This document analyzes government policy and the broadcasting industry in Canada. It provides background on Paul Young and his experience. The presentation discusses the broadcasting industry performance from 2011-2015, film tax credits in Canada, and Android boxes. The broadcasting industry generated 20% of its revenue from pre-tax operating income. While CBC receives over $1 billion in funding, it operates at a loss. The document also discusses tax credits available to the film industry in Canada and issues around "Netflix taxes". It analyzes the Android box market size and growth, as well as factors driving demand for these boxes like rising cable costs.

1. GOVERNMENT POLICY –
BROADCASTING– CANADA –
ANALYSIS AND COMMENTS –
JUNE 16, 2017
BY: PAUL YOUNG, CPA, CGA
DATE: JUNE 16, 2017

2. PAUL YOUNG - BIO
• CPA, CGA (1996)
• Financial Solutions (FOPM/FPM)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Advance Technology and Market Entry
• SME – Supply Chain Management
• SME – Business Strategy and Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com

3. PRESENTATION
• This presentation will discuss the broadcasting industry in Canada

4. AGENDA
• Radio and Broadcasting – Operational Performance – 2011 to 2015
• Film Tax Credits – Canada
• Android Boxes

5. SUMMARY
• CBC receives over $1B in funding and shows an Operating Loss
• Broadcasting industry made 20% of revenue in pre-tax operating income

6. BROADCASTING INDUSTRY
Source - http://www.statcan.gc.ca/tables-tableaux/sum-
som/l01/cst01/comm02e-eng.htm
Comment:
• CBC receives over 1B in funding and runs an
Operating loss
• Broadcasting sector in general sees a healthy
operating income of 21% of revenue
Source – CBC

7. BROADCASTING REVENUE / CANADA - 2015
• Stats Canada

8. FILM TAX CREDIT
• There are both Federal and Provincial Programs to support entertainment and media in Canada
• Canada has long been one of the preferred places to complete film projects by foreign producers due to the various federal and
provincial tax credits available. The Canadian government has been proactive in encouraging investment by domestic and foreign
producers by instituting tax credits to help offset the cost of production. This has had a major positive impact on the domestic
film production industry, which now has more than 127,700 employees, and an annual revenue of approximately $5.81 billion.
• Given the benefits of being able to access these tax credits, AG Tax professionals have prepared a brief summary of the credits
available to the film production industry. We have provided details on existing provincial tax credits, and also analyzed recent
changes to them, so that film producing companies can plan their tax measures accordingly.
• Source - https://www.pwc.com/ca/en/entertainment-media/publications/pwc-big-table-film-video-2015-09-en.pdf
• Source - http://agtax.ca/cra/canadian-tax-credits-for-the-film-production-industry

9. NETFLIX TAX
• https://www.theglobeandmail.com/news/politics/liberal-mps-call-for-5-per-cent-tax-on-streaming-services/article35313367/
A Liberal-dominated committee will be calling for a 5-per-cent tax on
broadband Internet services to fund Canada’s media industries, which
are struggling to adapt to technological changes and evolving consumer
habits, sources said.
The move would add hundreds of millions of dollars in revenues to the
Canadian Media Fund, which already receives a levy on cable bills to
finance the production of Canadian content. However, it would open up
the government to accusations that it is once again raising taxes on
consumers.
• There are already programs in place like tax credit programs for the entertainment industry
• CBC needs to look at their vault and license the vault as part of digitalizing their content
• Forcing taxpayers to pay into fund for local broadcasting is wrong. If network in Canada want to
produce content then come up with original ideas like they did in the past

10. CORNERGAS MOVIE
http://news.nationalpost.com/news/canada/corner-gas-movies-8-5m-budget-is-75-from-government-funding-despite-success-of-the-
original-tv-series

11. MARKET SIZE
• 15.9% is
many small
players
• Nvidia is
growing as
player

12. MARKET GROWTH – ANDROID TV BOX
https://www.ericsson.com/en/networked-society/trends-and-insights/consumerlab/consumer-insights/reports/tv-
and-media-2016
Since 2010, total viewing hours and time spent viewing
content on mobile screens such as smartphones, tablets and
laptops, have grown significantly

13. MARKET GROWTH – ANDROID TV BOX
https://www.ericsson.com/en/networked-society/trends-and-insights/consumerlab/consumer-insights/reports/tv-
and-media-2016
Since 2010, total viewing hours and time spent viewing
content on mobile screens such as smartphones, tablets and
laptops, have grown significantly

14. COST OF CABLE ARE DRIVING PEOPLE TO TV ANDROID
BOXES
• http://www.cbc.ca/news/business/piracy-android-box-free-tv-1.4098249
The software can be downloaded and used on many devices,
including computers and some smart TVs. But Sandvine estimates
that most of the households were using it on an Android box to
stream the pirated material to their televisions.
"It's not an insignificant amount of people if you think how many
households there are in Canada," says Sandvine spokesperson Dan
Deeth about the Canadians engaging in what he calls "the new face of
piracy." Seven per cent of the 15.4 million households in
Canada is more than one million.

15. Main players controlled 84% of the market. The remaining 16% is controlled by small players
721 android boxes available for sale!

16. AMAZON.COM
• There is well over 300 android boxes available on amazon.com

17. BEST BUY
Best Buy as well as other larger retailers only deal with name brand boxes

18. People need to go beyond headlines and asked
questions before they buy a Android Box

19. BLOG - BROADCASTING
• http://nationalpost.com/pmn/news-pmn/canada-news-pmn/no-netflix-tax-but-focus-on-economy-in-upcoming-liberal-
culture-policy-sources
• I take great offense when I read articles from LPC, especially Melanie Joly. Liberals think as always nothing was done
when it comes to Heritage under previous government which is not the case.
• Here are facts:
• Many provinces promote the arts with their own programs. Corner Gas is a good example of a local TV show that was
produced through film tax credits in SK. https://www.slideshare.net/paulyoungcga/government-policies-broadcasting-
and-tv-applications-canada-june-2017
• People are cutting their chord with TV and have move to streaming - https://www.slideshare.net/paulyoungcga/digital-
media-continues-to-evolve-with-more-streaming-options-april-2017. The problem has always been about licensing.
• CBC needs to get back to it roots that includes more original programming. In fact, CBC is sitting on a gold mine if they
were to move their historical content like The Beachcombers or Danger Bay or Street Legal to hosted environment.
• Urban development also should be reviewed to ensure we protect old buildings, but find other uses for them.
• Liberals also have in the past discussed a Netflix tax or lets call what it is and that is streaming tax -
http://www.torontosun.com/2017/06/14/liberal-mps-to-push-for-5-netflix-tax-on-streaming-services-in-canada
• CRTC also needs to be involved in terms internet fees, especially for devices like iPads, android phones and iPhones.
Canada is up there when it comes to internet cost - https://www.thestar.com/business/2016/12/22/crtc-broadband-
internet-ruling-still-leaves-room-for-high-prices.html

20. SUMMARY
• Small players will eventually be squeezed due constant changing in terms of both application and
technology
• Small players lack the ability to provide support to their boxes, i.e. issues with supported applications,
applications not loading, security protocols, etc.
• Many people enter the market to make a fast buck, but the reality that competition is now squeezing the
margins.
• People will buy what they know in terms of boxes. i.e. brand recognition
• TV android market will continue to shift to portability as it is becoming more about options to host
applications.
• People need to be leery of the term “Free TV”. There are free applications available like TubiTv or OV
Guide, but those applications have agreements with various movie and tv companies as part of hosting
content. Much of the content like movies are user fees driven.
• People also need unlimited high speed internet as part of using TV android boxes.
• People need to research companies to ensure their testimonies are true “I have the best android box on
the market”. People need to read review by various analysts as part of selecting an Android Box