Profile 2017

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3 Prepared for the Canadian Media Producers Association, Department of Canadian Heritage, Telefilm Canada, Association québécoise de la production médiatique Production facts and figures prepared by Nordicity Group Ltd.

4 is published by the Canadian Media Producers Association (CMPA) in collaboration with the Department of Canadian Profile 2017 Profile 2017 Heritage, Telefilm Canada, the Association québécoise de la production médiatique (AQPM) and Nordicity. marks the 21st edition of the annual economic report prepared by CMPA and its project partners over the years. This report provides an analysis of economic activity in Canada’s screen-based production industry during the period April 1, 2016 to March 31, 2017. It also provides comprehensive reviews of the historical trends in production activity between the fiscal years of 2007/08 and 2016/17. At the Department of Canadian Department of Canadian Ottawa At the CMPA: 251 Laurier Avenue West, 11th Floor Heritage: Heritage Susanne Vaas Ottawa, ON K1P 5J6 25 Eddy Street Runa Angus Vice-President, Gatineau, QC K1A 0M5 Tel: 1-800-656-7440 / 613-233-1444 Corporate & International Affairs Manager Tel: 1-866-811-0055 / 819-997-0055 Email: [email protected] Film and Video Policy and Programs Nicholas Mills TTY/TDD: 819-997-3123 cmpa.ca Wayne Timbers Director, Research Email: [email protected] Manager Toronto canada.pch.gc.ca Film and Video Policy and Programs 160 John Street, 5th Floor Mounir Khoury Toronto, ON M5V 2E5 Policy Analyst Tel: 1-800-267-8208 / 416-304-0280 The Department of Canadian Film and Video Policy and Programs Email: [email protected] Heritage contributed to the Justin Ciavarella funding of this report. Its content Policy Analyst Vancouver represents the opinions of the Film and Video Policy and Programs 736 Granville Street, Suite 600 authors and does not necessarily Vancouver, BC V6Z 1G3 represent the policies or the Vincent Fecteau views of the Department of Senior Research Analyst Tel: 1-866-390-7639 / 604-682-8619 Canadian Heritage or of the Research and Policy Email: [email protected] Government of Canada. Peter Mann Senior Policy Analyst CAVCO 1470 Peel Street, Suite 950, Tower A 360 St. Jacques Street nordicity.com Montréal, QC H3A 1T1 Suite 500 Montréal, QC H2Y 1P5 Nordicity Group Ltd. Nordicity is a leading consulting Tel: 514-397-8600 telefilm.ca firm specializing in policy, Email: [email protected] Senior Partner Peter Lyman, strategy and economic analysis aqpm.ca Partner Dustin Chodorowicz, At Telefilm Canada: in the media, creative, and information and communications Kristian Roberts, Partner At the AQPM: Richard Beaulieu technology sectors. Specialist, Intelligence and Analysis Senior Manager Stephen Hignell, Hélène Messier President and CEO Marie Robillard Emily Mcrae, Research Analyst Analyst, Performance and Data Integrity Research Analyst Balvinder Chowdhary, Carolyn Pennell Tara Rajan Analyst, Strategy and Research 2 Profile 2017

5 CONTENTS 7. 4 ... At a glance: Screen-based production in Canada 77 ... Foreign location and service production Total production and types ... 79 6 Introduction ... Region ... 81 Country ... 82 1. ... 13 Overview of the screen sector in Canada Film and television production in Canada ... 14 8. Broadcaster in-house production 83 ... 15 ... Total volume Production volume ... 84 Region 17 ... Genres ... 85 ... 18 Consumers’ media consumption patterns Region ... 86 20 On-demand services ... 9. 87 Convergent digital media production ... Economic Contribution ... 22 2. Volume and activity 88 ... 23 Film and television production ... 90 Production supported by the Canada Media Fund (CMF) 23 ... Employment by segment 92 10. Distribution ... ... Employment by region 24 25 ... GDP and labour income Revenue ... 93 ... Foreign investment in production 26 Investment in Canadian productions ... 95 27 Economic impact across the screen sector value chain .. 11. Television Broadcasting and Audiences ... 96 Summary of employment and GDP impacts 28 ... ... Revenue 98 3. ... Canadian content production 31 99 ... Investment in Canadian programming Language ... 32 . . . . . . . . . . . . . . . . . . . . . . . Top television programs 100 Genre ... 33 ... 103 Audience share 35 ... Animation 12. Theatrical exhibition and audiences 104 ... Financing ... 36 Total revenue ... 106 4. Canadian television production ... 38 107 Film festivals ... 39 ... Types National box office trends ... 109 40 ... Language Box office by linguistic market ... 112 Genre 41 ... ... Top feature films by language of presentation 113 44 ... Budgets Feature film viewing on television and alternative ... Animation 46 115 platforms ... Canadian content points ... 47 118 Broadcasting distribution undertakings ... 13. Region ... 48 48 Canada Media Fund ... 119 ... BDU subscribers and revenue Financing ... 51 Investment in Canadian programming 121 ... 5. Canadian theatrical feature film production ... 58 Notes on Methodology ... 122 59 Total production and average budgets ... Language 62 ... Glossary ... 127 Genres 63 ... Region ... 63 Telefilm Canada funding ... 64 Financing ... 66 Audiovisual Treaty Coproduction ... 68 6. 69 ... Television 72 Feature film ... ... 74 All release windows 3 Profile 2017

6 AT A GLANCE Screen-based Production in Canada The screen-based production industry in Canada is a major source of economic activity and jobs for Canadians across the country. The industry comprises film and television production as well as convergent digital media production. Total Film and Television Production in Canada + + + + 27% 24% 24% 41% FOREIGN INVESTMENT PRODUCTION FULL-TIME GROSS DOMESTIC VOLUME PRODUCT (GDP) EQUIVALENT JOBS IN PRODUCTION $8.38 B $12 B 171,700 $4.67 B The Screen-based Market in Canada Number of subscribers to Population of Canada (2016) Number of paid admissions to movie broadcasting distribution theatres in Canada (2016) 1 36.7 million undertaking services (2016) 3 100.1 million 4 Per-capita volume of film and 11.1 million television production in Canada Number of television services • Cable-television (2016/17) available in Canada (2016) 4 6.5 million 4 780 $228 • Internet protocol TV (IPTV) Canadian television services • subscribers Number of private households 4 4 453 2.5 million (2011) Direct-to-home satellite (DTH) • Non-Canadian services • 2 13.3 million and multipoint distribution 4 327 systems (MDS) subscribers Number of movie theatre screens in 4 2.2 million Percentage of households Canada (2016) subscribing to broadcasting 3 2,641 distribution undertakings (2016) 4 76.2% Sources: 1. Statistics Canada, CANSIM table 051-0001. 2. Statistics Canada, 2011 Census of Population and Statistics Canada, catalogue no. 98-312-XCB (most recent available data). 3. Statist ics Canada, CANSIM table 361-0070. 4. CRTC, Communications Monitoring Report 2017. 4 Profile 2017

7 Screen Production in Canada FOREIGN CANADIAN CONTENT LOCATION (FILM AND TELEVISION) AND SERVICE $3.30 billion $3.76 billion +16% +42% in production volume in production volume $2.99 billion 183 +16% +43% in television production theatrical feature films -5% $318 million 149 +14% in theatrical film production television series <-1% 723 86 +21% television series TV movies, mini-series, pilots and other types of television programs -12% 92 theatrical feature films 77,000 +40% full-time equivalent jobs 67,800 +15% full-time equivalent jobs 39.1% 44.5% TOTAL FILM AND TELEVISION PRODUCTION VOLUME $8.38 BILLION 0.8% 15.6% CONVERGENT DIGITAL BROADCASTER * MEDIA IN-HOUSE $1.32 billion $68.9 million +5% +5% in production volume in production volume -13% $693 million -19% 264 in conventional television projects expenditures $261,000 -2% +30% $623 million average project size in specialty and pay television expenditures 1,070 +2% full-time equivalent jobs 27,000 +4% full-time equivalent jobs Source: Canadian content: Estimates based on data collected from the Canadian Audio-Visual Certification Office (CAVCO) and the Canadian Radio-television and Telecommunications Broadcaster in-house: Association of Provincial Funding Agencies (APFA). Foreign location and service: Commission (CRTC). Estimates based on data from CRTC and CBC/Radio-Canada. Convergent digital media: A Estimates based on data from Bell Fund, Canada Media Fund (CMF), Ontario Media Development Corporation (OMDC) and Shaw Rocket Fund and a survey of CMP and AQPM members. * Convergent digital media production includes content developed for digital media platforms and integrated with a traditional audiovisual product (typically a television series) in order to enhance or deepen the audience experience of screen-based content. 5 Profile 2017

8 Introduction THE CONTENT EXPLOSION st It could be said that the 21 century world is one of massive production capacity, a time of scarce scarcity, an “age of 1 st This was true in 2016/17, as the 21 illustrates. Indeed, if there is a common thread edition of Profile abundance.” linking the various elements of the screen-based content sector in Canada, it is the content explosion. It is global viewers hungry for quality screen-based content. It is the proliferation of channels and platforms to deliver that content. It is the surge in production volumes and employment in Canada’s industry. For a sector that contributed over $12 billion in gross domestic product (GDP) to the Canadian economy in 2016, this explosion is exciting, and concerning. Profile 2017 tells the economic story of that development, providing market, technology and policy context for the numbers. The theme of last year’s Profile was transition, tempered by both uncertainty about evolving business models in production, distribution and content exploitation. This year, it is clearer that the demand for content is there. What remains unclear is how the content creation business models – currently prevailing in Canada – and supporting government policies can meet this demand in a sustainable manner. From the Canadian content user’s perspective, there has never been such an abundance of screen-based content, and ways to engage with it. Cumulatively, over the past five years, Canadian content creators have produced over 3,800 new television series and mini-series, over 1,200 theatrical feature films and television movies, and nearly 1,600 convergent digital media (CDM) productions. Each year, on average, 1,300 new Canadian content productions are added to Canada’s cumulative inventory of screen content. In 2016/17 alone, the industry produced 1,188 new television projects (i.e. series and other programs), 92 theatrical feature films, and 264 CDM productions. Production volumes in Canada in 2016/17 reached an all-time high of $8.38 billion. More Ways to Engage, and More Engagement Moreover, there have never been as many ways to experience this content. Canadians have access to nearly 800 television channels, more than half of which are Canadian, including public and private conventional, specialty, pay, video- 2 We can watch theatrical films on more than 2,600 screens in on-demand (VOD), community services, and others. 3 While much is made of the predominance of Netflix and Amazon Prime in the subscription VOD movie theatres. (SVOD) world, Canadians, in fact, can subscribe to more than 30 SVOD services, including Canadian services such as 1 See for example UK science broadcaster James Burke’s preface to Andrew A. Adams and Rachel McCrindle, Pandora’s Box: Social and Professional Issues of the Information Age (Chichester, UK: John Wiley and Sons, 2008). 2 CRTC, Communications Monitoring Report 2017. 3 Statistics Canada, CANSIM table 361-0070. 6 6 Profile 2017 Profile 2017

9 INTRODUCTION 4 Social media sites including Facebook, Snapchat Club illico and Sportsnet NOW – with more announced for 2018. and Twitter are all licensing and streaming video content – in addition to other ad-driven video content we stream on millions of apps and websites worldwide. These content outlets are, of course, supplying an avid public. Adults in Canada now watch an average of 28.2 hours 5 And we of traditional television per week, along with another 3.1 hours per week of television programming online. are not just watching video content – we are engaging with it. Even when we multitask while watching video, our multitasking is often video-related. We are having conversations (via social media, text, and voice) about the video we are watching, we are reading Twitter feeds from the characters in the video, we are playing a show-related interactive game, and we are visiting show-related websites. Indeed, non-traditional content companies have joined the screen-based video world. It takes deep pockets for a company to buy or create large libraries of video content, and companies like Facebook, Apple, and Amazon have the resources to build their own video content “war chests,” with Apple alone reportedly preparing to spend US$1 billion 7 6 and Twitter competing with Amazon for programming rights to live events. This next year on global video content, spending is apart from the reported US$7 billion anticipated to be spent by Netflix, and US$4.5 billion by Amazon 8 Prime, on global content. As we move away from ad-driven television and toward online and on-demand content, the form of video is shifting, too. Content creators can pace their video, and work with shorter formats, according to the creative needs of the story, rather than according to the imperatives of ad insertion. As a result, consumer-oriented video formats can range from 9 feature-length films to 23-minute episodic video, 2-minute animation clips, and even 44-second “SnackableTV”. The World Comes to Canada... The content explosion is a global phenomenon, bringing opportunities to Canadian creative talent, crews, producers, and distributors. The evidence? More than $3.7 billion in foreign location and service (FLS) production in Canada 10 Every province involved in FLS production saw an increase over last year: – the highest level this country has seen. British Columbia (46% increase), Ontario (23% increase), Quebec (43% increase), Manitoba (67% increase), Alberta (59% increase), Nova Scotia and the Territories (more than 200% increase). The draw for foreign producers and studios was once the favourable currency exchange rate. Now, they come to Canada mainly for the competitive incentives, skilled crews, award-winning creative talent, state-of-the-art technical facilities, and exceptional locations. More evidence: the international coproduction treaties with 55 countries and memoranda of understanding (MOUs), and $503 million in treaty coproduction activity in 2016. Most of this activity over the past 10 years has been with the UK, France, Australia Germany and Ireland, although Canadians also coproduced with a host of other countries including South Africa, Brazil, China, Israel, Singapore and the Philippines. Canada aims to remain a coproduction partner of choice and continually seek new partner countries. Recognizing the importance of global markets and the value of Canada’s coproduction treaties, the Canada Media Fund (CMF) has pursued bilateral co-development and coproduction agreements, setting aside modest funding envelopes for projects involving Canadian and Irish, Colombian, German, South African, Brazilian, Italian or New Zealand producers, with further such bilateral arrangements being contemplated in the future. And by becoming the first non-European country to join the Council of Europe’s Eurimages fund, in 2017, Canada is building more global opportunities for our screen-based content creators. The world comes to Canada to work with our talent, producers, studios and financiers. But the world also brings global content into our market. In this sense, the content explosion brings challenges as well as opportunities. Though Canada has policies, programs and regulations to support Canadian content, its market is wide open to global content on 4 Nordicity estimate based on review of international SVOD websites. Announcements for 2018 SVOD launches have been made by CBC and CBS. 5 CRTC, Communications Monitoring Report 2017, p. 157. Wall Street Journal 6 Tripp Mickle, “Apple Readies $1 Billion War Chest for Hollywood Programming,” , August 16, 2017. 7 Arjun Kharpal, “Twitter’s live video ambition risks all-out content spending,” www.cnbc.com, May 2, 2017. 8 Daniele Alcinii, “Report: Apple makes major push into original content,” Playback , August 16, 2017. 9 Bell Media’s mobile video offering, launched in 2017. In nominal or real-dollar terms. 10 7 Profile 2017

10 INTRODUCTION regulated and unregulated platforms. Capturing more than 3% of its domestic box office for Canadian films remains 11 12 On average, over half of Canada’s television viewing is of foreign content. elusive. Exhibit 1 Audience performance of Canadian television programs and feature films Share of television tuning to Canadian programs during peak-viewing period, 2015/16 broadcast season English-language 23% French-language 64% Share of theatrical box office to Canadian films in 2016 English-language 0.9% French-language 8.7% Source: Canada Media Fund (Numeris), Movie Theatre Association of Canada (MTAC). ...and Canada Travels the World Faced with a small domestic market and regulatory environment in flux, some Canadian screen-based content companies are looking globally for content and business opportunities: • On the one hand, Canadian companies are acquiring or producing content libraries in Canada, for distribution to the world. In 2016/17, some of these export success stories included Orphan Black , the Love It or List It format, and . Distribution advances and foreign financing now make up 29% Frontier , Annedroids , Long Time Running 19-2 of the total financing of Canadian television productions; although, as explained below, these indicators of the export potential of Canadian content really apply only to specific genres, formats and languages. • On the other hand, larger Canadian players are acquiring content catalogues and even facilities in global markets, Examples include Blue Ant’s acquisition of New Zealand’s Racat Group, Kew Media’s acquisition of Content Media Corporation, Lionsgate’s acquisition of UK’s Primal Media; as well as eOne’s purchase of a 70% stake in the UK animation studio, Astley Baker Davies, and its purchase of a 51% stake in the US production company, The Mark Gordon Company. Through these transactions, eOne acquired the international – and not just Canadian – rights to Peppa Pig globally popular titles such as Criminal Minds . and The sheer scale of the content explosion is driving Canadian policy for the screen-based content sector. The federal government’s Canadian content policy, with its focus on digital creative exports, builds on the sector’s momentum. It incorporates a cultural perspective, which brings Canadian stories and points of view to the world; an industrial perspective that leverages the strengths of Canadian screen-based content creators, producers and distributors; and an economic perspective that supports the growth of Canada’s digital markets. The Localized Nature of Global Success We should celebrate these Canadian global success stories and the opportunities they bring to Canadian creators, producers, distributors, broadcasters and exhibitors. But we should be mindful that not all producers and not all types of production are captured in this global content explosion. The sources of financing that indicate export potential (i.e. financing from Canadian distributors and directly from foreign sources) account for between 3% and 36%, depending on the genre (Exhibit 2). Still, most of the growth in Canadian television production in 2016/17 was fuelled by financing from Canadian distributors, which was ultimately based on the international demand for Canadian content. 11 See section 12 of this Profile , which provides box office data by feature films’ country of origin. 12 Anglophone viewing accounts for approximately three-quarters of total Canadian television viewing, and Francophone viewing for approximately one-quarter (based 2017, tables 4.2.12 and 4.2.13). Communications Monitoring Report on CRTC’s 8 Profile 2017

11 INTRODUCTION Exhibit 2 Sources of financing for Canadian screen-based production, by genre, 2016/17 Public funding Canadian programs and Canadian Release Foreign Other private distributors tax credits window sources Genre sources Total Broadcasters 100% Fiction 39% 18% 18% 18% 6% 16% 25% 8% 11% 100% 39% Children’s and youth Documentary 52% 24% 10% 10% 5% 100% Television Lifestyle/human 28% 51% 7% 5% 9% 100% interest Variety and performing 100% 2% 7% 40% 49% 1% arts Theatrical All genres 60% 1% 14% 20% 100% 5% feature films Source: Canadian Audio-Visual Certification Office (CAVCO). Note: Some totals may not sum due to rounding. Most genres of screen-based content are made for Canadian audiences with Canadian financing, with relatively low foreign pre-sales and sales of completed content. Indeed, among CMF-supported Canadian television projects, English- language drama has been the genre with the most international pre-sales. Exhibit 3 Cumulative international pre-sales of CMF-Supported television productions, 2006/07 to 2015/16 Genre Share of cumulative pre-sales Drama 66.0% Documentary 12.5% Animation 12.1% Children’s and youth 9.0% Variety and performing arts 0.4% Total 100.0% Source: CMF. Exhibit 4 Sales of CMF-supported productions in 2016/17 Genre and language Share of total sales in 2016/17 English drama 33.3% English children’s and youth 13.1% English documentary 18.5% French – all genres 3.1% Other languages – all genres 0.1% Games 31.9% 100.0% Total Source: CMF. Includes sales to Canada and foreign markets (sales to Canada account for 8% of total sales). 9 Profile 2017

12 INTRODUCTION The world wants scripted, big-budget drama, animation, science-fiction and thriller movies, and reality TV formats. So do Canadians. But Canadians also want locally relevant documentaries, children’s and youth programs, variety and performing arts programs, and feature films. Finding the next Mohawk Girls , Le Cri du Rhinocéros or Imagining Canada – the top-quality “Canadian” programs that do not make it to the top of a list of online search results – can be difficult. However, the objective to support the discoverability of Canadian content put forward as one of the pillars of the federal government’s Creative Canada Policy Framework is applauded by Canada’s content producers who continue to reach global and niche audiences with their critically acclaimed, cutting edge and innovative content. Across the Value Chain, Explosion = Diversification The exploding demand for content, and competition to attract production activity, means players across the screen- based content sector’s value chain are diversifying their strategies. This is true for producers, distributors, broadcasters, broadcasting distribution undertakings (BDUs) such as cable and direct-to-home (DTH) satellite companies, and theatrical exhibitors. At the development stage, producers are spending more on script and concept development and report working more closely with broadcasters and SVOD operators at the earliest stages of the project. Spending by the top 10 producers (in 13 Producers report looking terms of development) has doubled since 2015, and increased by about 3% in the last year. at marquee talent, devising concepts with global distribution in mind, and leveraging social media to test concepts and 14 marketing ideas – at the development stage. , the competition among platforms to acquire top-quality, globally-oriented content is reportedly In terms of production fierce. As some studios want to retain their rights to control the exploitation of their content on digital platforms, large 15 All of SVOD and social media operators are seeking to commission new, signature, content for their own networks. this means that there should be growing opportunities for independent Canadian producers. Still, the challenge for Canadian independent producers will be to retain some rights for other territories or platforms, and not selling them wholesale to a single content platform. Canadian market is essential. It provides the crucial first window for most And for all supported genres, a strong Canadian productions; it is the source of most of the financing of these productions, and it provides the breakthrough for diverse storytellers and producers to make their first productions and establish their careers and businesses. Focusing our attention on global opportunities should not divert us from building and strengthening Canadian companies and content targeting our own audiences. Canadian distributors – who are often also content producers – are taking their content libraries beyond North America. While a single sale to a global SVOD operator such as Netflix can cover 190 territories (where Netflix is currently available), it can also mean long-term exclusive deals that prevent the Canadian distributor from selling that production to other platforms or territories. Indeed, the data show that the bulk of sales of CMF-funded programs were for worldwide rights, not single territories. This is probably a higher degree of temporal and geographic exclusivity than Canadian distributors and producers are accustomed to, but one that might be necessary to secure part of the growing pot of content financing available from global SVOD platforms. 13 Based on Playback ’s annual survey of producers for 2015, 2016 and 2017. While responses are voluntary and involve self-reported financial data, the top 10 firms are fairly consistent from year to year, and therefore we believe the survey provides a useful indicator of development activity. According to the survey, the top 10 producers in development planned on spending $10.7 million in 2015, $20.6 million in 2016 and $21.2 million in 2017. 14 See for example Jordan Pinto, “Exclusive: eOne maps out the future of its scripted division,” Playback , August 29, 2017; Jordan Pinto, “2017 Indie List: The year in review,” Playback, June 12, 2017; Jordan Pinto, “On the Slate: Item 7,” Playback , July 10, 2017; and Gaëlle Engelberts, “Discoverability: Working with Filter Bubbles,” CMF Trends blog posting, July 6, 2017. Hollywood Reporter , August 9, 2017. 15 Paul Bond and Georg Szalai, “How Disney’s Plan to Pull Movies Could Impact Netflix,” Profile 2017 10

13 INTRODUCTION Exhibit 5 International sales of CMF-supported television productions by territory, 2012/13 to 2014/15 Share of total sales of CMF-support television programs Territory World 59% US 20% Individual EU countries 7% 14% All others Total 100% Source: CMF Canadian broadcasters are also competing for high-quality scripted content, and are adapting to the explosion in content platforms in several ways: • Broadcasters are jointly licensing Canadian content with SVOD services, as was the case with drama series Alias Grace and Cardinal , and the children’s and youth series, Justin Time GO! . • While Canadian broadcasters were typically the first release window for CMF-supported series, changes to funding rules and broadcast group ownership of some digital platforms (e.g. Bell Canada’s ownership of CraveTV, or CBC/ Radio-Canada’s ownership of Tou.tv extra) mean broadcasters can become a second window, after digital or SVOD release of content. • Broadcasters are negotiating long-term supply deals with key content providers, acquiring multi-platform rights where possible (e.g. Rogers Media Inc.’s acquisition of National Hockey League [NHL] sports rights). • Broadcast corporate groups are launching their own SVOD offerings: beyond the relatively well-established CraveTV (Bell Canada) or Club illico (Quebecor Media Inc.), Canadians can access Tou.tv extra (CBC/Radio-Canada), Sportsnet NOW (Rogers Media Inc.), History Vault (Corus Entertainment Inc.), and Love Nature (Blue Ant Media Inc.), while CBC/Radio-Canada has announced plans for an English-language SVOD offering to be launched in 2018. BDUs in Canada and worldwide are responding to the same challenge of “cord-cutting” – declining markets for their core cable or satellite offerings. While Internet protocol TV (IPTV) in Canada (such as Bell Canada’s Fibe or Telus Corporation’s Optik TV) has grown, and cable-TV operators such as Rogers Communications Canada Inc. and Shaw Communications Inc. are now offering their own IPTV services, it has not stemmed the overall decline in cable TV and DTH satellite subscriptions. Nor has the greater channel packaging flexibility offered by the Canadian Radio- television and Telecommunications Commission (CRTC) to BDUs in its 2016 Let’s Talk TV decision. Enhanced IPTV services, including 4K (enhanced resolution) video, voice-activated personal video recorders (PVRs), and SVOD access (including Netflix) integrated into IPTV platforms are among the ways that incumbent BDUs are making their video offerings more compelling. Canadian theatrical exhibitors are continuing the trend observed in last year’s Profile . With movie attendance declining in theatres, theatrical exhibitors are entering new lines of business to capitalize on the value of their physical venues. At Cineplex Inc., the largest theatrical exhibitor, this diversification has taken the chain into live-event screenings, amusement games and indoor golf driving ranges. Cineplex Inc. also has an online store, Cineplex Store. In August 2017, it announced a partnership with Imax Corporation, one of Canada’s most innovative screen sector companies, to 16 Smaller chains have also been diversifying the uses open the VR Centre at Cineplex’s Scotiabank Theatre in Toronto. of their space as event and party venues, gaming centres, and other lines of business. 16 Rebecca Hill-Duty (2017), “IMAX And Cineplex To Create VR Centre In Canada,” VR Focus, August 25, 2017, https://www.vrfocus.com/2017/08/imax-and- . cineplex-to-create-vr-centre-in-canada/ Profile 2017 11

14 INTRODUCTION For the screen-based content sector, then, capitalizing on the content explosion requires: • creators that compel – with their stories and performances; • content that travels – across platforms, audiences, and territories; • platforms that adapt – to audience preferences, and new technologies; and • policies that strengthen – supporting domestic and export-oriented content strategies. Public policy environment Even the producers, distributors and exporters with the greatest international success have benefitted from a robust Canadian policy framework and support programs. A combination of tax credits, regulated contributions and exhibition requirements, public funding, and coproduction treaties and agreements has fostered both domestic and export-oriented content. This fabric of support is constantly challenged by technological changes and a number of important developments over the last year have impacted the policy environment: • The federal government’s , announced in September 2017, contained a variety of measures Creative Canada framework that impact Canadian screen-based production, including an increase in the government’s investment in the Canada Media Fund, meant to address any declines in regulated BDU contributions • The Minister of Canadian Heritage also announced that her government will, “seek commitments from, and pursue 17 A first investment from Netflix, agreements with global Internet companies that provide services to Canadians.” concluded under the Investment Canada Act , will commit a minimum of $500 million in original productions in Canada over the next five years. • Global export development for screen-based content is where the federal government is putting much policy effort, with a planned $125 million investment in creative exports and the creation of a Creative Industries Council. • The CRTC also announced changes to the Canadian programming expenditure requirements of large television 18 This ownership groups, which could lead to less spending by broadcasters on “programs of national interest (PNI).” programming includes drama, comedy, documentary and children’s programs generally produced by independent production companies. In August 2017, the Governor in Council decided to refer the licence renewal decisions for the television services owned by large ownership groups, including as they pertain to PNI and required levels of original French-language content back to the CRTC for reconsideration and hearing. The data trends and analysis in Profile 2017 give rise to a fair bit of optimism for the Canadian screen-based production sector. Top-quality screen-based content is in demand, in Canada and across the globe. But some of the sector’s diverse strategies and policies for content creation, packaging, distribution and exhibition are likely to continue to be challenged by evolving technologies and business models over the coming years. The upcoming reviews of key pieces , the of federal legislation - the Broadcasting Act Telecommunications Act and the Copyright Act – will, along with CBC/Radio-Canada’s mandate “renewal” announced in fall 2017, play an important role in shaping the way forward. In Profile 2018 , we will trace the picture of how Canada’s screen-based content sector adapts in this age of content abundance. 17 Government of Canada, Creative Canada: Policy Framework , September 2017, section 2.2. The CRTC’s decision to renew the licences of broadcast groups Bell, Corus and Rogers (Decision CRTC 2017-148 to 2017-151, published May 15, 2017) was 18 estimated to result potentially in $39 million of reduced spending on long-form documentary, drama/comedy, music and variety, and certain awards shows. See Nordicity, “Analysis of Reduced Spending on Independent PNI Production,” prepared for CMPA, June 2017. Profile 2017 12

15 1. Overview of the screen sector in Canada SCREEN SECTOR VALUE CHAIN Over the past decade, the combination of digital technology, broadband Internet and new entertainment devices has led to the rapid evolution of the screen sector value chain. Exhibit 1 - 1 depicts the current configuration of the screen sector value chain in Canada in a simplified manner. Production converts the creative ideas of the screenwriter and • The screen sector value chain begins with production. director into a finished film or television program. In this report, the production segment includes pre-production (i.e. development), live-action production, animation production, all post-production, visual effects production (VFX) and digital media production • The production stage is followed by . Canadian and foreign distribution companies typically control distribution the economic rights of films and television programs, and plan and execute the release windowing of these films and television program. Distributors are a key feature of the theatrical market. In television, programs are often licensed directly by producers (or their distribution arms) to first-window broadcasters without a third-party distributor. • The evolution of the screen sector value chain is most evident in the content consumption stage. Film festivals are an important venue through which producers and distributors can raise awareness for their films and sell them into previously unsold territories. They can also generate significant economic benefits for their host cities. • Most films are still released first in the theatrical exhibition window; however, this is not always the case. Some films have their first release on on-demand services such as video-on-demand (VOD), subscription VOD (SVOD), transactional home video (i.e. DVD/Blu-ray sales and rentals). Some films VOD (TVOD) or advertising VOD (AVOD); or on will be simultaneously released in theatres and on on-demand services or home video (i.e. “day and date” releases). • For television programming, content consumption typically begins in the television broadcasting industry, which includes the conventional television broadcasters, and specialty and pay-television services that operate in Canada. • As noted above, audiences can also access films and television programs through on-demand services such as pay- per-view (PPV), VOD, SVOD or other online services. Many films and television programs use these services as secondary release windows or even first-release windows, thus bypassing the television broadcasting or theatrical exhibition industries altogether. • For the Canadian screen sector, it is also important to recognize the role of cable-television, direct-to-home satellite (DTH), Internet protocol television (IPTV) and other multipoint distribution systems (MDS). These entities comprise the broadcasting distribution industry and are referred to as broadcasting distribution undertakings (BDUs). They play an essential role in ensuring that Canadian audiences can reliably access the screen content available from the television broadcasting industry and certain on-demand services. Some on-demand services, however, exhibit content directly to consumers over broadband Internet connections, thus bypassing Canadian BDUs. 13 Profile 2017

16 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA The screen sector value chain in Canada Exhibit 1 - 1 Film festivals Theatrical Production exhibition Canadian television production DVD/Blu-ray Distribution sales and Canadian rentals** theatrical feature lm production Television broadcasting Foreign location and service Broadcasting production distribution CREATORS Broadcaster in-house CONSUMERS production Digital media production* On-demand services * This report only contains statistics for convergent digital media (CDM) production. See Section 9 for additional data on this segment. ** Estimates of the revenue and economic impact of DVD/Blu-ray sales and rentals in Canada are not included in this report. FILM AND TELEVISION PRODUCTION IN CANADA The film and television production industry in Canada consists of four key segments: 1. The Canadian television production segment includes television programs made largely by independent production companies, but also includes television programs made by production companies affiliated with Canadian broadcasters. All of these television programs are certified as Canadian content by the Canadian Audio-Visual Certification Office (CAVCO) of the Department of Canadian Heritage or the Canadian Radio-television and Telecommunications Commission (CRTC). 2. The Canadian theatrical feature film production segment includes feature-length films made by independent production companies that were certified as Canadian content by CAVCO. 3. The Foreign location and service (FLS) production segment is now the largest single segment of the Canadian screen-based production sector and largely consists of feature films and television programs filmed in Canada by 19 For the majority of FLS projects, the copyright is held by foreign producers or by Canadian service producers. non-Canadian producers; however, for approximately 5% to 10% of projects, the copyright is held by Canadians. 4. The Broadcaster in-house production segment includes television programs made by Canadian television broadcasters in their own facilities as opposed to being made by an external production company that is either independent or affiliated with the broadcaster. Broadcaster in-house production comprises primarily news, sports and current affairs programming 19 Canadian service producers are producers who provide production and/or post-production services in Canada on behalf of non-Canadian producers. 14 Profile 2017

17 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA TOTAL VOLUME The total volume of film and television production in Canada jumped by 24.3% to an all-time high of $8.38 billion in 2016/17. Over two-thirds of the growth experienced in 2016/17 was due to a sharp increase in the volume of FLS production in Canada. It rose by over $1 billion to an all-time high of $3.76 billion. Exhibit 1 - 2 Total volume of film and television production in Canada Broadcaster in-house Canadian television Canadian theatrical Foreign location feature lm and service 10,000 8,377 2,986 8,000 7,060 6,741 2,558 2,566 5,963 5,962 5,830 5,560 6,000 2,671 2,418 5,367 2,305 5,120 5,014 2,111 318 2,128 2,231 3,757 2,041 388 $ millions 280 2,600 4,000 2,644 352 379 326 340 323 1,826 1,740 1,874 363 260 1,687 1,770 1,445 1,508 2,000 1,515 1,406 1,365 1,316 1,265 1,252 1,249 1,184 1,147 1,103 0 2011/12 2009/10 2008/09 2007/08 2013/14 2014/15 2015/16 2016/17 2012/13 2010/11 Source: Estimates based on data collected from the Canadian Audio-Visual Certification Office (CAVCO), the Canadian Radio-television and Telecommunications Commission (CRTC), CBC/Radio-Canada and the Association of Provincial Funding Agencies. Note: Some totals may not sum due to rounding. 15 Profile 2017

18 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA Exhibit 1 - 3 Total volume of film and television production in Canada, share by segment Broadcaster in-house Foreign location Canadian television Canadian theatrical and service feature lm 100% 38 36 41 40 45 38 41 44 40 36 80% 4 60% 5 4 6 45 6 6 6 7 37 39 5 34 6 30 33 31 30 28 28 40% 20% 24 23 23 22 22 21 21 21 19 16 0% 2011/12 2010/11 2009/10 2008/09 2007/08 2015/16 2014/15 2016/17 2012/13 2013/14 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada and the Association of Provincial Funding Agencies. Note: Some totals may not sum due to rounding. 16 Profile 2017

19 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA REGION After adding over $700 million in FLS production and $100 million in Canadian television production to its total annual volume of production, British Columbia (BC) surpassed Ontario for the first time in 2016/17 to become Canada’s largest centre for film and television production. Both BC and Ontario now host nearly $3 billion in film and television production annually. As the home to Canada’s French-language production industry, Quebec was the third largest province in terms of annual film and television production volume, with $1.75 billion in 2016/17. Exhibit 1 - 4 Total volume of film and television production in Canada, by province and territory 2008/09 2009/10 2010/11 2011/12 ($ millions) 2013/14 2014/15 2015/16 2016/17 2007/08 2012/13 1,683 1,329 British Columbia 1,729 1,578 1,605 1,618 2,239 2,112 2,991 1,399 Ontario 1,903 1,910 2,077 2,586 1,961 2,439 2,763 2,703 2,977 2,439 Quebec 1,214 1,346 1,274 1,321 1,316 1,351 1,280 1,551 1,404 1,754 155 Alberta 153 148 167 181 274 264 254 308 179 Manitoba 107 55 72 69 79 76 100 84 91 129 98 Nova Scotia 151 107 99 104 93 124 69 84 100 Newfoundland and 43 Labrador 12 12 40 42 41 42 46 31 40 Saskatchewan 82 33 49 54 35 47 30 30 36 101 8 6 4 5 6 Territories* 8 9 8 24 9 21 New Brunswick 19 19 27 30 24 19 13 15 22 Prince Edward Island 6 2 1 2 4 2 2 2 2 2 Total 5,367 5,014 5,560 5,963 5,830 5,962 7,060 6,741 8,377 5,120 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada and the Association of Provincial Funding Agencies. Note: Statistics published by provincial funding agencies may differ from those in Profile 2017. Please see Notes on Methodology for additional information. Figures for 2014/15 may understate the total volume of production, since data was not available for the volume of FLS production in Nova Scotia in that year. Some totals may not sum due to rounding. * Includes Yukon, Nunavut and Northwest Territories. Exhibit 1 - 5 Share of total volume of film and television production in Canada, by province and territory, 2016/17 Ontario 35 % Prince Edward Island  %  % Territories*  % New Brunswick  % Saskatchewan  % Newfoundland and Labrador   % Manitoba British Columbia 36 % Nova Scotia  % Alberta  % Quebec 21 % Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada and the Association of Provincial Funding Agencies. * Includes Yukon, Nunavut and Northwest Territories. Note: Some totals may not sum due to rounding. 17 Profile 2017

20 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA CONSUMERS’ MEDIA CONSUMPTION PATTERNS Media consumption patterns in Canada continued to evolve in 2016 as Canadians increased their use of alternative video technologies and services to access film and television content. Canadians can choose from a large array of digital services available over the Internet, on Internet-connected mobile communications devices, or through BDUs. Most Canadian broadcasters offer programming directly through their websites, and on apps for mobile platforms and tablets. Via the Internet, Canadians can also access films and television programs through a variety of online services, including Netflix, Amazon Prime Video, Apple iTunes, CraveTV, Videotron’s illico.tv, the National Film Board of Canada, Cineplex and video game consoles. Most BDUs in Canada also offer on-demand services through digital set- top boxes (known as VOD), which also act as personal video recorders (PVRs). Personal video recorders (PVRs) Among alternative video technologies, PVRs were still the most prevalent in Canada’s French-language market, where they displayed a penetration rate of 55% in 2016 (Exhibit 1-7). In the English-language market, the penetration rate for PVRs was 50% (Exhibit 1-6). PVRs now trail Internet television viewing in terms of adoption in the English-language market (Exhibit 1-12) and are on par with the adoption rate for Netflix. Internet and online services In addition to licensed programming services, Canadians can access screen content over the Internet on online services using personal computers, laptops, smartphones and tablets. Canadians’ use of the Internet for accessing television programming continued to grow in 2016, however, at a slower rate than in previous years. The percentage of Canadians in the English-language market who watched television programming over the Internet increased from 57% to 59% in 2016, making this the most popular alternative video 20 In the French-language market, the share increased from 49% to 51%. technology in that market (Exhibit 1 - 6). Despite the much smaller screen, smartphones and tablets are playing a growing role in Canadians’ media consumption patterns because of their portability. In 2016, 23% of Canadians in the English-language market used a smartphone to watch television programming; in the French-language market the share was 20%. Approximately 23% of Canadians in the English-language market used tablets to watch television programming in 2016 – the same rate as in the French- language market, the share was 20%. Netflix, Amazon Prime Video, Apple iTunes, illico.tv and CraveTV are also proving to be fast-growing platforms for accessing films and television programming in Canada. As of 2016, 50% of Canadians in the English-language market had used Netflix. This is up from only 12% in 2011. In the French-language market, the rate of Netflix adoption rose to 22%. The lower adoption rate for Netflix in Canada’s French-language market is due in large part to the fact that CBC/Radio- Canada’s ICI Tou.tv and Videotron’s illico.tv already offer consumers online video options with more French-language content than is available on Netflix. 20 The statistics for viewing of television programming over the Internet include access by all types of Internet-connected devices such as desktop computers, laptops, cellphones and tablets. 18 Profile 2017

21 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA Exhibit 1 - 6 Adoption rates for alternative video technologies and services, English-language market 59 60 57 Watch TV programming on the Internet* 51 50 49 50 46 50 50 47 43 Personal video recorder** 44 39 38 40 35 Netix 31 34 30 29 30 23 Watch TV programming 23 22 22 21 on a smartphone* 23 18 20 19 14 13 Share of total population 18+ (%) 12 12 Watch TV programming 10 13 12 on a tablet device* 10 7 4 6 2 1 3 0 2008 2009 2010 2011 2007 2013 2014 2015 2016 2012 Source: Media Technology Monitor. * Watched a TV program or clip from a TV program available on the Internet during the past month ** Possessed a PVR. Adoption rates for alternative video technologies and services, French-language market Exhibit 1 - 7 60 56 55 Personal video recorder* 52 50 51 Watch TV programming 49 44 on the Internet** 39 40 42 38 42 39 Netix 30 26 Watch TV programming 23 22 22 on a smartphone** 20 19 20 17 16 20 13 Share of total population 18+ (%) 12 Watch TV programming 10 15 10 10 on a tablet device** 12 6 5 8 3 7 7 3 1 4 4 2 0 2014 2016 2015 2013 2008 2009 2010 2011 2012 2007 Source: Media Technology Monitor. * Possessed a PVR ** Watched a TV program or clip from a TV program available on the Internet during the past month 19 Profile 2017

22 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA Exhibit 1 - 8 Average weekly hours of television viewing in Canada, traditional television vs. Internet television Internet TV usage - typical weekly user Internet TV usage - total population Traditional televison viewing* (persons 18+) (persons 18+) (persons 18+)  . . . . .  .    Average per capita weekly hours  . . . .  . . . . . .        Source: Numeris and Media Technology Monitor (see CRTC, Communications Monitoring Report 2017 ). * Traditional television viewing includes television viewing via over-the-air signal reception, cable, satellite or MDS. Internet TV usage includes access by all types of Internet-connected devices such as desktop computers, laptops, cellphones and tablets. Data are reported for the broadcasting year ending in the indicated years (e.g. data for 2015 and 2016 correspond with the broadcasting year, September 1 to August 31. ** No data for Internet TV usage available for 2014. ON-DEMAND SERVICES Canada’s market for on-demand television services is estimated to have been worth nearly $2.3 billion in 2016. Canadians can now use a variety of on-demand services to access film and television content, including Netflix, Amazon Prime, CraveTV, Club Illico, as well VOD and PPV services operated by BDUs. While BDU’s PPV and VOD services continued to experience declining revenue in 2016, Netflix’s revenue in Canada increased to an estimated $709 million, thereby accounting for the largest single share (31%) of the on-demand services market. Other SVOD services, including CraveTV and Club illico, generated $373 million in revenue. AVOD generated an estimated $480 million in 2016; TVOD generated an estimated $394 million. The more traditional on- demand services operated by BDUs, including VOD and PPV, generated $231 million and $88 million, respectively. 20 Profile 2017

23 1. OVERVIEW OF THE SCREEN SECTOR IN CANADA Exhibit 1 - 9 Revenues of on-demand services in Canada Netix* TVOD AVOD Other SVOD PPV (BDU) VOD (BDU) 2,500 2,275 709 2,011 2,000 553 1,630 355 1,500 373 359 1,236 294 247 480 $ millions 1,015 384 1,000 121 219 292 219 13 394 365 323 496 294 151 500 253 109 351 293 233 258 205 264 154 265 255 255 231 100 145 140 133 129 116 101 100 95 88 0 2008 2016 2015 2014 2013 2012 2011 2010 2009 Source: Nordicity estimates based on data from CRTC, OVUM, MTM, Solutions Research Group, SNL Kagan and Digital TV Research. Note: Some totals may not sum due to rounding * Estimates based on secondary research SUPER SCIENCE FRIENDS Canadian web series picked up by American television after successful crowdfunding campaign Super Science Friends is an animated web series that brings together iconic figures from throughout the history of science for time travelling adventures. The series was created by Brett Jubinville of Tinman Creative Studios. It was made possible by a 2014 Kickstarter campaign that exceeded the initial goal of $25,000, raising almost $30,000 with the support of more than 400 backers. A pilot episode launched on YouTube in 2016. The next three episodes were picked up by American channel Cartoon Hangover. won the Audience Choice Award at the Toronto Animation The series has also been a critical success. Super Science Friends Arts Festival International and prizes for Best Canadian Web Series, Best Screenplay and Best Sound Design at TO Web Fest. Internationally, the show also won Best Animated Film at the New York Science Fiction Film Festival. 21 Profile 2017

24 Economic 2. 2. Canadian television Contribution Film and television production is a relatively labour-intensive activity. Films and television programs often employ dozens of people as cast and crew. On some occasions, the size of the cast and crew can exceed 100 people. Productions also purchase goods and services from other industries, thus generating spin-off economic impacts beyond the production industry. The employment and supplier purchases associated with film and television production have generated employment for tens of thousands of Canadians in recent years, as well as billions of dollars of labour income and gross domestic product (GDP). The economic contribution of the screen sector in Canada is not confined to the film and television production industry. The other industries along the screen sector value chain, including convergent digital media (CDM), distribution, film festivals, exhibition, television broadcasting and broadcasting distribution also employ tens of thousands of Canadians and generate labour income and GDP through the value they add to the distribution of content made not only in Canada, but in other countries. Highlights from 2016/17 • The total employment impact (including direct and spin-off impacts) of film and television production in Canada increased by 22.6% to 171,700 full-time equivalent jobs (FTEs) in 2016/17. • Employment directly within the film and television production industry itself (i.e. direct impact employment) increased by 22.5% to 67,500 FTEs in 2016/17. • The total labour-income impact of film and television production in Canada increased by 23.7% to $9.15 billion in 2016/17. • The total GDP impact of film and television production in Canada increased by 34.2% to $12 billion in 2016/17. • The entire screen sector value chain (including film and television production, CDM, distribution, film festivals, exhibition, television broadcasting and broadcasting distribution) generates an estimated 271,200 FTEs of employment, $15.6 billion in labour income and $23.6 billion in GDP, including direct and spin-off impacts (based on the most recent years of available data). • The largest contributions to the economic impact of film and television production in Canada came from foreign location and service (FLS) production. It accounted for 77,000 FTEs of employment, $4.04 billion in labour income and $5.43 billion in GDP. 22 22 Profile 2017 Profile 2017

25 2. ECONOMIC CONTRIBUTION The tremendous growth experienced by the Canada’s film and television production sector in 2016/17 translated directly into an even larger economic impact. Overall, the production industry generated 171,700 FTEs of employment for the Canadian economy in 2016/17, including direct (i.e. cast and crew) and spin-off impacts. These spin-off impacts include not only the employment and GDP generated within industries that supply goods and services to the production industry, but also the consumer industries within the Canadian economy that benefit from the re-spending of wages earned by cast and crew, and the workers employed in the supplier industries. The employment and supplier purchases associated with film and television production meant that the industry generated $9.15 billion in labour income and $12 billion in GDP for the Canadian economy in 2016/17. These total impacts included direct labour income of $4.08 billion and direct GDP of $4.24 billion. Overall, the screen sector value chain generates 271,200 FTEs of employment in Canada (based on the most recent years of available data). This total employment impact includes 109,820 FTEs of employment at companies operating directly in the screen sector value chain and a further 161,380 FTEs of employment in other industries. The screen sector value chain also generates $23.6 billion in GDP for the Canadian economy, including $10.8 billion directly within the value chain and an additional $12.8 billion in other industries within the Canadian economy. FILM AND TELEVISION PRODUCTION EMPLOYMENT BY SEGMENT Film and television production in Canada generated 171,700 full-time equivalent jobs (FTEs) in 2016/17. This total impact included 67,500 FTEs of employment directly in the film and television production industry (i.e. direct impact) and 104,200 FTEs in other industries within the Canadian economy (i.e. spin-off impact). Exhibit 2 - 1 Number of FTEs generated by film and television production in Canada 2007/08 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2008/09 Canadian television production 19,900 21,300 19,100 19,300 Direct 21,100 20,300 21,100 21,000 24,100 23,600 Spin-off 32,500 32,900 29,500 29,800 36,400 30,700 31,400 32,600 32,400 37,100 51,700 Total 48,600 49,100 60,000 50,600 54,200 53,700 53,400 61,200 53,600 Canadian theatrical feature film production Direct 3,200 2,500 3,400 3,000 3,000 3,300 3,000 3,200 2,300 2,600 5,000 Spin-off 5,200 4,600 4,600 3,800 4,600 4,900 3,500 4,000 4,900 6,600 8,100 6,300 8,600 7,600 7,600 8,300 7,600 8,100 5,800 Total FLS production Direct 17,500 14,100 17,200 14,900 15,000 15,400 21,500 21,600 30,300 13,800 23,700 27,000 26,500 23,000 23,200 21,800 33,100 33,300 46,700 Spin-off 21,300 44,500 35,100 35,900 43,700 37,900 38,200 Total 54,600 54,900 77,000 39,100 Broadcaster in-house production 12,100 11,300 10,300 11,400 Direct 11,400 11,500 12,500 10,200 10,600 11,200 Spin-off 17,500 17,500 15,900 17,700 17,300 18,700 17,700 19,300 15,800 16,400 29,200 Total 26,200 29,100 28,500 30,800 28,800 31,800 26,000 27,000 28,900 Grand total Direct 53,200 48,900 46,900 50,900 52,700 50,300 50,200 58,300 55,100 67,500 77,700 Spin-off 72,500 78,600 81,400 75,500 77,400 90,000 85,000 104,200 82,000 171,700 135,200 124,400 119,400 129,500 134,100 128,000 127,600 148,300 140,100 Total Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and Conference Board of Canada. Note: See Notes on Methodology for a description of the job-estimation methodology. 23 Profile 2017

26 2. ECONOMIC CONTRIBUTION EMPLOYMENT BY REGION The vast majority of the employment impact generated by film and television production – both direct and spin- off impacts – was concentrated in British Columbia, Ontario and Quebec, which hosted the bulk of film and television production in Canada in recent years. British Columbia is now the leading province for employment in Canada’s film and television production sector. Direct FTEs employed in film and television production in Canada, by province and Exhibit 2 - 2 territory 2009/10 2012/13 2013/14 2014/15 2011/12 2016/17 2007/08 2010/11 2008/09 2015/16 British Columbia 15,850 14,150 13,900 13,660 18,500 17,220 24,120 16,530 12,650 12,920 18,020 18,020 19,010 22,840 Ontario 20,770 23,190 22,460 24,080 19,050 21,230 12,690 12,130 12,460 11,980 12,020 11,120 13,140 11,780 14,540 Quebec 13,620 2,030 1,530 1,200 1,320 1,190 1,280 1,940 1,810 2,270 Alberta 1,620 1,150 570 720 680 740 690 910 740 Manitoba 1,100 790 Nova Scotia 1,640 1,160 1,010 1,020 930 1,160 620 760 880 990 Newfoundland and Labrador 390 410 380 360 380 250 320 320 120 120 370 970 440 460 290 310 230 230 270 Saskatchewan 850 240 320 200 190 260 New Brunswick 230 180 120 140 200 Territories* 80 30 40 50 50 50 60 50 160 70 20 70 10 20 40 20 20 20 20 20 Prince Edward Island Total 53,200 48,900 46,900 50,900 52,700 50,300 50,200 58,300 55,100 67,500 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, Association of Provincial Funding Agencies and Statistics Canada. Note: Some totals may not sum due to rounding. See Notes on Methodology for a description of the job-estimation methodology. * Includes Yukon, Nunavut and Northwest Territories. Exhibit 2 - 3 Total direct and spin-off full-time equivalent jobs (FTEs) generated by film and television production in Canada, by province and territory 2014/15 2011/12 2012/13 2013/14 2010/11 2015/16 2016/17 2008/09 2009/10 2007/08 British Columbia 32,530 39,880 35,740 35,140 34,590 46,660 43,620 60,870 41,580 31,450 42,640 39,920 40,380 42,560 51,310 47,720 46,790 52,020 50,630 Ontario 54,080 Quebec 41,060 37,060 38,050 36,730 36,900 34,210 40,230 36,250 44,560 38,750 4,650 3,440 3,680 3,450 3,830 Alberta 5,870 5,590 5,240 6,550 4,340 2,240 Nova Scotia 2,790 2,430 2,460 3,890 2,800 1,510 1,830 2,130 2,380 Manitoba 2,050 1,000 1,290 1,220 1,330 1,230 1,640 1,330 1,420 1,970 Newfoundland and Labrador 200 680 700 660 620 660 430 550 550 200 680 2,010 730 1,040 1,100 2,270 880 540 540 650 Saskatchewan New Brunswick 500 660 410 400 540 410 480 380 250 290 100 Territories* 60 90 100 160 100 130 100 340 150 Prince Edward Island 280 80 40 90 150 90 90 90 90 90 134,100 Total 124,400 119,400 129,500 135,200 128,000 127,600 148,300 140,100 171,700 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, Association of Provincial Funding Agencies and Statistics Canada. Note: Some totals may not sum due to rounding. See Notes on Methodology for a description of the job-estimation methodology. * Includes Yukon, Nunavut and Northwest Territories. 24 Profile 2017

27 2. ECONOMIC CONTRIBUTION GDP AND LABOUR INCOME Film and television production in Canada generated over $9.15 billion in labour income (i.e. wages and salaries) for Canadians and $12 billion in GDP for the Canadian economy in 2016/17. Approximately 45% of the impact on labour income was earned by direct-impact workers – that is, cast and crew working in film and television production. Exhibit 2 - 4 GDP and labour income impact film and television production in Canada, 2016/17 Direct Spin-off Total LABOUR INCOME ($ MILLIONS) Canadian content production 1,493 1,807 3,300 Canadian television production 159 Canadian theatrical feature film production 354 195 1,652 2,002 Subtotal 3,654 FLS production 1,766 2,274 4,040 Broadcaster in-house production 658 799 1,457 Grand total 4,076 9,151 5,075 GDP ($ MILLIONS) Canadian content production Canadian television production 1,553 4,245 2,692 Canadian theatrical feature film production 165 290 455 Subtotal 1,718 2,982 4,700 FLS production 3,593 5,434 1,841 Broadcaster in-house production 684 1,190 1,874 Grand total 4,243 7,765 12,008 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada. Note: See Notes on Methodology for a description of methodology. Some totals may not sum due to rounding. 25 Profile 2017

28 2. ECONOMIC CONTRIBUTION FOREIGN INVESTMENT IN PRODUCTION Foreign investment in production (FIIP) tracks the value of international financial participation in the film and television production industry in Canada. It includes foreign presales and distribution advances for all projects certified by Canadian Audio-visual Certification Office (CAVCO); estimates of presales and distribution advances for non- 21 CAVCO-certified productions; and the total value of foreign location and service (FLS) production in Canada. FIIP excludes the amount of revenue earned from the distribution of completed Canadian films and television programs to foreign broadcasters and distributors. However, data published by Statistics Canada (and found in Section 10) indicate that these sales of completed content generated an additional $184 million in 2013 and $206 million in 2015. Over 80% of the increase in FIIP in FIIP in Canada increased to an all-time high of $4.67 billion in 2016/17. 2016/17 was due to the growth in the FLS production. However, the FIIP of Canadian television grew 39.8% and reached an all-time high of $851 million. Exhibit 2-5 Foreign investment in production in Canada Foreign location and service Canadian television Canadian theatrical 5,000 4,668 851 4,000 60 3,321 3,260 609 3,757 547 3,000 2,404 68 2,324 113 2,295 2,285 446 534 2,032 348 $ millions 431 2,644 1,875 2,600 2,000 225 1,754 284 72 132 37 267 114 103 83 42 1,874 1,826 1,770 1,740 1,687 1,000 1,508 1,445 0 2012/13 2016/17 2010/11 2011/12 2009/10 2008/09 2007/08 2013/14 2014/15 2015/16 Source: Estimates based on data collected from CAVCO and the Association of Provincial Funding Agencies. Note: Some totals may not sum due to rounding. See Notes on Methodology for the definition of FIIP. 21 In the case of treaty coproductions, the data used to estimate FIIP includes only the financing of the Canadian budget. As a result, the foreign budgets for treaty coproductions do not directly contribute to FIIP. Treaty coproductions contribute only to FIIP if the financing of the Canadian budget includes a foreign pre-sale or distribution advance. 26 Profile 2017

29 2. ECONOMIC CONTRIBUTION ECONOMIC IMPACT ACROSS THE SCREEN SECTOR VALUE CHAIN While film and television production is the largest source of economic impact within the screen sector value chain, the other value chain industries also generate significant economic impacts. • CDM production generated 1,070 FTEs of employment, $67 million in labour income and $99 million in GDP in 2014/15. • The distribution industry in Canada generated 7,540 FTEs of employment, $405 million in labour income and $1 billion in GDP in 2015. • Film festivals generated 2,520 FTEs of employment, $90 million in labour income and $141 million in GDP in 2016. • The exhibition industry generated 17,280 FTEs of employment, $668 million in labour income and over $1.25 billion in GDP in 2016. • The television-broadcasting industry generated 19,420 FTEs of employment, $1.56 billion in labour income and just over $3 billion in GDP in 2016. • The broadcasting distribution industry generated 51,670 FTEs of employment, $3.69 billion in labour income and just over $6.1 billion in GDP in 2016. Combining the estimates of economic impact for 2016/17, 2016 (or the most recent year of published data) indicates that the screen sector value chain in Canada generates over 271,000 FTEs of employment, $15.6 billion in labour income and $23.6 billion in GDP for the Canadian economy. Exhibit 2 - 6 Economic impact of selected sectors in the screen sector value chain Spin-off Total Direct Employment (FTEs) Film and TV production (2016/17) 67,500 104,200 171,700 CDM production (2016/17) 610 460 1,070 Distribution (2015) 1,110 7,540 6,430 1,440 1,080 Film festivals (2016) 2,520 Exhibition (2016) 7,510 9,770 17,280 Broadcasting* (2016) 5,140 14,280 19,420 Broadcasting distribution (2016) 25,160 51,670 26,510 Total 109,820 161,380 271,200 Labour income ($ millions) Film and TV production (2016/17) 4,076 5,075 9,151 CDM production (2016/17) 45 67 22 Distribution (2015) 97 405 308 39 90 Film festivals (2016) 51 Exhibition (2016) 212 456 668 786 775 1,561 Broadcasting* (2016) Broadcasting distribution (2016) 2,406 3,691 1,285 7,661 7,972 Total 15,633 GDP ($ millions) Film and TV production (2016/17) 4,243 7,765 12,008 CDM production (2016/17) 52 47 99 Distribution (2015) 470 1,009 539 51 90 Film festivals (2016) 141 Exhibition (2016) 402 847 1,249 Broadcasting* (2016) 1,792 1,234 3,025 Broadcasting distribution (2016) 3,802 2,304 6,106 Total 10,812 12,825 23,637 Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada, Movie Theatre Association of Canada (MTAC), Cineplex Entertainment and Statistics Canada. Film and television production * Excludes in-house production, which is included in Note: Some totals may not sum due to rounding. 27 Profile 2017

30 2. ECONOMIC CONTRIBUTION SUMMARY OF EMPLOYMENT AND GDP IMPACTS The screen sector value chain in Canada generates 271,200 FTEs of employment, including 109,820 FTEs directly in the value chain industries (i.e. direct impact) and 161,380 FTEs in other industries within the Canadian economy (i.e. spin-off impact). Exhibit 2 - 7 Summary of total employment impact of screen sector value chain 300,000 271,200 51,760 250,000 19,420 17,280 200,000 2,520 7,540 1,070 171,700 150,000 FTEs 100,000 50,000 0 Film and TV CDM Film festivals Broadcasting* Exhibition Distribution Broadcasting Total production (2016) (2016) (2016) production (2015) distribution (2016/17) (2016/17) (2016) Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada, Movie Theatre Association of Canada (MTAC), Cineplex Entertainment and Statistics Canada. * Excludes in-house production, which is included in Film and TV production 28 Profile 2017

31 2. ECONOMIC CONTRIBUTION Exhibit 2 - 8 Direct and spin-off employment impact across screen sector value chain 300,000 271,200 161,380 250,000 200,000 150,000 FTEs 109,820 100,000 50,000 0 Spin-off Total Direct Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada, Movie Theatre Association of Canada (MTAC), Cineplex Entertainment and Statistics Canada. The screen sector value chain in Canada also generates an estimated $23.6 billion in GDP for the Canadian economy, including $10.8 billion of GDP directly in the value chain industries (i.e. direct impact) and $12.8 billion in GDP in other industries within the Canadian economy (i.e. spin-off impact). Exhibit 2 - 9 Summary of total GDP impact of screen sector value chain 25,000 , , 20,000 , , 15,000  ,  , $ millions 10,000 5,000 0 Total Broadcasting Distribution Exhibition CDM Film festivals Broadcasting* Film and TV distribution production (2016) (2016) (2015) (2016) production (2016) (2016/17) (2016/17) Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada, Movie Theatre Association of Canada (MTAC), Cineplex Entertainment and Statistics Canada. * Excludes in-house production, which is included in Film and TV production 29 Profile 2017

32 2. ECONOMIC CONTRIBUTION Exhibit 2 - 10 Direct and spin-off GDP impact across the screen sector value chain 25,000 12,825 23,637 20,000 15,000 10,812 $ millions 10,000 5,000 0 Total Spin-off Direct Source: Estimates based on data collected from CAVCO, CRTC, CBC/Radio-Canada, the Association of Provincial Funding Agencies, Statistics Canada and the Conference Board of Canada, Movie Theatre Association of Canada (MTAC), Cineplex Entertainment and Statistics Canada. 30 Profile 2017

33 Canadian content 3. production Canadian content production includes all film and television productions made by Canadian production companies. Most Canadian content production is made by independent production companies, although 22 also account for some production in this sector. This segment broadcaster-affiliated production companies excludes broadcaster in-house and foreign location and service (FLS) production. In this section, we provide summary statistics for Canadian content production. In Sections 4 and 5, we provide more detailed statistics for the Canadian television and Canadian theatrical feature film segments, respectively. Highlights from 2016/17 • The volume of Canadian content production increased by 16.1% to $3.30 billion. • English-language production increased by 16.6% to $2.44 billion. • French-language production increased by 15.9% to $856 million. • Canadian content production in the fiction genre increased by 33.1% to $1.8 billion. • Documentary production increased by 4.9% to $301 million. 23 increased by 18.6% to $543 million. • Production of programming in the lifestyle and human interest genre • Production in the variety and performing arts (VAPA) genre increased by 13.2% to $137 million. • Children’s and youth production decreased by 16.9% to $521 million. • Canadian animation production decreased by 19.9% to $266 million. Affiliated production companies are production companies in which a Canadian broadcaster owns or controls at least 30% of the voting equity. 22 Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 23 31 Profile 2017

34 3. CANADIAN CONTENT PRODUCTION Canadian content production rose by 16.1% to an all-time high of $3.3 billion in 2016/17. This growth came from both higher volumes of Canadian television production as well as Canadian theatrical feature film production. However, it was the former – the larger of the two segments – that made the biggest contribution to this growth. As the statistics in this section show, both language markets contributed to the higher volumes of Canadian content production. English-language production increased by 16.6% to an all-time high of $2.44 billion; French-language production increased by 15.9% to an all-time high of $856 million. What is more, every genre except the children’s and youth genre displayed higher volumes of Canadian content production in 2016/17. In fact, fiction production expanded by $448 million or 33% in just the past year, with contributions coming from both the television and theatrical segments. The children’s and youth genre did reach a ten-year high of $627 million in production volume in 2015/16, and even though it retreated to $521 million in production volume in 2016/17, it was still operating well above its 10-year average of $443 million in production volume. Related to the retreat in children’s and youth production was the drop-off in Canadian animation production in 2016/17. This production format also reached a ten-year high of $322 million in 2015/16 before falling back down to $266 million in 2016/17. It too, however, was still operating above its ten-year average of $227 million. LANGUAGE The total volume of Canadian film and television production increased by 16.1% to a ten-year high of Both English-language and French-language production contributed to this annual increase. English-language $3.3 billion. production was up by 16.6% to an all-time high of $2.44 billion. French-language production increased by 15.9% to an all-time high of $856 million. For both languages, the increases in 2016/17 were largely driven by higher volumes of Canadian television production, although theatrical feature film production was also higher in both languages. Exhibit 3 - 1 Volume of Canadian film and television production, by language Bilingual and other English-language French-language 3,500 3,304 6 3,011 2,945 3,000 2,846 856 2,770 34 19 2,684 13 16 2,491 716 2,450 748 2,437 11 2,403 2,500 738 629 18 2,442 676 26 42 18 2,260 672 2,178 658 634 2,125 676 2,000 2,095 1,997 1,801 1,774 1,753 1,710 $ millions 1,500 1,000 500 0 2014/15 2013/14 2008/09 2007/08 2011/12 2015/16 2016/17 2010/11 2012/13 2009/10 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 32 Profile 2017

35 3. CANADIAN CONTENT PRODUCTION GENRE Just over half of the Canadian production volume in 2016/17 was in the fiction genre, which included $1.56 billion in television production and $237 million in theatrical feature film production. Production in the fiction, documentary, lifestyle and human interest, and VAPA genres was higher in 2016/17, with both television and theatrical feature film production contributing to the increases. Only the children’s and youth genre experienced a decline in production volume. Exhibit 3 - 2 Volume of Canadian production by genre and market 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 ($ millions) 2016/17 2007/08 2015/16 Fiction 945 879 890 1,225 928 1,093 1,233 1,169 1,564 Television 1,096 297 226 305 291 277 357 314 295 184 237 Theatrical feature film 1,528 1,224 1,181 1,502 1,453 1,407 1,183 1,353 1,801 1,172 Total Children’s and youth 311 352 379 348 438 322 419 454 539 449 Television 29 13 40 22 45 14 16 84 88 72 Theatrical feature film 337 324 369 419 370 483 448 Total 538 627 521 Documentary Television 416 345 335 373 370 311 259 281 293 408 12 8 18 9 14 7 Theatrical feature film 8 6 9 11 319 421 363 344 387 377 Total 268 287 301 427 Lifestyle and human interest* Total 348 334 282 369 478 395 478 500 458 543 Variety and performing arts 112 133 157 173 160 122 Total 190 121 137 118 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. LES PAYS D’EN HAUT Television series reimagines Quebec classic with the help of digital tools Les pays d’en haut Les belles histoires des pays d’en haut , which aired from is a series based on the classic television show 1956 to 1970. The original series was inspired by the 1933 novel Un homme et son péché , by Claude-Henri Grignon, which tells the story of a Francophone settlement in the Laurentians in the late 1800s. Written by Gilles Desjardins, the first ten-episode season premiered on Radio-Canada in January 2016. The third season is currently in production and a fourth season is confirmed. The show alludes to the previous television adaptation of the novel and the third season will feature a special appearance by Denise Filiatrault, who starred in the original series. However, Les pays d’en haut is marked by a hyperrealist vision of a turning point in the history of Quebec. For this reason, the story is supported by extensive online resources that bring the period alive. Viewers can explore a 360° experience optimized for mobile devices. Moreover, in collaboration with Bibliothèque nationale du Québec, a web documentary presents archival Les pays d’en haut material tied to each episode. The second season of is nominated for 16 Gémeaux in 2017, including one for digital engagement. The first season won best dramatic series and best actor in a dramatic series. 33 Profile 2017

36 3. CANADIAN CONTENT PRODUCTION While the fiction genre accounted for the largest single share of production volume in 2016/17; the documentary genre accounted for largest single share of the projects produced in that year, with 375 projects. The documentary genre was followed closely by the lifestyle and human interest genre, with 352 projects. Exhibit 3 - 3 Number of projects, by genre and type, 2016/17 Lifestyle and human Children’s Variety and All performing arts Documentary and youth genres Fiction interest* Number 115 119 TV Series 313 43 723 133 Other TV programming** 27 231 39 28 466 141 70 11 11 0 0 92 Theatrical feature films Total 326 157 375 352 71 1,281 Share of total TV Series 76% 35% 89% 61% 56% 35% 43% 17% 62% 11% 39% 36% Other TV programming** Theatrical feature films 21% 7% 3% 0% 0% 7% Total 100% 100% 100% 100% 100% 100% Source: Estimates based on data collected from CAVCO. Note: Data includes an estimate of CRTC-certified television production. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. ** Other TV programming category includes single-episode television programming and television pilots. Overall, French-language production accounted for 26% of the total Canadian production volume, while English represented 74%. In some genres, namely fiction and children’s and youth, English-language production claimed a higher share of total budgets than the overall share – a reflection of both higher per-project budgets and a larger number of projects. In the documentary, lifestyle and human interest, and VAPA genres, however, French-language production’s share exceeded its 26% overall share. Exhibit 3 - 4 Volume of Canadian film and television production, by genre and language, 2016/17 Lifestyle All and human Variety and Children’s interest* genres performing arts Documentary Fiction and youth $ millions 1,430 2,441 215 307 70 English-language 419 French-language 100 86 234 67 857 369 Bilingual and other 2 2 <1 2 0 6 Total 1,801 301 543 137 3,304 521 Share of total 79% 80% 71% 57% 51% 74% English-language French-language 20% 19% 29% 43% 49% 26% Bilingual and other <1% <1% <1% 0% <1% <1% 100% 100% 100% 100% 100% 100% Total Source: Estimates based on data collected from CAVCO. Note: Data includes an estimate of CRTC-certified television production. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 34 Profile 2017

37 3. CANADIAN CONTENT PRODUCTION Live action production accounted for just over half of all children’s and youth production in 2016/17, with animation production accounting for the balance. There were, however, significant differences between the English- and French- language production in this genre. In English, animation production accounted for 56.8% of the $419 million production volume. In French, live action production accounted for 87.9% of the $99 million in production. In 2016/17, the total volume of children’s and youth production dropped $106 million or 16.9%. The statistics also show that 63% of this overall decline in children’s and youth production in 2016/17 was due to a lower volume of animation production; live action production accounted for the other 37% of the decrease. Exhibit 3 - 5 Volume of Canadian children’s and youth production, by language and category 2015/16 2016/17 Animation Total Live Action $ millions Animation Total Live Action English-language 224 299 522 182 238 419 French-language 20 100 87 13 99 80 Bilingual and other 4 1 5 0 2 2 320 Total 307 627 521 268 252 Source: Estimates based on data collected from CAVCO. Note: Some totals do not sum due to rounding. Data includes an estimate of CRTC-certified television production. ANIMATION After reaching a ten-year high of $332 million in 2015/16, animation production dropped by 19.9% to $266 million. † Exhibit 3 - 6 Total volume of Canadian animation production 350 332 300 266 251 250 223 220 217 214 198 194 200 151 $ millions 150 100 50 0 2015/16 2014/15 2013/14 2015/16 2011/12 2010/11 2009/10 2008/09 2007/08 2012/13 Source: Estimates based on data collected from CAVCO. Note: Data includes an estimate of CRTC-certified television production. † Includes television and theatrical feature film production. 35 Profile 2017

38 3. CANADIAN CONTENT PRODUCTION The children’s and youth genre accounted for 95% of total Canadian animation production in 2016/17. † Exhibit 3 - 7 Volume of Canadian animation production, by genre, 2016/17 Total animation production Other genres* $266 million $14 million 5% Children’s and youth $252 million 95% Source: Estimates based on data collected from CAVCO. Note: Data includes an estimate of CRTC-certified television production. † Includes television and theatrical feature film production. * Other genres category includes production in the documentary, VAPA, and educational/instructional genres. FINANCING The financing for Canadian film and television production draws upon a variety of private and public sources. In 2016/17, 48% of total financing came from purely private sector sources, including Canadian and foreign broadcasters and distributors; 43% of total financing came from public sources including public broadcasters; and 8% of total financing came from the Canada Media Fund (CMF), a public-private partnership. The overall financing picture in 2016/17 was very similar to 2015/16, with two key exceptions. First, Canadian distributors increased their contribution to Canadian production by 75% or $221 million. Although Canadian broadcasters increased their level of financing by $40 million in 2016/17, their share of total financing decreased from 26% to 23%. Similarly, foreign financing increased by $13 million, but its share declined from 13% to 12%. 36 Profile 2017

39 3. CANADIAN CONTENT PRODUCTION FINANCING FROM CANADIAN PRODUCTION COMPANIES Federal and provincial tax credits represent part of a Canadian production company’s financing contribution to film and television projects. Canadian production companies receive tax credits based on their eligible labour expenditures. In almost all cases, the amount of tax credits received by the producer for a specific project is invested directly into that project, in order to complete the financing for that project. As well, producers often have to raise capital for development and project financing through corporate or personal lines of credit, mortgages on personal property and deferral of producer fees. After taking into account provincial and federal tax credits and production-company financing for Canadian production, the producer’s contribution to production budgets is, at a minimum, between 25% and 35% of a project’s budget in most instances. Producers are also instrumental in securing domestic and international distribution, and arranging any necessary bank financing. Exhibit 3 - 8 Financing for Canadian film and television production 2013/14 2014/15 2012/13 2016/17 2015/16 $ millions $ millions % $ millions % $ millions % $ millions % % Private broadcaster licence fees 494 18% 594 21% 512 17% 475 17% 412 12% 259 Public broadcaster licence fees 245 9% 232 8% 8% 9% 363 11% 225 1 10% 264 10% 266 10% 294 10% 291 10% 341 Federal tax credit 1 564 493 18% 491 18% 17% 19% 517 18% 571 Provincial tax credits 343 Canadian distributors 291 11% 286 10% 12% 16% 293 10% 514 2 254 292 11% 317 9% 384 13% 397 12% 11% Foreign 300 10% 282 10% 286 Canada Media Fund 286 10% 278 8% 11% 54 Telefilm Canada 60 2% 58 2% 2% 2% 69 2% 66 3 2% 56 2% 26 1% 83 3% 66 2% 80 Other public 4 241 9% 229 8% 257 9% 221 8% 280 8% Other private Total 2,684 100% 2,770 100% 2,945 100% 2,846 100% 3,304 100% Source: Estimates based on data obtained from CAVCO, CMF and Telefilm Canada. Notes: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private and public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 37 Profile 2017

40 Canadian television 4. production Canadian television production includes the production of television series, mini-series, TV movies, single- episode television programming and television pilots. It consists of productions that are certified as Canadian content by either the Canadian Audio-Visual Certification Office (CAVCO) or the Canadian Radio-television and Telecommunications Commission (CRTC). Television production is produced across various genres, including fiction (i.e., drama and comedy), children’s and youth, documentary, lifestyle and human interest programming, and variety and performing arts (VAPA). This segment excludes broadcaster in-house production, that is, television programming such as news, sports 24 and public affairs programming produced by Canadian broadcasters. Highlights from 2016/17 • Canadian television production increased by 16.4%, to $2.99 billion. • English-language television production volume increased by 16.6%; French-language television production was up by 16.8%. • In the English-language market, average hourly budgets were higher in all genres. • In the French-language market, average hourly budgets were higher in all genres, except the VAPA genre. • Canadian distributors’ financing increased by 85.2% to $470 million. • Canadian public broadcasters’ financing of Canadian television production increased by 41.1% to $361 million. • Canadian television production from Ontario-based producers increased to $1.32 billion, although their share of the national total declined from 47% to 44%. • Canadian television production from Quebec-based producers increased to $894 million. • Canadian television production from producers based in British Columbia (BC) increased by 26% to $504 million. • The number of Canadian television series decreased slightly (729 to 723), although in volume terms, production increased ($2.15 billion to $2.42 billion). • Television animation production decreased by 16.5% to $223 million. • The Canada Media Fund’s (CMF’s) financial contributions to Canadian television decreased to $278 million (from $286 million) and supported $1.29 billion in television production volume – thereby yielding the fund’s highest rate of financial leverage in a decade. • Canadian private broadcasters’ financing of Canadian television production decreased by 14.5% to $410 million. Statistics for the volume of broadcaster in-house production can be found in Section 8 of this report. 24 38 38 Profile 2017 Profile 2017

41 4. CANADIAN TELEVISION PRODUCTION Canadian television production was operating on all cylinders in 2016/17. The increases in financing from public broadcasters, Canadian distributors and foreign sources helped propel the segment’s volume of production higher by 16.4% to all-time high of $2.99 billion. The growth in Canadian television production in 2016/17 was very much broad-based. Both language markets experienced similar rates of growth. English-language Canadian television production increased by 16.6% to $2.23 billion; French-language production rose by 16.8% to $754 million. Virtually every genre contributed to the increase in production volume. Only the children’s and youth genre – which had already reached a 10-year high in 2015/16 – experienced a decrease in production volume. In particular, it was the lifestyle and human interest, and fiction genres that really fueled the growth in Canadian television production in 2016/17. Higher volumes of both English- and French-language production in the lifestyle and human interest genre lifted it to an all-time high of $543 million in production in 2016/17. Both English- and French-language fiction production also reached all-time highs in 2016/17. The higher volumes of fiction production appear to have be driven by higher hourly budgets more so than by higher output. Furthermore, all indications are that the growth in fiction production was due to higher spending on TV series and mini-series production. TYPES The volume of Canadian television production reached an all-time high of $2.99 billion in 2016/17, with growth Nearly two-thirds of the increase in all types of television production, particularly in TV series and mini-series. in Canadian television production can be traced back to the increase in the volume of television series production. Although there were six fewer series produced in 2016/17 (Exhibit 4-2), total volume rose by $271 million, or 12.6%. Approximately one-quarter of the increase in 2016/17 was due to the expanded production of mini-series. The number of mini-series rose from 46 to 47, however, the volume of production increased by nearly three-fold to $172 million. Exhibit 4 - 1 Volume of Canadian television production, by type Other TV* Mini-series TV movies Series 2,986 3,000 127 172 2,671 2,566 2,558 265 203 97 2,500 98 2,418 79 61 45 2,305 136 2,423 2,231 155 256 215 59 133 2,128 2,111 2,234 159 170 81 2,200 2,041 2,152 143 128 88 143 2,000 140 2,053 67 96 240 1,948 118 167 302 153 1,749 1,743 1,630 1,500 1,586 $ millions 1,000 500 0 2007/08 2008/09 2009/10 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2010/11 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. * Other TV category includes single-episode television programming and television pilots. 39 Profile 2017

42 4. CANADIAN TELEVISION PRODUCTION Close to 1,200 Canadian television projects were produced in 2016/17, including over 700 television series. Number of television projects, by type Exhibit 4 - 2 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2007/08 694 724 643 647 738 717 687 747 729 723 Series TV movies 176 164 109 116 103 102 127 149 154 136 57 Mini-series 47 46 49 43 38 49 46 47 40 Other TV* 381 370 372 306 385 330 339 295 279 282 1,183 Total 1,294 1,171 1,115 1,275 1,321 1,191 1,241 1,208 1,188 Source: Estimates based on data collected from CAVCO. * Other TV category includes single-episode television programming and television pilots. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. LANGUAGE Increased volumes of both English-language and French-language production helped raise the overall volume of Canadian television production in 2016/17. English-language television production increased by 16.7% to an all-time high of $2.23 billion. Similarly, French-language television production was up by 16.8% to an all-time high of $754 million. Exhibit 4 - 3 Volume of Canadian television production, by language Bilingual and other French-language English-language 2,986 3,000 6 2,671 754 2,566 2,558 26 2,500 2,418 11 14 2,305 625 14 2,231 646 654 11 2,128 2,111 2,226 559 16 2,041 39 2,000 18 587 13 2,020 580 1,909 557 539 1,889 1,845 569 1,708 1,635 1,500 1,550 1,536 1,459 $ millions 1,000 500 0 2012/13 2011/12 2008/09 2013/14 2014/15 2010/11 2015/16 2016/17 2007/08 2009/10 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 40 Profile 2017

43 4. CANADIAN TELEVISION PRODUCTION Exhibit 4 - 4 Volume of Canadian television production, by language, 2016/17 share English-language French-language 75% 25% Bilingual and other <1% Source: Estimates based on data collected from CAVCO. Note: Total may not sum due to rounding. Data includes an estimate of CRTC-certified television production. GENRE Fiction production jumped by 33.8% to an all-time high of $1.56 billion and underpinned most of the growth in All genres recorded increases in production volume in 2016/17, with the Canadian television production in 2016/17. exception of the children’s and youth genre. In that genre, volume decreased from a 10-year high in 2015/16. While the fiction genre provided most of the growth in the production volume in 2016/17, the lifestyle and human interest genre also displayed strong growth. Production in that genre rose by $85 million, or 18.6% to an all-time high of $543 million. Exhibit 4 - 5 Volume of television production, by genre Children’s and youth Lifestyle and human interest* Documentary VAPA Fiction 2,986 3,000 543 2,671 2,566 2,558 478 2,418 2,500 458 500 2,305 137 478 2,231 2,128 293 395 2,111 334 2,041 157 119 348 369 2,000 111 282 373 449 281 117 259 122 183 311 133 370 157 170 416 539 454 438 408 345 1,500 335 1,564 419 322 $ millions 352 379 311 348 1,233 1,225 1,169 1,096 1,093 1,000 945 928 890 879 500 0 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2015/16 2016/17 2014/15 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 41 Profile 2017

44 4. CANADIAN TELEVISION PRODUCTION Over the past 10 years, the fiction genre has seen its share of production volume increase somewhat – from a low of 42% in 2008/09 to 52% in 2016/17. Conversely, the documentary genre’s share of total Canadian television production volume has steadily declined – from 19% in 2007/08 to 10% in 2016/17. Exhibit 4 - 6 Share of total volume of Canadian television production, by genre Fiction Children’s and youth VAPA Lifestyle and human interest* Documentary 100% 20 20 16 18 18 18 17 14 15 17 8 8 6 5 80% 8 5 5 6 4 5 17 16 19 11 19 10 14 10 13 16 15 21 18 60% 14 16 17 19 15 16 16 52 48 48 46 46 45 44 40% 43 42 42 20% 0% 2016/17 2007/08 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 Source: Estimates based on data collected from CAVCO. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 42 Profile 2017

45 4. CANADIAN TELEVISION PRODUCTION In the two genres that experienced the highest rates of volume growth in 2016/17 – fiction, and lifestyle and human interest genres – both English- and French-language production was higher. English-language fiction production increased by 33.6% in 2016/17; French-language fiction production was up by 34%. In the lifestyle and human interest genre, English-language production was up by 10%; French-language production was 32.2% higher. The drop in production in children’s and youth genre was entirely due to a contraction in English-language production. French-language children’s and youth production actually rose from $86 million to $95 million in 2016/17, even as English-language children’s and youth production dropped from $449 million to $352 million. In both the documentary and VAPA genres, English-language production increased, while French-language production declined. Volume of Canadian television production by genre and language Exhibit 4 - 7 2009/10 2010/11 2011/12 2012/13 ($ millions) 2014/15 2015/16 2016/17 2007/08 2008/09 2013/14 Fiction 774 695 690 1,035 896 903 996 English-language 1,289 738 965 180 183 198 190 195 184 230 203 272 French-language 171 6 0 1 1 5 1 7 1 2 Bilingual and other 10 928 945 879 890 1,225 1,096 Total 1,233 1,169 1,564 1,093 Children’s and youth 252 273 294 331 247 348 372 449 352 English-language 299 65 47 52 97 74 76 78 86 95 French-language 76 12 4 4 2 10 2 Bilingual and other 5 5 2 6 Total 352 379 348 438 322 419 454 539 449 311 Documentary English-language 324 252 248 286 314 235 169 189 207 278 French-language 86 89 90 85 84 89 73 87 91 85 Bilingual and other 8 2 1 4 3 3 3 1 0 3 259 408 335 373 370 311 345 281 293 Total 416 Lifestyle and human interest* 196 186 136 230 297 246 327 319 279 307 English-language 150 French-language 146 130 174 149 151 181 177 234 145 0 Bilingual and other 0 9 7 3 0 0 1 2 3 Total 348 334 282 369 478 395 478 500 458 543 Variety and performing arts 42 50 76 74 English-language 77 32 33 27 70 72 French-language 77 100 75 91 80 81 85 78 89 67 0 Bilingual and other 6 5 4 6 0 0 3 0 6 137 133 183 157 170 157 122 117 111 119 Total Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 43 Profile 2017

46 4. CANADIAN TELEVISION PRODUCTION BARONESS VON SKETCH SHOW Women-led comedy wows audiences in Canada and secures distribution in the US Baroness Von Sketch is a sketch comedy series written, produced and starring the incredibly talented Carolyn Taylor, Meredith MacNeill, Aurora Browne and Jennifer Whalen who loved the idea of a single camera comedy shot on location and focusing on absurd but instantly-recognizable moments in modern urban life. Together they draw on more than 17 years of comedy experience and multiple collaborations, ranging from to This Hour Has 22 Minutes to the indie The Second City MainStage . improv favourite Wand Portal The first season aired on CBC in 2016, and clips from the series became viral hits online attracting millions of views worldwide. Its second season was picked up by American channel IFC, and aired in August 2017 to rave reviews from, among others, The , Vogue and Chatelaine . Produced by comedy powerhouse, Frantic Films, a third season of New York Times Baroness Von Sketch is now in production. BUDGETS Average hourly budgets were higher for English-language production in all genres in 2016/17. In the fiction genre, the average budget rose to $1.55 million per hour. Even as the volume of production dropped in English-language children’s and youth production, the average budget increased to a 10-year high of $1.24 million per hour. The average budget for English-language VAPA production also increased to a 10-year high of $707,000 per hour. Exhibit 4 - 8 Budgets of English-language Canadian television production, by genre $ 000s per hour 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 Fiction Average 1,515 1,323 1,232 1,700 1,615 1,220 1,271 1,360 1,554 1,304 Median 1,523 1,257 1,367 1,207 1,470 1,308 1,150 1,267 1,316 1,503 Children’s and youth 854 607 820 788 863 Average 711 867 769 1,048 1,241 420 Median 496 777 653 500 583 512 656 754 820 Documentary Average 334 410 347 367 321 312 312 338 393 324 244 249 263 286 277 292 Median 256 272 341 291 Lifestyle and human interest* n.a. n.a. n.a. 266 Average 265 322 271 328 365 308 Median n.a. n.a. n.a. 288 305 277 286 246 301 306 Variety and performing arts 386 396 367 529 Average 476 461 280 450 707 556 Median 295 318 262 231 360 197 267 250 258 336 Source: Estimates based on data collected from CAVCO. Note that the data does not include an estimate (as used in other exhibits) of CRTC-certified television production. --: Data not reported due to the size of the sample of projects. n.a.: Data not available. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 44 Profile 2017

47 4. CANADIAN TELEVISION PRODUCTION For French-language production, all but the VAPA genre experienced increases in average hourly budgets. In the fiction genre, the average budget increased to $595,000 per hour – the highest level since 2009/10. The average budget in this genre was also more than double that observed in any other genre of French-language production. In the lifestyle and human interest genre, the average budget rose to $125,000 per hour – the highest level on record. Budgets of French-language Canadian television production, by genre Exhibit 4 - 9 2009/10 2010/11 2011/12 2012/13 2008/09 2014/15 2015/16 2016/17 $ 000s per hour 2007/08 2013/14 Fiction 450 520 517 427 402 621 503 511 595 520 Average 510 376 467 Median 327 342 417 505 514 527 504 Children’s and youth 220 209 206 313 187 233 353 184 216 Average 243 Median 179 163 150 167 143 159 175 141 147 115 Documentary Average 223 234 228 252 212 204 222 188 184 186 Median 190 197 211 173 179 190 163 165 159 189 Lifestyle and human interest* n.a. n.a. n.a. 113 Average 119 73 87 97 125 104 Median n.a. n.a. n.a. 83 79 63 69 76 83 107 Variety and performing arts Average 278 311 212 220 205 229 261 227 237 221 166 Median 168 161 163 148 150 201 197 148 137 Source: Estimates based on data collected from CAVCO. Note that the data does not include an estimate (as used in other exhibits) of CRTC-certified television production. n.a.: Data not available. * Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 45 Profile 2017

48 4. CANADIAN TELEVISION PRODUCTION ANIMATION In 2016/17 television animation production decreased by almost 17% to $223 million, with 89% of this total production in English. Exhibit 4 - 10 Volume of Canadian animation television production, by language English-language Bilingual and other French-language 300 267 1 250 11 223 220 216 212 254 12 2 201 201 3 22 3 193 200 16 1 2 11 35 23 4 23 192 165 199 18 198 2 145 150 177 178 176 10 2 171 $ millions 9 153 100 134 50 0 2007/08 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 46 Profile 2017

49 4. CANADIAN TELEVISION PRODUCTION CANADIAN CONTENT POINTS To certify television programs and films as Canadian content, CAVCO and the CRTC use similar evaluation tools based on assigning points to key creative production roles. Canadian broadcasters can use these certified films and television programs to meet their Canadian television exhibition requirements. CAVCO’s content-point scale is also used (in conjunction with other eligibility criteria) to determine if a film or television program is eligible to access the Canadian Film or Video Production Tax Credit (CPTC) and other funding mechanisms through Telefilm Canada and the CMF. The number of Canadian content points increases as the share of key creative positions occupied by Canadians increases. To be certified as Canadian content, a film or television program (that is not an audiovisual treaty coproduction) must obtain a minimum of six points; the maximum number of points a film or television program can 25 obtain is ten. The share of Canadian television production with 10 points decreased to a 10-year low of 71% in 2016/17. Television production by Canadian content points (excludes audiovisual treaty Exhibit 4 - 11 coproduction) 10 points* 8 and 9 points 6 and 7 points 100% 79 77 77 73 71 75 87 82 75 77 80% 60% 40% (based on dollar volume) 20 15 12 15 14 20% 11 14 12 Share of total volume of television production 10 14 7 12 12 10 10 9 9 9 7 5 0% 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 2016/17 Source: Estimates based on data collected from CAVCO. * Includes all productions (other than treaty coproductions) for which Canadians occupied all of the key creative positions as defined by CAVCO, even if not all key creative point positions were occupied. For example, a television program with only one lead performer would receive 9 out of 9 points, rather than 10 out of 10 points. Note: A similar mapping of points has been done to give all productions a score out of 10 points for the purposes of this exhibit. For example, a television program that receives 7 out of 9 points would be represented as an 8-out-of-10-point production. Some totals may not sum due to rounding. For more information on the Canadian content point scale, please visit: www.canada.ca/en/canadian-heritage/services/funding/cavco-tax-credits.html. A documentary project can receive certification even if it obtains fewer than six points. However, all the filled key creative positions must be occupied by 25 Canadians. 47 Profile 2017

50 4. CANADIAN TELEVISION PRODUCTION REGION Producers based in Canada’s three largest production centres were responsible for approximately 90% of all Canadian television production. Ontario-based producers accounted for $1.32 billion or 44% of total volume. Quebec- based producers accounted for $894 million in Canadian television production in 2016/17, an increase of 22%. BC-based producers increased their volume of Canadian television production by 26% in 2016/17, reaching a 10-year high of $504 million. Producers based in all other provinces and territories, except Nova Scotia and Prince Edward Island, also increased their volume of Canadian television production in 2016/17. Exhibit 4 - 12 Volume of Canadian television production, by province and territory 2016/17 share of 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 ($ millions) 2016/17 2007/08 2008/09 total 2015/16 Ontario 959 944 993 1,299 829 1,094 1,212 1,216 1,322 44% 1,056 Quebec 715 731 678 711 772 701 664 742 733 894 30% British Columbia 356 196 231 367 387 417 410 400 504 17% 287 91 Alberta 80 63 67 59 92 76 121 162 5% 80 Nova Scotia 46 47 44 29 52 35 74 42 43 37 1% Newfoundland and 1% 6 5 31 33 Labrador 31 33 21 29 33 32 Manitoba 34 40 44 25 40 22 30 42 15 20 <1% New Brunswick 16 13 8 15 7 9 7 2 5 <1% 11 42 4 11 16 21 5 Saskatchewan 3 3 5 <1% 58 3 Territories* 2 1 1 2 1 2 3 5 <1% 1 Prince Edward Island 5 0 0 0 3 0 0 0 0 0 0% 2,986 Total 2,041 2,111 2,671 2,305 2,418 2,558 2,566 2,231 100% 2,128 Source: Estimates based on data collected from CAVCO. Note: Data includes an estimate of CRTC-certified television production. Statistics published by provincial funding agencies may differ from those in Profile 2017 . Please see Notes on Methodology for additional information. Some totals may not sum due to rounding. * Includes Yukon, Nunavut and Northwest Territories. CANADA MEDIA FUND The CMF is funded by the Government of Canada, and cable and direct-to-home (DTH) satellite distributors (also known as broadcasting distribution undertakings [BDUs]). The CMF has a mandate to support the creation of Canadian convergent digital content across multiple platforms, including television and leading-edge new media applications, as well as experimental content applications or software for the Internet, wireless and other emerging digital platforms. The CMF was officially launched on April 1, 2010 to respond to changes brought about by new technologies and evolving consumer demand. It replaced the former Canadian Television Fund and the Canada New Media Fund. During its inaugural fiscal year of operation, 2010/11, the CMF launched a new slate of programs, with an overall program budget of more than $350 million for screen-based media across two funding streams: the Convergent Stream and the Experimental Stream. The Convergent Stream provides financial support to screen-based projects with television content and content or applications for at least one additional digital media platform. The Experimental Stream funds the creation of innovative digital media content and software applications. This section provides an overview of the screen-based production supported by the CMF’s Convergent Stream. 26 in television production in 2016/17 and generated CMF funding of $278 million supported $1.29 billion 27,500 full-time equivalent jobs (FTEs). Both the level of funding and volume of supported production were down slightly from the 10-year highs achieved in 2015/16; although the CMF’s rate of financial leverage increased. In 2016/17, each dollar of CMF funding attracted $3.64 in additional production financing. Canada Media Fund, custom tabulations. Funding and production statistics only include television-platform component of Convergent Stream projects. 26 48 Profile 2017

51 4. CANADIAN TELEVISION PRODUCTION Exhibit 4 - 13 Total volume of Canadian television production with CMF contributions Contribution Other nancing* 1,500 1,296 1,291 , , 1,192 1,191 1,200 1,149 1,128    1,056  1,003  943  869 900   $ millions 600 300           0 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 2016/17 2015/16 Source: CMF. * Other financing includes contributions from production companies, broadcasters, other government sources and distributors Exhibit 4 - 14 Number of FTEs generated by CMF-supported production Direct Jobs Spin-off jobs 30,000 28,000 27,900 27,500 26,200 26,200 26,000 17,000 16,900 16,700 25,100 24,300 15,900 15,900 15,800 23,900 25,000 15,200 22,800 14,700 14,500 13,800 20,000 15,000 FTEs 11,000 11,000 10,000 10,800 10,300 10,300 10,200 9,900 9,600 9,400 9,000 5,000 0 2007/08 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 Source: Estimates based on data from the CMF, Statistics Canada and the Conference Board of Canada. Note: See the Notes on Methodology section for a description of the job-estimation methodology. 49 Profile 2017

52 4. CANADIAN TELEVISION PRODUCTION The CMF’s contributions supported close to 2,900 hours of television production in 2016/17, down 2.7% from a 10-year high in 2015/16. Documentary productions accounted for 36.3% of the total hours of production, children’s and youth and drama each for 23.9%, and variety and performing arts for 14.5%. Number of CMF-supported hours of television production, by genre Exhibit 4 - 15 2014/15 2011/12 2008/09 2013/14 2009/10 2015/16 2016/17 2007/08 2010/11 2012/13 761 821 715 828 Documentary 886 925 1,041 1,045 806 828 693 639 695 812 785 646 799 763 688 Children’s and youth 712 Drama 480 580 610 659 613 671 661 700 757 728 (i.e., fiction) Variety and performing arts 352 422 549 404 223 354 398 418 217 321 2,195 2,210 2,422 2,491 2,801 2,688 2,580 2,778 2,959 2,878 Total Source: CMF. Note: Some totals may not sum due to rounding. Documentary production Over half (54%) of the CMF’s $278 million contributions went to drama production. accounted for another 25% of funding, and children’s and youth productions for 14%. Exhibit 4 - 16 CMF contributions to television production, by genre 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2007/08 ($ millions) 64 53 55 61 56 69 58 57 59 65 Documentary Children’s and youth 49 55 54 57 56 56 56 54 39 49 158 131 160 159 166 152 178 153 151 Drama (i.e., fiction) 162 Variety and performing 9 10 13 13 23 arts 16 13 13 19 18 Total 275 307 282 303 242 282 286 286 278 300 Share of total Documentary 22% 20% 20% 21% 19% 20% 21% 23% 25% 20% 19% Children’s and youth 18% 19% 19% 18% 20% 20% 19% 14% 20% Drama (i.e., fiction) 54% 59% 58% 57% 53% 56% 54% 55% 53% 54% Variety and performing 7% 4% 4% 4% 5% arts 6% 6% 5% 5% 8% 100% Total 100% 100% 100% 100% 100% 100% 100% 100% 100% Source: CMF. Note: Some totals may not sum due to rounding. 50 Profile 2017

53 4. CANADIAN TELEVISION PRODUCTION FINANCING Higher levels of private-sector financing, particularly from Canadian distributors, helped to underpin the growth in Canadian television production in 2016/17. Financing from Canadian distributors increased by $216 million to $470 million. In fact, approximately half of the year-over-year increase in the volume of Canadian television production ($420 million) can be attributed to the increase in Canadian distributor financing. Financing from public Canadian broadcasters, foreign sources and other private sources also increased in 2016/17. Only private Canadian broadcasters and the CMF reduced their levels of financing. Exhibit 4 - 17 Financing of Canadian television production 2012/13 2013/14 2015/16 2016/17 2014/15 $ millions % $ millions % $ millions $ millions $ millions % % % 491 591 24% 509 20% 21% 18% 410 14% Private broadcaster licence fees 474 Public broadcaster licence fees 10% 244 10% 231 9% 256 10% 361 12% 223 1 10% 238 10% 268 240 272 11% 318 11% 10% Federal tax credit 1 19% 18% 423 18% 485 417 459 18% 506 17% Provincial tax credit Canadian distributors 255 11% 252 10% 306 12% 254 10% 470 16% 2 176 193 8% 241 8% 355 14% 381 13% 9% Foreign 286 CMF 282 12% 286 11% 13% 11% 278 9% 300 3 40 5 <1% 5 0% 23 1% 1% 2% 45 Other public 4 198 9% 189 8% 209 8% 171 7% 218 7% Other private Total 2,305 100% 2,418 100% 2,558 100% 2,566 100% 2,986 100% Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private ad public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 51 Profile 2017

54 4. CANADIAN TELEVISION PRODUCTION Private Canadian broadcasters devoted the largest share of their $410 million in licence fees to the productions in the lifestyle and human interest genre; that genre received $206 million from private Canadian broadcasters in 2016/17. In fact, Canadian broadcasters’ licence fees (private and public) accounted 51% of total financing in that genre. Canadian broadcasters’ licence fees were also a major source of financing for programming in the VAPA genre, where they accounted for 49% of total financing. The fiction genre was the biggest beneficiary of public Canadian broadcasters’ licence fees. Television programs in this genre received $184 million of the $361 million in total licence fees paid by public Canadian broadcasters. In the children’s and youth genre, Canadian distributors contributed the largest single share to overall financing. In 2016/17, they contributed $114 million, or 25% to total financing. This was significantly more than the $71 million that this genre received from Canadian broadcasters. The large financing contribution from Canadian distributors to this genre reflects the strong track record of international sales of Canadian children’s and youth programming, and thereby, the prospects for Canadian distributors to licence these programs to foreign broadcasters and online platforms. For the documentary genre, both Canadian broadcasters and the CMF played important roles in overall financing. Each of these financing categories contributed $69 million, or 24% of total financing in 2016/17. Financing of Canadian television production, by genre, 2016/17 Exhibit 4 - 18 Lifestyle and human Children’s All Variety and 1 interest and Youth Fiction Documentary Genres performing arts Amount ($ millions) 101 37 40 206 27 Private broadcaster licence fees 410 Public broadcaster licence fees 184 34 29 73 41 361 2 Federal tax credit 164 46 32 61 15 318 2 Provincial tax credits 92 81 21 506 268 44 288 Canadian distributors 28 36 3 470 114 3 Foreign 289 37 29 26 1 381 4 CMF 151 39 69 0 19 278 5 Other public 26 1 8 10 0 45 6 Other private 50 94 14 218 50 10 Total 1,564 293 543 137 2,986 449 Share of total financing ($ millions) Private broadcaster licence fees 14% 38% 19% 14% 6% 8% 8% 10% 13% 30% 12% Public broadcaster licence fees 12% 2 Federal tax credit 10% 11% 11% 11% 11% 10% 2 Provincial tax credits 21% 15% 15% 16% 17% 17% 18% 25% 10% 7% 2% 16% Canadian distributors Foreign 18% 8% 10% 5% 1% 13% 3 CMF 9% 0% 14% 9% 10% 24% 4 Other public 2% 3% 2% 0% 1% 0% 5 Other private 6% 11% 5% 9% 7% 7% Total 100% 100% 100% 100% 100% 100% Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 2. Only programming in the fiction, children’s and youth, documentary and VAPA genres are eligible for CMF funding. 3. Includes private and public financing from outside Canada. 4. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 5. Other public includes financing from provincial governments, and other federal government departments and agencies. 6. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors 52 Profile 2017

55 4. CANADIAN TELEVISION PRODUCTION In English-language television production, the level and share of financing from foreign sources has grown steadily over the past five years. Over that period, the level of foreign financing rose from $167 million to $384 million, increasing its share from 10% to 17%. In 2016/17, the steady long-term rise in foreign financing was complemented by a sharp increase in Canadian distributor financing. It increased by $218 million to total $472 million; its share of total financing jumped from 13% to 21%. Canadian public broadcasters also lifted their financing contribution from $127 million to $186 million. Only Canadian private broadcasters and the CMF reduced their financing for English-language television production in 2016/17. Exhibit 4 - 19 Financing of English-language Canadian television production 2012/13 2013/14 2015/16 2016/17 2014/15 $ millions % $ millions % $ millions $ millions $ millions % % % 345 456 25% 327 17% 20% 15% 236 11% Private broadcaster licence fees 286 Public broadcaster licence fees 6% 124 7% 107 6% 127 7% 186 8% 101 1 Federal tax credit 11% 10% 197 10% 202 10% 238 11% 176 176 1 Provincial tax credits 19% 329 18% 377 20% 364 19% 394 18% 318 Canadian distributors 265 16% 244 13% 304 16% 254 13% 472 21% 2 Foreign 10% 10% 242 13% 357 19% 384 17% 167 187 197 CMF 183 10% 185 10% 185 10% 176 8% 12% 3 Other public 5 <1% 3 <1% 15 1% 33 2% 33 1% 4 Other private 8% 142 8% 146 135 100 5% 106 5% 8% Total 1,708 100% 1,845 100% 1,899 100% 1,909 100% 2,226 100% Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private and public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 53 Profile 2017

56 4. CANADIAN TELEVISION PRODUCTION As in previous years, French-language productions were financed primarily by broadcaster licence fees; they represented 48% of total financing in 2016/17 (compared to 19% for English-language productions). French-language production did not experience the same growth in Canadian distributor and foreign financing experienced in the English-language market. Instead, the overall growth in production volume was underpinned by higher levels of financing from Canadian public broadcasters and other private sources. Financing of French-language Canadian television production Exhibit 4 - 20 2013/14 2014/15 2015/16 2016/17 2012/13 $ millions % $ millions % $ millions % $ millions % % $ millions 144 132 24% 187 29% 25% 30% 184 24% Private broadcaster licence fees 195 122 Public broadcaster licence fees 125 22% 126 19% 132 20% 184 24% 21% 1 11% 61 11% 73 63 74 11% 86 11% 11% Federal tax credit 1 17% 17% 91 16% 110 97 100 15% 120 16% Provincial tax credits Canadian distributors 2 <1% 2 <1% 2 <1% 3 <1% 4 1% 2 2 1 <1% <1 <1% 2 <1% 2 <1% <1% Foreign 96 93 92 16% 93 14% CMF 14% 93 12% 16% 3 11 2% 11 2% 6 1% 2 <1% 10 1% Other public 4 44 48 8% 10% 8% 55 8% 45 7% 72 Other private Total 100% 559 100% 654 100% 646 587 754 100% 100% Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private and public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. When viewed on a genre basis, the financing statistics for English-language production demonstrate how English- language Canadian television programs in the fiction, and children’s and youth genres are highly exportable and have release windows beyond their first broadcast release. In the fiction genre, foreign sources and Canadian distributors contributed a combined 44% of total financing which significantly exceeded the 14% of financing supplied by Canadian broadcasters. Similarly, in the children’s and youth genre, Canadian distributors and foreign sources accounted for a combined 43% – more than four times the share of financing (10%) supplied by Canadian broadcasters. English-language documentary productions displayed one of the most diverse financing structures among all the genres. On a genre-wide basis, English-language documentaries drew upon very similar contributions from the CMF (21%), Canadian broadcasters (19%), foreign sources (17%) and Canadian distributors (16%). In both the lifestyle and human interest, and VAPA genres, Canadian broadcasters accounted for over 40% of total financing. Indeed, in the lifestyle and human interest genre, private Canadian broadcasters licence fees contributed 41% of total financing. This contribution reflected the licence fees from Canadian specialty television services, which commission and include a relatively large amount of lifestyle programming (e.g. home improvement shows, cooking shows) in their schedules. 54 Profile 2017

57 4. CANADIAN TELEVISION PRODUCTION Exhibit 4 - 21 Financing of English-language Canadian television production, by genre, 2016/17 Lifestyle Children’s and human Variety and All 1 interest and Youth Fiction Documentary Genres performing arts Amount ($ millions) 59 21 20 127 9 236 Private broadcaster licence fees 15 18 11 Public broadcaster licence fees 186 122 21 2 139 35 22 33 7 238 Federal tax credit 2 228 75 31 49 11 394 Provincial tax credits 288 112 36 3 472 Canadian distributors 34 3 285 36 25 1 384 37 Foreign 4 103 19 176 43 10 0 CMF 5 5 2 5 3 33 18 Other public 6 45 34 2 21 5 106 Other private Total 1,289 352 207 307 70 2,226 Share of total financing (%) Private broadcaster licence fees 6% 10% 41% 13% 11% 5% 9% 9% 4% 30% 8% 4% Public broadcaster licence fees 2 11% 10% 11% 11% 10% 11% Federal tax credit 2 18% 21% 15% 16% 15% 18% Provincial tax credits 22% 32% 16% 12% 4% 21% Canadian distributors 3 17% 22% 11% 17% 8% 1% Foreign 4 8% 5% 21% 0% 14% 8% CMF 5 1% 1% 1% 2% 5% 1% Other public 6 3% 5% 10% 1% 7% 8% Other private 100% 100% 100% 100% 100% 100% Total Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 2. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 3. Includes private and public financing from outside Canada. 4. Only programming in the fiction, children’s and youth, documentary and VAPA genres are eligible for CMF funding. 5. Other public includes financing from provincial governments, and other federal government departments and agencies. 6. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 55 Profile 2017

58 4. CANADIAN TELEVISION PRODUCTION On a genre-by-genre basis, French-language production is most reliant on Canadian broadcasters’ licence fees for the largest share of its financing. Canadian broadcasters’ contribution to financing ranged from 39% in the children’s and youth genre to 62% in the lifestyle and human interest genre. The CMF was another important source of financing in all genres, except the lifestyle and human interest genre, which is not eligible for CMF funding. And while the levels of Canadian distributor and foreign financing for various genres of French-language production were negligible in 2016/17 (as they were in previous years), French-language production in the fiction, children’s and youth, and lifestyle and human interest genres did attract additional private financing from other sources (i.e. other than broadcasters or distributors) within Canada. Exhibit 4 - 22 Financing of French-language Canadian television production, by genre, 2016/17 Lifestyle and human Children’s Variety and All 1 and Youth Documentary interest Fiction Genres performing arts Amount ($ millions) 43 17 23 82 17 184 Private broadcaster licence fees 67 13 63 20 184 Public broadcaster licence fees 20 2 28 11 10 29 8 86 Federal tax credit 2 43 17 15 34 11 120 Provincial tax credits Canadian distributors 3 0 <1 <1 4 1 3 0 <1 <1 0 2 1 Foreign 4 21 47 16 93 0 9 CMF 5 10 7 0 1 2 1 Other public 6 32 12 2 24 2 72 Other private Total 754 271 95 85 234 68 Share of total financing (%) Private broadcaster licence fees 18% 27% 35% 25% 24% 16% 25% 15% 27% 29% 24% 21% Public broadcaster licence fees 2 10% 11% 12% 12% 12% 11% Federal tax credit 2 16% 18% 17% 15% 16% 16% Provincial tax credits 1% 1% 0% <1% <1% 1% Canadian distributors 3 <1% <1% <1% <1% <1% 0% Foreign 4 17% 17% 25% 0% 13% 12% CMF 5 3% 0% 1% 1% 1% 1% Other public 6 13% 12% 10% 2% 10% 3% Other private 100% 100% 100% 100% 100% 100% Total Source: Estimates based on data obtained from CAVCO and CMF. Note: Some totals may not sum due to rounding. Data includes an estimate of CRTC-certified television production. 1. Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 2. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 3. Includes private and public financing from outside Canada. 4. Only programming in the fiction, children’s and youth, documentary and VAPA genres are eligible for CMF funding; programming in the lifestyle and human interest, and magazine genres is not eligible for CMF funding. 5. Other public includes financing from provincial governments, and other federal government departments and agencies. 6. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 56 Profile 2017

59 4. CANADIAN TELEVISION PRODUCTION Over the past five years, broadcaster licence fees have varied considerably from year to year in most genres and in both language markets. In the English-language market, licence fees have typically been in the range of $100,000 to $200,000 per hour, although they have dipped below that range in some genres and years. In 2016/17, the average hourly licence fee for English-language VAPA production jumped to a five-year high of $322,000. In the French-language market, broadcasters paid the highest level of licence fees for fiction productions, followed by VAPA productions. In fact, between 2014/15 and 2016/17, the average licence fees for French-language fiction productions exceeded that for English-language fiction productions. Exhibit 4 - 23 Average per-hour licence fees paid by Canadian broadcasters for Canadian television programming* VAPA Children’s and youth Fiction Lifestyle and human interest** Documentary 350 322 300 238 250 204 195 200 173 173 171 169 168 166 152 171 157 145 144 143 150 159 132 $000 per hour 120 138 135 138 135 133 129 124 101 127 116 115 114 100 105 76 72 92 69 70 63 68 83 68 77 66 62 68 54 50 56 58 51 47 0 2016/17 2013/14 2012/13 2015/16 2016/17 2012/13 2015/16 2014/15 2013/14 2014/15 French-language English-language Source: Estimates based on data obtained from CAVCO. * Statistics for average licence fees are based strictly on CAVCO-certified projects for which licence fee data was available. The statistics for average licence fees have not been adjusted in any manner to take into account television programs that only received certification from the CRTC. ** Includes magazine programming and a small amount of programming that was previously allocated to the educational/instructional genre. 57 Profile 2017

60 Canadian theatrical 5. feature film production The Canadian theatrical feature film segment produces feature-length films, which are intended for primary 27 Ballerina Recent examples of notable Canadian theatrical feature films include release in movie theatres. , Race , and (Leap!) . Les 3 p’tits cochons 2 Highlights from 2016/17 • Canadian theatrical feature film production volume increased by 13.6% to $318 million. • English-language theatrical feature film production increased by 16.1% to $216 million. French-language theatrical feature film production increased by 9.8% to $101 million. • The average budget of English-language feature films increased to $3.2 million; the average budget for French-language films increased to $3.5 million. • The total volume of theatrical feature film production in the fiction genre increased by 28.8% to $237 million. • Public sources accounted for 61% of total financing of Canadian theatrical feature film production, up from 56% in 28 2015/16. Telefilm Canada, alone, accounted for 22% of total financing. • The volume of theatrical feature films made by Quebec-based producers accounted for 47% of total production volume, up from 40% in 2015/16. • The volume of theatrical feature films made by producers based in British Columbia increased by 92.7% to $79 million. • Canadian producers made 92 theatrical feature films, down from 105 in 2015/16. • Theatrical feature films produced in other languages dropped to under $1 million. • The number of theatrical feature films in the fiction genre decreased from 80 to 70. • Foreign financing of Canadian theatrical feature film production dropped from $29 million to $16 million and 5% of total financing. • The volume of theatrical feature films made by producers based in Ontario decreased by 41.1% to $66 million. 27 For this report, the feature film category includes all films 75 minutes and over in length. The statistics presented in this report for the fiction production funded by Telefilm Canada include only films supported through Telefilm Canada’s main production 28 program and not its other production-assistance programs. 58 58 Profile 2017 Profile 2017

61 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION A bounce-back in the production of theatrical feature films in the fiction genre helped the overall volume of theatrical feature film production to recover from an eight-year low in 2015/16. Still, the $318 million in theatrical feature film production in 2016/17 was below levels seen earlier in the decade and under the 10-year average of $333 million. Even though the number of films produced dropped from 105 to 92 in 2016/17, healthy increases in the average budgets for fiction films in both French and English helped lift the overall volume of production. The average budget for French-language films increased to a ten-year high of $3.5 million. In the English-language market, the average budget increased from $2.1 million to $3.2 million. Though the foreign pre-sale financing of Canadian films dropped to a five-year low of $16 million and only 5% of total financing in 2016/17, other domestic sources of private and public financing helped to underpin the higher average budgets and increase in production volume. Telefilm Canada, Canadian distributors, and other public and private sources all increased their financing of Canadian theatrical feature film production. Telefilm Canada, in particular, increased its annual investment from $54 million to $69 million in 2016/17. This increase, alone, accounted for nearly 40% of the growth in production volume. TOTAL PRODUCTION AND AVERAGE BUDGETS The total volume of Canadian theatrical feature film production increased by 13.6% to $318 million in 2016/17. The increase in production volume took place despite the fact that the number of theatrical feature films produced decreased from 105 to 92. These contrasting trends imply that the average project budget increased in 2016/17. Indeed, the average budget of theatrical feature films in the fiction genre increased from $2.3 million to $3.3 million. Total volume of Canadian theatrical feature film production Exhibit 5 - 1 400 388 379 363 352 340 350 326 323 318 300 280 260 250 200 $ millions 150 100 50 0 2016/17 2015/16 2014/15 2007/08 2012/13 2011/12 2010/11 2009/10 2008/09 2013/14 Source: Estimates based on data collected from CAVCO. 59 Profile 2017

62 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION Exhibit 5 - 2 Number of Canadian theatrical feature films produced in Canada on an annual basis 150 132 128 117 120 116 114 111 105 103 100 92 90 60 Number of lms 30 0 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 Source: Estimates based on data collected from CAVCO. Budgets of theatrical feature films (fiction genre only) Exhibit 5 - 3 ($ millions) 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 English 3.5 3.9 2.5 4.2 3.8 Average 3.6 3.9 3.6 2.1 3.2 Median 2.1 1.9 1.4 1.4 1.8 1.2 1.3 1.3 1.3 1.2 French Average 2.7 2.6 2.9 3.3 2.7 2.5 2.3 2.6 3.5 2.8 1.8 1.6 1.9 2.2 2.4 2.1 1.9 1.3 1.9 3.3 Median All languages* 3.4 Average 3.6 3.4 3.4 2.6 3.5 3.1 2.3 3.3 3.5 2.1 2.0 1.7 1.5 2.0 1.5 1.4 1.4 1.3 1.3 Median Source: Estimates based on data from CAVCO. Note: Calculations exclude the foreign budgets of audiovisual treaty coproductions. * including other languages 60 Profile 2017

63 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION Exhibit 5 - 4 Theatrical feature film projects, by budget size (fiction genre only) $1,000,000 to $2,499,999 $2,500,000 to $4,999,999 under $1,000,000 $10,000,000 and over* $5,000,000 to $9,999,999 100% 6 5 6 6 6 5 11 12 7 1 10 14 18 12 10 16 9 15 16 23 23 21 17 27 80% 17 17 12 21 44 30 30 15 31 26 60% 44 36 17 26 23 40% 39 38 37 36 34 29 29 27 27 20% 19 Share of total number of theatrical feature lms in ction genre 0% 2011/12 2014/15 2013/14 2016/17 2015/16* 2010/11 2009/10 2008/09 2007/08 2012/13 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Budget calculations exclude the foreign budgets of audiovisual treaty coproductions. * Data for the “$10,000,000 and over” group has been combined with data for the $5,000,000 to $9,999,999 group. 61 Profile 2017

64 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION LANGUAGE Increased volumes of Canadian theatrical feature film production in both English and in French helped push the overall volume of production higher in 2016/17. English-language production was up by 16.1% to $216 million; French-language production was up by 9.8% to a six-year high of $101 million. Production in bilingual format or other languages was under $1 million in 2016/17. Volume of Canadian theatrical feature film production, by language Exhibit 5 - 5 French-language Bilingual and other English-language 400 388 379 363 5 0 352 350 340 5 1 94 326 90 323 318 9 106 4 71 8 0 300 280 91 289 288 95 102 101 260 280 2 250 252 2 92 240 92 224 216 216 200 $ millions 186 166 150 100 50 0 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 Source: Estimates based on data collected from CAVCO. Note: Some totals may not sum due to rounding. Number of theatrical feature films, by language Exhibit 5 - 6 2008/09 2009/10 2010/11 2011/12 2007/08 2013/14 2014/15 2015/16 2016/17 2012/13 English 63 63 70 66 75 90 75 87 72 60 French / Bilingual and other 37 41 50 39 40 42 45 33 32 38 Total 103 100 111 116 114 128 117 132 105 92 Source: Estimates based on data collected from CAVCO. Note: Due to the low number of projects in the bilingual and other category, the data for this language category has been combined with the data for French-language market. 62 Profile 2017

65 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION GENRES The majority of theatrical feature film production was in the fiction genre in 2016/17. Canadians produced a total of 70 fiction feature films in 2016/17, with total budgets of $237 million, or three-quarters of the total volume. Production in other genres (i.e. documentary, children’s and youth, and variety and performing arts [VAPA]) declined in terms of both volume and the number of films in 2016/17. Exhibit 5 - 7 Canadian theatrical feature film production, by genre 2014/15 2011/12 2007/08 2013/14 2008/09 2015/16 2016/17 2009/10 2010/11 2012/13 Volume ($millions) 226 305 291 277 357 314 295 184 Fiction 297 237 26 58 35 63 21 38 93 96 81 Other genres* 34 388 323 326 340 379 352 363 280 318 Total 260 Number of films 89 88 84 85 81 106 89 94 80 70 Fiction 23 Other genres* 31 33 22 28 38 25 22 25 27 113 128 116 114 112 117 132 105 92 111 Total Source: Estimates based on data from CAVCO. Some totals may not sum due to rounding. * Includes documentary, children’s and youth, and VAPA genres. REGION Producers based in Quebec, British Columbia and Ontario combined to account for 98% of theatrical feature film production in 2016/17. Quebec-based producers accounted for nearly half of a theatrical feature film production volume in 2016/17. Among the three largest centres of production, only Ontario experienced a year-over-year decrease in production volume. Volume of Canadian theatrical feature film production, by province and territory Exhibit 5 - 8 2016/17 share of total 2015/16 2012/13 2013/14 2014/15 2009/10 2016/17 2007/08 2010/11 2011/12 2008/09 ($ millions) 121 130 229 127 136 145 178 203 111 150 47% Quebec 37 65 53 25 41 8 18 British Columbia 55 41 79 25% Ontario 109 91 121 176 173 131 122 112 66 21% 46 3 5 14 10 7 0 1 5 11 3% Manitoba 0 11 15 3 11 7 4 15 0 0 7 2% Saskatchewan Alberta 9 3 2 0 1 3 4 5 4 1% 0 2 Nova Scotia 9 11 2 8 10 0 3 1 <1% 3 Newfoundland and Labrador 1 2 0 0 1 2 3 0 2 0 0% Territories* 0 0 0 0 0 0 0 0 0 0% 0 2 New Brunswick 1 0 0 1 3 0 0 0 0% 0 Prince Edward Island 0 0 0 0 0 0 0 0 0 0 0% 379 Total 260 363 326 340 323 352 388 280 318 100% Source: Estimates based on data collected from CAVCO. Profile 2017 Note: Statistics published by provincial funding agencies may differ from those in . Please see Notes on Methodology for additional information. Some totals may not sum due to rounding. 63 Profile 2017

66 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION TELEFILM CANADA FUNDING In 2016/17, Telefilm Canada provided $101.6 million in financial support for the development, production, distribution, marketing and promotion of 88 Canadian feature films. This total financial support included 29 Excluding its support for the Theatrical Documentary Program $68.1 million in financing for feature film production. and post-production activities, Telefilm Canada provided $69 million in production funding to 78 new fiction feature 30 films in 2016/17, with combined budgets of $245 million. Exhibit 5 - 9 Total Canadian theatrical (fiction) feature film production volume with contributions from the Telefilm Canada production funding programs Telelm Canada production funding Other nancing* 300 251 245 250 238 191 176 221 184 217 208 153 151 194 200 148 187 183 181 128 118 125 115 150 $ millions 100 69 69 68 67 66 66 60 60 50 58 54 0 2015/16 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2014/15 2007/08 2016/17 Source: Telefilm Canada. * Other financing includes contributions from production companies, broadcasters, other government sources and distributors. Notes: Some totals may not sum due to rounding. Calculations exclude the foreign share of audiovisual treaty coproduction budgets in which Canada was a minority partner. Statistics for 2005/06 to 2007/08 only include data from the Canada Feature Film Fund (CFFF) Production Program and exclude data from the Low Budget Independent Feature Film Assistance Program. Statistics for 2008/09 to 2012/13 include data for the Production Program and the Low Budget Independent Feature Film Assistance Program. In 2013/14, the Low Budget Independent Feature Film Assistance Program was rolled into the Production Program. 29 The statistics in this section may differ from statistics reported by Telefilm Canada in its annual report. Beginning with the 2012/13 Annual Report, Telefilm Canada reports only the level of production supported by all of its assistance programs on a combined basis. The statistics in this section include data from the Telefilm Canada production-support programs for fiction films, and exclude data from Telefilm Canada’s Theatrical Documentary Program, support for post- production and other feature film support programs. 30 Please note that the total volume of feature film (fiction) production supported by Telefilm Canada ($245 million) is not directly comparable to the total volume of CAVCO-certified theatrical feature film production in the fiction genre ($237 million). Projects may be recognized in different fiscal years. For example, projects may be recorded on the basis of the year in which principal photography started vs. the year in which an agency received a funding application. In addition, Telefilm Canada’s statistics include the value of foreign producers’ financing for majority-Canadian treaty coproductions. Statistics for CAVCO-certified production only include Canadian producers’ financing regardless of whether a project is a majority- or minority-Canadian treaty coproduction. 64 Profile 2017

67 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION NELLY Unconventional biopic highlights female talent on and off-screen Nelly is the third feature from Montreal director Anne Émond. The film premiered at the Toronto International Film Festival (TIFF) in 2016 and was later selected for the festival’s annual list of top Canadian cinema. Émond created an unconventional biopic based on the life and work of controversial literary figure Nelly Arcan. The film explores Arcan’s personal experiences as a sex worker, lover and writer but it also raises broader questions about beauty, mortality and the male gaze. For her work in the multifaceted title role, National Theatre School Graduate Mylène Mackay was named a TIFF Rising Star of 2016 and later won a Prix Iris for best actress. The film also features strong female leadership off-screen. While Émond Nelly was produced by Nicole Robert with cinematography by Josée Deshaies. acted as a writer and director, Nelly won a Canadian Despite the film’s challenging subject matter and experimental aesthetic, it was a critical success. Screen Award for Best Costume Design and three other Prix Iris for best music, best make up and best hair styling. Exhibit 5 - 10 Number of Canadian theatrical (fiction) feature films that received financial support from Telefilm Canada production funding programs, by language English-language French-language 100 87 34 78 80 73 23 67 25 19 60 60 60 55 25 25 53 51 22 55 53 20 25 43 48 48 40 17 Number of lms 35 35 33 33 26 26 20 0 2013/14 2014/15 2011/12 2016/17 2012/13 2010/11 2009/10 2008/09 2007/08 2015/16 Source: Telefilm Canada. 65 Profile 2017

68 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION FINANCING Canadian theatrical feature film production drew the majority of its financing (61%) from public sources (i.e. public broadcaster licence fees, federal tax credit, provincial tax credits, Telefilm Canada and other public After increasing to a five-year high in both dollar ($99 million) and percentage terms (28%) in sources) in 2016/17. 2013/14, foreign financing fell for the third consecutive year. In 2016/17, foreign financing totalled $16 million and accounted for 5% of total financing – five-year lows in both dollar and percentage terms. Exhibit 5 - 11 Financing of Canadian theatrical feature film production 2012/13 2013/14 2015/16 2016/17 2014/15 $ millions % $ millions % $ millions $ millions $ millions % % % 3 3 1% 3 1% 1% <1% 1 <1% Private broadcaster licence fees 1 Public broadcaster licence fees <1% 1 <1% 1 <1% 4 1% 2 1% 2 1 6% 28 8% 26 24 18 7% 23 7% 7% Federal tax credit 1 21% 20% 68 19% 80 76 59 21% 65 20% Provincial tax credits Canadian distributors 36 9% 33 9% 37 9% 39 14% 44 14% 2 78 99 28% 76 21% 29 10% 16 5% 20% Foreign 54 Telefilm Canada 60 17% 58 15% 17% 19% 69 22% 66 3 26 51 13% 20 6% 60 15% 11% 9% 35 Other public 4 43 11% 40 11% 48 12% 50 18% 62 20% Other private Total 379 100% 352 100% 388 100% 280 100% 318 100% Source: Estimates based on data obtained from CAVCO and Telefilm Canada. Note: Some totals may not sum due to rounding. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private and public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 66 Profile 2017

69 5. CANADIAN THEATRICAL FEATURE FILM PRODUCTION Higher levels of financing from Canadian distributors and Telefilm Canada’s production funding helped lift Higher levels of other-public and other-private the overall volume of English-language production in 2016/17. financing underpinned the growth in French-language production in 2015/16. Exhibit 5 - 12 Financing of Canadian theatrical feature film production, by language English-language French and other languages 2014/15 2016/17 2014/15 2015/16 2016/17 2015/16 % $ millions % $ millions % $ millions % $ millions % $ millions % $ millions Private broadcaster <1 1% 1 1% 1 licence fees 2 <1% <1 <1% <1 <1% 1% Public broadcaster 1% licence fees 3 2% 2 1% 1 <1% <1 <1% <1 <1% 0 Federal tax 1 8% 21 7% 14 7% 17 5% 4 4% 4 5% 6 credit Provincial tax 1 20% 57 20% 40 21% 20 21% 22 23% 19 20% 45 credits Canadian distributors 30 29 16% 36 17% 7 7% 10 10% 8 8% 10% 2 7 24% 23 13% 16 7% 68 8% 6 6% 0 0% Foreign 19 14% 28 15% 47 22% Telefilm Canada 19% 27 29% 21 21% 40 3 12% 34 29% 9 5% 6 3% 26 26% 17 18% 29 Other public 4 35 12% 38 20% 45 21% 12 12% 11 12% 18 18% Other private Total 288 100% 186 100% 216 100% 99 100% 94 100% 102 100% Source: Estimates based on data obtained from CAVCO and Telefilm Canada. Note: Some totals may not sum due to rounding. 1. Canadian production companies receive federal and provincial tax credits based on their eligible labour expenditures, and, in almost all cases, invest their tax credits directly into their film and television projects, in order to complete their project financing. 2. Includes private and public financing from outside Canada. 3. Other public includes financing from provincial governments, and other federal government departments and agencies. 4. Other private includes financing from production companies (excluding the tax credit contribution), independent production funds, broadcaster equity and other Canadian private investors. 67 Profile 2017

70 6. Audiovisual Treaty Coproduction 31 The Government of Canada currently has audiovisual coproduction treaties with 55 partner countries. These treaties offer Canadian and foreign producers the opportunity to combine their creative, technical and financial resources to make audiovisual treaty coproductions that could be granted national production status in each of the partnering countries. Audiovisual treaty coproductions that obtain national production status enable Canadian producers to access incentives available in Canada for eligible Canadian expenses. They also enable foreign producers to access their own country’s incentives, if any, for the foreign portion of the budget. Partnering production companies can take either a majority or minority participation position in an audiovisual treaty coproduction depending on the proportion of financing each producer brings to the project. Highlights from 2016 • The total budgets of English-language treaty coproductions increased by 21.5% to $474 million. • The total budgets of television treaty coproductions increased by 26.8% to $350 million. • The average project budget for television treaty coproductions increased from $8.1 million to $11.7 million. • France and the United Kingdom (UK) were Canada’s leading coproduction partners between 2007 and 2016. The UK was the leading television treaty coproduction partner. France was the leading partner for feature films. • Canada participated in 48 treaty coproductions, down from 62 in 2015. • The total budgets of Canada’s treaty coproductions declined by 0.8% to $503 million. • The total number of television treaty coproductions decreased from 34 to 30. • The total number of feature film treaty coproductions decreased from 28 to 18. • The total budgets of French-language treaty coproductions decreased by 75% to $29 million after rising to a 10-year high of $117 million in 2015. • Canada was a majority (or equal) partner for 40% of its treaty coproduction projects in 2016, however, these projects represented only 35% of total treaty coproduction budgets. . http://www.telefilm.ca/en/coproductions/coproductions/agreements A list of partner countries can be found on Telefilm Canada’s web site at 31 68 68 Profile 2017 Profile 2017

71 6. AUDIOVISUAL TREATY COPRODUCTION Overall, Canada’s total volume of treaty coproduction (i.e. global budgets) was virtually unchanged in 2016. It only declined by 0.8% to $503 million. However, underneath this overall stability, there were several year-to-year shifts in the composition of Canada’s treaty coproduction activity. First, there was a shift away from feature film production to television production in 2016. The number and volume of treaty coproduction feature films fell from 28 to 18 in 2016; and the volumes associated with these films fell from $231 million to $153 million. Meanwhile, despite a decrease from 34 to 30 projects, the volume of television treaty coproduction increased by 26.8% to an eight-year high of $350 million. This increase in treaty television coproduction in 2016 was driven by higher-budget drama projects. Although the number of television drama projects was unchanged (at six) in 2016, the average project budget jumped by 68% to a 10-year high of $45.7 million. The total volume of television drama projects (i.e. global budgets) also hit a 10-year high of $274 million, as both the documentary, and children’s and youth genres experienced falling volumes. Second, while the overall volume (i.e. global budgets) of treaty coproduction was virtually unchanged in 2016, the portion of these budgets covered by Canadian producers was slightly lower. The Canadian share of treaty coproduction budgets decreased from $212 million to $199 million, thus lowering Canada’s share of budgets to a ten-year low of 40%. In fact, this share was six points lower than the ten-year average of 46%. TELEVISION Although the number of television treaty coproductions decreased in 2016, the value of total budgets rose by The Canadian share of total budgets decreased from 41% in 2015 to 26.8% to an eight-year high of $350 million. 33% in 2016. Both English- and French-language production contributed to the overall increase in total budgets and the decrease in the Canadian share of those budgets. Exhibit 6 - 1 Volume* and activity of audiovisual treaty coproduction, television sub-segment 2009 2010 2011 2012 2013 2008 2015 2016 2007 2014 ENGLISH-LANGUAGE Canadian share of 100 151 114 81 134 110 budgets ($M) 120 108 108 93 Foreign share of 118 124 119 161 122 182 179 153 216 budgets($M) 175 225 327 296 200 296 232 Total budgets ($M) 298 262 324 212 Number of projects 53 32 25 27 30 36 35 28 20 43 FRENCH-LANGUAGE Canadian share of budgets ($M) 10 10 8 9 1 10 1 2 5 7 Foreign share of budgets($M) 17 7 10 3 18 1 4 9 19 17 27 2 14 19 4 28 Total budgets ($M) 6 14 26 27 3 9 10 10 6 12 Number of projects 4 6 10 12 ALL LANGUAGES Canadian share of budgets ($M) 110 161 122 90 136 120 94 121 113 115 Foreign share of budgets($M) 194 188 129 163 142 119 183 163 235 140 Total budgets ($M) 252 354 310 219 299 260 213 304 276 350 42 Number of projects 65 42 35 33 45 46 39 34 30 Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. * The total volume of coproduction refers to the value of total global budgets for coproduction projects. The total volume of production includes the financial participation of Canadian producers (i.e. Canadian share of budgets) and foreign producers (i.e. foreign share of budgets). 69 Profile 2017

72 6. AUDIOVISUAL TREATY COPRODUCTION As in previous years, most television treaty coproduction projects were in the documentary genre (17 of 30 projects); however, the relatively small number of drama projects (6) accounted for 78% of total television coproduction budgets. Indeed, all of the overall increase in television treaty coproduction in 2016 was in the drama genre, where total budgets jumped by 68.1% and the average project budget increased from $27.1 million to $45.6 million. After increasing to $79 million in 2015, television treaty coproduction budgets in the children’s and youth genre fell to $47 million; the average project budget fell from $13.1 million to $6.7 million. Exhibit 6 - 2 Volume and activity of audiovisual treaty coproduction, television sub-segment, by genre 2007 2009 2010 2011 2012 2013 2014 2015 2016 2008 Total global budgets ($ millions) Drama (fiction) 97 101 158 147 203 153 108 221 163 274 63 Documentary 48 28 30 72 55 36 35 30 48 Children’s and youth 106 181 104 43 66 44 51 47 79 47 260 Total 354 310 219 299 252 213 304 276 350 Number of projects 6 Drama (fiction) 6 10 5 8 6 8 8 11 6 27 Documentary 20 17 26 23 21 22 17 32 22 17 23 14 7 10 8 11 7 6 7 Children’s and youth 46 45 42 35 33 42 65 39 34 30 Total Average project budgets ($ millions) Drama (fiction) 16.2 10.1 31.7 18.4 33.8 19.2 13.5 20.1 27.1 45.6 2.4 Documentary 2.1 1.4 1.8 2.2 2.0 1.7 1.6 1.7 2.2 6.7 6.2 7.9 7.4 6.2 6.7 5.5 4.6 6.8 13.1 Children’s and youth 11.7 All genres 5.6 5.4 7.4 6.3 9.1 6.2 4.6 7.8 8.1 Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. 70 Profile 2017

73 6. AUDIOVISUAL TREATY COPRODUCTION Between 2007 and 2016, the UK and France were Canada’s largest coproduction partners for television productions. The UK alone accounted for 37% of the coproduction projects and 25% of total budgets during that period. France accounted for 27% of projects and 21% of total budgets. Canada’s other leading partner countries included Australia, Ireland, Germany and Brazil. They all participated in at least 11 projects with Canada between 2007 and 2016. Overall, over the 10-year period, 2007 to 2016, the Canadian share of total global budgets was 42%, although the share did vary significantly from country to country. Audiovisual treaty coproduction partner countries, television sub-segment, 2007-2016 Exhibit 6 - 3 Canadian share of Total global total global budgets budgets Number of ($ millions) $ millions % projects United Kingdom 153 712 379 53% France 604 293 49% 113 Australia 23 179 99 55% Ireland 14 605 131 22% 130 Germany 14 34 26% Brazil 11 23 45% 51 9 34 59% Singapore 58 7 6 Israel 56% 4 South Korea 5 24 10 40% Philippines 4 13 11 85% Other Bipartite 171 90 53% 32 Multipartite* 26 284 75 26% Total 411 2,838 1,183 42% Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. * Multipartite production includes audiovisual treaty coproduction projects where Canada has two or more partner countries. 71 Profile 2017

74 6. AUDIOVISUAL TREATY COPRODUCTION FEATURE FILM Canadian producers participated in 18 feature film treaty coproductions in 2016, with total budgets of $153 million. After jumping to a 10-year high of 15 projects and $102 million budgets in 2015, French-language feature film treaty coproduction fell to only one project with a budget of $3 million in 2016. This fall in the French-language segment offset the increase in the number of films (13 to 17) and total budgets ($128 million to $150 million) in the English- language segment. Exhibit 6 - 4 Volume* and activity of audiovisual treaty coproduction, theatrical feature film sub-segment 2008 2009 2010 2011 2012 2013 2014 2007 2016 2015 ENGLISH-LANGUAGE Canadian share of 88 23 87 117 budgets ($M) 102 128 100 66 82 150 Foreign share of budgets($M) 134 15 44 86 69 71 92 73 63 68 159 Total budgets ($M) 130 203 218 37 220 173 128 150 236 Number of projects 16 8 11 21 14 14 12 18 13 17 FRENCH-LANGUAGE Canadian share of budgets ($M) 20 23 24 17 30 17 7 19 33 2 Foreign share of budgets($M) 1 52 37 17 26 59 17 9 24 69 Total budgets ($M) 72 40 44 89 34 16 43 102 3 60 8 5 3 7 8 5 Number of projects 9 15 1 14 ALL LANGUAGES Canadian share of 122 46 110 134 budgets ($M) 105 135 119 99 84 180 Foreign share of 88 budgets($M) 61 113 127 52 101 97 132 69 186 Total budgets ($M) 308 98 171 247 307 193 236 216 231 153 19 Number of projects 22 14 28 22 24 17 27 28 18 Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. * The total volume of coproduction refers to the value of total global budgets for coproduction projects. The total volume of production includes the financial participation of Canadian producers (i.e. Canadian share of budgets) and foreign producers (i.e. foreign share of budgets). 72 Profile 2017

75 6. AUDIOVISUAL TREATY COPRODUCTION In the feature film treaty coproduction segment, France was, by far, Canada’s most active partner country between 2007 and 2016. During that period, Canada made 72 films with France with total budgets of $849 million. France accounted one-third of all Canada’s feature film treaty projects during that period and 39% of total budgets. Canada’s other leading partner countries included Germany, the UK, Ireland and Belgium. Canada produced at least 10 films with each of these countries. Overall, over the ten-year period, 2007 to 2016, the Canadian share of total global budgets was 52%, although the share did vary significantly from country to country. Exhibit 6 - 5 Audiovisual treaty coproduction partner countries, theatrical feature film sub-segment, 2007-2016 Canadian share of Total global total global budgets budgets Number of $ millions % ($ millions) projects 849 408 48% 72 France Germany 522 319 61% 21 United Kingdom 184 95 52% 21 12 58 65% Ireland 89 10 43 Belgium 44% 19 Switzerland 9 25 11 44% South Africa 7 41 17 40% Spain 6 36 51% 71 5 6 48% Australia 13 4 61 48 79% Italy China 18 12 68% 4 Other Bipartite 34 100 48 48% Multipartite* 14 146 56 39% Total 2,159 1,133 52% 219 Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. * Multipartite production includes audiovisual treaty coproduction projects where Canada has two or more partner countries. MAUDIE Coproduction attracts international talent and wins hearts across Canada Maudie is a feature-length dramatization of the life and work of Nova Scotian folk artist Maud Lewis. Although the story takes place in Nova Scotia, the film was shot in Newfoundland and Labrador. A Canadian majority coproduction (H is 4 Productions, Rink Rat Productions and Solo Productions) with Ireland (Parallel Films), the script was developed by Canadian writer Sherry White and the film was directed by Irish director Aisling Walsh. Maudie also attracted talent from the UK and the United States, starring Sally Hawkins and Ethan Hawke. Maudie was selected for a special presentation at the Toronto International Film Festival (TIFF) in 2016 and went on to play at more than 75 screens across Canada, grossing almost $10 million worldwide (over $3 million in Canada alone) by November 2017. The film premiered at the Telluride Film Festival to rave reviews, and won the People’s Choice Award at the Vancouver International Film Festival, the Grand Prix at the Festival du cinéma international en Abitibi-Témiscamingue, and prizes for Best Atlantic Feature and Best Atlantic Screenwriting at the Atlantic Film Festival in Halifax. 73 Profile 2017

76 6. AUDIOVISUAL TREATY COPRODUCTION ALL RELEASE WINDOWS Although television treaty coproduction was higher in 2016, the decline from 2015’s French-language feature film treaty coproduction resulted in an overall decline in Canada’s treaty coproduction activity. The number of projects fell from 62 to 48; however, total budgets were relatively stable and declined by just 0.8% to $503 million. While overall treaty production was slightly lower, total treaty coproduction in English showed a healthy increase in 2016. The number of projects was lower, but total budgets increased by 21.4% to a five-year high of $474 million. Across both language markets, the Canadian share of budgets decreased by 6.1% to a ten-year low of $199 million. Exhibit 6 - 6 Volume* and activity of audiovisual treaty coproduction 2009 2010 2011 2012 2013 2014 2015 2016 2007 2008 ENGLISH-LANGUAGE Canadian share of 174 201 198 284 198 202 219 174 190 budgets ($M) 221 Foreign share of 259 190 226 205 230 194 211 budgets($M) 216 284 252 Total budgets ($M) 364 426 403 514 391 432 471 390 474 461 52 55 43 46 41 44 Number of projects 53 41 37 61 FRENCH-LANGUAGE Canadian share of 30 33 31 26 32 budgets ($M) 8 21 38 9 27 Foreign share of budgets($M) 69 54 23 36 61 35 10 27 79 20 Total budgets ($M) 99 55 62 93 62 18 48 117 29 88 17 8 13 17 14 17 Number of projects 13 21 11 26 ALL LANGUAGES Canadian share of 232 207 232 224 budgets ($M) 225 229 240 212 199 316 Foreign share of 228 budgets($M) 249 241 291 245 221 280 295 304 328 Total budgets ($M) 560 452 481 465 607 453 450 520 507 503 61 Number of projects 87 56 63 55 69 63 66 62 48 Source: Telefilm Canada. Note: Statistics as of September 2017. Some totals may not sum due to rounding. * The total volume of coproduction refers to the value of total global budgets for coproduction projects. The total volume of production includes the financial participation of Canadian producers (i.e. Canadian share of budgets) and foreign producers (i.e. foreign share of budgets). 74 Profile 2017

77 6. AUDIOVISUAL TREATY COPRODUCTION The declines in the level and overall share of Canadian budgets on Canada’s treaty coproduction projects reflects the fact that Canada was minority partner on most of its projects in 2016. Out of a total of 48 treaty coproduction projects in 2016, Canada was a minority partner for 29 projects and a majority (or equal) partner for 19 projects. Furthermore, the total volume (i.e. global budgets) of minority projects increased from $310 million to $325 million in 2016, while the total volume of majority (and equal-participation) projects decreased from $197 million to $178 million. Exhibit 6 - 7 Audiovisual treaty coproduction, majority vs. minority Canadian production Minority Majority* Minority Majority* 400 369 350 353 325 300 310 269 268 266 250 257 254 253 248 246 224 219 200 202 197 191 $ millions 185 184 178 150 100 151 50 0 2013 2012 2011 2010 2014 2008 2007 2016 2015 2009 42 44 50 37 36 37 40 33 33 43 29 29 29 30 30 29 28 27 27 26 26 26 20 19 10 Number of projects 0 Source: Telefilm Canada. Note: Statistics as of September 2017. 75 Profile 2017

78 6. AUDIOVISUAL TREATY COPRODUCTION France was Canada’s principal coproduction partner, overall, between 2007 and 2016. It accounted for 29% of projects and 29% of total budgets. The UK also accounted for a large share (28%) of Canada’s treaty coproduction projects during this period; however, the UK’s share on the basis of total budgets (18%) suggests that Canada’s projects with the UK were smaller than those with France. Canada’s other leading treaty coproduction partners included Germany, Australia and Ireland. Across the entire 10-year period, Canada captured a 46% share of the total budgets of the treaty coproductions it was involved in. Audiovisual treaty coproduction partner countries, 2007-2016 Exhibit 6 - 8 Canadian share of Total global total global budgets Number of budgets projects ($ millions) $ millions % 185 1,453 701 France 48% United Kingdom 896 474 53% 174 35 353 54% Germany 651 28 192 Australia 55% 105 Ireland 26 693 189 27% Brazil 12 56 26 46% South Africa 10 34 51% 68 10 19 44% Belgium 43 10 27 Switzerland 44% 12 Singapore 9 58 34 59% Israel 9 10 5 49% Other Bipartite 420 232 55% 82 Multipartite* 40 430 131 30% Total 630 4,997 2,316 46% Source: Telefilm Canada. Statistics as of September 2017. Some totals may not sum due to rounding. * Multipartite production includes audiovisual treaty coproduction projects where Canada has two or more partner countries 76 Profile 2017

79 Foreign location and 7. service production The foreign location and service (FLS) production sector is primarily comprised of films and television programs filmed in Canada primarily by foreign producers with the involvement of Canadian-based service producers. This includes the visual effects (VFX) work done by Canadian VFX studios for foreign films and television programs. For the majority of FLS projects, the copyright is held by non-Canadian producers; however, for approximately 5% to 10% of projects, the copyright is held by Canadians. During the past five years, Canada’s FLS production sector has contributed to numerous films that achieved successful global box office runs. Some recent Hollywood films that have either been shot in Canada or had their VFX work done in Canada include . Canada has also become a destination It , The Shape of Water Deadpool , and The Handmaid’s Tale for the filming of many American television series and mini-series such as , Timeless and Supergirl , which have been commissioned by US networks as well as online video streaming services. Highlights from 2016/17 • The total volume of FLS production in Canada increased by 42.1% to $3.76 billion. • The number of FLS productions increased by 17.7% – from 355 to 418. • The number of FLS feature films shot in Canada increased from 128 to 183. The total volume increased from $1.12 billion to $1.86 billion. • The total volume of FLS television series increased from $1.28 billion to $1.64 billion, even though the number of series fell. • All provinces that hosted FLS production in 2015/16 experienced an increase in production volume in 2016/17. • FLS production in British Columbia (BC) increased by 46.8% to over $2.31 billion. • FLS production in Ontario increased by 23.2% to $860 million. • FLS production in Quebec increased by 43.3% to $404 million. • Canada’s territories hosted $18 million in FLS production– a six-fold increase from the year before. • The copyright for approximately three-quarters of FLS projects was held by persons or companies based in the US. • The number of FLS television series shot in Canada decreased from 156 to 149. 77 Profile 2017

80 7. FOREIGN LOCATION AND SERVICE PRODUCTION Canada’s FLS production segment was also operating on all cylinders in 2016/17. The volume of production rose by 42.1% to an all-time high of $3.76 billion. The segment’s overall growth was not only remarkable, but also broad-based – both in terms of geography of production and release medium. In terms of geography, every single province or territory that hosted FLS production in 2015/16 experienced an increase in FLS production in 2016/17. BC – Canada’s leading province for FLS production – led the way with a $737 million increase in production volume. However, Ontario and Quebec also added over $100 million in FLS production volume, respectively, in 2016/17. According to Creative BC, the increase in foreign production activity in BC was mainly driven by the US, with a large part of the increased demand fuelled by the commissioning activities of online services such as Netflix, Amazon, and Hulu. The growing production presence of these online services also affected FLS activity in other provinces. In terms of release medium, both feature film and TV series production made important contributions to these segments’ unprecedented growth. Not only did the number of FLS feature films shot in Canada increase to an all-time high of 183, but the average budgets of those feature films also increased – from $8.8 million to $10.2 million. The combination of more and larger projects added $738 million to Canada’s volume of FLS feature film production, lifting the 2016/17 volume to $1.86 billion. The vast majority of this feature film production and the year-over-year growth was concentrated in BC. BC, alone, hosted 95 features films and $1.19 billion in feature film production volume. The number of FLS TV series shot in Canada did decline in 2016/17 – from 156 to 149. However, the average budgets for FLS TV series rose from $8.2 million to $11 million. These higher average budgets may also partly reflect the commissioning activities of online services and the heightened competition among broadcasters and online platforms for global viewers. A large portion of the growth in TV series production also occurred in BC. However, Ontario, as The Handmaid’s Tale, also made a key contribution to the growth. host to production of series such as 78 Profile 2017

81 7. FOREIGN LOCATION AND SERVICE PRODUCTION TOTAL PRODUCTION AND TYPES The total volume of FLS production jumped by 42.1% to an all-time high of $3.76 billion in 2016/17. This sharp increase was driven by higher volumes of both feature film and TV series production. Feature film production was up by 65.7%, while television production rose by 27.6%. Other production also increased 8.9% to its highest level in eight years. Exhibit 7 - 1 Volume of foreign location and service production, by type TV Series Feature lms TV Other (e.g., TV features, mini-series) 4,000 3,757 1,862 3,500 3,000 2,644 2,600 1,124 2,500 1,067 1,874 2,000 1,826 1,770 1,740 1,687 1,639 $ millions 933 857 1,096 1,508 642 1,445 841 1,500 1,347 1,284 675 667 1,000 969 806 720 703 605 519 446 500 260 256 235 228 228 222 185 163 143 129 0 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 Source: Association of Provincial Funding Agencies. Note: Some totals may not sum due to rounding. 79 Profile 2017

82 7. FOREIGN LOCATION AND SERVICE PRODUCTION In both the feature film and TV series segments, larger projects (i.e. those with higher average project budgets) helped to push the volume of production higher. The number of FLS feature films shot in Canada did increase from 128 to an all-time high of 183 – a 43% increase. The average budgets of these films also increased – from $8.8 million to $10.2 million. Together, the expanded number of projects and budgets lifted the total volume of feature film production by 65.7% to $1.86 billion. The number of FLS TV series shot in Canada declined in 2016/17 – from 156 to 149. However, the average budget of those TV series increased from $8.2 million to $11 million, thus raising the volume of TV series production by 27.6% to $1.64 billion. Exhibit 7 - 2 Annual number of foreign location and service projects, by type 2007/08 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2008/09 2009/10 103 89 53 66 99 93 91 111 128 183 Feature films 62 115 61 76 78 85 92 TV series 156 149 57 42 TV other* 67 81 58 71 51 53 71 86 63 Total 228 217 181 223 235 220 234 279 355 418 Source: Association of Provincial Funding Agencies. Note: Totals are based on available data and make no allowance for unavailable data. * Includes TV movies, mini-series single-episode programming and pilots. Between 2012/13 and 2016/17, the value of the Canadian dollar (compared to the US dollar) fell by 24.2%; over that same period, the volume of FLS production in Canada more than doubled in real (inflation-adjusted) Canadian dollars. Volume of foreign location and service production vs. Canadian dollar Exhibit 7 - 3 Total volume (real 2016 dollars) Value of Canadian dollar 110 4,000 3,757 100 99 99 97 97 97 3,500 92 91 90 89 3,000 2,666 2,681 80 2,500 78 2,066 2,038 70 75 2,000 1,807 1,836 1,692 1,626 1,910 60 U.S. cents per C$ 1,500 Volume ($ millions) 50 1,000 40 500 0 30 2012/13 2016/17 2013/14 2010/11 2014/15 2007/08 2015/16 2008/09 2009/10 2011/12 Source: Bank of Canada, Statistics Canada and Association of Provincial Funding Agencies. 80 Profile 2017

83 7. FOREIGN LOCATION AND SERVICE PRODUCTION REGION British Columbia – mainly Vancouver – dominated Canada’s FLS production, with 62% of the total volume of BC’s share and total volume of FLS production increased in Canadian FLS production taking place in that province. 2016/17, as its gains in production volume outpaced the large gains experienced in Ontario and Quebec. Exhibit 7 - 4 Volume of foreign location and service production, by province and territory 2016/17 share of 2014/15 2012/13 ($ millions) 2007/08 2015/16 2016/17 2008/09 2009/10 total 2010/11 2011/12 2013/14 900 1,092 British Columbia 1,102 1,076 1,080 1,672 1,574 2,311 62% 1,174 1,364 350 225 224 382 399 206 545 698 860 23% Ontario 446 120 211 122 240 157 212 147 275 282 404 11% Quebec 11 56 11 8 23 47 15 42 70 2% 2 Manitoba 24 20 7 4 13 4 88 92 34 54 1% Alberta 17 29 43 31 22 25 80 n/a 12 39 <1% Nova Scotia 0 5 6 3 1 Territories* 2 2 3 3 18 <1% New Brunswick 0 0 n/a n/a 0 0 1 0 0 0% 10 Prince Edward Island n/a n/a n/a n/a 0 0 <1 0 0 0% n/a 0 Saskatchewan n/a 0 1 1 9 0 0 0 0% 13 Newfoundland and Labrador 0 0 0 0 0 0 0 0 0 0 0% 3,757 Total 1,508 1,874 1,687 1,740 1,826 2,600 2,644 1,445 100% 1,770 Source: Association of Provincial Funding Agencies. Note: Statistics published by provincial funding agencies may differ from those in Profile 2017 . Please see Notes on Methodology for additional information. Some totals may not sum due to rounding. n/a – Data not available or suppressed for confidentiality. * Territories include Yukon, Nunavut and Northwest Territories. STAR TREK BEYOND International blockbuster lands in Vancouver is the thirteenth Star Trek film and the third in the reboot series to be filmed in Canada. Principal Star Trek Beyond photography for the film took place in and around Vancouver. The city offered proximity to LA-based talent, access to striking landscapes and state-of-the art technical facilities. Several landmarks in the region were transformed for the production including Stawamus Chief Provincial Park, near Squamish, BC. Canadian grips developed an innovative approach to integrate these natural settings with digital animation. Aircover Inflatables, based in the Vancouver suburb of Delta, provided inflatable green screens during filming. The company had initially experimented with this technology during the 2013 production of Godzilla in Vancouver but Star Trek Beyond gave the team an opportunity to perfect this approach, which offers more flexibility than conventional green screens. This Canadian expertise did not go unnoticed as David McIntosh, Steve Smith, Mike Branham and Mike Kirilenko won an Academy Award for Technical Achievement in 2016. Alongside these four innovators, the Motion Picture Association – Canada estimates that more than 3,900 British Columbians helped bring Star Trek Beyond from the green screen to the big screen. Over the course of 78 days of filming in BC, the production contributed $69 million dollars to the province’s economy, including over $40 million to hire local cast, crew and extras. 81 Profile 2017

84 7. FOREIGN LOCATION AND SERVICE PRODUCTION COUNTRY As in previous years, the vast majority (73%) of FLS productions in Canada were produced by US companies. The UK and France accounted respectively for 9% and 5% of FLS production, with Germany and other countries accounting for the rest. Number of foreign location and service projects, by country of copyright Exhibit 7 - 5 2011/12 2012/13 2013/14 2014/15 2010/11 2016/17 2009/10 2008/09 2015/16 Number of projects 139 194 185 171 United States 197 261 304 158 177 4 4 5 3 4 33 16 39 United Kingdom 7 1 1 France 8 9 7 3 12 20 7 Germany 4 1 2 1 4 2 3 4 4 14 9 1 8 Other 13 19 36 28 18 Canada* 15 16 27 27 26 25 27 23 36 Total 217 181 223 235 220 234 279 355 418 Share of total United States 77% 87% 79% 78% 76% 71% 74% 73% 73% 2% 1% 2% 2% United Kingdom 3% 12% 5% 9% 2% France 1% 3% 3% 4% 3% 1% 3% 5% <1% Germany 2% 2% <1% 1% <1% 2% 1% 1% 1% Other 10% <1% 3% 4% 6% 7% 10% 7% 6% Canada* 17% 8% 7% 11% 12% 11% 9% 8% 6% 100% Total 100% 100% 100% 100% 100% 100% 100% 100% Source: Association of Provincial Funding Agencies. Note: Some totals may not sum due to rounding. * Canadian projects in the FLS sector include projects made by Canadian producers primarily for foreign audiences, or as part of international co-ventures. International co-venture production includes films and television programs made as international coproductions, but outside of the auspices of an audiovisual coproduction treaty 82 Profile 2017

85 Broadcaster in-house 8. production Broadcaster in-house production (“in-house production”) refers to television programs made internally by private conventional television broadcasters, public broadcasters, and specialty and pay television 32 In-house production largely consists of news and sports programming, but can also include services. production in other genres. Highlights from 2016 • The total volume of in-house production increased by 5% to $1.32 billion • Despite lower revenues (see Section 11.1), private conventional broadcasters’ spending on in-house production increased by 12.7% to $693 million. • Spending on the in-house production of sports programming increased 32.7% to $532 million. • Despite higher revenues (see Section 11.1), specialty and pay-television services’ spending on in-house production decreased by 2.4% to $623 million. • Spending on the in-house production of news programming fell by 7.2% to $668 million. Note that the statistics in this section exclude data for provincial educational (television) services. 32 83 Profile 2017

86 8. BROADCASTER IN-HOUSE PRODUCTION After falling by over 17% in 2014, the total volume of in-house production rose by 5% to just under $1.32 billion in 2016. The sharp drop in in-house production in 2015 was largely due to lower spending on sports programming following the televising of the Winter Olympics, Paralympic Winter Games, Commonwealth Games and FIFA World Cup in 2014. The recovery in in-house production was also driven by a positive swing in spending on sports programming. It rose by 32.7% to $532 million. Meanwhile the volume of in-house programming decreased by 7.2% to $668 million. In-house production in other genres also decreased – by 10% to $117 million. Both CBC/Radio-Canada and Canada’s specialty television sports services contributed to the increased spending on in-house sports programming in 2016. In particular, Sportsnet (including Hockey Night in Canada) increased its 33 spending on in-house production by $13.5 million, or 17.4%. CBC/Radio-Canada’s spending on in-house production of sports programming increased by more than three-fold to $117.3 million, since it televised the 2016 Rio de Janeiro 34 Summer Olympics. The drop in news programming appears to have been concentrated at CBC/Radio-Canada and in the specialty television 35 segment. Spending on in-house news programming among private conventional broadcasters rose by 2.2% to 36 $347.5 million. PRODUCTION VOLUME This increase was largely due to a 12.7% increase in In-house production increased by 5% to $1.32 billion in 2016. in-house production in the conventional television segment, which was partially offset by a 2.4% decline in in-house production in the specialty, pay, pay-per-view (PPV) and video on demand (VOD) segment. Total volume of broadcaster in-house production, by sub-segment Exhibit 8 - 1 Specialty, pay, PPV and VOD Conventional 1,600 1,515 863 1,406 1,365 1,316 771 750 1,265 1,253 1,249 693 1,184 725 615 1,200 730 1,147 1,103 717 717 641 800 $ millions 652 638 635 623 616 540 519 468 463 400 430 0 2016 2012 2013 2011 2010 2009 2008 2014 2015 2007 Broadcasting year ending Source: Estimates based on data collected from CRTC and CBC/Radio-Canada. Note: Some totals may not sum due to rounding. Individual Discretionary and On-Demand Services: Statistical and Financial Summaries 2012-2016 . 33 CRTC (2017), 34 CRTC (2017), Conventional Television: Statistical and Financial Summaries 2012-2016 , p. 19; CRTC (2016), Conventional Television: Statistical and Financial Summaries 2011-2015 , p. 19. 35 CRTC (2017), Conventional Television: Statistical and Financial Summaries 2012-2016 , p. 19; CRTC (2016), Conventional Television: Statistical and Financial Summaries 2011-2015 Discretionary and On-Demand Services 2012-2016 , p. 19; CRTC (2016), Pay, Pay-per-View, Video-on-Demand and , p. 19; CRTC (2017), Specialty Services: Statistical and Financial Summaries 2011-2015 , p. 13. 36 CRTC (2017), Conventional television: statistical and financial summaries 2012-2016 , p. 7; CRTC (2016), Conventional television: statistical and financial summaries 2011-2015 , p. 7. 84 Profile 2017

87 8. BROADCASTER IN-HOUSE PRODUCTION GENRES Spending on in-house news programming declined by 2.4% in 2016, however, a 32.7% increase in spending on sports programming helped raise the overall volume of in-house production. Exhibit 8 - 2 Broadcaster in-house production, by genre News Other Sports 1,600 1,515 1,406 160 1,365 1,316 205 1,265 1,253 1,249 178 601 117 1,200 183 130 193 477 532 438 401 440 405 800 $ millions 754 749 724 720 668 651 641 400 0 2014 2013 2012 2015 2011 2010 2016 Source: Estimates based on data collected from CRTC and CBC/Radio-Canada. Note: Some totals may not sum due to rounding. 85 Profile 2017

88 8. BROADCASTER IN-HOUSE PRODUCTION REGION As the locations for Canada’s English-language and French-language television networks, Ontario and Quebec accounted for a combined 78% of all in-house production in 2016. Broadcaster in-house production, by province and territory Exhibit 8 - 3 2016 share of 2008 2010 2011 2012 2013 2014 2015 2016 2007 ($ millions) total 2009 767 674 649 739 729 811 692 890 677 729 55% Ontario Quebec 258 273 245 242 252 293 291 331 279 307 23% 103 British Columbia 86 93 100 104 89 101 97 96 7% 88 Alberta 67 68 64 79 86 92 92 91 94 88 7% 23 Manitoba 13 12 19 21 13 24 29 30 28 2% 16 Saskatchewan 18 18 22 2% 24 26 28 27 27 24 Nova Scotia 15 12 29 28 31 32 27 26 23 2% 14 7 13 5 11 11 12 New Brunswick 11 11 10 <1% 7 Newfoundland and Labrador 6 9 9 9 6 11 10 9 8 <1% 10 Prince Edward 2 Island 1 2 2 2 1 2 2 2 <1% 1 Territories* 2 2 2 3 3 3 3 3 2 1 <1% 1,406 Total 1,184 1,102 1,249 1,265 1,147 1,365 1,515 1,253 1,316 100% Source: Estimates based on data collected from CRTC, CBC/Radio-Canada and Statistics Canada. Note: See the Notes on Methodology section for a description of methodology. Statistics published by provincial funding agencies may differ from those in Profile 2017. Please see Notes on Methodology for additional information. Some totals may not sum due to rounding. * Territories include Yukon, Nunavut and Northwest Territories. 86 Profile 2017

89 9. Convergent digital media production Digital media production refers to the creation of content and experiences across a range of online communications platforms – from mobile devices, to computers, to smart TVs. Digital media production varies greatly in format: from applications used in passing, on a person’s daily commute, to rich and immersive experiential content supported by multi-million dollar budgets. As audiences continue to expand their use of digital devices (i.e., computers, smartphones, tablet devices), their ability to find, access and enjoy screen- based content, digital media production is becoming increasingly important to the audiovisual experience. Convergent digital media (CDM) refers specifically to the digital media components of broadcast television projects. Such components are typically standalone products that relate to, extend, and/or enhance the Canada in a Day , an associated television production. Examples of convergent digital media products include initiative that aggregated more than 11,500 user-created videos from around Canada to reflect Canadians’ thoughts hope, and lives; and George of the Jungle: Owie Owie , a mobile game created in support of Teletoon’s animated series. Highlights from 2016/17 • The volume of CDM production increased by 5% to $68.9 million. • The average project budget increased by 29.9% to $261,000. • Rich digital media accounted for 61% of CDM projects and 55% of volume. • 264 CDM projects were funded, 62 fewer than in 2015/16. • The average budget for CDM projects was just over $200,000 (per project), with video projects commanding somewhat larger average budgets. 87 Profile 2017

90 9. CONVERGENT DIGITAL MEDIA PRODUCTION CDM products are often stimulated by the Canada Media Fund’s (CMF) Convergent Stream program, which encourages the production of value-added digital media content (i.e., digital media component) that is associated with CMF-funded television productions. The CMF program guidelines define the digital media component of a convergent project as original content that is separate and distinct from the television component of the project. A rich and substantial digital media component provides a coherent and value-added digital or social media experience to the audience before, during or after the broadcast of the television component. It expands the television viewer’s experience beyond simple fact-finding about the television component and aims to augment engagement towards the television component. It can be either one or a mix of the following: 1. Interactive or linear original content related to the television component of the Convergent Stream but created specifically to be consumed on digital media platforms. 2. Activities and applications using digital and social media aimed at locating, leveraging or building audiences. 3. Interactive online activities or applications providing a synchronised experience during the broadcast of the television component of the Convergent Stream (excludes standalone web series and other standalone digital content, which may be eligible for funding through the CMF’s Experimental Stream). VOLUME AND ACTIVITY In 2016/17, the total volume of CDM production increased by 5% to $68.9 million. Exhibit 9 - 1 Volume of convergent digital media production 2014/15 2010/11 2011/12 2012/13* 2013/14* 2015/16 2016/17 Total volume of production ($ million) 34.6 43.4 69.9 70.1 65.6 68.9 27.6 Number of projects 160 217 324 342 340 326 264 Average project budget ($000s) 126 159 134 205 206 201 261 Source: Estimates based on data from Bell Fund, CMF, Ontario Media Development Corporation (OMDC) and Shaw Rocket Fund and a survey of CMPA and AQPM members. Note: Statistics for 2012/13 and 2013/14 include estimates for the production that took place without financial support from Bell Fund, CMF, OMDC or Shaw Rocket Fund, and therefore are not directly comparable to statistics for other years. See Notes on Methodology for more information. 88 Profile 2017

91 9. CONVERGENT DIGITAL MEDIA PRODUCTION In 2016/17 the average budget of CDM web series projects was almost three times the average for all CDM projects. Exhibit 9 - 2 Average convergent digital media budget by type of project Web 708 series Games 272 Video 242 Rich interactive 237 media Social 129 media 500 400 300 700 200 100 600 800 0 $000s Source: Estimates based on data from Bell Fund, CMF and OMDC. In 2016/17 rich interactive media projects comprised the majority of projects funded and of the total volume of CDM production. Exhibit 9 - 3 Share of funded convergent digital media projects and production volume, by type of project 17% Rich interactive media 19% 6% Video Games 6% 1% 12% 5% eBooks 61% 55% Social media 0% Outer circle: Inner circle: share of total projects funded share of total production volume of funded projects Source: Estimates based on data from Bell Fund, CMF and OMDC. 89 Profile 2017

92 9. CONVERGENT DIGITAL MEDIA PRODUCTION ABIGAËLLE ET LE DATE COACHING First-ever Franco-Albertan web series features talent from across Western Canada Abigaëlle et le date coaching is the first francophone web series from Alberta, shot in Edmonton. The show is based on the novel of the same name by Stéphanie Bourgault-Dallaire, who also adapted the story of a thirtysomething’s search for love for online audiences. Abigaëlle et le date coaching is a project of Far West Productions, directed by Jessica L’Heureux and produced by Corey Loranger with support from Fonds TV5 and Telefilm Canada. Although the production company is based in Edmonton, the show features francophone talent from across Western Canada. Marie-Claire Marcotte from Saskatchewan plays the title character alongside Vincent Beaudoin and Sabrina Auclair, both of whom are from Vancouver. Abigaëlle et le date coaching consists of six ten-minute episodes. It was shot over 13 days and required 10 sets and more than 25 actors. The production transformed Edmonton’s francophone neighbourhood into a character in its own right, with filming concentrated around École Gabrielle-Roy. It was released online by TV5.ca in fall 2017. PRODUCTION SUPPORTED BY THE CANADA MEDIA FUND The CMF operates two funding streams for digital media production: the Convergent Stream and the Experimental Stream. The Convergent Stream provides financial support to screen-based projects with television content and content or applications for at least one additional digital media platform. The Experimental Stream funds the creation of innovative digital media content and software applications. This section provides an overview of the digital media production supported by the CMF’s Convergent Stream – i.e. CDM production. In 2016/17, the CMF provided $27.9 million in funding to 195 CDM projects. These projects had total budgets of $50.4 million and were created across all of the CMF-supported genres. Exhibit 9 - 4 CMF-supported convergent digital media projects, by language, 2016/17 French-language Other languages* 110 18 56% 9% Total number of projects 195 English-language 67 34% Source: CMF. Note: Some totals may not sum due to rounding. * Includes aboriginal languages and other languages. 90 Profile 2017

93 9. CONVERGENT DIGITAL MEDIA PRODUCTION Exhibit 9 - 5 Volume of CMF-supported convergent digital media production, by language, 2016/17 Other languages* French-language $3.3 million $16.0 million 7% 32% Total volume of production $50.4 million English-language $31.2 million 62% Source: CMF. * Includes aboriginal languages and other languages. Note: Some totals may not sum due to rounding. Exhibit 9 - 6 CMF contributions to convergent digital media production, by television genre, 2016/17 Variety and performing arts Drama $1.0 million 4% $10.2 million 37% Total CMF contributions Children’s and youth $27.9 million $6.6 million 24% Documentary $10.1 million 36% Source: CMF. Note: Some totals may not sum due to rounding. 91 Profile 2017

94 10. Distribution Canada’s distribution industry includes both Canadian-controlled and foreign-controlled companies that distribute film and television content through theatres, television broadcasters, DVD wholesaling and other video platforms. Some of the leading Canadian-controlled distribution companies include eOne Distribution, Métropole Films, KinoSmith, MK2/MILE END and Mongrel Media. The foreign-controlled distribution companies operating in Canada include the distribution arms of major Hollywood studios. Highlights from 2015 • Revenue increased by 13.1% since 2013 to a total of $2.02 billion. • Revenue earned from the distribution of Canadian films and television programs increased by 12.1% (compared to 2013) to a total of $206 million. • Sales of Canadian films and television programs to foreign markets increased by 11.6% (compared to 2013) to a total of $77 million. • Canadian distributors’ investment in Canadian films and television programs in 2016/17 increased by 75.3% (compared to 2015/16) to a total of $514 million. • Revenue from the distribution of Canadian films and television programs accounted for 10.2% of total industry revenue. 92 92 Profile 2017 Profile 2017

95 10. DISTRIBUTION 37 This represented a 13.1% Total revenue in Canada’s audiovisual distribution industry was $2.02 billion in 2015. increase in total revenue since 2013 (the previous year of published industry statistics). So, although distribution companies in Canada have experienced significant declines in the revenue they earn from the wholesaling of pre- recorded video (i.e. DVDs), as consumer demand for this medium has fallen, they appear to have more-than-offset those declines from healthy growth in their core business: licensing of television programs and films. What is more, distribution companies in Canada have been able to increase the revenue they earn from sales of Canadian content. In 2015, they earned $206 million from sales of Canadian content, up from $184 million in 2013. They have also been able to maintain and even expand their investments in Canadian content. Estimates of Canadian distributor’s financing of Canadian film and television production (based on data from the Canadian Audio-Visual Certification Office [CAVCO]) indicates that they invested $514 million in Canadian content in 2016/17, up from $293 million in 2015/16. REVENUE 38 In 2015, distribution companies operating in Canada earned total revenue of $2.02 billion. Total revenue in the Canadian distribution sector Exhibit 10 - 1 Other revenue** Distribution of lm and TV content 2,500 2,047 2,017 1,975 1,968 2,000 1,855 802 1,819 386 1,784 829 662 585 871 516 1,631 1,500 1,306 1,270 1,268 1,245 $ millions 1,146 1,000 948 500 n/a* n/a* 0 2011 2010 2014 2009 2012 2015 2008 2007 2013 Source: Statistics Canada, CANSIM table 361-0056. n/a: No data available. * As of 2011, Statistics Canada only publishes data on a biennial basis. For that reason, no data is available for 2012 and 2014. ** Includes revenue from the wholesaling of pre-recorded video, production of audiovisual works for outright sale, contract production of audiovisual works, and other sources. 2015 is the most recent year of data published by Statistics Canada for the film and video distribution sector. 37 38 Ibid. 93 Profile 2017

96 10. DISTRIBUTION The distribution of Canadian films and television programs generated $206 million in revenue in 2015 and The licensing of foreign content – within Canada and other markets – still accounted for 10.2% of industry. accounted for the vast majority of industry revenue. Revenue from the distribution of Canadian content increased by 11.2% between 2013 and 2015. Sales to foreign markets rose from $69 million to $77 million over this period. Exhibit 10 - 2 Revenue from distribution of Canadian film and television content, by market 250 206 77 184 200 Foreign markets 69 Canadian VOD/PPV and other platforms 150 Canadian theatrical 35 Canadian TV (conventional, specialty and pay) 31 $ millions 100 25 24 68 61 50 0 2013 2015 Source: Statistics Canada, CANSIM table 361-0055. Note: Some totals may not sum due to rounding. 94 Profile 2017

97 10. DISTRIBUTION INVESTMENT IN CANADIAN PRODUCTIONS Through their minimum guarantees and advances on anticipated distribution revenues Canadian distributors The value of Canadian distributors’ invested $514 million in Canadian films and television programs in 2016/17. investment in Canadian content rose sharply in 2016/17, increasing by $221 million or 75.4% compared to 2015/16. Investment in Canadian television programs accounted for $216 million, or 98%, of that increase. This increased investment reflected the growing international appeal of Canadian television programming, thereby, giving Canadian distributors the confidence that they can recover their investments from sales to other territories or online platforms. Canadian distributors’ investment in Canadian theatrical feature films also increased in 2016/17 – rising from $39 million to $44 million. Canadian distributors’ investment in Canadian film and television production Exhibit 10 - 3 Television Theatrical feature lm 600 514 500 44 470 400 357 343 24 37 333 293 291 286 300 306 39 36 33 $ millions 225 255 254 252 205 197 33 200 55 37 193 155 160 26 150 128 100 0 2016/17 2015/16 2014/15 2013/14 2012/13 2011/12 2010/11 2009/10 2008/09 2007/08 Source: Estimates based on data obtained from CAVCO. Note: Some totals may not sum due to rounding. 95 Profile 2017

98 Television Broadcasting 11. and Audiences The Canadian television broadcasting industry consists of four key segments: • The private conventional television segment includes private broadcasters that maintain over-the-air infrastructure to broadcast to households, although the vast majority of Canadian households now receive conventional television signals via cable or satellite television providers. segment includes CBC/Radio Canada’s conventional services and • The public conventional television 39 provincial educational broadcasters in Quebec, Ontario and British Columbia. • Services in the specialty television segment are only available via cable or satellite television providers and typically provide sports, 24-hour news, movies, arts and other thematic programming. Specialty television services earn revenue from a combination of subscription fees and advertising. services are also only available via cable or satellite television services. They typically feature • Pay television premium programming such as recently released films and do not earn revenue from advertising; instead they rely on subscription or transactional payments. Data for on-demand services such as pay-per-view (PPV) and video-on-demand (VOD) services have been included in this segment. Highlights from 2016 • Broadcasting industry revenue increased by 2.2% to $7.28 billion. • Revenue increased at specialty-television services (5%) and CBC/Radio-Canada (7%). • Canadian programs accounted for three of the top 10 programs on Canadian television during the 2016 broadcast season. • All of the top 10 Canadian-produced programs during the 2016 broadcast season were in the French-language market. • All of the top 10 programs in the French-language market during the 2016 broadcast season attracted an average minute audience (AMA) of over one million. • In the French-language market, Canadian programs held a 64% audience share (in the genres supported by the Canada Media Fund [CMF]) in 2016. • In the English-language market, Canadian programs held a 23% audience share (in the CMF-supported genres) in 2016. • Revenue at private conventional broadcasters decreased by 4.5%. • Revenue at pay-television services decreased by 2.3%. • Canadian broadcasters’ expenditures on broadcaster-affiliated production dropped by 58.8% – from $158 million to $63 million. • Only one of the top 10 Canadian-produced programs in the English-language market attracted an AMA of over one million (down from four in 2015). 39 The revenue of public educational broadcasters has been excluded from the statistics in this report. 96 96 Profile 2017 Profile 2017

99 11. TELEVISION BROADCASTING AND AUDIENCES Total revenue in Canada’s broadcasting industry did increase by 2.2% in 2016. Overall, revenues grew by $159 million to $7,278 million however half of that increase was in the public broadcaster segment which was bolstered by an additional $75 million in federal government funding for CBC/Radio-Canada. The only other segment to experience growth was the specialty television sub-segment, where a revenue model based largely in recurring subscriber fees helped lift revenue by 5% and maintain this segment’s growth trend of recent years. Meanwhile, the private conventional and pay television and PPV and VOD sub-segments continued to experience long-term declines in revenue. The former is challenged by a revenue model based exclusively on ad sales, which are adversely affected by the business cycle and competition for ad dollars from the Internet and mobile platforms. The latter is also suffering from a business model that directly competes with online on-demand services, namely Netflix. The audience performance of Canadian programming was a tale of two language markets, once again in 2016. Overall, Canadian programming’s share of the peak-period audience in the French-language market held steady at 64%. Canadian programming’s share was also steady in the English-language market, but at a much lower share of 23%. Canadian French-language programs dominated the list of the top 10 Canadian television programs (across both language market) in 2016 – holding all 10 places. Also concerning was the fact that only one Canadian English- language program, Cardinal , managed to attract an average audience of more than one million viewers in Canada during the 2016 broadcast season. In recent years, as many as three or four programs had achieved this milestone on an annual basis. 97 Profile 2017

100 11. TELEVISION BROADCASTING AND AUDIENCES REVENUE This Total revenue in the Canadian television broadcasting industry increased by 2.2% to $7.28 billion in 2016. growth was largely due to the continued growth of Canada’s specialty television services, where revenue increased by 5% to $3.69 billion. Increased funding from the federal government also boosted CBC/Radio-Canada’s revenue by 7%. A weakening advertising market and migration of audiences contributed to the fifth consecutive decline in revenue at private conventional broadcasters. Pay television services also experienced the fifth consecutive year of revenue decline, as they continue to experience competition from online on-demand platforms. Exhibit 11 - 1 Total revenue in the broadcasting industry, by segment Private conventional Specialty television* CBC/Radio-Canada conventional Pay-TV/PPV/VOD 8,000 7,374 7,348 7,282 7,278 7,231 7,119 1,369 6,860 1,328 1,247 1,185 7,000 1,339 1,107 1,243 6,319 6,312 6,083 1,226 1,243 6,000 1,678 1,187 1,944 1,804 1,757 2,038 2,144 2,142 5,000 1,971 2,138 2,171 722 739 4,000 788 799 837 $ millions 856 3,693 3,516 799 3,428 3,292 3,000 3,130 696 596 2,892 547 2,676 2,426 2,335 2,000 2,178 1,000 0 2012 2011 2010 2009 2008 2007 2016 2015 2014 2013 Source: Nordicity estimates based on data from CRTC. * Includes revenue earned by specialty television services owned by CBC/Radio-Canada. 98 Profile 2017

101 11. TELEVISION BROADCASTING AND AUDIENCES INVESTMENT IN CANADIAN PROGRAMMING While Canadian television revenues increased in 2016, Canadian broadcasters’ contributions to independently- produced Canadian programming were lower in 2016. Statistics published by the Canadian Radio-television and Telecommunications Commission (CRTC) indicate that Canadian broadcasters invested $835 million in Canadian independent production, or 11.5% of their total revenue. The drop in overall investment was largely due to specialty television services’ scaling back their contributions by $58 million. This scaling backing was partially offset by higher spending by CBC/Radio-Canada and private conventional broadcasters. Exhibit 11 - 2 Expenditures on Canadian independent production by Canadian broadcasters CBC/Radio-Canada conventional Specialty television* Pay-TV/PPV/VOD Private conventional 1,000 895 223 785 782 780 800 744 736 193 191 192 191 236 142 600 139 139 153 133 120 148 $ millions 77 70 69 400 67 410 376 379 369 352 353 200 0 2015 2012 2013 2014 2011 2016 Source: CRTC * Includes CBC/Radio-Canada’s specialty television services. Notes: Spending on Canadian independent production programming refers to programming and production expenses of conventional television licensees, and Canadian program amortization of specialty and pay television licensees. 99 Profile 2017

102 11. TELEVISION BROADCASTING AND AUDIENCES Private broadcasters’ spending on broadcaster-affiliated production fell by 58.8% to $63 million in 2016. Private broadcasters also commissioned productions from their affiliated production companies. This broadcaster-affiliated production activity excludes news and most sports programming, which private broadcasters produce in-house. It includes, however, drama, documentary, some sports programming, and other genres (e.g., variety and performing arts [VAPA], human interest, reality). Exhibit 11 - 3 Expenditures by private Canadian broadcasters* on broadcaster-affiliated production 2008 2009 2010 2011 2012 2013 2014 2015 2007 2016 Drama and comedy 4 6 1 8 11 13 9 3 <1 10 Long-form documentary 0 0 0 5 10 7 10 7 11 <1 86 Sport 0 161 0 1 5 <1 21 10 0 Other genres** 79 82 72 69 65 68 75 96 118 53 83 Total 89 86 79 236 171 63 103 113 153 Source: CRTC. * Includes private conventional services, private pay and specialty services, and CBC/Radio-Canada’s specialty services. ** For example, VAPA, human interest and reality television. Note: Some totals may not sum due to rounding. TOP TELEVISION PROGRAMS The following section presents statistics on the top-rated programs broadcast on television in Canada. The lists of top 10 television programs are drawn from Numeris’ database of audience statistics for the 2016 broadcast season (September 1, 2016 to August 31, 2017) and includes programs in the CMF-supported genres (i.e. drama, children’s and youth, documentary, and VAPA). In cases where the same title ranks in multiple occurrences, only the audience level of the top-ranking instance has been used. Top-Rated Television Programs La Voix junior , La Voix and Unité 9 were among the top 10 shows in Canada during Three Canadian television programs, the 2016 broadcast season. Exhibit 11 - 4 Top 10 television series in Canada, 2016 broadcast season* Average Minute Program (country of origin) Audience (000s) Big Bang Theory (US) 2,688 1. La Voix junior 2,332 (Canada) 2. 3. La Voix 2,309 (Canada) Unité 9 (Canada) 4. 1,983 5. Designated Survivor (US) 1,980 6. NCIS (US) 1,945 7. (US) 1,935 Bull 8. America's Got Talent (US) 1,800 9. Grey's Anatomy (US) 1,694 1,584 10. Lucifer (US) Source: CMF Research (Numeris), 2017. * Television series include all television projects with more than three episodes televised during a single broadcast season. 100 Profile 2017

103 11. TELEVISION BROADCASTING AND AUDIENCES All of the top 10 Canadian-produced series during the 2016 broadcast season were in French. They all attracted AMAs La Voix junior La Voix , attracted over 2.3 million. of at least 1.1 million and two programs, and Exhibit 11 - 5 Top 10 Canadian-produced television series, 2016 broadcast season* Average Minute Program Audience (000s) La Voix junior 2,332 1. 2. La Voix 2,309 3. Unité 9 1,983 4. Boomerang 1,379 5. 1,363 L'Échappée 6. Les Pays d'en haut 1,325 7. District 31 1,242 8. L'Heure bleue 1,232 9. O' 1,167 10. L'Imposteur 1,143 Source: CMF Research (Numeris), 2017. * Television series include all television projects with more than three episodes televised during a single broadcast season. English-Language Market Only one English-language Canadian drama series, Cardinal , attracted an AMA of over one million during the 2016 broadcast season. The other nine series within the top 10 attracted average audiences of 750,000 or more. Top 10 Canadian television series in the English-language market, 2016 Exhibit 11 - 6 broadcast season* Average Minute Audience (000s) Program Cardinal 1,097 1. 2. Murdoch Mysteries 970 Mary Kills People 936 3. 4. 901 Saving Hope 5. Anne 898 6. Private Eyes 898 7. Kim's Convenience 863 8. Vikings 801 9. Ransom 788 752 10. Schitt's Creek Source: CMF Research (Numeris), 2017. * Television series include all television projects with more than three episodes televised during a single broadcast season. 101 Profile 2017

104 11. TELEVISION BROADCASTING AND AUDIENCES French-Language Market All the top 10 Canadian television programs in the French-language market during the 2016 broadcast year attracted audiences of over one million viewers, with the top two television series achieving average minute audiences of over two million. Exhibit 11 - 7 Top 10 Canadian television series in the French-language market, 2016 broadcast season* Average Minute Program Audience (000s) 1. La Voix junior 2,332 2. La Voix 2,309 Unité 9 3. 1,983 1,379 Boomerang 4. 5. L'Échappée 1,363 6. Les Pays d'en haut 1,325 7. District 31 1,242 8. L'Heure bleue 1,232 9. O' 1,167 1,143 10. L'Imposteur Source: CMF Research (Numeris), 2017. * Television series include all television projects with more than three episodes televised during a single broadcast season 102 Profile 2017

105 11. TELEVISION BROADCASTING AND AUDIENCES AUDIENCE SHARE This section includes aggregate statistics on Canadian programming’s audience share in each of the CMF-supported genres. These statistics are only available on a one-year-lagged basis, and therefore, report audience share for the 2015/16 broadcast season (September 1, 2015 to August 31, 2016). In the English-language market, Canadian programming in the CMF-supported genres accounted for an audience share of 23% during the 2015/16 broadcast season. The highest audience shares were in the documentary (56%) and children’s and youth (50%) genres. Exhibit 11 - 8 Television audience share of Canadian programming, English-language market, peak viewing period 2007/08 2008/09 2009/10 2010/11 2011/12 Broadcast season 2013/14 2014/15 2015/16 2006/07 2012/13 13% 13% 16% 15% 16% 12% 17% 16% 15% Drama (fiction) 17% 48% 49% 49% 35% 35% 45% 49% 48% 49% 56% Documentary 49% 30% 46% 44% 46% 49% 45% 50% 50% 43% Children’s and youth Variety and 25% 31% 29% 20% 19% 22% 13% 13% 18% 20% performing arts All CMF-supported 22% 29% 31% 34% 23% 22% 23% 24% 24% genres 23% Source: CMF Research (Numeris), 2017. In the French-language market, Canadian programming in the CMF-supported genres accounted for an audience The highest audience shares were in the VAPA (96%), and share of 64% during the 2015/16 broadcast season. children’s and youth (72%) genres. In all four genres, Canadian programming accounted for at least half of total viewing to that genre. Exhibit 11 - 9 Television audience share of Canadian programming, French-language market, peak viewing period 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 Broadcast season 2013/14 2014/15 2015/16 2012/13 Drama (fiction) 52% 55% 52% 48% 56% 48% 49% 52% 51% 46% Documentary 71% 74% 77% 74% 76% 72% 72% 73% 73% 62% 74% Children’s and youth 75% 81% 76% 73% 63% 66% 66% 72% 72% Variety and performing arts 93% 79% 84% 85% 87% 92% 91% 94% 95% 96% All CMF-supported 64% genres 68% 66% 67% 63% 62% 61% 62% 62% 64% Source: CMF Research (Numeris), 2017. 103 Profile 2017

106 Theatrical exhibition 12. and audiences The theatrical exhibition industry includes theatre chains, independent theatres and IMAX theatres that exhibit theatrical feature films. Despite the growth in online digital distribution platforms, the theatrical exhibition industry remains an important window for the release of feature films in Canada. In 2016 (the most recent year 40 of available data), there were 2,641 theatre screens in Canada and over 100 million paid admissions. Highlights from 2016 • Theatrical exhibition industry revenue increased by 1.1% to $1.76 billion. • Total box office receipts increased by 0.7% to $993 million. • US films captured 87.7% of these box office receipts. 41 • There were 133 new Canadian feature films released in Canadian theatres in 2016. • In the English-language market, Canadian films’ share of the box office increased to 0.8%. • was the top grossing Canadian film in Canada, with a $4.1 million box office (calendar year only). Brooklyn • Canadian films’ share of the Canadian box office declined to 1.8% – a 10-year low. • In the French-language market, Canadian films’ share of the box office declined to 8.7%. • Three of the top 10 Canadian films in the French-language market earned more than $1 million at the box office. • Canadian films’ shares of viewing on pay television (9.5%), specialty television (2.7%) and conventional television (6.9%) declined but were still higher than their box office share (1.8%) Statistics Canada (2017), CANSIM table 361-0070 40 Note that the number of new Canadian films released in theatres in 2016 (133) will differ from the number of Canadian theatrical feature films produced during 41 the 2016/17 fiscal year (92 [see Section 5.1]), since, for example, some of the films released may have been produced in earlier years. 104 104 Profile 2017 Profile 2017

107 12. THEATRICAL EXHIBITION AND AUDIENCES Despite competition from online platforms, Canada’s theatrical exhibition industry recorded another year of growth in 2016. Feature film exhibitors’ total revenues increased by an estimated 1.1% to $1.76 billion in 2016, and ended up just shy of the 10-year high reached in 2013. This growth was fuelled by another year of growth at the box office. Canada’s theatrical box office rose for the second consecutive year to $993 million. With two Star Wars films and other Deadpool , the box office had a good year, but still has some ways to go to get back to the $1.1 billion level hits such as reached in 2012. Although the overall box office grew in 2016, Canadian films’ share of that box office weakened. Canadian films earned $18 million in Canadian theatres in 2016, down from $19 million in 2015. Canadian films’ share of the box office also declined from 1.9% to a 10-year low of 1.8%. Canadian films exhibited in the English-language market did show an improved box office performance in 2016 – increasing their revenue to $7.4 million and their share to 0.8%, but this was still short of the 10-year average performance of $9.6 million and 1.1%. With $10.3 million in revenue at the Canadian box office and an 8.7% box office share, Canadian films also underperformed in the French-language market in relation to the past 10 years. Box office performance in 2016 was below the 10-year averages of $16.7 million and 12.3%. While Canadian films had a difficult year at the box office in Canada, they continued to capture a larger share of audiences on various television platforms, including pay television, video-on-demand (VOD), specialty and conventional television. On pay-television, Canadian films earned a 9.5% market share (share of views) in 2016; on VOD, the share was 7.3%; on conventional television the share was 6.9%; and on specialty television, Canadian films captured 2.7% of total views. In all cases, Canadian films’ market share exceeded the 1.8% share that they earned at the box office. Canadian films’ better performance on television platforms suggests that their curtailed access to theatrical screens in Canada – as well as the marketing competition they face from newly released American films – may be adversely affecting their box office performance. 105 Profile 2017

108 12. THEATRICAL EXHIBITION AND AUDIENCES TOTAL REVENUE In 2016, the theatrical exhibition industry in Canada earned estimated total revenues of $1.76 billion, an increase of 1.1% over 2015. While most of this revenue was earned from box office receipts (56%), other sources of revenue for the exhibition sector included food and beverage sales (34%), and advertising, merchandise sales and other sources (10%). Exhibit 12 - 1 Total revenue in the exhibition sector 2,000 1,770 1,764 1,763 1,743 1,648 1,643 1,609 1,534 1,484 1,500 1,384 1,000 $ millions 500 0 2015 2014 2013 2012 2011 2010 2009 2008 2007 2016 Source: Nordicity estimates based on data from Movie Theatre Association of Canada (MTAC), Cineplex Inc. and Statistics Canada, catalogue no. 87F0009X and CANSIM table 361-0068. Note: See Motion Picture Association-Canada and Canadian Media Production Association (2013), The Economic Contribution of the Film and Television Sector in Canada for additional description of methodology 106 Profile 2017

109 12. THEATRICAL EXHIBITION AND AUDIENCES Sources of revenue in the exhibition sector, 2016 Exhibit 12 - 2 Food and beverage 34% Total revenue $1.76 billion Box ofce 56% Other revenue* 10% Source: Nordicity estimates based on data from MTAC and Cineplex Inc. * Includes revenue earned from sale of in-theatre advertising, other advertising sales, merchandise sales, private screenings and parties and corporate events. Note: Some totals may not sum due to rounding. See Motion Picture Association-Canada and Canadian Media Production Association (2013), The Economic Contribution of the Film and Television Sector in Canada for additional description of methodology. FILM FESTIVALS In recent years, many of the film festivals that traditionally acted as markets for the selling of independent productions to distributors, have evolved into a more sophisticated marketing and sales operations. Often festivals are now a means of building word-of-mouth and interest by actively cultivating audiences ahead of theatrical release, as well as providing the fora for industry practitioners to engage with each other and filmmakers. Film festivals continue to be an integral element of the film sector ecosystem, with hundreds spread right across the Canada, covering a broad range of genres. There are genuinely global festivals such as Toronto International Film Festival (TIFF), operating in the company of Cannes, Venice, and Sundance; world-leading specialist film festivals like Ottawa International Animation Festival and Hot Docs Canadian International Documentary Festival; as well as popular genre festivals, such as Montreal’s Festival international de films Fantasia, which continue to bring in the crowds. Telefilm Canada provided $6.9 million in financial support to 42 film festivals and 102 industry events and initiatives in Canada in 2016. These 42 film festivals represent the major events in Canada; however, there are numerous smaller local 42 tracks Canadian film festivals that operate without funding from Telefilm Canada. Telefilm Canada’s Success Index films’ recognition (i.e. selections, prize nominations and awards) at 15 Canadian film festivals and three events (DGC Awards, Canadian Screen Awards and IRIS Awards) as part of its holistic assessment of Canadian films’ commercial, cultural and industrial performance. 42 Telefilm Canada’s Success Index combines 10 indicators that measure Canadian films’ commercial, cultural and industrial performance to track the overall . https://telefilm.ca/en/business-intelligence/success-index success of the films it funds. For more information, see 107 Profile 2017

110 12. THEATRICAL EXHIBITION AND AUDIENCES Exhibit 12 - 3 Canadian film festivals that contribute to Telefilm Canada’s Success Index* Calgary International Film Festival Ottawa International Animation Festival Cinéfest Sudbury International Film Festival Rencontres internationales du documentaire de Montréal Festival du Nouveau Cinéma de Montréal TIFF Kids International Film Festival Festival international de films Fantasia Toronto International Film Festival (TIFF) Festival international du film pour enfants de Montréal Vancouver International Film Festival (VIFF) (FIFEM) Victoria Film Festival FIN: Atlantic International Film Festival Whistler Film Festival Hot Docs Canadian International Documentary Festival Source: Telefilm Canada. * List under review In terms of the value chain that operates in the film and television sector, film festivals play a key role in often mediating the transactions between independent filmmakers and distributors and broadcasters. These significant economic benefits are mostly captured within the distribution and broadcasting segments of the value chain. In addition, economic impact for the Canadian economy can also be achieved through the audiences and industry delegates that attend the festivals and that of the festival operations themselves. These key festivals attract an audience of approximately 1.4 million, including local and foreign attendees and delegates. TIFF is the most well-attended film festival in Canada but attendance at the other highlighted festivals also remains robust. Most film festivals also seek to extend their reach and impact outside of the festival. They offer schoolchildren free attendance or have community outreach programmes (e.g. TIFF). Others offer programming throughout the year (e.g. VIFF), or they take the most well-received programming on tour (e.g. Hot Docs). Exhibit 12 - 4 Attendance at key Canadian film festivals Attendance* Toronto International Film Festival (TIFF) 383,970 (2016) 215,000 (2017) Hot Docs Vancouver International Film Festival (VIFF) 133,000 (2016) 100,000+ (2016) Fantasia Film Festival Calgary International Film Festival 36,693 (2016) FIN: Atlantic International Film Festival 28,085 (2016) Ottawa International Animation Festival 26,599 (2016) Victoria Film Festival 25,000+ (2017) Whistler Film Festival 15,000+ (2016) Source: Michael Oliver-Harding (2017), “TIFF by The Numbers,” Elle Canada, August 22, 2017, http://www.ellecanada.com/culture/movies-and-tv/article/tiff-by- the-numbers. Hot Docs (2017), “Hot Docs Wraps 24th Edition with Record-Breaking Audiences of 215,000, https://www.hotdocs.ca/news/hd17-wrap. VIFF (2016), Greater Vancouver International Film Festival Society Report to Community 2016, https://www.viff.org/ArticleMedia/Files/documents/report/VIFF2016_ CommunityReport_Web.pdf, p. 3. Fantasia Film Festival: http://www.fantasiafestival.com/2016/en/about/about-the-festival. FIN: Atlantic International Film Festival: https://www.halifax.ca/sites/default/files/documents/city-hall/regional-council/170613rc1441.pdf. Calgary International Film Festival (2016), Festival Report Sep 21 - Oct 2 2016, https://www.calgaryfilm.com/sites/default/files/FestivalReport_CIFF%202016_spreads%20WEB.pdf, p. 3. Ottawa International Film Festival (2016), Final Report 2016, http://www.animationfestival.ca/pdfs/OIAF16FINALREPORT.pdf, p. 4. Victoria Film Festival, (2017), “VFF 2017 – It’s a Wrap!,” February 15, 2017, https://www.victoriafilmfestival.com/vff-2017-wrap/. Whistler Film Festival (2016), “2016 WFF Backgrounder,” September 28, 2016, http://whistlerfilmfestival.com/wp-content/uploads/2016/07/WFF16-Backgrounder.pdf. * Most recent year of published data 108 Profile 2017

111 12. THEATRICAL EXHIBITION AND AUDIENCES NATIONAL BOX OFFICE TRENDS Canada’s total theatrical box office continued to hover just below $1 billion for the third consecutive year, and . US films captured an 87.7% share of these receipts (Exhibit was still 9.2% below the 10-year peak reached in 2012 12-6). Other foreign films claimed 10.5% of total box office receipts. Canadian films’ box office share hit a 10-year low of 1.8% in 2016, down slightly from 1.9% in 2015. Exhibit 12 - 5 Box office revenues in Canada, by origin of production US Canada Other foreign 1,200 1,094 1,042 1,030 1,007 1,001 993 986 27 1,000 946 24 920 32 34 18 28 19 858 28 26 800 28 902 923 954 871 864 889 795 820 600 815 763 $ millions 400 200 172 165 109 104 97 95 84 80 67 43 0 2013 2012 2011 2010 2009 2008 2007 2016 2015 2014 Source: MTAC. Note: Some totals may not sum due to rounding. 109 Profile 2017

112 12. THEATRICAL EXHIBITION AND AUDIENCES Exhibit 12 - 6 Share of total box office revenues in Canada, by origin of production Canada Other foreign US 100 1.8 1.9 2.3 2.5 3.0 2.8 3.1 3.3 3.3 2.9 80 87.7 80.6 88.6 82.4 86.3 88.6 86.7 92.7 88.9 88.3 60 40 20 17.4 Share of total box ofce at theatres in Canada (%) 15.1 10.9 10.5 10.3 9.1 8.7 8.3 7.8 4.2 0 2013 2012 2011 2010 2009 2008 2007 2016 2015 2014 Source: MTAC. Note: Some totals may not sum due to rounding 110 Profile 2017

113 12. THEATRICAL EXHIBITION AND AUDIENCES A total of 772 new release films played in Canadian theatres in 2016 – a new peak. Out of this total, there were 133 Canadian films, compared to 290 American films and 349 films from other countries. Exhibit 12 - 7 Number of new-release feature films playing in theatres in Canada, by origin of production Canada US Other foreign 800 772 748 133 722 137 696 700 126 652 129 122 290 582 600 269 553 249 89 273 94 485 226 500 470 466 230 97 93 83 209 400 217 229 181 349 347 342 Number of lms 300 304 294 263 250 200 196 171 154 100 0 2012 2011 2010 2009 2008 2007 2016 2015 2014 2013 Source: Department of Canadian Heritage analysis of data from MTAC. Note: Data only include feature films released for the first time in theatres in a particular year. For example, the statistics for 2015 only include the number of films released in Canadian theatres for the first time in 2015. Some totals may not sum due to rounding. TWO LOVERS AND A BEAR First English-language feature from Kim Nguyen secures American distribution Two Lovers and a Bear is a drama directed by Kim Nguyen. The film is the Montreal-born director’s first English-language feature, following his work on the Oscar-nominated Rebelle . Two Lovers and a Bea r premiered at Cannes and screened at TIFF. Following accolades on the festival circuit, American distribution rights were acquired by 20th Century Fox and Netflix. The film was acquired by Sony Pictures for the rest of the world. The Nunavut-set love story brings together Canadian and international talent, with Orphan Black ’s Tatiana Maslany starring alongside Dane DeHaan and Gordon Pinsent as the title characters. The bilingual production team, led by producer Roger Frappier of Max Films, also earned critical acclaim at both Anglophone and Francophone awards ceremonies. The film won two Canadian Screen Awards for Best Art Direction and Best Editing, two Prix Iris for Best Sound and Best Editing, and earned Frappier the CMPA’s Established Producer Award for his outstanding achievements and distinguished career as an independent feature film producer in Canada. 111 Profile 2017

114 12. THEATRICAL EXHIBITION AND AUDIENCES BOX OFFICE BY LINGUISTIC MARKET Growth in the box office for Canadian films in the English-language market was not enough to offset declines in The total box office the French-language market, which dragged down the overall box office share to a 10-year low. ($10.3 million) and box office share (8.7%) earned by Canadian films in the French-language market declined in 2016. In fact, both the box office and share hit 10-year lows. Despite these declines in the French-language market, it was still larger than Canadian films’ box office in the English- language market and over 10 times larger in terms of box office share. Canadian films in the English-language market earned $7.4 million in 2016 and recorded a 0.8% share. In the English-language market, however, Canadian films accounted for only 10% of the 1,086 films screened. Exhibit 12 - 8 Box office revenues and market share at theatres in Canada, by linguistic market 2010 2011 2007 2013 2014 2015 2016 2008 2009 2012 FRENCH-LANGUAGE MARKET $ millions Box office of Canadian feature 17.4 26.7 20.1 19.8 12.9 12.6 12.1 13.8 10.3 films 20.8 107.6 117.9 129.8 127.3 130.2 108.5 108.4 115.2 108.7 Box office of foreign feature films 126.7 128.5 125.9 144.7 149.9 147.1 143.1 139.3 120.5 129.0 119.0 Total box office of feature films 16.2% Canadian feature films’ share 13.4% 13.4% 9.0% 9.0% 10.0% 10.7% 8.7% 13.8% 18.5% Number of feature films playing in theatres in Canada 78 78 74 76 Canadian 97 91 84 104 79 84 328 293 316 293 279 310 301 280 280 291 Foreign Total 412 394 367 355 372 398 371 364 395 388 Ratio of foreign to Canadian feature films 3.9 4.1 4.0 3.7 4.0 3.1 3.1 3.3 2.8 3.7 ENGLISH-LANGUAGE MARKET $ millions Box office of Canadian feature 6.9 8.5 6.8 12.1 8.1 13.9 11.2 16.3 4.9 7.4 films 722.2 845.8 855.4 867.9 Box office of foreign feature films 937.2 893.0 809.1 852.2 866.4 786.0 951.2 Total box office of feature films 862.2 880.0 852.9 794.5 915.3 825.3 857.1 873.8 729.1 Canadian feature films’ share 1.0% 1.1% 0.8% 1.4% 0.9% 1.5% 1.2% 2.0% 0.6% 0.8% Number of feature films playing in theatres in Canada 80 63 71 70 Canadian 72 111 121 102 113 76 Foreign 438 436 422 406 568 803 867 870 803 973 883 Total 508 493 476 644 501 978 991 905 1,086 Ratio of foreign to 8.6 Canadian feature films 7.0 6.1 5.9 5.8 7.5 10.0 7.8 7.2 7.9 Source: MTAC. Note: Some totals may not sum due to rounding. 112 Profile 2017

115 12. THEATRICAL EXHIBITION AND AUDIENCES TOP FEATURE FILMS BY LANGUAGE OF PRESENTATION US films generated the highest box office receipts in both the English- and French-language markets in 2016. In , the English-language market, the top Canadian film was the Canada-UK-Ireland treaty coproduction Brooklyn which earned $4.1 million at the Canadian box office during the 2016 calendar-year. The other top-grossing Canadian Room films were Race , a Canada-Germany coproduction; however, , another treaty coproduction with Ireland, and these films – and no other Canadian films – earned more than $1 million at the Canadian box office in the English- language market. Top 10 Canadian-produced feature films presented in the English-language market, Exhibit 12 - 9 2016 Box office Original language of receipts* Title ($ millions) production 1. Brooklyn 4.10 English 2. Room English 0.85 Race English 3. 0.79 Born to Be Blue 0.22 4. English 5. Juste la fin du monde 0.15 French 6. Sleeping Giant 0.14 English 7. 0.14 French La guerre des tuques 3D 8. Shut In 0.08 English 9. A Date with Miss Fortune 0.08 English Into the Forest 10. 0.07 English Source: MTAC. * Box office receipts earned between January 1 and December 31, 2016. This amount may under-represent a particular film’s total box office receipts if the film played in Canadian cinemas across two calendar years. Three Canadian feature films earned over $1 million in box office receipts in the French-language market. The leading ($2.9 million), Votez Bougon ($1.2 million) and 1:54 Les 3 p’tits cochons 2 films were ($1.1 million). Top 10 Canadian-produced feature films presented in the French-language market, Exhibit 12 - 10 2016 Box office Original receipts* language of ($ millions) production Title Les 3 p'tits cochons 2 1. French 2.90 2. Votez Bougon 1.20 French 3. 1:54 1.10 French 4. Juste la fin du monde French 0.72 Brooklyn 0.68 5. English 6. Nitro Rush 0.59 French 7. Les mauvaises herbes 0.52 French 8. 0.47 French Chasse-galerie: la légende 9. La guerre des tuques 3D 0.34 French 10. Race 0.34 English Source: MTAC. * Box office receipts earned between January 1 and December 31, 2016. This amount may under-represent a particular film’s total box office receipts if the film played in Canadian cinemas across two calendar years. 113 Profile 2017

116 12. THEATRICAL EXHIBITION AND AUDIENCES Exhibit 12 - 11 Top 10 feature films presented in the English-language market, 2016 Box office receipts* Country of origin ($ millions) Title Deadpool 34.72 US 1. 2. 32.58 US Finding Dory 3. Rogue One: A Star Wars Story 32.05 US 4. Star Wars: The Force Awakens 30.61 US 5. Captain America: Civil War 30.53 US 6. The Jungle Book 29.83 US Suicide Squad 27.76 7. US 8. Zootopia 27.48 US 9. The Secret Life of Pets 25.74 US 10. Batman v Superman: Dawn of Justice 24.37 US Source: MTAC. * Box office receipts earned between January 1 and December 31, 2016. This amount may under-represent a particular film’s total box office receipts if the film played in Canadian cinemas across two calendar years. Exhibit 12 - 12 Top 10 feature films presented in the French-language market, 2016 Box office receipts* Country of origin ($ millions) Title The Secret Life of Pets 4.17 US 1. 2. 3.24 US Star Wars: The Force Awakens 3. Zootopia 3.15 US 4. The Jungle Book 3.08 US 5. Finding Dory 3.03 US 6. 2.93 US The Revenant 7. Rogue One: A Star Wars Story 2.87 US 8. Les 3 p'tits cochons 2 2.87 Canada 9. Deadpool 2.70 US 10. Captain America: Civil War 2.70 US Source: MTAC. * Box office receipts earned between January 1 and December 31, 2016. This amount may under-represent a particular film’s total box office receipts if the film played in Canadian cinemas across two calendar years. 114 Profile 2017

117 12. THEATRICAL EXHIBITION AND AUDIENCES FEATURE FILM VIEWING ON TELEVISION AND ALTERNATIVE PLATFORMS Although, newly released Canadian films only achieved a 1.8% box office share in 2016, Canadian films, achieved This outperformance was largely consistent across both much higher shares of views on television platforms. language markets. Across both language markets, Canadian feature films’ share of audiences exceeded their 1.8% share of the theatrical box office on all television platforms in 2016. The shares of views held by Canadian films on pay television (9.5%), specialty television (2.7%), conventional television (6.9%) and VOD (7.3%) were all well above the share they held at the theatrical box office. Exhibit 12 - 13 Market share of Canadian feature films exhibited in Canada, television windows vs. theatrical box office Conventional TV (share of total views) VOD (share of viewer orders)* Specialty TV (share of total views) Pay TV (share of total views) Theatrical box ofce (share of box ofce receipts) 12% 10.3 10% 9.5 8.9 8.9 8.9 8.6 8.6 8.5 8 7.8 8% 7.6 7.6 7.4 7.3 7.3 7.2 7.1 7.1 6.9 6.9 6.1 6.1 5.9 6% 5.3 4.7 4 4% 3.5 3.4 3.1 2.7 2.6 2.3 2.2 2.1 2% 1.3 0% 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 4% 3.3 3.3 3.1 3.0 2.9 2.8 3% 2.5 2.3 1.9 1.8 2% 1% 0% Source: Department of Canadian Heritage analysis of data from Numeris (television markets), Canadian Radio-television and Telecommunications Commission (CRTC) (VOD) and MTAC (theatrical box office). Note: For the television markets, the total number of views was estimated by dividing the total number of minutes spent watching a feature film by the average duration of the film. Only feature films that had a theatrical release were considered in this analysis. Market shares are based on total views. * Includes free and paid orders. Data not available prior to 2012. 115 Profile 2017

118 12. THEATRICAL EXHIBITION AND AUDIENCES In the English-language market, Canadian feature films’ share of audiences easily exceeded their 0.8% share of the theatrical box office on all television platforms . In fact, Canadian films’ share on the pay television platform was just shy of 10% in 2016. Exhibit 12 - 14 Market share of Canadian feature films exhibited in English in Canada, television windows vs. theatrical box office Conventional TV (share of total views) Specialty TV (share of total views) VOD (share of viewer orders)* Pay TV (share of total views) Theatrical box ofce (share of box ofce receipts) 12% 10.1 9.8 10% 9.2 9.1 8.4 8.1 8 8% 7.6 7.5 7.4 7.1 6.9 6.8 6.7 6.7 6% 5.6 5.2 4.9 4.8 4.2 4 3.9 3.9 4% 3.6 3.6 3.1 3 2.9 2.3 2.2 2 1.9 1.9 2% 1.7 0% 2007 2016 2015 2014 2013 2012 2011 2010 2009 2008 2% 1.5 2.0 1.4 1.2 1.1 1.0 0.9 0.8 0.8 1% 0.6 0% Source: Department of Canadian Heritage analysis of data from Numeris (television markets), CRTC (VOD) and MTAC (theatrical box office). Note: For the television markets, the total number of views was estimated by dividing the total number of minutes spent watching a feature film by the average duration of the film. Only feature films that had a theatrical release were considered in this analysis. Market shares are based on total views. * Includes free and paid orders. Data not available prior to 2013. 116 Profile 2017

119 12. THEATRICAL EXHIBITION AND AUDIENCES In the French-language market, Canadian feature films’ share of audiences on television platforms was slightly higher than the 8.7% box office on all but the conventional TV platform. Historically, Canadian films have performed better at the theatrical box office in the French-language market than on television platforms. However, in 2016, Canadian films’ shares of views on pay television (9%), specialty television (9.6%) and VOD (10.4%) all exceeded the 8.7% box office share. Only the conventional television platform under-performed the box office, with a 7.6% share of views. Market share of Canadian feature films exhibited in French in Canada, television Exhibit 12 - 15 windows vs. theatrical box office VOD (share of viewer orders)* Conventional TV (share of total views) Specialty TV (share of total views) Pay TV (share of total views) Theatrical box ofce (share of box ofce receipts) 12% 11.5 11.3 11.3 10.8 10.7 10.7 10.4 10 10 10% 9.6 9.4 9 8.9 8.8 8.7 8.7 8.6 8.5 8.2 8 8% 7.7 7.6 7.6 7.6 7.3 7.3 6.7 6.5 6.3 6.2 6 5.8 6% 5.1 4.9 4% 2% 0%           18.5 20% 16.2 13.8 13.4 13.4 15% 10.7 10.0 9.0 9.0 8.7 10% 5% 0% Source: Department of Canadian Heritage analysis of data from Numeris (television markets), CRTC (VOD) and MTAC (theatrical box office). Note: For the television markets, the total number of views was estimated by dividing the total number of minutes spent watching a feature film by the average duration of the film. Only feature films that had a theatrical release were considered in this analysis. Market shares are based on total views. * Includes free and paid orders. Data not available prior to 2013. 117 Profile 2017

120 13. Broadcasting distribution undertakings The broadcasting distribution sector includes cable-TV, direct-to-home satellite (DTH), multipoint distribution services (MDS) and Internet protocol TV (IPTV) services which allow Canadian households and businesses to access licensed television programming services, including conventional and pay and specialty services, by subscribing to channel packages and certain à la carte services. Cable-TV, DTH, MDS and IPTV services are also referred to as broadcasting distribution undertakings (BDUs); collectively they comprise the BDU sector. Highlights from 2016 • IPTV subscribers and revenues increased to 2.5 million and $1.8 billion, respectively. • The number of BDU subscribers declined by 1.1% to 11.1 million. • Lower revenues for cable-TV and DTH/MDS led to a 2.1% decrease in total BDU revenues. • BDUs’ contributions to the creation of Canadian programming decreased by 1.6% to $419 million. 118 118 Profile 2017 Profile 2017

121 13. BROADCASTING DISTRIBUTION UNDERTAKINGS Canada’s traditional BDUs continued to experience declining subscriber levels and revenue in 2016. While IPTV services did expand their subscriber base in 2016, the overall number of BDU subscribers in Canada declined for the fourth consecutive year. It is now clear that that 2012 marked the peak year for BDU subscribership Canada. Some of these declines in overall BDU subscriptions and revenue can be attributed to Canadian households’ migration to online on-demand services such as Netflix and CraveTV. However, recent research by MTM also indicates that approximately 43 70% of subscribers to on-demand services in Canada also maintain a subscription to a traditional BDU. The fact that the BDU industry’s revenues declined at a faster rate (negative 2.1%) than the number subscribers (negative 1.1%) suggests that consumers may be benefitting from the purchasing flexibility offered by the Let’s Talk TV Policy – introduced by the CRTC in 2015 – or are simply “cord-shaving” to accommodate the additional expense of also signing up to an on-demand service such as Netflix. BDU SUBSCRIBERS AND REVENUE Although the BDU subscriptions declined by 1.1% in 2016 – continuing a four-year decline that began in 2012. number of subscriptions to IPTV grew to 2.47 million, a 3.8% decrease in cable-TV subscriptions and a 7.1% decrease in DTH/MDS subscriptions brought down the overall number of BDU subscriptions. Exhibit 13 - 1 Number of subscribers to BDUs† Cable DTH and MDS IPTV 12,000 11,529 11,517 11,405 11,397 11,247 11,156 11,121 10,855 1,006 1,397 1,788 657 10,616 420 2,169 2,468 10,322 2,877 2,862 2,826 311 225 10,000 166 2,691 2,761 2,559 2,699 2,631 2,375 2,206 8,000 7,874 7,863 7,783 7,697 7,692 7,525 7,429 7,058 6,703 6,447 6,000 000s 4,000 2,000 0 2012 2011 2010 2009 2008 2007 2016 2015 2014 2013 Source: Canadian Radio-television and Telecommunications Commission (CRTC). † Excludes BDUs not required by regulations to report financial and operating data to the CRTC. , October 23, 2017. Playback 43 Bree Rody-Mantha (2017), “Study says OTT vs. TV not a zero-sum game,” 119 Profile 2017

122 13. BROADCASTING DISTRIBUTION UNDERTAKINGS Total revenues in Canada’s broadcasting distribution sector declined by 2.1% in 2016 – the second consecutive Although revenue in the IPTV segment increased to nearly $1.8 billion, falling subscriptions in both year of decline. the cable-TV, and DTH and MDS markets brought down overall broadcasting distribution sector revenue. † Exhibit 13 - 2 Total revenue in the Canadian broadcasting distribution sector Cable IPTV DTH and MDS 10,000 8,930 8,919 8,794 8,734 8,561 8,449 1,285 1,563 931 1,795 7,980 585 8,000 322 2,492 7,318 2,472 208 2,414 6,798 2,289 2,532 151 2,385 2,149 6,168 108 2,196 6,000 76 2,036 5,595 5,483 5,390 5,387 1,834 5,231 5,067 4,971 4,790 $ millions 4,654 4,000 4,258 2,000 0 2009 2008 2013 2014 2015 2016 2007 2010 2011 2012 Source: CRTC. Note: Some totals may not sum due to rounding † Excludes BDUs not required by regulations to report financial and operating data to the CRTC. 120 Profile 2017

123 13. BROADCASTING DISTRIBUTION UNDERTAKINGS INVESTMENT IN CANADIAN PROGRAMMING Through their contributions to the Canada Media Fund (CMF), independent production funds and the funding of local programming, BDUs support the creation of Canadian content. In 2016, BDU contributions to the CMF, independent production funds and local programming all decreased slightly. In total, BDUs contributed $419 million to the creation of Canadian programming, a decrease of 1.6% from 2015. Since reaching a peak of $493 million in 2012, BDUs’ contributions to Canadian programming have fallen by 15%. Exhibit 13 - 3 BDU investment in Canadian programming CMF Independent production funds Local programming* 493 500 482 481 465 234 463 216 226 192 227 426 419 153 151 400 348 324 123 300 116 300 106 54 55 53 52 51 50 $ millions 47 45 219 218 200 215 214 208 42 205 39 189 180 166 155 100 0 2012 2011 2007 2009 2013 2015 2016 2008 2010 2014 Source: CRTC Note: Some totals may not sum due to rounding * Includes expenditures on local expressions (i.e. community television channels) and contributions to the Local Program Improvement Fund (2009-2014) 121 Profile 2017

124 Notes on Methodology Estimates of Canadian Production The estimates of Canadian production are based on data from the Canadian Audio-Visual Certification Office (CAVCO) of the Department of Canadian Heritage. In order to account for the fact there is a 42-month window in which 44 Nordicity applied a gross-up factor of 10% to the raw CAVCO producers may submit their application to CAVCO. statistics for 2016/17. This rate of 10% was based on historical rates of under-coverage observed in the CAVCO statistics over the past decade, with particular weight given to the rates of under-coverage observed in recent years. Estimates of Canadian Television Production Certified by the Canadian Radio-television and Telecommunications Commission (“CRTC-Certified Production”) The estimates of Canadian television production include an estimate of CRTC-certified television production (i.e. television production exclusively certified by the CRTC). Research conducted by Nordicity and the Department of Canadian Heritage in 2009 indicated that CRTC-certified television production accounted for an estimated 13.5% of Profile 2017 to estimate the total volume of CRTC-certified production. total Canadian production. This rate was used in Revisions to Historical Statistics Due to the 42-month application lag at CAVCO, it is possible that the data from CAVCO may not provide a comprehensive indication of production volume until up to four years after the end of a particular fiscal year. As a result, the Canadian production statistics reported in Profile 2017 for the previous three years (2013/14, 2014/15 and 2015/16) have been revised to reflect all currently available data from CAVCO. Short films Short films include films under 75 minutes in length. In and earlier editions, data for theatrical short films Profile 2012 was included in the overall statistics for Canadian theatrical production. Beginning in Profile 2013 , data for theatrical , data for theatrical short short films was included in the statistics for Canadian television production. In Profile 2017 films has been included in Canadian television production for 2009/10 through 2016/17. For the years prior to 2009/10, data for theatrical short films remains within the statistics for Canadian theatrical production, since we were unable to implement historical revisions for those years. The guidelines for the Canadian Film or Video Production Tax Credit (CPTC) allow producers to submit their CPTC application to CAVCO up to 42 months after the 44 end of the fiscal year in which principal photography started. 122 122 Profile 2017 Profile 2017

125 NOTES ON METHODOLOGY Although the definition of theatrical short films would imply that they should be included in the Canadian theatrical production statistics, by removing them, we can better isolate data on theatrical feature films. Furthermore, we note that the low volume of theatrical short film production reported in earlier editions of Profile suggests that applicants had, in fact, reported many theatrical short films in the Canadian television production category. Canada Media Fund The statistics reported for the Canada Media Fund (CMF) include data for Convergent Stream production supported by the CMF starting in 2010/11. The data for prior years correspond with production supported by the Canadian Television Fund. Broadcaster In-house Production A complete set of provincial statistics was not available for private broadcaster in-house production in the Prairie Provinces and Atlantic Canada. For the Prairie Provinces, Nordicity developed estimates based on the historical shares observed in the CRTC statistics prior to 2001 – before the CRTC stopped publishing the provincial statistics. The breakdown of private broadcaster in-house production among the provinces in Atlantic Canada was also based on the development of estimates. Because no historical data existed, each province’s share of Atlantic Canada’s total GDP was used as the proxy variable for the estimate. Reconciliation with Statistics Published by Provincial Funding Agencies Certain provincial funding agencies in Canada also publish statistics for film and television production activity within their provinces. Their statistics may differ from those in Profile 2017 for a variety of reasons. • Some provincial funding agencies publish production statistics on a calendar-year basis rather than on a fiscal-year Profile basis, as they are reported in . • Some provincial funding agencies report production activity on the basis of the fiscal year in which a film or television project receives approval for its tax credit application rather than the year in which the project’s principal photography starts (i.e. the practice used by CAVCO). • Statistics reported by provincial funding agencies exclude broadcaster in-house production. • Provincial funding agencies typically report production activity on the basis of the province in which the film or Profile are reported on the basis of the province in which the television project occurred; whereas the statistics in producer of the project is based (i.e. the practice used by CAVCO). Convergent Digital Media Production The convergent digital media (CDM) production statistics are derived from the collection of data from funding agencies in Canada supporting that type of production (i.e., CMF, Bell Fund, Ontario Media Development Corporation [OMDC] and Shaw Rocket Fund). Projects funded by more than one agency are counted only once in the derivation of the estimate of production volume and tabulation of the total number of projects. The collection of the data for CDM production began in 2011, therefore only six years of data are available at this time. For the 2013 and 2014 editions of Profile , a survey was conducted of Canadian Media Producers Association (CMPA) and Association québécoise de la production médiatique (AQPM) members in order to obtain data that could be used to estimate the number of convergent digital media projects and production volume that was made without financial support from CMF, Bell Fund, OMDC or Shaw Rocket Fund. These estimates have been incorporated into the statistics from 2012/13 and 2013/14. As a result, the statistics for 2012/13 and 2013/14 are not directly comparable and thereafter. For this reason, no estimates to the statistics for other years. No surveys were conducted for Profile 2015 have been made for convergent digital media projects that did not receive support from CMF, Bell Fund, OMDC or Shaw Rocket Fund for 2014/15 and subsequent years. 123 Profile 2017

126 NOTES ON METHODOLOGY Foreign Investment in Production Foreign investment in production (FIIP) tracks the value of international financial participation in the film and television production industry in Canada. FIIP includes foreign presales and distribution advances for all projects certified by CAVCO; estimates of presales and distribution advances for non-CAVCO-certified productions; and the total value of exports better reflects the nature of film foreign location and service (FLS) production in Canada. FIIP as opposed to just and television production in Canada. It acknowledges that film and television productions are intangible products and portions of the copyright can be exported to foreign countries. It also accounts for the budgets of productions shot in Canada, even when the copyright is held by a foreign entity. The data used to estimate FIIP only includes the financing of the Canadian budgets of treaty coproductions. As a result, the foreign budgets for treaty coproductions do not directly contribute to FIIP. Treaty coproductions contribute only to FIIP if the financing of the Canadian budget includes a foreign pre-sale or distribution advance. Direct Jobs Multiplier Nordicity calculated the number of direct jobs by estimating the share of total production volume that was paid as salary and wages and then divided this estimate by an estimate of the average salary of a full-time equivalent (FTE) worker in the film and television production industry. Nordicity multiplied the total production volume by 50%, to estimate the portion of production budgets which was paid as salary and wages. This assumption of 50% is based on data provided by CAVCO on the average portion of production budgets comprised of Canadian labour expenditures. The average FTE salary assumption for 2016/17 was $62,043. Nordicity developed the average FTE salary assumption based on data from Statistics Canada’s 2006 Census . Nordicity makes annual adjustments to the average FTE assumptions Survey of Employment, Payroll and Hours for annual changes in the average hourly based on data from Statistics Canada’s wage (excluding overtime) of employees paid by the hour in Canada (see Statistics Canada, CANSIM Table 281-0030). Average FTE salary in the film and television production industry 2009/10 2008/09 2012/13 2010/11 2011/12 2007/08 2013/14 2014/15 2015/16 2016/17 $57,900 Average FTE salary $53,404 $54,578 $56,543 $52,305 $59,423 $60,552 $61,168 $62,043 $50,488 Source: Nordicity calculations based on data from Statistics Canada, Census 2006, and Statistics Canada, Survey of Employment, Payroll and Hours , CANSIM table 281-0030. Spin-off Jobs The number of spin-off FTEs is equal to the sum of indirect and induced FTEs. Indirect Jobs Multiplier Nordicity used a multiplier of 1.17 to estimate the number of indirect jobs; that is, for every direct FTE in the film and television production industry, 1.17 additional FTEs were employed in other industries supplying goods and services to film and television production. Nordicity obtained this multiplier from Statistics Canada’s 2004 multiplier tables. The multiplier is based on the ratio of indirect and direct jobs generated per $1 million dollars of output in the industry group, Motion Picture and Video Other Motion Picture and Video Industries Production , Distribution , Post-Production and , which is the closest industry grouping to film and TV production (and excludes exhibition). 124 Profile 2017

127 NOTES ON METHODOLOGY Induced Jobs Multiplier Nordicity applied a multiplier of 0.17 to estimate the number of induced FTEs attributable to film and television production; that is, for every direct and indirect FTE generated by film and television production, an additional 0.17 FTE was employed in other industries in the Canadian economy because of the re-spending of income by the direct and indirect workers. Nordicity derived the induced-jobs multiplier by using the ratio of the total-GDP multiplier (1.87) and indirect-GDP multiplier (1.54) derived by the Conference Board of Canada and applied to its analysis of the economic impact of the (2008). To Canadian cultural industries in Valuing Culture: Measuring and Understanding Canada’s Creative Economy adopt this approach, Nordicity assumed that the GDP-to-FTE ratio for induced jobs was equal to that for indirect jobs. Provincial Jobs Estimates To estimate the number of direct FTEs in each province, Nordicity used a similar approach to that used to derive the national estimates of direct FTEs. However, Nordicity adjusted the average FTE salary in each province to reflect general differences in economy-wide wages across the provinces. Thus, for provinces where the average wage in the provincial economy across all industries was higher than the national average, Nordicity used a higher average FTE salary to estimate the number of direct jobs. The adjustment was equivalent to the province’s overall wage premium or discount compared to the national average. The provincial wage adjustment factors are presented in the table below. An adjustment factor of greater than one indicates that average wages in the provincial economy are higher than the national average. To estimate the number of indirect jobs, Nordicity used the provincial-level indirect-job multipliers available from Statistics Canada. These multipliers are based on the ratio of indirect and direct jobs generated per $1 million dollars of , Distribution , output in each province in the industry group, and Motion Picture and Video Production Post-Production Other Motion Picture and Video Industries . Provincial adjustment factor for average FTE salary 2008/09 2009/10 2010/11 2011/12 2012/13 2007/08 2014/15 2015/16 2016/17 2013/14 Alberta 1.134 1.122 1.126 1.125 1.124 1.136 1.126 1.146 1.097 1.091 1.008 0.997 1.013 0.999 0.986 British Columbia 0.997 0.999 1.003 0.999 1.005 0.946 Manitoba 0.939 0.934 0.945 0.934 0.926 0.940 0.943 0.951 0.920 New Brunswick 0.925 0.907 0.908 0.906 0.906 0.901 0.891 0.892 0.885 0.909 Newfoundland and Labrador 0.969 0.955 0.959 0.987 1.004 1.027 1.020 1.036 1.028 0.988 0.925 0.907 0.868 0.901 0.903 Nova Scotia 0.899 0.911 0.905 0.911 0.884 0.992 Ontario 0.992 1.001 1.001 1.010 0.988 0.984 0.984 0.996 1.020 Prince Edward Island 0.835 0.825 0.864 0.856 0.860 0.850 0.843 0.832 0.854 0.867 0.971 Quebec 0.984 0.971 0.972 0.945 0.969 0.975 0.975 0.972 0.948 Saskatchewan 0.958 0.996 1.019 1.025 1.029 1.048 1.064 1.063 1.071 1.066 1.173 Territories 1.124 1.172 1.179 1.185 1.124 1.184 1.259 1.260 1.223 Source: Nordicity calculations based on data from Statistics Canada, CANSIM, table 281-0030. Nordicity then summed the estimated number of indirect FTEs and compared this total to the national estimate of total spin-off FTEs employed by the film and television production industry in Canada. Nordicity calculated the differential between these two numbers and then allocated the difference across the provinces in proportion to each province’s share of the national total of indirect FTEs. 125 Profile 2017

128 NOTES ON METHODOLOGY Economic Impact of Production Labour Income Direct production industry labour income was derived by multiplying the number of direct FTEs by the average production-industry FTE cost of $62,043. The estimate of spin-off labour income was derived by multiplying the number of spin-off FTEs by an economy-wide average FTE cost of $48,700. Gross Domestic Product Economic modelling of the overall economic impact of film and television production, using Statistics Canada’s input- output tables, indicates that direct GDP in the film and television production industry is equal to approximately 1.13 times total labour income. This ratio was multiplied by our estimate of direct labour income to arrive at an estimate of direct GDP in the film and television production industry. For broadcaster in-house production, we used a rate of 1.17, which better reflected the higher rate of profitability in the Canadian broadcast industry. Similar economic modelling (also based on Statistics Canada’s input-output tables and analysis found in the Conference ) points to a GDP-wage Board of Canada’s Valuing Culture: Measuring and Understanding Canada’s Creative Economy relationship of 1.49 for the spin-off impact. We used this ratio to derive an estimate of spin-off GDP by multiplying our estimate of spin-off labour income by 1.49. 126 Profile 2017

129 Glossary An internet-based service that gives consumers free Advertising Video-on-Demand (AVOD) access to video content in exchange for being exposed to advertising (e.g. YouTube). Average Minute Audience (AMA) The average number of persons watching a television program during any 60-second portion of that program. Broadcaster In-house Production Refers to television programs made internally by broadcasters. It largely consists of news and sports programming, but can also include production in other genres. Includes cable, direct-to-home satellite (DTH), multipoint Broadcasting Distribution Undertakings (BDUs) distribution services (MDS) and Internet protocol TV (IPTV) services which allow Canadian households and businesses to access licensed television programming services, including conventional TV, pay TV and specialty TV services, by subscribing to channel packages and certain à la carte services. Canada Media Fund (CMF) Funded by the Government of Canada, and cable and satellite distributors, with a mandate to support the creation of Canadian convergent digital content across multiple platforms, including television and leading-edge new media applications, as well as experimental content applications or software for the Internet, wireless and other emerging digital platforms. Launched on April 1, 2010. 127 Profile 2017

130 GLOSSARY Canadian Audio-Visual Certification Office (CAVCO) The section within the Department of Canadian Heritage that co-administers (with the Canada Revenue Agency) the two federal tax credit programs (Canadian Film or Video Production Tax Credit [CPTC] and Film or Video Production Services Tax Credit [PSTC]). It is also responsible for assessing television programs and films against its content- point scale (in conjunction with other eligibility criteria) to determine if a film or television program is eligible to access the CPTC and other funding mechanisms through Telefilm Canada or the Canada Media Fund (CMF). Canadian Film or Video Production Tax Credit (CPTC) The federal government tax credit program for supporting the production of films and television programs that qualify as Canadian content. The CPTC provides a tax credit equal to 25% of a production’s qualified labour expenditures. Qualified labour expenditures are capped at 60% of a production’s total costs, net of any (public) assistance received. Canadian Radio-television and Telecommunication Canada’s regulator of the broadcasting and Commission (CRTC) telecommunications sectors. Conventional television / Conventional TV Includes private and public broadcasters that maintain over-the-air (OTA) infrastructure to broadcast to households, although the vast majority of Canadian households now receive conventional TV signals via cable or satellite television providers. Convergent Digital Media (CDM) Refers specifically to the digital media components of broadcast television projects. Such components are typically standalone products that relate to, extend, and/or enhance the associated television production. Convergent Stream A funding stream of the Canada Media Fund (CMF) that provides financial support to the production of digital media components that are related to CMF-funded television productions in order to provide content on different digital media platforms. Coproduction A film or television program made by producers from two or more countries and typically shot in those producers’ countries. Coproductions are often made in accordance with international treaties to ensure that they receive national treatment in each producer’s country. Creative Industries Council As part of Creative Canada, the Government of Canada announced that it would form a Creative Industries Council, which will advise the government on policies for amplifying growth of the creative industries. 128 Profile 2017

131 GLOSSARY Direct-to-home (DTH) A BDU service under which households and businesses utilize a small aperture satellite antenna to receive television signals. Eurimages Established in 1989, Eurimages is the Council of Europe’s fund for supporting the cultural sector. It has an annual budget of €25 million which is distributed across five streams (film coproduction, theatrical distribution, exhibition, promotion and gender equality). Experimental Stream A funding stream of the CMF that provides financial support to the production of interactive digital media content and software applications that and are unrelated to CMF-funded television productions. Film or Video Production Services Tax Credit (PSTC) The federal government tax credit program for supporting the production of films and television programs that do not qualify as Canadian content. The PSTC provides a tax credit equal to 16% of a production’s qualified labour expenditures. Foreign Investment in Production (FIIP) A measurement of the value of international financial participation in the film and television production industry in Canada. It includes foreign presales and distribution advances for all projects certified by CAVCO; estimates of presales and distribution advances for non-CAVCO-certified productions; and the total value of foreign location and service (FLS) production in Canada. Foreign Location and Services (FLS) Includes feature films and television programs filmed in Canada primarily by foreign producers. It also includes the visual effects (VFX) work done by Canadian VFX studios for foreign films and television programs. Full-time Equivalents (FTEs) A measurement of employment that converts the number of part-time workers or any workers working less than a full work year into the equivalent number of full-time workers. Gross Domestic Product (GDP) Refers to the monetary value of the unduplicated value added generated by an industry or economy. The difference between the value of an industry’s output and the value of the inputs it consumes from other industries. Internet Protocol TV (IPTV) A BDU service that is supplied to households and businesses through a broadband connection. A fixed wireless broadcast communications system that Multipoint Distribution Systems (MDS) uses microwave antennae to transmit broadcast signals point-to-multi-point basis. Profile 2017 129

132 GLOSSARY National Film Board of Canada (NFB) A federal cultural agency within the portfolio of the Department of Canadian Hertiage with a mandate to produce, distribute and films that interpret Canada to Canadians and to other nations. On-demand Services On-demand services permit consumers to watch specific films or television programs whenever they want, rather than at a scheduled time (i.e. linear television”). On- demand can be offered over BDU platforms (e.g. cable-TV or DTH satellite) or over the Internet. Pay television / Pay TV Pay TV services are available via cable or satellite television services. They typically feature premium programming such as recently released films and do not earn revenue from advertising; instead they rely on subscription or transactional payments. Data for on-demand services such as pay-per-view (PPV) and video- on-demand (VOD) services have been included in this sub-sector. Specialty television / Specialty TV Specialty TV services are only available via cable or satellite television providers and typically provide sports, 24-hour news, movies, arts and other thematic programming. Specialty television services earn revenue from a combination of subscription fees and advertising. Spin-off impact Refers to the sum of the indirect and induced economic impacts. The indirect impact includes the employment and GDP generated within industries that supply goods and services to the production industry. The induced impact includes the employment and GDP generated in consumer industries within the Canadian economy that benefit from the re-spending of wages earned by production sector cast and crew, and the workers employed in the supplier industries. Subscription Video-on-Demand (SVOD) A television service whereby consumers pay a monthly subscription fee so that they can choose what and when they want to watch specific films or television programs (e.g. Netflix, CraveTV, Club illico). Consumers typically access SVOD services over the Internet. Telefilm Canada A Crown corporation within the Portfolio of the Department of Canadian Heritage. Established by the Government of Canada in 1968 with a mandate to invest in the production of Canadian films. Telefilm Canada now administers most of the federal government’s programs for supporting the Canadian film industry. It also administers the Canada’s treaty coproduction agreements on behalf of the federal government. 130 Profile 2017

133 GLOSSARY Transactional Video-on-Demand (TVOD) An online service whereby consumers can pay a fee to download a specific film or television program (e.g. Apple iTunes). In some cases, TVOD can be used to rent a film or television program, where use of the download is restricted to a period to time. Video-on-Demand (VOD) A television service whereby consumers can pay a fee to choose what and when they want to watch specific films or television programs. In Canada, VOD is typically offered over BDU platforms (i.e. cable-TV, IPTV or DTH satellite). Profile 2017 131

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