Is Canada getting a 'raw deal' in its partnership with Netflix?

Story transcript

The federal government says it wants to do a better job exporting Canadian culture abroad. Now,it's enlisted Netflix to help them do that.

On Thursday, Heritage Minister Mlanie Joly announced a plan that would see Netflix pony up half a billion dollars over five yearsfor investment in Canadian TV and film production.

But Globe and MailTV critic John Doyle tells As It Happens host Carol Offit's a sweet deal for Netflix, not Canada. Here is an excerpt of their conversation.

What are Canadians getting with this Netflix proposal?

That is a very good questionand the reason I was tempted to pour cold water on the minister's big announcement is that I think it could end up being a raw deal for Canada. It is not new, it is not revolutionary, which is how it's being presented by the minister and the government today.

But still, $500 million over five years, $100 million a year over five years, to make Canadian productions. Why isn't that a good thing?

Oh, it is a good thing. But it's not as revolutionary are presented. The fact is that Netflix has already been spending vast amounts of money in Canada, helping fund programs, buying programs to distribute and to stream programs around the world.

Netflix pointed out, at the end of last year, that it had already spent about $100 million last year. So what's happening now is not new, it is simply formalizing an arrangement that was already there ... Netflix, essentially, takes advantage of Canadian television that is already being made and either fully or partly subsidized by the Canadian taxpayer.

Can you give me examples of Canadian shows that have been subsidized directly or indirectly by Canadian taxpayers that Netflix then distributes?

Well, Alias Grace would be the most recent ... Netflix is part of the deal making [the show] and gets to distribute it and stream it outside of Canada.

That's an example of Netflix taking programming that Canadians are already paying them to makeand streaming them around the world.That's good in that it allows people outside of Canada to see good Canadian productions, but it's a very sweet deal for Netflix.

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What does Netflix itself get out of the announcement from the minister today?

It gets content. Netflix has an insatiable appetite for content.That is its business model. It relies on getting its subscribers all over the world to keep paying their fees every month to get new content.

This year, Netflix is expected to spend $6 billion on new content, so when it makes a deal like it has just done with Canada, it is a straight line to content that is already under way, sometimes already made, and it doesn't have to invest as much as it would if it was starting entirely from scratch with original programming.

Why are companies like Bell Media angry with this decision? What did they want the minister to do with Netflix?

They wanted Netflixto be taxed. They wanted it to be treated as if it were operating like it was a Canadian company, that has to do minimum standards of Canadian content in terms of production and development, and to pay taxes and pay into the funds for the creation of Canadiantelevision that Canadianbroadcasters do.

Netflix is getting away, in this circumstance, with committing to helping Canadian television without all of the obligations that are put on top of Bell Media and other Canadianbroadcasters ...The announcement, to me, is a kind of glossy sticker on the minister's big, new remake, remodel of Canadiancreative policyand, in fact, it doesn't really amount to a lot.

How will the CanCon regulations be applied to Netflix?

That remains to be seen. That is part of the opaque quality of all of this. As far as I know it remains to be worked out the devil is in the details.

Netflix tends to be a pretty opaque company. It doesn't deal in ratings, it never announced how many people watch the shows that it streams. It tries to shy away from the amount of money that it spends, in detail, on the creation of shows, per episode or per series.

So it seems odd to me that the government ministeris sort of hitching her wagon to this secretive, rather opaque foreign streaming service.

This interview has been edited for length and clarity. For more on this story, listen to our full interview with John Doyle.