Front Burner - A call to govern media giants like Netflix, Amazon Prime

Episode Date: February 4, 2020

A new federal report proposes sweeping changes to Canada’s broadcasting and telecommunications sector. The recommendations range from bringing online media platforms like Yahoo and Facebook under the scope of Canada’s Broadcasting Act to making sure that streaming companies like Netflix and Amazon Prime are sufficiently promoting Canadian material. Today on Front Burner, CBC Entertainment reporter Eli Glasner joins host Jayme Poisson to explain what’s at stake.

In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. This is a CBC Podcast. Hello, I'm Jamie Poisson. So I don't need to tell you that the way that we watch television has changed a lot in the last decade. We now have Apple, Netflix, Crave. But the thing is, the rules that govern traditional broadcasting, well, they haven't changed at all in a very long time. And how to modernize them and preserve Canadian culture has been the subject of a lot of talk, including on this podcast.

But late last week, we got some tangible recommendations on how to do that in the form of a government-commissioned report. on how to do that in the form of a government-commissioned report. Our report is a roadmap for addressing the challenges of today while remaining flexible enough to anticipate and adapt to the unforeseen changes and challenges of the future. Taken together, they would represent huge changes to Canada's broadcasting and telecommunications sector, from bringing online media platforms like Yahoo, MSN News, and Facebook under the scope of Canada's Broadcasting Act, to making sure that streaming companies like

Netflix and Amazon Prime are sufficiently promoting Canadian material. This marks the first time these decades-old laws have been reviewed in such a comprehensive and integrated manner. There are a whopping 97 recommendations in this report, but don't worry, we'll only talk about some of the most interesting ones today. This is FrontBurner. Okay, with me today is Eli Glasner, entertainment reporter and film critic with the CBC. Eli, it's a pleasure to have you.

Thanks, happy to be back. This is the first time that I get to talk to you. Last time you were here, I think someone else was hosting. Yes, Matt. We got to talk superheroes. Matt Braga. I'm very jealous. This is almost as exciting, though. So now we get to talk. Much more earth-shaking.

Regulation of the internet and Canadian broadcasting and 97 recommendations. Recommendations. 235 pages of bureaucratic glory. Lucky me. All right. Let's start with the big picture here. And then we'll narrow it down to some of the specifics. What is this report about? We are pleased to submit to government our final report and recommendations for updating Canada's communications laws and regulatory framework.

I think essentially the report is about updating the Broadcasting Act. We are talking about rules that govern how you insert Canadian content, who gets to run which stations, all of that good stuff. And it was written in 1991. That is before Netscape, not even like before Google News, before Netscape, before dial up mode. And so you think of how intrinsic the internet is now, and how much of our experience of the outside world and how much of what we watch and how we learn of news, and our favorite programs all comes through data. And well, the report, the original Broadcasting Act

doesn't speak to that necessarily. And so there has been this struggle of do you bring the internet under the domain of the CRTC? And so a lot of things have been changing. The Canadian content creation rules and structures and funding bodies haven't really been necessarily keeping up with the times because the way people watch stuff is changing and ad revenues are falling. So this is an incredibly ambitious report trying to bring all of that into 2020. Okay, so let's try and pick apart some of this report. But first, who produced it? Just so that people have a sense of where it came from. So an independent panel of experts with experience in broadcasting and telecommunications. My name is Janet Yale, and I am chair of the Broadcasting and Telecommunications Legislative Review Panel.

So these are people who know those fields, have been part of those fields, and certainly know how legislation is written and the ins and outs of broadcasting regulations. And, you know, over the last couple of years, they've been getting all of this feedback, right, from stakeholders across the country. 2,000. They heard from 2,000 people either in person or people wrote in submissions. There were hearings all across the country. It took 18 months. And so they did a lot of work. And it was based on other reports. The CRTC

also did an examination on the challenges that that regulator is facing. So there's been a lot of work done to get us to where we are now. Okay. And we're not going to go over the 97 recommendations. That was a joke. But some of them are not very controversial, like getting the internet to more rural areas with greater speed. A lot of people kind of agree about that. But let's start with this broad idea that the CRTC, which regulates broadcasting in Canada, has regulated traditional broadcasters like Bell and Rogers. This idea that they should essentially start regulating a whole bunch of online platforms too. And Eli, explain to me what is being proposed here in this report. There are a bunch of categories.

Curation, aggregation, and sharing. It is a new system of regulation that would now bring your Amazon Primes, your Netflix, any foreign media streaming service under the control of the CRTC. And so there are these new tiers of regulation, and I will go through them. So first, the top tier is media curators. And so they define this as a service provider that has editorial control. So they're sharing stuff, but it's also stuff that they make their own. Certainly Netflix qualifies under that.

And as examples, they give Amazon Prime, Crave, and Netflix. And so they would be certainly regulated. They would be licensed and they would have to take a portion of their budget and spend that on the creation of Canadian content. Then we have the aggregators. And so this includes your cable companies, which are taking American content and then sharing it in Canada.

Also services like MSN News and Yahoo News. And they would be given a levy. And so they would have to pay a portion of what they're earning, again, back into Canadian content funds. And finally, we have the sharers, your YouTubes, your Facebooks, where their services are basically based on a mixture of professional copyright content, media content, and amateur content. Of course, they too would have some kind of levy, call it a tax, and have to pay into those Canadian content funds. Okay, so this is essentially all about trying to bolster Canadian content. Well, and yeah, the system that we have right now, and a big part of it is money that comes from like your cable companies, etc.

And just the way we watch TV is changing. And so the whole system that's set up to encourage the creation of Canadian content and the very revenue stream, well, that's declining. And yet you see more and more of us are subscribing to services like Netflix. Eli just knocked his water bottle over. Excitability on broadcast regulations. And so this is an attempt to address that and also, I think, find a new, more consistent, stable and modern revenue stream to ensure that there is a place to fund Canadian content. to regulate these big internet giants. We've talked about this concept on the show before, including John Semley, culture critic. And I phoned him up earlier today, and I want to play you a clip. Okay.

Netflix is already producing Canadian content. It has already exceeded its commitment to produce $500 million worth of, or invest $500 million into Canadian content over five years. And I think that this is all coming at500 million into Canadian content over five years. And I think that this is all coming at a time when Canadian content has never had a greater value in the marketplace. The rate of production has increased something like 6% in 2019 alone. We read all these articles about how Canadian content is having a moment. So what's the problem? I mean, you know, this is what I don't understand. It's like, Jamie, it's like if I owned a store and you came to my store all the time and you were a great customer at my store.

And then all of a sudden I said, I know how to keep Jamie spending money at my store is by locking the door behind her when she comes in. It just creates this sort of weird attitude that I think will scare off for an investment instead of encouraging it. What do you make of that argument? So I love John, but I'm going to argue with his analogy. We're not locking people in. I think the system we have right now is that you're encouraging store owners to have a place or even investigate the idea of certain Canadian choices, right? And yeah, there's some wonderful Canadian success stories right now.

But many of them, your Schitt's Creek, your Kim's Convenience, like global success around the world, much of it due to being on Netflix, your Letter Kenny, etc. They were begun because in part of the system that we had that said, yes, you have to try and find new Canadian dramas and comedies to put on air to satisfy the regulatory burden. Making Canadian stories, making popular Canadian shows is hard. It's really hard. And there aren't that many successes. And I think if you took off all the things that compel broadcasters to try, there's a lot of other ways to create content or just to simply buy content that would fill those slots.

Let's stick for a little bit longer with some of these specific recommendations. So the Netflix argument, the Apple TV argument, another argument against this is that this is going to cost me more money. We've talked about this on the show before. Did the authors of the report respond to this? We do not think that this is something that would be passed on to consumers or result in higher prices. The argument is that if Netflix has to pay into this pot to create more Canadian content, they're just going to pass this cost on to me. May I read from the report? Yes, we are going to read from the report.

We want to be clear that we are not recommending that Canadian content be supported by the so-called Netflix tax, charging consumers an extra levy on subscriptions to such services such as Netflix. It is more appropriate to establish a regime that requires online streaming services that benefit from operating in Canada to invest in Canadian programming that they believe will attract and appeal to Canadians. So that is their way of saying, don't call it a Netflix tax. It's our way of encouraging streaming services, media curators,

to invest in Canadian programming. Okay. And hopefully that Canadian programming will be stuff that their customers want to watch. So then it's perhaps... It's a win-win for everyone according to them. Yeah. According... That is their defense. I... They're saying people will want to watch all of this Canadian content. You're only going to make stuff that people would want to watch. So then therefore,

you're making a successful program. And so why would you then want to pass that cost on to the customer? In the Dragon's Den, a simple pitch can lead to a life-changing connection. Watch new episodes of Dragon's Den free on CBC Gem. Brought to you in part by National Angel Capital Organization, empowering Canada's entrepreneurs through angel investment and industry connections. Now I want to loop back to something you mentioned earlier, how difficult it is to define who is a content creator. I feel like I'm like a social media influencer saying all these words. Who is a content creator? Who is an aggregator? And there are some people who were very worried in the wake of this report that it would also include news organizations, in part because it seems to

recommend that. Mr. Speaker, yesterday, a government-appointed panel enthusiastically recommended that the government should control what news coverage Canadians should be allowed to see. Talk to me about this. Yeah, I mean, under the original language of the report, it would seem to me everyone from Breitbart to CTV News, I mean, the language is a service provider that has editorial content. So if you're a news site and you create your own editorial content, well, then you're a media curator. So you are going to be licensed. You are going to be under the control or under the provision of the CRTC. But I think more onerously for a lot of people across Canada, when they heard this is,

okay, wait, you're licensing news sites, right? And this now falls under governmental control. And this created quite the conversation for many people, such as Michael Geist. I mean, anytime you're talking about internet regulation, Michael Geist has something to say. He's the University of Ottawa law professor, and he's the Canada chair in internet and e-commerce law. The notion that we would leave to the CRTC, to a government regulator, the power to dictate what a trustworthy news site is, to require that websites, news aggregators display those sites prominently, how they link to them, strikes me as really fundamentally wrong in an open democratic society. The Minister of Heritage appeared in Parliament to clarify some earlier comments.

Let me be clear. Our government has no intention to impose licensing requirements on news organizations, nor will we try to regulate news content. And seems to now say, although I mentioned the language of the report originally, that there is now an exemption. And so news sites will not fall under the regulation or the license of this new structure. So that's like essentially a walk back from what the report is currently recommending. We are not proposing to regulate the internet,

and we are not proposing to regulate news content on the internet. I think you've misunderstood our recommendations, if that's what you think. So on this topic of news, I think that we should move. I know where you're going now. To our own employer, the CBC. The most complicated. Which is a little bit awkward for us to talk about. We should acknowledge we both work at the CBC. But let's do our best here to try and

navigate all the different perspectives here. The report is also recommending an ad-free CBC. We also feel that the need for advertising revenues and the commercial imperative that goes with that takes away from their public interest mandates. This is sort of protected to the idea of preserving Canadian culture and quality news, so everything that we've been talking about. And let's talk about why the authors of the report are recommending this. It seems to be another bulwark in giving Canadians high-quality journalism that they can trust. And there are other methods in the report

in terms of more funding for news sources. And already we have newspapers getting support, and they're going to actually broaden that to audiovisual sources. But CBC in particular, they see as a great source of that, but they want more. And so the report talks about reflecting Canadian stories, reflecting regional stories, reflecting local stories, reflecting indigenous stories and indigenous cultures and languages. And I think there is, according to the authors of the report, their perspective is that because we are partially commercially driven, that that is affecting

the CBC's willingness to be bold and take risks. And so they see by unlinking us from advertising revenue and by making this a fully funded, publicly funded corporation, and actually the budget would be a five-year cycle. So the government says, here's your budget for five years. That way, I guess there's less political interference and we have all the money we need to do what we can do. And then we don't have to worry necessarily about ratings, but we can just do our best job as a news service. And so they say ad-free within five years beginning with the news service. And that would be a very dramatic shift. What is the argument for having ads on the CBC?

Well, first of all, you talk to people in the CBC and when we ask them to respond to this report, I mean, one thing they would say, and Catherine Tate actually said on stage, is that they are already bold and taking risks. And she pointed to the upcoming TV show Trickster as an example, which is an indigenous drama. And this is a show with indigenous characters based on an indigenous novel, I believe, with indigenous directors behind the scenes. And we're able to do this because we are the public broadcaster. So we are taking risks. And they say they will continue to take risks. able to do this because we are the public broadcaster. So we are taking risks and they say they will continue to take risks. But also a spokesperson for the CBC has basically made the

point that many public broadcasters, virtually all in their language, have a mixture of commercial and public funding models. And essentially they're saying if you take ads away from the CBC, saying if you take ads away from the CBC, you're going to need an extra $300 million or so in public funding. And the CBC's position is that they'd rather just invest that in resources or programs. They'd rather keep that revenue and just work on better serving their audience. Okay. And the numbers just for people listening are about a billion dollars in government revenue and about 250 million dollars per year in ad revenue. I've also heard the argument that the CBC doesn't get as much money as other public broadcasters like the BBC. And so advertising is a way to augment that. Again, this is an incredibly ambitious report and even what they're asking

of the CBC. And the real question is, would the federal government be willing to fund the public broadcaster the way that the report suggests so that it could really fulfill this new broader mandate? And depending on what party is in power, who knows how sustainable that is. or who knows how sustainable that is. OK, this is a lot of stuff and it's complicated and it's controversial. And this is a government that is also in a minority position and might not even be around.

The Minister of Heritage has said he wants to present a bill in Parliament, I think, by the end of June. This is something we want to move on quickly. Do you think that there is even the political will to get this done? I know the Heritage Minister is talking about it and wants to do this, but is this a priority for this government? I do believe, and what I am hearing from some sources, is that the government does want to do this. Is it achievable so that they can actually present a bill by June? I mean, just think about everything we've talked about so far. It is incredibly detailed stuff that is going to change the very structure of regulation of broadcasting

telecommunications in Canada. Can they solve those problems and write these new rules that quickly that you could see a lot of fear mongering around this bill if other parties start saying, well, this is going to affect your Netflix bill? Exactly. Right. And so it depends, I think, on the perceptions on what that bill looks like. Frankly, I've talked to other people in the industry such as the national president of ACTRA who said, look, I'm just happy this is here. I'm happy that it's – that the bill itself, that the report itself is bold and his concern is as long as they pass this while they're still in power. as they pass this while they're still in power, that it's taken so long for us to get to this point for these rules to finally be updated, that if they miss this opportunity, it doesn't have to be by June. But if they miss this opportunity, and then another, the minority government, the minority government could fall. And then the next group comes in, and then they hold

more hearings. And then, you know, we'll be watching holograms before we finally get the laws updated. And then we're going to need to update those laws. But anyways, Eli, thank you so much. We're going to keep tabs on the story. I know we were joking at the beginning of this conversation that this was a 235-page report with 95 recommendations, and I was jealous that you got to talk to Matt Brega, but superheroes. But I actually find this discussion very interesting because it is about the regulation of the Internet and Canadian culture and how they intersect. And so thank you very much. My pleasure.

Before I let you go today, an update on the coronavirus outbreak. The Chinese government has agreed to let permanent residents of Canada with children take part in an airlift out of Wuhan, the epicentre of the outbreak. It will allow this as long as one of the parents or the child holds Canadian citizenship. We will be in touch with Canadians in Wuhan to provide them all the necessary details. In order to prevent the virus's spread, Beijing won't allow permanent residents without children to leave the quarantined zone. Federal officials are now on the ground in Wuhan to facilitate the evacuation of Canadians. Foreign Affairs Minister Francois-Philippe Champagne said on Monday

that there are 280 Canadian passport holders and 24 others who have requested to be airlifted out of the region. There's still no timeline on when the flight will take off though. Additionally, we also need to consider the health and safety of Canadians here at home. When it does get here, the passengers will be quarantined for two weeks at Trenton Military Base in Ontario as a precaution. That's all for today. I'm Jamie Poisson. Thanks so much for listening to FrontBurner and talk to you tomorrow. For more CBC Podcasts, go to cbc.ca slash podcasts.