The Standing Committee on Canadian Heritage concluded a study on the Canadian film industry this week, releasing a report that lists 11 recommendations that generally call for continued industry support. The NDP and Liberals both issued supplementary opinions in which they called for requirements that online video providers (such as Netflix) disclose revenues, Cancon availability, and subscriber numbers to Canadian officials. The NDP recommendation:
the NDP fully supports the recommendation made by Carolle Brabant of Telefilm Canada, who argued that it is vital for over-the-top services to be able to do what traditional platforms and media do, namely, provide government authorities with detailed information about their services, such as consumers’ habits, the Canadian films available, the revenues generated and the costs associated with such services.
The Liberals issued a similar recommendation:
It is recommended that the Department of Canadian Heritage and the (CRTC) gather data on over-the-top services, with particular focus on consumer habits, availability of Canadian films, and revenues and expenses associated with these services.
The issue of data disclosure has been a contentious one, with companies such as Netflix and Google refusing to provide the CRTC with confidential information during the TalkTV hearings, leading to a high-profile showdown on the issue. Better information is obviously important, but the challenge is how to gather that information. Voluntary disclosure would address the issue, but if providers are unable or unwilling to comply, gathering such information brings up the thorny world of regulating online video providers with rules that mandate disclosure to the CRTC and/or the government.
This sounds like a political ploy in an election season by the Liberals and NDP to match the grandstanding by Conservatives at the recent committee hearing standoff with Netflix.
They can’t though…Netflix does not collect any personal information (Which could be faked anyway). I just signed up. It collected my name, which I could fake if I wanted to, my e-mail, which can be anything anywhere in the world and payment info, which I use PayPal, which I don’t believe they can determine my residency from. If I were to get a VPN, it would appear as though I were in the US or UK. I don’t think Netflix can reliably provide the information being requested by the CRTC and Telefilm Canada without changing their business model, which I don’t see happening any time soon. The CRTC can threaten to kick them out of Canada if they refuse to provide the information, but Netflix is so established here now that doing so would bring down so much public ire that it would not achieve anything positive.
And how exactly do you “kick them [Netflix] out of Canada”? They’re not like the cable company which needs physical presence in Canada to do business with Canadians. And it’s not like any technological measures to prevent Canadians from using Netflix would go unopposed by the millions of Canadians that watch it. You are messing with their entertainment after all. They might keep quiet about silly little issues like C-51 but dick around with their television watching and you will see a revolt (as sad as that is to say).
And then there is the old adage about how the network routes around “damage” anyway.
Organizations like the CRTC (which seem to be coming around) and the Canadian politicians/government need to get over themselves and finally admit that this is now a global market that cannot be “walled” out. It cannot be regulated to force CanCon on Canadians. That ship has sailed people.
If CanCon is to survive, it needs to be able to compete, not be forced onto a population that is not interested in watching it. And it can compete. I have voluntarily watched CanCon in preference to foreign (read: US) programming because I enjoyed it.
If I were Netflix or Google, I’d be telling the NDP and Liberals that they can stick their requests/requirements up their collective arses because there is nothing they can do to compel me to meet them. And I will continue to do business with your constituency.
You say they can’t kick them out, but they did just that with Pandora, which had pay-for options if you wanted more control over the content delivery. The only difference between Pandora and Netflix is the size the of the user base. They got Pandora out before the user base got large. The Netflix subscriber base grew so quickly and to such an extent, before the media cronies could get their ducks in a row, that to try any kick them out now would be public suicide. My point was that Netflix is not under any obligation to supply the number the CRTC wants nor does it really have any reliable way to collect said information.
> but they did just that with Pandora
Uh. No. You might want to get your facts straight before commenting. The CRTC/Government did not kick Pandora out. Pandora declined to come and do business in the Canadian market due to licencing costs: http://www.michaelgeist.ca/2010/09/pandora-and-canada/
Netflix are already over that hurdle and are licencing and doing business, legitimately in Canada.
Thanks! I was looking for a reference before answering. I should have looked right here on Michael’s blog first!!!
hi As discussed in an earlier comment, Pandora wasn’t . thank you
Totally agree with you Brian, there are a few very good original shows being done in Canada and are being exported to other countries (eg Murdoch Mysteries). These have high quality acting, excellent writing and really good fan base. If we are to spend funds lets support these enterprises rather then dumping more money on regulation (requiring departments to oversee, etc). Help the startups to get going and help them to export a marketable product. UK, Australia and France all do that.
Actually the Government can’t “kick” Netflix out of Canada. Netflix has no presence or operation physically in Canada neither are they required to remit taxes to the Canadian government since digital media is exempt.
Neither can the Government block Netflix as that may be cause Net Neutrality issues.
With linear television providers – either broadcasters or cable channels – there was a reasonable justification for this type of data. Someone in a company office somewhere was directly controlling what could be seeon on their channel. Any channel was always going to be a limited resource – 168 hours per week, and no more.
But Netflix is much more like video rental store than it is like a specialty cable channel. It has some effect on availability, but the final decision rests with the customers. A thousand Netflix customers could watch 168,000 unique hours of content in one week.
I would be interested in knowing if any of the CRTC, the NDP, or the Liberals have now or ever indicated that video rental stores should also provide this information. I doubt very much that this version of the data gathering was ever suggested.
I think that’s an excellent question! I know the line is getting fuzzy but I definitely see Netflix, YouTube, etc. more as video rental stores than as broadcasters. Of course Videotron and Rogers (maybe others) also operate video rental stores (used to be brick & mortar now just on line) so maybe there is no line. Maybe Google et al should put up a useless antenna somewhere and say “ok, here’s our broadcast subscriber numbers – now leave our video rental business alone.” Does CraveTV or Showmi provide the information the NDP and Liberals are asking for?
The Ndp and Liberals are trying to win votes that’s all this is about as for kicking Netflix out that will not even be possible but it could lose them thousands of votes.
RE: Kicking Netflix out of Canada
All I can say to this is never say never. Our government’s capacity to kowtow to the pressures of our telecom/media monopolies is pretty amazing. Outrightly kick them out, like they did with Pandora, perhaps not, inflict crippling regulations upon Netflix making it not worth their while…probably not for the time being and they’ll probably admit defeat here as anything else is political suicide, but would it really surprise anyone here some something like this happens in the next couple years? Canadians have a notoriously short memory when it comes to government corruption and underhanded dealings to appease big business and no business is dirtier than big media. C-51 is a prime example of this.
If the feds said were going to set regulations on the internet there would be massive protests if not all out riots.
I agree, if they do it in one big swoop, but implementing in small steps, like C-51, there would be little or no pushback. On-line spying and usage tracking is simply the first step in what I’m sure is a multi year plan to place regulations on the Internet. Now that C-51 gives the copyright bill teeth the media industry can use, next comes the inevitable letters and law suits…profiling Internet users based on which sites they visit…then censorship and blocking of sites considered “illegal”, then blocking “legal” sites that threaten our big businesses (i.e. Pandora, Hulu, Netflix, etc), making VPN for non-commercial use illegal, SOPA-style regulations making it illegal to obscure your IP address, etc. Anyone who believes C-51 had anything to do with terrorism is deluded. As long as Harper is in charge, would any of this surprise anyone? I said, not any time soon, but in the next couple years I would not be surprised to see Netflix pushed out or forced to raise their rates to be more in line with the Bell’s and Rogers’ and Shaw’s, let’s see how it pans out.
> Outrightly kick them out, like they did with Pandora
As I clarified above, Pandora was not kicked out of Canada. They declined to come to Canada to do business due to exorbitant licensing costs. So that was a decision squarely on Pandora, not the Government/CRTC.
As discussed in an earlier comment, Pandora wasn’t “kicked out”.
OK, my bad for not having the facts entirely straight. The end result remains the same.
No, the end result is not the same. They are completely opposite in fact.
Pandora is not here of their own choosing and Netflix has chosen to be here and is and can neither be “kicked out” nor “regulated” by CRTC even if that’s what the CRTC wanted. This is because they have no presence here in Canada to regulate or kick out other than a virtual one.
Out of curiosity, is it really THAT different if they’re kicked out vs being forced out by exorbitant fees and regulations? Be it directly or passively, it’s still the government/CTRC interfering. The end result is the same for Joe-Canadian.
What exorbitant fees do you mean? They have already secured their content licensing deals so those fees are known. They are a non-Canadian company so what other fees or regulations do you see the CRTC being able to impose on them?
The CRTC can’t impose regulations or fees on Netflix any more than they can impose fees and regulations on any other non-Canadian company.
Sorry, I’m going on 4-5 year old memory here, it was actually SOUND demanding an enormous amount of money that was causing issues for Pandora. I apologize for accusing the Canadian government and CRTC for underhanded dealings here, they would never do such a thing. 😉 According to a 2011 press release I found, RE:SOUND, the rights holder group Pandora would have to deal with, was demanding 45% of Pandora’s gross Canadian income, or 7.5-tenths of a cent per streamed song, which ever figure is higher…I would say that’s pretty exorbitant and unreasonable…more of a “Go away, we don’t want your type here” kind of deal. You can’t even budget for something like that as a sudden surge in popularity could bury you.
Right. So you would agree, completely orthogonal to any concept of the CRTC trying to “kick out” Netflix, right?
Agreed. It’s more the licensing bodies and rights groups I think are the problem. However, I still think the government itself could become problematic if it succumbs to industry pressure to deal with Netflix through legislation (Ultimately violating net neutrality by censoring the Internet)…especially if the conservatives get in another term. They’ve already shown their willingness to violate international laws with C-51, with the OSCE finding it violates the Universal Declaration of Human Rights.
CRTC
It seems like the closest example is France, where they avoided regulation and fees by having their French operations outside the country. Since their Canadian operations are run from the US, a similar circumstance exists here if the CRTC decides to regulate. It’s hard to see how that decision would be anything but toothless (as it was when they demanded information at the TalkTV hearing) without going to China-emulating extremes.
Netflix has already put money into Canadian co-ventures Between and now Degrassi, plus they picked up Trailer Park Boys … possibly similar to what they’re doing in France again to show they’re contributing somewhat to the home culture outside of regulation to let our Canadian regulators save face to a degree if they don’t try to regulate. Or who knows, maybe they just purely believed in those shows.
For the French case see for example: http://www.telegraph.co.uk/news/worldnews/europe/france/11095268/Netflix-launches-in-France-to-hostile-reception.html