PART I/THE PRESENT: WHY CANADA HASN’T MADE GLOBAL TV HITS

CHAPTER 2

INDUSTRY WEIGHS IN

“When you over-subsidize and over-regulate an industry, you suck out all the competitive will. There’s no need to compete. If the numbers don’t matter, why be competitive?”

The explosive uptake of Netflix signalled that global TV disruption was finally on. It seemed certain that the unstoppable transition to a global, borderless, online media market would threaten the survival of Canada’s TV policy framework that had been in place for nearly five decades.

To examine how this would play out in the Canadian industry, I interviewed some of its top-tier, focusing on functions at the nexus of TV creation and policy: showrunners, producers, development executives, and policymakers. The interviews, undertaken with the promise of anonymity, were in Toronto, Hollywood, and by phone. Some of my sources were first responders who sounded an early alarm for the three-alarm fire threatening to torch the Canadian framework’s financial stability by disrupting geographic monetization, linear broadcasting, and cable delivery. Given a vantage point from Hollywood, some were among the first to embrace the new opportunities in a global media market, including unprecedented demand for creative services and TV content.

TV development is an arena of work that tends to be hidden from public understanding and even from many industry folks. I was surprised to find that senior policy makers and mid-level production professionals sometimes have only a vague idea of how a project is created, financed, or what happens in a writers’ room. In this chapter, industry weighs in on the often hidden work of TV development and its critical importance in the global, online TV ecosystem.

A simple definition of development involves two processes, assembly of both the financial and the creative elements of a project. Quintessentially, the financial dynamics in development will be revealed to be the weak link in the Canadian system. The time frame from the first conceptual pitch to delivery of a show is highly variable and can span a few months to years. Successful development requires the completion of essential components: (1) financing package; (2) financier approval of key above-the-line people48 including showrunner; producer(s), lead actor(s); and (3) financier approved creative, often including at least a pilot script and sometimes episode scripts. The conclusion of development is signalled by a greenlight from the financier that manufacturing can begin, starting with official pre-production.

The entire development endeavour is very costly and almost unimaginably risky. In Hollywood, development has been estimated to add a third to the cost of production. While current reporting no longer breaks out these expenditures, Canadian network expenditures on development have been reported to CRTC as a tiny fraction of this, about 1%.49 The chances of success of any one show have been estimated as low as 1/1000 to 1/10,000. Moreover, there is no average or right-sized budget. The cost of a long-form TV episode can range from the tens of millions per episode (such as HBO’s Game of Thrones; Netflix’ The Crown; or Hulu’s Handmaid’s Tale) downwards to one to three million per episode, more typical for an episode of Canadian TV, or even less. Yet, there is no direct relationship of budget to popularity, as exemplified by low budget, foreign language hits from small countries around the world, as well as high-budget failures. This underscores that popularity is driven, more than by any other factor, by storytelling.

Who are the development workers and what do they do? The core triumvirate consists of showrunners, producers, and development executives, whose skills may overlap and who often interchange roles in the course of a career.

The showrunner is the top job in TV; showrunners literally run the show. To reach this level of eminence, showrunners must climb a brutally competitive ladder from freelancer to staff writer, story editor, co-producer, producer, supervising producer, co-executive producer, to finally attain the formal title of executive producer, which is the most common official credit for showrunner, since there is no screen credit such as showrunner. Responsibilities range from interacting with financiers (networks and studios), to constructing workback schedules, casting, hiring the line producer, staffing, and overseeing all aspects of post-production through delivery to the financier. But above all, showrunners manage the writing room and the development of every script within a series. They are considered the “last typewriter” (holdover term!) to edit, review, revise, and greenlight every script for production. This industry structure, i.e. writers in charge and accountable, evolved due to the primacy of script in the high-pressure, high-stakes world of TV production. Practically speaking, putting any other professionals at the helm could not focus the pressure on TV’s single critical element, script. You may have heard the industry truism, “if it ain’t on the page, it ain’t on the stage.”  Showrunner David Shore confirmed its resonance:

“Here’s my theory on the reason writers got power on TV. Not because of any creative or any policy decision; it’s a simple reality of the production schedule. It’s the only way to get any really good stuff out. If you’re doing a show every seven or eight days, you need somebody who can crank out really good shows.”

The allure of a career as a creative can obfuscate its high risk. It was shown that at any one time, nearly half the membership of the Writers Guild of America (WGA) was unemployed.  To further underscore a sense of the extreme risk, it was shown that a WGA member with one TV credit had a greater chance of never having any more credits, than of having even one more.50 Canadian research found that more than half of Writers Guild of Canada (WGC) screenwriters earned less than 40,000 per year.51 An irony is that while Canada has never been great at exporting TV content, it has been excellent at exporting TV content creators. Many talented Canadians have sought opportunity and career acceleration in Hollywood. With an estimated 100,000 Canadians in Hollywood,52 25% of creatives have been estimated to be Canadian.53 Canadian brain drain to Hollywood has been acknowledged since the 1951 Royal Commission on National Development in the Arts, Letters and Sciences (Massey Commission):

“Of American institutions we make the freest use, and we are encouraged to do so by the similarities in our ways of life. … Canada ‘sells down south’ as many as 2500 professional men and women in a year.”54

Five decades later, in 2003, brain drain was again bemoaned in a 1,000+ page report by Canada’s Lincoln Commission:

“The list of talented Canadians who have worked in the United States is a veritable who’s who, and includes such notables as Dan Aykroyd, Pamela Anderson, Raymond Burr, Neve Campbell, James Cameron, John Candy, Jim Carey, Sarah Chalk, John Colicos, James Doohan, David James Elliot, Dave Foley, Michael J. Fox, Tom Green, Graham Greene, Lorne Greene, Paul Gross, Phil Hartman, Jillian Hennessy, Michael Ironside, Norman Jewison, Rich Little, Norm MacDonald, Raymond Massey, Lorne Michaels, Colin Mochrie, Rick Moranis, Carrie-Anne Moss, Mike Myers, Kate Nelligan, Leslie Nielson, Catherine O’Hara, Matthew Perry, Mary Pickford, Christopher Plummer, Jason Priestley, William Shatner, Martin Short, Jessica Steen, Donald Sutherland, Dave Thomas and Scott Thompson.”55

In 2014, in my testimony at CRTC’s first inquiry into the future of TV, I suggested that brain drain be repositioned as a brain chain for brain gain by activating the untapped value of Canadian creatives in Hollywood. This received press attention and was eventually included in Let’s Talk TV’s decision on content:

“Ms. Berkowitz [discussed] turning Canada’s proximity to the U.S. into a competitive advantage rather than disadvantage… “Canadian-created stories,” in Berkowitz’s view, would recapture the value of Canadian expatriates working in Hollywood and make the ‘brain drain’ into a ‘brain chain.’”56

Producers are the central fulcrum in the alchemy of making TV because, to oversimplify, they buy, sell, and buy again. Producers buy concepts from creatives, sell concepts to financiers, buy more substantive creative services in development — and then buy production services once a show is greenlit. This is assuming all goes well, which it often doesn’t, and the complex buy-sell-buy cycle repeats in what is called turnaround or more precisely, development hell. During development of a series, producers work with the financiers to assemble the financial structure of the project and approve above-the-line creative elements including the showrunner, actors and directors. An important feature of a producer’s role concerns money and risk. While the studio executives (to whom they sell) always get paid during development and so do writers (from whom they buy), often producers do not. Their risk is politely called deferral and it is a further indication of the high-wire act of making TV. It’s a forcing function, i.e. financiers leveraging power in the attempt to reduce their own exposure by holding producers accountable for the value of the asset being developed. Typically producers begin to draw a salary when production starts, and even then there can be deferrals to further downstream, to the show’s delivery and beyond, into monetization.

Network and studio development executives are the face of the vested interest of the project’s financier. Development executives interact with producers and writers to manage and approve creative and financial elements, and are often hired for their excellence in both arenas.

Overall, it is widely agreed that TV is writer-driven and, per the words of a Hollywood studio executive, market performance ultimately turns on what happens in development: “Most of the value comes at the front end; this is also where the most damage can be done.” Despite its importance, development has been largely overlooked by Canadian TV policy. The reason is likely that development is extremely risky and always a cost, yet it requires few jobs. Its public policy risk/reward profile is not an easily justifiable value proposition, given that public policy processes favour predictable and easily measurable outcomes. A caveat is that in recent years supporting development has become politically trendy. But, as the analysis in this book will demonstrate, throwing money at development won’t have an impact unless the funds invested are linked to a real need to succeed in the market.

Globality: Audience, audience, audience

I often began my conversations with creatives by asking what is uppermost in their mind when planning a pitch to a potential financier.  They agreed that TV, from the first moment of a pitch, is defined by a singular word, audience: “Success is defined by renewed. Renewed is defined by getting an audience.”

Of course, a large audience can now come from anywhere and everywhere. Canadians in Hollywood were early adapters to the concept of globality. They worried that Canada was falling behind other countries in the goldrush to take advantage of the opportunity opening up as demand ​for scripted entertainment ​began to outpace​ Hollywood’s capacity to supply the global market. This was causing Hollywood to be open to development partnerships — for the first time ever. From their Hollywood vantage, some Canadian producers saw this transformation to a global popularity contest early on. They were quick to get that Hollywood no longer prioritized discount TV production, for which Canada had become known. Hollywood was now interested in commissioning TV that could win a global battle for attention. Audience numbers, not production numbers were what mattered now. This new ethos had quickly become a shared understanding between Hollywood studio executives and the producers who supplied them. A studio executive said “We won’t sacrifice creative for cost” while a Canadian producer lamented the national status-quo that favoured production volume over audience volume: “If the numbers don’t matter, why compete?”

A toss-away remark by a Canadian development executive stuck with me. Its simplicity confirmed that the policy framework has been embedded for so many decades that even senior network development executives could not see the current problem. They believed, and some still do, the market failure myth, i.e. that Canadian TV cannot be self-sustaining because of the small domestic market — even though the TV market was rapidly becoming global. It was said: “Canadian original production is not an ROI business.” Today, the belief that original production is an inevitable money loser remains common. Yet, it avoids a potent irony, that these executives’ salaries were, and are still, paid by ROI from profits derived from broadcasting popular Hollywood hits.

Arguably, if Canadian content is not an ROI business, it is no business at all. In contrast, Hollywood makes TV to make money. So do countries like Denmark, Netherlands, Israel, and South Korea. So could Canada. Moreover, this book demonstrates that pressure to make money is the singular goal that does make TV good enough to become popular with audiences in Canada or around the world.

Canada: Are we encouraging mediaucracy?

Canadians working in Hollywood were clear that their decision to leave Canada was not motivated by a desire to run away. Their decision was driven by their need to run towards irreplaceable advantages in the planet’s unparalleled cluster, which they called “the apex, the centre of the universe of creativity.”

“I’m the only idiot who listens to the commencement day speaker. He said ‘whatever you’re doing, be near the heartbeat. If your company’s headquarters are in New York, find a way to get to New York because that’s where the action’s at. That’s where you’ll learn the most.’ For what I wanted to do, it meant being in Hollywood. It’s the cradle.”

They were adamant that aspiring writers should be exposed to the gold standard of writing that results from systemic DNA that lives and breathes the relentless need for a hit:

“This is where TV is: Hollywood. The relationships are here. This entire 10 miles is full of people who stay up till 3:00 in the morning thinking about creative. I do think people should be coming out here and working in this system for the experience and see that level of value, then they can go back. If the executives were involved in these conversations to — so writers are not held to just a Canadian standard. Because there’s a universal standard. But it depends on what the goal is for the Canadian industry.”

Canadian Sandy Pearl, Emmy award-winning TV/film producer and development executive, perceived a stark contrast between the fundamental dynamics of the two creative clusters:

“Pitching in the U.S. and Canada is like two different universes. It’s not the same game. It’s rigged a different way and the criteria are different. In Canada it’s a much smaller pool and quite incestuous. The rationale for why certain things got made isn’t based on merit or about taking risk.”

Counterintuitively, getting a show into development was simpler in Hollywood because of the clarity around the need to succeed in the marketplace:

“If you demonstrate that your idea, your script, your series will get them more audience than something else, they’ll buy it. In Canada, there are bureaucracies to deal with. They don’t act like the people who get excited here. I looked at someone afterwards and said ‘I don’t need this crap.’”

Most revealing, from a policy perspective, was an anecdote by a studio development executive tasked with managing Canadian series. It even suggests an instinctive understanding that the policy framework is the culprit for making Canadian creative weak because it favours a rush to production:

“The writer we passed the baton to run the show literally cracked under pressure. The scripts just weren’t ready to shoot. We kept giving notes and notes, even the night before a scene. We were trying to patch the blood that was hemorrhaging from the wound because they could never get ahead of it. They shut down for a while to do the re-writing so when production went up, we wouldn’t have the constant starting, stopping, starting, stopping. I’ve developed three different [Canadian series] and noticed a pattern. The writing process was, to me, really second rate. The DNA of the system has to change.”

A Canadian development executive also worried about the systemic lack of pressure on writers: “Are we too rewarding? If you can do an okay series and get renewed, why would you do something brilliant?” In Hollywood, development failure has sky high stakes:

“People here in L.A. are terrified of failure. In Canada people don’t feel like they’re going to lose their jobs. Here in L.A., you’re the big exec who makes the wrong decision on a show: You’re gone. There’s a joke here, but it’s true. You can pitch to a guy at Fox on Monday. He gets fired on Tuesday. You pitch at NBC on Friday and that same guy is there. That’s actually happened to me. He said: ‘Yeah I made the move.’”

Comparatively Canadian development is a low stakes version:

“In Canada producers will make anything for the fees. The approach is ‘let me get some development money so I can keep my lights on and a production order.’ The broadcasters are in alignment with this: ‘Let’s keep making that show, it doesn’t matter what the quality is, doesn’t matter what the ratings are, doesn’t matter what the reviews are.’”

A-list Hollywood showrunner, David Shore, perceived the Canadian system from afar:

“What you want up there is not jobs, you want some individual Canadian to create a show in Canada that is respected around the world. That takes one person; it doesn’t take a committee. It will be destroyed by a committee.”

Canadian development was called warped, broken, and a bridge to nowhere, rendered aimless without imperative for the resulting show to be popular and make money:

“Here, they’re so focused. They’re on you because they’re not going to lose their money. My bridge to nowhere was that they had the money to spend, so they spent it, instead of saying ‘we can’t afford to lose this money.’”

Policy: The DNA of the system needs to change

In the field, an unexpected analysis emerged: The root of the problem is the policy structure, not the creative. Producers could sense that the policy itself was at odds with the only goal that is now relevant: popular content.

“There’s not one broadcaster that would say we’re doing this because we believe in Canadian culture. That’s bullshit. They’re doing it because they have to. It’s a systemic structural problem. Canadian broadcasters make their money by buying U.S. shows and simulcasting them. They make Canadian shows because it’s a license requirement. The Canadian model is artificial and doesn’t make any sense.”

Creatives could sense the framework had been designed with a self-fulfilling prophecy — not an inevitable prophecy — of market failure:

“The system is set up to fail, so there’s a self-fulfilling prophecy of failure. If the big Canadian media companies threw the same amount of effort into developing content as they do building their corporations, they would make money there. They would make great Canadian television that’s globally loved. But it’s an accepted loss. The money is given to them. They have to follow rules to do a certain amount of Canadian content, but that’s not where they make their money. They make their money on American acquisition.”

We have to stop whining and just get on with it

The most famous line from Charles Darwin’s 1859 blockbuster book, On the origin of species, is often misunderstood. The spirit of the text is acknowledged not to be “survival of the fittest,” but “survival of the most adaptive.” Some of my sources were early adapters who immediately understood the historic opportunity inherent in TV disruption. They embraced urgency for policy change with stories that reflected both their frustration with the status quo and their fearlessness about the shift to a global, online TV market.

I heard anecdotes about how more money could be made by not using Canada’s bureaucratic system — but by taking a risk to make the best show possible. I heard about how the protective framework was so embedded that “the whole mindset is regulatory” and young producers developing a world class project were afraid to go outside the public framework — even if it meant larger audiences and more money.

I heard frustration with reluctance to completely overhaul the outdated system, but instead, a preference to tweak the old framework in an attempt to retrofit it to new market fundamentals. Observing that if you try to mandate policy fixes that reflect the same era in which the policy was created, “you have a massive problem on your hands.” Hearing these words, I couldn’t help but see how closely they mirrored Einstein’s brilliant observation that you can’t solve a problem with the same level of thinking that caused it.

The thinking of award-winning Canadian producers was aligned with the idea that new industrial paradigms call for new policy approaches. John Morayniss could clearly see the problem’s root in policy:

“The rules are not supporting the opportunity to have a real hit. There has to be change. We have to step back and look at the Canadian system from first principles and say, ‘OK, these rules came into place in the 60s and 70s and may have made sense back then, but do they still make sense now? The whole system needs an overhaul.”  

I continue to be haunted and inspired by these prescient policy marching orders, from a production executive, which remain urgent:

“The protection helped develop the industry but now we need to stop focusing on protecting and trust we’re strong enough to be able to compete. We have to change so let’s start the process. Let’s start from zero. Take the subsidies off the table. See what’s working, and how it could work differently. See where that leads us. We all have to figure this out and stop whining and just get on with it.”