The Pennsylvania State University The Graduate School College of Communications ALLIANCE ATLANTIS COMMUNICATIONS INC: THE EMERGENCE OF A CANADIAN CONTENDER IN THE INTERNATIONAL MEDIA MILIEU A Thesis in Mass Communications by Marsha Ann Tate © 2007 Marsha Ann Tate Submitted in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy May 2007 ii The thesis of Marsha Ann Tate was reviewed and approved* by the following: Dr. Jorge R. Schement Professor of Communications Chair of Committee Thesis Co-advisor Dr. Theordore R. Alter Professor of Agricultural, Environmental, and Regional Economics Thesis Co-advisor Dr. Richard D. Taylor Professor of Telecommunications Studies Dr. Patrick R. Parsons Professor of Ethics Dr. John S. Nichols Professor of Communications Associate Dean of Graduate Studies *Signatures are on file with the Graduate School. iii Abstract Using a combination of case study and historical research methodologies, this study examines the development of Toronto, Ontario-based Alliance Atlantis Communications Inc. and its predecessor companies within the context of a globalized media environment. Specifically, the study identifies and analyses key factors that helped Alliance Atlantis to emerge as a viable competitor in both the North American and international television marketplaces. The in-depth investigation of Alliance Atlantis Communications Inc.—one of Canada’s most successful integrated distribution- exhibition-production companies to date—illustrates the complex interrelationships between domestic and international economics, regulatory policies, technological innovations, as well as entrepreneurial skills in shaping the development of a modern-day media corporation. By highlighting key stakeholders, productions, and mergers over the course of Alliance Atlantis’ and its predecessor companies’ histories, the study also considers how the above-mentioned factors have forcibly changed Alliance Atlantis’ corporate structure, strategies, and entertainment products. In a broader sense, the examination and analysis of Alliance Atlantis Communications Inc. provides insights into the transitioning North American and global mediascapes and may prove helpful to other foreign-based production companies struggling to compete within a global audiovisual market traditionally dominated by Hollywood-based companies. iv Alliance Atlantis Communications: The Emergence of a Canadian Contender in the International Media Milieu Contents List of Acronyms and Abbreviations................................................................................xiii List of Illustrations............................................................................................................xv Acknowledgments............................................................................................................xvii Dedication......................................................................................................................xviii PART ONE Introduction, Literature Review, and Methodology Chapter 1. Introduction, Scope of the Study, and Guiding Questions General Background of the Study 1 Purpose of the Study 1 Guiding Questions Addressed in the Study 2 Basic Assumptions 3 Parameters of the Study 4 Definition of Terms 5 Significance of the Study 7 Arrangement of the Study 8 Chapter 2. Behemoth at the Border: U.S. Hegemony and the Broader Issue of Globalization from a Canadian Perspective Globalization 13 The Myriad Meanings of Globalization 13 The Emergence of Globalization in the Nineteenth and 14 Twentieth Centuries The Multinational Corporation (MNC) and Globalization 16 Global Culture 18 The Cultural Hegemony and Cultural Hybridity Approaches to the 19 Study of Globalization Strengths and Weaknesses of the Cultural Hegemony and 21 Cultural Hybridity Approaches Globalization, Political Economy, and Communication 22 From Global to Local: Canadian Cultural Discourse and Canada’s 23 Cultural Industries Canadian Culture: A Definitional Dilemma 23 Canadian Culture Within a North American Context 24 v Major Theoretical Approaches Used to Examine Canadian Cultural 25 Policy The Nationalist and Open Approaches to Canadian Cultural 26 Policy The Question of the Mutual Exclusivity of Cultural and 29 Economic Goals The Cultural Discount Theory 31 Psychological Aspects of Canadian Cultural Policy Discourse 32 Canadian and U.S. Stereotypes 32 Canadian National Low Self-esteem 32 Canadian Media Scholarship: An Assessment 34 Canadian Media Scholarship: An Exhausted Paradigm? 34 Additional Gaps in the Research Literature on Canada’s Film 37 and Television Industries Conclusion 38 Chapter 3. Analytical Framework and Methodology Building an Analytical Framework to Study Canada’s Film and 44 Television Industries in the Twenty-first Century The Strategy of Inquiry 47 The Case Study Method 47 The Historical Method: A Natural Complement to the Case 49 Study Method Alliance Atlantis Communications Inc. Case Study Design 50 Criteria Used to Select Alliance Atlantis Communications Inc. 50 as the Case Study Subject Evidence Collection and Analysis Procedures 51 Strategies Employed to Mitigate Methodological and Data 54 Limitations Thoroughness and Triangulation 55 Generalizability 56 Presentation of the Case Study's Findings 58 Conclusion 58 PART TWO Context Chapter 4. An Overview of the Canadian Media Landscape The Structure and Regulation of Canadian Broadcasting 62 Canadian Cable Television Services 64 Discretionary or Pay Services 64 Digital Television 64 vi Canadian Government Regulatory Intervention in Broadcasting 66 Simultaneous Signal Substitution 67 Canadian Content Quotas 69 Licensing Restrictions 71 Foreign Ownership and Investment Limits 71 The Economic Dimension of Canada’s Media Industries 72 Competitive Advantages Enjoyed by Canada’s Film and 73 Television Production Sectors International Trade Agreements and the Canadian Mediascape 74 Government and Private Subsidization of Canada’s Film and 74 Television Industries The Canadian Film Development Corporation 74 (CFDC)/Telefilm Canada Other Production Approaches 75 Television Production Funds 76 The Canadian Television Fund (CTF) 76 Independent Production Funds 77 From Script to Screen: The Canadian Television Production Process 78 The Four Sectors of Canadian Film and Television Production 78 The Process of Making a Canadian Television Program 79 Canadian Television Programming and the International Audiovisual 82 Marketplace Treaty Coproductions 82 Coventures 84 Presales 84 The Drawbacks of Coproductions, Coventures, and Presales 84 Canadian Television Drama 85 Industrial Dramas 87 The North American Syndication Marketplace 88 Conclusion 90 Chapter 5. The Early Development of Ontario’s Independent Television Production Sector Television Arrives in North America's Living Rooms 95 U.S.-Canadian Coventures 97 Normandie Productions 98 Hawkeye and the Last of the Mohicans (1957–1958) 99 The Adventures of Tugboat Annie (1957–1958) 100 Cannonball 100 The Sale of Normandie Productions to Independent 101 Television Corporation (ITC) Frank Radford “Budge” Crawley Jumps into Series Television with 101 the RCMP U.S.-Canadian Coventures as a Training Ground for Canadian Talent 103 Toronto: The Next North American Television Production Center 104 vii Toronto International Film Studios 104 Attempts to Delineate the Boundaries Between Canada’s Feature 107 Film and Television Industries Conclusion 108 Chapter 6. Culture, Commerce, and the Canadian Production Sector During the 1960s and 1970s Canada and the United States at the Crossroads: 1967–1968 113 The 1968 Broadcasting Act and the Establishment of the Canadian 116 Film Development Corporation (CFDC) The Shifting North American Audiovisual Marketplace 118 of the Late 1960s and Early 1970s The Renewed Demand for Syndicated Programming 119 in the United States The Expansion of Toronto’s Production Sector 121 British Interests in Toronto's Production Sector 122 The Motion Picture Association of America's Jack Valenti 123 Voices Concerns over Runaway Production Canada’s Tax Shelter-ignited Production Boom of the 1970s and 124 Early 1980s Capital Cost Allowance (CCA) 124 From Boom to Bust 125 Conclusion 128 Chapter 7. Boom, Bust, Rebound: Canada’s Federal and Provincial Governments’ Strategies to Create a Sustainable Production Sector The Emergence of Deregulation and Free Trade as Dominant 133 Political Philosophies in North America During the 1980s North America's Changing Television Scene 135 Strategies for Stabilizing Canada’s Production Sector 138 The Establishment of the Canadian Broadcast Program 139 Development Fund The Redefinition of Canadian Productions 141 Implications of the Revised Canadian Content 142 Rules for Canadian Producers Canada's Federal Government Makes Television Funding a Priority 143 Emphasizing a Business-like Atmosphere in the Canadian 144 Production Sector Opposition to the Televisual Shift 145 The Mid-1980s Resurgence of the Canadian Production Sector 147 The Creation of the Ontario Film Development 147 Corporation (OFDC) Ontario Reaps the Economic Benefits of Television 150 Production The Canadian Cultural Campaign of 1986 152 The Canada–United States Free Trade Agreement (CUSFTA) 154 viii Conclusion 156 Chapter 8. Selling Canadian Television Programming to the World Telefilm Canada’s Media Marketing Strategy 160 The American Initiative 161 Taking Canadian Television Programming Beyond the North 163 American Marketplace The Growth and Diversification of Toronto's Independent Television