Netflix doesn’t want to pay into Canadian Media Fund

Being forced to pay into funds is discriminatory, company says

Netflix says it shouldn’t be forced to pay into funds that are designed to support the creation of Canadian content, arguing that the country is better served by market competition than by regulating foreign online services.

The California-based company makes the argument in a submission to a government-appointed expert panel that will make recommendations for changing Canada’s laws governing broadcasting and telecommunications.

“Numerous online distributors offer an abundance of content, including Canadian content, on demand, anywhere and any time to anyone with access to the open internet,” the Netflix submission says.

“We do not subscribe to the theory that a “regulated investment” is more valuable than a consumer and market-driven one.”

RELATED: VIDEO — Netflix Canada plans biggest price hike yet as rivals step up

The 30-page submission, made public Friday, says Netflix is on track to “significantly exceed” a $500-million commitment to fund original content made in Canada under a five-year agreement announced in 2017.

The paper, dated Jan. 11, is one of many submissions to the expert panel, which is expected to complete its review by Jan. 31, 2020 — after the next federal election in October.

Although the panel hasn’t made the full collection of submissions public, some groups have released theirs — often in support of positions that have been made in previous public debates.

Stephane Cardin, Netflix director of public policy, said Friday that the company decided to release its position paper ahead the 2019 Prime Time conference next week, when it will be on a panel with groups that had disclosed their positions.

Netflix argues that foreign online services such as itself would face unfair discrimination if it’s forced by law to pay into the Canadian Media Fund, which it says currently denies it the same rights as Canadian-owned broadcasters and distribution companies.

“For certified CanCon, the Canadian broadcaster obtains “first-window” rights in Canada while Netflix, or another online service, gets international rights outside Canada and possibly second-window rights in Canada,” it says.

If foreign online services are required to contribute to the CMF without getting “first window” rights in Canada, Neflix says, it would be discriminatory.

“It would also effectively force foreign online services to subsidize Canadian broadcasters, and reinforce the market power of vertically-integrated incumbents.”

Alternatively, it says, if foreign services had equal access to the CMF “they would be drawn into competing with Canadian broadcasters or VOD services for the Canadian first window rights for publicly funded original Canadian content.”

When asked by The Canadian Press whether Netflix was calling for an end to the Canadian Media Fund, where Cardin was a vice-president for 12 years, he was unequivocal.

“Absolutely not,” he said. “We do not say that, nor do we advocate for it.”

Netflix noted that it faces increased competition from other foreign and Canadian video-on-demand services, including Bell Media’s Crave subscription service, and the newer ad-supported CTV Movies and CTV Throwback.

The Canadian Broadcasting Corporation, which receives funding from the federal government and advertisers, has also launched its new Gem online service to provide live and on-demand programming.

Netflix said it’s not trying to get special treatment under Canadian tax laws, and noted it will begin collecting and remitting a Quebec sales tax in January 2019.

“We will comply with tax laws if and when they legally are extended to services like Netflix,” it says.


Like us on Facebook and follow us on Twitter.

Just Posted

Barry Marchi’s spirits high as treatment in Seattle continues

Barry Marchi’s spirits are high as he continues treatment in the United… Continue reading

PHOTOS: 2019 Wapiti Music Festival

With eyes to the stage and hands to the sky the crowd… Continue reading

New art gallery opens downtown Fernie

Two local artists, Tara Higgins and Kerri Holmes have joined forces to open H2 Studio Gallery

Search continues for new leads in Mt. Bisaro cave system

Cavers returning October, November to push new leads, extend Canada’s deepest cave near Fernie

Wildfire update in the Southeast Fire Centre

No fires currently pose a threat to structures or communities, says BC Wildfire Service

QUIZ: How much do you remember about Woodstock?

Weekend music festival in Bethel, New York, was held 50 years ago

U16 B.C. fastpitch team named national champs

Girls went undefeated at national tournament in Calgary

Advocates ‘internationalize’ the fight to free Raif Badawi from Saudi prison

Raif Badawi was arrested on June 17, 2012, and was later sentenced to 1,000 lashes and 10 years in jail for his online criticism of Saudi clerics

Canadian entrepreneurs turning beer byproduct into bread, cookies and profits

Some breweries turn to entrepreneurs looking to turn spent grain into treats for people and their pets

Canada ‘disappointed’ terror suspect’s British citizenship revoked

Jack Letts, who was dubbed “Jihadi Jack” by the U.K. media, has been detained in a Kurdish prison for about two years

Chrystia Freeland condemns violence in Hong Kong, backs right to peaceful assembly

There have been months of protests in the semi-autonomous region

Most Read