Tech View - Over-the-Top
BY Patricia Bailey
Stock market star Netflix launched its “watch instantly” service here last September and some industry observers fear its presence signals the end of Canadian broadcasting as we know it.
As North Americans abandon their local video stores and cancel their monthly cable subscriptions to buy or pirate television shows and films online, Netflix and other over-the-top content providers are setting themselves up as home entertainment one-stop-shops.
The expanding company has more than 20 million subscribers in the U.S. and its CEO, Reed Hastings, predicts 900,000 Canadians will pay $7.99 per month for his service by March 2011. Although Netflix.ca tends to stream 2nd window content, Hastings is investing millions to change this. Ultimately the ambitious CEO wants his customers to have access to first-run movies and the latest episode of Mad Men with the click of a mouse.
“This is is the biggest issue facing the Canadian broadcasting industry right now. We have a player who is operating outside the regulations of the Broadcasting Act. It's unfair competition,” says Canadian Media Production Association (CMPA) president Norm Bolen. “These over-the-top service providers have no obligation to spend on Canadian content or to promote it. There are no rules requiring them to make a contribution to the Canadian system.”
“Netflix is operating here as a broadcaster,” says the Executive Director of the Writers Guild of Canada, Maureen Parker. “They need to be doing something to support Canadian content.”
What makes content makers so nervous is that Netflix is operating completely outside the jurisdiction of the Canadian Radio-television and Telecommunications Commission (CRTC) (In 1999, the CRTC decided not to regulate the Internet and introduced the New Media Exception order to that effect. More on that later.)
Right now, support for Canadian programming is directly tied to BDU (cable and satellite service companies like Shaw, Rogers and Bell) revenues and the conventional and specialty broadcaster licenses. But if Canadians increasingly seek content online, and the CRTC keeps its nose out, non one is sure where the money and the political will is going to come from to ensure that distinctive Canadian programming survives?
