The best thing the Canadian Radio-television and Telecommunications Commission (CRTC) ever did about Netflix was never doing anything about Netflix.
It wasn’t easy. Getting a regulator to resist regulating is like trying to keep a retrieving dog from chasing sticks in ponds.
Plus, many within Canada’s codependent film and programming industries were, from the moment Netflix emerged, tugging on the skirts of the CRTC and the federal government. They insisted that the commission must do something because, well, innovation was taking place outside the system and, at all costs, the system must be protected.
To be fair, many of those folks were trained to think that way. A series of governments and CRTC commissioners taught them that their very existence was due to and dependent upon those bodies, and their unique abilities to tap into people’s cable bills and find the money to sustain them within the warm and intellectually cozy embrace of the system. This was so ingrained that it appeared at times that segments of the industry, while wonderfully creative in many areas, had all but lost the capacity to adapt or innovate in the face of change. Because inside the system, change always and only occurred after consultation and by consensus.
As a CRTC commissioner, I tried to make the point that not only should we not do anything about Netflix, we should also make it clear so industry would get the message that they needed to compete.
It wasn’t, after all, as if Netflix had invented the light bulb – others could and many have created viable competitive platforms.
Perhaps because people found it unimaginable that the CRTC would allow the system’s underbelly to remain exposed as it did, the industry for too long adopted the pose of a deer in the headlights of an oncoming semi.
And then things changed.
Shomi and Crave both launched, albeit too late for the former to survive. And the CRTC’s Let’s Talk TV process reimagined the system. So, for instance, I encountered a young producer in early 2016 who told me he had announced this to his staff: “OK guys – new rules: if we don’t think we can sell it to Netflix, we don’t make it.”
And then late last year, a number of independent producers delivered a united message to me and, I expect, others: Don’t do anything about Netflix – they’re outstanding partners who are pouring loads of money into our industry in Canada.
It appeared at last that something resembling normal market behaviour was emerging even while Heritage Minister Melanie Joly’s “everything is on the table” consultation was – as an unfortunate but unavoidable side effect – arousing hopes among some that Netflix would somehow be drawn into the system and change would go away.
And that’s why, on the Netflix file, Joly got it exactly right with her recent announcement.
Netflix promised to spend a minimum of $500 million over five years on production in Canada. In exchange, the government will not attempt to force it to contribute to the system.
Some have criticized this because they say Netflix was already investing at least $100 million annually so, essentially and despite all the buzz around the announcement, nothing changes.
Others have worried about French production. But Netflix apparently intends to invest $25 million of its annual expenditure on French works. For those accustomed to traditional funding models that allocate one-third of every dollar to French production – a number that, due to a couple of generations of demographic change, can no longer be justified – this will come as a bit of a shock. But with French being spoken in only about 22 per cent of Canadian homes these days, that reality has been dawning for a while.
The announcement, the critics say, means Joly really did nothing about Netflix.
If that’s the case, she did exactly the right thing.
Peter Menzies is a former newspaper publisher who spent 10 years as a CRTC commissioner.
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