell, Shaw, Rogers Shift from exhibition to spending requirements: o Minimum 30% of revenues spend on Canadian programs o Minimum 5% of revenues on drama & documentaries o 75% of drama & docs spend on independent producers Minimum hours per week of local (community) programming: 14 in large cities; 7 in others

8. TV Providers (cable, satellite) Contribution of 5% of revenues to Canadian production –minimum 2% to Canada Media Fund –up to 1% to independent production funds –up to 2% to community programming Carriage of all local/regional conventional stations Carriage of all Category A specialty services Carriage of unaffiliated Category B specialty services Predominance - majority of programming services received by subscribers must be Canadian

9. Support for Canadian Programming BROADCASTER EXPENDITURES ON CANADIAN PROGRAMS Private$ 605 M CBC $ 700 M Specialty, Pay, PPV & VOD$1,300 M $2,605 M PRODUCTION FUNDS/Community Canada Media Fund $ 360 M Independent Funds $ 62 M Community programming $ 124 M $ 526 M

10. Tangible Benefits Policy All broadcasting asset transfer requests must include a proposed benefits package: o 10% of the value of the transaction o Minimum 85% of benefits must support production of Canadian programming o Up to 15% may be “social benefits” (e.g. educational) Value of benefits (2008-2012) = $450 million

11. Traditional Challenges French-Canadians prefer French-language Canadian programming, but small market limits production American entertainment/drama programs are very popular in English-Canada, less expensive to buy than produce Canadian shows: big ratings + lower costs = more profits Regulation is necessary to ensure Canadian programming is produced and broadcast

12. What are Canadians watching? All Canada, except Quebec Franco market 12 Canadian services: 86% of total viewing Canadian programs: 44% of total viewing  Majority of Canadian viewing is to Canadian services but not necessarily of Canadian programs  6% of viewing hours are to the CBC compared to 27% to private conventional TV

13. What are Canadians watching? (cont’d) Quebec Franco market 13 Canadian services : 99% of total viewing Canadian programs: 63% of total viewing  Majority of Canadian viewing is of Canadian programming to Canadian services  12% of viewing hours are to the SRC compared to 34% to private conventional TV

14. New Challenges/Opportunities Increased viewing on new platforms means: o Audience fragmentation = decline in ad revenues o Decline in cable/satellite subscriptions = decline in contributions to program funding New platforms don’t lend themselves to traditional regulatory approaches: exhibition/spending rules New platforms = new players = new customers

15. Opportunities for Collaboration between South Africa & Canada The global marketplace: smaller countries need to work together! Co-production agreement: Canada/S.A Canadian Media Production Association

16. Thank you!