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Netflix drawing criticism from TV industry

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crtc netflix
75K views 412 replies 72 participants last post by  Wayne 
#1 ·
#29 ·
I disagree.

In this case its about tax and regulatory fairness.

The government imposes numerous taxes and expensive regulations on Cable and Satellite tv providers in this country.

While I agree that that the level of taxes and regulations is far to onerous, I would also argue that Netflix should be subject to many of those same taxes and regulations since they are, in many ways, offering a similar service.

If cable and sat companies have to pay a tax for Canadian development funds when they charge for a movie or show, then isn't reasonable that Netflix or any other Internet television provider do the same. Why should Rogers or Bell pay but not Netflix?

Again, I AM NOT ARGUING for more regulation or taxation, just looking at it from an equity perspective.
 
#33 ·
MarcP, who said anything about "going after" companies. This isn't the wild west or a witchhunt. I'm simply saying that this is an equity issue and that rules should apply evenly.

Personally I see a difference between iTunes and Netflix. IMO, iTunes is a retail store like Blockbuster selling and renting movies whereas Netflix is more like a cable company delivering multiple channels and shows.

You can argue all you want whether you want on how this companies should be categorized but I think its wrong if you don't treat the companies on an equal basis WHICH is the whole point of the debate.
 
#35 ·
I don't see the logic either. Netflix doesn't have channels. You select what you want to watch (TV or movies) and you get to watch it. iTunes has movies and TV shows as well (and much faster too).

You can argue for equality, but if only Netflix is the catalyst for this movement, it is a valid question why iTunes never raised the alarm bell. Why has iTunes been able to operate so freely for so long... and PSN and XBox marketplace... but here comes Netflix and the bullseye is on them.
 
#36 ·
Guys, actual titles and Apple is a red herring. See the quote in post #1

"Netflix is now securing exclusive distribution rights to content in Canada, and it's selling subscription-based access to this content to households. Therefore, they are acting as both a pay TV operator (such as Astral) and a cable company (such as Rogers). Fine and dandy, except that in Canada both pay TV operators and cable companies need to be Canadian-owned and licensed by the CRTC," one Bay Street source said.
To argue that Netflix shouldn't have to pay or be constrained by the CRTC means you must argue that Netflix is NOT "securing exclusive distribution rights to content in Canada, and it's selling subscription-based access to this content to households"

The moment it bought rights to programming for distribution, it became a pay tv operator and as such should be constrained by the rules that govern pay tv operators.

A pay tv operator buys exclusive rights to content that it can distribute over a regional area and then sells subscriptions to it. This is what Astra does and what the industry argues Netflix is doing.
 
#42 ·
The CRTC will try to make them play by the same rules as others in the industry - whether they can do anything to enforce the rules, I'm not sure.
That's the key. We can debate till the end of time on if they should do this but all that really matters is if they can.

I'm inclined unless Netflix plays ball they can't because the fallout in PR at home and abroad would be too great.

Paramount clearly wants to deal with Netflix and not a Canadian player - if the Canadian industry had spent the last few decades making content we wanted to watch and pay for they'd be in a stronger position. It's not like we're a big market - if all the US companies feel shaken down by Canada they could even just refuse to license any of their programming and bring Canadian TV to it's knees.
 
#39 ·
You said

An old business model on its way to become outdated is fighting back by convincing law makers instead of trying to compete. Typical.
Suggested that you thought Netflix shouldn't have to pay the way pay tv operators do.
 
#40 ·
Didn't the CRTC specifically exclude Internet video/radio from the regulations that are imposed on the broadcast/cable companies? Yeah, I know they are planning to re-visit the issue every few years, but for now Netflix is free-and-clear.

I think it will be difficult for the CRTC to actually impose and police internet versions of the regulations that they have today (e.g. Canadian content requirements). The inability to police it will probably prevent them from trying to regulate it. I just don't think they have the technical means to do it. Sure, they can go after the big companies (like Netflix), but it would turn into a huge political issue, and those haven't worked out well for the CRTC recently.

Imagine the outcry from the public if the CRTC asked Canadian ISPs to block streaming video sites if they don't have a certain percentage of Canadian content. Not going to happen.
 
#41 ·
Imagine the outcry from the public if the CRTC asked Canadian ISPs to block streaming video sites if they don't have a certain percentage of Canadian content. Not going to happen.
I disagree. Get the right gov in Ottawa and they will happily pass a law that permits the big ISPs to block "foreign" streaming video sites. After all... what is the difference between that and forbidding Canadians to watch US satellites or having controls of the permitted channels on the cable.

The "little Canada" gang will be waving the flag in favour as will the conventional media channels.
 
#46 ·
I would argue that Netflix is no different from a Blockbuster or any of the other online DVD rental outlets. I can pay a monthly subscription to any of the online rental houses now and get monthly access to all the rentals I want. How much different is Netflix from that model? If we had more rental houses competing, it's not inconceivable that one would try to secure DVD rental rights to specific movie studios.

It will be interesting to see how this all plays out, but in the end I'm sure that we'll see what usually happens and the CRTC will make sure that all competition is stifled and the consumer pays more than we should have to.
 
#47 ·
The difference between Netflix and pay TV is the fact that if the CRTC regulates or taxes Netflix too much or pushes it too hard, it is relatively easy to get access to the US Netflix and subscribe to that instead.

Push the regulatory hurdles up and people will give up on the Canadian version of Netflix. I can't run a TV cable up from the US, but the internet is global. I could use a US satellite and there are a good many who do, it's just you have to have a physical address in the US as far as I know to do this.

It is a fine balancing act. I don't see the Netflix, Apple, Blockbuster connection since the other services are pay per use (pay per view?) whereas Netflix more closely approximates traditional TV where you have a selection for a fixed price and can watch as much or as little as you want.
 
#49 ·
The Canadian model is based on forcing us to pay for trash we don't want. Canadian programming that doesn't appeal to the masses or Cogeco (for example) bundling and making you pay for a number of religious channels on digital basic are a couple examples of why I've opted out of the Canadian system.

If they're going to start trying to bill services like Netflix or iTunes or even DVD purchuses at my local HMV it'll give me more insentive to just buy my stuff online from US e-tailors and boycott the Canadian system even more so.
 
#51 ·
Netflix is distributed though the internet, an internet connection you pay for regardless of usage. If Netflix changed there delivery model, I could see opening the debate on them...

To regulate or tax a service that is provided through the internet is opening a whole new debate on net neutrality.
 
#52 ·
Keep in mind that many of the CRTC handcuffs were essentially in exchange for being granted the use of limited national resources like airwaves (for TV/radio stations and terrestrial wireless BDUs) or satellite orbital slots (for DTH BDUs). In other words, "if you want access to our airwaves, you have to play by our rules and help perpetuate our Canadian culture."

The comparison is a little better vs. wireline TV BDUs since they don't really preclude the presence of other wireline BDUs, but even then, the barriers to entry for wireline are so high that the incumbents have monopoly or duopoly status in most parts of the country.

A service like Netflix has a very low barrier to entry at the subscriber end, but that also means that all of its competitors have an equally low barrier. Their challenges are primarily at the business and content end. They do not consume any limited Canadian resources and they can be usurped just as quickly as they've risen to their current position. How do you regulate such an agile technology?

I really don't think you can equate Netflix with the BDUs just because they happen to deliver the same kind of content. The CRTC would have to regulate each and every source of video on the Internet, be it foreign or domestic. It would also beg the question of why they haven't regulated Internet radio, which has existed for years. Perhaps that's only because none of the big boys have complained about it... yet. Pandora hasn't gotten past the Canadian music licensing hurdles so we can't subscribe to it, but once we can, don't be surprised if many of the same arguments come up.
 
#54 ·
I am not in favor of this but couldn't the CRTC with government help start charging a fee on the internet providers (same ones as the cable providers in most cases) to give to the Canadian Industry? They do this with both tape and cd/dvd's for copyright, they certainly could do this without charging the Netflix people directly.
 
#55 ·
The Canadian system is broken. It is over taxed, over managed, over protective of local industry; not open to a competitive environment.

CRTC is in the dark ages. The last solution should be to tax Netflix to make it a level playing field. Tax that and what is next? We need change and remove the waste in our bloated telecommunications system.

I love my Netflix app built into my internet enabled Samsung TV. That is why I bought the TV. I'll pay extra for Netflix if I have to, and at some time dump my cable provider, unless my cableco can provide the service I want (cable card) and value for money.

Heck, the CRTC says it is illegal for me to watch OTA from the US of A and record it on my Windows 7 Media Centre. Ridiculous.
 
#56 ·
The difference between Netflix and Apple's iStore has been debated before. The difference is that Netflix streams video on demand, a market that competes with cable, IPTV and, to some extent, satellite operators (BDUs.) Apple sells product directly, so that are competing with brick and mortar stores and online retailers such as Amazon. Those are two different markets with completely different regulators.

OTOH, is Netflix really competing with broadcasters? I say no. They are competing with PPV and VOD operations from BDUs. Netflix is also competing with video rental stores. Does the CRTC regulate them? No. Just what are the regulations for PPV and VOD operations? Does Cancon apply? No. Are they a conventional broadcast station or specialty station. No. Though they do supply some content originating from specialty stations, PPV and VOD operations are treated separately. Again, they are competing with video rental operations, not broadcasters.

So what exactly is the TV industry's complaint? Is it that Netflix is competing with a regulated industry? Just what CRTC regulations affect VOD, PPV and video rental operations? I don't know of any. Or is it yet another case of a TV industry who doesn't want competition and goes crying the the CRTC to protect them? IMHO, the CRTC should tell them to grow up and find ways to compete instead of hiding under the CRTC's coat tails.
 
#63 ·
The difference between Netflix and Apple's iStore has been debated before. The difference is that Netflix streams video on demand, a market that competes with cable, IPTV and, to some extent, satellite operators (BDUs.) Apple sells product directly, so that are competing with brick and mortar stores and online retailers such as Amazon. Those are two different markets with completely different regulators.
The difference is fundamentally streaming vs download, and how the copyright holders choose to "bill" for that which is why Netflix and Apple have different models.
OTOH, is Netflix really competing with broadcasters? I say no.
They are competing with PPV and VOD operations from BDUs. Netflix is also competing with video rental stores. Does the CRTC regulate them? No. Just what are the regulations for PPV and VOD operations? Does Cancon apply? No. Are they a conventional broadcast station or specialty station. No. Though they do supply some content originating from specialty stations, PPV and VOD operations are treated separately. Again, they are competing with video rental operations, not broadcasters.
With the exclusive Paramount deal, I say yes, and it possibly should be looked into, if they at least should be paying into the prodction funds, and
possibly have some Cancon requirements (how you would do that on a VOD service needs figured out).
So what exactly is the TV industry's complaint? Is it that Netflix is competing with a regulated industry? Just what CRTC regulations affect VOD, PPV and video rental operations? I don't know of any. Or is it yet another case of a TV industry who doesn't want competition and goes crying the the CRTC to protect them? IMHO, the CRTC should tell them to grow up and find ways to compete instead of hiding under the CRTC's coat tails.
Basically, yes, they are competing with conventional TV services, but not contributing to the content industry conventional services have to.
 
#57 ·
Interesting.

The Heritage Committee put forth a ninth report on that was released about a week ago called the Impacts Of Private Television Ownership Changes And The Move Towards New Viewing Platforms in which they want the CRTC to hold a public hearing on whether companies like Netflix, Google TV, Apple TV, etc., should be contributing funds to the Canadian television industry.

A quote from inside, Rogers Communications’ senior vice-president, regulatory, Ken Engelhart in the report:
“Canadian broadcasting and distribution companies face more and more competition from unregulated over-the-top service providers like YouTube, Apple TV, Hulu, and Netflix, and various illegal black market services. These companies pose a serious threat to broadcasting and cable companies, as they compete with Canadian media companies for scarce advertising and subscription dollars and encourage consumers to cut the cord on the regulated system by offering niche low-cost or free on-demand content.”
So the Committee came up with five recommendations, the one that sticks out is:

• That the Commission examine the growing emergence of non-Canadian broadcast players in the new digital realm and initiate a public consultation process to determine whether and how such non-Canadian companies should support Canadian cultural programming (this is the recommendation we led with, aimed squarely at making the likes of Netflix et al pay into the system)
I think the CMPA also backed this report.
 
#58 ·
If they even THINK of adding a surcharge for Netflix users I'd make a point of boycotting virtually everything Canadian for viewing online like I've done with TV.

If the Canadian industry wants to make money start making stuff we WANT to see. 18 to Life (which was finally cancelled by the CBC) got such bad ratings as summer filler on the CW they pulled it.

Pulled filler summer programming that's our prime TV viewing.

People watch and liked SCTV, The Newsroom, Electric Circus and Kids in the Hall (for example) - if they want to make money they need more shows like these
 
#59 ·
I am getting really tired of a bunch of bureaucrats telling me what I should watch and then taxing me for it's production, only to end up with a bunch of unwatchable crap. Let's face it, government broadcast industry protectionism has failed, as can be witnessed every night on prime time. The government already gives the CBC billions of dollars from general taxes. Let the CBC be responsible for "Canadian culture" and open up the rest of the industry by reducing taxation and regulation.
 
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