C-11 amendments: Bell seeks partnerships with American streamers to recapture programming rights

November 15, 2022

Senate committee chair Leo Housakos says Bill C-11 hearings will be “wrapping up soon” and it looks like representatives of Bell Canada will not appear before the Senate as they did June 1st before the House of Commons Heritage Committee.

But Bell submitted some intriguing amendments to the Senate which deserve consideration.

The common reaction to anything Bell has to say is that anything good for Bell is bad for everyone else, and vice versa.

So Bell’s C-11 amendments probably won’t get a warm reception.

That’s too bad. As our biggest domestic cable provider and broadcaster at $4.3 billion annually in television revenues, Bell is trying to figure out a way to keep profit margins healthy enough to keep spending about $870 million of that on Canadian content and TV news that doesn’t make money.

As any historian or analyst of Canadian broadcasting will tell you, the algebra of the industry’s finances has been domestic broadcasters retailing American shows and spending the profit on Canadian shows.

“To be clear,” says Bell in its Senate brief, “everything we are able to achieve is directly related to the profits we make by accessing foreign content, and through a regulatory regime that enabled this,” although others believe it’s a timid and unimaginative strategy.

Bell wants to keep that business model alive, hence its proposal for four key amendments to C-11 and its renovated regulatory scheme.

The first amendment (reproduced at the bottom of this post) is to empower the CRTC to encourage, reward, prod or force the Hollywood studios and streamers into content distribution co-ventures with Canadian TV companies.

“The Act must ensure the regulatory regime continues to incent foreign content owners to partner with Canadian broadcasters which our regulatory system historically supported,” says the brief.

Those co-ventures already exist on a small scale: Canadian media ownership laws in the Broadcasting Act and regulations restrict foreign equity stakes in Canadian programming services to a minority investment: examples are TSN/ESPN, Discovery Canada, or the branded licensing agreement Bell has with HBO.

Bell wants to scale up these programming co-ventures so they can continue to buy American hit shows whose prices are spiralling upwards or not even for sale because they are increasingly released as exclusives on American streaming apps.

The Bell amendment would force Hollywood to keep making licensing deals with Canadian TV companies or else create co-venture apps with Canadians, perhaps a Netflix Maple, jointly owned with Bell or Corus.

That’s on the distribution end. 

On the production side, Bell lines up with other Canadian broadcasting stakeholders in favour of equal responsibility on both domestic and foreign media companies to make use of Canadian talent and labour when making Canadian programming (the House of Commons version of C-11 holds foreign companies to a less onerous standard).

Unfortunately in doing so, Bell and the Canadian Association of Broadcasters break ranks with the rest of the Canadian industry by proposing to water down the obligations in section 3(1)(f) to “employ and make maximum use, and in no case less than predominant use, of Canadian creative and other human resources in the creation, production and presentation of programming.”

Here’s the legal text beginning with the existing Broadcasting Act, then the C-11 text, and finally the CAB/Bell proposal:

Current Broadcasting Act, s.3(1)(f)

each broadcasting undertaking shall make maximum use, and in no case less than predominant use, of Canadian creative and other resources in the creation and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources;

From C-11

(f)each Canadian broadcasting undertaking shall employ and make maximum use, and in no case less than predominant use, of Canadian creative and other human resources in the creation, production and presentation of programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that use impracticable, in which case the undertaking shall make the greatest practicable use of those resources;

(f.‍1)each foreign online undertaking shall make the greatest practicable use of Canadian creative and other human resources, and shall contribute in an equitable manner to strongly support the creation, production and presentation of Canadian programming, taking into account the linguistic duality of the market they serve;

Bell/CAB:

each broadcasting undertaking, shall make a significant contribution to the creation, production and presentation of Canadian programming, unless the nature of the service provided by the undertaking, such as specialized content or format or the use of languages other than French and English, renders that contribution impracticable, in which case the undertaking shall make an appropriate contribution;

delete 3(1)(f.1)

Bell’s third amendment already has broad support (including a rare endorsement by the CRTC): legislate that foreign online undertakings carrying on business as Internet cable companies (e.g. Roku, Pluto TV) must obey Canadian rules on mandatory carriage of public service channels, some of which come with compensation at a subsidized rate set by the Commission. MediaPolicy.ca previously wrote about that here.

The fourth amendment is to produce a larger stream of industry dollars flowing from both foreign and domestic media companies to a fund supporting money-losing local TV news.

Similar to the Unifor amendment on local news, the Bell proposal permits the CRTC to tithe both profitable domestic cable companies and online undertakings and then distribute the funds to all Canadian news networks (including CTV’s 30 stations) or independent stations. 

The broad drafting of the Bell amendment gives the CRTC the option to assign asymmetric responsibilities for the creation of Canadian dramas, documentaries and news programming: perhaps more “Programs of National Interest” from the foreign streamers (who are good at making drama) and less for Canadian companies who can divert resources into the news production at which they excel.

***

Bell partnership amendment:

3.(1) (s.1) foreign broadcasting undertakings should 

(i) make their programming available to Canadian programming undertakings pursuant to contractual arrangements on reasonable terms; and 

(ii) be encouraged to partner with Canadian undertakings in the distribution of their programming throughout the Canadian broadcasting system. 

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