Sunday, March 25, 2007

Tear Down This Wall, Mr.Von Finckenstein!

Today’s topic, Kids -- after I apologize to Ronald Reagan for warping his quote and explain to non-Canadians that Konrad von Finckenstein is the new head of the CRTC...

Why am I apologizing to Reagan? He's dead. And he was a right wing goof. As well as a terrible actor -- although not bad in "The Killers" -- and I once caught my dog watching "Bedtime for Bonzo" with apparent interest...

I also wrote a speech for him. More on that another day...

Anyway, today's topic is the Capitalist system and how it doesn’t apply to Canadian television.

A quick lesson for those who, like me, grew up under one socialist regime or another and don’t really understand where money comes from: “Capitalism: A logline”…

Profits attract investment -- which increases production -- which increases profit.

In short, “if you build it, they will come”, spend their money, allowing you to build more or bigger, which makes more money.

Now let me tell you a couple of stories.

About 2 years ago, a friend of mine received a screenwriting grant/loan/whatever from Telefilm for a feature project. A couple of months later, he completed a script that was pretty damn entertaining.

This script also included, from a prospective producer’s point of view, everything you could possibly want in satisfying Canadian government funding sources. It was set in a formidably tax incentive friendly region, had a sizable diversity component to its cast, and told a story that was 100% Canadian and yet spoke to the universal human condition.

On the Cancon, CTF and CRTC checklists, my friend had managed to tick every box and still leave room for a viable co-production deal and the participation of bankable stars. In my world, this is tantamount to one of those guys on “The Ed Sullivan Show” who kept endless numbers of plates spinning. Despite their glittery pirate shirts, they always impressed the heck out of me too.

"Ees no the same without my brother..." Sorry, old joke...

Whatever happened to all those guys? There used to be a whole plate spinner industry.

Anyway, my friend dutifully provided a number of Canadian production companies with his script and waited. And waited. A few weeks later, the phone still silent, he followed up. No one had read it yet. Not one company. So he waited some more. And waited.

After six months he still had not received a single reply, so he did something unusual. He contacted Telefilm and got the names of all the other writers who had received a grant/loan/whatever in the same funding period as he and called those writers.

Like him they had all submitted their material to Canadian production companies. And like him, not one had received a single reply.

By his estimation, half a million dollars of taxpayer money had been spent funding scripts which were not only not being considered for production by the major and minor players in the Canadian industry but, quite possibly, had not even been opened.

I used to think the silence on the other end of the calls I make or the black hole my scripts and projects disappear into in Canada were a result of people not liking or not wanting to do them. But I’ve come to believe its something else entirely.

Last week I had a conversation with an LA based producer. He’s ribald and rough around the edges, with his finger firmly on some starlet and yet never far from the public pulse. He makes a lot of films – many up here. He liked one of our projects and asked who’d seen it. I gave him a list of Canadian producers. His response, “What’re you wasting your time on them for? They don’t have any f---ing money!”

He’s right. Our system of government administered funding has finally reached a point where the players see no purpose in buying anything unless it fits an already specified broadcaster need and falls within their pre-approved envelope.

Nobody risks anything unless the carrot is within immediate reach.

So, although my friend thought he’d leapfrogged the Turtle Derby of the development process by solving all the culture restrictions for his producer, our producers now focus their energies not on executing work that might capture an audience but on the limited windows our national broadcasters and re-broadcasters have in their schedule. The money in their “envelopes” is the only thing driving the Canadian industry.

I’m not saying the days of producing something because it’s original or innovative or immediate are over in Canada, but the shadows are lengthening. And that does not bode well for the industry or any of us creatives and semi-creatives who labor within it.

Writers and Producers in Canada have been reduced to surviving on corporate welfare.

A second story, this one detailed in Friday’s Globe and Mail.

“Some of the most attractive -- and lucrative -- real estate on the television dial will be up for grabs next week, and several cable channels are scrambling to stake their claims.

The CRTC is planning to redefine basic cable service, shuffling the list of channels available to all cable and satellite subscribers who buy the minimum packages offered by their carriers.

Basic cable and satellite packages are akin to beach front property on the TV dial, since it exposes those channels to more than 10 million households.

Specialty cable channels are paid a fee for each subscriber they have by the cable and satellite carriers. Every viewer who has basic service is considered a subscriber, so being on basic can mean big dollars.

The Weather Network, for example, gets paid 23 cents per subscriber each month. The network, estimates it has 12 million subscribers, meaning it collects roughly $2.76-million a month and fears moving off basic would cause revenue to plummet, since fewer subscribers would buy the channel.

It plans to argue that its forecasts and road reports are a crucial service. It has offered to drop its subscriber rate to 20 cents to stay on basic, essentially surrendering more than $4-million in annual revenue to remain there.

Each channel must also argue it is crucial to the national fabric, including furthering Canadian culture, contributing to learning or providing an essential service. They must also prove that without the financial benefits of basic cable they would be losing money.”

Two points I find interesting here. The first is uniquely Canadian. Our national symbol is the Beaver, a rodent known to gnaw off its own testicles and offer them to a predator so it can live to fell another tree. And here we have a Canadian company willing to give up 15% of its annual income simply to maintain the status quo.
Given that the “profit margin” in the Canadian broadcast industry runs around 20% that’s a very substantial hit to take. Maybe they’re only doing it to serve that last point of proving they’d be losing money…

What’s more interesting is that rather than creating programming to attract more viewers, making format adjustments to increase interest or doing “anything” for that matter, to make their product more marketable; the Weather Channel is arguing that unless they retain their cushy beachfront condo, their subscribers will “suffer” from a reduced service.

And we wouldn't want the little people to "suffer" would we, Mr. Von Finckenstein?

Maybe “Weather” isn’t the best example here, but other companies in danger of slipping off the basic tier are making similar noises.

This is where the Canadian broadcast system is skewed and our creatives screwed. In Canada, the market does not drive the industry. Here, government and the industry dictate to the market.

Historically, we’ve always been a protectionist bunch. Part of that comes from the domino theory of Canadian culture. The xenophobic belief that some (probably American) entity will come in and topple what we have.

The odd thing about this theory is that in the digital age, the American elephant we so fear treading on us is just one of a herd beaming internet or satellite options in the first languages of a good portion of our population.

From 1982 to 2005, The Canadian government made $18.4 Billion dollars in corporate grants and loans. That includes a couple of hundred million a year for the last 10 years to the Canadian Television Fund and Telefilm. To date only $1.3 Billion of all that money has been repaid, little of it from corporations within our own industry.

We’re told that such subsidies create jobs, encourage research and development and spur economic growth. But the sad fact is that they often have the opposite effect.

GM and Ford, for example, have received Billions in subsidies and yet are slashing jobs while producing a product people stopped wanting to buy years ago.

Our largest corporate welfare bum, Bombardier, can’t make money no matter what it does and its leading product was grounded by dozens of airlines this month because it didn't seem to be able to stay up in the sky.

Most protected industries aren’t a magnet for brains. Their cash flow is propped up. They don’t have to think about coming up with an engine that gets 100 km/liter or runs on highway litter to trump the competition. They don't need to innovate or create to survive at all.

Think about it! If you’re dynamic and filled with new ideas are you taking a job where most of your time is spent dealing with bureaucracy and filling out forms?

And given the numbers above, our government has proven itself incapable of selecting corporations to fund that can earn a return, protect and grow their employees jobs or wean themselves off the government teat. And why should these companies even try? Cashing a cheque from Ottawa is way easier than having to actually compete for the consumer’s money.

And who suffers?

It’s not just the guy who thought he had a lifetime job at Chrysler or the screenwriter who believed Canada wanted to tell its own stories to its people. It’s those subscribers who zap their remote hour after hour not understanding why the same series is playing at the same time on eight different channels, the same movies are endlessly repeating and some show about painting your dog house is on virtually every tier they subscribe to –- all -- day -- long.

That’s why Jim Shaw and Quebecor touched such a nerve when they challenged having to make further contributions to the CTF. That’s where the vitriol that spewed from viewers came from. Our over-protected industry is the primary reason Canadians hate or mistrust much of Canadian television.

The system that works for broadcasters sure doesn’t work for them. And oddly, they’re the ones the CRTC is mandated to protect and serve.

Another industry protected and regulated by the CRTC is the telecom industry. Last week numbers were released showing that Canadians paid some of the highest rates in the world for cell phone service. An example of the average monthly cost…

Canada $48/mo
Denmark $9/mo

Okay, maybe there’s only three people to phone in Denmark but the reason for this huge ding to the consumer is the same as the television industry. The CRTC has set prices to benefit the telecom companies while barring new competitors who might lower costs or offer innovations to the market.

The CRTC doesn’t seem to understand that by lifting restrictions, they would spur companies to create and compete or perish. And if they perished, somebody who could do it better would come along to replace them. Y'know that “survival of the fittest” thing.

Would anybody watch the Superbowl on Global if they could get the American feed? Of course not! And it’s not just because of the commercials. This year, Global eliminated the post game hoopla, including the presentation of the Vince Lombardi trophy and the MVP award, cutting directly from the final gun to the “Canadian” version of “Deal or No Deal”.

Imagine being a hockey fan denied the moment when the Captain of your team finally hoists the Stanley Cup! That's what Global did to football fans. Not only that, but during their NFL playoff coverage, they missed two different game deciding scoring plays with their extended commercial breaks.

That’s not giving the audience what it wants – and yet, they know they will still be paid their mandated subscriber fees, despite substandard service and they will still retain a privileged position on the dial.

How much better do you think Canadian TV might get if HBO and Showtime were allowed to be carried here?

And come to think of it, why aren’t they? Those networks are providing a higher level of dramatic Canadian content (in the form of individual artistic contribution) than some of our own.

Don’t start screaming that this would kill us all. Because we’re dying anyway. You can only boost productivity and quality and make room for new ideas, up-and-comers, original scripts and unique programming by removing the coddling and shifting the focus to what our audience wants to pay to see.

Content doesn’t need to be protected if there is an appetite for it. And creating an appetite is what 99% of showbusiness is based on. Everybody knows most of the movies that debut every friday aren't as exciting, funny, or ground-breaking as their trailers and media hype would have us believe. But they pique our interest or suggest a respite from our boredom and we go.

If CTV or Global or any other Canadian Broadcaster or re-broadcaster was faced with disappearing or funding programming that won an audience, they would opt for the latter and market it like their lives depended on it -- because they would.

Look, the hard truth of show business is nobody needs Canadian movies any more than they need Marty Scorcese’s. Nobody’s life will be over if there’s never another episode of “Intelligence”, “Little Mosque”, “Studio 60” or “Lost”.

Okay, we’ll lose a few after “Lost” but I was talking about normal people. The ones with lives and regular jobs, hockey practices to get kids to and favorite bars to be found drunk in.

We’re merely the soundtrack and the diversions of their lives. They don’t live and breathe this business like we do. They just drop in from time to time, and can occasionally be encouraged to park some cash in our pockets for the treats we deliver. They don’t care where it’s shot, what passport the writer carried or if its production benefited one socio-economic group or another.

And if they don’t find what they’re willing to buy on their remote, they’ll find it on a P2P site – and what difference will any of our protections and regulations make then?


wcdixon said...

So what are you proposing Mr. Finckenstein try to do, Jim? Start dismantling the restrictions? Stop the regulation and protection? (swell essay btw)

CAROLINE said...

Wow, nice job. I'm sensing today was a high caffeine day.

Not much to disagree with regarding the tv stuff.

I have been especially cheesed off by the cell phone thing for years, because it is strictly corporate ... there's no apple pie, cultural sovereignty issuea t stake.

I hate that we not only have crap service but lousy hardware ... the cell phones Canadian Telcoms deign to give us are like pre-historic relics compared to what Europeans are using, we're easily five years behind.

In France, all incoming calls to a cell phone are free and don't count against your minutes. Even if they're foreign calls. Sweet. Finland's cell phone service has evolved to such a high degree that about 1/3 of the population doesn't even have a land line anymore, they operate completely off cell because they actually work and the rates are affordable. Finland is a nation of 5 million. So, are our Telcoms just inefficent or are they gouging the shit out of us? My bet is on both.

Anonymous said...

These so-called "businesses" are the squeegee-kids of the broadcasting industry. They "provide a service" that most people don't ask for, and then they demand to get paid. If they can't make it on their merits, they deserve to go under, just like "C-Channel" back in 1983.

The Weather Network is a prime example. I can tune in to a local AM radio station, and get "The Traffic and Weather together on the ones", i.e. 1, 11, 21,31,41, and 51 minutes after the hour. Weather Network doesn't have anything for me. And if you're not in Toronto. you can get traffic and weather on the net, even on dialup.

Bill Cunningham said...

Again Jim, you give voice to my thoughts on so many things... We live in an era of a phenomenal shift in our entertainment consumption. I would say equal to television supplanting radio as the media of choice back in the late 40's early 50's.
But the engine that is driving this change can be boiled down to a simple word: CHOICE.

I can choose when and how I ingest my entertainment - a powerful concept to say the least as it extends and transforms the whole idea of "audience" and "ratings."

What has happened in Canadian television, by my observation, is that "choice" has been taken away, and in today's market...

Well, let's just say that's going to be one lonely beaver...

Anonymous said...

In what way does the CRTC picking basic channels and bundles protect Canadian consumers from monopoly, loss of culture, or whatever else they are supposed to be doing?

Go ahead and license the channels and then buzz off. I have no more use for CRTC meddling than the dreck they bundle in with the real channels. I have to buy religious programming on the Vision network or the parlimentary channel to get news stations? If that's Canadian culture, count me out.

The CRTC should wake up and smell the stench of death. No more Canadian content rules and no more bundling. Each channel should stand on its own instead of the welfare packages keeping these channels alive. Eventually better broadband service will force the death of all these channels regardless of what the obsolete CRTC thinks anyway.

jimhenshaw said...

Cunningham, you crack me up!

Anonymous said...

How does televising ten and twenty year old “Frasier”, “Seinfeld” and “Married With Children” re re-runs make PrimeTV, or whatever it's called this week, "crucial to the national fabric, including furthering Canadian culture, contributing to learning or providing an essential service"?

Nonetheless, the CRTC requires me to subscribe to it to receive other channels I want.

Many of those channels are also filled with reruns, endlessly repeating programs, and 'paid programming'. Filler, basically; these companies are 'parking' on these channel slots while they are being subsidized, and for their future value.

Any wonder there is such a big black market for satellite TV? I would have no qualms about 'stealing' signals, when our government has made stealing by the TV operators quite legal.