Netflix regulations will mean more really useless projects

07 Jul

Should Netflix be regulated? There’s a very simple answer to that question. All you have to do is look at what the effects of doing so would be.

If Netflix and other so-called “over-the-top” internet services such as YouTube do get Canadian content regulations applied to them, which is what the CRTC is currently trying to determine, they will likely have to pay money into the Canada Media Fund the same way traditional Canadian broadcasters do. The CMF then turns around and spends that dough on Canadian projects.

Reading about those efforts, it’s obvious the CMF is a complete waste of money. From a press release issued on Tuesday, the CMF is spending $16.8 million on 51 “innovative interactive projects.” Production grants are going to 22 projects including: “11 games, 5 interactive contents, 4 mobile applications, 1 interactive webseries and 1 application software.” More money is being spent on development and marketing of similar work.

A full list of approved projects can be found here. Highlights include a social-networking website for Canadian artists, a dancing video game, a mobile app for motorcycle riders, an Italian cooking app, a virtual pet for social networking, plus a bunch of other mobile apps and games intended for consoles. It’s really hard to read the list without snickering at best, or getting angry at worst.

In a nutshell, broadcasters are being forced to spend millions of dollars – which are costs that are inevitably passed on to us, the consumers – to produce video games, mobile apps and web features that no one is likely to use. This, in a country that already employs more people than anyone, with the exception of the United States and Japan, in making some of the world’s best and most highly acclaimed video games. This, despite Toronto already being the mobile app development centre of the universe, according to the Wall Street Journal.

As Google’s submission to the CRTC on this issue says, things are going just fine for Canadian creators online – there’s no need for these sorts of ridiculous subsidies. The video game industry, for one, has already recieved hundreds of millions of dollars in provincial tax breaks, which has resulted in creating a vibrant and ass-kicking industry. A few extra CMF dollars here and there is like trying to tip a millionaire with a $1 bill. Indeed, that dancing video game sure sounds a lot like Michael Jackson: The Experience, which was created for Xbox Kinect by Ubisoft Montreal.

If you’re not angry about these sorts of useless regulations and how they needlessly drive up prices, check out that list of projects and you will be. If Netflix and the rest really do get pounced on by regulators, I for one won’t blame them for packing up and going home.

UPDATE: I’m told broadcasters don’t actually contribute directly to the experimental stream of the CMF, which the above projects are part of, unless they are directly related to television. Of course, with today’s vertical integration, it’s hard to find anything left that isn’t connected to TV, so that may be splitting hairs. In any event, the experimental stream gets its funding from the Department of Canadian Heritage, which is actually worse because that means taxpayers are paying for the above projects even more directly.


Posted by on July 7, 2011 in crtc, netflix


12 responses to “Netflix regulations will mean more really useless projects

  1. russellmcormond

    July 7, 2011 at 9:10 am

    I have no problem with the cross-subsidies programs applied to broadcasters and BDU’s, who have largely made their businesses from taking content from elsewhere (primarily the USA) and distributing it to Canadians. When you take things like simultaneous substitution into consideration, the government subsidies to these folks are massive… They waive the flag and claim they are Canadian when it comes to all the handouts, but give me a break.

    I would prefer the results of these subsidies to go to better projects, but that is a subjective thing that will be very hard to deal with. It is the same thing for arts funding in general, where we as a society do not agree on where that funding should go.

    Competitive services built on to of raw data services are in an entirely different situation. They don’t exist as creations of the state, and can legitimately be considered private sector. This is very different than CBC/CTV, Bell, Rogers, Telus, etc who are about as “private sector” as Ontario Hydro was when the Harris government finally modernized them.

  2. hfiguiere

    July 7, 2011 at 10:56 am

    If YouTube is forced to pay something, then I believe YouTube is just gonna block access to the service to Canada.

  3. Marc Venot

    July 7, 2011 at 1:29 pm

    You didn’t indicate what is the percentage in added cost.
    Maybe a more neutral way to transfer that money would be to pour it into the budget of the national channels (CBC and Radio-Canada)?

  4. Yuv

    July 8, 2011 at 2:17 am

    I rather have taxpayers paying directly than an industry penalized and the market outcome skewed. Less attrition.

    The decision is a societal and political one, not a bureaucratic one: what level of public subsidy of Canadian culture do Canadians want? let the elected representatives decide; and finance public endeavors from the public purse.

    Even better: make it a refundable tax credit, so that local taxpayers decide on the allocation, not Ottawa bureaucrats. if the budget is $16 millions and there are 32 millions taxpayers (to make the math easy), refund each Canadian $0.50 on their tax returns if they give $0.50 for a project form a list of admissible projects.

  5. John

    July 8, 2011 at 2:38 pm

    The update kind of makes your whole article worthless, doesn’t it. Next time try getting some facts before spouting nonsense.

    • petenowak2000

      July 8, 2011 at 6:10 pm

      Nope, not really, because if Netflix et al were required to contribute to CanCon, what else would they pay into other than the CMF?

  6. Serge

    July 8, 2011 at 2:39 pm

    Actually, broadcasters don’t contribute directly to any part of the CMF at all. Cable and satellite companies do.

    • petenowak2000

      July 8, 2011 at 6:12 pm

      With the exception of the CBC, all major broadcasters are owned by cable and satellite companies so they’re one and the same.

  7. Serge

    July 8, 2011 at 2:42 pm

    Wait, you’re fine with direct subsidies to the video game industry, but you don’t like this idea of requiring companies to subsidize the content industry, but it’s even worse that these are direct subsidies to the content industry? If your view is the cars and video games should be subsidized and video shouldn’t, then just say so, no?

    • petenowak2000

      July 8, 2011 at 6:12 pm

      I’m afraid I don’t understand your point at all.

  8. Gregg T

    July 8, 2011 at 5:55 pm

    Wow. First and last time here. This Waiter guy is not the most well rounded person is he?

    Comparing baseball teams to the arts?
    Making incorrect statements and references.
    Attacking dozens of projects and thousands of people just to make a cheap point?

    Ouch. I could go on. Sloppy writing, lazy research and weak argument.

    The US has always had right wing, anti-culture, overly simplistic commentators. It’s too bad they are now slipping into Canada.

    • petenowak2000

      July 8, 2011 at 6:09 pm

      I agree, who the heck is this Waiter guy?

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