Coalition targets Netflix in Canada

Now that the streaming service is in the content game, a working group of Canadian industry stakeholders is asking the CRTC to reconsider how it categorizes the company.

They avoid naming their target, suggesting only “a foreign over-the-top service operating in Canada.” But it’s not hard to discern who Canadian broadcasters and other content distributors have in their crosshairs in an April 1 call-to-action letter from a designated “Over-The-Top Services Working Group” to CRTC chairman Konrad von Finckenstein: Netflix Canada.

The hardest part will be convincing the CRTC to compel the US video streaming giant to subsidize Canadian indie production now that it competes in the Canadian marketplace.

The Canadian industry in the April 1 letter takes a circuitous route to urge that Netflix subsidize homegrown production.

The working group first points to a May 2011 Standing Committee on Canadian Heritage report on broadcast industry consolidation and new digital platforms that makes the following recommendation: “That the Commission examine the growing emergence of non-Canadian broadcast players in the new digital realm and initiate a public consultation process to determine whether and how such non-Canadian companies should support Canadian cultural programming.”

The April 1 letter then raises the spectre of an un-named “foreign over-the-top service operating in Canada” that has commissioned its own exclusive drama series, and acquired the rights to Hollywood studio product in the windows of Canadian broadcasters.

Netflix last month revealed it has acquired 26 episodes of the drama House of Cards, a political thriller that stars Kevin Spacey and is to be directed by David Fincher.

“Therefore, the Working Group submits that the Commission should initiate the public consultation recommended by the Standing Committee,” the industry group insists.

The April 1 plea to the CRTC springs from an industry summit in February at the Canadian Media Production Association’s Prime Time conference in Ottawa to deal with Netflix’s Canadian expansion.

A Netflix spokesman said that the company is aware of the industry letter to the CRTC, before repeating its opposition to regulating the internet.

“Whether it’s Netflix, Skype, YouTube or other internet video providers, an unregulated approach to the internet is effective for consumers,” the spokesman argued.

The industry request to the CRTC to regulate Netflix and other over-the-top digital platforms as online broadcasters that support homegrown production puts the regulator in a tight spot.

CRTC chairman Konrad von Finckenstein in the past has pointed to a 2010 Canadian appeals court decision to contend Netflix just distributes content online and plays no active role in the content.

Netflix has similarly preferred to see its new Canadian service as an aggregator of content, including Canadian-made film and TV series.

But Canadian broadcasters are asking the CRTC to reconsider that agnostic distributor definition now that Netflix is getting into the drama production game with House of Cards, and could arguably be morphing into a premium cable channel like HBO, Showtime and AMC.