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Canadian Bill Could Change the Game for Streaming Services

By Gary Symons

Nov. 4, 2020

The federal government in Canada has tabled a bill proposing amendments to its Broadcasting Act that will force major changes for streaming services like Netflix, Crave, Disney+, Amazon Prime and Spotify, as well as for non-Canadian licensees. 

The changes affect a market of 39 million people – about the size of California – and will result in higher costs for streaming services in the country, and a requirement for more Canadian content. 

Bill C-10 essentially brings streaming services under the Canadian Radio-television and Telecommunications Commission, which currently regulates broadcasters, cable providers and telecommunications companies. 

The bill would require streamers to contribute up to $830 million annually toward Canadian content by 2023, and would require a significant amount of Canadian content to be made readily available on various streaming services, whether they are for television or music. 

The regulations are similar to the so-called ‘CanCon’ or Canadian Content measures that require TV networks to include a certain percentage of Canadian-produced shows on their networks, or radio stations to play a percentage of Canadian-produced music.  

Failure to comply with the new measures would result in large financial penalties.

Canada’s Heritage Minister Steven Guilbeault, who is responsible for the bill, says it’s a case of ‘What’s good for the goose is good for the gander’, but in this case the geese are Canadian broadcasters, and the ganders are mainly foreign streaming services. 

“One system for our traditional broadcasters and a separate system for online broadcasters simply doesn’t work,” Mr. Guilbeault told reporters. “This outdated regulatory framework is not only unfair for our Canadian businesses, it threatens Canadian jobs and it undermines our ability to tell our own Canadian stories.”

The bill faces critics on both sides, as supporters of non-regulated streaming have denied the contention that their offerings are negatively affecting Canadian produced content, while supporters of Canadian culture say the bill is too weak. 

The Friends of Canadian Broadcasting, a lobby group that promotes Canadian content, called the bill a mess that fails to ensure the companies are subject to specific requirements for using Canadian production teams.

“No wonder it’s being tabled on election day in the U.S.,” the group said in a statement. “The government is hoping we won’t notice Big Tech wrote this bill.”

Tech giants Netflix and Google have taken a wait and see approach to the bill and the regulations it would spawn if passed by the House of Commons, but it’s worth noting that while the regulations wouldn’t affect user-generated content on sites like YouTube, it would impact ‘curated’ services like YouTube Music or Spotify. 

CanCon requirements for radio currently demand that 35 per cent of all popular music broadcast on both English and French radio stations must by Canadian content. Bill C-10 could therefore decrease the play of foreign artists by more than two-thirds in the Canadian market, and theoretically the bill could also impact other nations around the world. 

From a Canadian perspective, however, artists and broadcast producers could see a boost to their fortunes, as happened after the original CanCon regulations were introduced, helping give rise to globally known artists like The Guess Who, Heart and Bachman Turner Overdrive. 

Michael Geist, a law professor at the University of Ottawa, told the national Canadian newspaper the Globe and Mail that the regulations could backfire on Canada’s red-hot market for film and television production, and that the government’s claims that the Canadian film and television production industry is in crisis is not supported by evidence.

“The truth is that the market has been working really well as Canada being an attractive place to invest in these areas,” he said.

Geist argues there’s a risk that some of the largest investors in film and television production in Canada will pull back until they have more certainty on their obligations under a new Act,  and that new services will think twice before entering the Canadian market.

“I think from the consumer perspective, where this ultimately leads, in addition to the possibility of less choice, is that we’re gonna end up with the CRTC-approved Netflix service or a CRTC-approved Disney+ service,” he said.

But Canadian media producers don’t agree. Reynolds Mastin, president of the Canadian Media Producers Association, said the bill is “important legislation” that will address significant shifts in the market.

“In particular, we applaud the government’s intent to bring online broadcasters – which includes some of the world’s largest global technology companies – into Canada’s legislative and regulatory system,” he said.

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