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Canada Media Fund – Policy Changes for 2017-2018

In March, 2017 the Canada Media Fund (“CMF”) released its policy changes for 2017-2018. There are several key policy changes and initiatives that are important to know for anyone seeking CMF funding.

CMF has chosen to focus its policy for 2017-2018 on the following key initiatives: gender parity, support for Aboriginal Peoples content, developing diversity, and expanding digital content.

Gender Parity:

CMF has added new incentives and mandatory requirements aimed at increasing the presence and influence of women in the Canadian film and television industry.

To determine who is awarded funding, the CMF uses a points-based system. Evaluation criteria vary for different programs, but all programs are based on a 100 point scale. The CMF will now award three (3) points to any project where at least 40% of the following key positions are held by women: Producer, Executive Producer, Director (including Technical Director, Creative Director, and Interactive Director), Senior Programmer, Designer, and Project Leader).

Broadcasters are now required to direct 15% of their respective Performance and Development Envelope Allocation dollars to projects in which women hold at least 40% of the Producer, Director, or Writer positions. This 15% will increase to 25% in 2018-2019, and 35% in 2019-2020. If Broadcasters do not meet this minimum requirement, the CMF will impose a dollar-for-dollar penalty in the following year’s funding.

Developing Diversity and Support for Aboriginal Peoples Content:

Applicants to the CMF must apply under one of two streams: the Convergent Stream or the Experimental Stream. The Experimental Stream is much smaller and contains the Web-Series Program, and the Commercial Pilot Project Program.

The Convergent Stream funds content that is produced for distribution on at least two platforms, one of which must be television. Therefore, an application for Convergent Stream funding requires a Television (“TV”) Component as well as an accompanying platform (i.e. Digital Media (“DM”) Components, Video-on-Demand presentation of the TV Component, or digital distribution of the TV Component).

Starting in 2017-2018, the requirement for an accompanying platform no longer applies to projects in the Development Program, Aboriginal Program and Francophone Minority Program.

Expanding Digital Content:

Beginning in 2017-2018, DM Components must be associated with a TV Component that is funded by the CMF in the same fiscal year. It is no longer possible to come to the CMF with an unfunded TV Component and receive DM Components funding.

To expand its Web Series Pilot Program, in addition to increasing the amount of funding available, the CMF has added Documentaries to the genres that are eligible to receive CMF funding.  Previously, funding was restricted to the genres of Drama and Children’s and Youth.

The Convergent Digital Media Incentive (“CDMI”) is designed to encourage the production of DM Components that are related to CMF-funded television productions to give Canadians access to programming on different platforms. Previously, projects applying for the CDMI were selected on a first-come/first-served basis. Now, projects will be selected according to the criteria listed in the CDMI Evaluation Grid.

The distinction between “value-added” and “rich and substantial” DM Components has been removed for applying for development funding. In addition, DM Components (if applicable) will now be submitted with the TV Component’s application.

Other Changes:

Other Rights (now renamed “Other Exploitation Rights”): In addition to the right to broadcast a show on TV and to make it accessible through CRTC approved Video-On-Demand services, there are numerous other ways a broadcaster may exploit a project. Some of these “Other Exploitation Rights” have been enumerated by the CMF and include the following:

  1. Free Internet broadcast/distribution;
  2. Advertising Video On Demand (“AVOD”);
  • Paid Internet broadcast/distribution;
  1. Subscription Video On Demand (“SVOD”);
  2. Mobile/wireless distribution;
  3. Original digital content rights;
  • Electronic sell-through and/or digital rental;
  • DVD, Blu-ray, or other compact video device distribution;
  1. Theatrical distribution;
  2. Non-theatrical distribution (e.g., educational institutions and airlines);
  3. Merchandising and ancillary rights.

Previously, some broadcasters used these Other Exploitation Rights to access additional revenues, even if they had not made an investment in a project. To close this loophole, the CMF has clarified that Other Exploitation Rights applies only to various subsidiary and ancillary exploitation rights of a project, and that a broadcaster may only recoup on exploitation revenues if they are making an investment in the project.

License Fee Thresholds (“LFT”): Broadcasters must pay a license fee in exchange for the right to broadcast a TV show. To receive CMF funding, the CMF requires that the license fee must be worth a pre-determined minimum amount—this amount is the LFT. There are many categories of LFT, a full list of which is available here.

Beginning in 2017-2018, French Drama, Mini Series is no longer an exclusive category of LFT, but is now merged with other LFT’s in French Drama.

The “English Documentary (all projects, excluding feature-length, $750K/hr or more)” category has merged with the “English Documentary (all projects, excluding feature-length, $400K/hr to $750K/hr)” category, and the $750K/hr cap has been removed. French Documentary categories have also merged in the same respect.

Applicable Language: Previously, there was no distinction between live-action and animated series when determining a project’s original language. Now, the original language of animated productions will be determined by the language of the Broadcaster with the highest Eligible Licence Fee for the project.

Elimination of Broadcaster Convergence Requirement: Broadcasters are no longer required to spend 60% of the Development Envelope allocation on projects with a “rich and substantial” DM Component or to have a minimum of 60% of their projects include a DM Component which meets the CMF’s standard for “value-added” or “rich and substantial” content.

English Regional Production Bonus (“ERPB”): Previously, the ERPB was awarded on a first-come/first-served basis, while no province could access more than 35% of the allocation for the ERPB. These restrictions no longer apply to applicants that are awarded funding through the English POV Program or the Aboriginal Program.

Please note that this post does not constitute an exhaustive list of the CMF policy changes for 2017-2018; although it does, in our opinion, cover the most significant ones. A complete list of the CMF policy changes can be found here.

Edwards PC, Creative Law is a boutique law firm provides legal services to Music, Film, Animation, TV, Digital Media, Game, Software and Publishing industry clients. For more information and blogs, please visit www.edwardslaw.ca

© 2018 Edwards PC

* This blog is for general informational purposes only and is not to be construed as legal advice. Please contact Edwards PC, Creative Law or another lawyer, if you wish to apply these concepts to your specific circumstances.

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