Canada Imposes 5% Tax On Streaming To Fund Local News, Diverse Content
from the get-ready-to-pay-more dept
Canadian Regulators are leaning on new authority built into the 2023 Online Streaming Act to impose a new 5 percent tax on streaming TV and music services like Netflix and Spotify; funding that the regulator says will then be used to help fund Canadian broadcasting.
According to the Canadian Radio-television and Telecommunications Commission (CRTC) announcement, the plan should drive $200 million in new funding annually to local news and a variety of other public interest content:
“The funding will be directed to areas of immediate need in the Canadian broadcasting system, such as local news on radio and television, French-language content, Indigenous content, and content created by and for equity-deserving communities, official language minority communities, and Canadians of diverse backgrounds.”
The fee systems effectively mirrors the fees already imposed on local broadcasters. Past efforts on this front (in the U.S. and Canada) haven’t been received particularly well by streaming giants, and the same applied here. The Digital Media Association, which represents Amazon Music, Apple Music and Spotify, insisted in a statement that the new tax will only expand what they’re calling an “affordability crisis”:
“As Canada’s affordability crisis remains a significant challenge, the government needs to avoid adding to this burden. This is especially true for younger Canadians who are the predominant users of audio streaming services.”
Huge contracts for the likes of Joe Rogan and Wall Street’s insatiable demand for relentless quarterly growth have more to do with streaming affordability than anything else, though in this case the services are correct in that they’ll simply pass the cost of the new taxes directly on to users. Facing slowing subscriber growth, streaming giants have already been pretty relentlessly raising rates.
That said, real journalism (especially independent and minority owned) is consistently facing a funding crisis, and much of the conversation (both in the U.S. and Canada) tends to be centered around what isn’t possible, shouldn’t be done (usually framed around the interests of giant corporations), as opposed to actually fixing the problem.
At the same time, similar efforts are often derailed by corruption, and there’s no guarantee the money guaranteed for useful things actually finds the way it its original destination.
Efforts to tax streaming companies to help fund broadband deployment in the States, for example, risk being hijacked by telecom giants looking to exploit corrupt policymakers simply to pad their wallets. Municipalities in Texas have also tried to tax Netflix with a fairly broad disdain for existing law and no particular public interest initiative in mind.
Filed Under: canada, crtc, journalism, streaming, tax, video
Comments on “Canada Imposes 5% Tax On Streaming To Fund Local News, Diverse Content”
IOW: “We’re going to pass this tax on to customers in our fees rather than paying ourselves as we should, thereby raising prices to unaffordability for those already significantly impacted by the rise in the cost of living.”
Some threat. People living below the poverty line are already not using pay-for streaming services, making this threat not only SOP, but also completely hollow.
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More precisely, we’re going to piggyback a rate hike on top of the tax and blame badman govt.
You can really tell this article wasn’t written by mike.
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The byline gave it away pretty early for me.
Ok, just so we are all on the same page, the problem is that local broadcasters in Canada need more funding for localized news and content:
“The funding will be directed to areas of immediate need in the Canadian broadcasting system, such as local news on radio and television”
And the funding will be raised by:
The fee systems effectively mirrors the fees already imposed on local broadcasters.
Um…ok….
I’m no financial wizard, but I believe I might have a suggestion that would increase funds available to local broadcasters, without awakening the ire of streaming media companies.
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Dunning-Kruger be like that, no doubt.
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Ah, but does in have the all-important, but never mentioned “regulators acting like big-important people in public”? Seems like if you are not one of relevant regulators (who would never admit to NOT being wizards), then the idea already has a huge setback.
No way this doesn't get abused
The only way journalism can actually be a check on government or on the powerful is if it is independent of government. But in this case, local news will be beholden to government entities for their funding. And based on their own statement of using the funds for specific types of news content, the government is already not going to be content agnostic.
So I expect that any news reporting that is critical of the government or not prioritizing whatever content the government wants to promote, will quickly lose their funding.
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Looks from BBC to American media landscape back to BBC
About that…
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While I agree it will probably be abused, I don’t think it will in the way you think. The Canadian government just doesn’t work that way. Far more likely is that there will be bizarre and nonsensical decisions made that are unfathomable to the general public.
As an example, there was a show called SCTV, funded by Canadians, written by Canadians, performed, filmed and directed by Canadians, in Canada. The CRTC told them it didn’t have enough “Canadian content”. In response Mike Myers et al created Bob and Doug McKenzie in the regularly recurring “Great White North” skit, partly to satirize the government agency. This is how government usually fails in Canada, not maliciously but incompetently.
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I thought Bob and Doug McKenzie were Rick Moranis and Dave Thomas (the actor, not the Wendy’s entrepreneur), and that Mike Myers was associated with Saturday Night Live, which was started by another Canadian, Lorne Michaels.
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“In response Mike Myers…”
You meant Rick and Dave. Moranis and Thomas
how to fix the problem?
The problem is that people who aren’t geriatric cable news watchers have decided that news isn’t worth paying for. They get their news from YouTube and TikTok. Obviously their goal is not quality.
But the solution is not for government to start taxing consumers so they can foist their government approved news on everyone.
And taxing streamers is absurd because they only tangentially have anything to do with news. When I subscribe to Netflix, Amazon or Apple, I get no news. Disney, Paramount and Max do offer some iterations of news but I doubt anyone is subscribing to get access to ABC, CBS or CNN. And what Max has of CNN is pretty anemic anyway
The fact that Netflix could grow to a 270M subscriber behemoth without offering news just shows you how little people really care about news. If there was a groundswell of demand for news, Netflix would have started offering it long before now.
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Geriatric cable news watchers are largely watching entertainment masquerading as news.
This isn’t a “kids these days” problem. Boomers killed news while “kids these days” were still in diapers, if they were even born yet.
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History literally didn’t exist until the first millennial was born.
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Actually, that kind of explains quite a lot of what’s been going on.
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So the Second World War I was taught about in the Noughties didn’t actually happen?
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If it had, that would mean there are effects of it that cannot be blamed on kids these days.
As we know, kids these days managed to screw up everything from the moment they were born. The boomers did their best to save us from ourselves, but even as newborns, we just couldn’t stop ourselves from destroying any and all sense of society.
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But if the Second World War didn’t happen, then there can’t be any Boomers! *mind explodes*
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You’re conflating news with cable-style video-format news. There is plenty of demand for news in other formats. People still want real-time factual information about breaking news stories, they just don’t go to on-demand streaming sites for it.
Streaming sites beat cable on entertainment shows because their offering was better: on-demand viewing without having to know in advance what you want to watch and program a TiVo to record it. But on-demand viewing doesn’t make for a better offering if the content is real-time up-to-the-minute breaking news. So it’s not really surprising that Netflix didn’t eat all of cable’s lunch.
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Frankly, I find talking heads to be one of the more annoying and useless news sources. With text sources, I can have half a dozen different views of the same situation open across my desktop, comparing and fact-checking. I can tear away into a tangent to do deep reading on some aspect of the article, go back and reference the claims against expert literature, and do it all quickly to form a coherent picture. It’s just ultimately easier to control for Gell-Mann amnesia in print sources.
In the words of the GOAT: Video is for your optics, that’s why you watch this. But it can become hypnotic if you cannot stop it.
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This is David Byrne and Tina Weymouth libelslander and I won’t take it sitting down!!!
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It depends on the talking heads, and the interviewers, and the production support (researchers, fact-checkers, etc).
But yeah — most “talking head” news programs are just filler, with no meaningful push-back on facts or logic, nor meaningful digging in to the roots of the story.
Each streaming platform should calculate, movie by movie, episode by episode, the cost for the customer. Then, before playing anything, they should display a screen explaining the Canadian government wants money to keep funding failing un-economically viable businesses. With one “Cancel” butotn and one “Pay $ XXX to the government”.
This button will have to be pressed every single time a canadian wants to watch any stream. Every single one.
You gotta keep those customers well informed. You know.
Be compliant to the government overlords.
I don’t think imposing mandatory availability and production of local content an issue. If you don’t the media giants will just make content from and made in the US. Generally speaking this is good wherever I’ve seen it implemented like most European countries for example.
The tax to fund local TV channels, news outfits without ads and free from stock market pressures seems to be a good compromise to me but it needs to be implement carefully and with balance among all media outfits, not only streaming to keep it as low as possible.
We have a TV channel in my state that’s govt maintained and was forbidden from showing ads till very recently. The problem is some more fascist governments have recently degraded funding and liberated advertisement effectively destroying it. It was great for many years though, while governments weren’t bent into destroying state-owned stuff people liked.
If you could have a tax that was directed exclusively to keep independent media outfits producing quality with assured funding it can make a lot of difference in keeping private entities on their toes quality and price-wise (I know you’ll need performance metrics and to figure out how the administration board will be composed etc etc).
That said, it doesn’t seem Canada gave it much thought and just shoved in some random tax.
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*quality content
Define 'local' and 'small'
And I’m sure that the large stream of new money will only go to smaller, local outlets and nary a cent will end up in the pocket of major companies that are already swimming in money but could really do with an extra exec bonus…
Dear Streaming services…
OMFG learn the lesson. If you don’t use the nuclear option, they are going to keep coming back over & over & over.
Imagine each province adding their own tax on top of the national tax, then each city, then each other entity who can levy a tax on you doing so.
See every single country that has tried to demand online platforms give money to news sites and the number making that demand grows & the damage caused to those new sites when the platforms opt to no longer promote those sites with snippets that drive more eyes to their sites.
Suck it up & leave Canada as a market until they get their shit together. So many “intellectuals” offer up these easy solutions to difficult problems that can be summed up as blame technology, no facts, just blame technology.
You’d be shocked how well closing your doors & explaining it is because of government stupidity will motivate your former customers to start asking the hard questions.
This Already Sparked a Lawsuit
Been covering this story for a while now. A lot has happened since the CRTC announcement.
The CRTC ordered Google to fork over money related to revenue generated from user generated content. Google said “no” and remitted money related to other activities. The CRTC insisted and said that user generated content revenues are taxed under this scheme. Google ultimately complied, but then proceeded to sue the CRTC over it: https://www.freezenet.ca/crtc-incurs-its-first-lawsuit-over-bill-c-11-from-google/
Today, I found out that the government responded to the lawsuit and, for the first time ever, finally admitted that the Online Streaming Act, indeed, regulates user generated content: https://www.freezenet.ca/canadian-government-to-court-bill-c-11-regulates-user-generated-content/
This aspect will get fought out in court, but it is my view that this, alone, is blatantly unconstitutional. Traditional broadcasters had no role in the generation of revenue related to user generated content, yet those traditional broadcasters are unjustly enriching themselves off of those revenue streams – all of this under the insult-your-intelligence banner of “pay their fair share”.
What is coming down the pipeline is the downranking of user generated content which is a bit more of a direct way for the government to censor speech without actually removing that speech. Because the government has already admitted in court that this law regulates user generated content, they admitted that this law is, in fact, unconstitutional. In my view, the question will end up being how long it will take for this law (or, at least, the problems associated with it) gets struck down in court. I have a very hard time believing that redefining “speech” as a “broadcast” could possibly pass constitutional muster, but this has yet to be decided in the courts.
Canada seems to have forgotten what happened the last time they tried to fuck around with taxing other modes of media and entertainment. Facebook refusing to allow reports on wildfires turned out not to be such a great idea.
Re: Tech execs: 'Okay THIS time is the last time we'll have to pay the danegeld...'
Eh, it’s not a guarantee but these days governments know that if they push a tech company for long enough odds are good they’ll fold and start paying out, they just might throw a fit or two first.
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I must be missing something, but lately, I’m seeing examples of platforms choosing to drop services in a given country over paying obvious rent seeking initiatives.
Meta told Australian publishers and their government that they were pulling out of news support and dropping news links. Meta already did the same thing in Canada.
Additionally, I’ve seen Aylo/Pornhub just block various states enacting “age verification” laws.
Also, I recall Twitch pulling out of South Korea over their BS ISP “fees” as well.
Further, a number of streaming platforms have openly contemplated leaving Canada over the Online Streaming Act because they can’t afford the added 5% fees.
Pornhub also openly contemplated blocking Canada over Bill S-210 (Canada’s age verification laws) which could receive a final vote of approval as early as Friday (today).
Feel free to enlighten me on signs pointing to the opposite, but my understanding is that the trend these days is platforms are just saying “no” to BS laws and pulling up stakes or dropping specific services when governments choose to get belligerent about it. The only instance I’m aware of lately is Google going along with the Online News Act in Canada (and I’d argue that was actually a case of the Canadian government folding to pressure more than Google caving to the government).
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I’m not sure I’d include services where they face legal rather than just financial penalties over stupid laws as that provides all the incentive they need to stick to their guns but if tech/social media companies are indeed following through on their threats to leave/shut down rather than just folding and paying out after a bit that would be welcome news to me and I’d be glad to walk back my comment.
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Google, sure, but Meta?
I think you’d have better luck asking Musk to fuck a femboy.
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A child femboy, to boot. You know what they say about false accusations here.
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If you accuse a rightoid of pedophilia, there’s less than 1% chance of it being a false accusation.
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Exactly. Everyone knows that all Republicans are child molesters.
I’ve heard Stephen T Stone and Samuel Abram say it. I see no reason for them to lie or exaggerate for effect. To suggest otherwise would be homophobia.
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That’s not how anything works, especially since Samuel has never said he’s not straight, to my knowledge.
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When did I say that all republicans were Child Molesters? I don’t recall myself saying that. Links, please.
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4a. I don’t believe Samuel has ever claimed to be gay.
4b. That’s not what homophobia is.
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In the deepest hearts of hearts we all know that’s not true.
That One Guy might say that calling Republicans pedophiles gets them to double down and therefore we should stop. But guess what? We don’t. We do it all the harder.
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Hear, hear!