In what is shaping up to become a very heated rivalry, the Motion Picture Association didn’t quite use the word socialism today over a Canadian regulatory move, but they got damn close. The studios and streamers’ trade association did warn that “new rules” and financial contributions determined today by Canada‘s Canadian Radio-television and Telecommunications Commission for streamers “undermines the open, market-based system.”
So, as the Stanley Cup playoffs advance, it’s not just the NHL’s Montreal Canadiens and the Carolina Hurricanes who are in a Canada and USA skirmish
“The Motion Picture Association strongly condemns the CRTC’s decision to impose unprecedented, unnecessary, and discriminatory investment obligations on American streaming services operating in Canada,” MPA chief Charles Rivkin stated Thursday in an uncharacteristically fast response to the move up in the Great North
While legacy TV caught a break, Rivkin and his corporate bosses are pissed about the measure under the 2023 passed Online Streaming Act that’s going to make Netflix, Disney+, Amazon Prime Video and others fork over 15% of the revenue they make in the Great North for “Canadian and Indigenous content”
Leaning into where the vast majority of viewers in Canada and elsewhere actually get their entertainment nowadays, the Commission insist their latest move is to “ensure that traditional and online broadcasters contribute to the creation of Canadian and Indigenous content in an equitable way that reflects their size and business models.”
“Contributions will be recalibrated so that traditional broadcasters will contribute 25% of their annual revenues to support Canadian and Indigenous content and benefit from greater flexibility in how they meet this requirement,” the CRTC announced Thursday after months of study and public impute across the second largest country in the world. “For major broadcasters, this will provide relief as their current requirements range from 30% to 45%. Online broadcasters will contribute 15%, which includes their existing 5% base contribution.”
As a part of the big hike for the streamers, the CRTC also are mandating “clear expectations for the discoverability of Canadian and Indigenous content so that it is made available and visible to audiences.” Centering on apps architecture, scrolling choices and algorithm, the independent agency says “this will make it easier for people to find this content on the platforms they use, while giving broadcasters flexibility in how they meet the new expectations.”
That didn’t win over the MPA, which has Disney, Netflix, Prime Video & Amazon MGM Studios, Sony, Universal, as members, plus the likely soon to merge Paramount and Warner Bros. Discovery.
“This burdensome framework unfairly targets global streamers with requirements that directly violate Canada’s obligations under the United States-Mexico-Canada Agreement,” Association boss Rivkin noted, with a nod to the currently under re-negotiation continental tariff free trade deal.
“The decision also undermines the open, market-based system that has helped fuel investment, job creation, and creative partnerships across North America,” the MPA CEO went on to say in flag flying for capitalism. “American studios and streaming services are already the top foreign investors in Canada’s film and TV ecosystem – delivering content to Canadian audiences and sharing Canadian stories with the world. This decision triples the cost of doing business in Canada and will spark even more inflation in the market, making further investment and innovation less attractive. For years, the MPA has consistently made clear that Canada’s Online Streaming Act is an unfair trade practice. We urge the Canadian government to reconsider this approach.”
Introduced in the 1960s and 1970s, the much maligned CanCon has proven one of the few barriers to total American media dominance that Canada (a nation where the vast majority of the population live within miles of the border) has been able to put in place. Even though the percentages and point-system, along with simulcast rules, can seem silly and out of touch with creative and investment reality, CanCom made possible global hits like Crave and HBO’s hockey romance series Heated Rivalry.
Clearly aware she has a hard sell down south with the new rules and coming to the cottage won’t cut it CRTC CEO Vicky Eatrides tried to put a positive Stateside spin on “today’s decisions are about building a stronger broadcasting system.” Without mentioning the long disputes, some of which are in court currently, between CanCon and American media companies, Eatrides added: “We are taking action to ensure stable funding for Canadian and Indigenous content, and to help make it more discoverable.”
As the MPA are quite likely to take their concerns to the Canada-pounding White House, the CRTC CEO may have some discoveries of her own soon.
