Village Squire, 1979-05, Page 42P.S.
How's this for a bargain: it cost 5100, 000
to make and sells for 560.
BY KEITH ROULSTON
If you were a shoe maker trying to make
a living making and selling shoes and
suddenly someone from the country next
door started selling shoes that cost $20 to
make for $5 and taking away your
business, you'd be angry.
If you were a farmer and were raising
cattle and suddenly somebody in the next
country started selling cattle that cost $700
to raise for $100, you'd complain to the
government.
Such practices of selling something for
far less than it costs in another country is
called dumping. There are international
regulations 'against it. It usually happens
when through some miscalculation in the
marketplace far more of some product or
commodity is produced than the domestic
market can handle. Rather than have the
law of supply and demand knock the
bottom out of prices at home, a company,
sometimes aided by the government, will
ship the surplus off to another country to
sell it for whatever it can get. Usually the
company gets caught with international
repercussions, although sometimes dump-
ing does succeed.
At least dumping in most areas of
industry is recognized as bad and moves
are made to stop it. But there is one area
where dumping is not an under-the-table
operation. What would you say if you were
making somthing in Canada and found out
you had competition from a foreign country
that produced something at a cost of
$100,000 and was dumping it into your own
local market for as little as $60. Sounds
impossible doesn't it. But it is true.
I recently had occasion to do some
research into television production in
Canada, particularly by local television
stations. During that research I was told by
someone who should know that a half-hour
situation comedy from Hollywood could be
bought by a station in a small, rural market
for as little as $60 for a larger market, say
the size of London, the price might be
$250. Now I haven't heard any figures
about Hollywood production costs recently,
but 1 do recall a few years ago before the
Mary Tyler Moore show was cancelled that
Miss Moore was earning a cool $25,000 per
episode. The budget for the show was more
than $100,000 for a half hour show at that
time. The difference between show
business and other forms of industry is that
the cost is in the initial production. It costs
a lot of money to make the initial copy of a
40 Village Squire, May 1979
film but once that's accomplished, the cost
of producing prints of that film for sale
around the world is so small in relation to
overall cost that it is relatively insignifi-
cant.
Costs in the U.S. are based on the money
that can be made back in the U.S. market.
Every show down there is designed to
make money. Sure $25,000 per episode for
a single star of a television show seems
absurd, but if the show's a hit it's going to
make a pile of money and the star might as
well pocket some of that as the network
bosses.
But once the Americans have produced
the show for their own audiences, once
they've met their costs there, then they can
look at other foreign markets. To them,
anything they get on top of their U.S.
income is gravy. Thus, selling a show for
$60 to a small Ontario station is $60 the
makers wouldn't get anywhere else so why
not?
And who can blame them? Wouldn't we
do the same thing if we could? The
problem is not so much with the Americans
as with our own people with letting them
away with it. In any other industry in
Canada it would be outlawed, but not in
television. Instead we let people like John
Bassett make a fortune by buying U.S.
television series cheap (a heck of a lot more
than $60 to be sure but still a lot less than
the real cost of production) and selling
advertising at the same rate he could in an
equal city in the U.S. He produces virtually
no shows of any quality himself and
pockets all the profits he makes from cheap
U.S. programing.
Of course things are even worse when it
comes to cable television. Here the cable
companies pull in American programing at
absolutely no cost whatsoever and sell it to
local suckers who buy cable television
subscriptions. In any other business this
would be called theft, but not in the
television business. One can't really blame
the government in this area because every
time the government's agency in such
matters, the Canadian Radio -television and
Telecommunications Commission tried to
do something about this by saying that
Canadian channels came before American
channels on cable setups, householders
reacted as if the government was forcing
their eldest daughters into white slavery.
The result is that we have very little
Canadian programing left on television.
Once nearly every Canadian television
station had its own programing. One local
Continued on page 39
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