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Wednesday, May 20, 2009

The Thick, Black Line (Part 1)

Jim's recent post got me thinking -- thinking that there's a whole hell of a lot that I just don't know about how the TV industry works.

So I've downloaded the .PDF and I'm reading through it, making notes as I go.

Here's my list of notes - along with a smattering of questions with answers that I wish weren't redacted in the recently released minutes from the CRTC License Renewal Hearings.

Consider this a sort of live-blog of my reading through of this 251 page document.

It's gonna be a long haul, so buckle up.

COMMISSIONER KATZ (Pg. 24 - about purchasing American programming): Tell us your thought process. What do you prepare for in advance? How do you go in there, and how do you know what you end up paying? Do you walk in saying, "We can afford this much money. We are going to go in, and at this point in time we walk away from a certain program"? Or do you say, "We absolutely have to have this program because it's integral, and we will buy it at any cost," and at the end of the day you walk out of there -- at the end of May, and you go to John Gossling and say, "We just overspent by so much money"?

MR. FECAN: [REDACTED for 1 page, followed by a response by Mr. Gossling, also redacted] First available answer follows (pg. 27): And maybe the most important piece you are missing is just the terms of trade for how you do business with American studios, and this has been true for conventional since the beginning of time, you pay by telecast.

*** Maybe I'm being nosy, but I'm interested in how this all works. I'd also be interested in finding out what happened in pages 29 to 38... which is redacted in its entirety with the exception of the noted bit of 'laughter' at the bottom of page 32. Essentially, an entire discussion brought forth by the raising of this topic cut out in its entirety - A chance for us (you know, tax payers) to see, understand and maybe identify with the very nature of the problems that CTV is facing... unfortunately, we're not given that option.

THE CHAIRPERSON (Page 79): [REDACTED]... And so if you look at sports, this is the perfect example. You have salary caps, you know, and therefore that acts as a discipline to everybody. Within that salary cap you decide what is the best for you, et cetera. And so analyzing from that it appeared to us that 1:1 would be sort of that same thing. You can spend as much as you want in Hollywood, et cetera, but that triggers an expenditure in Canada. I have heard both from you and from Canwest saying that this is way too dangerous. I would like to understand why. I am not sure I fully -- I understand your restraint on the U.S. parallelism that I wasn't aware of until this morning but I still don't see why on a group basis you would throw in the whole ensemble of your specialties as well as your conventionals and 1:1 is not doable.

MR. FECAN: [REDACTED] Summary provided by CTV: The Chairperson asked the liscensee to comments on the practicality of the Commission's 1:1 spending proposal and the licensee outlined its concerns.

*** Again, after this statement, mid-page on page 80, 6 pages are redacted. A whole other conversation brought up by these questions lost. Personally, I'm very interested understanding why 1:1 spending is "way too dangerous".

Side Note - What does Mr. McClusky mean when he says this?: MR. McCLUSKEY (page 105/106): Yes. I mean, we are just postulating here. You have really got two CBCs. One is the sports CBC, which is a high-profile player that commands a premium, and one is the other CBC, which is a discount station. So if the CBC were to shut down their discount station, the first beneficiary would be the remaining discount conventional stations in the market.

The 'non-Sports' CBC is considered a "Discount" station? What is a "Discount" station?

Moving on...
Page 133 on is after the lunch break - it appears to be with Global and company instead of CTV.

Interesting quote:
MS WILLIAMS (page 138/139]: When you buy a show, what you are negotiating is the price per telecast, and when you buy it, you have no idea how many telecasts there will be, because you pay according to the U.S. network's schedule. So you buy House, and you have agreed how much you are going to pay every time they broadcast House. And if they broadcast it twice, you only pay twice, and it cancels and goes away and you are done. [REDACTED 1/2 page or so]... You are trying to establish a budget and stay in control of that budget, when you are really, completely dependent on the U.S. network's scheduling.

*** AHA! A possible answer re: 1:1 and why it's 'too Dangerous'!

THE CHAIRPERSON [page 143/144]: Now, when I asked you yesterday about one-on-one, you said that you didn't like the idea because you thought it was too dangerous. That is really the cause of your concern, if I now understand, because when you buy those big shows, you don't know how much they are going to cost you, because you don't know how much they will be shown by the U.S. network, which drives your price.

MS WILLIAMS: It is very, very hard to manage the budget as it is.

THE CHAIRPERSON: I never understood it until I understood how the pricing goes. Now I can see some of your reluctance. Help me out here. As you know, the artistic community, every time they appear before me, makes the same point, saying that we could do so much better if those broadcasters wouldn't go to Hollywood and compete against each other, and beat themselves over the head, and completely overprice the American product, and therefore that leave not enough for Canadian production.

If there were to be some sort of constraint, or some sort of limitation on what they can spend in Hollywood, that would solve it. And they have suggested that we put a one-to-one expenditure ratio on it, or a luxury tax, or something like that. Clearly, they are looking to the sports franchises, where you have a salary cap. That is a restraint on the whole system, and everybody has to use their ingenuity on how to use the place within the salary cap to their maximum vantage, and why couldn't that be applied to the film industry, or to the broadcasting industry.

Whether one-to-one is the right ratio, or a different ratio, that doesn't make a difference. Do you see a way that we could do a ratio, or anything like that here, so as to address this concern? I understand that you want to buy shows and maximize your income. On the other hand, you are really bidding against two other people who have interests in Canadian rights, other than City and CTV.

MS WILLIAMS: Just before we comment specifically on the one-to-one, I think it's important to understand the next layer of risk to this.

THE CHAIRPERSON: Okay.

MS WILLIAMS: The studios had traditionally been very interested in selling their product to Canada because it was a nice, closed, tidy market. There was a good little competitive game going on there between a couple of big buyers. It represented a fair bit of money to them. Their game is changing too. They are also trying to figure out how to curtail costs, and they are also trying to figure out how to engage their product differently across other platforms. The other risk here in all of this, which we just are very unsure of, is, if there were to be a cap -- Because, essentially, that is what we are talking about, I agree with you.

THE CHAIRPERSON: Yes.

MS WILLIAMS: [REDACTED]

*** Note: aaand this is where it gets frustrating. Because, again we're kicked out of a lot of the discussion and actual communication. I understand this might veer into operating procedure, etc. But it, again, goes toward us actually understanding where the problem lies. Even more frustrating, we come out of the [REDACTED] bit to get this:

THE CHAIRPERSON (page 148): That's interesting, what you said. Of course, that is why we are having this hearing. We want to hear your views, because the last thing we want are unintended consequences.

*** And then we hop right back into being [REDACTED] only to end on the following note:

THE CHAIRPERSON (page 149): Did you want to add something, Mr. Viner?

MR. VINER: No, I think that Barb has said it well. The connection that I find frustrating with the creative group and the production community is that, first of all, we don't like spending all of this money on U.S. product, and we are working hard at trying to bring it down, but, number two is, that is the engine that subsidizes the product that we commission from them. So it is a little bit of a lack of recognition of acknowledgment of that.

THE CHAIRPERSON (page 150): You are absolutely right, but I wish that the Canadian artistic community would understand exactly what Ms. Williams just explained to me, because they just don't understand it, and I have had delegation after delegation before me, saying, you know, you have to stop this. All of our money goes to reward Hollywood, rather than being used to create Canadian creativity.

*** I'm just going to interject here: Mr. Chairman - you know, maybe us Canadian creatives would understand exactly what Ms. Williams just explained to you if you allowed us to, you know, hear the entirety of what she was saying. You can't hide yourselves in a back room, talk shop in private and then complain that 'they just don't understand'. Maybe we're not "understanding" because you're not communicating? Maybe you're running thick black lines through any information that might actually be useful to a proper, intelligent, informed discourse that might help us "understand"?

Just a thought.

Okay, well, I've made it through the first 150 pages, I'll come back tomorrow and finish reading this puppy. 100 pages left and, you know, I am actually feeling sort of enlightened by this lil' document, there is some good stuff here. What pisses me off is that this kind of conversation has to happen behind closed doors.

Hiding behind the safety of a felt-tip pen.

Anyways - more to come.

Cheers!
Brandon

EDIT: Interesting note: I just went through and counted it out - of the 150 pages I read, approximately 105 of them were redacted (I counted 2 half-pages as 1 page, etc). Of the 150 pages I 'read' I really only got to read around 45 or so.

So... yeah.

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