The Decibel - How a new Canadian law will change what’s on your Netflix

Episode Date: May 2, 2023

The Online Streaming Act is officially law. Now, online streaming services such as Netflix and Spotify have to promote and invest in Canadian content. But there are still questions and concerns – from content creators themselves – over how this law will actually work.Kate Taylor is the arts critic for The Globe and Mail. Today, she tells us about this new law, and how it might change the landscape of content made in Canada and what you’ll end up watching on your streaming platforms in the future.Questions? Comments? Ideas? E-mail us at [e-mail]

When you log on to your streaming platforms like Netflix or Spotify in the future, you might start noticing more Canadian content popping up. That's because late last week, Bill C-11, the Online Streaming Act, became law. It's the first time Canada has updated its broadcast rules in more than 30 years. But there are still lots of questions and concerns about how it will actually work. Kate Taylor is the arts critic for The Globe. She writes about film and cultural policy. She's here to tell us about this new law and how it might change the landscape of content made in Canada. I'm Maina Karaman-Wilms, and this is The Decibel from The Globe and Mail.

Kate, thanks so much for being here on the podcast. Glad to be here. So let's just start with the basics. What exactly is this legislation? Well, it's an update to the Broadcasting Act. The Broadcasting Act was last updated in 1991, so obviously before the rise of the internet. And it became apparent as early as 1999 that audio and visual content were going to be distributed over the internet. So what the CRTC, the Canadian Radio, Television and Telecommunications

Commission decided in 1999 was, well, we'll just wait and see here. So they made an exemption order. They said, we won't rule on this. We won't regulate it. So 24 years later, they have finally decided to regulate on it. And what they've regulated is that the law the government has passed, which will then allow the CRTC to regulate the foreign streaming services, is that there are, say, two categories of broadcasting in Canada. One is the conventional broadcasting owned by Canadian companies. So, you know, CTV, Global, your local radio station. And then there are these foreign online services, and that that is a form of broadcasting, and that they should be subject to regulation, although not necessarily the same level of regulation as the old-fashioned conventional broadcasters. But it will bring

them into the system and ask them to prove that they are either making or spending on Canadian content. Okay. So yeah, the CRTC regulates broadcast in Canada. And so existing television and radio in Canada already have to abide by these rules that we're talking about here, maybe to a lesser or more greater extent, depending on what actually happens here. But which companies are now newly going to be affected by this law? Well, the obvious one is Netflix, right? Is that you'll say to Netflix, what percentage of your catalog you're offering in Canada is Canadian content? And this has already been done in Europe. In Europe, Netflix is required to have 30% European content in its European markets. Spotify, you'd ask them to, the way Canadian radio stations have always been asked to program 30% Canadian music, you'd ask Spotify to have Canadian music in their catalog.

I guess the trickiest one will be YouTube, because the government has made it pretty clear that user uploaded content is not covered by this. They're talking about professional content. So on Netflix, that's clear. Everything on Netflix is professional content. On YouTube, a social media site, that perhaps becomes a bit fuzzy. But the government has repeatedly stated this is not meant to cover user-uploaded content or social media. It's professional content. Yeah. And we'll get into YouTube as an example a little bit later.

But just to clarify, so this covers all kinds of streaming. So Netflix, also like Disney+, Amazon Prime, Crave, like any of those is going to be counted. Okay. And so what do the companies, what will these companies have to do that they are using in the production of their shows, Canadian creative talent, as much as is practically possible. Often what happens in these circumstances is you say to people, well, you must have this much Canadian content. And if they don't find it practical, you'll say to them, okay, then you must contribute money, you must consider a percentage of your revenue to Canadian content funds. So either you spend the money yourself and show us you're spending the money,

or you contribute the money to the fund. The new law on that is quite vague. It's giving general parameters. It's not giving numbers. There's no quota written into the law. Not like right now with radio in Canada, right? It's 30% of stuff you play has to be Canadian. It's a number. But those actual numbers come from the CRTC. There's always been a requirement that both English and French be used. But there's more stress on representing indigenous cultures in the new act. There's also a direct reference to representing racialized and black cultures.

So it's general about what you want the system to do. It's not specific about you must spend this much or you must create that. Okay. So I guess the big question that ends up coming to mind here is then what exactly qualifies as Canadian content? Do we know what the criteria are? Well, it varies a bit from television to film and depending whether it's the Canadian content you're programming, which is one kind of point system or funding. Funding is a different kind of point system. But generally speaking, the sort of rough rule is that Canadian content is content in which the majority of the top line creators are Canadian. So a Canadian writer, a Canadian director, Canadian stars.

And then when it comes to funding, Canadian money becomes quite important. Yeah, I can see how this would very quickly get very complicated when we're starting to break down these parameters. Maybe we can look at an example to kind of illustrate this, Kate. So let's look at the Disney Plus movie Turning Red. I'm Maylin Lee. I wear what I want, say what I want, 24-7, 365. I've never said no fine. I think a lot of people have heard this or seen it, right? It's based in Toronto.

It stars Sandra Oh, who's Canadian. The director and the writer is Canadian. So that, though, under the previous rules was actually not considered Canadian content. So why wasn't it considered Canadian content? I think that's a money question. I think it wasn't. I'm not sure it was made, but I don't think there was any Canadian money invested in it. I think there is recognition as this will sort of move from Parliament into the CRTC and get down into the nitty gritty that the CRTC needs to be friendly and not illogical, like not absolute doctrinaire. But there are examples that, you know, people often say, well, why isn't Handmaid's Tale Canadian?

It's based on a very famous book by a very famous Canadian writer, and it was shot here in Toronto. But all its stars are American. It's set in the States, and it's made – basically, the real reason is it's made by American money. And so the decisions are all being made by non-Canadians, sort of the important creative decisions. The notion really is creative control. Who has creative control? Interesting. Okay. So what's the current landscape like of Canadian content? Like when we're looking at Canadian content that's out there, how much is there compared to, you know, European or American content? Well, it's kind of a, you know, glass half empty, half full kind of situation. The Canadian film and television industry as an industry right now is doing very well.

But it's doing very well because it does an awful lot of work making foreign content, what we call service production, where Canadian crews are working on usually American shows and films. And Canada does sell, and when you get to actual Canadian content where there are Canadian writers, Canadian directors, Canadian stars, Canada's quite successful at selling that material internationally. And shows like Kim's Convenience or Letter Kenny have done quite well internationally. But that said, what's happening,

as for all of us as consumers, streaming becomes more important than conventional TV. The amount of Canadian television production is dropping and the service production that is Canadian crews working on foreign projects is rising. So there's lots of activity, but the activity is less and less Canadian. So in the lead up to the bill, there were stats cited as to what percentage, what was happening with Canadian content. And in TV, it's about half, half of the TV shot in Canada in 2020 was Canadian. And that was predicted to drop to 40% by 2025. When we're looking at Canada's rules and the guidelines that are kind of being talked about here, I wonder, how does that compare to other places?

Like we talked about Europe a little earlier that has parameters kind of to promote its own content as well. But how do like the rules that we want in Canada compare to like the UK or Europe, for example? Well, Canada used to be greatly admired for the way in which sitting right next door to the largest entertainment producer in the world and sharing a language with the U.S., obviously. And also, Canadian consumers don't make a huge distinction between Canadian content and U.S. content. They're quite happy to watch U.S. shows. So, Canada was admired for the way it had managed from the 1970s onward to craft this regime where you did make some room for local content. With the rise of the internet streaming services, that's come under threat and shrunk, basically. So we're not, I would say,

as admired as we used to be. but you know right now the Australians are watching uh what happens with the online streaming act very very carefully because they're about to try and launch their own version of it um in Europe uh there's been a big push on this and um as I mentioned in 2018 they passed they they passed a content uh rule and you see um I don't know if you know the the the show Lupin, the French show on Netflix, which is kind of fun, sort of romantic kind of mystery, contemporary kind of mystery set in Paris. I wanted to stay in the dark, but I went back into the light. Now, look at me disappear. one of the reasons they've got to produce this high quality European content. And then, of course, that European content winds up in our Netflix catalog so we can watch it too. And similarly,

if, as is hoped, this act will produce more Canadian content, those shows will also obviously wind up being seen internationally. We'll be right back. We've been talking around this a little bit, Kate, but I guess we should maybe address this directly. Like, why does it matter if we have or promote Canadian content? I see it basically as part of having a living culture. Obviously, all of us consume culture from all over the world. And we don't just consume American content, we consume, you know, Asian martial arts movies, or Bollywood, you know, shows, or, you know, we consume all kinds of stuff,

music from around the world. But I think if you don't have at least some stuff that's being made at home, in your local market, you're not a very dynamic or creative culture. And you're, of course, encouraging all your cultural creators to leave. You're telling them. And, of course, you know, the old joke in the Canadian television industry is Canada makes fantastic TV. They do it in L.A. So to me, it's, yeah, it's about being a dynamic place, a dynamic culture. It's both economic and social.

I think it has a real social importance that people feel something is happening here. You don't just always have to look somewhere else for action. I think the other thing worth noting here too is this legislation is really important in Quebec. And if you go on Netflix, I watch some TV in French. And if you go on Netflix, there is no Quebec content on Netflix. I can't find any. If I want to watch something in French. And if you go on Netflix, there is no Quebec content on Netflix. I can't find any. If I want to watch something in French on Netflix, I'm watching French television shows. So one of the concerns in Quebec is that as people are pushed more towards the streaming services from conventional broadcasting, they're being pushed more towards English and away from

French. And that's a very real concern in Quebec. Yeah. So, I mean, it sounds like really part of this argument is just to kind of just surface the Canadian stuff, Canadian artists, so that you're kind of on an equal playing field with music and TV from elsewhere. being the problem that's very, very hard for Canadian shows or music to get a listen when you were up against a massive marketing machine, sort of Hollywood and then the international music industry on the music side. Yeah. Okay. So we should say this legislation also does have a lot of critics. And one of the concerns with this legislation is the impact that it might actually have on content creators. So let's get into this. Can you help me understand

what they're worried about? They seem mainly to be worried about algorithms. So the really tricky of the services that would be covered by this, the really tricky one is YouTube. I mean, it's pretty obvious that if the government says this is about professional content, not user content, Netflix is all professional content. Disney Plus is all professional content. So for that matter, Spotify, right? And we should mention YouTube is the only social media platform that's covered in this legislation. TikTok, for example. TikTok, Twitter, no. So, you know, in the early days of discussion of this kind of legislation, people would always say, no, no, the government is not coming for your cat videos.

That remains true. The government is not coming for your cat videos. But the problem, of course, on YouTube is the line between professional and user is blurry. And, you know, if you have a channel on YouTube that's making you money, are you a professional? And the fear, though, I mean, the government has said quite strongly, no, no, none of that will be, you know, we're only looking at the platform. The fear is that if the platform is asked to privilege Canadian content in any way, that will muck with the algorithms. And if you're someone who happens right now to be benefiting from an algorithm, you know, maybe you won't if your content isn't labeled Canadian or is labeled Canadian. Maybe then it won't do as well internationally. They're all very hypothetical fears.

But to be fair, the government has not exactly specified how they would regulate this, right? And this will be up to the CRTC, right? Interesting. Yeah, so we don't know. The CRTC still has to kind of set out the standards for what they're going to regulate here. The Minister Pablo Rodriguez, who's the Minister of Canadian Heritage, has, I think, a month to give the CRTC a policy directive. So he'll basically tell them, this is why we're doing this. This is how I want you to make it work. And then it'll be up to the CRTC to try and do that. And so some content creators are concerned they will be sideswiped by it.

Okay. So when the government created this legislation, I mean, why didn't they just put in provisions to make sure that content creators don't have to be worried about being regulated? If you read the sort of summary of the legislation, right at the top, it says this does not apply to user-uploaded content. And I would say they are a classic example of user-uploaded content. So they're not really being considered as distributors. So, you know, my take is that the fears are exaggerated, but we'll see. Does this legislation, would it change what would be considered Canadian content at all? Well, that's a really good question. Because one of the criticisms of the bill, there are many criticisms about, oh, it goes too far.

And, you know, what about the algorithms? But there are criticisms on the other side that it doesn't go far enough. And one of the criticisms from the television film industry is that it makes a distinction between Canadian broadcasters who are to use predominantly Canadian talent and foreign online streaming services who are to use, make the greatest practical use of Canadian talent. So there's a difference between predominantly Canadian talent and greatest practical use of Canadian talent. And so the question will be, you know, what will be a Canadian show on Netflix. And your earlier example of turning red would now qualify, since the new act gives more leeway to the foreign streaming services than it does to conventional Canadian broadcasters who are still basically being held to what they've always been

held to. Kate, you wrote in a column last week that this law is a victory of sorts. Why do you think that is, given that there's still confusion and frustration around how it's actually going to work? This act is a blow for fairness. Netflix, Spotify, Disney+, Apple Music, these services take millions and millions and millions of dollars out of Canada in subscription fees and don't have to spend a cent here. And while Canadian broadcasters, even if they do like to wiggle around their Canadian content regulations, obviously are here, physically present here, spending money here, creating local productions. So part of it is a leveling of the playing field. And it's very easy to paint Canadian content regulation as somehow, you know, a crutch or a, I hear people all the time say,

oh, you know, if it were good, it would succeed. And that's just, that's just ignorant of the way international entertainment markets work. So if you look at some of the great Canadian successes like Kim's Convenience or Letterkenny, they existed initially. And ultimately, they succeed internationally. But they existed initially because of subsidy and regulation and because you just don't have the scale you do in the U.S. Yeah. In the future, what do you picture streaming platforms in Canada looking like down the line? Like how how are we going to notice this if at all? oh, did you hear there's this new show sort of, you know, the way you have some local hits that you hear about, I think you'll see more of that on the streaming services. And we're all going to, you know, shift more and more right away from conventional TV to the streaming services.

So it sounds like when it comes down to it, it's not about suppressing other content, but it's just kind of promoting Canadian conduct so that you see it in line with other stuff. We all of us have huge consumer choice. So I think the notion that there's anything you won't have access to or anything that would be suppressed is, I think, false. Kate, thank you so much for taking the time to speak with me today. Thank you. That's it for today. I'm Mainika Raman-Wilms.

Our interns are Wafa El-Rayis, Andrew Hines, and Tracy Thomas. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrian Chung is our senior producer, and Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.