CineMag (May 5, 1980)

6s CineMag Astral On Pay TV “ The polls indicate that a great number the acquisition of the Pay TV rights to of Canadians want a television viewing | Canadian movies. alternative, and that they would be willing to subscribe to a high quality Pay TV system. The experience of our neighbours to the South is probably a good indicator of what one could expect from’ the introduction of a Pay TV system to Canada. Home Box Office, in its submission to the Commission pointed out that whereas Pay TV had humble beginnings in 1972 “seven years later, at the end of 1979, Home Box Office had more than four million subscribers in more than 1,700 affiliated systems...” Furthermore they pointed out that ‘“by the end of 1979, an estimated six million U.S. homes received Pay TV programming from one source or another,” and that “although Pay TV purchasers still represent barely 7.5% of U.S. television homes, their numbers have doubled in each of the last two years.” Besides the market demand, another important factor is that as a result of the rapid development of Pay TV in the U.S., the Pay TV opportunity has become well recognized. This has led to the very real danger that, if Pay TV is not introduced to Canada quickly, unlicensed systems using U.S. programming will intrude into the Canadian Market. Economic and Cultural Benefits’ A part of the monies that would be generated by a Pay TV system should be refunnelled into the Canadian production industry to help create the Canadian element of the Pay TV system’s programming. This could be done through the development of entirely new Canadian programming, as well as through All of the above would generate more jobs for Canadian performers, technicians, producers, directors, writers, support personnel, etc. etc. The boost that this would provide to the Canadian production industry is truly incalculable. On the cultural side, it is both desirable and to be expected that Canadian programming will often focus on Canadian themes and experiences. For this reason, we believe that a certain portion of Pay TV revenues should be set aside to help foster more of the high quality script writing which can be expected of Canadians if sufficient encouragement is provided. We will return to this latter point towards the end of our submission. If the time is right and the benefits of the system are obvious, the questions to which we must now address ourselves are how should a Pay TV system be organized and, more specifically, what sort of entity should be running Canada’s Pay TV system. The Ideal Programmer The basic elements of a Pay TV system are, as others have pointed out before us, as follows: } (1) The Delivery System — or Exhibitor of the program material. (2) The Programmer — the entity that will choose, acquire, and have developed the programming material for the system. (3) The producing entities which will supply the programming material. ‘The element that we should like to analyze at this time is that of the Programmer. Its basic function will be to secure, package, and distribute a pay television programming service to affiliated local exhibitors which are expec [a a eee |] INSURANCE INSURANCE a — SEYMOUR ALPER & COMPANY LTD. CANADA’S MOST EXPERIENCED MOTION PICTCRE INSGRANCE BROKER MORE THAN 45 FEATURE FILMS INSURED TO DATE CONTACT: SEYMOUR ALPER MONTREAL: 5165 Queen Mary Road, 3rd Floor, Montreal, Quebec H3W 1X8 Telephone: (514) 489-8601 Telex: 05-566187 (SACO LTD.) TORONTO: 965 Bay Street, Suite 1902, Toronto, Ontario M5S 2A3 . Telephone: (416) 968-0239 Telex: 05-566187 (SACO LTD.) **System Run By Private Sector Co” ted, in the majority, to be cable television systems. It will use its programming budget to initiate, fund or purchase appropriate productions. What then will be the activities of and the skills required of the Ideal Programmer? (A) The Development and Acquisition of Canadian Content Programming in English and French. The program mix of the English language and French language Pay TV systems should be obliged to contain a certain percentage of “Canadian Content’ programming. The principal means of supplying that Canadian Content programming would be as follows: (a) Development of new Canadian T.V. programming in both the English and French language for the Pay TV systems, through the use of-independent production companies. (b) Acquisition of the Pay TV rights to Canadian-made English and French language films. (c) Development of new Canadian Content programs through co-productions between Canadian and Foreign _ production houses, for the Canadian and International markets. (B) The Acquisition of the Pay TV Rights to American Theatrical Features from American Production Entities, _ This part of the business would involve negotiating with U.S. production houses, including the U.S. majors (Columbia, Twentieth Century-Fox, Paramount, United Artists, Warner Brothers, Universal, MGM, etc.) in order to acquire their product. It would involve an expertise and knowledge in all of the following areas : saps: (a) Knowledge as to the workings of the various U.S. production entities. (b) Knowledge as to their product, and an ability to evaluate it properly. (c) A knowledge of the parameters within which one should be able to acquire that product. (d) With respect to the ability to play some of the U.S. theatrical features on the French language pay system, one would have to be/knowledgeable in the area of dubbing or the addition of subtitles to English language programming. (C) The Acquisition from U.S. Pay TV Companies the Canadian Pay TV Rights to Theatrical Features, as well as Television Programming that those U.S. Companies are now starting to develop for their Pay TV Systems. : This part of the business would involve not only a knowledge of the workings of the U.S. Pay TV entities but, in order to negotiate and acquire the Canadian Pay TV rights from them, would also require: : _.(a) An expertise with regards to the product they control and their cost of acquisition. —_— (b) Knowledge with regards to the cost of production to the U.S. Pay TV entities of the programming that they are developing. The System — Some © Recommendations At this point we should like to make some brief comments on how we believe the Pay TV system should function in Canada. We submit to you that at the outset the Pay TV system in Canada should be run on a national level, by one private sector company. — We agree with the CBC when in their brief on Pay TV they state on Page 19 that: ‘We should in the first instance, organize Pay TV as a national monopoly, as the CRTC itself has recognized, to ensure that overhead, procurement, programming, Origination, and other costs are not aggravated through unnecessary competition and duplication. Competing Canadian operations would, quite evidently, lead to an escalation of the prices paid to American film suppliers, for example, and the more systems in place, the more money potentially available to transformation of Canadian broadcasting is used up in duplication of programming, promotion, Origination, and other functions of a Pay TV operation. The ‘Single National Pay-Television Network’ described on pp. 38-9 of the Com. mission’s 1978 Report on Pay Television outlines with great clarity the advantages of such an ap proach,” We also agree with the Independent Producers’ Committee for pay Television when they state that: “Programmers of the subscription television service will be competing for the discretionary dollar — money which the consumer spends only after food, clothing, Shelter, transportation and other essentials have been purchased. Only the Programmer motivated by the expectation of profit will attract the discretionary dollar. Quite properly this makes the service the business of the private sector.” Furthermore, if ABP were to operate the Pay TV system we would suggest the following : (1) All cable business should be re quired to grant.access to their distribution systems on a reasonable basis when required to do so, (2) As a Canadian producing entity we recognize the conflict of interest that would be inherent in our deciding which Canadian films or television programming should be developed through revenues generated by the Pay TV system. Astral feels confident that an acceptable solution to this issue can be worked out, and would offer the following suggestions: (A) ABP could set up an advisory committee which will make recommendations with regards to the acquisition of, and development of Canadian Pay TY programming and theatrical features, (B) If the CRTC felt it necessary, an independent committee could be set up to decide upon the acquisition of, and development of Canadian Pay TV programming and theatrical features, cont. on p. 70