Large corporate media giant, Shaftesbury, was at the CRTC making numerous wild claims about the disappearance of Canadian culture.
We are continuing our incredible coverage of the CRTC hearings on the implementation of the Online Streaming Act. Large portions of the debate within these hearings circles around how much free money the mainstream cultural elite industries are somehow entitled. This while building a cultural wall at the Canadian border and making streamers pay for it.
Generally speaking, it seems that parts of the debate surrounds how much each cultural elite entity is entitled to in terms of how much money gets pillaged from various streaming services. This while complaining that the content that they produce is so terrible on quality, not enough people are willing to watch or listen to it. They claim that the streamers are able to produce high quality content and they can’t compete against that high quality content being produced by these streamers in the first place. Therefore, if they don’t get tens of millions in investment dollars from these platforms, then Canadian culture will dry up overnight and Canada will simply have no culture. It’s all ridiculous nonsense, but these lobbying organizations aren’t trying to convince rational independent minds, but rather, a regulator that has a long history of towing their corporate interests. It’s probably about the only environment that these conspiracy theories have a hope in flying at all.
In November, we reported on Bell’s hearing where they argued that a level playing field is not enough. They argued that they should be free from most, if not, all broadcasting obligations by the CRTC so they can more cheaply rebroadcast American programming. They bemoaned the fact that American programming is increasingly going exclusive on various streaming services owned by the same American companies. As a result, they claim, if they can’t tell the American stories showcased in these programs, then they can’t tell Canadian stories… or something like that. It’s hard to follow such illogical ponderings in the first place.
Rogers, for their part, argued that 30% of streaming loot should be redirected to news operations. With the Online News Act going sideways, many legacy players are pushing shoulder to the wheel with the Online Streaming Act, hoping to make up the differences that they see between what they felt they should get and what they actually got. Unsurprisingly, desperation is setting in for these legacy players as their visions of a massive financial windfall dries up.
Corus, a major corporation that owns numerous legacy radio stations, argued that 64% of that streaming loot should go to radio stations. This while suggesting that some of the money that is to be swiped from the streaming services should also be redirected to news operations as well.
Another witness at the CRTC hearing was Shaftsebury. As some Canadians are aware, this is a major corporate production company that, among other things, produces TV programs. Like so many other lobbying organizations, Shaftsebury is yet another corporate entity that has essentially lined up at the CRTC trough hoping the scheme envisions with the Online Streaming Act will translate into a major windfall of free money for their bank accounts. A transcript of what they said can be found on the CRTC website. So, we were able to get some highlights of what was said.
First, they came out swinging by claiming that streaming services don’t invest at all in Canadian productions:
7826 And this is the perspective that I come from today to offer some comments for your attention.
7827 We feel that it is important to remind ourselves that public policy in this area has been a true success: cooperatively invented, applied across federal and provincial governments and agencies, driven by the regulator. Today’s CRTC stands on the shoulders of fearless, uniquely Canadian, and incredibly creative public policy measures, consistently applied for decades, and it has created a vibrant storytelling from all across our country.
7828 You guys face a very interesting puzzle in these hearings. How will Canada’s broadcasting system manage through a fundamental technological transition? Will there be anything Canadian about that system when we’re done? Change brings opportunities but also the real risk of unintended consequences.
7829 The American studios and streamers are here seeking rules that would give them access to the Canadian market with as few public obligations as they can talk you into. Watching the MPA presentation the other day, I was transported back to my grade 12 Canadian history class, and for a brief moment I thought that Canada remained a hewer of wood and drawer of water. That can’t be the outcome under this modernized public policy: not partners in success, but a work for hire; no IP ownership; market revenues from success of these US‑led productions flowing to the finance departments in the studios and not being reinvested in the Canadian system.
This is generally the talking points that the streamers have pushed back against. Platforms like YouTube, Paramount, Netflix, and Amazon all went to the CRTC with their own sides of the story where they offer numerous examples of how they invest in Canadian productions. They spoke at length of all the productions that were produced, the jobs created, and the money that was, in fact, flowing into the Canadian economy as a result of their activities.
Shaftsebury compared the situation to wood and water for some reason, though that is where the comparison ends. It was unclear what they were even really talking aboutthere from our perspective.
From there, the corporation engaged in the standard fearmongering that Canadian culture is at risk of disappearing simply because streaming services exist in Canada:
7830 Canada is built beside one of the global cultural giants, but we are clearly different. Canada weaves together a thousand strands of culture, language, and history into an unique country with unique stories. It cannot be in the public interest to lose the creative spark that powers our country because we give our village square away to foreign giants and let them take ownership of our storytelling. Was that Parliament’s intent in modernizing broadcast regulation? I suggest not.
Of course, no one is saying that these streamers are somehow buying up all of the Canadian intellectual property and taking the profits for themselves. There’s scant evidence that this cultural takeover is really happening in the first place. Arguably, this is probably the first time anyone has suggested such a thing. Naturally, there was no evidence to back up this wild claim.
In fact, the evidence points in entirely the opposite direction. Canadian culture has never been more vibrant. Canadian creators are using these streaming services to tell their Canadian stories and reaching audiences once thought impossible for such small production operations. Naturally, for this production house, none of that Canadian content that is reaching success really counts – perhaps considering it “not art” or something.
Shaftsebury then went on to start issuing their demands by saying this:
7832 Let’s write rules for digital that work for Canada and for Canadians. And as you turn to that, we have some specific suggestions.
7833 First, we applaud a base contribution model that triggers change now under existing CanCon rules rather than putting it off indefinitely. Let’s build a system that gets new added money working effectively as soon as possible. It is disingenuous to say nothing can happen until the conclusion of this lengthy process. It is entirely possible that you may decide that the definition of what constitutes a Canadian program may not differ greatly from what it is now.
So, this is essentially corporate speak for, “I want money and I want it now” – not really that dissimilar from the famed JG Wentworth commercials. I mean, who doesn’t want free money with no strings attached?
The “base contribution model” is essentially requiring platforms to send cultural elite entities a set amount of money. Usually, the streamers invest millions in the Canadian ecosystem to produce content, but for the traditional corporations, they are the ones entitled to that money and maybe even more. So, the production corporations take that money for themselves and say afterwards that if the streamers want to invest in their own productions, they have to fork over even more, but that “base” level of money means that the Canadian corporations have to be paid first before anything else. What’s more, the streamers are not allowed to benefit from those “base” investments in any way.
Another thing to unpack is the call for the Cancon regulations to remain unchanged. As you might recall, back in 2022, I wrote an analysis on how horribly out of date the definitions of what constitutes “Cancon” are. Essentially, if you are a small independent Canadian creator, then your work does not count as “Cancon” (Canadian content). As a result, your content, as envisioned under the Online Streaming Act, will get treated as foreign content and downranked in the discovery algorithms of various streaming platforms. Shaftesbury, for their part, is essentially arguing that disqualifying these successful Canadian productions is perfectly acceptable – likely because they prefer a system where only a handful of the largest corporations can ever have content be qualified. It’s basically a cultural power grab for the most part.
Shaftesbury then went on to say this:
7834 Second, we would suggest that current delivery systems can be used in the first instance rather than creating new delivery systems from scratch.
This is a somewhat vague statement, but it suggests that they want to use platforms like Netflix to distribute their content. This has been a well known ask where Canadian cultural elite corporations are demanding that all discoverability algorithms heavily favour their content over everyone else regardless of user preferences. Last year, we highlighted one incident where there was a push to have these results shown globally. In all likelihood, that would probably be a red line for a lot of streaming platforms who would rather not sabotage their own services to favour a handful of Canadian production houses they derive no benefit from. After all, many of these platforms made a lot of revenue for showing audiences what they want to watch. Having the CRTC dictate what those results should be is likely not going to fly.
They then went on to say this:
7835 And finally, it is equitable that the new contributors should have access to these funds, but we do not believe it should be on a hundred‑per‑cent self‑directed basis. We look to the current CMF model that allows a 75‑25 split between independent producers and broadcaster‑affiliated as a fair model to duplicate. Treat the streamers the same as the Canadian broadcasters.
There’s really not much to say here. This is Shaftesbury arguing they want most of the money for themselves and fellow cultural elite corporations. It really highlights the level of greed they are operating under.
During the question and answer period, Shaftesbury more or less talked about how the CRTC and their companies represents the good guys in this debate and that streamers represent the bad guys in this debate:
7839 COMMISSIONER NAIDOO: Yes. Thank you very much, and thank you for being here.
7840 I’m going to target my questions to each of you, because I have a lot of questions and I want to make sure we get a chance to go through them. You will have an opportunity at the end to comment on anything that you feel that was important that we didn’t ‑‑ you didn’t get a chance to mention.
7841 So I’m going to start off with ‑‑ I think I’m going to direct this question to Shaftesbury. In your view, what constitutes an acceptable base requirement for online undertakings? Should it be comparable to traditional broadcasting undertakings? And what about in the case of foreign versus domestic undertakings? If you could touch on all that.
7842 MR. GARVIE: I think I would repeat the presentation that was given the other day by the CMPA, who dug into the numbers a lot more than I have. I find it a bit complicated to think because we’re talking percentages, we’re not talking actual numbers. So it’s still a bit of a mystery to me what is it we are actually talking about coming into the system.
7843 I do believe that the Canadian broadcasters are under duress, and they’ve talked to you about it. I don’t believe that they should be ‑‑ have their rules of engagement changed until the end of this process. I do believe that the foreign streamers should be treated in an equitable way with the Canadian broadcasters.
7844 But I think the real thing that I want us to focus on is that you guys have been given an opportunity to regulate and supervise, and that means to me transparent, accountable, and directed. You have a basket of goals in the direction from the government to do a lot of fantastic, great things and to a very diverse and ‑‑ impossible way to carve all this up, and you guys are going to have to do that.
7845 And you have to direct these foreign streamers. This new money, some of it can be used for your own purposes, some of it has to be used for our purposes. And I think of a Venn diagram, you know. You have a circle that is what the streamers think they would like to do with that money, and they want to tell you what they want to do with that money. Then there’s a separate circle that is all the good public policy things that you guys want to achieve. And in a perfect world, it would be a circle, one circle. But we know that’s not going to be the case.
7846 So I think you have to look at each foreign service and look ‑‑ and I do have some sympathy for if there’s things that they don’t do. There’s going to be money that you put into that they can deal with their audience, and there’s things that have to go to the greater good.
7847 And I hope that is responsive.
So, quite a remarkable ask here. In Shaftsebury’s view, the CRTC is supposed to direct the streamers to do everything the Canadian cultural elite want them to do, then it’s up to the streamers to “deal with their audience” afterwards. It’s kind of a hint towards this idea that it is the streamers job to force government designated “Cancon” down the throats of audiences and it is entirely on the shoulders of the streamers to get those audiences to like that content.
Obviously, this is not how any of this works. Platforms, generally speaking, present a wide variety of content and the audiences, themselves, decide what they do and don’t like. From their, streaming services figure out other kinds of content that those audience members like. For Shaftesbury, though, it kind of sounds like they envision this relationship the other way around. They have their productions, then the streamers demand that audiences like the Canadian companies content and it’s the job of the consumers to simply like whatever is shoved in their faces.
This is generally a really old way of thinking that dates back to various eras that happened pre-internet. Indeed, broadcasting content over the airwaves content was a one way relationship. The production companies and broadcasters showcase a specific production on their specific channel and it was up to the audience to simply consume that content. They had that captive audience, so they didn’t really have much of a risk of Canadians simply going somewhere else.
All that changed with the rising popularity of the internet. At least since the early 2000’s, that “we know best what audiences want and we give it to them” attitude gradually started to erode and, today, that mentality simply doesn’t work. If audiences don’t like what’s being broadcast on television, they can simply turn the TV off and go to the internet and watch something on, say, YouTube for instance. They can pick and choose what they want to watch instead of the producers dictating what the consumers are to watch or listen to.
With the comments above, you can really get a sense that production companies like Shaftesbury never really got over that mentality even though the time to drop that mentality was arguably, at latest, in the 2010’s somewhere. It is also probably why they are losing audiences to platforms because the platforms have adapted to a modern age – something most mainstream broadcasting houses seemingly failed or refused to do.
What is surprising here is the fact that Shaftsebury couldn’t come up with an answer as to how much money they expect to receive in this system that they ware wanting to get. It’s surprising because that is ultimately their main argument in this case. You would think that they would have an idea of how much money they are wanting, but instead, it was a general, “we just want money” response. You can almost be reminded of the famous Homer Simpson Internet King scene where Comic Book guy makes a very specific request to upgrade his internet – to which Homer replies, “Can I have some money now?“. It’s kind of amusing how the exchange wasn’t really that far off from that scene.
Either way, it looks like Shaftesbury wasn’t exactly all that prepared for their hearing. They just waltzed in expecting everyone to be wowed by general demands of money and the CRTC responding by just carrying out their marching orders. The sad thing is, given the cozy relationship the large Canadian companies have with the CRTC, the outcome is entirely possible at this point.
Shaftesbury’s appearance doesn’t really offer anything new here. It’s the same old tired story of internet platforms somehow slurping up all the money and audiences, leaving those poor broken Canadian companies with nothing left. There’s these tall tales of how if nothing is done about these platforms, then Canadian culture will practically disappear tomorrow. The evidence used to back this up is, at best, wafer thin and, more likely, non-existent.
Of course, the much of what goes on in these hearings will likely matter. Chances are, the CRTC will simply carry out the corporations marching orders, point a regulatory gun at the streaming platforms and scream, “Gimme all your money!” When the stickup fails as a number of these services simply jump out of the window and exit the market, they corporations and the regulator will end up scratching their heads, mystified as to why the stickup didn’t work. Unless there are significant surprises happening later on down the road, it’s hard to envision things going down any other way.