CRTC working group joins call for proceeding on Netflix

A CRTC working group of industry insiders is the latest voice to call on the commission to open a public consultation on the role of Netflix Inc. in the Canadian broadcasting system. The working group, tasked with looking at over-the-top programming services, asked the commission in an April 1 letter to open a proceeding on “whether and how such non-Canadian companies should support Canadian cultural programming.” The letter comes as Shaw Communications Inc. and the Canadian Media Production Association (CMPA) have said Netflix, which is aiming for 1 million Canadian subscribers this summer, should have to make contributions to the Canadian broadcasting system--as broadcasting distributors do. The working group letter applies further pressure on the commission to look at how to regulate over-the-top services. The CMPA and the House of Commons heritage committee have also called on the CRTC to open a proceeding to examine the emergence of foreign-owned, online streaming services like Netflix and Apple Inc.'s Apple TV and iTunes. “The Working Group believes indeed, like the Standing Committee, that foreign over-the-top services are becoming a significant presence in the domestic market. It is now public knowledge that a foreign over-the-top service operating in Canada has commissioned new exclusive dramatic content, including for the Canadian market,” said the letter from the working group, chaired by independent broadcasting consultant Alain Gourd. The letter alluded to Netflix’s recent deal to acquire the rights to films in the Paramount Pictures library as well as the company’s agreement to create a new television series called House of Cards starring Kevin Spacey. “ is buying exclusive rights with studios in the windows of certain linear Canadian programming services. Therefore, the Working Group submits that the Commission should initiate the public consultation recommended by the Standing Committee,” the letter said. Ken Stein, senior-vice president of corporate and regulatory affairs at Shaw, told the commission at a hearing last week that the “deal with Paramount was a real ground shaker,” and suggested that Netflix fits the role of regulated broadcasters. “If it looks like a duck, it’s a duck," he said. The working group also noted that the CRTC requires new media undertakings tied to traditional broadcasting companies to report data to the commission, but said it would like to see that reporting requirement expanded to cover foreign-owned services like Netflix. “In due course, the Working Group hopes to propose to the Commission what could be an appropriate form of questionnaire and a list of the foreign over-the-top operators that to our collective knowledge have a sufficient presence in Canada to warrant receiving a questionnaire.” Under Canada's broadcasting regulatory framework, online content sites benefit from the CRTC’s new media exemption order, which exempts new media undertakings from the requirement to hold a broadcasting licence. The Broadcasting Act requires licensed broadcasters to be Canadian-owned, but the exemption order effectively allows unlicensed, foreign-owned players like Netflix to offer content online. At a closed-door meeting in late February, industry leaders discussed the power of the CRTC to attach new conditions to its new media exemption order, which could require a foreign-owned player like Netflix to pay contributions to support the Canadian broadcasting system. André Bureau, chairman of the board of Astral Media Inc., acknowledged during a quarterly earnings call Thursday that the broadcasting industry had asked the commission to open a proceeding. “We’ve asked the commission to look into it, and to initiate, if necessary, a process,” Bureau said. “The objective is really, from an industry point of view, that we maintain a level playing field within the system—a system that is a very positive and strong element in terms of our Canadian culture, identity and the Canadian economy." He added: “We are trying to make sure that we see the regulator looking at it from the same point of view.” In previous statements, Netflix has said it does not qualify as a regulated broadcaster and that it offers significant amounts of Canadian programming in its library. news@thewirereport.ca

CRTC working group joins call for proceeding on Netflix

Broadcast | April 14, 2011

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