CRTC Won't Regulate Netflix Canada

9:09 AM PST 10/05/2011 by Etan Vlessing
Jin Lee/Bloomberg/Getty Images

Canada's TV regulator has ignored industry calls to put the U.S. video streaming giant in its place, and will instead let the online and mobile video content market evolve.

TORONTO – Netflix has dodged another bullet in Canada.

The CRTC, the country’s TV watchdog, on Tuesday said it will not regulate Netflix Canada, or force the U.S. video streaming giant and other foreign digital platforms to subsidize homegrown Canadian TV series.

Instead, the federal regulator said it will leave the market to sort itself out as little evidence emerges that Canadians are cutting the cord, or domestic broadcasters and cable operators have been disadvantaged as Netflix Canada, iTunes Canada and other so-called “over-the-top” (OTT) U.S. digital platforms set up shop here.

“The commission (CRTC) considers that currently it is best to allow the OTT market to continue evolving, better measurement tools to emerge and entities that contribute to the policy objectives of the (Broadcasting) Act to take advantage of the many opportunities in this new environment,” the CRTC said Tuesday after a summer fact-finding exercise was launched to probe Netflix Canada and other new market entrants.

The industry consultation followed Canadian cable operators and broadcasters urging the CRTC to order Netflix Canada and other U.S. digital platforms to contribute to Canadian content production because they operate as online broadcasters.

Mistrusting Canadian broadcasters complained the U.S. digital players take dollars out of the Canadian broadcast system, and need to put financing back in homegrown production.

But the CRTC, in a report issued Tuesday, pointed to “inconclusive results” after asking whether the U.S. OTT services or traditional Canadian content carriers most have the interests of Canadian online and mobile video consumers in mind.

The regulator found Canadian indie producers have been selling library titles to Netflix Canada, and viewership of OTT services is driving online data consumption for major cable and phone giants that offer Internet access services.

In addition, Canadian content creators are exploiting the changing digital landscape to find new business opportunities.

“Canadian creators are taking advantage of the digital environment to produce innovative content and to reach Canadian and global audiences,” the CRTC report stated.

“Some online programming services have established viable business models and are competing in the marketplace for programming rights and viewers,” the regulator added.

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