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Netflix drawing criticism from TV industry

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75K views 412 replies 72 participants last post by  Wayne 
#1 ·
#141 ·
You tell them, Ted!

http://www.hollywoodreporter.com/news/netflix-were-paying-higher-license-202014
[Netflix: We're Paying Higher License Fees Than Canadian Broadcasters]

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.

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.
 
#142 ·
SOCAN or SOCANT?

http://money.canoe.ca/money/business/canada/archives/2011/06/20110615-121412.html
[SOCAN wants to tax YouTube, Netflix, Apple, Sony]

A group representing Canadian songwriters is asking the Copyright Board of Canada to immediately start collecting royalties from the likes of YouTube, Netflix, Apple, Sony, Vimeo and others serving up movies and television shows that contain their music.

The board is already reviewing the issue but the Society of Music Authors, Composers, and Publishers of Canada (SOCAN) had filed an interim tariff application after similar interim royalty arrangements were awarded to Access Copyright.

The decision has opened the floodgates to stakeholders like SOCAN to make similar demands, University of Ottawa e-commerce professor Michael Geist said on his blog Wednesday.

“For services thinking about the Canadian market, it may provide yet another reason to think again,” he writes.

The interim tariff application covers the years 2007-2012 and could generate millions of dollars for SOCAN.

For steaming services like Netflix, Apple TV and Sony’s Crackle, SOCAN suggests taxing roughly 1.9% of gross revenues.

“This could lead to significant money as Netflix alone appears headed to generate at least $50 million in revenues in Canada this year, resulting in a SOCAN payment of nearly $1 million/year,” Geist writes.

For user-generated sites such as YouTube the group, representing more than 100,000 artists, recommends charges of 6.8% of advertising revenue for music videos and 1.9% for other audiovisual content with Canadian copyright-protected music.
 
#143 ·
I thought a movie needed to pay copyrights to songs in order for the song to be used in the movie. Sounds like double taxation regarding Netflix, a movie and TV service. I vividly remember the C.R.A.Z.Y. movie makers mentioning they had paid an arm and a leg for specific songs in their movie.
 
#146 ·
SOCAN may as well ask for a percentage of all advertising revenue from websites that have videos on them. Hell, why not take a portion of all advertising revenue from websites that could potentially have videos on them? That would be in keeping with their logic for the CD-R tariff.

I'm sure Hugh won't mind giving SOCAN a cut of his advertising revenue so that we can still embed videos in posts, right? ;)
 
#147 ·
Netflix buys rights to show content.Its really no different then Blockbuster.Does Blockbuster contribute to any fund?Does Rogers give a portion of there on demand service to a fund ?
 
#149 ·
My recollection is that it is the cable/satellite companies ("broadcast distribtution undertakings", or BDU) which make the contributions to the media fund. So Rogers Cable would pay a percentage of their revenues to the fund, but I don't know that it would be directly chargeable to any particular channels, including their PPV offerings. Blockbuster rentals obviously don't go through a broadcaster, and are a separate concept altogether.

Read Hugh's earlier posts. It helps to think of it from the point of view of the broadcasters and networks. They are interested in things like advertising and protection from American distribution. iTunes (for now) is basically a fee for discrete product service, like a DVD rental or purchase, which is a model not subject to the CRTC. Netflix is a subscription service, is likely to compete for existing BDU revenues, and is starting to buy programming rights in potential competition with the channels. You don't see a lot of people reducing or cancelling cable because of buying stuff off iTunes, but Netflix is a different matter.

The industry isn't completely loopy to raise fairness issues; the real question is how much the entire system should change with the Internet. The old way "worked" because distribution depended on a small number of controllable entities, so you could get the desired benefits (Canadian programming and economic participation) by using them as a chokepoint. Now we'll have to see how things get reconfigured. My guess is that Netflix will drag their heels but pay something eventually if they have to.
 
#155 ·
Renting physical DVDs comes under what the US calls the "first sale doctrine"; basically, the copyright holder isn't in a position to control subsequent sale (or rental for personal use) of physical media. PPV streaming of discrete titles like iTunes and others currently do may not legally qualify, but the analogy is close enough that there's no real-world likelihood that the CRTC is going to get involved right now. It "feels" like Internet commerce. Netflix has enough "broadcast-y" feel to at least give the BDUs some traction with the CRTC. I have no idea what the chances are that the CRTC will actually do anything - there's the whole "regulating the internet" third rail that might keep their paws off.
 
#157 ·
I don't think that any service is free from broadcaster attack and CRTC tampering. The real issue is, does the CRTC have jurisdiction? In the long run, that's a matter for the government and courts to decide. If BDUs see iTunes, Netflix or any other content provider as a competitive threat, they will pressure the CRTC to take action. Consumers are seeing a double edged sword here. The vertically integrated broadcasting industry is using both regulation and financial pressure (though their ISPs) to eliminate competition. If broadcasters want equal regulation for internet content providers, they must also agree to a flat rate model for their ISP operations.
 
#158 ·
That's certainly possible, and I'm sure Netflix will argue it. The point is that the current system is designed to achieve certain things in regard to Canadian content funding, Canadian economic participation in the entertainment/communications sector, as so on. The required control and toll-gating to make this possible is via regulation of the distribution infrastructure. If significant amounts of distribution shift to the internet and avoid this, the other side of the equation doesn't work anymore. If the internet eventually replaces broadcasting, you either have to some degree "regulate the internet", or abandon some of the other current things that come about from the current setup. That's one of those public policy/special interest debates that won't get solved quickly.
 
#161 ·
Netflix and other OTT services may soon be regulated by the CRTC

Under pressure from the Canadian television industry the CRTC may cave into their demands and regulate OTT services such as Netflix and Youtube.

Corporations such as Bell and Rogers want Netflix and other OTT services to be regulated like a broadcasters.

"Canada’s television industry is banding together to pressure the CRTC into regulating Netflix, as traditional broadcasters face a mounting challenge from the fast-growing online TV and movie service.

It’s the strongest sign yet of the Canadian television industry’s growing worries in the face of the threat posed by alternative broadcasters."


http://www.theglobeandmail.com/repo...to-look-at-regulating-netflix/article1985547/
 
#162 ·
Although I don't agree with it, I wouldn't be surprised if the CRTC once again caters to the wishes of the bdu's who ultimately own the tv industry here in Canada.

I always thought of Netflix as more of a video rental service like Blockbuster. And I don't believe Blockbuster was ever regulated by the CRTC.
 
#163 ·
NightHawk1, not sure why you are posting an article from April which has been thoroughly discussed. I have moved your thread into the April Discussion.


As I said on the first page of this thread. It's about fairness and I think that Netflix should be regulated. Having said that I don't think YouTube should be because its not operating as a subscription based service.

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.
For anyone who disagrees with me, I ask the same question that I asked before "Forgetting the distribution method, what is the difference between TMN, Movie Central or Netflix?" I would argue that they are all essentially the same and should be treated so by the government.
 
#164 ·
...For anyone who disagrees with me, I ask the same question that I asked before "Forgetting the distribution method, what is the difference between TMN, Movie Central or Netflix?" I would argue that they are all essentially the same and should be treated so by the government.
But it is the distribution method: that's the whole point. The CRTC was originally formed to protect & control our airwaves and who could broadcast over them (and effect every citizen with RF radiation).

To me it's the difference in the distribution method that's more significant in the difference in the price model. Because what you're saying is that if it wasn't an $8 flat fee service and instead was say $1/movie then it would be exactly equivalent to iTunes and perfectly ok? So then what if they charged an $8/month "membership fee" and then $0.01/movie. I'm sure most Canadians would still be happy and the price model would be exactly the same as iTunes. But Bell, Rogers, etc, etc, would still be crying foul to the CRTC!
 
#165 ·
IPTV and cable companies use internet technologies to deliver TMN, Movie Central and Superchannel so that negates your argument.

TMN, MC and SC have NEVER been delivered OTA.
 
#166 ·
I ask the same question that I asked before "Forgetting the distribution method, what is the difference between TMN, Movie Central or Netflix?"
Forgetting the distribution method, what is the difference between Netflix and Blockbuster?

Sure, we could say "Netflix is like CBC or Movie Central" and should be treated the same; but we could also say that Netflix should be treated like a video store and that argument would be just as strong (or weak). I think that Netflix is different from either of those examples and should be treated differently. It is a internet service that is more like Hulu or YouTube, and should be treated in the same way as those services are treated; or would be treated if Hulu officially provided content to Canadians.

But to answer your above question, the difference between broadcast "channels" and Netflix is that channels choose the content for the user. Laws like "x% of the content broadcast during prime time needs to be Canadian produced content" make sense for these channels where they actually decide what airs @10pm on Tuesdays. Those same laws make about as much sense for Netflix as they do for Hulu or YouTube.
 
#169 ·
Forgetting the distribution method, what is the difference between Netflix and Blockbuster?
C'mon, please read. As noted many times on this thread, Netflix is " "securing exclusive distribution rights to content in Canada, and it's selling subscription-based access to this content to households" , Blockbuster, Zip and iTunes are not.

Netflix is a pay television station. TMN, Superchannel, and Movie Central are pay television stations.

Blockbuster is a video rental and sales store. Zip and itunes are video rental and/or sales stores.
 
#172 ·
C'mon, please read. As noted many times on this thread, Netflix is " "securing exclusive distribution rights to content in Canada, and it's selling subscription-based access to this content to households" , Blockbuster, Zip and iTunes are not.
Blockbuster essentially buys a license to do what they do. It's not like they are buying the same $20-$30 DVD or Blu-ray disks that we do; it's significantly more expensive for them. What they are buying is the physical disc and the licenses to allow customers to borrow the disc. That is a distribution method.

The only different is that it isn't "exclusive".

I should point out that Netflix' license isn't exclusive for most of their content; it's only distribution rights. Blockbuster and CBC/CTV/Global/iTunes/Zune could show the same content.
 
#170 ·
Netflix is not a television station. It is a web site that streams videos YOU choose. You're not stuck with their idea of what you should be viewing. And iTunes works on a subscription scheme too if you consider the TV season tickets. You can subscribe to a particular TV show.
 
#171 ·
In my opinion, all those competitors not using OTA or traditional BDUs as distribution mechanism should be put under the Over the top category - OTT.

That includes video stores, mail order, Internet sites (all of them).

I don't buy the buy exclusive content argument. This whole thing is a result of Tv channels nowadays insist on getting multi-platform rights including Internet in order to cut Netflix's legs and not giving them a chance at getting the content as Internet only. In return, Netflix is forced in securing full multiplatform tv rights if the tv rights owners insist of making the same type of deal (since no tv channel seems to be interested in a non multi platform deal nowadays). Tv channels would pay a lot less for the same content if they didn't insist on multiplatform. But instead they go complaining to the CRTC.
 
#173 ·
Netflix is a pay television station.
Netflix is a video on demand (VOD) service, not a broadcast service. As such, any regulations should be the same as other VOD services, such as Rogers VOD or TMN VOD. I'm not sure the CRTC even regulates VOD services at this time. VOD is set to become a cash cow for BDUs such as Rogers, Shaw, Telus and Bell. Canadian operators just want Netflix neutered because they undercut their overpriced VOD offerings. $6.99 VOD/PPV movies or even $1.99 VOD TV shows look very expensive compared to $8.99 per month, unlimited viewing services such as Netflix.

Exclusive distribution rights should be a non-issue. Services such as iTunes or B&M stores such as Walmart acquire exclusive rights to distribute certain titles. That doesn't make them subject to CRTC regulation.
 
#174 ·
Question. Are there any other countries broadcast or internet policies that our government might want to examine? One that is a balance between the options that are being proposed? Is certainly seems a redux or re-imagining is in order for Canada's TV industry.

Or let me ask this. Is it common for the content owners, BDUs and internet industries to be so closely intertwined in other parts of the world? Surely Canada is not unique in the known universe. :p
 
#177 ·
For the US there is some evidence that suggests what oberst is saying is correct for the US market. I believe the Redbox kiosks were buying their DVDs straight from Wal-Mart and other retailers, leading these retailers to limit the number of DVDs per client you could buy in one shot. But that's all I can recall and I have no personal opinion in this matter. I think it's a bit irrelevant.
Video stores are Over the Top services just like Netflix and should be treated the same way.
 
#178 ·
@DancesWithLysol - I was for a time the Content Manager at Zip.ca. I can assure you there is no special "lending rights" version of DVDs, or any such fee. While there may not be an explicit "first sale" statute, de facto that's how DVD rentals work in Canada. I'd be amazed if Blockbuster Canada was doing anything different, and I'm confident if you asked your local indie DVD rental shop (harder to find these days) they get their stock from Entertainment One or another wholesaler.
 
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