Transcription, Audience du 27 juin 2025

Les participants et l'endroit

Tenue à :

Centre de Conférence
Portage IV
140, Promenade du Portage
Gatineau (Québec)

Participants :

• Président de l’audience : Nathalie Théberge
• Membres : Adam Scott, Vice président, Télécommunications
  Bram Abramson, Conseiller, Ontario
  Joanne Levy, Conseillère, Manitoba et Saskatchewan
  Stéphanie Paquette, Conseillère, Québec
• Conseillers juridiques : James Wilson, Imene Benaissa, Kathleen O’Toole
• Secrétaire de l’audience : Sonia Gravelle
• Gérantes de l’audience : Sylvie Julien, Jacquilynne Schlesier

Table des matières

Présentations

5551 Accessible Media Inc.

5680 Timeless Inc.

5708 Anthem Sports and Entertainment

5875 Canadian Independent Music Association

6006 Access Communications Co-operative Limited

6072 Canadian Association of Film Distributors and Exporters

Transcription

Gatineau (Québec)
27 juin 2025
Ouverture de l'audience à 9 h 00

Gatineau (Québec)

‑‑‑ L'audience débute le vendredi 27 juin 2025 à 9 h 00

5549 THE SECRETARY: Good morning. We will start with the presentation Accessible Media Inc.

5550 Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

5551 MR. ERRINGTON: Good morning.  Thank you.  Vice‑chairs, Members of the Commission, Commission staff, my name is David Errington. I'm the president and CEO of Accessible Media Inc. With me today is Kevin Goldstein, our outside regulatory counsel. And we will now begin our presentation.

5552 As we highlighted during our appearance before the Commission in May, AMI is a not‑for‑profit media company that operates three 9.1(1)(h) services dedicated to establishing and supporting a voice for the more than 6.2 million Canadians with a disability, representing their interests, concerns, and values through accessible media, reflection, and portrayal.

5553 What started as television services offering a second window for programming commissioned by other broadcasters that AMI would then make fully accessible has transitioned to channels offering almost exclusively original content produced by and for the disabled community. We take our responsibility to those we serve very seriously and hope to be able to do so for many years to come.

5554 AMI welcomes the opportunity to appear before you today as the Commission continues to review of how to modernize the regulatory framework that applies to both Canadian broadcasting undertakings and streaming services. While the Notice of Consultation addresses various issues, our comments today are limited to the regulatory framework for public interest services and, more specifically, those that benefit from a 9.1(1)(h) order.

5555 Public interest services such as those that AMI operates play a critical role in the Canadian broadcasting system. By definition, 9.1(1)(h) services make an exceptional contribution toward the achievement of the Canadian broadcasting policy objectives. These channels have significant obligations relating to Canadian programming and would not be viable without the regulatory support they receive.

5556 The impact online streaming services and platforms have had on the system and 9.1(1)(h) services, in particular, has been well documented. BDU subscriptions have been in decline for many years, and 9.1(1)(h) services rely almost exclusively on wholesale fees from BDUs to operate. Those rates are fixed. Therefore, as the Commission is well aware, as subscribers decline, so do our revenues.

5557 Numerous BDUs in this proceeding have argued that the solution to the challenges that they are facing is no longer to require them to support 9.1(1)(h) services, suggesting that this should be the responsibility of online undertakings. For their part, online undertakings, including those operating virtual BDUs, have resisted any commitment to support public interest services, either through carriage or financially, and have attempted to distinguish their operations from what traditional distribution undertakings do.

5558 While AMI accepts that the requirement to support 9.1(1)(h) services should not fall solely on the shoulders of traditional BDUs, shifting all this responsibility to online undertakings is not the answer. Given that 9.1(1)(h) services are compensated based on basic subscribers, when Canadians cancel their BDU service, a BDU no longer pays a fee to the service for that subscriber. Furthermore, payments to 9.1(1)(h) services represent less than seven and eight per cent of the cost of basic in the English and French markets respectively.

5559 It is also important to highlight that traditional BDUs already have relatively modest regulatory obligations, and the Broadcasting Act mandates that all broadcasting undertakings, including BDUs, are required to contribute to the objectives of the Canadian broadcasting policy in a manner that is appropriate to their circumstances. Carrying 9.1(1)(h) services and supporting them financially is a key element of the contribution BDUs make to this requirement.

5560 With respect to online streaming services, the issues that 9.1(1)(h) services may face relate both to access and compensation. Contrary to what they have suggested in this proceeding, these platforms are gatekeepers. They do not provide open access and they play exactly the same role as a BDU does: they receive and retransmit broadcasting services. And much like the Commission heard from operators of ethnic services last week, public interest services are not a priority. Resources will not be directed to ensure that these services are made available unless the Commission requires it.

5561 Moreover, even if a virtual BDU carries a public interest service, they are under no obligation to provide comparable terms to how these channels are distributed in the traditional BDU ecosystem. In fact, the Commission is limited in its ability to impose such terms on online undertakings. A duty to negotiate in good faith will not lead to reliable revenue for public interest services.

5562 For AMI, the solution to these problems is twofold. First, any online undertaking that operates as a virtual BDU should be required to carry all current and any future 9.1(1)(h) services pursuant to an order issued under section 9.1(1)(h) of the Act. Second, and even more importantly, all virtual BDUs and standalone online undertakings, including services such as Netflix and Disney+, must be required to contribute to a Service of Exceptional Importance Fund or SEIF. We note that numerous other participants in this proceeding have recommended a similar approach.

5563 The combination of these two measures is the only way to ensure a future for public interest services and the important contribution they make to the system.

5564 We'd like to thank the Commission for allowing us to appear before you today, and we'd be pleased to answer any questions that you may have.

5565 THE CHAIRPERSON: Thank you very much, and welcome to you both. A very good morning. Nice to see some familiar faces on this sunny Friday morning. Again, thank you for your participation today. I will turn things over to Vice‑Chair Scott, who will lead the questions.

5566 VICE‑CHAIRPERSON SCOTT: Good morning. Yes, as you mentioned in your opening remarks, you are focused in on a subset of the issues before us. I think a lot of the questions will be along those lines. I'll probably throw in a couple broader ones as we go, just to tease some more out of you as well.

5567 But your proposal for 9.1(1)(h) services, you're putting forward that the wholesale rate for existing BDUs ‑‑ the wholesale framework for BDUs should continue and that online undertakings should pay into the fund. If we were to adopt that proposal, what factors should we consider? How should we approach rate‑setting for contributions to the fund? How do we get to that number?

5568 MR. ERRINGTON: Sure. Our proposal is that the current system for existing BDUs should remain in effect. So the rates are already established based on criteria of how the contribution to the Broadcasting Act is. Our recommendation for the contributions to the fund and how to set rates for that would be on a pro‑rated basis of those rates themselves. So all the underlying conditions and benefits that we put forward to the Act have already been taken into consideration, and those would just be transferred over on a pro‑rated basis to the fund, how the rate would be applied to that fund.

5569 MR. GOLDSTEIN: If I could just add, I think ‑‑ and just a clarification, are you asking in terms of the rate that you would apply to the online undertakings, or how we would assess who got what out of the fund?

5570 VICE‑CHAIRPERSON SCOTT: I was thinking more on the payment‑in side, so how do we determine who pays how much into the fund?

5571 MR. GOLDSTEIN: So, I think we commented on this in the RFIs for 2024‑288, but just to get it on the record at this proceeding, I think the Commission needs to assess the overall needs of the 9.1(1)(h) services as a whole that we have today and any future ones.

5572 For those that we have today, the revenues have been declining for a period of time. And so I think what we suggested was that the Commission look as a baseline what the revenues that were available to those services were in 2018, which was the last time the Commission wholistically looked at the wholesale rates that 9.1(1)(h) services charge as part of their licence renewals. That would give you a baseline of revenue for the industry as a whole.

5573 You would look at then where things stand today, and that would give you, if you take A and minus B, it would give you what needs to be made up and could then be factored into a percentage contribution requirement.

5574 I think the Commission is in a better position, I think, than the industry is to know at a granular level what the revenues are of specific online undertakings ‑‑ I don't think that information is public ‑‑ but could then look at those numbers and back out what the appropriate percentage would be.

5575 The one thing I would add, and I think we saw this in the previous proceeding, and I think it's probably on the record at this proceeding from some of the BDUs, I don't think 9.1(1)(h) services, and specifically we're talking for AMI, see this as a capped amount. You know, that's a starting point. The intent is for, as BDU subscribers decline, for revenues ‑‑ and online services grow ‑‑ for those revenues to grow as well, and to grow with inflation.

5576 You know, when 9.1(1)(h) ‑‑ for example, I think AMI, I think, was licensed first ‑‑ the television services licensed back in the late aughts. BDU subscribers were still growing then, so revenue grew in the early years, and then as it started to decline, it started to decline. I don't think we should see the contributions 9.1(1)(h) services as something that we put in a box with, you know, that has four walls and says this is the only revenue you're ever going to get over time.

5577 VICE‑CHAIRPERSON SCOTT: Okay. Other than an inflationary adjustment, would you foresee a need for us to look at this again on a periodic basis, keeping in mind the objectives of stability and minimizing regulatory ‑‑

5578 MR. GOLDSTEIN: Yeah, I think, you know, inflation probably is the first way of dealing with it. I don't think we can ever look at any regulatory policy and say we can put this in place and 40 years from now we'll look at it again. But perhaps, as these services go through licence renewal or, you know, I have to envision that at some point, whether it's on a five‑year cadence or seven‑year cadence, the Commission is going to look at its policies to determine whether or not they continue to be relevant.

5579 VICE‑CHAIRPERSON SCOTT: Thanks. I'd also like to get your thoughts on the proposal that Bell put forward. So the similarity with what you're suggesting is that they also foresaw that online undertakings should pay into a fund, but their proposal is that, you know, the BDUs that are currently paying the wholesale rates should also be contributors to the fund. Do you see any disadvantages to that approach versus what you've put forward?

5580 MR. GOLDSTEIN: I think our general view on that is, is that we have a system, and the BDU ecosystem seems to work. And the BDU ecosystem is likely to be around for the foreseeable future alongside other options. So we don't really see what the advantage of doing that is.

5581 I think Bell's proposal was twofold. I think, one, it was to do that, and two, that they should get credit for that against their overall contributions. With regard to the second part, we don't have an issue with that. That's really their issue to demonstrate. We don't really take a position one way or the other.

5582 But I think our general preference would just be to continue the existing situation where BDUs pay on the basis of their subscribers and that's ‑‑ you know, and then they pay us. And that seems to have worked for decades.

5583 VICE‑CHAIRPERSON SCOTT: And you see the consistency as maybe more important than the ‑‑ like I'm a bit surprised that you're looking at a declining revenue stream and proposing that that be the model that carry forward. I would have thought one of the advantages of the Bell proposal is that you are able to lock in more stable, consistent funding.

5584 MR. GOLDSTEIN: Oh, I think the intent is, is that as one goes down, the other one increases. And not increases by in terms of what the factor the Commission applies, but those revenues are growing, and we've seen those revenues growing quite significantly and steadily over the last number of years. So I think that the intent is let's keep the current model the way it is. We know what that is. We know how the remittances come in, and everyone's comfortable with that model. And then as the new model comes and the new payors come onboard, those revenues would grow and offset any declines on the other side.

5585 VICE‑CHAIRPERSON SCOTT: Thank you. Another aspect of the Bell proposal was the theory that if online undertakings are paying into the fund and therefore ought to be given distribution rights at zero cost and the presumption that, since it's free and they're paying into the fund, that they would carry it, obviously, I think was the implication ‑‑ what's your response to that? Is there enough of incentive for them to carry it just based on the fact that they're paying into the fund and it's free?

5586 MR. GOLDSTEIN: Perhaps I'll start, and Dave may have something to add.

5587 I'm not sure we agree with that. I think that in certain instances, yes, where there are no kind of overall other costs involved in doing that for them. But I think some of ‑‑ there continue to be challenges in getting carriage on especially foreign VBDUs, largely because these types of niche services ‑‑ and it was the same issue with the ethnic services last week ‑‑ are just not a priority for them. I don't think it's an issue of, oh, they're favouring their own services, or we've done this sweetheart deal over here, so we're going to impair you. It's just that it's not a priority for them in terms of ‑‑ well, David, perhaps you want to comment on your experience.

5588 MR. ERRINGTON: I think the best thing for us is certainty. So if we know our funding going forward for a five‑to‑ten‑year period, we can operate a business that's going to deliver content that reflects the community that we want. So revenue certainty is what we're asking for. And if it's not a mandated distribution model, it doesn't really give us that certainty that we require. So I would say certainty of distribution is one.

5589 And you want the product in as many homes as possible. That's the mandate, right, is to inform, empower, and entertain Canadians from the disability community. So you want them to have access to that content on all platforms. So mandatory distribution would be part of that.

5590 MR. GOLDSTEIN: I think I might just add one other thing. It's kind of an interesting ‑‑ it's kind of a chicken and an egg scenario, when you think about it, which is, you know, Bell's commentary was, Well, if they're funding it, of course they're going to carry it, because why wouldn't they? There's no other issue for them. And our view is, Well, if there's no other issue for you, why do you care if you have an order that forces you to carry it, because if you were going to do it anyway, why is there a problem?

5591 VICE‑CHAIRPERSON SCOTT: That's a helpful comparison, thank you.

5592 And you did start to segue into my next question, too, which was more about kind of moving beyond just access. So assuming you get mandated access, can you speak about the importance of placement, prioritization, discoverability? Because, like you said, getting access is one thing, but getting seen by the eyeballs that matter is another.

5593 MR. ERRINGTON: I'll give you an example. So our position is that Canadian services should be at the front of the retail shop. They should be discoverable. They should be easy to access and easy to find. That's part of the privilege of doing business in Canada is supporting Canadian services.

5594 We have had ‑‑ we did a deal with Amazon a number of years ago when we were getting into original content production. We thought we should try to monetize our content, so we reached out to various distributors such as Amazon and said, Hey, are you interested in some of our content? With the Amazon USA, it took over a year. They finally realized that, yeah, it might be a good thing to carry some of AMI's content. It's good content. It serves a specific niche. It's a good thing for us to do.

5595 We put the content on their platform. It got buried within all their content. Nobody found it. The views are next to nothing, and the revenue back was in the dollars a month rather than tens of thousands. So yeah, they'll carry it, but it will just get buried. And that's the last thing you want for content like ours. You want it to be easily accessible.

5596 If you're in Canada and you're doing business in Canada, Canadian services should have priority. And we believe we're one of them.

5597 VICE‑CHAIRPERSON SCOTT: When I was talking to Apple yesterday, one of the things they said is that they were not aware of any programming services that had approached them from Canada that had been rejected from being included in their list of channels. There may be some nuance there. I think we were mostly talking about commercial arrangements and revenue‑sharing opportunities, which might be a different scenario than you. But does that ring true to you, or have you had direct experiences?

5598 MR. GOLDSTEIN: Maybe I could start, and Dave can talk more about the direct situation.

5599 I think Apple is in a bit of a unique scenario amongst the foreign streamers who are appearing, because they operate I wouldn't call it an open‑source iOS situation, because nothing with Apple is open source, because one of their value props ‑‑ propositions ‑‑ is that they control the environment. But generally, Apple said, These are the criteria or technical specifications for developers; develop your app and we'll put it in our store.

5600 And, you know, Apple obviously operates, you know, an iPhone. But they have, you know, I have an Apple TV now, you know, box. And I have one actually now. They've built it into a lot of TVs.

5601 And so the way in which their operating system works, to the best of my knowledge, is you meet their developer specifications, it goes into their store, the app store. They approve it. There are fairly standardized terms in terms of, if someone were to subscribe through that, how the revenue share works. So I don't think the case of Apple is that they would really be rejecting anything. It's it would be more for them about other things like placement in terms of what Dave is saying.

5602 Now, that's a very different situation for an Amazon, which operate ‑‑ everything exists within their own app as opposed to kind of a universal store like Apple. And on top of that, Amazon actually ingests all the content like a traditional BDU. And so you have to reach an arrangement with them to do that, versus Apple, which I think is just more automatic in terms of the way things work.

5603 So I think they are different in terms of the way in which they've chosen to operate and the business models they've chosen to adopt.

5604 Dave?

5605 MR. ERRINGTON: Yeah, and we do have our content available on an iOS platform, an Apple iOS platform, and we've met all those standards and our content is on there. But there's no revenue derived from that that's meaningful. We could try to sell sponsorship. We haven't gotten that far as of yet. But content is available there because the goal is to get as much content in the hands of as many people as possible and access it on any platform they can. And mobile is a large, fast‑growing platform for that purpose. But revenues derived from that are next to nothing. It's just a matter of having content available to the community.

5606 VICE‑CHAIRPERSON SCOTT: Another area I want to talk about, you'd opposed the proposal for exempting BDUs with fewer than 20,000 subscribers from supporting 9.1(1)(h) services. To me, it feels a little bit like asking a drowning man to throw his life preserver to another drowning man. Is that really where we need to hunt for additional revenue?

5607 MR. GOLDSTEIN: So I think our opposition on that was principally driven by that the Commission regulates on an undertaking‑specific basis. And so there are various systems that are exempt under the exemption order for BDUs under 20,000 that are not small BDUs. Bell operates a significant number of exempt systems. Rogers a significant number of exempt systems.

5608 So what we would do in terms of applying that more broadly, you know, or just everyone ‑‑ it doesn't distinguish between whether you're like a CCSA member with, you know, 3,200 subscribers and one of Bell's systems or Rogers' systems which fall into their multiple millions of subscribers they have and are integrated with their overall BDU networks.

5609 So you know, I think that if you're a really small BDU, I think, one, if you're already under either 6,000 or 2,000 ‑‑ I haven't looked at the exemption recently, but ‑‑ you know, you already are exempt from doing that.

5610 I think it depends on who you are and what your overall size is in terms of combined between your exempt and non‑exempt systems. Because, you know, for example, if you look at a BDU that has a variety of exempt systems and a variety of licensed systems, they don't ‑‑ their financial performance isn't broken down between their exempt and non‑exempt. It might be in terms of how it's reported to the CRTC, but not in terms of how they derived their business objectives.

5611 And so you know, I think our concern would be that that's pulling out revenue out of the system overall, that's a more general concern, when we're seeing significant declines in revenue to begin with. And then I think the primary concern is just that if you're going to do that, you're actually exempting a bunch of large systems from a bunch of larger players who perhaps don't necessarily need that relief.

5612 VICE‑CHAIRPERSON SCOTT: That's helpful, thanks. And a last question from me, just a really general, broad one, kind of vision‑of‑the‑future type question. So we're five years down the road. What does a successful transition to a more online‑focused system look like for AMI?

5613 MR. ERRINGTON: I think it's sustainability. So we are now creating, you know, 80 hours of original content for our English service and 70 hours of original content for our French service. Its content is relevant and reflective of the disability community. It's meeting all the requirements of a 9.1(1)(h) service and it's actually achieving the goals of the updated Broadcasting Act.

5614 So having some certainty and some sustainability and ability to do that on an annual basis going forward, creating great content that's relevant to that community, then having that content available on all these evolving platforms so it's easily accessible to the disability community. It's not just on a linear service; it's available broad spectrum.

5615 If we can do that, we can hit our mission of informing, entertaining, and empowering people of the disability community. They have to have access to the content. So we need funding for the content that's sustainable and long‑term. Once we have that, we can create great content. We can take that great content and push it out to all the various platforms that people are engaging with, including people from the disability community. And that would be the long‑term goal of our company in achieving the objectives of the Act.

5616 VICE‑CHAIRPERSON SCOTT: Great. Those are all my questions. Thank you very much.

5617 Madam Chair, I'll turn it back to you.

5618 THE CHAIRPERSON: Thank you, Vice‑Chair Scott. I'll turn things over to Conseillère Paquette.

5619 COMMISSIONER PAQUETTE: Good morning. I think I'll stay in the general forms of questions.

5620 We had in front of us two weeks ago the Deaf Grassroots Movement and the Deaf Wireless Canada Committee, who demanded more programming for ‑‑ by and for deaf people.

5621 First of all, have you followed their interventions and do you see AMI as playing a role in the solution to what they are asking for?

5622 MR. ERRINGTON: Definitely. So we currently ‑‑ obviously all of our content is captioned like any other broadcaster, so we meet all those standards. We have had ASL on some of our content. We have shows now that have ASL. We have a comedy show out of Halifax that we've done ASL with. We're currently investigating the cost of adding ASL to all of our content. Again, adding costs while our revenues are going down is difficult ‑‑ a lot of that will come out of this today. But if we had sustainable funding and we knew where we were heading going forward, we would look at the option of putting ASL on all of our original content going forward. That's something we would investigate.

5623 COMMISSIONER PAQUETTE: Can you give us an idea of how much original programming you're producing right now and which part at the moment is dedicated to ASL content?

5624 MR. ERRINGTON: Well, none of it is dedicated to ASL content right now, to make that clear. We're currently doing, between AMI‑télé and AMI‑tv ‑‑ let's take the audio service out because it’s a little bit different ‑‑ we're doing between 50 and 100 hours of original content per year per service. That's content that we own IP to. It's content that's relevant to the community. And it's also content ‑‑ I just want to throw this in there because it's a good stat ‑‑ we employed 725 people from the disability community who participate in the production of that content. So it's there.

5625 Going forward, when we're creating between 50 and 100 hours of original content per service, if we have the funding and we have the sustainable revenue model going forward, we would consider adding ASL to that content.

5626 COMMISSIONER PAQUETTE: Okay, I understand.

5627 MR. ERRINGTON: And that would exclude our live content; that's a different thing. We're not doing any live on AMI‑tv and AMI‑télé now. We do some live on audio. That adds a bit of a wrinkle to it, but we'd have to look at that.

5628 COMMISSIONER PAQUETTE: Okay.

5629 And one last question. You called for a mandatory carriage of 9(1)(h) services on the online platforms. Is there a specific form that should be mandatory, or like, should a mandatory order be limited to the linear services or should it include the complete suite with the apps, the on‑demand content?

5630 MR. GOLDSTEIN: I think it's the complete suite. I think it obviously would need to be customized in terms of the way in which those online services are offering their content. But what I think we would want to see is whatever the experience that exists in the traditional BDU system should exist for people who want to access it in the online world.

5631 COMMISSIONER PAQUETTE: Okay. Okay, thank you. No more questions.

5632 THE CHAIRPERSON: Merci, Conseillère Paquette. I'll turn things to Commissioner Abramson.

5633 COMMISSIONER ABRAMSON: Thanks. Good morning. Thanks for being with us.

5634 Let me start with discoverability. I've been asking folks ‑‑ because we're trying to get to throwing some spaghetti against the wall ‑‑ their views on the IBG prominence and discoverability principles. Is that in line with your recommendations? Do you differ from them?

5635 MR. GOLDSTEIN: No, I think we fully support it.

5636 COMMISSIONER ABRAMSON: Thank you. Would that proposal encompass, then, a number of your positions? In other words, would that accomplish much of what you're looking for?

5637 MR. GOLDSTEIN: I think if it's coupled with a 9.1(1)(i) order to carry it, yes. I think that, as we elaborated on in our opening presentation today, our request is twofold. There needs to be an order relating to access and then there needs to be funding to ensure the sustainability of the services, as Dave was highlighting. And that funding ‑‑ the order applies to a more limited subset of online undertakings than the funding requirement would apply to. Because, from our perspective, the funding should come from those parties that are impacting the declining revenue situation in the traditional BDU ecosystem. And so that isn't just services like Amazon Channels that offers a true BDU alternative. It's also services like Netflix and Disney and Paramount and others who are causing people to cut the cord. And their contribution to the system from our perspective should reflect the impact overall they're having on the system.

5638 COMMISSIONER ABRAMSON: Let me ‑‑ you've introduced that idea of, I suppose, players that are more like a vBDU and players that are online undertakings and that are less like a BDU. And I took note during your opening remarks at paragraph 9, talking about online undertakings as gatekeepers.

“They do not provide open access and they play exactly the same role a BDU does...”

5639 So my impression from your remarks was that you would have sort of a more expansive view of how we should read 9.1(1)(i) of the revised Act which talks about, you know, the mandatory distribution orders that we're able to issue on online undertakings that provide programming services in a manner that is similar to a distribution undertaking.

5640 What fits the bill of being similar to a distribution undertaking, in your view?

5641 MR. GOLDSTEIN: If you distribute services that you receive from others ‑‑ as opposed to yourself, because that would just make you an SVOD or linear D2C platform ‑‑ and you deliver it over the internet, you're a vBDU.

5642 COMMISSIONER ABRAMSON: So, it's a distinction between programming and services?

5643 MR. GOLDSTEIN: Not necessarily, because ‑‑ well, it depends, because a service can be linear or nonlinear in scope. You know, you can have a bunch of services that are a collection of programming that allow you to do it on demand. They're operating essentially their own on‑demand service; you're doing that and selling it for a fee. So, for example, you know, for a while I was a BritBox subscriber through Amazon Channels and didn't get any linear product, but that isn't ‑‑ I subscribed to it and it was a subscription fee specific to that content and that service that was being offered on that basis.

5644 So I think BDUs right now obviously distribute linear programming services ‑‑ some of which are licensed, some of which are exempt ‑‑ and BDUs offer an on‑demand platform that is also regulated but is distinct from their BDU license. It's a programming undertaking in and of itself. It just happens to be that the way in which that developed in the traditional ecosystem is that the BDUs generally operate their own, although some of them provide that facility to other BDUs who don't offer it.

5645 So to us, you're either ‑‑ you can be an on‑demand undertaking in which you operate your own programming and sell it for a fee or you can be a linear service.

5646 But I don't think we're proposing a more expansive definition under 9.1(1)(i). The expansive is more the funding under, I think it's 11.1, for public interest services.

5647 COMMISSIONER ABRAMSON: Got it. No, that's helpful. So what I'm hearing is the making available of linear programming services sort of online would be, if we were looking for a bright line, perhaps that would be it?

5648 MR. GOLDSTEIN: I think it's clear that if you make linear services available online, you are a vBDU. I'm not sure it's as clear a line as that, but I think definitely, if you do that, it's clear that you fall within the tent.

5649 COMMISSIONER ABRAMSON: Thanks, and obviously, we're still considering this issue, as we are all of the issues on this proceeding. On data, just quickly, I was hoping to get your views on the conversation we've been having around audience and content performance data.

5650 Is that, I guess I should ask, for AMI, is that a significant factor in programming, in revenue achievement, and so on?

5651 MR. ERRINGTON: I think, from a traditional standpoint, data with respect to audience and ad sales and revenue opportunities from that, not so much. Because we're a very, very niche service, we target a very, very niche audience. We rely on our own research that's specifically directed to the disability community. So we have a panel of over 3,000 people and we make content decisions based on that. So that's data that we see as relevant.

5652 As far as other data, audience, box data, things like that, I think that's more for the bigger players to deal with than us, to be honest with you.

5653 COMMISSIONER ABRAMSON: Understood. And then guide data, content inventory data, the kinds of things that would help enable a bit more of a TV Guide style ecosystem, is that something that would make any difference for you were that an area for improvement?

5654 MR. ERRINGTON: I think from a discoverability standpoint, yes. I think Canadian services and 9(1)(h) services should be at the forefront of that from a guide standpoint, definitely.

5655 MR. GOLDSTEIN: I think if I could just add, I think data is a legitimate issue and a legitimate issue for Canadian programming services in terms of getting, you know, what they need, especially as they're figuring out new ways in terms of how they want to monetize their services. I think for 9(1)(h) services generally ‑‑ specifically for a very niche service like AMI, there isn't a significant amount of advertising revenue. These services are never going to be able to be sustained alone through advertising revenue. They need subscription revenue. They need money from a fund that's reliable to support this. That's why they're 9(1)(h) services to begin with.

5656 COMMISSIONER ABRAMSON: For sure. And, yeah, that's where I'm distinguishing I guess between audience data and then EPG‑style data. And I think yesterday we had some discussion around creating a bit more of an open data ecosystem where you could have maybe third parties provide discoverability and program location tools, you might call them, in order to identify where to find closed captioned programming or described or whatever it is.

5657 But thank you. Those are helpful responses. And Madam Chair, those are my questions.

5658 THE CHAIRPERSON: Thank you, Commissioner Abramson. And lastly, I'll turn to Commissioner Levy.

5659 COMMISSIONER LEVY: Just a really quick question.

5660 You did talk about having some experience with the Apple operating system. And I wondered whether ‑‑ you know, what your experience has been trying to negotiate or starting discussions with any of the other online undertakings.

5661 MR. ERRINGTON: The Apple experience is we’re just in the Apple Store and creating an app and following their guidelines. There's really no negotiation. You kind of follow the guidelines that Apple sets forth and you're done.

5662 With respect to distribution requests to other foreign services or Canadian virtual BDUs, we haven't really got there yet. I think it would be prudent to see how this hearing came out prior to doing that. It's easier to have established rules such as must‑carry, funding, however that deems to be put forth. So we were just kind of taking the hold place and Canadian virtual BDUs are really relatively new; I think they've only been around for a year now. So I think we need a little bit of help and support from the Commission to help us with those negotiations to get us on those platforms.

5663 COMMISSIONER LEVY: Are you distributing any of your programming on YouTube?

5664 MR. ERRINGTON: Yes. YouTube is the fastest growing platform with respect to audience. So having a presence there is really, really important. We're in the process right now of doing an overall review of strategy on YouTube.

5665 There's different types of content you want to put on YouTube. I see it more as a marketing tool and a discoverability tool and less of a content tool. So we're using it to show background of the actual productions that we're doing. So kind of one‑liners, interviews of the actors and actressed and that kind of thing. So that's part of it. So kind of like a behind the scenes content of the content that we're creating. We're putting that on YouTube.

5666 We're establishing some influencers from within the community. We have a couple of influencers in the community that have large followings and we wanted them to be part of the AMI influencer side of it.

5667 And then finally, we may consider putting our long form content on YouTube. We haven't done that as yet, but we would window that with a minimum of a year hold‑back on current content to make sure that it's not conflicting with our linear and our other digital products. But that's something we would do on YouTube as well.

5668 But I think it's a really, really important platform. You have to have a presence there because that's where people are going.

5669 COMMISSIONER LEVY: Thank you very much.

5670 THE CHAIRPERSON: Thank you, Commissioner Levy. And thank you both for your presentation and this conversation this morning. And we wish you a very happy Friday.

5671 Thank you.

5672 MR. ERRINGTON: Thank you.

5673 MR. GOLDSTEIN: Thanks very much.

5674 THE CHAIRPERSON: Madame la secrétaire?

5675 THE SECRETARY: Thank you.

5676 We will now connect to Zoom to hear the presentations of the next two intervenors on the agenda who will be appearing as a panel. Timeless Inc. and Anthem Sports and Entertainment. We will hear each presentation, which will then be followed by questions by the panel to both participants. We will start with the presentation of Timeless Inc. Can you hear us correctly?

5677 MR. MITCHELL: We can.

5678 THE SECRETARY: Perfect. Please introduce yourselves and you may begin your presentation.

5679 Thank you.

Présentation

5680 MR. MITCHELL: Thank you very much. Well, at least a couple of my colleagues have had substantial experience at CRTC hearings. This is my first and I'd like to formally thank the Commission and the panel for the opportunity to appear before you.

5681 My name is Scott Mitchell. I'm the CEO, owner, and operator of OneSoccer, an exempt programming service devoted to bringing the beautiful game to Canadians. I'm also the managing partner and CEO of the Hamilton Sports Group, which, amongst other properties, owns and operates Forge Football Club of the Canadian Premier League and the Hamilton Tiger Cats of the Canadian Football League.

5682 With me today is Laura Mellanby, who in her 37‑year career involving media and telecommunications has worked for Bell, Rogers, Sportsnet, and ESPN.

5683 Joining us remotely is Scott Moore, a consultant with 40 years of sports broadcasting experience, including Sportsnet, TSN, CBC, and CEO of the 2025 Invictus Games. He was on the teams that launched TSN in 1984 and Sportsnet in 1998 and served as a senior executive in both organizations, including as president of Sportsnet for eight years.

5684 Also joining us is Peter Menzies, our senior advisor, who served the CRTC as a commissioner and vice‑chair for 10 years following an award‑winning career in journalism.

5685 You've asked if the Commission's tools regarding undue preference, the Wholesale Code, and ADR are still needed. Yes, indeed, they very much are.

5686 In 2019, the Canadian Premier League launched as a Tier 1 FIFA‑sanctioned league with teams now in eight cities from coast to coast. Simultaneously, I started OneSoccer, and in September 2021, it was authorized as an exempt programming service. OneSoccer has by far the most meaningful and comprehensive package of Canadian soccer rights that exist in our market, including the exclusive rights to Canada's men's and women's national teams, the Canadian Premier League, the Canadian Championship, all CONCACAF competitions, and League One, the fastest growing men's and women's sports league in Canada.

5687 In other countries, carriage of games like these is a given, but we have only been able to secure carriage on TELUS because the largest vertically integrated BDUs, Bell and Rogers, view us as a competitor. We are very much relieved when, in broadcasting decision CRTC 2023‑94, the Commission found Rogers had exercised an undue preference and ordered them to carry us. But more than two years later, Rogers continues to delay. We submit that when the Commission orders a BDU to carry a service, affiliation payments must start 90 days after the order, which will remove the incentive to delay and prevent BDUs from attempting to starve independents into submission.

5688 Scott?

5689 MR. MOORE: Good morning.

5690 I was involved with the launch of TSN and Sportsnet; we were required to carry a certain amount of underrepresented Canadian sport. Those requirements no longer exist and now Sportsnet and TSN are dominated by five leagues: the NHL, the NFL, National Basketball Association, Major League Baseball, and the CFL. All but one of those is American‑based with the majority of teams in the U.S. and the majority of rights fees going south of the border.

5691 As Canadian sport becomes more diverse, new leagues and entrants like the Canadian Premier League, the Professional Women's Hockey League, the Canadian Elite Basketball League, and others are told by those two networks there is no room for them ‑‑ or if there is, they must pay their own way onto the networks. That model puts the financial burden on the leagues, while the networks not only avoid investing in Canadian content, they either get it for free or turn it into a direct revenue source. Remarkably, that is how it works.

5692 Because of vertical integration, Bell and Rogers, the respective owners of TSN and Sportsnet are also the BDU gatekeepers, which is why no Canadian independent sports broadcaster has been successfully launched in wide distribution by Rogers in the last 15 years or so. And yet, interestingly, Rogers was able to find room for their new VOD services in broad distribution. One Soccer is told by Rogers that there is no room for them. And as I said, Rogers still is able to launch their own services. Soccer, basketball, and women's sports are the fastest growing segments in sport in Canada. But on the current system, the diversity that they represent is woefully underrepresented.

5693 Laura?

5694 MS. MELLANBY: Our journey epitomizes that of new independents who are seeking carriage on the traditional BDU platforms where well over half the market is still consuming its content. We have to be there.

5695 We agree with others that parts of the Wholesale Code would benefit from fortification and, at a minimum, the current regulatory framework must be retained and actively enforced.

5696 Vertical integration means market forces alone will not drive carriage of independent services. We've learned that the hard way. Our opinion is that all BDUs should carry a minimum number of independent services and carriage terms should align with rates and distributions similar to the channels they own and operate.

5697 Enforcement is critical as our experience has been that certain regulatory provisions are resisted by BDUs. Packaging protections like the “Best Available Theme Pack” are not on offer to us. We've been told by BDUs that they have moved away from penetration‑based rate cards as well as revenue certainty for independents. It seems VIs do not distribute new independents widely even while they distribute their own new services that way. To that end, we recommend that the penetration‑based rate card, which overcomes these market failures, at least financially, be automatic for new independents.

5698 Every year One Soccer puts millions of dollars of investment into the Canadian broadcast sector. This has positive ongoing impacts for many Canadians and should be a key consideration of fair market value. In short, the concentration of power and the gatekeeper effects of vertical integration must be balanced. If this does not happen, new entrants will be fully deterred and new blood will simply drain away.

5699 Scott?

5700 MR. MITCHELL: Thanks very much, Laura. Madam Chair, we'd be pleased to answer yours and the Commission's questions.

5701 THE CHAIRPERSON: Thank you.

5702 THE SECRETARY: Thank you. We will now hear the presentation of Anthem Sports and Entertainment. Can you hear us correctly too?

5703 MR. ASPER: Yes.

5704 THE SECRETARY: Perfect, thank you. So you may introduce yourselves and you may begin.

5705 Thank you.

5706 MR. ASPER: Well, first of all, good morning, Madam Chair. Can you hear me properly?

5707 THE CHAIRPERSON: Yes, we can hear you very well. Thank you.

Présentation

5708 MR. ASPER: All right. So Madam Chair, Vice Chairs, Commissioners, and Commission staff, my name is Leonard Asper. I'm the President and CEO of Anthem Sports and Entertainment. With me today is David Kynes, Anthem's new President of our entertainment channels. You probably know David very well. Prior to joining us, he was the President and Co‑Founder of Hollywood Suite, one of Canada's great entrepreneurial successes, due in large part to David, but also Jay Switzer. And we have to think of him always when we think of Hollywood Suite and the Canadian broadcast system.

5709 So this is the latest addition to the Anthem family. David brings about 20 employees over to Anthem. And as I said, before that, he worked at CHUM, primarily running MuchMusic and other specialty channels.

5710 We do appreciate the opportunity to once again appear in front of you to discuss the industry. The problem with all of this is, going after Kevin Goldstein, David Errington, Scott Mitchell, Scott Moore, and Laura, I almost want to rewrite my entire submission because they said some things that ‑‑ first of all, I agree with everything they've said and I reserve the right to call them as witnesses because we're all kind of in the same boat. I hope we get a chance in the questions to talk a little bit more about some of the things you raised with them, whether it's the overall activity of the streamers because ‑‑ whether they're being here... The streamers can't be lumped into one basket. I'm a little off script here, but it's because of what I just heard. So they raised a lot of good points. So hopefully we can come back to some of them in the questioning after our comments.

5711 But we are an independent channel group. We produce content. We have been for many years. We distributed some of it and we operate seven specialty services here in Canada. We have GameTV, Game+, and the Fight Network, and we thank you very much. Finally, we now are the operators and owners of the four Hollywood Suite channels that will be operated by David Kynes.

5712 Worth noting is we also operate AXS TV and HDNet Movies in the United States, and that several of our channels are distributed internationally and on digital platforms.

5713 I’m here today because, you know, the same ‑‑ and I want to echo a lot of the comments of my predecessors today, because it’s the same issue we keep discussing. I’m glad that you opened up the process again and are having this particular hearing, because this is really the nub of the Canadian broadcasting system.

5714 It’s an integrated system, and this is one aspect of it. The funding and all the other things are part of it as well. We’ll stick to the topic today, but in my closing comments I’ll discuss the holistic nature of it and how the States can’t be siloed, as they are so far.

5715 I think it goes without saying is, and nobody disagrees, that independent broadcasters, like us, bring valuable diverse voices to Canada’s media landscape. And we deserve a shot, a better shot, at success within the broadcasting system.

5716 There have been fixes made along the way, but then events and business decisions by larger companies overtake those attempts, and we end up in a worse position through whether it’s technology or other decisions by corporates that are much larger than us.

5717 So we’re back to a world where the system, heavily favoured, big, vertically‑integrated players, leaving smaller independent voices with yet again significant structural challenges that are existential.

5718 So I know you’re reading a document that has specific words in it, but I’m adlibbing a little bit here because I don’t think it’s fair to just talk about BDUs without ‑‑ and then we’ve talked about streamers, but it used to be just broadcasters and BDUs and their potentially conflicting interests.

5719 But the BDUs are facing a massive challenge themselves, and that’s going to dovetail into some of my closing comments, because we’ve got to spend a little more time talking about the streamers. And I think some of Kevin’s comments were very important and should be dug into a little bit more about how things work on the ground.

5720 But again, just to echo everybody else, the biggest issue for independent broadcasters, whether they’re new or established, is getting carried, getting in a package that makes sense, you know, and allows us to be discovered.

5721 Despite a proven, engaged audience, whether it’s soccer or combat sports or gameshows, we encounter resistance from BDUs and streamers in carrying our channels, packaging them effectively, and making this content discoverable. There’s lots of ways they do that.

5722 It’s not a question of just packaging, it's what ‑‑ I think it was Scott who said, you know, interestingly, you know, all over the dial the BDU‑owned channels, you know, can appear every fifth channel. Whereas, you know, independent channels can appear only once. So if you’re scrolling, you always somehow land on a BDU‑owned channel. You struggle to find that one slot for the independent channel. This is one example.

5723 But, you know, it’s that whole matrix of packaging techniques that hurt the independent broadcasters. So there just isn’t enough teeth in any of the legislation or the guidelines or the policies. It just doesn’t ‑‑ there’s no ‑‑ the system just doesn’t effectively require the traditional BDUs, and especially online broadcasting undertakings to either carry or make discoverable our content.

5724 So this regulation just has to be updated, and there’s no incentive for them to do so. In some cases, they’re just being normal corporate actors. I mean, why wouldn’t they want to carry their own channels? It’s in their economic interest, they’re just being rational.

5725 Once the CRTC opened the door letting the railroad on the wheat and the oil, and the stuff they carry, of course they’re going to favour their own products, just like Loblaws is trying to push President’s Choice food in front of us instead of somebody else’s.

5726 So they’re not being bad, they’re just doing what they’re incentivized to do. So there have to be some regulations to combat that.

5727 The CRTC keeps saying the system’s got to be fair, and they’ve just got to put into place the right legislation so that the risks and the rewards are shared.

5728 THE CHAIRPERSON: Mr. Asper, could I ask you to perhaps conclude your intro remarks? Because my colleagues have a lot of questions, and we want to make sure that we have enough time, if you don’t mind?

5729 MR. ASPER: Okay. So I guess I'll say quickly, and David’s going to speak quickly too, but I guess I’ll say this; the playing field has to be levelled. Yes, we use these words a lot, but it’s just a question of, again, making the packing part fair.

5730 We recommend that there become a committee of some sort to advise the Commission on the independent sector so that we don’t have these conversations every once in a while, and there’s lots of precedent for that.

5731 You know, the one thing we also mention in our submission is the tangible benefits policy. That has to be addressed too. Charging 10 per cent of a transaction, and having the money go completely outside the acquired system is just outdated.

5732 Now, you know, what we’ll be recommending is that number be reduced, and we be allowed to spend that money on our own content, and at least split between our content and the content of the other funds that exist already.

5733 David, why don’t you try to bring us home. I’m sorry, there’s too much here before us that started my brain going a little bit off‑script, as they say. But, David, why don’t you make a couple comments from your perspective, and we’ll finish up?

5734 MR. KINES: Sure. Thanks Len. Yes, we had four key points we wanted to get across, you’ve covered the first two.

5735 Our third key point today is we urge the CRTC to consider the terms of distribution, packaging and promotion for both traditional and online broadcasters, as Len’s kind of spoken to already.

5736 The mere fact of being available on an online platform does not in and of itself lead to viewership, nor give a reasonable chance of competitiveness, especially when compared to VI content.

5737 We’re proposing an incentive‑based model. The Commission should allow BDUs and online broadcasters to receive a form of regulatory contribution credits when they distribute and promote independent services to a significant percentage of their subscribers. This would encourage meaningful carriage and meaningful discoverability, not just token compliance.

5738 Lastly, fourth of our key points today, we urge the CRTC to mandate data sharing across all platforms. Many have spoken about this today. Both traditional and online broadcasters have access to important data about where our content appears and how customers interact with it; channel placement, playlists, recommendations, first watched, these are just a few of the many many data points that are available to VI services and, of course online broadcasters. We just don’t have access to most of this information, and this creates an unfair advantage, especially given the vertical integration issues we’ve spoken to.

5739 Lastly, I’d like to just echo that we support the IBG proposal, as a bare minimum, weekly access to Numeris‑style level of information. That data wouldn’t be made public, but would help channels make informed decisions around sales, programming, and marketing.

5740 Len.

5741 MR. ASPER: Yes, just to wrap‑up here. Obviously, this requires a full update to the wholesale code. We didn’t talk about reform, but the US ad avails remain extremely important to us, so some stronger presence in US programming for independent services, you know, a portion being reserved.

5742 Very supportive, as David says about the data. I mean, I can’t tell you the number of times the conversation goes like this: “Well, no one’s watching your channel.” And the answer is, “Well, what data are you relying on?” Because Nielsen says, or Numeris says, they are. “Well, we’ve got set‑top box data.” “Well, can you to show it to us?” “No.”

5743 I mean, we should all have the same data, because it helps programming decisions too.

5744 So we just urge the Commission to revisit this whole thing. I would just say there’s ‑‑ and I am wrapping up right now ‑‑ you know, the problem with this whole process is that you’ve got the CRTC with a legislative ‑‑ you know, the Broadcasting Act, which limits its ability to do certain things.

5745 You’ve got government funding mechanisms over here and the Heritage Department over there. You’ve now go three real actors; you’ve got channels, you’ve got BDUs, and you’ve got foreign streamers. There’s never an ability of one to cross‑examine the other on the statements they all make, so everybody is agreed everybody is a victim, and we never really get to the nub of it, which is a solution where everybody’s either equally unhappy or somehow satisfied.

5746 And, you know, I’ve spent some time before this hearing talking to producers, talking to the BDUs in Canada for sure, and everybody wants this to work and the BDUs are willing to play ball, they just don’t want ‑‑ you know, they want their position, they’re competing against much larger entities, and they’re good Canadian citizens, they want the system to work.

5747 My ultimate suggestion would be I think there should be a working council of all of the parties so we can all be in the room at the same time and try to work this out. Because I think it’s just more productive and I think most are good‑hearted, reasonable people acting in their commercial interests, but who also understand there’s a bigger picture. So I think that’s the next step here.

5748 THE CHAIRPERSON: Thank you very much for this thorough presentation. And please, rest assured, that we’ve read your submissions, and so we’re ready to ask questions.

5749 I’m just going to ask you, Mr. Asper, to perhaps bring your mic a little closer to you mouth so we can better hear you. Thank you so much.

5750 MR. ASPER: Is that better?

5751 THE CHAIRPERSON: Yes, that’s much better. Thank you.

5752 I’ll turn the floor to my colleague, Commissioner Abramson, who will lead the questions.

5753 COMMISSIONER ABRAMSON: Thank you, Madam Chair, and thank you to both parties in the panel for being with us today.

5754 I’m going to try and ask you about industry situation about some of the problems you see, and about some of the solutions you propose, if I can present that to you as a bit of an agenda.

5755 So let me start with industry situation. And where I’d like to start perhaps is the relationship between your online and BDU‑based activities. You know, both parties have really focused, you know, on equity, I suppose, and fair commercial relations on the BDU platform, and it strikes me that you both have pretty busy online sets of activities.

5756 So how do you square those two sets of activities in terms of, you know, not cannibalizing your BDU revenue, but continuing to reach audiences where they are in terms of your online direct‑to‑consumer, your online platform distribution, and then your BDU distribution?

5757 MR. ASPER: Well, David, maybe you can start with ‑‑ it varies by channel, by property. But, David, maybe start with your experience with Hollywood Suite. I mean, it’s very successful on Amazon, yet GameTV can’t get onto Amazon. So there’s different stories for different channels. But I want to talk about sort of the online revenue opportunity generally. There’s a lot of myths around that too.

5758 But, David, maybe talk about Hollywood Suite.

5759 MR. KINES: Sure. So Hollywood Suite launched 13 years ago on various BDUs gradually over the years. And then six years ago, we actually just crossed our sixth anniversary of launching on Amazon Prime video channels, and that’s been great, it’s been additive, it’s worked for us, it’s worked very well for Corus, they’ve been very public about that as well. We view it as another BDU, it’s another revenue stream, so that’s worked out well.

5760 I’m 15 days into this job at Anthem, but Fight and Game+ and Game are looking for mass distribution. So wherever you can get those eyeballs, as long as they can be measured for advertising, is a plus to that business. So, in that respect, going online is additive as well. So it’s not additive for Hollywood Suite, because we’re almost entirely based on subscriber revenue.

5761 MR. ASPER: And, Commissioner Abramson, I think there’s a lot of distinctions where Hollywood Suite is a pay service, a subscription service within a subscription service. So BDUs like it because, you know, every time we sell a subscription for $6.00 or someone subscribes, they get their percentage. So we’re making them money, not costing them money, so they like that.

5762 Although, in the case of Rogers, they decided that Hollywood Suite was so good that it drove packaging ‑‑ you know, it was a package driver, so it’s been well‑placed there.

5763 So I fully acknowledge that you’ve got to have good content. You can’t just say, you know, I want to put up my content and, by definition, everybody has to carry it. But the ones in the middle like, you know, GameTV made the decision to give up its subscriber fee years ago in return for full distribution.

5764 And the conundrum is, you know ‑‑ you know, I think in the end where this has to go to help BDUs is we, as broadcasters, have to stop relying so much on subscription fees, but we can’t ‑‑ like, Fight Network can’t give up its fee and still be in a million homes or 800,000 homes out of 8 million, it’s got to get in 8 million homes, because now not only can I sell advertising, I’m not bound by any restrictions of cable or BDUs on what I do online.

5765 But we have to remember that, no matter what ‑‑ forget viewing, for example, I mean you can have millions of views on YouTube and get very little money for it. A CPM, a Nielsen‑rated, or Numeris‑rated person, is worth a lot more than a digital person to date. Now, that may change some day. And as David Errington said, it’s a marketing tool. Yes, you’ve got to be everywhere.

5766 We talked about Apple. Well, Apple, you know, you’re in the middle of thousands of channels, you’re not organized that well. They take 30 per cent, you have the cost of the developer, and some of these streamers are what they call rev share, so you don’t know how you’re doing, you never deal with the advertiser. You just get a cheque one day, and you may get a cheque that’s $1.00, maybe $3.00, and they say, well, you know, you didn’t do that well.

5767 Because you just get paid numerically, mathematically on the number of views they say you have, and where they package you. And then they start their own channels against you.

5768 So it’s not the panacea everybody thinks it is. You know, you hear these influencers, you know, who make a killing. But, you know, mostly broadcasters are not ‑‑ you know, that’s not where the answer is. Again, it’s just a branding thing. Some day it may happen that way but, you know, there’s ‑‑ because you’re getting a ‑‑ so I’ll finish‑up here.

5769 You’re getting a rev share of their entire universe, and they have a huge universe. So if you’re one‑millionth of their revenue, you’re going to get that amount of money, which isn’t very much sometimes, but it varies. Like, TNA Wrestling, we do very well online, because people love that. But, you know, this other content that ‑‑ because it’s a unique product.

5770 You know, when you’re, you know, a gameshow network, you know, online’s not your future.

5771 COMMISSIONER ABRAMSON: Got it, thank you, and that’s helpful. And timeless, you know, similar question, I suppose. You’re online, where you’re having trouble is getting BDU distribution, from your submissions, digital pennies and physical dollars?

5772 MR. ASPER: Was that for Scott or it was for ‑‑

5773 COMMISSIONER ABRAMSON: Yes, that’s for Scott, sorry.

5774 MR. MITCHELL: I think, in our case, when you look at what our business is and what our company is, you know, the overwhelming amount of the value in our platform is in live sports. You know, we have hundreds of live matches, soccer matches, that we have access to and that we distribute. We produce ourselves, in Canada, from a domestic perspective, almost 150 matches alone.

5775 I think when you look at a common theme, it’s going to be fair and equitable treatment. When you compare what our business is to vertically‑integrated BDUs, and our two biggest competitors obviously in TSN and Sportsnet, theirs is live programming as well, those are live games, live matches.

5776 I think when you look at the comparison for us and you look at fair and equitable opportunity, the overwhelming amount of their viewership obviously is through linear, and the overwhelming amount of their revenue is through linear subscriptions.

5777 You know, we need the same opportunity. The direct‑to‑consumer is important, it obviously serves an audience. Now, there’s a fair bit of the shoulder programming that goes around the live matches, which is where that is consumed, and it’s a certainly an important part of our platform.

5778 But we’re no different than the vertically‑integrated BDUs, in that the overwhelming amount of our revenue will be driven through linear subscriptions, and the overwhelming amount of consumption in Canada for live sports is through linear subscriptions.

5779 MR. MOORE: If I could add, Mr. Commissioner. That balancing the two revenue streams are like riding two elevators; as the revenue in the BDU comes down, you want to have the revenue on the digital side coming up. But let’s be clear, the revenue from the BDU side is not coming down nearly as fast as people think it is, and the revenue from the BDUs is not coming up anywhere close to what people think.

5780 And live sports is the life blood of BDUs. Live sports is what keeps people on the cable system. And currently in Canada, in the most profitable genre of the ecosystem, there are only two players and, in fact, soon to be one dominant player. And for Rogers to hold back independents, like ourselves, makes it almost impossible for new entrants and diversity of voices in the sports genre.

5781 When Rogers says that the business isn’t what it used to be and want less regulation, business must be pretty good, they just paid $26 billion for Shaw for a bunch of cable subscribers, they just doubled the amount they paid to the NHL for the NHL rights for 12 years. And they’ve just paid their star baseball player $500 million for 13 years.

5782 So the sports business is pretty good, but they have the ability to keep independents like Anthem, OneSoccer, and others out of the business.

5783 COMMISSIONER ABRAMSON: Thank you, that’s ‑‑

5784 MR. MENZIES: Sorry, if I could just throw in for a second that ‑‑

5785 COMMISSIONER ABRAMSON: Please.

5786 MR. MENZIES:  ‑‑ really, what the independents, and OneSoccer in particular, are looking for is access, discoverability, and prominence. The difficulty about balancing the revenue from online and BDUs is likely a problem they’re looking forward to having.

5787 MS. MELLANBY: I will finally add, if I may, you mentioned, Commissioner Abramson, about digital pennies. I mean, it’s our intention and we’ve been consistent to maintain rate integrity with the online providers. We are, at this time, only carried on Fubo, but we have a very good rate and penetration.

5788 In terms of cannibalization of our BDU revenues, I think, you know, that is not at all our intention or our strategy. In fact, we like to have some BDU revenues.

5789 MR. ASPER: Well, if I can just ‑‑ if you don't mind me doing another lastly here, finally, because we’re in all parts of this conversation. Game+, for example, broadcasts the CEBL games, and I happen to be associated with the league, and so I understand how the league operates. And I’m, you know, very fluent with a lot of the sports leagues.

5790 This does go back to my comment about this has to be holistic, because Game+ would love to carry every one of these sports, whether it’s rugby, soccer, women’s hockey, volleyball, whatever it is, new sports, but there’s no production subsidy for it, so somebody’s got to pay.

5791 So the leagues are trying to produce their content, but they’re not using, you know, I think to be fair, I haven’t seen a soccer game, so certainly you watch, you know, a lot of the pro‑league teams’ or the minor league teams’ games, and they’re just not as fully produced as obviously a National Hockey League game.

5792 But this is one of those genres where there’s no funding from Telefilm or anywhere else, and that’s the new drama. Like, sports is the new drama, we’ve just got to get our heads around that. And it’s not to exclude drama, real drama from it, but we would be producing way more, all of these leagues.

5793 And the way a league like OneSoccer, the CEBL, the future of it is that they have their games on their own channel, it’s on a BDU system, they have their games distributed on other channels like Game+, and then they have their own app, which is a subscription product probably.

5794 So it’s about being everywhere and having your product on every platform. But it still is vital to have your content in the 8 million to 10 million Canadian BDU homes, which then will help drive your app subscriptions and your sponsorship dollars, and all those things. So, I think it comes down to not ‑‑ you know, I’m not sure if Scott

5795 COMMISSIONER ABRAMSON: Thank you and that's helpful all that Scott, Laura, and ‑‑ so, the Scotts ‑‑ would agree with this, but I say, Don’t try to make your subscription fees off the backs of the BDUs. Just get their 8 million homes, and if there’s a small subscription fee, great, but getting access to the whole universe as opposed to being pigeonholed in some obscure sports package is the problem. And if you add on top of that funding to produce it, I know the CEBL has to pay a production fee ‑‑ you know, the deals on some of these networks are just so punitive that it’s just not sustainable. So, that’s why it’s got to be ‑‑ you know, there’s four or five issues that have to get resolved. Some of them are outside the CRTC’s scope, but certainly when you talk to your colleagues, letting us ‑‑ letting the government fund sports, unscripted, all those things would make these channels stronger.

5796 COMMISSIONER ABRAMSON: Thank you. And that’s helpful ‑‑ all that background and colour on the relationship between the traditional and the online, and I suppose what we’re hearing from you is a vision of more of a hybrid than a switch to new media system, at least for the next number of years.

5797 I was struck by a bit of a contrast in that respect, between your submissions. Timeless folks ‑‑ you wrote:

“Online undertakings are not BDUs. They are online video‑on‑demand and live event streamers. They do not receive and rebroadcast programming services. ... There is no need for ADR with an online streaming service. Therefore, the Commission should continue to be involved by providing ADR services for traditional broadcasting undertakings.”

5798 Whereas Anthem, you said:

“With regards to the streamers, we assert that these undertakings should, themselves, be considered vertically integrated. ... [They have] the same effect as those VI’s which operate in the traditional broadcasting space. We therefore recommend that the VI and Wholesale Code be updated and applied to online streamers where possible.”

5799 And I don’t want to get too deep into it, and I have heard from both of the parties here that we really ought to be paying a lot of attention to the BDU side of things, to which I want to turn shortly, but one of you wants us to focus solely on BDUs, and the other says, “Well, you need to sweep the online environment into your existing framework.” Why the difference?

5800 Maybe, Timeless folks, we can start with you?

5801 MS. MELLANBY: So, please let us clarify our perspective. In terms of sort of the virtual BDU, which we didn’t reference in our submission, we do believe virtual BDUs that do retransmit linear channels and that’s a primary strategy for them ‑‑ you know, if it looks like a duck and it quacks like a duck, it’s a duck. So, therefore, we do belief that where it is within the Commission’s jurisdiction to regulate with policies consistent to those applied to the BDUs, that they should do so. That would be our recommendation.

5802 MR. ASPER: And I think I can draw the distinction maybe even with a finer point on it. First of all, in the US, BDUs are called MVPDs, and for examples, a Sling or a Fubo would be a VMVPD, which is just called virtual, but the one thing ‑‑ one common thing they have is they are a pay subscriber service just like a cable company, and then they offer channels in packages, and YouTube TV would be an example of that. Fubo of course is one, and the internet version ‑‑ I think DIRECTV would be one. So, those are the ones that look and quack like the BDU duck. That’s what I think we’re saying should be regulated.

5803 Apple TV ‑‑ Apple, just a wide‑open platform ‑‑ the Tubi’s ‑‑ they’re advertising video on‑demand services ‑‑ you know, probably harder to do. Amazon would be a VMVPD. So, Amazon Canada would be. So, that’s the ones that are doing this ‑‑ I think are the ones we’re talking about regulating.

5804 MR. MOORE: And if I could just add the importance of sports in making sure the BDU system continues to be healthy ‑‑ I’ll give you a story that happened shortly after Rogers bought the entire NHL rights in 2014. I was involved in that. YouTube television wanted to launch in Canada. They came to us at Rogers and said, “We’d like to launch, but we won’t launch without NHL content. Will you give it to us?” And it was in Rogers’ best interests to say, “No, we’re not going to.”

5805 So, they were able to keep that American competitor out and keep the BDU system in Canada healthy by being one of the few places you can get NHL in Canada, again underscoring the importance of this genre for the health of the overall system, and why we think it’s also important to have a number of healthy players in that system, including independents.

5806 COMMISSIONER ABRAMSON: Fair enough, and thank you for that.

5807 Let me then turn to some of the remedies that both of you are proposing in terms of looking at your relationships with BDUs. And I’ll start out here with penetration‑based rate cards, simply because we talked a lot about it yesterday. Timeless, you had a proposal about it today, and the contrast is really interesting.

5808 We’ve heard in this proceeding much what you said you have heard directly from BDUs, which is that they are looking to move away from penetration‑based rate cards. Eastlink and Telus, both independent BDUs that are not vertically integrated, talked about this in particular, and I guess their focus was on seeing penetration‑based rate cards as a way of causing the BDU to retain all of the risk. And Telus spoke in particular about having to retain the risk at the same time that the programming service is able to go direct to consumer and sort of cannibalize the BDU revenue ‑‑ something that we’ve talked about and of course they are not necessarily looking to do, but it’s there.

5809 So, they want to move away, and Timeless, you said you want to impose mandatory penetration‑based rate cards. So, how do we, as the Commission, square that circle?

5810 MS. MELLANBY: We have recommended that we would like to impose mandatory penetration‑based rate cards for new independents. For us, being brand new is daunting. We are a new brand, a new service, and there is much work to do to be discoverable and to grow as we know we can grow, and we want to have a fighting chance.

5811 We need revenue certainty because we have already invested millions and millions and millions of dollars, and we will continue to invest that. The runway is shortening for us because we truly do need to get onto the BDU system so that we can be a successful independent service that Canadians want and need. We will need revenue certainty to meet our programming requirements, which are sometimes onerous in sports. Sports is very, very expensive.

5812 But generally, you know, we agree with Eastlink, for example, that the principle of shared risk and a shared reward is critical. And they have made some suggestions about how that might apply in the total universe of discretionary services. For us, a penetration‑based rate card ‑‑ and they used a number of 50 percent ‑‑ you know, with an independent BDU, we would ask to be anchored at 50 percent penetration, at least for the first five years of our carriage. Cannibalization is not a desirable outcome for us, and we agree with some of the things suggested, including, you know, ensuring that the price point for direct‑to‑consumer services is maintained at a higher rate.

5813 BDUs have always provided efficiencies of economies of scale, and that’s important to consumers. So, perhaps there is some mathematical equation that could even be arrived at where your direct‑to‑consumer, once they hit a certain penetration threshold as a percentage of a BDU’s subscriber base, that perhaps at that point the PBRC is amended or lifted.

5814 COMMISSIONER ABRAMSON: So, it sounds like ‑‑ or I don’t want to put words in your mouth ‑‑ let me ask you. Would you be willing to sort of find a way to look at your proposal and build in some of the risk factors that we were talking about, and perhaps you could put that in the final reply? Would you ‑‑ and would you go as far as ‑‑ and I’m just thinking about what we’ve heard in the last couple of days ‑‑ looking at building in a way to, I don’t know, grind down the total PBRC based on cannibalization from non‑BDU revenues? Is there some way of coming to a meeting of the minds there?

5815 MS. MELLANBY: Oh, I think indeed we could do that.

5816 COMMISSIONER ABRAMSON: That would be welcome, thank you.

5817 And then, actually, let me ‑‑ just in the interests of time, I am going to move on to one of Anthem’s proposals which I think was one of Timeless’s as well, and this is around applying what you might call “the Rogers/Shaw solution”, which saw 45 independent services be required to be carried.

5818 Anthem ‑‑ Mr. Asper, are you looking at that as opposed to the existing one‑to‑one linkage, or in addition to it?

5819 MR. ASPER: Yeah, I think it's ‑‑ it could be more than that, too. I mean, 45 was just a ‑‑ I was trying to count which 45, you know, I remember with Rogers, I mean, 45 what ‑‑ I don’t know what falls in the category of independent ‑‑ were they 9(1)(h)’s, et cetera? So, I don’t know if there is the right number. I think it probably has to be higher.

5820 I actually like a world where there is a concept of if there’s a history of contributing to the system, you kind of go back to category A and category B, which is there should be a must ‑‑ I think a must‑carry or sort of grandfathered for existing channels. There should be a separate requirement for new channels that meet certain criteria to be distributed, and I come back ‑‑ well, I mean, I’m not a fan of required penetration‑based rate card, only because I want the flexibility to do different kinds of deals with ‑‑ I mean, we have some fixed fee deals now that work just fine for us because they ‑‑ you know, as long as ‑‑ and then, BDUs also want certainty of costs, and the problem is I think that defeats that purpose. They want flexibility of packaging and they want to be responsive to consumer demands, but I come back to there’s got to be a minimum number of homes ‑‑ sorry, a minimum number of channels that BDUs carry ‑‑ Canadian channels ‑‑ to satisfy certain criteria, and there’s got to be a minimum penetration ‑‑ I think 50 percent’s a good number; it could be 60 or 70, but, you know, if every channel had, say, 4 million homes instead of 800,000 or 200,000 or whatever, then we can live with lower subscriber fees.

5821 So, the one‑to‑one ratio ‑‑ I mean, I think we argued for two‑to‑one at the same time, you know, at the time, and weren’t successful, but I think that ratio has to be looked at again. But I like the minimum number. I like the wording in the Rogers/Shaw decision about pricing, because it’s also about pricing. There’s got to be some grandfathering of pricing as well. So, I think they have to be looked at. That’s why I stated it as sort of an overall revisit of the Wholesale Code that has to happen, but so, but clearly a minimum number ‑‑ minimum penetration requirements and, you know, it’s just discoverability ‑‑ all those things, I think have to be implemented.

5822 And then, I think, you know, what we said was that there should be an incentive. I always like ‑‑ I hate taxes, I love incentives. So, you know, give them something for it.

5823 COMMISSIONER ABRAMSON: And that's the proposal to sort of credit back against their contributions a ‑‑

5824 MR. ASPER: Yeah.

5825 COMMISSIONER ABRAMSON:  ‑‑ portion of affiliation fees based on penetration.

5826 MR. ASPER: Yeah, because if you net out the fact that ‑‑ the idea would be to come up with some way of creating a system where, to the extent Rogers, Bell, whatever are reducing some spend somewhere by carrying channels here, the fact is, those channels, by being carried, are going to probably put more money into the system, whether it’s, you know, producing content, selling ads, paying income tax on that ‑‑ you know, there’s going to be a net gain, and I’m sure that could be proven very easily, and I think it’s always better to incentivize people to do what you want them to do.

5827 COMMISSIONER ABRAMSON: Got you, thank you.

5828 MR. KINES: Commissioner Abramson, ‑‑

5829 Commissioner ABRAMSON: Please.

5830 MR. KINES:  ‑‑ and not distribution, but also discoverability. That’s got to go ‑‑ because it’s fine to get carried, but then people have to find you, and as we said earlier, that’s half the challenge.

5831 COMMISSIONER ABRAMSON: Understood.

5832 And Mr. Mitchell, did you have a view on Anthem’s proposals around mandatory number of channels to be carried, but in particular around this idea of an incentive‑based penetration and affiliation payments credit?

5833 MR. MITCHELL: Well, it's a great question, and I do, but my colleague Laura will articulate it much better than I will.

5834 COMMISSIONER ABRAMSON: Thank you.

5835 MS. MELLANBY: Thank you for that.

5836 COMMISSIONER ABRAMSON: Apologies.

5837 MS. MELLANBY: We do have a perspective on both. The linkage rule of one‑to‑rule we believe strongly needs to reflect the condition that was put on Rogers during the commentary around the Rogers/Shaw transaction of 45 minimum channels. We believe that that should be extended to all BDUs, to protect the opportunity for new independents in particular to get carriage. We also agree and support the position of IBG, who recommended that in fact it be increased to accommodate the Corus channels which may not have been contemplated at that time.

5838 We have reviewed the suggestions made by Anthem. We would leave that in the discretion of the Commission to determine, of course. I think our concern would be that that money is currently being used for very important funds, and if it were to be rerouted to independent channels like ourselves who believe we’re viable without it, we think that that has to be a consideration. I mean, it could be a zero sum game.

5839 COMMISSIONER ABRAMSON: Always a risk.

5840 MR. ASPER: Just to clarify, if we said that, I guess I would be flexible on the ‑‑ like, I certainly ‑‑ the funds ‑‑ these production funds are vital to the industry, so I would say if there’s any other thing they’re doing that you can really give them relief on that, you know, doesn’t hurt content, I think that’s probably, you know, certainly a better solution. But that’s where I think this is a negotiation. It’s not, you know, us saying this and you having to go back and play judge. So.

5841 COMMISSIONER ABRAMSON: Fair enough, and I do hear you on wanting to design an incentive‑spaced mechanism for independent services penetration on the BDU platform, and not wanting to cannibalize ‑‑ to use that word again ‑‑ the programming funding that we arrange.

5842 MR. ASPER: Yeah.

5843 COMMISSIONER ABRAMON: I am going to sit there with my questions because I know we’re starting to run short on time and my colleagues will have some as well. You have done a great job of explaining and reminding of your various proposals again today, so even the ones we don’t ask about, please rest assured that we are considering carefully.

5844 THE CHAIRPERSON: Thank you. Well said, Commissioner Abramson.

5845 Very quickly, I will turn to conseillère Paquette.

5846 COMMISSIONER PAQUETTE: Thank you.

5847 I have a question that I would like to ask to Timeless. We see the cost of the sports rights doubling or tripling every 10 years, I could say. Do you see popular sport on TV becoming more and more kind of premium content, or is there a way to keep it accessible? And if it’s becoming more and more expensive, what is your opinion on this notion of accessibility to events of national importance that we are exploring, which include some sports events?

5848 MR. MITCHELL: Well, it's a great question, and I know my colleague, Scott Moore, will have some thoughts on it as well.

5849 There is no question that live sports has become ‑‑ it has always been, but it has become even more important and more vital in terms of destination viewing. It is the most important content that is appointment viewing that can’t be affected by, I think, Canadians’ behaviour in terms of how they consume other content. You can’t avoid the live sports component of it. It’s the only thing that you can consume where it’s not a movie or a show that you can consume any time you want; you have to consume the live sports at that time. It’s not nearly as much fun to watch it later, when you already know the score. So, there’s no question that you’ve seen the value of the rights skyrocket ‑‑ for those reasons.

5850 I think it’s a great question, and I’m going to answer it in a bit of a different way, that’s specific to our challenge. You know, tonight there’s a fantastic match at BMO Field for the Canadian Women’s National Team, playing Costa Rica. Our Women’s National Team is amazing. It’s one of the best teams in the world. They’ve had incredible performances and gold medals and world cup performances, yet tonight, because of our challenges with distribution through the BDUs, it really is only available to a very small audience. That game and that incredible women’s match should be available to a wide audience. And what we’ve asked for, and we’ve looked to for fair and equitable treatment, is a very modest fee in terms of distribution, both from a linear perspective as well as from an OTT perspective.

5851 So, we are trying ‑‑ you know, incredible effort to not only produce these games, but distribute these games to the widest audience possible, and I think our men’s and women’s national teams, which are ‑‑ you know, we pay significant dollars for those rights ‑‑ they deserve to be distributed to as far and wide an audience as possible. The women’s and the men’s national teams are every bit as popular as the men’s and women’s hockey teams, and we deserve the opportunity ‑‑ and they deserve the opportunity ‑‑ to have their matches consumed by as many Canadians as possible. And that is a big and important central discussion ‑‑ a central point to our discussion.

5852 MR. MOORE: You know, if I could add ‑‑

5853 COMMISSIONER PAQUETTE: Maybe if I could just ask one more question directly linked to what you just said ‑‑ even if you are carried by BDUs, if the cost of sports continue to increase, maybe at one point your channel will have to become a premium channel for which a subscriber will have to pay 20, 30 dollars per month to be able to subscribe to your channel. So, is it only a question of carriage, or is there something more here that we need to wonder about?

5854 MR. MITCHELL: Well, I think what we are looking for is the opportunity to make those decisions. And I think if you look at the behaviour of OneSoccer thus far, we’ve made those games available to as wide an audience as possible and, quite frankly, we’ve borne the complete and total cost of that because we know some of these matches are of national importance. But as we get to a healthier and healthier economic situation, there is no question there’s a benefit to both the sport and the Canadian audience to have those games available as widely as possible. I think it’ll be a great day for us when we can have those discussions about what is premium versus what’s a priority to serve the national audience.

5855 MR. MOORE: And if I could, first of all, I thank you for including sports in the definition of programming of national interest.

5856 MR. ASPER: Yes.

5857 MR. MOORE: As somebody who has been in sports interest my entire life, too often we are “the toy department,” and the programming of national interest is usually just the dramas. We used to joke, when I was at CBC, “How do we know that it’s programming of national interest in sports? Because they play the national anthem before every game.”

5858 But the accessibility versus cost ‑‑ it’s a really interesting debate because I think one of the problems with cord cutting, particularly in the US, was when ESPN just kept doubling the rights fees for the NFL and put those rights fees directly to the consumer. And we are ‑‑ certainly at OneSoccer, and I will assume Anthem ‑‑ not in that position, without broad carriage and without a decent distribution fee from the BDUs to do that. But it is something I think the Commission and the business are going to have to be mindful of as rights fees go up. We can’t just turn that back to the consumer in the form of doubling the subscription fees, because that will lead to more cord cutting, in my opinion.

5859 MR. ASPER: So, can I just, like, try to slip in, I think the distinction here, when we hear about rights fees, there’s sort of a tale of two cities because the NHLs, the NFLs, the NBAs ‑‑ massive numbers ‑‑ you know, they are must‑have properties, and without them everybody cuts the cord. So, what we see with our sports properties ‑‑ and I’m sure the Scotts and Laura are starting to feel the same thing ‑‑ is there’s no money left over to pay any other league anything.

5860 So, and that’s what we hear all the time, so it becomes either, “You pay us if you want to be on TSN or Rogers Sportsnet.” Or “Here. Here is some inventory. It’s a barter deal; we won’t pay you a rights fee, and you get some ad units to sell.” And yeah, that helps a little bit. In the case about the CEBL, I know they still have to pay Dome Productions, another bunch of money to produce the thing, so sports rights are all going to the big ones, and the lesser leagues therefore need to either have Game+ in 8 million homes so they could put their cut in on a Game+, or their own channel better penetrated.

5861 So, and it’s probably ‑‑ and then, they’re going to have an app, but no one will know about the app unless they see it on TV. It’s an integrated, holistic marketing system, and together it adds up to a good number that they can live with, but all parts of it have to be in place.

5862 COMMISSIONER PAQUETTE: Okay. I feel we could continue for hours, but since we are limited in time, I will stop the discussion here. But thank you ‑‑ thank you for your answers.

5863 THE CHAIRPERSON: Thank you, Commissioner Paquette, and I completely agree. I was about to say the same thing ‑‑ we could go on for hours. Thank you for your generosity in your replies. You should probably expect a couple of RFIs coming from this Panel, to follow up on certain points that you have raised today ‑‑ very interesting, including points of clarification on several of your very concrete proposals. We always appreciate when we have intervenors providing us with concrete proposals, and you have done just that. So, thank you very much, and we wish you a very happy Friday.

5864 Thank you very much.

5865 MR. MOORE: C’est bien.

5866 MR. ASPER: Thank you for having us.

5867 MR. MENZIES: Thanks.

5868 THE CHAIRPERSON: Madame la secrétaire.

5869 THE SECRETARY: Thank you. We will take a short break and resume at 10:45.

5870 Thank you.

‑‑‑ Suspension à 10 h 38

‑‑‑ Reprise à 10 h 48

5871 THE SECRETARY: Welcome back. We will now hear the Presentation of Canadian Independent Music Association, who is appearing remotely.

5872 Can you hear us correctly?

5873 MR. CASH: Yes, I can.

5874 THE SECRETARY: Perfect, we can so too. You may present yourself and begin. Thank you.

Présentation

5875 MR. CASH: Okay, thank you.

5876 Good morning, Commissioners and Commission staff and fellow intervenors and participants. I am Andrew Cash, president and CEO of CIMA, the Canadian Independent Music Association. Our membership includes Canadian‑owned music companies, artists, managers, publishers, promoters, industry‑adjacent service companies, and solo, self‑employed entrepreneurs from every province in the country.

5877 Having said that, my remarks today and those contained in past submissions are focused solely on the non‑francophone and particularly the English‑language market. I defer to my francophone stakeholder colleagues and their expertise in describing the realities and particular needs of the francophone‑language market in Canada.

5878 Sto thank you for inviting me to appear before you today. I come to reiterate really two central themes for your consideration under these proceedings. Firstly, market consolidation in the music sector and its potential impact on the goals of the Online Streaming Act to have a system that is effectively owned and controlled by Canadians; and secondly that, in our view, the most effective and proven discoverability mechanism to achieve the Commission's statutory goals on global digital platforms is investment in the artists and music businesses themselves.

5879 To achieve the goals of Canada's Broadcasting Policy, notably section 3 of the Online Streaming Act, we posit that the Commission must ensure that Canadian‑owned music businesses and artists can successfully work within a foreign‑owned, borderless, global online music market. This means doing what the Commission can to respond to global corporate consolidation and, crucially, how Canadian artists and Canadian‑owned music businesses engage and compete in this system.

5880 Furthermore, CIMA argues that actions that strengthen Canadian ownership and control of Canadian music and/or minimize the risk of that content being owned and controlled by foreign entities is crucial. It's crucial to a healthy, thriving Canadian cultural ecosystem and aligns with the goals of section 3 of the Online Streaming Act, and it's good for the Canadian economy.

5881 CIMA believes that the market consolidation of broadcasters and companies in the audio space is anti‑competitive and presents particular and unique challenges for the English‑language market in Canada due to its proximity to the world's largest producer of English‑language music.

5882 Recently, CIMA wrote to the Competition Bureau regarding TikTok's refusal to negotiate with Merlin, the global collective licensing body for independent music companies. Merlin's collective licensing is a crucial service for Canadian‑owned independent labels to receive better commercial terms from huge, powerful global tech platforms.

5883 But the actions of TikTok are but an example of the growing power of global tech platforms to dictate terms in the music marketplace. We have seen, via court cases and legislative tactics over the years, some attempts at delay for the introduction and adherence to regulations and a push to avoid paying altogether into the system.

5884 It's not just global tech platforms that represent consolidation in the music business, however. As we noted in our submission, companies like Universal Music Group, with an estimated market share of 45 per cent in Canada, continue to push for increased global market share through the acquisition of independently owned music businesses, the latest of which being its purchase of Downtown Music, which includes vital independent distributors Fuga and CD Baby, while also holding an ownership stake in streaming platforms like Spotify.

5885 But we don't come here today to ask for you to address global competition issues. However, we believe it's important that the Commission understands the market forces which govern the foreign‑owned global music business which operates here in Canada and how that deeply impacts the Canadian‑owned and ‑controlled music business which operates here in Canada and competes globally. As we have noted in our written submission, we submit that you are obligated to regulate a system that is effectively owned and controlled by Canadians.

5886 Given the realities of borderless digital technology, a Canadian music system that is owned and controlled by Canadians cannot possibly start with the broadcasters or the platforms themselves as it did with terrestrial radio broadcasters many decades ago. We are too far down the road. But we can put in place measures to strengthen and grow the ownership and control of Canadian music by Canadians. That means investment in artists and music businesses, like the ones CIMA represents.

5887 We submit that your lens of analysis should start with the following: how can the regulatory choices made here result in the growth and strengthening of Canadian‑owned music companies which invest in, develop, nurture, and support world‑class creative artists that compete globally, while keeping all that intellectual property here in Canada?

5888 Now, the system that we have developed over the last several decades is a proven one. When we invest directly in artists and music businesses through FACTOR, Musicaction, and Canadian Starmaker, we have seen the results. Canadian artists and companies grow their businesses, find audiences, and compete on the world stage.

5889 Competitive artists and music businesses which have the investment required to compete with foreign‑owned giants here in Canada as well as on the global market drive visibility and discoverability of content, which builds audiences, which build long‑term sustainable careers for Canadian artists. And it is in the building of long‑term, sustainable music careers of Canadian artists that best ensures that Canadian content is discoverable by Canadians.

5890 That is only going to happen if the investment is there to ensure that IP developed ‑‑ in other words, music created ‑‑ is owned and controlled in Canada by Canadians and stays that way.. And that is why there is wide‑spread consensus amongst stakeholders in the Canadian‑owned and ‑controlled music sector to concentrate on investments through existing programs like FACTOR, Musicaction, and Radio Starmaker. These are proven tools that ensure investment in Canadian artists and music businesses which, in turn, allows the IP to remain in Canada.

5891 I would be pleased to answer any questions you have about our submission or any comments I've just made. Thanks so much.

5892 THE CHAIRPERSON: Thank you very much, Mr. Cash. Really happy to see CIMA in front of the CRTC this morning, so thank you for being here.

5893 I will turn things to Conseillère Paquette, who will lead the questions.

5894 MR. CASH: Okay.

5895 COMMISSIONER PAQUETTE: Good morning, Mr. Cash.

5896 MR. CASH: Good morning.

5897 COMMISSIONER PAQUETTE: So, Mr. Cash, you mentioned in your intervention that most methods of distribution, licensing, negotiations are controlled by large multinationals which dictate market terms, you say.

5898 MR. CASH: Mm‑hmm.

5899 COMMISSIONER PAQUETTE: You also mentioned that their position limits market function for Canadian‑owned music companies and artists.

5900 MR. CASH: Mm‑hmm, mm‑hmm.

5901 COMMISSIONER PAQUETTE: As well as limiting the choice for Canadian consumers.

5902 I find your point of view very interesting, because we hear exactly the opposite from the online music services like Spotify and YouTube, who appeared in front of us this week and last week. They are telling us that they are democratizing the access to music by providing tools for the creator to easily publish their music around the world, not only in Canada, but around the world.

5903 Can you comment on this? Do you see in fact any opportunities, additional opportunities related to the access to the Canadian and international market that have emerged with these platforms?

5904 MR. CASH: Thanks for your question. And absolutely, the access is ‑‑ I mean, it is a fundamental change in the music industry over the last 20 years. And it is true that it has granted access to everyone, access to audiences all over the world and access for Canadian artists to find audiences all over the world. And that is the great opportunity here for us as a culture to kind of respond appropriately to the terms that are ‑‑ that we have before us. Right?

5905 So I don't disagree with the premise that, yes, this has created huge opportunity. And we've seen artists that would have otherwise not been seen or heard, we have seen them be seen and heard due to this. There's no question about that.

5906 But democratizing this, there's other elements to a functioning democracy. And one of them is around who owns and controls the product and how do we set forth public policy in this space that aligns with what we feel appropriate. And you can't do that effectively when, you know, right now, globally, upwards of 80 per cent of music is owned and controlled by three global companies and that streaming services are controlled essentially by just a couple. That doesn't sound like democracy.

5907 And so we're not here to say, CRTC, you know, you have to do something about the size of these ginormous tech companies. But what we are saying is this is actually what we can do here with the tools, and they are formidable and potentially awesome tools.

5908 But to say democratizing the music sector because of access, that's only half of a functioning democracy.

5909 COMMISSIONER PAQUETTE: So many intervenors from the Canadian music industry that we had so far in front of us mentioned that discoverability of the Canadian music on the streaming platform is the biggest challenge that the industry is facing. You seem to suggest that we should focus more our attention on access to Canadian‑owned and ‑controlled business. This is more a priority. Is it more a priority than discoverability? Is focusing on the existing system the solution to maintain the sustainability and viability in the long‑term basis?

5910 MR. CASH: The idea of how to discover artists and the idea around how to find audiences for your artist is job one for every artist and every music company that they work with. So that is important. That is crucial.

5911 The question is: What's the most effective way of doing that in the online reality that we now have? So we're not talking about radio, here. I think the way radio is working is working. And our position there is that it ‑‑ status quo. But on streaming services, particularly given the outsized power that they have in the Canadian market, and particularly given the fact that when you put your music on a streaming service, you're not competing just with every other Canadian artist in your genre, you know, you're competing with everyone; right?

5912 So the question is: How best can we get our artists in front of an audience? And our conclusion is that that's about long‑term investment in artists; that's about careful development of their careers; it's about smart, competitive, well‑resourced, well‑capitalized Canadian‑owned companies who know how, who have the expertise to bring those artists to market.

5913 And you know, there's a particular reality here for the Canadian music sector, which is that the more audience you have globally can oftentimes help drive your audience domestically. And those things really do go hand in hand. So I think if the priority here is discoverability, our position is this is our route. This is the most proven route to discoverability.

5914 COMMISSIONER PAQUETTE: So you stress the importance of entities such as FACTOR, Musicaction, the Canadian Starmaker Funds in promoting and making the content discoverable. Can you please expand on how these entities support the ‑‑ expand more on how they support the discoverability of the Canadian music, and is there anything that the Commission can do to support more the discoverability through these initiatives.

5915 MR. CASH: Sure. I think, first of all, it's important to acknowledge just how incredibly unique and special these programs are globally. I do have the opportunity as the president of CIMA to be in different parts of the world, and there is never a trip that I make where someone or usually many people ask me, How did you do that FACTOR thing? How did you get that happening? We want to learn that. In fact, you know, Australia is looking at it right now. So we've built something really important here and over multiple decades. And so that's the first thing.

5916 Secondly, the ways in which FACTOR, Musicaction, and Starmaker invest, they do it in multiple different ways. They invest directly in artists' recordings. They help with the cost, you know, the increasingly higher cost of touring, videomaking. But they also ‑‑ and this is crucial ‑‑ they also, particularly in the case of FACTOR and Musicaction, are investing in companies. And those companies are the ones who are out there working with artists.

5917 And, you know, it's a risky investment. And it's very difficult, almost near impossible for Canadian‑owned music companies to find domestic investors. And I think this is a really important point is that we are very vulnerable here in Canada to have our cultural ecosystem purchased by foreign‑owned entities. And it is happening. It's happening. And I think this is something that concerns me deeply, not just in terms of the cultural impact, but also the economic one.

5918 COMMISSIONER PAQUETTE: So in terms of regulatory measures, I understand that you recommend of course to continue to support these entities like FACTOR, Musicaction, Canadian Starmaker.

5919 MR. CASH: Yeah, mm‑hmm.

5920 COMMISSIONER PAQUETTE: Is there more that could be done to enhance the discoverability of our content?

5921 MR. CASH: I think that those on the ground in the industry, if given the tools and, in other words, the investment, they know we know how to deploy those tools effectively.

5922 And you know, I will just say it is very difficult to make a living in this business. It is very difficult to be an artist in this business. It's not guaranteed. And you know, those things have always been the case, and they are still the case today. You know.

5923 But I think we are at a moment in time, quite frankly ‑‑ and we saw this with the announcement of Canadian Starmaker recently, you know ‑‑ that unless this regulatory process results in the investment in the contribution from the tech sector, we're going to see a significant decline in the investments that these ‑‑ that Starmaker and FACTOR and Musicaction can make. That's where we are right now. It's not just a theoretical conversation for the future down the road. It's actually a present and real risk right now.

5924 COMMISSIONER PAQUETTE: Okay. And regarding the current market dynamics, you give the example, you mention it in your written intervention but you also referred to it in your presentation, you give the example of TikTok, which refuses to engage discussion with Merlin, the collective licensing body for independent music companies. What about the relationship between Merlin and the music streaming services like Spotify, YouTube, Amazon? What's the relationship like, and are you able to have a collective negotiation with these entities?

5925 MR. CASH: Currently, yes.

5926 COMMISSIONER PAQUETTE: Okay.

5927 MR. CASH: Merlin does do that. The concern is the precedent that TikTok has set and where that goes with other platforms.

5928 COMMISSIONER PAQUETTE: So is TikTok the only problem, or there are more problems in terms of discussions and ‑‑

5929 MR. CASH: I think TikTok is just an example of just the power of global tech platforms to set market terms.

5930 COMMISSIONER PAQUETTE: And you see TikTok as an important vector for the discoverability of music?

5931 MR. CASH: Yes. It is. I mean, you see music being discovered on TikTok every day. And again, it's important. It's a very important thing to artists and to the music industry, just as the other ones are as well, but they all function differently and have different roles. And by the way, those roles kind of shift and change over time too.

5932 COMMISSIONER PAQUETTE: Yeah, okay. And what, in your point of view, would be fair conditions for the discoverability of the Canadian music in the platforms which you ‑‑ well, not you, but Merlin negotiate?

5933 MR. CASH: What are fair conditions?

5934 COMMISSIONER PAQUETTE: Yeah.

5935 MR. CASH: You mean what are fair licensing terms?

5936 COMMISSIONER PAQUETTE: What are you looking for in terms of discoverability on these platforms?

5937 MR. CASH: Oh, I see, okay. Well, you know, I'm not party to the negotiations that Merlin has with platforms.

5938 What I do see, though, is that we're at a point here where, you know, we've built a system. And, you know, others in our sector have come before the Commission and suggested or claimed, and I have no reason to discount the claim, that Canada is the third‑largest exporter of music today, which is kind of amazing. But what needs to be stressed here is one of the reasons a country of barely 40 million is the third‑largest exporter of music is that we have invested in our infrastructure and our artists and our companies for over 40 years.

5939 That success doesn’t happen with the turn of a switch in a global platform to upload all your music. It happens because an ecosystem has painstakingly, brick by brick over four decades, been built.

5940 COMMISSIONER PAQUETTE: Okay, so it comes back to financing the industry and supporting it.

5941 MR. CASH: It really does. I mean, it’s not ‑‑

5942 COMMISSIONER PAQUETTE: Because, as an example ‑‑ and we had some representatives from the Quebec industry last week. We had ADISQ and l’apem which are suggesting to impose obligation under the form of results with, as an example, a certain penetration of the Canadian music, in the listening on each platform.

5943 What do you think of this kind of proposal?

5944 MR. CASH: Well, as I said off the top here, I defer to my Quebec and francophone colleagues and their expertise in their market.

5945 COMMISSIONER PAQUETTE: Okay. But you don't feel that this would be required or necessary for the English side of Canada.

5946 MR. CASH: I think it would be an interesting discussion to have some broad understanding of what we’re hoping to achieve here. But I don’t think ‑‑ our position has been that given all of the circumstances and all the dynamics that are happening, particularly right now, the best way forward, the most effective way forward in the English market is to maintain or increase the access to the capital investment for RS and for companies.

5947 COMMISSIONER PAQUETTE: Okay.

5948 MR. CASH: And, you know, we have some successful case studies and we also have an opportunity with some of this work to really build a stronger middle class of arts and culture workers in the arts sector and the music sector. And I think that is sometimes lost in the conversation of the Drakes and the Biebers and the Shawn Mendeses who are ‑‑ and we should be rightfully proud of all those, etc.

5949 But we’ve always had global superstars. What we are really risking is the middle class of Canadian artists, and I think that that’s a key sub‑theme of this entire proceeding and conversation.

5950 COMMISSIONER PAQUETTE: Okay. So, thank you. You express your position very clearly. I have no more questions.

5951 I believe we will see you maybe again at the next consultation on audio.

5952 MR. CASH: You will.

5953 COMMISSIONER PAQUETTE: Thank you very much.

5954 THE CHAIRPERSON: Thank you, Commissioner Paquette.

5955 I will turn things over to Commissioner Levy.

5956 COMMISSIONER LEVY: Hi. Thank you so much for being here.

5957 I was taken by a comment ‑‑ and you’ve alluded to it in the issue of Merlin versus Tik Tok. I wonder if you can expand on the anti‑competitive behaviours that you have seen online players bring into the system.

5958 What else beyond that can you explain?

5959 MR. CASH: Well, you've got ‑‑ you know, you've got three foreign‑owned multinational conglomerate music companies who negotiate their deals with the streaming services, and they include massive market power because of their market share. And that in turn squeezes every other independent music company who is trying to negotiate fair deals for their content.

5960 So, that’s step one.

5961 And then step two, you narrow closer to the Canadian‑owned companies. There’s almost no leverage except if you decide that you are going to turn to one of those multinational foreign‑owned labels to do your distribution for you. Okay?

5962 So, one of the things that is happening is that because of issues like the Merlin Tik Tok situation, it becomes less and less viable for Canadian‑owned music companies to seek independent distribution routes to market. They are, almost by necessity, being pushed into the stream that is controlled and operated by Sony, Warner and Universal, frankly.

5963 That’s one area of it. There’s just very few routes, or there’s very few options for independently owned music to get to market, other than through those massive gatekeepers.

5964 COMMISSIONER LEVY: And are you saying that those gatekeepers, when they get involved, they take some part or all of the rights to that intellectual property, so that Canadians lose the rights to their own intellectual property when they sign on with the big distributors?

5965 MR. CASH: Yeah, I'm not saying that. There's different routes here. There are, for example, over the last couple of years, significant Canadian independently owned music companies who have thousands of master recordings that have been purchased by American companies. That is the transfer, the wholesale transfer of Canadian IP to American‑owned companies.

5966 Then you have artists who are signed directly to foreign multinationals, whether they sign directly to the offices located in Canada, whether they sign elsewhere. Those masters are usually owned outside of Canada too.

5967 What happens with Canadian independent music companies, if they go through the major label distribution route, they do retain their ownership. They do retain it. That is true. But their ability to set terms or to negotiate terms is limited, if it’s there at all.

5968 COMMISSIONER LEVY: But if they are hanging onto their IP, what is the long‑range harm?

5969 They are being successful. They are making money, which is important.

5970 MR. CASH: Well, we would have to wait and see if that was the case.

5971 But what you are doing, though, is you’ve got say a major label distributor ‑‑ and by the way, our ecosystem in Canada is very dynamic, and the major labels play a very important role for many independent labels in Canada. And I’m not here to throw anyone under the bus.

5972 And by the way, a lot of those folks who work at those companies in Canada are just phenomenal boosters of Canadian music. So, it’s important for me to have that on the record.

5973 But that’s actually not what we’re talking about here. We’re talking about the ownership of things.

5974 If you are a distributor, which say Universal is, but you also own 45 or 50 percent of the masters in Canada, well, who do you think you are going to prioritize in your distribution? Who is going to get up to the front of the queue?

5975 What we need is a way to more effectively compete, and that way, in our view, is through the investments that can be made through FACTOR, Musicaction and Canadian Starmaker.

5976 COMMISSIONER LEVY: You seem to be concerned, of course, that there is a certain siphoning off of talent, distribution, etc., and that therefore some of the support for FACTOR, Musicaction, etc. is not there, is reduced?

5977 MR. CASH: I'm concerned that, for example, if contributions aren’t made into these programs, the conversation around discoverability on platforms is a moot one, because there won’t be the content to discover. There just won’t be.

5978 COMMISSIONER LEVY: So, what specifically can we do as a regulator to address that?

5979 MR. CASH: Well, I think that the decisions around contributions from platforms into the system, broadly speaking, was the right decision. I’m here to really underline our support for that and to say that, you know, this particular hearing is around market conditions, that oftentimes we talk a lot about the artists, and we will name very successful Canadian artists. But what we don’t talk about is well, who actually owns their recordings? And that’s what I’m here today to do, is to talk about the ownership and to relate it to the Online Streaming Act and the priorities underlined in that section 3.

5980 COMMISSIONER LEVY: Thank you.

5981 THE CHAIRPERSON: Thank you very much, Commissioner Levy.

5982 While I would love to engage in a deep conversation on copyright, I won’t.

5983 MR. CASH: Thank you, I appreciate that.

5984 THE CHAIRPERSON: Maybe at another time, and I’m sure you will bring the wonderful issue of copyright and who owns what in the context of the audio policy hearing.

5985 MR. CASH: Yeah, sure.

5986 THE CHAIRPERSON: But for this particular hearing, I would like to stay on the issue of discoverability and in particular the role data plays, audience and content performance data.

5987 We’ve heard many intervenors from the content creating side of things saying, you know, we need the data to be able to make informed decisions and make a compelling pitch to platform in carrying us and promoting use, etc. And then when we’re talking with the other side, for example, Apple, they say well, we don’t necessarily have the necessary data or it’s not tagged in a way that could allow us, for instance, to provide to those who ask information in terms of audience. We don’t even know how to measure Canadian content on our own platform.

5988 So it almost looks like a hot potato game. Right? It’s not us, it’s them, we need data, we don’t have it.

5989 I’m going to ask you to take a step back and perhaps give me a little bit of your sense of what the issue is around data. We’ve been asked by the Ontario Library Association to do a feasibility study so that we can establish some sort of a common standardized terminology, a one‑stop shop for aggregated data.

5990 Could you give us a sense of what’s available out there in terms of data for the sector that you represent, any initiatives out there that you would be willing to share? We are aware of the MetaMusic initiative in Quebec, which sounds quite promising.

5991 I know it’s a rather broad question, but obviously data seems to be at the heart of any kind of conversation around discoverability, which is one of the key issues that we’re looking at in this particular hearing.

5992 MR. CASH: Well, I think data and the access to it for companies to understand their markets better so that they understand how to strategize and deploy resources to develop markets and to build audiences, those things are crucial. That data is crucial.

5993 There’s a lot of metadata that is being ingested into the system now and functions on certain levels for certain streams of revenue. But we don’t know a lot about the market in Canada vis‑à‑vis the platforms, because they don’t share it. And some of that would be very helpful.

5994 I’m not in a position right now to get too detailed about that. I think that, you know, I defer to some of my colleagues, particularly on the francophone side around the data which they have, I think, eloquently communicated.

5995 But again, for the English language market in Canada around data, yes, we would like more. For example, there’s oftentimes a lot of talk about the amount of money and resources platforms like Spotify put into editorial playlists and how important that is. But we’re not really clear right now about whether editorial playlists drive discoverability at all. We do have some information that shows that algorithmic playlists and algorithmic play is much more of an important factor in the way in which music gets heard on a platform like Spotify.

5996 So if that is the case, well, that would change the way music companies attempt to get their music seen and heard on those platforms.

5997 We don’t have a lot of that kind of information readily available, and I think that’s important that we have that. And I think that sort of information is information that the platforms likely could provide if they were so apt.

5998 THE CHAIRPERSON: All right, thank you for your answer. This concludes our question period for today.

5999 Thank you again to CIMA for being with us this afternoon ‑‑ this morning. We’re not yet in the afternoon. Almost lunch.

6000 We wish you a very, very happy Friday. Thank you again, Mr. Cash.

6001 MR. CASH: All right, thank you. Bye‑bye.

6002 THE CHAIRPERSON: Madame la secrétaire.

6003 THE SECRETARY: Thank you. We will take a short break for technical tests and resume at 11:35.

‑‑‑ Suspension à 11 h 30

‑‑‑ Reprise à 11 h 35

6004 THE SECRETARY: Welcome back. We will now hear the presentation of Access Communications Cooperative Ltd., who is appearing remotely.

6005 Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

6006 MS. HAINES: Thank you. Commissioners, and Commission staff, thank you for the opportunity to appear before you today.

6007 My name is Carmela Haines, and I am the President and CEO of Access Communications Co‑operative. With me today is our Senior Manager of Community Engagement, Tracey Mucha, and our Chief Financial Officer, Sandy Bain.

6008 For nearly 50 years, Access Communications has connected people by delivering exceptional communication and entertainment services, creating opportunities for local expression as a 100 per cent community‑owned, not‑for‑profit co‑operative. Our mission is to ensure that local voices, stories, and issues have a platform, voices that otherwise would not be heard from over 200 urban and rural communities across Saskatchewan.

6009 We appear today to offer our insights into how the Commission’s objectives for this consultation, developing a sustainable model for the delivery and discoverability of diverse Canadian and Indigenous content and building a fair and competitive marketplace, can be achieved.

6010 We believe that any discussion of these objectives must include community television and local expression. Community television is a key part of the Canadian marketplace and offers a unique avenue for expression for diverse Canadian and Indigenous voices. Its funding is also less secure today than it has ever been before due to declining BDU revenues.

6011 Tracey will now discuss the key contributions community television makes to the broadcasting system.

6012 MS. MUCHA: Hello, Commissioners. I am privileged in my position in Community Engagement to witness the unique value of our community channels every day. Our community programming provides a platform for a diverse group of Canadians to have a voice on the issues most important to their communities.

6013 This includes content like arts and culture, local sports, election coverage across all levels of government, Indigenous programming, and fundraising events, all programs and narratives that are produced by and for the communities they represent, on the only platform for these collective voices. They are locally produced, locally relevant, and locally trusted.

6014 And make no mistake, a BDU community channel is not a replaceable service. YouTube, websites, online streaming, we have heard other recommendations in previous consultations, but the unique combination of easy discoverability, access to the community’s base, hyper‑relevance, and independence make community programming irreplaceable and unique.

6015 As our media universe continues to grow, the essential nature of this platform becomes more and more apparent to local communities. And even as they become more important, Canada’s BDUs are less and less able to support these platforms. We now have a backlog of diverse Canadian contributors who want nothing more than to produce content for their communities, and we are forced to turn them away due to a lack of funding.

6016 A sustainable and diverse broadcasting system must include sustainable community programming. We hope the commission can also recognize the critical need for this essential service.

6017 Sandy will now speak regarding the financial state of community programming.

6018 MR. BAIN: Thank you, Tracey. Commissioners, in our written submission, we discussed the decline of community program funding in Canada. The downward trend in community programming is a direct result of how the funding model is currently structured, as a percentage of BDU revenues. As those revenues decline, so too does the funding.

6019 For example, our total dollar contribution to community programming in 2024 was less than 80 per cent of what it was in 2017. But here’s the key point: even though the amount has dropped, we’re contributing a higher percentage of our revenues today than we did in 2017 in order to maintain the levels of community programming that our communities expect and value.

6020 In other words, we’re doing more with less. This challenge is not unique to us, the current model, which requires BDUs to contribute an increasing share of shrinking revenues, cannot continue indefinitely without causing serious harm to Canadian community programming, and to the BDUs.

6021 We respectfully ask the Commission to recognize that the old funding model no longer works. The CRTC previously relied on the BDU percentage contribution model because it provided a stable source of funding. But the reality today is very different, BDU funding is anything but stable. Meanwhile, the cost to produce community programming increases every year. Under this system, something has to give, and community programming and Canadian communities must not be the ones sacrificed.

6022 We propose that a dedicated funding envelope for community programming be established, aimed at allowing independent BDUs to continue providing opportunities for diverse local expression at the same historical levels of service. It is critical that this funding envelope be designed to grow year‑over‑year, for as long as BDU revenues continue to decline in Canada.

6023 Additionally, we recommend that BDUs be permitted to solicit limited commercial advertising on their community channels. This would provide an important supplementary revenue stream, and reflect the evolving funding realities, without compromising the community mandate.

6024 MS. HAINES: Thank you. Sandy. Community programming is one of the few remaining platforms that exists solely to reflect the people it serves. We’d like to thank the Commission for your time, and for allowing us to speak on behalf of every person involved in our community television, including our community producers, volunteers, and our viewers.

6025 We ask that the Commission recognize the critical role of community programming, and its equally critical need for support. We look forward to answering your questions.

6026 Thank you.

6027 THE CHAIRPERSON: Thank you so much to the three of you for being with us on this Friday late morning. I will turn to Commissioner Levy to lead the question period.

6028 COMMISSIONER LEVY: Hello, good afternoon. I guess it's still morning, just technically.

6029 I am interested in the communities you serve, you say 200. What’s the smallest community you serve and what’s the biggest?

6030 MS. HAINES: Oh, Regina would be the largest community that we serve. The smallest community we serve is probably Alsask. It’s really hard, because we’ve got communities that have less than 100 people, and so there’s a lot that’s lower than 100 people that are living in them today.

6031 COMMISSIONER LEVY: And Access is a BDU associated with the CCSA, I gather. CCSA probably does most of the negotiating of the carriage of your programming services, I would think.

6032 MS. HAINES: Correct.

6033 COMMISSIONER LEVY: And you have other product lines as well, right? You do home security...?

6034 MS. HAINES: Yes. We do home security, we do internet and home phone today.

6035 COMMISSIONER LEVY: So you do have some other sources of revenue. I’m not saying that that’s making up for the decline in the BDU subscriber sets. That’s really germane to what you’re talking about.

6036 But you see a continued role for community programming in this declining system. How do you see it maintaining a presence, especially as there’s the increasing presence of online platforms and what’s generally considered to be an inevitable move to online distribution?

6037 MS. HAINES: So there's a need for local programming that’s hyper local, and we do provide it on our linear TV, but we do also have an app, and we’re going to continue to evolve. But the problem with evolving is you need the funds in order for that to happen.

6038 So we have an online app today. And one of the things that we would like to do with that is to provide not just only the linear content that we have on our TV, but also the video‑on‑demand content as well. And one of the struggles that we do have is we have limited sources of revenue. And how do you maximize where those dollars are going to go to have the largest impact?

6039 We make difficult decisions today in regards to our community programming in order to sustain it at the level that we are today in regards to that. We were able to do 1,700 hours of original content. Used to be 1,800 hours. Now we’re sitting around the table going, can we still do that?

6040 Tracy had indicated earlier that there’s this demand; we’re turning away groups and saying we just don’t have the resources and the funds to continue at the level. We’re at this impasse at this moment in time, and this need is needed sooner than later.

6041 COMMISSIONER LEVY: Do you have any sense of what the impact of community TV is on your viewership? Does it really attract people to the rest of your offerings or is it a relatively niche‑oriented population?

6042 MS. HAINES: I think it's more niche‑oriented. I think it’s more impact to the communities. And I’ll give you an example. Like, we assist community groups to do fundraising, and we do this in communities such as Estevan and Weyburn, and they have a population of less than 6,000 people there. But we’ve done their telethons for them, raising over $300,000 per community. These are significant.

6043 When I go to our co‑op district meetings they come up to me and say, thank you, thank you for being there, thank you for being in our community. Because without you being there, without you broadcasting it for us, this wouldn’t happen, we wouldn’t have the reach and the impact in the communities here today.

6044 COMMISSIONER LEVY: You've talked about introducing some commercial advertising on the community channels. How do you intend to incorporate that and still maintain the very community‑oriented nature of the community channels?

6045 MS. HAINES: Yes. We see this as being a supplement, by no means to be commercial. We see it being on the beginning of the program and at the tail end of the program, with nothing in between. And the reason for this ask, because were being creative an innovative and going like how can we generate more revenue to support our community programming?

6046 We don’t see it being a major revenue source, we see it as being local. Individuals who want to support our community channel because they see the relevance and the importance that it does have to our communities.

6047 COMMISSIONER LEVY: So you are looking more at sponsorships?

6048 MS. HAINES: Well, yes, but ‑‑ more like sponsorships, but being able to do more, because they can’t ‑‑ to being able to advertise their products and their services, like a true type of ad at the beginning and the end.

6049 COMMISSIONER LEVY: Oh, so you would have like a formal kind of ad?

6050 MS. HAINES: Yes.

6051 COMMISSIONER LEVY: Okay. How do you see that impacting your peers in those areas who are also commercially driven?

6052 MS. HAINES: I see these being more people who don’t have very many ‑‑ like the dollars, to be spending on advertising on that means. So I don’t believe it’ll be taking it away, because these are small, local businesses that don’t have the dollars that they can spend those big dollars and other means.

6053 COMMISSIONER LEVY: You know, in terms of the totality of your business, moving away from community television, there have been any number of BDUs who’ve come in front of us and have asked for a lighter regulatory touch and a move to do away with a number of the aspects of broadcasting as we know it today, you know, mandatory carriage and all of those sorts of things.

6054 Do you have any views on those sorts of issues?

6055 MS. HAINES: I think mandatory carriage, it’s not so much that they don’t want to carry it, it’s the dollars that has to be paid for that. Believing in, you know, total accessibility and for all Canadians to be able to view it, but it’s becoming very hard to remain competitive in the marketplace, and not to have this fair, level playing field.

6056 So the rules need to be the same for online streamers and for the BDUs. And if the rules are the same and the playing field is the same, it makes it easier from a competitive point of view, and I think that’s the real root of the issue, as opposed to say we don’t want to be carrying or to relax the rules, but to make it fair playing rules.

6057 COMMISSIONER LEVY: I think that that's just about all I have for questions. Madam, thank you very much.

6058 THE CHAIRPERSON: Thank you, Commissioner Levy. I believe Commissioner Abramson has a question.

6059 COMMISSIONER ABRAMSON: Thank you, Madam Chair, and welcome to the folks from Access Communications.

6060 We heard the other day from your industry association of CCSA about challenges relating to signal transport.

6061 My colleague, Commissioner Levy, had a good exchange with you about all the different communities you serve of all sizes. How big of a challenge is this for you?

6062 MS. HAINES: Well, there's only a couple players in the marketplace. We’ve been lucky to date to be able to get the signals that we do require. It is a challenge when there is new signals and new programs or new networks, to get them, so those comments are correct in regards to that.

6063 COMMISSIONER ABRAMSON: How much have your costs gone up for signal transport in the last few years?

6064 MS. HAINES: We've been locked in in a contract, so it’s been fixed. I don’t know what it’s going to be when we do renegotiate. But the concern that I have is when your TV revenues are declining, and if our costs are not going to be coming down correspondingly with that, that’s going to be a major issue. And that’s a real reality, I believe.

6065 COMMISSIONER ABRAMSON: And, to be clear, in terms of different competitive options for providing that service, how many folks are you talking to?

6066 MS. HAINES: Two.

6067 COMMISSIONER ABRAMSON: Thank you. Those are my questions, Madam Chair.

6068 THE CHAIRPERSON: Thank you, Commissioner Abramson. And thank you to the three of you for being with us this ‑‑ well, for us, it’s late morning, it’s probably early morning for all of you. So thank you very much, and we wish you a very good Friday.

6069 MS. HAINES: Thank you, and thank you for your time today, much appreciated.

6070 THE CHAIRPERSON: Thank you. Madame la secrétaire.

6071 THE SECRETARY: Thank you. We will now hear the presentation of Canadian Association of Film Distributors and Exporters, who are also appearing remotely. Please introduce yourselves, and you may begin your presentation. Thank you.

Présentation

6072 MR. REBELO: Thank you. Good morning, Chairperson, Commissioners, and fellow participants.

6073 My name is Justin Rebelo, I’m the CEO of Vortex Media and a member of the Canadian Association of Film Distributors and Exporters, also known as CAFDE. I am joined by Noah Segal, Co‑President of Elevation Pictures and President of CAFDE. Together, we represent Canada’s leading independent film distributors and exporters; organizations dedicated to ensuring Canadian stories are seen both at home and around the world.

6074 CAFDE is the national voice for Canadian‑owned film distributors. Our mission is to support Canadian ownership and control, support the commercial viability of Canadian films, and ensure our stories reach audiences in every region and on every platform.

6075 As the volume of global content grows and audience preferences evolve, it has become increasingly challenging for Canadian theatrical feature films to secure meaningful visibility. Even our most compelling stories can be overshadowed or lost within platform algorithms and crowded digital libraries.

6076 Ensuring that Canadian films, and the diverse voices they represent, our discoverable is critical to maintaining a strong cultural presence both at home and internationally.

6077 To achieve this, we need targeted measures that guarantee Canadian feature films have a prominent and accessible place on every platform, allowing our national cinema to remain vibrant and relevant in a rapidly changing media landscape.

6078 With this in mind, I would like to share CAFDE’s key recommendations to ensure a thriving future for Canadian feature films and documentaries. First, we urge the Commission to explicitly recognize Category 7D, Theatrical Feature Films, as programs of national and cultural significance.

6079 These films foster national pride, cultural understanding, and industry innovation, making their discoverability and sustainability a matter of public interest. This recognition will help ensure these films receive the attention and support they deserve within the Canadian broadcasting system.

6080 Second, to address the discoverability challenge, we recommend that at least 30 per cent of prime carousel slots on digital and streaming platforms be dedicated to Canadian content, including both new releases and catalogue titles. Too often, Canadian content is buried or marginalized by algorithms that prioritize global or high‑traffic titles, making it difficult for viewers to discover local productions, even when there is genuine interest.

6081 A 30 per cent mandate will counteract this marginalization, reinforce Canadian cultural identity, and support our domestic industry, including diverse and underrepresented voices.

6082 Third, we suggest introducing a 150 per cent Canadian Programming Expenditure credit for feature films that are pre‑bought by broadcasters or platforms, as well as 150 per cent discoverability credit when those pre‑bought films are featured in prime carousel slots.

6083 Early investment by broadcasters reduces financial risk for producers, enabling independent filmmakers to secure financing and advance their projects. This dual incentive will promote both early investment and prominent placement, boosting the visibility and influence of Canadian feature films

6084 Fourth, we recommend lowering the revenue threshold for mandatory contributions to Canadian programming expenditures from $25 million to $10 million in gross Canadian revenues. Currently, only foreign online streaming services earning more than $25 million in annual Canadian revenue are required to contribute to the CanCon system.

6085 By reducing the threshold to $10 million, a greater number of streaming platforms, including smaller and emerging services, would be required to support Canadian content creation. This would increase the pool of available funding for independent film and television projects, offering more opportunities for creators who often struggle to access financing in a highly competitive environment.

6086 Fifth, robust data collection and transparency are essential. We urge the Commission to require regular, detailed public reporting on how platforms fulfill discoverability and funding guidelines for Canadian content. Transparent data and public accountability are crucial to ensure platforms are truly giving Canadian content the visibility it deserves. Without this, many independent filmmakers, creatives, and investors will continue to face barriers to reaching audiences.

6087 In summary, these measures, recognizing the significance of theatrical feature films, mandating discoverability, incentivizing early investment, expanding the contribution base, and ensuring transparency, will secure a vibrant, diverse, and globally recognized Canadian film sector.

6088 Thank you for your attention. We look forward to your questions and to working together to build a sustainable and inclusive future for Canadian broadcasting and digital media.

6089 THE CHAIRPERSON: Thank you very much, and thank you to you both for being here with us. You’re our last intervenor of the week. So it’s a prime spot in our carrousel.

6090 MR. SEGAL: Do we get a prize for that or...?

6091 THE CHAIRPERSON: Maybe we should get a prize for that, we’ve been sitting here for a while.

6092 Anyways, thank you for your submission. It does include, you know, a suite of very concrete proposals, some of which perhaps are better discussed in the CanCon hearing because they deal with funding of content. So I will not focus on those proposals. My questions will be more on the other ones, in particular your recommendations with respect to discoverability.

6093 You recommend introducing, and I quote, “incremental discoverability credits.” I suppose those credits would be against some sort of future CPE requirements placed on online platforms?

6094 I just want to understand a little more. If you could unpack how it would work, and what a platform would actually have to do concretely to qualify for a credit, how they would be calculated, would be in year of the direct contribution to fund, for example? We had a proposal coming from Friends of Canadian Media that explore that idea; if you do more on discoverability, maybe then, you know, you have to contribute less to a fund.

6095 I’m trying to figure out what the whole package would like and how you would measure success.

6096 MR. REBELO: Absolutely. Thank you for the question.

6097 I think the reason we reference the pre‑buying contribution to feature film is because it ties directly to how the discoverability would be calculated.

6098 So, imagine on a streaming platform there are ten prime carousel slots. We’re asking that three of those feature Canadian film, and if one of those slots was a film that was pre‑bought by that platform, they would get 150 percent credit within that; right? So, they could essentially reduce the number of films over time that they need ‑‑ because in a full month, they would need to calculate and report to the CRTC that they’re meeting this requirement, and every time they feature a film that they pre‑bought, they would get incremental credit, which would ultimately reduce the number of films that were featured in that, but they would get the credit for pre‑buying that film and then putting it in the prime discoverability slot.

6099 THE CHAIRPERSON: So, do you get an extra point if there is prominence given to that particular slot? Because it’s one thing to be on the slot, but if it’s complicated to find it, or if you have to go through several hoops to be able to find that information or that particular feature film, it’s less credits? If it’s the first thing that you see when you go to the home page, you get a ‑‑ could you unpack that a little bit?

6100 MR. REBELO: I think it's fairly straightforward. Again, if you imagine in a carousel environment that there are 10 prime slots ‑‑ like 10 pieces of real estate, they only get the 150 percent credit for that prime slot. As soon as it’s outside of that, it’s 100 percent credit.

6101 THE CHAIRPERSON: All right, so it needs to be both discoverable and it needs to be prominent; you need to be able to access it.

6102 MR. REBELO: Correct

6103 THE CHAIRPERSON: Okay. All right, thank you for this.

6104 MR. REBELO: That’s correct.

6105 THE CHAIRPERSON: You also recommend other types of incentives for Canadian owned and operated services for commissioning, pre‑acquisitioning, and featuring Canadian theatrical feature film. Could you expand a little bit on what those incentives would look like, specifically?

6106 MR. REBELO: So, I think again, are you referring to the pre‑buy? Is that correct?

6107 THE CHAIRPERSON: Yes. The pre‑buy, yes.

6108 MR. REBELO: Right. So, when you're financing a feature film, really where the producers need the support is at the script phase when you’re trying to get the money to make the film.

6109 THE CHAIRPERSON: M’hmm.

6110 MR. REBELO: So, what we’re asking is for platforms and broadcasters to come in with their financing ‑‑ so, pre‑buying the rights to broadcast or stream that film at the financing phase, which would then give ‑‑ for each dollar they spend, they could get $1.50 credit towards their total CPE, ‑‑

6111 THE CHAIRPERSON: M’hmm.

6112 MR. REBELO:  ‑‑ and then, that would carry down to the discoverability credit as well, as we had talked about in the last question.

6113 THE CHAIRPERSON: Okay, thank you. And in terms of measuring success, of course, data plays an important role, and we’ve talked a lot about data since the beginning of this particular hearing, and we’ve talked about how difficult it is to obtain, not sure who has it. I mentioned with the last intervenor that it was kind of a hot potato game ‑‑ nobody really wants to say whether they have it; it’s always the other guy who has it.

6114 Apple, you know, was very clear and straightforward about the fact that they don’t necessarily have the data because it depends on the content owner; it’s their responsibility to tag it so they can eventually report on what’s Canadian, what’s not Canadian. They also said that they’re doing a really, really good job in promoting Canadian content.

6115 I’m interested in getting your own diagnostic on how easy it truly is currently without the measures that you recommend, to find Cancon, and what could be done in terms of getting the data that will help you guys make informed decisions about the type of things that you want to promote, and how you measure success?

6116 MR. SEGAL: Yeah, I'll grab this one. Yeah, I think it’s ‑‑ we have to distinguish between the different types of services that have trouble chasing data. So, for clarity, we’re talking about the streaming service, not necessarily the transactional services, and in the movie and TV space, companies like Netflix ‑‑ and not to poke the bear or just use them, but they are an example ‑‑ they are actually now sharing a data dump every six months globally called “What We Watch” that is available for everybody around the world. You can go to their website, click it, and see it on a global scale, divided by each show that’s on air, whether it be a series or a feature, and then you can parse that data any way you like. So, they divide it by series and then movies, and you get the full clicks.

6117 In this case, all we’d be asking Netflix is, “Can you distinguish that just for the Canadian market, please?” And then you can do your own data dive by your Canadian content, and we can all see how well the Canadian content is faring in our market. So, if Netflix is able to do it, I’m pretty confident they all can do it. I’m having a little trouble understanding that Netflix is actually doing it and that another service couldn’t. In fact, I’m sure they can.

6118 On a streaming service, it’s built on an idea that they are licensing the product. So, they’re paying money for something. So, they are tracking it ‑‑ whereas on a transactional basis, they’re sharing revenue, so they may not have the same capabilities. So, any of these licensed deals can do that, and that’s where the greatest proportion of revenues and discoverability exists for content.

6119 THE CHAIRPERSON: Thank you. Thank you for this. It’s ‑‑ sorry, did you want to add something?

6120 MR. REBELO: I was just going to add, I mean, obviously we would need them to be transparent and report to the CRTC the requirements of those discoverability meeting those metrics; right? So, beyond the commercial reality of how something is doing, obviously that they met the requirements of the regulations, obviously would be an incremental part to that.

6121 THE CHAIRPERSON: Yes, and that could eventually be folded into their reporting on their conditions of service. I suppose that’s where you were going.

6122 All right. So, we’ve been talking about your relationships with online platforms. Can we talk perhaps a little bit about the traditional broadcasters? I’m interested in getting your sense of how things are going, the types of challenges that you face when you are negotiating distribution rights with traditional broadcasters. Is it a different game? Are the expectations different? Are there specific challenges when you are negotiating with Canadian versus foreign undertakings?

6123 MR. REBELO: So, I'll start with that and pass it to Noah, but it used to be part of the regulations that the broadcasters ‑‑ the pay television networks specifically did get 150 percent CPE credit, as well as 150 percent primetime discoverability credit for pre‑buying feature films. That was eradicated in 2016, during the Let’s Talk TV, when pay was lumped into specialty, and that has had a significant impact in the pre‑buying of feature film in this country, and really paid television was the backbone of the funding of Canadian films.

6124 And so, what’s happened, other than a number of these services have been gobbled up and others vertically integrated CPEs, but most of that money has now been filtered to television series, which is also great, but we do need an incentive for feature film in this country.

6125 THE CHAIRPERSON: And would you say, because it's been said in this hearing that the fair relationship between content distributors and BDUs is broken, and if so, what could the CRTC do to reestablish healthier, more fair relationships between these two elements of this important equation?

6126 MR. SEGAL: I'll jump in. It’s interesting because ‑‑ and I know, maybe Justin, we haven’t talked about this previously, so this is very candid ‑‑ I’m not sure it’s as relevant anymore.

6127 I think what’s ‑‑ as Justin alluded to, feature films being purchased by broadcasters is at an all‑time low globally. The broadcasters are basically trying to survive in a world that used to be 100 percent of the eyeball, and then quickly became 50 percent when the streaming services came on, and then, when YouTube and TikTok started grabbing eyeballs, the entire feature film and television landscape became 50 percent of 50 percent. So, YouTube and TikTok grabbed 50 percent of eyeballs where there are no feature films. So, the broadcasters are struggling to survive with the BDUs, and the BDUs are struggling to keep their customer base because they’re losing out to over‑the‑top.

6128 So, our primary motivation is, again, using the right colloquialism, welcoming the streamers into the ecosystem, period. We’re not that worried about the BDU conflict with broadcaster and how it impacts us, because truthfully, if any broadcaster is buying content from us, we’re happy. We’re finding it very difficult ‑‑ all of us ‑‑ to sell feature films to broadcasters unless it’s put together, bundled up with, let’s say, a Crave deal in line with a secondary CTV play. CBC is really the only broadcaster that buys en masse. In Québec it’s a bit different; it’s a little more buoyant, but I’d say it’s coming there, what’s already affected English in a significant way.

6129 So, I think our primary focus, as Justin alluded to, is less about that and more about, Okay, we’re moving to this new universe ‑‑ or we have moved, and the carousels and the recommendation from streamers that, “Oh, we don’t run the algorithms, the computers do, based on your uses,” is not real. We know that they are shepherding those carousels, and the carousels are deciding what everybody watches, period.

6130 So, I’m less concerned about BDU and broadcaster. I don’t want to get in that fray. I don’t think it really impacts us. I think it’s really clear that they would all agree that the carousel on Netflix means more than any debate about BDU/broadcaster discussion.

6131 THE CHAIRPERSON: It's very interesting. Thank you for bringing this information and this perspective to the forefront. This is very useful.

6132 I believe my colleague, Commissioner Abramson, has a question. So, I will give him the floor.

6133 COMMISSIONER ABRAMSON: Thank you. Thank you, Madam Chair.

6134 Thank you for being here, CAFDE. Let me follow up on the metadata discussion that you had. Is there a fair point being made by some of these services that there is nowhere for them to turn to programmatically identify what has been certified as Cancon, and what hasn’t? In other words, isn't there sort of just a missing element in the data ecosystem for someone to publish ISAN numbers that are Cancon?

6135 It doesn’t seem all that complicated to me. I’m just not sure that responsibility has been assigned anywhere yet.

6136 MR. SEGAL: Right, I think that's the key, is that because we’ve never really broached this, it’s quite a simple solve; right? Like, you have the data, and because Netflix has already shown publicly it’s really easy to dump that data, we just have to add something that we can all agree on is a code or a this or a that ‑‑ you know, just put “CanCon” on the end of every title, so then they do a search and it will only print the things that say “CanCon”.

6137 MR. REBELO: I mean, in the past, broadcasters just had to provide either the CAVCO number or the C number or the SR number if it was a co‑pro. So, all of that ‑‑ I’ve had certain streamers coming to me asking for that information because they’ve never collected it, but all of that information is very providable, and it’s just a responsibility they’ve never had in the past.

6138 COMMISSIONER ABRAMSON: Should the CRTC and should CAVCO just begin publishing ISAN numbers with ‑‑ and, you know, lists of ISAN numbers, I suppose, that they’ve certified, in a clear format? Is that all it would take?

6139 MR. REBELO: I mean, it used to be, right, that you could go ‑‑ between CAVCO and, you know, the C numbers, you could just go to the CRTC site and you could search it; right? I used to do that as my job ‑‑ a long time ago now. And now, between CAVCO and the C numbers, right, and finding the SR numbers, you know, it’s not as publicly available. It is on the producer to provide it to the broadcaster as a required deliverable. So, yes, it would be great if they were more searchable online, but also it should be on the supplier to provide it to the streamer or broadcaster.

6140 COMMISSIONER ABRAMSON: Sounds like a solvable problem in a number of corners. Can you ‑‑

6141 MR. REBELO: I hope so.

6142 COMMISSIONER ABRAMSON: I suppose someone has to be told they have to do it.

6143 MR. REBELO: Yes.

6144 COMMISSIONER ABRAMSON: Which we haven't done yet. Let me ask you about carousel slots. I was listening. It’s an interesting discussion, and I guess the question I was thinking about is, how standardizable is this?

6145 And I guess in two ways in particular ‑‑ I don’t know how far you’ve adventured down this road, to think about the answer to that question, but the two vectors along which I’ve been thinking about that are, first of all, to what extent is carousel slots a meaningful way of pinning down what a broad range of online streaming platforms do?

6146 And then, relatedly, how similar are carousel slots, from user to user? Are they the same for everyone in Canada? Are they personalized for each user? I don’t know the answer, and it’s a little bit unfair that I’m asking you the answer, because I guess ‑‑

6147 MR. REBELO: No.

6148 COMISSIONER ABRAMSON:  ‑‑ it lies with other parties, but you’re pitching carousel slots, so let me ask you.

6149 MR. REBELO: Yeah. I think it's straightforward. It’s actually a very straightforward mathematical equation; right? If your user system ‑‑ if the system in which, you know, again I’ll use Netflix versus Amazon versus Apple versus Tubi as an AVOD platform, there are a finite number of slots; right? And instead of trying to count up number of hours, it’s literally counting slots. It’s not dissimilar to, you know, many years ago walking down the Blockbuster aisle or ‑‑ you know, a better equivalent, Rogers Video, right, and just counting how many videos were in that number of slots. It really is a finite calculation.

6150 MR. SEGAL: And to add to that, I just ‑‑ for further clarity, I think you look at it this way ‑‑ if you look at all these services, the two primary carousels are “new to the service”, and their “top ten”. And you’re right that they’re distinguished to some extent by your input as a consumer, so if you only watch martial arts films, likely martial arts will factor into that, but the computer is factoring in your choices coupled with the manipulation provided by the service.

6151 And what I mean by that is, when a company, say ‑‑ again I’ll use Netflix as a placeholder, not ‑‑ because they all do it; it’s not Netflix, they all do it ‑‑ when they spend 250 million dollars making a movie, you can bet it’ll be on the “new to” and on the “top ten”. And so, what we’re saying is, if they can find a way to do that, because if anybody in this country can’t find the new Netflix movie when it drops in their service, they do not have the service.

6152 You can just add some sort of quotient in there that says, Okay ‑‑ as we’re suggesting, 30 percent should be ‑‑ so, if they have 10 slots, three of those 10 slots on the “new to” should be Canadian content. They can pick the three hottest or most clicked Canadian films and put that on that carousel, along with their seven other choices.

6153 And this is very similar to the way that radio programming for a hundred million years, when they had to have a certain quotient that was Canadian content played ‑‑ and I remember as a kid going into CKXL in Calgary and they showed me their very arcane computer system that wouldn’t allow them to play a certain radio track because the computer would flag, “Oh, they’d better play a Canadian track now because they haven’t done their 30 percent per hour as Canadian content.”

6154 So, it’s really not that complicated. Like Justin said, we’re talking about 20 slots, and we’re saying, you know, six of those slots should be Canadian‑centric, and just built around two decipherable aggregates, one that is truly what’s most popular, and the second, what’s truly most popular in the Canadian sector.

6155 COMMISSIONER ABRAMSON: Got you. And just to play devil’s advocate, because that’s sort of our job, is that better than a sort of more outcomes‑based approach? In other words, is there a different world where we say to folks ‑‑ and I’m not advocating that we necessarily take this approach but, you know, we put up straw men and shoot at them all day here ‑‑ to say to them, “Look, we don’t care how you accomplish it, but if 30 percent of your views are Canadian, you met the criteria no matter what you did on discoverability”?

6156 In other words, shouldn’t we be throwing it to them to get there, and if it’s carousels or if it’s something else ‑‑ or, I guess, are we microregulating here?

6157 MR. REBELO: I mean, I would say to that, you know, one of the things I’ve heard which I think is a valid point, from a number of the streamers, is there’s just ‑‑ some of these platforms have an infinite number of pieces of content on their platform ‑‑ you know, hundreds of thousands of pieces of content. There is no way that they could meet 30 percent of the total content within there because their catalogues are just that deep in many cases. So, this is why we’ve really focussed on prime slots. Again, in the old paid television universe, it used to be 30 percent in prime, 25 percent out of prime, and then they went to a more aggregate 35 percent against everything.

6158 I do think that that’s much more challenging, and I take their point, to try to do that, but I guarantee if you leave it on them to say, “30 percent, but you figure out 30 percent,” they’ll figure out the way to push it to the bottom and kind of meet it with the lowest barometer or commercial impact to them.

6159 COMMISSIONER ABRAMSON: Got it. And then playing the other side of the equation, I guess, you’re focussed on shelf space ‑‑ the analogy that most comes to mind on this one is, I guess, the beer stores and my friends in the microbrewery industry, but that’s neither here nor there ‑‑ and not other functions that folks have talked to us about, like search, like recommendations, like voice‑assisted responses to vague requests, and what I’m hearing, I think, is that, look, you’ve got to start somewhere, and carousels are a straightforward place to start. Is that a fair understanding of your position?

6160 MR. SEGAL: Yeah. Yeah, I think it is. I think ‑‑ look, like Justin said, we aren’t the specialists in retail, and they are. Right? They have a retail relationship with the consumer; we don’t. So, they probably could say ‑‑ like, just speaking for them again ‑‑ they could say, “You know what? The carousel is not as important as that frontline trailer that rolls up when you turn on your service. That’s the key metric.” Okay, you know your consumer.

6161 But ultimately, you’re right, it’s been proven over and over again at true retail, shelf space is shelf space. Right? And we know it’s a limited quantity because the consumer ‑‑ the idea of search is good, but it’s not great. I really don’t think it’s the arbiter of how to get consumers to see content, and that’s also why we do not want, very clearly, one small carousel that just says, “Canadian content”, because then we’re ghettoized into one slot, and I truly believe the trick is to integrate our content with the other, huge content that comes globally. Right? I think that’s very important.

6162 As a case in point, as a matter of practice commercially, I know folks in the US that are selling their first season episodics ‑‑ broadcasters that own the content they create ‑‑ they sell their first season of a long‑running series to Netflix at a low price so it gets on that carousel ‑‑ that primary carousel, and then it gets watched, and the streams are so high on Netflix as opposed to any other service, that it drives those people back to watch seasons 2, 3, 4, 5, and 6 on that broadcast service.

6163 And they have more than a dozen times shown how this has impacted the broadcast, and upping the ante at those broadcasters. Right? So, it is the primary barker channel, and those carousels are the primary barkers. So, I’m not sure there’s another quotient to do it. That’s all. You know?

6164 MR. REBELO: I might also add, I think, there are some streamers where the search tool is a primary function, and there are others where it’s not really a useful commercial tool. So, I would say the carousels are actually the most consistent way to be able to regulate because I think you will find that, yeah, sure, if you regulate through search function, that might impact on one, but the other one will go, “Great, no problem. You know? That’s not a primary function for us, so it’s no problem.”

6165 COMMISSIONER ABRAMSON: And just to make sure I understood correctly, Mr. Segal, I think you said that by selling content at a low price to Netflix, the producer or the seller of the content is able to obtain a better carousel position? In other words, ‑‑

6166 MR. SEGAL: Yeah, I ‑‑

6167 COMMISSIONER ABRAMSON:  ‑‑ that the low price affects ‑‑ or that Netflix’s presumably profits on views affect the carousel positioning. Do I have that right?

6168 MR. SEGAL: Yeah, I think I would say that I don’t know for sure how those negotiations ‑‑ I’m not party to any of those negotiations, but I know that those broadcasters ‑‑ historically, the original plan was, “We’ll sell everything to Netflix,” and when they realized that Netflix was going to take over the entire world ‑‑ because it’s an incredibly successful, effective service ‑‑ people starting holding their content, saying, “No, no, no, no, we need to have exclusives on our network that you can’t get on Netflix, to make sure people come back to us,” and then they realized, “Okay, we’ll put up the white flag. There is no way we ‑‑ Netflix is primary, so we have to find a way back in,” and they had to make their content attractive to Netflix, to get it back on Netflix and use it as a loss leader then, to drive back. So, I am assuming that price became sensitive at that point ‑‑ and timing. Right? So, if you’re releasing a new movie like 28 Years Later, you’ll notice 28 Days Later and 28 Weeks Later are on the streaming services now, like Netflix. Right? There’s good reason.

6169 MR. REBELO: The highest profile example thus of course being Breaking Bad; right? When Breaking Bad was ‑‑ the previous seasons were on Netflix, suddenly it started doing 10, 11, 12 million viewers on AMC. That also happened in Canada with Schitt’s Creek; right? It’s currently happening with Sullivan’s Crossing, which has just launched a new season, but the previous seasons are on Netflix.

6170 COMMISSIONER ABRAMSON: Very interesting. Well, thank you for answering my questions, and Madam Chair, I don’t have any others.

6171 THE CHAIRPERSON: Thank you very much, Commissioner Abramson.

6172 Vice‑Chair Scott has a question.

6173 VICE‑CHAIRPERSON SCOTT: Thanks very much. So, I have two questions, both on the theme of incentives, and starting with kind of where Commission Abramson left off.

6174 So, I was trying to get a sense of, for the online streamers, what incentives are they responding to when they’re filling their carousel, absent any regulations? So, first and foremost, I have to assume that user experience and kind of giving customers content that they want is there. You’ve posited that there is a self‑preference motivation as well. Are there other incentives? What would you think goes through their mind as they are trying to fill their carousel?

6175 MR. REBELO: I mean, I think currently because they're unregulated, it is really a commercial viability thing, you know, and it’s gone noticed that when there are hearings, we get calls to licence more Cancon, and suddenly it’s more prominently featured on various platforms, streamers ‑‑ we’ve seen that. But own, I do think most of these streamers are driven just by commercial best user experience and the prominent content that they think works for their user base.

6176 Would you expand to that, Noah?

6177 MR. SEGAL: Yeah, the only thing I would add to that is that, yeah, it is a commercial thing, and it’s very hard to argue against that, right, in a world of a capitalist free country. Why can’t they just do what they want to do? But I’d say what it is ‑‑ the problem is there used to be 30 doorways to go to, to put your content up and see if it performed, to get the eyeballs, but with less and less choices ‑‑ like, I’ve heard from one streamer historically once, and I won’t say who it was, “Yeah, we need to be a ‑‑ like, the content we’re being offered, which is everybody’s content ‑‑ like, if you’re not, like, Dark Knight Returns, which did 300 million dollars at box office, I don’t know if we can program it.” Right? So, where does that leave us all? Right? Nowhere to go.

6178 VICE‑CHAIRPERSON SCOTT: Right. And is there a risk, though, that in imposing these new requirements, we would also be devaluing the customers’ experience?

6179 MR. SEGAL: I don't think so at all, because again, all we're asking for is a percentage of their carousel. Right? They talk about the idea that their commercial valuation for consumers ‑‑ “Look, we have everything, and if you can’t find it on the 10 carousels, you can just search it.” So, there is no devaluation for consumer. The only thing is, I guess you could argue from their position, “Well, we have 10 slots that are primary real estate, and you’re asking us to give a portion of those away?” But I would argue it doesn’t seem to stop people from finding content eventually, if they really, really want it.

6180 MR. REBELO: Correct. I would also add, I think by adding an incentive that’s at the financing of a film stage, that’s going to help producers in this country make better movies and really support the stories that have commercial viability, because at that stage you’re going to be in a conversation with the end user and they have valuable information that’s going to be able to direct you creatively to making the best content for their platform.

6181 VICE‑CHAIRPERSON SCOTT: Okay. Yes, and I did want to ask you about that incentive measure that you proposed as well ‑‑ the 150 percent. Any time I see incentives, I worry about, well, what if it doesn’t work at all, or what if it works too much? Can you speak to why 150 percent is right in the middle? What kind of uptake would you expect? Is there a risk that if it’s too successful, by giving that multiplier, we actually decrease the total amount of benefit ‑‑ so, yes, we’re getting more movies, but we’re getting less of something else? Or is there a risk that, you know, 150 percent doesn’t actually move the needle at all, and we’ve created a regulation without any effect?

6182 MR. REBELO: I think at the end of the day, while feature film is a powerful tool, you know, there’s still a different experience to the television series; right? So, we are not proposing that that incentive exists for television series; it’s very rare that a TV series gets made without the commission from that broadcaster or streamer. So, it doesn’t need the incentive. And it’s such a different experience that I don’t think it’s going to meaningfully take away from licensing TV series.

6183 What I do think will happen is there will be, as these streamers grow and, you know, again we’re talking about the CPE being relative to their gross revenue ‑‑ 30 percent of their gross revenue ‑‑ you know, they’re going to want to try to find a way to make themselves more profitable, and how better to do that than to take some money, redirect it to feature film to get that incentive, and they’re going to want ‑‑ because they have to do it and they have to give away their prime carousels to do it, they’re going to want the content to be as commercial as possible because they want that Canadian film to sit next to The Dark Knight Returns and feel welcome and integrated. So, I think it will be very effective.

6184 MR. SEGAL: I think also, again, this is consistent ‑‑ to your point, there is a mathematical possibility of what you’re suggesting, that it ‑‑ you know, they pre‑buy everything and we get less. Right? But I think that ultimately, I think at CAFDE, what we tried to do when we submitted to you guys at the CRTC was we tried ‑‑ our approach was try to give you something ‑‑ we established the problem, we established a solution, and we tried to make the solution that we’re suggesting easy to administer, meaning, well, let’s look at past practices, and what Justin proposed here was something that existed for the longest time and really worked.

6185 So, we understand that we’re no longer in a pay TV/free TV world; we’re in a streaming world, and so there might be a different quotient at the end, but we do think it did work historically, and we think ‑‑ because nobody knows, nobody has a crystal ball ‑‑ it should work going forward. We’re just trying to create some form of incentive for them to believe in Canadian content’s potential, and we think that if this was overly successful and we had that thing where they only pre‑bought, we’d be the best country in the world to make content in, because we’d be the people that would be able to get content greenlit, which in the world of making content right now, is the hardest thing in the feature film space.

6186 VICE‑CHAIRPERSON SCOTT: Great. Thank you very much for your expert answers.

6187 Madam Chair, those are my questions.

6188 THE CHAIRPERSON: Thank you very much, Vice‑Chair Scott, and thank you to both of you for your participation in our hearing today and the generosity of your replies. It’s much appreciated. We wish you a very happy Friday. Thank you very much ‑‑ and Happy Canada Day.

6189 MR. SEGAL: Thank you.

6190 MR. REBELO: Thank you very much. We appreciate your time.

6191 THE CHAIRPERSON: Thank you. Madame la secrétaire.

6192 THE SECRETARY: Thank you.

6193 MR. REBELO: Have a great weekend.

6194 THE SECRETARY: The hearing is adjourned for the day, and we will resume at 9:00 a.m. on Wednesday, July 2^nd. Thank you.

6195 LA PRÉSIDENTE : Je profite de l'occasion pour remercier toute l'équipe encore une fois, toujours fidèle au poste. Je remercie mes collègues et je souhaite à tout le monde une excellente bonne fête du Canada Day. Merci beaucoup.

‑‑‑ L'audience est ajournée à 12 h 30 pour reprendre le mercredi 2 juillet 2025 à 9 h 00

Sténographes
Ada DeGeer-Simpson
Monique Mahoney
Lynda Johansson
Tania Mahoney
Brian Denton