Gary Maavara, Part 3: Vertical Integration and Re-visioning Media Industries

Interviewed by Fil Fraser on June, 2011

Fraser. We are now at a watershed. We have a government with a clear mandate to manipulate its way through things; a CRTC chairman calling for a restructuring of the regulatory system, as far as broadcasting goes; Telefilm still looking for ways to market films like Barney's Version for a better return. What are we doing to take advantage of the advantages you're talking about?

Maavara. We have a saying around the shop that a problem that is well-defined is half-solved. Part of the problem about the policy development process right now, and this is a point we have been making to the government and to the chairman of the CRTC, is that we have become too parochial in our presentations. The CRTC is left with 1000 different viewpoints; everyone is saying, “Here's what I think you should do.” That does not bring the CRTC any closer to the truth. What the government should do is appoint a panel of experts to take a few months behind closed doors to assess what the issues really are. When they come back, they can put something on the table, and we can say whether they're correct or not.

F. Almost like a new Caplan-Sauvageau Commission.

M. Exactly. Then we can see where we go from here in that context, because so much of that debate, and this is what really concerns me, is what I call “Debate by Tweet.” You cannot capture the essence of a problem with a Blackberry. Part of the problem with superficial analysis is a tendency to throw the baby out with the bathwater. There are still many elements of the Canadian regulatory regime that are relevant: valid public funding being one of them. We cannot function without public funding in Canada. The real question is how we use it. But there are other issues: for example, who should be allowed to make programming.

Corus is one of the largest producers in Canada and we are in a very particular niche; at the same time we are constrained in our ability to make programming, by regulation. We literally cannot use our own programs on our own channels, because there is a limit on the number of independent productions that we're allowed to make. That's what I mean by being strategic. We're not suggesting that the independent production community should disappear; when I look at my own history, we made a lot of great shows around the country. Second City grew out of local television. We lament the fact that our local television stations are not reflecting the nation as much as they used to. That is due to regulation. We created a regulatory structure that took away the impetus to do local, because it had to be independent.

F. The situation in the 1980s when Second City was being produced was quite different from now. Today there are no radio or television stations in Alberta that are locally owned. The Caplan-Sauvageau Commission, which I was on, recommended that there be a division between carriage and content.

M. I disagree with that.

F. Yes, but what has been the impact of vertical integration?

M. Vertical integration is good. We have a lot of folklore in Canada about the “system.” The fact is that in Canada, in order to make a good motion picture, you have to have from $2-30 million. Suggesting that the only way we can do that is through mom and pop industries is just silly. If you look south of the border, arguably the largest place that creates storytelling of all shapes and forms.... those stories are made in Hollywood studios. People think of Hollywood studios as physical places; but Hollywood studios are really banks. They are just pots of money. They spend their time and money assessing ideas. The soundstage is probably the most incidental aspect of a Hollywood studio. It's the end of the whole process.

We need to do that in Canada. We need to create these pots of money. One of the problems we have had in Canada is that people have not been able to make crap. That may sound silly. Producers in Canada cannot make mistakes because that would be fatal to their business. In the United States, a producer can make six bombs and then two gems. And that's what we have to be able to do; we have to create that power. Back to your point about local ownership.... ownership does not necessarily determine the ability to tell local stories. For example, our radio station in Edmonton, CHED, makes local stories. We don't tell them what to do. They have to be local. And if they're not local, nobody's going to listen to them.

F. How can producers create an environment where bankers and pots of money will follow?

M. A variety of ways. It's interesting to me, that if you look at the curriculum at this Banff Festival, and this is not a criticism, because I think this place is fabulous, there's not enough discussion: there are seminars on how to develop ideas; seminars on where to find financing; on where to find markets. There isn't a single seminar here on how to run a business or how to manage the intellectuals who create the intellectual property. There isn't a session here on organizational development.

One of the reasons I'm saying that is because whether you are an independent producer or not, you are developing a business. For example, Corus is a very successful company because of our management committee. We probably spend 40% of our time talking about people issues. We have institutions within our company such as Corus University where our staff has access to professors from a variety of universities, or experts. We have courses going every week at Corus. We have training assistance on human resource issues, compensation, on what to do if you're sick. We want the intellectuals to be able to do what we need them to do.

There aren’t many producers who can do that. They struggle to get their picture made and, as soon as the picture’s over, all the people who helped make it are gone. They have to find another job. Point number one. We have to create a production infrastructure that is supported by pools of risk capital. In other words, we need companies like Corus that create movies, but maybe 10 of them. On the delivery side of things, I don't think it really matters if Rogers is delivering content. In the good old days, they were producing all of it.

Gary Maavara, Part 4: Capital Investment and Digital Revolution