Netflix confuses entertainment with culture

The video-streaming giant Netflix recently told a panel reviewing Canada’s Broadcast Act that “market forces” should determine the programs that Canadians watch, not pooled resources like the Canadian Media Fund.

image: Lifewire

In making this claim, Netflix is essentially saying that they will determine how to spend our money –the fees they collect from Canadians- and not be dictated by what Canadians want to see.

Netflix’s arrogance is offensive, not just because it’s paternalistic, not just because it treats programs as entertainment, but because it pretends that it’s not a Canadian broadcaster.

Netflix claim that it’s not a broadcaster is suspect. It’s a disingenuous argument considering that millions of Canadians now watch shows and movies through video-streaming. Surely, that makes them a broadcaster.

OK, maybe Netflix is not a broadcaster in the traditional sense that their broadcasts are not over-the-air. That’s a technicality. But TV stations don’t stop being broadcasters because they transmit over cable. Our Broadcasting Act and Telecommunications Act, currently under review, should be updated to include video-streaming as broadcasting.

The reason Netflix doesn’t want to be defined as a broadcaster is because they would have to pay into the Canadian Media Fund like every other broadcaster. The Canadian Media Fund produces programming that reflects who we are. It’s a modest fund run by a not-for-profit corporation to deliver funding for Canadian TV and digital media.

If your eyes glaze over at the talk of culture, digital media and regulations, it’s because there are so many distractions in the Netflix debate that it’s hard to keep track of them. Last year it was the so-called “Netflix tax” which has nothing to do with Netflix specifically. Rather, it’s a proposed tax on the entire internet. That’s obviously a bad idea because the internet has become essential in accessing education and government, not just video-streaming. The internet has insinuated itself into our lives that’s necessary for a functioning democracy.

Then there is the sales tax that Quebec and Saskatchewan have imposed on subscriptions to Netflix. While Netflix is not technically obliged to collect the tax and pass it on to provinces (they are not a Canadian corporation), they have agreed to do so.

Why is Netflix so agreeable in the matter of collecting sales tax and so disagreeable when it comes to contributing to the Canadian Media Fund?

It’s because they persist in claiming that what they sell is a product. But what they see as entertainment, the rest of the world sees as culture.

It’s a blind spot that all big American media giants have. They see the exportation of American culture as subject to the forces of the marketplace. They studiously ignore the fact that exported American culture is intended to swamp local, more poorly funded, productions.

Don’t get me wrong. Netflix produces some very good programs and is rivaling Hollywood in quality. It also produces some mundane and derivative schlop.

As much as Netflix wishes, programs don’t compete in a marketplace where the most popular ones win. The stories we tell ourselves capture our identity. While those markets are as small, they are as important as a tile in our cultural mosaic.


We Must Stand on Guard for a Democratic Internet

Canadians must stand on guard for a free and democratic internet. Look what happened in the U.S. when they let their guard down.

Earlier this year, a U.S. appeals court ruled that internet democracy was dead. That’s not the language that the court used: the technical term is “net neutrality.” Net neutrality means that everyone, even your humble scribe, has equal access to the internet; little bloggers, small businesses and big corporations alike.


While the ruling affects only the U.S., the effects will resonate around the world. Now money trumps net neutrality. The federal regulator dropped the ball, says Stanford law professor Barbara van Shewick on CBC radio’s tech program, Spark.

In the States, the telecommunications regulator is called the Federal Communications Commission similar to our Canadian Radio-television and Telecommunications Commission. While past CRTC rulings have not pleased everyone, they have favoured net neutrality.

What keeps Internet Service Providers neutral is their status as an “open carrier.” This status benefits both ISPs and the general public alike because the content is separate from the service.

To illustrate, telephone companies are common carriers. Separation of content and service means the company can’t be sued for something a person says on the phone regardless of how defamatory or libellous it is. Nor can they give an advantage to advertisers with the promise that their annoying calls will getpreferential treatment.

Because of legal bungling, the FCC failed to argue that the internet is a common carrier. As such, ISPs in the U.S. can mess with content as much as they want, including censorship or preferential treatment. That will lead to a two-tiered internet, warns Professor van Shewick in which big players with lots of cash can get through where small start-up companies can’t.

Big players will use seduction to woo users rather than punishment. This is how it works. Big media will pay ISPs so that there data will be passed through to the user at no charge. As it now stands, subscribers have to pay for data, either in volume or by caps. For example, if a ISP carries a sponsored pay-for-view movie channel, users would not pay for that data whereas users would pay for competitors such as Netflix.

Given a choice of free data or paying for it, there is really not much of a choice. It would be very difficult for small start-ups to compete in a market where users would have to pay for their data, especially when start-ups have virtually no advertising revenue to begin with. When EBay and Google were just starting, it’s unlikely that they would have been able to raise venture capital under such conditions says van Shewick.

Some CRTC rulings in favour of ISPs have been warranted. I argued in an earlier column that data caps are a reasonable restriction on a limited resource such data. Data hogs should pay for their excess as should water hogs through water meters.

However, the CRTC must guard against any attempt to remove the status of open carrier from the internet. Failure to do so would not only limit freedom of expression and restrict charitable organizations, it would limit the growth of innovative technologies.