Netflix looms large in Cancon cultural policy

In addition to revealing a $500 million investment - and a new local production house - from the SVOD, the government also commits to stabilizing CMF funding.

Leaked to the Globe and Mail Wednesday in advance of Heritage Minister Mélanie Joly’s speech today, and provided to reporters this morning, the federal government’s cultural policy review has been revealed, with Netflix positioned front and centre.

After years of discussion and lobbying efforts by the global SVOD, the government has brokered a deal with Netflix that will see it contribute “at least” $500 million to Canadian content production over five years, and establish a local production house, under the banner Netflix Canada. It will be the first such facility outside the U.S.

The government states that the company will “continue to work with Canadian producers, production houses, broadcasters, creators and other partners to produce original Canadian content in both English and French.” However, at a press briefing prior to the speech, spokespeople were unable to confirm who would own the content created at the studio, and whether or not the house constitutes a vertically integrated studio model. (That is to say: will they be Canadian productions or productions shot here?)

Canadian producers and broadcasters currently involved with Netflix include DCTV and its coproduction partners for Tokyo Trial, nominated yesterday for an Emmy, Take the Shot Productions/Discovery Canada for Frontier and CBC/Halfire Entertainment’s Alias Grace.

The Netflix deal also includes a provision to support Canadian French-language content with a $25 million investment, which “will include ‘pitch days’ for producers, recruitment events and other promotional and market development activities” as well as a pledge to highlight and promote Canadian content on the platform.

What the Netflix-new-money deal does not include, however, is a requirement that the SVOD, or any others operating in the country, contribute to the creation of Canadian content in the same manner that traditional broadcasters are required. No provision was also made for a change in regulation that would see foreign content services such as Netflix collect sales tax from Canadian consumers.

However, the government is addressing the decline in funding the Canada Media Fund has experienced over the past several years as revenues from BDUs, which feed the fund, have declined in the face of cord-cutting. Its own contribution to the CMF will increase from the level set in 2018 (it currently stands at $130 million) and it has promised more flexibility for the CMF in its contribution agreement with governments for 2018-19. The government has also promised to work with the CMF to provide support for early-stage development, including scriptwriting.

Valerie Creighton, who leads the fund, says the organization sees today’s news as positive for the industry but notes there are still issues to be addressed as the review of the Broadcasting Act is undertaken.

“The commitment of the Government of Canada to increase their contribution to stabilize the level of support to screen-based content supported by the CMF is a recognition of the contribution to and impact of the screen based production industry to the country,” she told Playback via email from Ottawa. “It is a critical step towards maintaining creation and production while we eagerly await further changes to the system to enhance Canada’s competitive position. The CMF is delighted at this news.”

Another policy endeavor that producers will likely welcome is a move by the government to work with CAVCO to “improve the administration of tax credits” and “streamline the application process for producers applying to both CAVCO and Telefilm.”

The much-discussed export strategy did come to fruition in the form of $125 million in funding over five years. Included within that strategy is a commitment to market Cancon via a federal cultural trade mission in 2018 and a fund for Canadian content creators to help achieve “international business objectives.” The strategy includes a $2.5 million investment in Telefilm to promote Canadian content in Europe and Asia in 2017-2018. Coordinating the international promotion and branding effort will be a new Creative Industries Council headed by the Minister of Heritage and Minister of Innovation, Science and Economic Development.

Slightly less clear than the above tactics is a pledge by the government to seek “commitments and agreements with other new digital players that have emerged as key elements of Canada’s digital landscape to invest in the creation, distribution and discovery of Canadian content,” which it has placed along with the export strategy in its “discoverability and promotion” basket of policy initiatives.

And while many anticipated big changes at Canada’s public broadcaster, including a move to an ad-free model, the only changes revealed were the appointment of a new senior executive team next year, and a refresh of its mandate as part of the review of the Broadcasting Act, which will be reviewed no later than June 1, 2018, the government has promised. In that review, the government has ordered the CRTC to examine “the distribution model or models of programming that are likely to exist in the future”; “how and through whom Canadians will access that programming”; and “the extent to which these models will ensure a vibrant domestic market…”

Updated 2:05

 Image: Flickr