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Netflix to Canada: Take Your Busy-Body Threat and Shove It

By: Andrew Woodbury - @A_W10 - Sep 23, 2014, 10:29 am

EspañolAs the Canadian Radio-Television and Telecommunications Commission (CRTC) sparred with executives of Netflix Inc. in Gatineau, Quebec, last Friday, one thing became abundantly clear: there’s an elephant in the Canadian-media regulatory room, and it’s dressed as a dinosaur.

On the final day of a two-week conference on the future of television in Canada, sparks flew between CRTC chairman Jean-Pierre Blais and Netflix representative Corie Wright. The tense and openly hostile exchange stemmed from Blais’s demands that Netflix reveal its Canadian user data or risk being relegated to the rules of traditional Canadian television.

And with those demands, the CRTC revealed two of its most common traits: archaism and an ability to be out of touch with even the most obvious of trends.

CRTC chairman Jean-Pierre Blais took issue with the streaming service's implication that it can’t trust the regulator to prevent information from leaking.
CRTC chairman Jean-Pierre Blais took issue with the streaming service’s implication that it can’t trust the regulator to prevent information from leaking. (National Post)

Thankfully — and rightfully so — Wright told Blais, in no such terms, to mind his own business. Since coming into the Canadian media market in 2010, the online-streaming provider has operated essentially unregulated, under a “new media” exemption, allowing the US-based company to avoid paying into a pool that contributes to the development of Canadian content.

Media providers in Canada who are not under the new-media umbrella must, according the Canadian Broadcasting Act, are taxed to fund the production of material made in Canada. In addition, they must make a certain amount of Canadian content available to their consumers — which is what the CRTC has used to propel its crusade against Netflix.

In requesting the private information of its constituents, the government entity has not only embodied similar predatory tendencies of its parent entity, it has disrespected the very people whom it’s designed, in theory, to represent.

Highlighting what many in Canada are thinking, Wright offered this during the proceedings last Friday: “Viewers should have the ability to vote with their dollars and eyeballs to shape the media marketplace.” She eloquently pointed to the actual root of the absurdity: that Canadian media juggernauts Rogers and Bell are losing subscribers.

In 2013, viewing of internet-based television in Canada surged by 46 percent, according to a report released by the CRTC in early September. Further, viewing of traditional television among 18-34 year olds — the key demographic for advertisers — over the same time dropped by nearly 4 percent. And with that, the incumbent media moguls have started to take notice.

If the CRTC makes good on its threat, the outcome will only hurt Canadian consumers. With traditional Canadian cable packages prohibitively expensive for many, any kind of ban — or worse, forcing Netflix to leave — would merely result in Canadians using existing proxies to access the US version, something many have already done.

The argument here isn’t against support for Canadian content; rather, that an archaic organization, that represents two of the most monopolistic, consumer-gouging companies in the nation, has no right to demand the private information of users in its own country — much less demand it under the guise of consumer protection. The CRTC, along with Bell and Rogers, are perfectly fine with Canadians having their choice of programming, so long as they choose from the selection — and time-slots — that they have preordained as acceptable.

Corie Wright, director of global public policy at Netflix, is questioned at the CRTC, Let's Talk TV hearing on Friday.
Corie Wright, director of global public policy at Netflix, is questioned at the CRTC, Let’s Talk TV hearing on Friday. (National Post)

Reflecting what rival media outlets have been feeling, Pierre Dion, president and CEO of Quebecor Inc. told the delegation on September 9 that “If the commission fails to act swiftly after this proceeding, a service such as Netflix will become one of the largest broadcasters in this country in the near future.”

With Canadian revenues estimated to be close to CAN$300 million in 2014, Dion could be right. A monthly subscription fee of $8 per month represents consumers choosing quality per price point, and not being subject to irrational and prohibitive television packages for four or sometimes five times that amount.

The real solution lies in making Canadian media affordable through an open market, not in regulating those playing by the rules to further punish the consumer base. If regulators like the CRTC allow this to occur, then conglomerates like Bell and Rogers may well see consumers come back.

On Monday, before a CRTC-imposed 5 p.m. deadline, Netflix announced that it would not succumb to the threat and release the private information of its subscribers, citing, among other things, concerns over whether the CRTC could be trusted with the information. A spokesman for Netflix, in showing the backbone that this government sorely lacks, stated that the organization was not “in a position to produce the confidential and competitively sensitive information ordered by the commission due to ongoing confidentiality concerns.”

The response by the Netflix should be applauded for composure, after a reprehensible request; they would have been forgiven for telling the CRTC where to put their exemption. What shouldn’t be applauded is a government entity refusing to accept that media has changed, and that further regulations not only insult the Canadian population, but degrade a country where the same regime so often claims to be one of the freest on the globe. Here’s hoping they soon wake up and smell 2014.

Andrew Woodbury Andrew Woodbury

From Toronto, Canada, Woodbury is a Young Voices advocate, editor, and educator at the International Language Academy of Canada. Follow him @A_W10, and read more of his featured PanAm Post column, “Connecting the Dots.”