There’s a saying at Netflix Inc. that the company creates “content for individuals, not quotas.”
This core philosophy has put the streaming service in direct conflict with important sections of Canada’s cultural industries, which have worked for decades with strict rules and regulations that include quotas for Canadian content. In short order, Netflix’s promised $500-million investment has exposed a culture clash in the nation’s creative community.
“It is unfortunate that the government does not hold all broadcasters and distributors to the very same rules when they’re working in Canada,” stated David Sparrow, national president of the Alliance of Canadian Cinema, Television and Radio Artists, which represents 23,000 individuals working in film, television and electronic media.
“In Canada, we’ve created rules and regulations by which companies are permitted to access our Canadian individuals and market. Netflix and another over-the-top services aren’t necessarily contributing to this content generation,” he added.
Other online players are more optimistic, saying Ottawa is looking into the future with the deal with Netflix and, finally, other electronic platforms.
“This was a bold and brave move in building partnership between government and private enterprise,” stated Shahrzad Rafati, the founder and chief executive of Vancouver-based BroadbandTV. “Digital is the future, and if the government engages with programs such as Netflix or not, they will garner eyeballs and be prosperous.”
Netflix has largely remained quiet because its deal with the federal government was announced on Sept. 28. The business is still integrating a production house in Canada and is awaiting firm up production deals before announcing how it will spend the new money, sources close to the company said.
However, it’s clear Netflix wants to keep on operating outside the national broadcasting regime. In a presentation to the CRTC in 2014, Netflix proudly pointed it out wasn’t a “traditional broadcaster” but an “online video services.”
“Regulating Internet content seems unnecessary,” Corie Wright, manager of international public policy for Netflix, stated at the time. “In the competitive environment, reliance on market forces is the best way to support the future success of Canadian television.”
In a statement on Friday, Ms. Wright stated Netflix would like to reassure the Canadian television industry it’s setting up shop in the nation due to its “amazing talent and amazing stories.”
“All streaming solutions — domestic and foreign — are exempt from quotas that apply to conventional broadcasters,” she said. “People choose what they want to see on our support, therefore we must invest in the very best content from around the globe.”
Canadian Heritage Minister Mélanie Joly has been traveling the country for over a week promoting the offer. Even though it falls under the Investment Canada Act, Ms. Joly signed it as it’s linked to the cultural industry.
At each stop, Ms. Joly has depicted the arrangement as a crucial moment in the history of Canadian culture, with Ottawa and a new digital participant joining forces to raise the creation of national television series and films.
“I’m convinced that we introduced a very forward-thinking plan, something which is extremely fresh and that, of course, is dealing with a business facing plenty of disruption,” she said in Vancouver on Thursday.
But she’s struggled at times to market the agreement, especially in Quebec, where it’s been widely decried because Netflix is refusing to earmark a particular amount for French-language productions in the state.
Ottawa has confronted attacks for refusing to impose sales taxes on Netflix subscriptions in Canada, with companies and artists complaining that gives the company a leg-up over Canadian-based competitions.
Dave Forget, director of policy at the Directors Guild of Canada, said there are still unanswered questions over how Netflix’s production house will spend its $500-million.
“When we have talked to the authorities, they’ve been clear the money is meant to be over and above whatever Netflix is currently doing [in Canada],” he said. “That’s happy news. What is left to do is to have more scrutiny and understand exactly what we are talking about.”
Under the arrangement with the national government, Netflix will spend an average of $100-million annually on original productions in Canada within the next five decades and a total of $25-million to create French-language content.