Gary Maavara, Part 4: Capital Investment and Digital Revolution
Interviewed by Fil Fraser at Banff World Media Festival on June, 2011
Fraser. So, are you optimistic [about the Canadian film industry]?
Maavara. 0h yeah. When you walk around, the ideas that you see are fantastic. I probably shouldn't say this, but last night some old friends who live in Edmonton made a pitch to me about a local figure there; it is a dramatically compelling story. And if they can make that film, that story will resonate around the world. People talk about the Netflix and the Googles out there, but the difference between Netflix and Corus is simply capital. Netflix has a $12 billion market cap. Corus has $1.8 billion. We can compete with them but we have to be very strategic about it.
F. This leads me to a question about how companies like yours are affected by foreign ownership rules.
M. There are really two aspects to the foreign ownership discussion. One is access to capital to build your business and I think most Canadian business leaders will tell you they have access to capital. We don't have to go to foreign markets to find money. We have a lot of offshore shareholders, but they are prepared to invest in us in a Canadian regulated context. And frankly they do quite well by us. Nobody is complaining. Our dividend policy is terrific. (CJR.B, if anyone wants to invest in us!) Foreign ownership is just a disguise for opening the markets and that's a different thing.
There are very few markets on earth that are completely open. The market shields are either explicitly regulatory, or not so explicit. For example, in England you can talk until you are blue in the face, but you're not going to get into the “club.” There is no regulation on that; the regulation is whether you went to Oxford or Cambridge. It’s been that way for 200 years and I have seen it personally, how you can work your butt off in England trying to accomplish something; but if you're not part of the club, the wall is there. In the United States, the walls are theoretically open, but you're up against such huge scale. So our position is that the foreign ownership regime is pretty good.
F. But what use is a regulatory regime if you still don't have access to capital?
M. But we do have access to capital. There's plenty of capital here to build the system. I don't think that Nadir Mohamed, or Brad Shaw, or J. R. Shaw, or Peladeau have said that they need more money. The people who are arguing about opening up foreign ownership are the people who are outside.
F. Can you talk about the changes that technology is making to the industry?
M. Mobile is terrific; we need to get more competitive with mobile devices. The other side of it is that we are going through very subtle and profound change in innovation. For example, when people say that the Internet is free, they’re wrong. The Internet is not free. It is full of intersecting closed networks. It’s becoming very clear to content suppliers, that Apple is becoming a closed network, not unlike CBS in 1968. They are telling us that, “If you're going to be on iTunes, or you're going to be in the iCloud, you're going to do it on our terms. And we're going to pick whether you are a winner or a loser. And here is what you're going to get.” That is no different from someone supplying content to CBS. Is there a role for regulation in that context? Absolutely! So the notion that we're going to dispense with regulation is completely ridiculous. It's just that the rules have to be adjusted, not thrown out.
F. What do you think the odds are for bringing together that task force you were discussing earlier… to reprise the work of Caplan-Sauvageau, so that we can step back and look at the situation?
M. The government certainly learned from its furtive attempts to amend the copyright act that these discussions can be horribly contentious, even if so much of the copyright debate was ridiculous. People were bloating small parochial interests into these massive things: essentially, as I was saying earlier, throwing the baby out with the bathwater. Copyright is fundamentally about protecting authors’ rights so that they can derive some value from their work; that’s fundamental.
I think were going to get a new copyright act. And one of the things about this government, whether you agree with their politics or not (and I have been active since the early 70s), there very few governments that have spent so much time thinking about cultural/ industrial issues in our sector: how they relate to the Canadian economy and our ability to compete on a world basis. For example, when we have run the Canada 3.0 conference in Stratford three times now; in the first year, we had seven federal cabinet ministers there…. seven. And they were truly interested in doing something. On a provincial level in Alberta, there is a provincial minister of culture [Lindsay Blackett] who wants to have a conversation about things. In Ontario we have a variety of ministers, including Glen Murray on the innovation side, or John Malloy the Minister of Industry who understand that this business is a huge part of the Canadian economy.
It's not just about culture; we are moving into a huge area of intellectual property. It's all about driving intellectual property to push the economy. So I'm optimistic that they're going to look at it in the broader scale of ICT.
And, as far as the Commission is concerned, I would love to sit on it. You know we have great scientists who struggle to find funding, great storytellers like yourself in your recent book on Harry Jerome… that's a great story.
F. Let's start a movement.
M. Well, I think there is movement. Canada 3.0 is a part of that. We've created the Canadian Digital Media Network in which we are trying to foster an understanding of ICT. There's a lot of impetus out there for this. More importantly, on an optimistic viewpoint, we have the ability to compete on a worldwide basis. It’s just a question of strategy. For example, with Corus, we realized that we’re not going to compete with Viacom or Disney in their realm, so we decided to find our niche, which is kids seven and under. We created values-based programming and ride just underneath their radar. We're basically in every country on earth and run channels and networks in Europe, Asia and around the world. We have a partnership with NBC-Universal, now Comcast. I'll bet you didn't know that NBC on Saturday morning is one third Canadian. And that's the way you do it. You find the niches. You don't try to slug up against them. You find the niches.
F. We are playing Hollywood's own game, but we have a game of our own.
M. Yeah. And they are not mutually exclusive. There are so many areas in high tech. No one is likely to develop a Canadian search engine, but we can find ways to help Google go to the next level, while giving Canadian kids jobs and telling Canadian stories. I'm very optimistic that we can do that.