Netflix: We're Paying Higher License Fees Than Canadian Broadcasters

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Netflix chief content officer Ted Sarandos argues Canadian broadcasters are reducing what they pay for local rights as the U.S. video streaming giant pays premium license fees for Canadian content.

BANFF, ALBERTA – Netflix chief content officer Ted Sarandos on Wednesday told Canadian content producers to ditch their begging bowl and line up for rich license fees the U.S. video streaming giant is paying for local programming rights.

“We make a meaningful contribution by licensing Canadian content,” Sarandos told Canadian critics at the Banff World Media Festival as they continue to urge Netflix Canada to subsidize the production of homegrown content.

He added Canadian broadcasters and distributors in recent years have reduced what they pay for domestic content, while newcomer Netflix Canada is resetting the market by paying higher prices for local content.

“If you own content, that’s a good thing,” Sarandos said.

Netflix becoming another local bidder for film and TV rights has posed a major challenge for Canadian pay TV operators like Movie Central and the Movie Network.

Their options include getting out their wallets and outbidding Netflix Canada, only to see their margins compress, or seeing their share of the domestic pay TV market shrink as local product flows to Netflix Canada.

Sarandos dismissed as “hyperbole” warnings that Canadian broadcasters will wither without Netflix Canada subsidizing their business.

"Canadian broadcasters enjoy more benefits from Cancon (Canadian content) than they put in. If you’re lacking our contribution, you‘re not hurting because we’re not taking anything out,” he told festival delegates.