Entertainment & Media Law Signal : Canadian Entertainment Lawyers for Licensing, Intellectual Property & New Media Matters

All funding applications for the CMF's Experimental Stream program have been submitted and now the waiting begins. According to the CMF, the fund received almost 200 applications for digital media and interactive software applications. 

As applicants wait patiently, a jury of Canadian and international experts and the CMF Program Administrator at Telefilm Canada will sift through hundreds of applications and base their decisions on the following Evaluation Matrix:

15% - Production Team: Experience and achievements of producer and management team.

40% - Innovation & Originality: Originality of the content and potential for legacy to the industry.

30% - Business Plan: Viability of the project and financial stability of the applicant.

15% - Distribution Plan: Marketing and promotion plan.

(Note: The complete Evaluation Matrix can be found at Article 2.4 of the Experimental Stream Guidelines 2010-2011)   

The CMF hopes that projects selected for funding will be announced by the end of February 2011.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

You can say that weaving through the system at the CMF can be a frustrating process, but you can't say the staff at the CMF aren't helpful. After coming across a question regarding the CMF's eligibility requirements for distribution fees and having difficulty in finding an answer on their website, a staff member with the CMF was more than willing to help me with my task. In fact, this staff member seemed almost excited at the prospect of helping me. I think the staffer's motivation came from the fact that I would become one less person confused about the new rules with the CMF and therefore, one less person inclined to call their offices for assistance.

Well, friendly CMF staffer - I've decided to help you out and pass on the information.

When submitting a distribution agreement for CMF's approval, if the distributor in question is taking a distribution commission of anything more than 15%, the distribution terms will be rejected. The CMF will only allow non-eligible distributors to receive 15% of revenues. So, in order to receive distribution fees in excess of 15%, one must either be an eligible distributor or a broadcast-affiliated eligible distributor. Distribution fees for such entities include 30% of gross revenues for television (conventional, pay) and 35% for television (syndicated).

According to the CMF, an eligible distributor must demonstrate the following to the CMF:

• A level of experience and expertise
• Sufficient volume of business and financial viability
• That it regularly attends international television markets
• That it has distributed productions of a similar size and nature
• That it is Canadian-controlled within the meaning of the Investment Canada Act (for the projects it will distribute in Canada)

According to the CMF, an eligible distributor affiliated with a broadcaster, may distribute a project if it meets certain requirements of the CMF and follows various "safeguards", which include the following: 

• The negotiation for traditional distribution rights are conducted separately from the negotiation for a broadcaster license fee
• There is a delay after the producer and broadcaster have completed a short form broadcast agreement and before the broadcaster-affiliated distributor and producer commence negotiations of a distribution commitment
• The broadcaster-affiliated distribution company is prohibited from accessing information from its affiliated broadcaster that would give it an advantage in negotiating with the producer.

Attached is the CMF Eligible Distributor questionnaire and checklist, which is used by the CMF to evaluate those distributors that want to be included on the CMF’s list of eligible distributors. It usually takes about 4 weeks for the CMF to review the form.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Considering the fact that I have become the de facto spokesperson for the Canada Media Fund (CMF) on this blog, I couldn't resist making available the CMF's new business policies, which were made public on May 20.

The CMF's Business Policies (2010-2011), available here, includes the following information:

• Default Policy;
• Accounting and Reporting Requirements;
• Producer’s Fees and Corporate Overhead Policy;
• Completion Protection Policy;
• Production Insurance Policy;
• Standard Recoupment Policy; and
• Treatment of Tax Credits.

Producers should also note the following with regards to Producer's Fees and Corporate Overhead for projects in the Experimental Stream:

For projects in the Experimental Stream, the producer’s fees included within the budget shall be a maximum of 10% of Sections B+C of the budget. The corporate overhead included within the budget shall be a maximum of 10% of Sections B+C of the budget and must be comprised of costs directly related to the project.

Producers should note the following with regards to Producer's Fees and Corporate Overhead for the production of television components of projects in the Convergent Stream:

The producer’s fees and corporate overhead (“PFCO”) included within the production budget shall be a maximum of 20% of Sections B+C of the production budget, with the exception of productions with budgets of less than $500,000 (Low Budget Productions) for which the percentage is 30%. Beyond these percentages, there is a maximum dollar amount of $1.4 million per project which is pro-rated up for series of more than 13 hours (13 one-hour episodes or 26 half-hour episodes).

Slowly but surely, it appears that producers are finally receiving the information they need from the CMF....even if it's only one step at a time.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After launching on April 1, 2010, the Canada Media Fund has now released the Experimental Stream Application Form, which can be found by clicking here. Better late than never, I suppose.

The CMF's contributions are divided into two streams of funding:

The Experimental Stream and the Convergent Stream.

The Experimental Stream of the CMF is intended to support digital content that is innovative and interactive. It's important to note that projects must include these characteristics to be eligible for this stream of funding. 

According to the CMF's Experimental Stream Guidelines 2010-2011, the definitions of innovative and interactive are as follows:

Innovation: Eligible projects must be innovative. Innovative may be expressed in terms of innovative business models, innovative content, or innovative technology. The CMF does not define or limit what is innovative - applicants are encouraged to pursue their own vision of innovation and articulate to the CMF how their project is innovative.

Interactivity: Eligible projects must be interactive. Interactivity is defined as a participatory experience between the user and a product/technology or the user and other users as enabled by the product/technology. Projects that use the internet or mobile platforms to distribute linear content without any significant interactive feature(s) are not eligible.

While the definitions of "innovative" and "interactive" are not entirely clear, what is apparent is that a simple interactive website wont be eligible for funding. The CMF are clearly looking for producers to invest a great deal of time and money in their digital content in order to be eligible under the Experimental Stream of funding. Digital content should now include sophisticated features and interesting and distinct technologies.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

HotDocs 2010, North America's largest documentary festival, will be hosting a micro session on CMF's programs and funding on May 3. This information session is part of a growing number of information sessions springing up around the country in an attempt by CMF officials to better explain the new program, which officially started on April 1, 2010.

The session at HotDocs follows a less than stellar reception that the president of CMF, Louis Roquet, received when he presented at a luncheon in Montreal on April 20, 2010. According to Playback Daily, Roquet spent much of the time talking about changing consumer habits and not about the scope of CMF's acceptable digital platforms.

After various Heenan Blaikie lawyers attended a similar information session held in Toronto on April 8, it would appear that producers and stakeholders want to hear more about eligibility requirements under the CMF's multi-platform programs and less about its cultural and technical objectives.

If you are interested in attending the CMF information session during HotDoc2010, it will be taking place on Monday, May 3rd at 4 p.m. ET at Victoria College, Room 323, 140 Charles Street West, Toronto, Ontario.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

CBC is reporting that the planned closing of the Saskatchewan Communications Network, the province's public educational broadcaster, could jeopardize nearly $1 million of Canada Media Fund money that had been allocated to the province.  That amount, according to SCN Matters (which describes itself as "an ad-hoc group of viewers, voters and television industry personnel concerned with the government’s decision to terminate the operations of SCN"), could be distributed between around 20 different programs.

The SCN Matters website includes links to a variety of different news stories covering the announced closure of SCN and the reaction, including this story in The La Ronge Northerner:

The government’s decision to eliminate the Saskatchewan Communications Network (SCN) met with dismay among local filmmakers.

“It limits our opportunities for production. I’m not sure who will fill the gap of Saskatchewan- based production,” Randy Johns, of Keewatin Career Development Corporation (KCDC), a La Ronge-based production company, said in an interview with The Northerner.

The SCN website includes an annual report, which provides detailed information on the revenue and expenses of the network.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Peter Howell writes in the Toronto Star about how "Canadian films don't have to 'look Canadian' any more" - describing the aesthetic improvement resulting from increased production budgets.  On the one hand, Howell notes, Canadian locations, particularly films shot in Canadian urban centres, seem increasingly capable of functioning as "every place and anyplace".  On the other hand, some directors are increasingly willing to expressly set their movies in identifiably Canadian locales (Atom Egoyan's recent work Chloe is set in Toronto).

One item which Howell touches on warrants further attention:

[Kari] Skogland presents a pragmatic truth that all filmmakers must accept, Canadian or not: financing often determines your setting. Tax incentives are often doled out on the proviso that a film be shot in a certain location...

The bolded portion deserves to be unpacked a little.  When financing a Canadian film, there are generally two different types of "tax incentives" a producer can try to obtain: tax credits, which are payments made by the government (federal and/or provincial) on the basis of how much money has been spent on paying "production" or "labour" costs to Canadians in a given jurisdiction (eg if you film a movie in Toronto, you can qualify for federal tax credits and for Ontario tax credits); and "direct incentives", such as equity investments or (recoupable) grants made by a government agency such as Telefilm Canada or the Canada Media Fund.  (Heenan Blaikie's publication Producing in Canada, available here, offers a comprehensive guide to the various types of incentives available.)

 Tax credits, whether the somewhat confusingly named "Canadian content" credits (which are for projects which include a sufficient number of individuals who are Canadian working in creative roles, such as directors, screenwriters and actors, as measured by the Canadian Audio-Visual Certification Office (CAVCO)) or (the less lucrative) "production services" credits (which are for projects shot in Canada, but which do not have the required Canadian nationals fulfilling the required creative roles), are not required to be set in Canada or to be "about" Canada or Canadians.  A sci-fi movie such as Resident Evil: Apocalypse, which was shot in Toronto, can qualify to obtain tax credits just as Passchendaele can.

Direct government incentives, on the other hand, where the government is effectively using taxpayer money to directly invest in a movie, generally do require that a project, in addition to qualifying as "Canadian content" due to the nationality of the people working on it, have some kind of "Canadian content" in respect of the story itself.  Thus, the Canada Feature Film Fund guidelines state that, when considering which projects to invest in, they will prioritize projects which

"present a distinctly Canadian point of view (for example: Canadian characters, setting, themes, talent and stories reflecting Canadian society and cultural diversity)"

The basic requirement is that a project be filmed in Canada and make payments to Canadian residents - but that bare minimum entitles a producer only to receive the bare minimum of available incentives (the "production services" tax credits).  The more "Canadian" a project is, in terms of Canadians working in creative roles, and in terms of being "about" Canada, the more incentives for which it can potentially qualify.

• Email This
• Print
• Comments
• Trackbacks
• Share Link