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The following are responses to the questions asked during the CMF’s webcast on the changes to the 2011-2012 Guidelines, held on February 23, 2011. These responses are to questions that the CMF was unable to fully answer during the webcast itself—questions that we were able to fully answer have not been repeated here. For the Experimental Fund, is there a weight toward the development of interactive games and software development over interactive websites or vice-versa? Is there a type of project that CMF is looking for, or looks more favorably upon? No. The CMF is looking for the best innovative, interactive projects possible. A jury of Canadian and International experts makes this selection as part of the CMF assessment process. The next deadline for the Experimental Stream is April 11, 2011. Is there a date when you expect the funding for that round to be allocated? The CMF expects funding results for the April 11, 2011 deadline to be released within 12 weeks, so around the beginning of July. When will the requirement for 3rd party market channel partner be waived? Where there are clear and acceptable alternative arrangements for taking the project to market, or where the applicant can demonstrate that it has the ability to effectively self-distribute the project. I had posed a question during the live stream Q and A today about how and if CMF prioritizes Indigenous language and cultural content projects (e.g. Aboriginal peer-reviewers, matrix calculations, etc). However, I should have been more clear that this question was posed specifically for the Experimental Stream, since your answers seemed to be in relation to the Convergent Stream. Can you email me back an answer regarding my question, but specifically addressing the Experimental Stream? In the Convergent Stream, the CMF has an express mandate to support Aboriginal languages convergent television productions. The CMF carries out this mandate via the Aboriginal Program of the Convergent Stream, which has the features we described on the webcast, including the participation of Aboriginal individuals in the project assessment process. The CMF does not have such a mandate in the Experimental Stream. One of the overriding objectives of the Experimental Stream is to fund projects that are innovative and leading-edge, and the CMF has been asked to focus closely on this objective. As such, the CMF seeks to choose the best, most innovative projects regardless of the region of Canada they originate from or the cultural background of the applicants. Despite this, some Aboriginal projects were successful in the 2010-2011 Experimental Stream selection process because they met these standards of quality and innovation. CONVERGENT STREAM English Production Incentive Are there any considerations on projects using English language incentive, where a interprovincial copro might be in place, does the majority provincial producer as lead, become the measure for funding eligibility? And does a % spend per province become a factor? Yes, the English Production Incentive Guidelines refer to interprovincial co-productions and set out the criteria for such a co-production to qualify for the Incentive. Where an applicant that is based in an eligible province/territory: owns at least 51% of the copyright of the Television Component; exercises control of the creative, artistic, technical and financial aspects of the Television component in proportion to its copyright ownership; shares equitably in fees payable to producers and corporate overhead; and the markets and potential revenues are shared equitably in proportion to their financial participation; then the project will be eligible for the Incentive and the CMF contribution will be based on the entire Eligible Costs of the Television Component (not just the costs attributable to the eligible-province-based applicant). The percentage of the budget spent by each co-production and/or within each province/territory is not a factor considered by the CMF in this regard. Could a province's $200K production incentive go 100% to one production ...? Yes, this would be possible. The English Production Incentive is a first come, first served program with a Maximum Contribution of 10% of the Eligible Costs or $1 million, whichever is less. This would allow a $200,000 province/territory allocation to be used by a single project, (provided that the budget was over $2 million). Indeed any province/territory allocation could be spent on a single production if the allocation were small enough and the budget high enough. How will the English Production Incentive Allocation be determined for Provinces or Territories with less than 1% overall production volume? Projects with less than 1% overall production volume will receive an allocation of $200,000. Technically speaking from the Summary of Changes, a province with no previous CMFable production volume will now be eligible for an allocation. Is this accurate, or will CMF have discretion to hold back funds from a province? Yes, provinces that have never had productions receiving CTF/CMF funding are now eligible for an allocation under the English Production Incentive. The CMF always has discretion to allocate its funding as it feels is necessary, however there are no plans to “hold back” funding from a province that is otherwise eligible to receive funding under the criteria of the English Production Incentive. English POV Program Can you explain how a project can receive funding from both the English POV stream and Convergent stream? For example, if a project is awarded the maximum 49% funding from the POV program, will that project also qualify for funding from the Convergent stream (provided all license thresholds are met in each program?) The CMF considers that the Maximum Contribution amounts for each CMF Program apply to that Program only. As such, the Maximum Contributions listed in the Performance Envelope Program Guidelines apply to funding from the Performance Envelope Program, and the Maximum Contributions listed in the English POV Program Guidelines apply to funding from the English POV Program. As such, it is possible for a project to receive the Maximum Contribution of 49% of the budget’s Eligible Costs (or $300,000, whichever is less), and also receive additional funding from the Performance Envelope Program, subject to the Maximum Contribution amount applicable to that Program. The above is the case notwithstanding the definition of “Maximum Contribution (CMF)” at section 2.4 of the Performance Envelope Program Guidelines. That definition is in error, which the CMF intends to correct shortly. What will the license free threshold be if the POV and Performance envelopes are combined? Licence Fee Threshold is calculated based on the proportion of the CMF contribution from the Performance Envelope Program and English POV Program respectively. This proportion is then prorated to the Television Component’s Eligible Costs and the actual Licence Fee Threshold is calculated accordingly. Take, for example, a project in which the Eligible Costs of the Television Component budget is $250,000, and the project receives $22,000 from the Performance Envelope Program and is seeking $37,500 from the English POV Program. The total CMF contribution would be $59,500, 36.97% of which would be from the Performance Envelope Program and 63.03% of which would be from the English POV Program. Prorating this number to the budget of $250,000 gives you a Performance Envelope Program portion of $92,425 and an English POV Program portion of $157,575. The applicable Licence Fee Threshold from each program is applied to the respective portion of the budget: for the Performance Envelope Program, a 30% Licence Fee Threshold applied to $92,425 is $27,727; and for the English POV Program, a 15% Licence Fee Threshold applied to $157,575 is $23,636. Obviously the above requires the amount of the Performance Envelope Program contribution to be known before the Licence Fee Thresholds can be calculated. What we would have liked to find out is whether or not the TV component (which was 100% financed) could have gone through the POV program, while the DM component for that same project could have gone through a combination of the POV and PEP program if we had provided the license fees to meet the DM threshold. We found that it was often much more difficult to close financing on DM components compared to TV, since there are fewer places to go to for DM funding (other than the Bell New Media fund.) An eligible Convergent Project can receive funding for one component (i.e. Television or Digital Media) through one program (i.e. the Performance Envelope Program or the English POV Program) and receive funding for another component through the other program. MISCELLANEOUS QUESTIONS We are signing a DM agreement with a broadcaster that limits our interactive rights through a non-compete clause that is lasts through the program license time. Does your \"use it or lose it\" clause supercede that? The 2011-2012 Performance Envelope Guidelines state: All Other Rights acquired by a Canadian broadcaster or Canadian VOD service must be subject to a “use it or lose it” provision that requires the broadcaster/VOD service to exploit the right(s) within 12 months of that broadcaster/VOD service’s first broadcast/premiere of the Television Component, failing which the rights revert to the producer without restriction. For Other Rights not acquired by a Canadian broadcaster or Canadian VOD service, the broadcast licence agreement cannot restrict the Applicant’s ability to exploit the Other Rights for longer than 12 months from that broadcaster/VOD service’s first broadcast/premiere of the Television Component. “Other Rights” includes “Original digital content rights, such as the right to produce and exploit digital interactive or digital linear content derived from the Television Component and distributed to the Canadian public by digital distribution.” So, assuming that the interactive rights you refer to in your question correspond to the CMF’s description of “original digital content rights”, and assuming that the “limit” you refer to is an outright restriction on their exploitation, and that restriction is longer than 12 months, then on its face it would appear that the agreement you are signing is in contravention of the Guidelines. However, the Guidelines do not “supercede” your agreement with the broadcaster. Rather, the “non-compete clause” would normally be flagged by CMF/Telefilm analysts and the broadcaster would be asked to remove or amend the clause to conform with the Guidelines. If the broadcaster chooses not to do so, the project would be ineligible for CMF funding. It is hoped that the broadcaster would choose to remove or amend that clause rather than disqualify the project for CMF funding. It is important to note, however, that a complete and accurate assessment of your situation would require analysis of the actual language in the broadcast licence agreement. Is there a mechanism for a broadcaster to acquire a holdback against Other Rights that is longer than 12 months? No. The CMF wants to ensure that CMF-funded content is available to Canadians on multiple platforms in a timely manner. As such, the CMF does not encourage holdbacks on Other Rights longer than 12 months. If digital media marketing costs are now allowed, can they be in both the TV and Digital media budgets? Yes, eligible marketing expenses may be placed in the Television Component budget or the Digital Media Component budget, at the election of the applicant. But the same costs cannot be claimed in both budgets at the same time—the CMF will not finance the same costs twice.
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