September 19, 2014 / 9:29 PM / 5 years ago

Netflix tells Canada regulator it shouldn't subsidize 'old media'

TORONTO (Reuters) - Online video streaming service Netflix Inc told Canada’s broadcast regulator on Friday that it opposes paying to support “old media” and its own commercial interests and market dynamics were enough to ensure it distributed Canadian content.

An illustration photo shows the logo of Netflix the American provider of on-demand Internet streaming media in Paris September 15, 2014. REUTERS/Gonzalo Fuentes

The submissions from Netflix came on the last day of a two-week hearing on the future of Canadian television in which the Californian company has been painted as a disruptive threat to the country’s established cable and broadcast television interests.

“We are moving from a period of broadcast scarcity to one of Internet abundance,” said Corie Wright, director of global public policy at Netflix. “This has a profound and largely positive impact on consumers and the marketplace for content.”

Netflix and other online-only services have been exempted from Canadian Radio-television and Telecommunications Commission (CRTC) rules that enforce a minimum level of financial support and air time for Canadian programs on traditional TV.

Some politicians have advocated that streaming services like Netflix be regulated like traditional Canadian broadcasters, though the federal Conservative government had said they are not interested in taking this route.

Domestic broadcasters and distributors have suggested at the hearings that if Netflix remains exempt, they should also be granted more flexibility.

The question of consumer choice has been key to the Let’s Talk TV hearings, with the government eager to see the CRTC force distributors to offer smaller packages of channels, saying Canadian viewers should not be compelled to pay for channels they don’t watch in order to get the channels they do.

Netflix’s Wright argued that the reliance of established players on advertising means they must aim for the widest possible audience - which encourages bundling of channels - while Netflix has more freedom to offer niche or experimental content.

“Our business does not depend on getting millions of people to watch a single show, all at once, at a predetermined time,” she said.

The regulator has already said that whatever replaces existing rules - conclusions will not be made until well into 2015 - should not protect specific channels or business models to the detriment of consumer choice.

In terse exchanges, the head of the CRTC demanded Netflix hand over details of its operations in Canada, including revenue and subscriber figures, and amounts spent on Canadian productions and programming, by Monday.

The information will not be disclosed outside of the CRTC.

Netflix, which chose Canada for its first international expansion back in 2010, has more than 50 million subscribers worldwide who pay far less per month than cable subscribers for on-demand programming without commercials.

Editing by Jeffrey Hodgson and Marguerita Choy

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