Canadians Hold Crisis Talks Over Netflix

A hobbled Canuck industry wants Netflix to pay for local production as an online broadcaster.

OTTAWA – Canadian film and TV industry players are coming together Friday in Ottawa to discuss how to deal with Netflix. Local broadcasters, cable and satellite TV services, indie producers and unions and guilds will overcome rivalries and in-fighting to address concerns that the upstart Netflix Canada service undermines their industry’s revenue model. 

The crisis-era Netflix summit was called by the Canadian Media Production Association, representing indie producers meeting in Ottawa this week. CMPA president and CEO Norm Bolen said the CRTC, the country’s TV watchdog, needs to order Netflix to help bankroll the local industry. “It’s unfair competition,” Stephen Waddell, national executive director of ACTRA’s Canada’s actors union, agreed as Netflix offers Canadian subscribers online movies and TV shows for $7.99 a month. Waddell said the industry needed to speak with one voice to convince the CRTC to impose conditions on Netflix Canada operating here.

The U.S. video streaming giant is considered the canary in the mine as other so-called over-the-top online movie providers like Hulu and Google TV get set to enter the Canadian market. Currently, Canadian broadcasters, cable operators and other domestic content carriers must help underwrite local content production. But Netflix operates in the Canadian market without supporting Canadian production.

The current Netflix debate is only the latest instance of the Canadian industry clrlcing its wagons over new U.S. digital technology. In 1994, the Canuck industry protested DirecTV launching a Canadian service north of the border in partnership with Power Corp. Dubbed the “deathstar” by Canadian cable companies, the U.S. satellite TV service was deemed a threat to the Canadian industry for its technology and signal spilling over into Canada. In the end, the CRTC blocked DirecTV from operating in the Canadian market, even as illegal DirecTV dishes proliferated among local TV viewers. 

Whether the CRTC can effectively regulate Netflix remains an open question. That door closed in 1999 when the Canadian regulator ruled it would not referee the Internet as it does traditional media. But the CRTC is taking another look at the Internet as Canadians increasingly view video online and reduce their consumption of traditional media. The Canuck industry’s doomsday scenario is Canadians will continue to pay Netflix Canada $7.99 a month while reducing their cable and satellite TV bills to offset rising Internet data charges from consuming movies online.

The CRTC and the federal government are already butting horns over whether usage-based billing for Internet users should be introduced to deal with Netflix, Skype and other online bandwith-hogs. The CRTC will hold an invitation-only roundtable discussion on online broadcasting on March 23-24 in Ottawa. The Canuck industry is betting Netflix may agree to help fund local production to avoid Canadian Internet bandwidth caps considered a drag on its Netflix Canada expansion.