My CBC Radio column this week is all about whether the CRTC should consider streaming video services like Netflix to be “broadcasters.” It’s posted below, for posterity. Audio to follow.
Let’s play a little game. One of these things is not like the others: CBC, CTV, Global, Netflix.
If you guessed Netflix, you win. In the eyes of Canada’s telecommunications authority, the CRTC, Netflix isn’t considered a “broadcaster.” But some industry groups think it should be.
Part of being a broadcaster in Canada means that you’re obliged to give something back to Canadian programming. It’s right there in the Canadian Broadcasting Act: “each element of the Canadian broadcasting system shall contribute in an appropriate manner to the creation and presentation of Canadian programming.” Practically speaking, this means that Canadian broadcasters are required to give a percentage of their annual revenues to organizations like the
Canadian Media Fund (correction: Canada Media Fund) — which help pay for new Canadian content. Basically, if you want to run a TV station, you need to help pay for new Canadian TV. Broadcasters have to do this.
But here’s the thing: the CRTC doesn’t consider services like Netflix to be broadcasters, so they can distribute movies and TV shows without the same requirement to help fund new Canadian productions.
Late last week, a group of Canadian film and television companies got together during an industry conference to talk about this. In addition to a panel discussion that was part of the official conference program, there was also a separate, private meeting, organized by the Canadian Media Production Association. The CBC reported that it included cable companies, broadcasters and union representatives, and the topic of conversation was essentially, “What do we do about over-the-top (OTT) services like Netflix?”
The same day, the chairman of the CRTC, Konrad von Finkenstein was quoted as saying, “It’s not broadcasting, within the Broadcasting Act.” I clarified this with a representative from the CRTC, who told me that companies like Netflix fall under the CRTC’s new media exemption.
Back in 1999, the CRTC said, “new media broadcasting undertakings are not subject to licensing by the Commission.” In 2009, they said basically the same thing: “While broadcasting in new media is growing in importance, we do not believe that regulatory intervention is necessary at this time. We found that the Internet and mobile services are acting in a complementary fashion to the traditional broadcasting system.”
That was, of course, more than a year before Netflix started streaming movies and TV shows to Canadians. Now, in 2011, I’m not so sure that “complementary” is the right word to describe services like Netflix in relation to traditional broadcasters. “Competitive” is probably more accurate.
So, who cares, aside from traditional broadcasters? Well, if you’re concerned about the amount of homegrown content that’s produced in this country, you might care about this. Because over-the-top services like Netflix aren’t obliged to financially contribute towards new Canadian production. Or, if you’re a Netflix customer, you might care about this. Because if the CRTC were to decide that it should regulate these services, and treat them more like traditional broadcasters, we’d probably see prices go up.
But for me, the biggest reason Canadians should care the precedent it could set. Netflix is just the thin edge of the wedge. What happens (or doesn’t happen) with Netflix will affect whether we see other services like Hulu, Google TV, or Amazon Video on Demand north of the border. The big issue for me is consumer choice.
But the bigger issue here is the role of the broadcaster in 2011. What exactly does “broadcaster” mean anymore? When I contacted Netflix, a representative was very clear, saying: “Netflix is a distributor of TV show and movies, not a broadcaster.”
But I wonder: in the minds of consumers, is that a distinction without a difference?
For instance, I can pay for movies on demand from the cable company, and I can pay for movies on demand from Netflix. They both travel into my home through the same wire. They both play back on my television set. But one’s a broadcaster, and the other’s not. What’s the difference, really?
And if Canada does decide to regulate online broadcasters, where do we draw the line? If we decide that Netflix should be considered a broadcaster, does that mean YouTube should be considered a broadcaster? If I take a video on my phone and email it to you, does that make me a broadcaster? Regardless of whether the industry likes it or not, or if the regulators acknowledge it, consumers’ ideas about “broadcasting” are changing.
In its 2009 new media decision, the CRTC said, “Given the pace of change in the new media environment, and in accordance with established policy, the Commission expects to conduct the next review of the broadcasting in new media environment within five years, or at such time as events dictate.” That means another review by summer 2014.
I can only hope that the Broadcasting Act doesn’t fall even father out of step with reality by then.