Netflix among sources facing new regulation
The government of Ontario is hoping to push Canadian Radio-Television and Telecommunications Commission (CRTC) standards on the new-media streaming services, requiring services like Netflix to pay for the development of Canadian content.
At a CRTC TV Policy Review Public Hearing on Monday, Sept. 8, 2014, Assistant Deputy Minister of Tourism, Culture, and Sport Kevin Finnerty announced plans to introduce “proper guidance by policymakers [that] will be essential to maintain the current levels of success for [Canadian Content]…and ideally, to increase its success.”
Clumping together Canada’s broadcasting and screen-based sectors, as well as Ontario’s Entertainment and Creative Cluster, into the term “Cluster” for reference, Finnerty’s remarks emphasized the importance of TV broadcasting to Ontario’s economy.
However, as has been an issue of great import for Canadian broadcasters and audiences, Finnerty’s presence at the hearing had to do with the subject of Canadian media content.
Canadian content (Cancon) refers to media content created and aimed at the Canadian public. The CRTC has strict guidelines on the amount of foreign media content that is allowed to be aired on Canadian television and radio.
However, with the introduction of streaming services that give Canadians easier access to foreign media, Canadian broadcasters have been finding it more and more difficult to find an audience for Cancon.
“The cultural and economic heart that feeds a vibrant Ontario Cluster and Canadian broadcasting system is Canadian content,” explained Finnerty. “Cancon is also important in that it plays a vital role in maintaining our cultural identity as Ontarians and Canadians.”
With services like Netflix, iTunes, and Amazon giving instant access to Canadians seeking foreign media content, the CRTC has been forced to reconsider existing guidelines to cater to an evolving market.
Recently, the subject of pick-and-pay programming led to reforms in CRTC guidelines. By picking only the channels they want to watch and paying exclusively for those channels, consumers were able to save money by avoiding the cost of any unused channels. For consumers, this meant cheaper cable bills and programming more catered to personal tastes. For cable service providers, this meant lower revenue and potential losses in advertising revenue.
In reference to the pick-and-pay issue, Finnerty’s remarks reflected a ministry attempting to make sense of confusing policy and a drastically changing media landscape.
“The ministry believes that in the next five years, the rapidly evolving broadcasting environment will demand the public policymakers at all levels of government be able to properly navigate this transformation, whose characteristics and timing we cannot fully anticipate,” explained Finnerty. “The ministry’s suggested approach to change is therefore a balance one that promotes broadcasting policy objectives while responding to Canadians’ wants and needs.”
The ministry proposed recommendations to allow over-the-top service providers, like popular US streaming service Netflix, to foot the bill for Cancon. By doing so, the ministry hopes to prevent major losses to a Canadian industry responsible for providing over 200,000 jobs and approximately $12 billion in revenue.
Simply put, “the ministry is concerned about changes to barriers to direct foreign entry.” Finnerty’s remarks came to a head when the Assistant Deputy Minister raised the issue that “potential regulatory change and inaction in key areas could erode the Canadian program rights market and negatively impact Canadian broadcasting industry players and the success of Cancon.”
While the ministry’s concerns seem reasonable, not all Canadians agree with the ministry’s recommendations. Chris Katsaras is, a Guelph student and paid subscriber of Netflix, worries that forcing service providers to foot the bill for exclusively Canadian content will lead to the degradation of such services.
“Netflix is a premium international service, and while they are American, I don’t think it’s right to get them to pay for content that will only air in certain regions,” Katsaras said. “I like Netflix because I pay a small fee per month to choose what I want to watch without having to worry about ads or other intrusions.”
Others express thinking more in line with Finnerty and the ministry. Trevor Bott, also a Guelph student, believes that service providers should cater to the guidelines of the markets they serve.
“It doesn’t matter where a service is based,” he said. “If service providers want to be a part of certain markets, then they should be expected to cater to the legal requirements of those markets. The CRTC has set guidelines for how much programming must be Canadian, and I think services like Netflix should be required to honour those requirements.”
Time will only tell how services will react to increased restrictions. What can be expected is that there are sure to be unforeseen consequences from increased guidelines and restrictions.