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I Didn’t Say That – The Ability of Actors to Control Their Performances Under Canadian Copyright Law

When the United States Ninth Circuit Court of Appeals issued its 2014 opinion in Garcia v Google (the original order and opinion is here; the amended order and opinion is here), its tentative conclusion that actors might enjoy copyright protection in their on-screen performances was met with vociferous criticism from movie producers and online content providers – the criticism was so fierce, and the arguments marshaled so convincing that on May 18, 2015 the US Ninth Circuit Court of Appeals en banc reversed the earlier decision (the May 18, 2015 opinion is available here). But Canadian copyright law has protected performer’s performances for nearly two decades, without much trouble or even attention – is there an explanation for the discrepancy in reactions?

Garcia v Google – Facts and Procedural Background

The May 18, 2015 decision  brings to an apparent close one of the stranger copyright cases in recent memory. The decision appears to definitively state that, under US copyright law, actors are not entitled to copyright in their on-screen performances – a conclusion which was vigorously argued over by a remarkably long list of intervenors in the case. The facts in Garcia are fairly straightforward: an actor responded to a casting call for movie titled “Desert Warrior” and appeared on-screen uttering two lines in the low-budget movie; unbeknownst to the actor, the producers of the movie dubbed her lines in the final version of the movie so that she appeared to be saying words she didn’t actually speak and re-titled the movie to “Innocence of Muslims“; worse, the movie, the trailer for which was uploaded to YouTube, proved to be incredibly controversial – in the words of the court, “the film fomented outrage across the Middle East, and media reports linked it to numerous violent protests”. The procedural history of the case is a bit more convoluted. The actor, seeking to have her participation in the trailer and film excised, sued Google and the producers of the movie and issued DMCA take-down notices, arguing, amongst other claims, that the defendants had infringed her copyright. Seeking an injunction forcing the removal of the footage from YouTube, she was unsuccessful in the district court, but a panel of the Ninth Circuit Court of Appeal reversed and granted the injunction. The court’s reasons seemed to indicate that Garcia had a protectable copyright interest in her performance as captured in the producer’s movie. That conclusion excited much debate and the case was re-heard by the Ninth Circuit Court of Appeal sitting en banc, which, as noted above, reversed the earlier Court of Appeal decision (Judge Alex Kozinski, who authored the original, controversial decision, stuck to his guns and dissented from the reasons of the en banc majority).

The initial 2014 Ninth Circuit Court of Appeals decision was controversial because it seemed so incongruous with established American copyright practice. American copyright law has historically not recognized any copyright interest on the part of an actor in their performance; indeed, when Garcia tried to register a copyright claim with the United States Copyright Office, the Office rejected the application, explaining that “longstanding practices do not allow a copyright claim by an individual actor or actress in his or her performance contained in a motion picture”. There seemed to be doctrinal and practical obstacles to recognizing performances as copyrightable, not least of which would be that, to again quote the Ninth Circuit’s en banc decision, “treating every acting performance as an independent work would … be a logistical and financial nightmare”.

In any event, for purposes of US copyright law, the “nightmare” now appears to be over (at least until the Supreme Court decides to take up the matter…). All that being said, Canadian copyright law does offer copyright protection to actor’s performances – so how have we avoided the “nightmare”?

Performer’s Performances in Canadian Copyright Law

As an initial observation, the Canadian Copyright Act required some significant amendments, introduced in 1997, in order to enable the protection of what the Act terms “performer’s performances”. Prior to those 1997 amendments, performances were not protected by Canadian copyright law, as they failed to constitute a “work” for purposes of copyright law; post-1997, they still aren’t a “work”, but rather are protected as other subject-matter.

Sections 15(1) and 15(1.1) of the Copyright Act state that (subject to various threshold matters, found in Sections 15(2), (2.1) and (2.2), such as where the performance occurred) “a performer has a copyright in the performer’s performance”. “Performer’s performance” is a defined term in the Act (found in Section 2), and it means:

(a) a performance of an artistic work, dramatic work or musical work, whether or not the work was previously fixed in any material form, and whether or not the work’s term of copyright protection under this Act has expired,

(b) a recitation or reading of a literary work, whether or not the work’s term of copyright protection under this Act has expired, or

(c) an improvisation of a dramatic work, musical work or literary work, whether or not the improvised work is based on a pre-existing work;

“Performance” itself as also defined in Section 2 and means “any acoustic or visual representation of a work, performer’s performance, sound recording or communication signal, including a representation made by means of any mechanical instrument, radio receiving set or television receiving set”.

Readers will note that the definitions are impressively broad: virtually any motion or sound created by the human body seems to qualify as a “performer’s performance”, including dance, mime, recitations of lines or extemporaneous utterances – clause (c) of the definition, which allows for the protection of “improvisations” seems particularly expansive. Further, it should be highlighted that there is no requirement that any performer’s performance be “original” – thus, even that low bar does not apply and thereby restrict the scope of protection for performer’s performances.

The exact nature of the rights accorded to performer’s in their performances are found in Sections 15(1) and (1.1): the copyright in the performance includes the rights to fix the performance and to reproduce the fixation of the performance.

At first glance, then, the situation under the Canadian Copyright Act seems like a particularly robust example of what the full Ninth Circuit was concerned about: if copyright protection extends that far, it seems designed to make for logistical nightmares in the administration of copyright. But the Canadian film and television production industry has not ground to a halt in the face of this tsunami of copyright claims – why not?

I think there are two partial answers. On a practical level, most of the problems are addressed by simple contractual arrangements – producers ensuring that everyone who appears on-screen signs some kind of waiver/release/transfer of rights. But if that doesn’t happen (which is more often the case in small budget projects – the Garcia reasons state “low-budget films rarely use licenses”), there remains a “fail-safe” mechanism in the Canadian Copyright Act: Section 17(1). What the Act gives with one hand (Section 15), it takes away with another: Section 17(1) states that when a performer “authorizes the embodiment of [his or her] performer’s performance in a cinematographic work, the performer may no longer exercise … the copyright [in that performance]”. In other words: if a performer authorizes the inclusion of their performance in an audio-visual project, the performer loses the right to control the exploitation of their performance in that project. And note what the language does not say: it does not say that the performer has to “authorize” the embodiment in writing. Thus, if there’s no need for the performer to memorialize their authorization in a written instrument, it becomes much easier to conclude that a performer authorized the embodiment of their performance simply by agreeing to be present in front of the camera (of course, that argument works only when the performer is aware that the camera is present and recording).

One final consideration which bears mention, and which is the more troubling: what about moral rights? The Copyright Modernization Act, enacted in 2012, added Sections 17.1 and 17.2 to the Copyright Act, which extended moral rights to some performances (for earlier Signal commentary on the topic, see Moral Rights Extended – But How Far?). It’s not immediately clear whether moral rights apply to an actor’s performance (or all actor’s performances) – the language of Section 17.1 states that it gives moral rights to “a performer of a live aural performance or a performance fixed in a sound recording”; that seems to indicate an intention to grant moral rights to what we might call “musicians”, and possibly “singers”… but actors? Most actors do generate an “aural performance” (by speaking lines) but is what they do a “live aural performance”? (What is a “live” performance anyways? What role is “live” playing in that phrase? What would a “non-live” performance look like? Is there a distinction for these purposes to be drawn between actors performing on the theatrical stage and actors performing for embodiment in a film?) The easier position is to conclude that the moral rights provisions in Sections 17.1 and 17.2 don’t extend to film/TV actors. But if that is incorrect, and actors do enjoy moral rights in their performances, then the position of producers becomes more complicated. Moral rights cannot be assigned, but they can be waived (Section 17.1(2)); there is no requirement that the waiver be in writing, but presumably for there to be a waiver there must be some turning of the mind to the matter – which, I think it’s safe to conclude, isn’t something that happens very often on set. One could try to rely on industry practice resulting in an implied waiver of moral rights, but even that seems a bit of a stretch. More fruitful might be the inherent limitations on moral rights: the right of association (i.e., the right to be identified as the performer of the performance) is limited to when it is “reasonable in the circumstances”; the right of integrity (i.e., the right to control the distortion, mutilation or modification of a performance and the right to control the use of the performance in association with a product, service, cause or institution) is limited to uses which “prejudice” the performer’s honour or reputation. Interestingly, Garcia might have had more luck with her claims under Canadian law, relying on moral rights infringement on the basis that, when the producers dubbed her lines and included her performance in a motion picture which was apparently different from what she originally understood herself to be participating in, her performance had been modified in a manner which prejudiced her honour or reputation.

I Didn’t Say That – The Ability of Actors to Control Their Performances Under Canadian Copyright Law

Ontario Passes Protecting Child Performers Act

On April 30, 2015, Ontario passed Bill 17, entitled the Protecting Child Performers Act; on May 5, 2015, Bill 17 received Royal Assent, and so, by its terms, the Act will come into force in February 2016 (nine months from Royal Assent). As set out in Section 2 of the Act, its purpose is to “promote the best interests, protection and well being of child performers”. The text of the legislation as passed can be accessed here. The Act changes in critical ways the obligations of Ontario employers of children in the entertainment industries.

Effect of the Act

The particulars are set out below, but the “big picture” summary of the Act is that it extends to all child performers in a wide range of entertainment activities the types of working condition protections which have historically been associated with the collective agreements of performers’ unions and guilds, such as ACTRA. It is impossible to avoid the minimum protections afforded by the Act, but where an employment contract, collective agreement or other statute applies directly to a matter addressed by the Act and the provision in the employment contract, collective agreement or other statute provides “a greater right or protection to a child performer, the provision in the employment contract, collective agreement or other [statute] applies” and thus “trumps” the application of the Act. In short, a child performer can contract for better protection than that provided by the Act, but cannot contract for worse protections.

Scope of Application

To begin, we need to determine the scope of the Act’s application. At its core, the Act governs the relationships between employers, parents and “child performers”. Failure by an employer to comply with the Act can result in liability under the Employment Standards Act. The following criteria must be present for the Act to apply:

  • the “child performer” must be under 18 years of age;
  • the child performer must be receiving “monetary compensation” (i.e., the Act does not apply when the child performer is not being paid, or is being compensated by means other than monetary payments); and
  • the child performer must be performing work or supplying services in the “entertainment industry”
    • “entertainment industry” means either (i) the “live entertainment industry”, which means the “performing arts industry that provides live entertainment in theatre, dance, music, opera or circus” or (ii) the “recorded entertainment industry”, which means “the industry of producing visual or audio-visual recorded entertainment that is intended to be replayed in cinemas, on the Internet, on the radio, as part of a television broadcast, or on a VCR or DVD player or a similar device, and includes the industry of producing commercials”

We can see at this point that there are some ambiguities about the precise scope of the Act’s reach – namely, it is unclear the extent to which it applies to what we might colloquially refer to as the “music industry”. From the definition of “recorded entertainment industry”, it does not appear that the Act covers the rendering of performing services where what is being produced is an audio-only sound recording – but that’s not entirely certain, since the definition does include recorded entertainment that is intended to be replayed “on the radio”. Using the example of a “boy band” made up of members under the age of 18, it seems the Act would not apply to their in-studio recording work, but would apply to their live concert performances. (The Act has some other drafting oddities – is it really necessary to refer to “VCRs”?)

General Engagement Rules

The Act imposes three different sets of obligations on employers: (1) obligations which apply to all engagements of child performers, irrespective of which aspect of the entertainment industries they are providing service sin; (2) obligations which apply only to engagements in the “recorded entertainment industry”; and (3) obligations which apply only to engagements in the “live entertainment industry”. The following obligations apply to all engagements of child performers:

  • Contracts Must be in Writing. All engagements of child performers must be pursuant to a written contract. [Section 5]
  • Pre-Contract Meeting and Ongoing Disclosure. Before entering into a contract with a child performer, an employer must meet with with the child’s parent or guardian (the child performer is entitled to be present at and participate in such meeting) and disclose the following information: (a) a general description of the role the child performer will play; (b) the location and hours of rehearsals and performances; (c) any health or safety hazards to which the child performer may be exposed during rehearsals or performances, and the precautions that will be taken to prevent injury to the child performer; (d) any special skills the child performer is expected to perform that require a level of physical proficiency or other skill superior to that of an average child; and (e) any special effects to which the child performer may be exposed. If any of the items disclosed at the pre-contract meeting change, the employer must notify the parent/guardian of the change, and the employer is prohibited from implementing any proposed change unless the parent/guardian has agreed to in writing to the change. [Section 4]
  • Script Disclosure. A copy of the portion of any script relating to the child performer’s services must be provided to the parent/guardian prior to the commencement of production.
  • Travel. If a child performer is younger than 16, the parent, guardian or “authorized chaperone” (who must be over 18 and have written authorization from the parent/guardian) must accompany the performer to and from the workplace. If a child performer is obliged to be “away from home overnight”, a parent/guardian (but not an authorized chaperone) must accompany the child “at all times”, and the employer must pay for all “daily expenses and the costs of travel and accommodation” up to maximums to be set out in the Act’s regulation. [Section 6]
  • Tutoring. An employer must “provide time in the work schedule for a child performer who is of compulsory school age to receive tutoring”. Details of the elements required in the tutoring will be set forth in the Act’s regulation. [Section 7]
  • Income Protection. Where a child performer earns more than $2,000 on a production or project, the employer must deposit 25% of the child performer’s earnings into trust (to be held until the child turns 18). Details of the trust arrangements will be set out in the Act’s regulation. The foregoing will not apply in situations where the child performer is a union member, and the union’s collective agreement requires that funds be deposited into trust. [Section 8]
  • Health and Safety Training. Employers are required to provide training for each child performer (in a manner “appropriate to the child performer’s developmental stage”) and their parent/guardian/chaperone with respect to the following matters: emergency procedures; restricted areas; safe waiting areas; the location of washrooms, make-up areas and “other areas relevant to the child performer’s work”; and “the procedure for identifying and reporting unsafe working conditions”. [Section 23]
  • Right to Refuse Work. For purposes of subsections 43(3)-(10) of the Occupational Health and Safety Act (which permits workers to refuse to work in unsafe conditions), where a child performer is under 14 years of age, their parent/guardian/chaperone is given authority to make decisions for them. [Section 24]
  • Healthy Food. When employers provide food to child performers, they must provide them with “healthy snacks and meals … as close to the child performer’s regular snack and meal times as possible”, and must ensure that any food provided “meets the child performer’s needs in respect of food allergies and special dietary requirements”. [Section 25]

Recorded Entertainment Industry

The following obligations apply to engagements of child performers in the “recorded entertainment industry”:

  • Minimum Age. No child performer who is younger than 15 days can be engaged to provide services. [Section 10]
  • Hours of Work. The Act imposes strict limitations on the number of hours that child performers can work, which are different for different age groups: performers under two years can only work a maximum of four hours a day, while those over two years can only work a maximum of eight hours in a day. Overtime is permitted only if the child performer is a union member and the child is paid overtime rates. An employer must provide at least 48 hours notice if the child performer’s start time is after 7pm. [Section 11]
  • Turnaround Time. Child performers are entitled to a minimum of 12 consecutive hours “free from work” each day and 48 consecutive hours “free from work” each week. [Section 11]
  • Limits on Time in Front of Recording Device. The Act contains very detailed limits on how much time a child performer can spend being filmed/recorded before receiving a break (and how long such break period must last), based on the age of the performer. [Section 12]
  • Parental Accompaniment. Child performers who are under 16 years of age must be accompanied in the workplace by a parent/guardian or “authorized chaperone” (who cannot be the child’s tutor or agent), who is “accessible to the child performer at all times”. [Section 14]
  • Child Performers’ Coordinator. The employer must designate one person at the workplace as a child performers’ coordinator who is “responsible for co-ordinating matters related to the welfare, safety and comfort of child performers”. If there are more than six child performers in the workplace, the coordinator cannot also be the tutor. [Section 15]

Live Entertainment Industry

The following obligations apply to engagements of child performers in the “live entertainment industry”:

  • Minimum Age. No child performer who is younger than two-and-a-half years can be engaged to provide services. [Section 17]
  • Hours of Work. The Act imposes strict limitations on the number of hours that child performers can work, which are different depending on which “phase” the services are rendered in (the “rehearsal phase” or the “performance phase”) and depending on the age of the child performer. No overtime is permitted in either phase. [Section 18]
  • Turnaround Time. Child performers are entitled to a minimum of 12 consecutive hours “free from work” each day and 36 consecutive hours “free from work” each week. [Section 18]
  • Breaks. No employer shall require or permit a child performer to work for longer than two consecutive hours without a break of at least 10 minutes. During the rehearsal phase, the employer shall give the child performer an eating period of at least 90 minutes and shall schedule eating periods so that the child performer does not work more than four consecutive hours without an eating period. [Section 19]
  • Option for Chaperone. Unlike the situation in the recorded entertainment industry (which requires parental accompaniment for performers under 16 years of age during working hours), parents/guardians of child performers older than two-and-a-half years of age in the live entertainment industry may designate a chaperone to “be available to the child performer while the child performer is at the workplace”. Thus, for child performers in the live entertainment industry there is no obligation that they be accompanied by a parent/guardian/chaperone. [Section 20]
  • Child Attendants. The employer is obliged to designate a “child attendant” who is “responsible for monitoring the child performers at the workplace while the child performers are not rehearsing or performing”. The “child attendant” must be at least 18 years of age, not otherwise employed on the production, not the child’s tutor and must possess a clean criminal (as defined in the Act’s regulations). The number of child attendants required to be engaged is determined by a formula which is based on the age of the youngest child performer: where the youngest performer is under six years of age, there must be one attendant for every six children; where the youngest performer is between six and ten years of age, there must be one attendant for every ten children; and where the youngest performer is ten years of age or older, there must be one attendant for every fifteen children. [Section 21]
  • Clean Criminal Record. Section 22 of the Act requires that “prescribed individuals” (to be defined in the Act’s regulations) who “may be required to be alone with child performers” must have a “clean criminal record” (to be defined the Act’s regulations). The Act is silent on why this requirement applies only to the live entertainment industry but not to the recorded entertainment industry.

As readers can see, the Act imposes a raft of obligations on those who engage child performers in the live and recorded entertainment industries. While there is some overlap with existing union/guild requirements, there are also new statutory obligations which go beyond what might otherwise be required under an applicable collective agreement. Those engaging child performers must therefore take the time to familiarize themselves with the Act and determine what additional steps, if any, they must take to be in compliance.

Ontario Passes Protecting Child Performers Act

Handy-dandy Comparison Chart: Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions

Everybody likes a “cheat sheet” which clearly summarizes the differences between various options – and now the Dentons Media and Entertainment practice team has prepared one to assist producers and their counsel in choosing between the various “structures” for producing film and television content in Canada: click here to access an online version of our Comparison of Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions – there is also a .pdf version which can be downloaded from the same page.

Handy-dandy Comparison Chart: Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions

Let’s Talk TV – CRTC Roadmap to “Maximize Viewer Choice”

The Canadian Radio-television and Telecommunications Commission (CRTC) has issued its fourth “Let’s Talk TV” policy decision on the regulation of the Canadian television system.  Today’s decision is  A World of Choice – A roadmap to maximize choice for TV viewers and to foster a healthy, dynamic TV market.

The new roadmap affects the “basic” TV service Canadian subscribers receive, and adds new options for subscribers to choose additional services on a pick-and-pay or a la carte basis.

We wrote last week about the CRTC’s new regulatory measures geared to creating and showcasing Canadian content, set out in its policy decision The Way Forward – Creating Compelling and Diverse Canadian Programming.  Many of those decisions are geared to industry-based expenditure and exhibition requirements, and will have an indirect or gradual impact on viewers’ TV experience.  By comparison, today’s decisions take direct aim at viewer choice.

Skinny Basic

By March 2016, licensed broadcasting distribution undertakings (BDUs) must offer a small basic, entry-level service that includes:

  • local and regional Canadian over-the-air (OTA) stations;
  • the applicable provincial / territorial educational service;
  • all  mandatory distribution “9(1)(h)” television services – about 15 channels, depending on the market; and
  • the community channel and the proceedings of the provincial legislature (if offered).

The basic package may also include other Canadian OTA stations in markets where fewer than 10 local or regional stations are available; local radio stations; an out-of-province designated educational service, and a set of “US 4+1 signals” (NBC, CBS, ABC, Fox and PBS).  BDUs may not offer any other services in the basic package.

Moreover, the basic package must now be priced at or below $25.   The CRTC had de-regulated the basic package in 1997, stating at that time that deregulation represented “a fundamental change” for subscribers from a “20-year regulatory regime with Commission scrutiny” of basic service rates to a regime driven by market forces only.  With today’s decision, the Canadian regime is back  under Commission control, to further its policy of consumer control.

 Pick and Pay / A la carte 

In 2013, the Governor in Council (Cabinet) issued an Order in Council to the CRTC to report on how to maximize pick-and-pay in Canada.  In response, the CRTC observed that Canadians were getting “a more customized viewing experience” from online platforms, and considered how mandating increased choice and flexibility for television would potentially impact cable and satellite operators, broadcasters, and the production industry.

In today’s decision, the CRTC has taken the position that “it must take positive steps to bring about greater choice and flexibility in the Canadian television system”.

  • By March 2016, all licensed broadcast distributors (BDUs) must offer all discretionary services – meaning those not in the basic service – either on a pick-and-pay basis or in small, “reasonably priced” packages.  These packages may be set by the BDU or by the subscriber.
  • By December 2016, all licensed BDUs must offer all discretionary services on both a pick-and-pay basis and in small packages.

The CRTC noted the risk this “unbundling” poses to the Canadian system and the survival of some Canadian services; its greater concern was the risk it saw in “maintaining the status quo in a context of increased demand for more choice”.

Distribution of non-Canadian TV services

While the Commission entitled its decision “A World of Choice”, the Commission has not changed the process for authorizing the entry of non-Canadian services.  The current List of non-programming services authorized for distribution (the List) includes a range of U.S. and other foreign services, including channels such as A&E, AMC, and MSNBC.   The Commission has authorized services on a case-by-case basis, permitting Canadian services to object to the addition of a new non-Canadian channel on the basis that it will unfairly overlap and compete with its own genre and nature of service.  The Commission will continue to authorize only those non-Canadian services that do not compete with Canadian specialty or pay services.

However, the CRTC is bringing the distribution of non-Canadian services in line with the rules set out in today’s policy regarding consumer choice.  As a condition of authorization – for existing services to remain on the List, and for new services applying to be added – the service must be offered on the basis of pick-and-pay and small packages.  The CRTC has said that “it expects non-Canadian services, as good corporate citizens, to continue to abide by the applicable rules …if they wish to continue to have their programming services available in Canada”.

An Expanded and Stricter Wholesale Code

In 2011, largely in response to what it considered to be imbalances in the wholesale marketplace brought about by “vertical integration” in the industry, the CRTC put in place a new regulatory framework for the commercial arrangements between BDUs, broadcasters, and digital media undertakings.  While the 2011 Code was originally drafted with certain mandatory requirements, the CRTC issued a correction to change various instances of “shall” to “should”.  Subsequently the CRTC applied elements of the Code to some licensees as a condition of licence.

Today, the CRTC not only effectively put the “shall” back into the Code for the industry as a whole, stating that it will be a regulatory requirement, not a guideline, for all licensed undertakings.  The CRTC also indicated that the Code will be expanded to include a number of additional prohibitions and mandatory requirements.  These are intended to ensure that the terms of wholesale agreements do not undermine or hinder choice and flexibility in the retail market.  New provisions, to enter into effect by September 2015, will target agreement terms that address packaging, service penetration and revenue guarantees, rate cards, and marketing.

Today’s decision was the 4th of 5 arising from the CRTC’s Let’s Talk TV Proceeding.  The final decision is expected next week, under the CRTC’s “Protect” banner:  consumer protections, BDU Code of Conduct, industry ombudsman, and accessibility issues.

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Let’s Talk TV – CRTC Roadmap to “Maximize Viewer Choice”

Let’s Talk TV – Delayering 50 years of Regulation in “the Age of Abundance”

In an important policy decision issued today, “The way forward – Creating compelling and diverse Canadian programming”, the CRTC announced “significant changes to bring the CRTC’s regulations and Canadian television forward into the Age of Abundance”, where content is everywhere online and on TV.  Commission Chair Jean-Pierre Blais warned the audience for his speech today to the Canadian Club of Ottawa that the sheer length of the policy decision – 323 paragraphs – “illustrates how complex it is to delayer regulatory rules built over the past 50 years.”

Genre Exclusivity

The delayering includes eliminating the genre exclusivity that many Canadian services have relied on for years.  This was no surprise, as the CRTC had previously announced its intention to review the policy and asked for comment not only whether to eliminate it, but also the “earliest feasible timeframe” to do so.

By way of background, the Commission has in the past licensed must-carry “Category A” services – such as HGTV Canada, Bravo!, Sportsnet 360, and YTV – on a one-per-genre basis.  Genre exclusivity is intended to prevent “head-to-head” competition for Category A services with each other, or with any other linear service in Canada.  Category A services have been insulated at least in part from competition with other Canadian services (may-carry Category B services, and Category C news and sports services).  The rules to authorize non-Canadian services for distribution in Canada have also prohibited “direct competition” with Canadian services as a condition of authorization.  The “must carry” and the genre protection privileges for Category A services were designed in large part to ensure that the services achieved enough revenues to meet their Cancon and related programming obligations, and thereby maximize their contribution to the creation of Canadian programming.

In a 2013 Discussion Paper commissioned by the CRTC, Broadcast consultant Peter Miller concluded that

Genre exclusivity cannot be considered ‘smart regulation’.  It has elements that make it internally contradicting, ambiguous, difficult to understand, costly to enforce, and it may possibly be just plain wrong-headed for today’s Canadian broadcast system.  […] The CRTC is not required to ‘rely on market forces to the extent possible’ in its regulation and supervision of the Canadian broadcasting system. But in this instance there is much to be said for doing just that.

In today’s decision, the CRTC stated that in the “Age of Abundance”:

the genre exclusivity policy is no longer needed to ensure programming diversity between services and [the CRTC] is therefore eliminating this policy. […] By eliminating this policy, the Commission is removing regulatory barriers so as to allow entry by new programming services, programming flexibility and greater domestic competition.

Genre exclusivity will be retained only in the conditions of licence (COLs) for the so-called 9(1)(h) services that benefit from a CRTC mandatory distribution order.  Such services include CBC News, The Weather Network, and the Aboriginal Peoples Television Network (APTN).  Limited genre protections also remain for mainstream sports services.

For all other Category A services, it remains to be seen how market forces of supply and demand will impact what has been a regulated and “exclusive” space.

The Commission has significantly “delayered” or revised regulatory requirements in a number of other areas, summarized below.

A.  “Leveling the playing field” for SVOD (subscription video-on-demand) services

A new category of “hybrid” SVOD services will be exempt from licensing.  These hybrid services would be available both over the closed facilities of a broadcasting distribution undertaking (BDU), and also delivered and accessed over the Internet.  Such SVOD services would be able to offer exclusive content – just as exempt online-only services can do – as long as that content is available over the Internet to all Canadians without BDU subscriber authentication.

The CRTC has issued a call for comments on revisions to the VOD exemption order and standard conditions of licence for VOD services.  Comments are due April 27.

B.  Promotion and “discoverability” of Canadian programming

Promotional and marketing expenses for Canadian-made content

Independent broadcasters may use up to 10% of the amount they invest in programs for marketing and promotion, including payments to other broadcasters for paid promos.

Local Availabilities to Promote Canadian Programs

Local availabilities, or “local avails”, are the two minutes per hour of reserved advertising time in non-Canadian specialty channels.  Broadcast distributors in Canada contract with the non-Canadian channels to insert promotional materials in these avails.

Under the current regulatory regime, 75% of this time is made available to Canadian broadcasters to promote their services, to promote the community channel, and for unpaid Canadian PSAs.  25% has been available to broadcast distributors for information on and promotions for distributors’ services.

Going forward, at least 75% of local avails must be used to promote first-run, original Canadian programs.  The remaining 25% can be used to promote Canadian channels and broadcast distribution services.

C.  Funding models for Canadian-made programs

As exceptions to the CRTC’s standard Canadian program certification process – and subject to certain streamlined criteria – the CRTC is launching the following pilot projects:

Pilot project 1:  CRTC will recognize adaptations of best-selling novels by Canadian authors as Canadian live-action drama and comedy productions.

Pilot project 2:  CRTC will recognize Canadian live-action drama and comedy productions with a budget of at least $2 million per hour as Canadian productions.

D.  Terms of Trade

In a 2007 policy decision, the CRTC encouraged the development of terms of trade agreements between broadcasters and independent producers.  In the years following that decision, the CRTC imposed adherence to a terms of trade agreement with the Canadian Media Production Association (CMPA) as a condition of licence for large English-language TV groups, and for the CBC.  The CRTC has now – to the surprise of many in the industry – stated that it will eliminate those conditions of licence effective April 29, 2016, stating that “it is no longer necessary for the Commission to intervene in this relationship by requiring adherence to terms of trade agreements”.

E. Cancon quotas

In its policy shift from “quantity to quality”, the CRTC is eliminating the daytime quotas for Cancon for local TV stations; the quota for prime time remains at 50%.  For specialty channels, 35% of all programs broadcast overall must be made by Canadians.  This sweeps away varied levels from 15% to 85%, depending on the service, and does away with a specific quota for prime time.

F.  Viewer Information:  Set-top boxes

Industry stakeholders are to form a working group to develop an audience measurement system based on STB data.  The group is to report back to the CRTC by June 10 on its progress on technical standards, privacy protections, a governance structure, and cost-sharing.

Privacy protection issues have long been raised in this area as a key concern.  The collection and sharing of viewer data has also received recent media coverage in the context of user commands to Smart TVs.  STB data collection, use and disclosure proposals can be expected to be watched closely by the Office of the Privacy Commissioner of Canada.

G.  National news services

Existing and new Canadian news services will have to meet additional regulatory criteria.  Going forward, they must broadcast an annual average of 16 hours per day, 7 days per week, of original programming.  95% of their programming must be drawn from specific news-oriented categories. They must also operate a live broadcast facility, and have news bureaus in at least 3 other regions.

Next Steps

The Commission has called for comments on the proposed exemption order for hybrid VOD services, and will be amending regulations and conditions of licence in further proceedings, to implement today’s policy decisions.

The Commission will also be issuing decisions on pick-and-pay (a la carte) programming and related issues in the coming days.

 

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Let’s Talk TV – Delayering 50 years of Regulation in “the Age of Abundance”