The document discusses several topics related to heritage, culture and broadcasting policies in Canada. It provides an overview of CBC's funding and operating losses, trends in the film tax credit program, and issues with the regulation of digital media and streaming services. The CRTC is seen as needing modernization to properly account for streaming applications and online content. There is also discussion around supporting small media companies and whether media firms should receive government handouts if they cannot be self-sufficient.
Sincerely, The Friday Club - Farewell Quiz-Finals.pptx
What is going on with Canada Arts and Entertainment Sector
1. HERITAGE AND CULTURE
POLICIES –BROADCASTING–
CANADA – ANALYSIS AND
COMMENTS
BY: PAUL YOUNG, CPA, CGA
DATE: OCTOBER 3, 2018
2. PAUL YOUNG - BIO
• CPA, CGA (1996)
• Financial Solutions (FOPM/FPM)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Advance Technology and Market Entry
• SME – Supply Chain Management
• SME – Business Strategy and Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com
3. AGENDA
Radio and Broadcasting – Operational
Performance – 2011 to 2015
Film Tax Credits – Canada
Android Boxes
New funding for small media companies
Issues with Digital Media
4. SUMMARY
CBC receives over $1B in funding and shows an Operating
Loss
Streaming services will continue to expand
CRTC needs to be modernized when it comes to streaming
of application
There should be no handouts to media companies. If
media companies cannot stand on their own two feet
then those media companies should die
Broadcasting industry made 20% of revenue in pre-tax
operating income
5. BROADCASTING INDUSTRY
Source - http://www.statcan.gc.ca/tables-tableaux/sum-
som/l01/cst01/comm02e-eng.htm
Comment:
• CBC receives over 1B in funding and runs an
Operating loss
• Broadcasting sector in general sees a healthy
operating income of 21% of revenue
Source – CBC
7. FILM TAX CREDIT
• There are both Federal and Provincial Programs to support entertainment and media in Canada
• Canada has long been one of the preferred places to complete film projects by foreign
producers due to the various federal and provincial tax credits available. The Canadian
government has been proactive in encouraging investment by domestic and foreign
producers by instituting tax credits to help offset the cost of production. This has had a
major positive impact on the domestic film production industry, which now has more
than 127,700 employees, and an annual revenue of approximately $5.81 billion.
• Given the benefits of being able to access these tax credits, AG Tax professionals have
prepared a brief summary of the credits available to the film production industry. We
have provided details on existing provincial tax credits, and also analyzed recent changes
to them, so that film producing companies can plan their tax measures accordingly.
• Source - https://www.pwc.com/ca/en/entertainment-media/publications/pwc-big-
table-film-video-2015-09-en.pdf
• Source - http://agtax.ca/cra/canadian-tax-credits-for-the-film-production-industry
8. NETFLIX TAX
• https://www.theglobeandmail.com/news/politics/liberal-mps-call-for-5-per-cent-tax-on-streaming-services/article35313367/
A Liberal-dominated committee will be calling for a 5-per-cent tax on
broadband Internet services to fund Canada’s media industries, which
are struggling to adapt to technological changes and evolving consumer
habits, sources said.
The move would add hundreds of millions of dollars in revenues to the
Canadian Media Fund, which already receives a levy on cable bills to
finance the production of Canadian content. However, it would open up
the government to accusations that it is once again raising taxes on
consumers.
• There are already programs in place like tax credit programs for the entertainment industry
• CBC needs to look at their vault and license the vault as part of digitalizing their content
• Forcing taxpayers to pay into fund for local broadcasting is wrong. If network in Canada want to
produce content then come up with original ideas like they did in the past
10. NAFTA AND CULTURE
• The prime minister also said his government won't
sign an updated free trade accord with the U.S. and
Mexico if the deal doesn't continue exemptions for
Canada's cultural industries, which aims to protect
Canada's publishing and broadcast industries.
• That too was entrenched in the original Canada-
U.S. free trade deal that preceded NAFTA. Giving up
the exemptions would be tantamount to giving up
Canadian sovereignty and identity, Trudeau said.
• "It is inconceivable to Canadians that an American
network might buy Canadian media affiliates,
whether it's newspapers or TV stations or TV
networks," he said.
• "So we've made it very clear that defending that
cultural exemption is something that is
fundamental to Canadians."
”
Source - https://www.ctvnews.ca/politics/liberals-
won-t-compromise-on-culture-dispute-resolution-in-
nafta-talks-trudeau-1.4079435
• Netflix Canada – Canadians have been denied
content due to Canada stance on content -
https://www.huffingtonpost.ca/2016/07/11/canadia
n-netflix-worse-us_n_10931218.html
• Netflix and PQ –” For a francophone minister from
Montreal, Ms. Joly has been staggeringly deaf to
that concern. Last fall, she was pilloried in her home
province for claiming she had cut a lovely deal with
Netflix, without being able to point to any
commitment that the service would run Quebec
francophone productions.”
https://www.theglobeandmail.com/canada/article-
no-applause-in-quebec-as-melanie-joly-gives-netflix-
a-free-pass-till/
• Broadcasting has been moving to streaming services
like TubiTV or Youtube or other sites
• CBC moved content to youtube -
https://www.cbc.ca/news/business/youtube-
spotlight-canada-1.4228735
• Trudeau has no clue what is happening with the arts
including streaming of content. This all about
protecting CBC
12. MARKET GROWTH – ANDROID TV BOX
https://www.ericsson.com/en/networked-society/trends-and-insights/consumerlab/consumer-insights/reports/tv-and-
media-2016
Since 2010, total viewing hours and time spent viewing
content on mobile screens such as smartphones, tablets and
laptops, have grown significantly
13. COST OF CABLE ARE DRIVING PEOPLE TO TV ANDROID
BOXES
• http://www.cbc.ca/news/business/piracy-android-box-free-tv-1.4098249
The software can be downloaded and used on many devices,
including computers and some smart TVs. But Sandvine estimates
that most of the households were using it on an Android box to
stream the pirated material to their televisions.
"It's not an insignificant amount of people if you think how many
households there are in Canada," says Sandvine spokesperson Dan
Deeth about the Canadians engaging in what he calls "the new face of
piracy." Seven per cent of the 15.4 million households in
Canada is more than one million.
14. Main players controlled 84% of the market. The remaining 16% is controlled by small players
721 android boxes available for sale!
16. BEST BUY
Best Buy as well as other larger retailers only deal with name brand boxes
17. People need to go beyond headlines and asked
questions before they buy a Android Box
18. CRTC AND BROADCASTERS
Source -https://business.financialpost.com/telecom/media/crtc-rejects-call-to-block-content-pirates-in-setback-
for-bell-rogers-cbc-coalition?utm_medium=Social&utm_source=Twitter#Echobox=1538504366
A coalition of media organizations
suffered a setback in their fight
against so-called content pirates on
Tuesday when the CRTC said it
doesn’t have authority to police the
activities they want shut down.
The Fair Play Canada coalition that
includes Bell Canada, Rogers, the
CBC and other large media
companies had asked the Canadian
Radio-television and
Telecommunications Commission in
January to help protect their
ownership and licensing rights by
setting up an independent agency to
help locate websites with pirated
material.
• “The CRTC said it agrees “piracy causes harm to the Canadian
broadcasting system and the economy” but that it didn’t
consider the proposal because it doesn’t have jurisdiction under
the Copyright Act.”CRTC should have work with the Justice
Department to modernized the copyright laws - http://laws-
lois.justice.gc.ca/eng/acts/c-42/page-26.html
• I can see a lawsuit being filed against the CRTC by the
entertainers guild - https://www.actra.ca/
• Bains did nothing to work with Justice Department on
revamping the copyright laws around streaming -
http://www.michaelgeist.ca/2018/04/ellasinjunction/.
19. BLOG - BROADCASTING
• http://nationalpost.com/pmn/news-pmn/canada-news-pmn/no-netflix-tax-but-focus-on-economy-in-upcoming-liberal-
culture-policy-sources
• I take great offense when I read articles from LPC, especially Melanie Joly. Liberals think as always nothing was done
when it comes to Heritage under previous government which is not the case.
• Here are facts:
• Many provinces promote the arts with their own programs. Corner Gas is a good example of a local TV show that was
produced through film tax credits in SK. https://www.slideshare.net/paulyoungcga/government-policies-broadcasting-
and-tv-applications-canada-june-2017
• People are cutting their chord with TV and have move to streaming - https://www.slideshare.net/paulyoungcga/digital-
media-continues-to-evolve-with-more-streaming-options-april-2017. The problem has always been about licensing.
• CBC needs to get back to it roots that includes more original programming. In fact, CBC is sitting on a gold mine if they
were to move their historical content like The Beachcombers or Danger Bay or Street Legal to hosted environment.
• Urban development also should be reviewed to ensure we protect old buildings, but find other uses for them.
• Liberals also have in the past discussed a Netflix tax or lets call what it is and that is streaming tax -
http://www.torontosun.com/2017/06/14/liberal-mps-to-push-for-5-netflix-tax-on-streaming-services-in-canada
• CRTC also needs to be involved in terms internet fees, especially for devices like iPads, android phones and iPhones.
Canada is up there when it comes to internet cost - https://www.thestar.com/business/2016/12/22/crtc-broadband-
internet-ruling-still-leaves-room-for-high-prices.html
20. 2017-2018 – FEDERAL BUDGET - $50 MILLION FOR
SUPPORT TO LOCAL NEWS MEDIA
• https://www.thestar.com/news/canada/2018/02/23/ottawa-to-pledge-50-million-for-local-
journalism.html?source=newsletter
• Government should not be supporting failing periodicals. http://www.canadianbusiness.com/lists-and-
rankings/profit-500/2017-marketing-media-fastest-growing-companies/
• Are the liberals looking at controlling the news?
21. ISSUES WITH DIGITAL MEDIA
• What are the issues?
• Copyright rules, especially with streaming. More and more applications
are allowing access to content throughout the world. The legality of
streaming is a hot issue as the rules implemented on downloaded
content. Source - http://www.pcadvisor.co.uk/opinion/photo-video/is-
streaming-pirate-movies-legal-3640854/ . Key quote “Back in June 2014,
there was a “landmark” case where a media service company
(Meltwater) was sued by several media groups including the UK-based
Newspaper Licensing Agency. Essentially, the CJEU ruled against the NLA
saying that viewing copyrighted content online is not copyright
infringement. It all boils down to the fact that the copyrighted
information is stored only temporarily on the user’s computer, and
temporary copies are exempt from copyright laws.
• Broadcasters have not come clear with their plans on how their content
can be shared across different platforms. Broadcasters could be missing
access to wider audience as more and more people moved to apple tv,
android boxes and smart/android devices.
http://www.marketsandmarkets.com/PressReleases/global-smart-
homes-market.asp
• Local government have rules on local content. How the local content
rules will be managed has yet to be determine.
• Production companies are looking at different vehicles to host their
content, like YouTube or their own sites that host content. How do
regulators handle online content directed at their local market?
“The CRTC has sent letters to a number of Canadian and U.S.
companies, including digital giants like Netflix, Facebook,
Amazon, Apple and Google, requesting their participation in
the commission’s report on future programming distribution
models.
In return for their participation, the CRTC has agreed that it
will not disclose potentially sensitive data relating to
audience size, revenues and viewing metrics.
Source - http://mediaincanada.com/2018/02/06/crtc-asks-
digi-giants-for-input-in-heritage-report/
Comment
• More and more content is being
streamed through applications like
Crave TV or TubiTv or OVGuide or
other sites
• CRTC has never made any sort of
adjustment to streaming services
• CRTC needs to be modernized with
the times when it comes to
streaming
22. SUMMARY
Small players will eventually be squeezed due constant changing in terms of both application
and technology
Small players lack the ability to provide support to their boxes, i.e. issues with supported
applications, applications not loading, security protocols, etc.
Many people enter the market to make a fast buck, but the reality that competition is now
squeezing the margins.
People will buy what they know in terms of boxes. i.e. brand recognition
TV android market will continue to shift to portability as it is becoming more about options to
host applications.
People need to be leery of the term “Free TV”. There are free applications available like
TubiTv or OV Guide, but those applications have agreements with various movie and tv
companies as part of hosting content. Much of the content like movies are user fees driven.
People also need unlimited high speed internet as part of using TV android boxes.
People need to research companies to ensure their testimonies are true “I have the best
android box on the market”. People need to read review by various analysts as part of
selecting an Android Box