Netflix, Paramount, and Crunchyroll are appealing the CRTC’s (Canadian Radio-television and Telecommunications Commission) regulation that would force global entertainment streamers to give back 5 percent of their Canadian revenue to support several funds — including a portion to subsidize local news.
The Canadian MPA, on behalf of the streamers, has two problems with the regulation, which falls under Canada‘s already-passed Online Streaming Act. For starters, newsflash, they don’t make news.
These global entertainment streamers — which also includes Disney+, though it is not named as an applicant in the appeal — by definition make entertainment content, not news. So why would they hand over about 1.5 percent of their local revenue to subsidize Canadian local news, the MPA argued? Of note, the streamers and the MPA are not appealing the 3.5 percent mandated support to other funds within the Online Streaming Act, including those supporting Black and Indigenous filmmakers.
In theory, this revenue loss could be passed on to you, the Canadian consumer.
Though not an applicant in the lawsuit, Disney+ would benefit just as much as any other service should the appeal go through. Both Paramount+ and Paramount Global’s FAST platform, Pluto TV, are named as applicants alongside Netflix and Sony’s anime platform Crunchyroll.
The other problem the streamers have is they feel such a mandate could also expose the streamers to the potential release of proprietary, otherwise non-public financial information. The current proposal by the CRTC does not adequately safeguard against the exposure, the MPA said.
The MPA also argues global studios and their streaming services are doing more than their fair share to kickstart the Canadian economy already. According to the MPA’s figures, the studios and their streamers spend more than $6.7 billion annually producing entertainment in Canada for both local and international audiences. (Vancouver is all the rage these days.) That’s more than the CBC (Canadian Broadcasting Corporation) does, the local MPA says, and it is more than the Canada Media Fund and Telefilm combined.
All of this makes the regulation “discriminatory,” Wendy Noss, the president of the MPA of Canada, said, and it “exceeds the CRTC’s authority.”
“The CRTC’s decision to require global entertainment streaming services to pay for local news is a discriminatory measure that goes far beyond what Parliament intended, exceeds the CRTC’s authority, and contradicts the goal of creating a modern, flexible framework that recognizes the nature of the services global streamers provide,” Noss said in a statement shared with IndieWire. “Our members’ streaming services do not produce local news nor are they granted the significant legal privileges and protections enjoyed by Canadian broadcasters in exchange for the responsibility to provide local news.”
Preach, said the streamers, basically.
The CRTC has some stuff to say as well.
“The CRTC is an independent quasi-judicial tribunal that regulates the Canadian communications sector in the public interest. The CRTC holds public consultations on telecommunications and broadcasting matters and makes decisions based on the public record. The Online Streaming Act, which amended the Broadcasting Act, requires the CRTC to modernize the Canadian broadcasting framework,” it said in a statement provided to IndieWire. “The CRTC will continue to balance consulting widely with moving quickly to build the new regulatory framework. As this particular matter is before the Federal Court of Appeal, it would be inappropriate for the CRTC to comment.”
Well, you just did.
