Netflix argues against mandatory contributions in CRTC hearings

The Path Forward: The streamer also discussed its existing investments in Canada, while the Bell Fund called for additional support for CIPFs.

Imposing a mandatory initial base contribution under the federal Online Streaming Act (Bill C-11) would be “inconsistent with the principles of flexibility and adaptability,” argued Stéphane Cardin (pictured), director of public policy for Netflix Canada, to the Canadian Radio-television and Telecommunications (CRTC).

Speaking at the Path Forward hearings in Gatineau, Que. on Thursday (Nov. 30), Cardin said Netflix has spent more than $5 billion — or $2.7 million daily — on productions in Canada over the past five years, and base contributions would not “recognize our longstanding and significant contributions to the system here in Canada.”

“We’re opposed to outcomes that would have us simply subsidize the existing framework, while restricting our ability to continue to invest directly in Canadian stories,” he said, later claiming that Netflix’s investment in partnerships with independent producers in Canada is its highest expenditure anywhere in the world.

Cardin said Netflix supports a maximum contribution of 2% of annual revenues, but does not believe it should contribute to a dedicated news fund, which he noted should be “a temporary measure.”

“Countries with the least regulatory burden and the greatest stability to invest in content that will thrill our members are the most innovative entertainment markets,” he added.

Cardin noted that Netflix Canada wants to work “with the Commission on defining the rules for an overall contribution framework that will allow us to contribute to Canada in a way that makes sense for our business, for the thousands of Canadians involved in the creative ecosystem that we work with, and most importantly, for Canadian audiences.”

However, Nancy Chapelle, executive director of the Bell Fund, told commissioners that “the consumer shift from traditional broadcast to streamers has had an indirect but significant impact on our ability to support independent producers as we once did.”

She said that since contributions from broadcasting distribution undertakings (BDUs) — based on a percentage of revenues — to Certified Independent Production Funds (CIPFs), such as the Bell Fund, “has been in continual decline, the funds flowing to CIPFs have correspondingly dropped.”

“In just the past two years alone, we have seen a decline of 19% in available funding,” said Chapelle. “We are at risk of not being able to continue to support independent producers at a level that can be impactful.”

She said that “it takes a village to produce content in this country,” noting that the price of production in Canada has increased by more than 35% over the past 18 months, resulting in the cost of making a short-form digital series rising from between $300,000 and $350,000, to over $500,000.
One fund alone, Chapelle said, will be insufficient to support a production.

“We’re only funding about 35% of applications that come to us,” she added. “If we get additional funds, we’ll be looking to fill those gaps.”

The 11-year-old Ottawa-based Broadcasting Accessibility Fund (BAF), which supports the availability of closed captioning and described video and positions itself as the world’s only “consumer-focused fund of its kind,” welcomed an initial base contribution along with “the language of the Online Streaming Act that establishes as a policy objective, accessibility to the broadcasting system ‘without barriers’ for persons with disabilities,” BAF board chair Marcia Yale said at Thursday’s hearing.

“We’ve barely scratched the surface on the vast potential of artificial intelligence on content accessibility,” said Yale, who is blind, “and need to pursue solutions to the complex challenges encountered by people with exceptionalities.”

The Path Forward hearings are scheduled to continue until Dec. 8.