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Feds to push Netflix, streaming giants to spend big on CanCon

Last Updated Nov 3, 2020 at 12:35 pm PDT

FILE - This June 24, 2015, file photo, shows the Netflix Apple TV app icon, in South Orange, N.J. Netflix reports financial results on Monday, April 18, 2016. Sports are on hold, movie theaters are closed and so are amusement parks. But Americans held captive at home by the coronavirus can turn to Netflix, Amazon, Hulu and other streaming services, outliers in an entertainment industry otherwise brought to an unprecedented standstill. (AP Photo/Dan Goodman, File)
Summary

Streaming services could soon be paying big bucks to produce Canadian content if proposed policy changes happen

A tabled bill by the federal government suggests companies like Netflix, Crave pay the same as traditional broadcasters

The changes could mean they pay as much as $830 million annually toward Canadian content

VANCOUVER (NEWS 1130) — Streaming services could soon be required to pay the same as traditional broadcasters to produce Canadian content if a proposal from Ottawa goes forward.

The federal government has tabled a new bill that proposes putting online streaming platforms, such as Netflix and Crave, under the Broadcasting Act through a new category called online undertakings.

The government estimates the changes could mean these streaming services pay as much as $830 million annually toward Canadian content.

“We’re not asking these companies to do things that they’re not already doing, they are investing in Canada,” says Heritage Minister Steven Guilbeault. “What we’re doing is putting a regulatory framework on how those investments should be made in light of things we’re already asking from Canadian broadcasters.”

While the bill will presumably mean higher costs for streaming services, the government insists the bill won’t be passed onto Canadians.

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Guilbeault says he isn’t concerned about Netflix increasing subscription costs in response.

“Many European countries have had in place similar legislation since 2018,” he says. “We haven’t seen an increase in costs for a consumer because of the imposition of such regulations.”

According to the government’s technical note, online video services have grown their revenues over the last two years, while Netflix has made its way into 62 per cent of Canadian households.

Netflix reported revenues of $780 million in Canada in the first nine months of the 2019 fiscal year, while the Canadian Radio-television and Telecommunications Commission said the traditional television sector saw its revenues decline on average by 1.8 per cent per year between 2014 and 2018.

Guilbeault says it’s about asking large companies to invest in Canadian stories, music, and artists the same way traditional broadcasters are.

“We’re putting a framework around those investments so it’s not on a voluntary basis whether or not [streaming companies] want to invest in Canadian stories, in Francophone stories, in Indigenous stories,” he says.

On top of facing revenue declines, traditional broadcasters have also had to comply with government demands to support Canadian music and storytelling, but the streaming giants have largely been able to escape such requirements.

“We all have a role to play in supporting the future of film and television created in Canada,” says a Netflix spokesperson in an email to NEWS 1130. “We are reviewing the legislation and remain committed to being a good partner to Canada’s creative community while also investing in local economies.”

There’s no exact timeline for when this would potentially become law, but Guilbeault says the aim is to bring the changes in as quickly as possible.