Cinema Canada (Aug 1976)

duced programming could be exported to United States pay television systems which are unquestionably looking for more material, and programs produced initially for pay television could subsequently be released on conventional over-the-air television. This would benefit nonpay television subscribers by increasing Canadian programming choices in the broadcasting system, especially in those remote and rural areas of Canada that may have lost, or have never had, a movie theatre. The negative impact The benefits of pay television can be great but its introduction could also have a negative impact. Concern about these negative aspects has led in the past to the conclusion that the introduction of pay TV was premature. Even now, there would be little reason to permit the introduction of pay TV if it were left to develop in the same manner as the motion picture industry in Canada. Foreign interests have acquired a virtual monopoly over exhibition and distribution, thus gaining control over the financial resources needed for production. Canadian producers still find it difficult to obtain exhibition opportunities in Canadian moviehouses. Pay television must not be allowed to follow this course. ‘Pay television, if left uncontrolled, could damage conventional broadcasting in several ways. It could lead to siphoning — that is, the draining from conventional television of those programs which are most attractive for pay television service, such as feature motion pictures and sports. If such programming were offered on pay television, programs which the public normally sees without charge on off-air television might be siphoned away to a service which is only available to those able and willing to pay. Another cause for concern is the threat of further fragmentation of the audience upon which the advertising revenues of Canadian broadcasting now depend. This threat may, in the long run, be serious. In the immediate future, however, pay TV will depend for its revenues largely on frequent presentations of a limited number of feature films. Useful data on the exact effect of fragmentation is difficult to obtain, since, at present, pay television penetration rates and the amount of viewing time per subscriber are not known. The communications disparity between urban and rural areas is another problem that could be exacerbated by pay television when delivered by cable, since cable is primarily an urban service. The federal government must obviously try its best to work against this danger, perhaps by ensuring that in those areas where pay television is not available, pay TV programs are made available to off-air broadcasters after an appropriate time delay. Another problem, which is one of my greatest fears about pay television, is that the pay TV operator, like the conventional broadcaster, will tend to cater to the lowest common denominator of the viewing audience. And like his American confréres, he will want to show U.S. feature films and sports events in order to increase his audience as much as possible. This situation would perhaps be more likely to arise in a system where the consumer is billed per channel; in a system of per-program billing, greater variety and even improved quality would be encouraged because programming could be geared to the tastes of minorities willing to pay. It does appear that initially, the per-channel approach to pay TV will probably be necessary for the generation of sufficient revenues to make the system financially stable. However, a per-program system could perhaps spin off from the profits of the per-channel approach. In any case, the fundamental consideration is to encourage pay-tv/6 development of a delivery system which provides new outlets for Canadian programs and wider viewer choice to the Canadian audience. A major task In order to accomplish this, a major task ahead will be to devise a structure that will maximize pay TV’s potential benefits for our broadcasting system and for viewer choice. This structure will have to accomplish three objectives which are what I want to stress more than anything else I have to say today: First: It must provide a range of programming which does not duplicate that now offered by broadcasters and must do so without siphoning programs from the broadcasting system. The continued federal regulation of the broadcasting system, including the regulation of pay television, is a crucial factor in the coherent and orderly provision of program services to the entire Canadian viewing public. Second: It must ensure the production of high-quality Canadian programs that Canadians will watch. Third: It must ensure that programs are produced in Canada for international sale. Whatever pay television system is established, the structure must be designed to achieve these objectives — with which I am sure no one will disagree. In developing the system which would stand the highest probability of achieving the three goals I have outlined, it is probably best to separate delivery of signal to the home from the other two aspects of the process, namely program production and distribution or packaging. The first element of the system, delivery to the home, is relatively simple to handle. Because of the high level of penetration of CATV in Canada, coupled with off-air frequency short august 1976