Newspaper article The Canadian Press

Editorial Exchange: A Great Deal - for Netflix

Newspaper article The Canadian Press

Editorial Exchange: A Great Deal - for Netflix

Article excerpt

Editorial Exchange: A great deal - for Netflix

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An editorial from the Toronto Star, published Sept. 28:

The deal with Netflix that Heritage Minister Melanie Joly trotted out on Thursday as the centerpiece of her "Creative Canada" policy may turn out well for those who want to watch more Canadian movies and TV shows, and for those who want to produce them.

Just how good it is will depend on how the half-billion dollars Netflix promises to spend on producing programs in Canada over the next five years is spent, and what is created as a result.

But before any of that happens one thing is already clear: it's an excellent deal for Netflix itself.

For one thing, it removes any possibility that Ottawa might slap a tax on the giant streaming service to help fund Canadian content. Unwisely, the government had already taken that proposal off the table, reducing its leverage with Netflix. But content producers, rival broadcasters and even some Liberal MPs were still pushing for a levy.

In return, Netflix has pledged to spend at least $500 million over five years on original productions in Canada. It will also open a "television production presence" in this country, its first outside the United States.

That may well be the best deal Ottawa could get from a company that right now has almost no physical presence in Canada. And half a billion, even these days, is nothing to sneeze at. But the reality is that there's a lot less here than meets the eye.

To begin with, the deal does not "level the playing field" between Netflix and traditional Canadian broadcasters, which are struggling with falling revenues and competition from streaming services.

As a condition of renewing their licenses this year from the CRTC, the broadcasters had to agree to spend 30 per cent of their revenues on original Canadian content. Netflix won't say how much revenue it collects in Canada. But in June an independent consultant estimated the service has at least 5.2 million subscribers in Canada, and at roughly $10 per month per subscriber that quickly adds up to an awful lot of money.

The $100 million a year it has pledged to spend doesn't come close to 30 per cent of revenue. …

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