True to its nature, Netflix provided a mixture of action, drama, and even some laughs as it kicked off the final day of proceedings at the CRTC’s “Let’s Talk TV” hearings on Friday.
The highly anticipated appearance by the streaming video service was marked by several testy exchanges between Netflix’s director of global public policy, Corie Wright (pictured above), and both CRTC chairman Jean-Pierre Blais and vice-chairman Tom Pentafountas.
These exchanges, which at one point led Blais to call an abrupt halt to proceedings, stemmed from Wright’s reluctance to provide the Commission with details about key facets of Netflix’s Canadian business – such as the size of its Canadian customer base and the consumption of Canadian content – because of competitive reasons.
Blais, who is also a lawyer, suggested that Wright’s fears about “commercially sensitive” business information finding its way into the public domain were unfounded.
“We have hundreds of proceedings every year… and very often evidence is filed in confidence,” he said. “We often give confidential treatment, particularly where markets are competitive, and we do that everyday. But we do treat everyone equally.”
It was reminiscent of a similarly tense appearance by Google’s lawyer Jason Kee on the opening day of “Let’s Talk TV,” with Wright being repeatedly admonished for failing to provide the CRTC with any evidence to back up arguments made during her presentation.
“When you mentioned that you liked mysteries I thought there may have been a connection there – that the facts were only going to come out slowly,” said a clearly exasperated Blais at one point during Wright’s nearly 80-minute appearance.
Netflix’s voluntary appearance before the CRTC coincided with the announcement that it has launched this week in six European countries. The streaming video-on-demand service now has 50 million subscribers in 40 markets.
Its disruptive model is at the crux of these hearings into the future of the Canadian broadcasting system, though Wright attempted to downplay its impact during her presentation. “Though some interveners seem to think this proceeding is all about Netflix, it’s not,” she said.
Netflix urged the regulator to take a hands-off approach to online services, saying that excessive regulation would not be in the best interest of consumers. The service is not currently regulated by the CRTC, although several groups appearing at the “Lets Talk TV” hearings have pushed for that to change.
“This cautions against the application of regulation – however well intentioned – that might inadvertently usurp Canadian consumers’ ability to vote with their dollars and eyeballs to shape the media marketplace into one that best suits their needs and demands,” said Wright.
“We believe that the CRTC’s historically light-touch approach to the online video space creates an environment that is more likely to produce increased consumer choice, content diversity, innovation, higher value and lower prices.”
Several groups appearing at the “Let’s Talk TV” hearings, including the Ontario government, had suggested that Netflix should be regulated and required to pay into the funding for Canadian productions.
However, Wright noted that Netflix is seeking none of the regulatory benefits afforded to traditional broadcasters, such as program subsidies and guaranteed distribution.
In one of several “homework” assignments given to Wright, Pentafountas asked her to provide information on Netflix’s European operations, specifically related to reports that it has agreed to pay the French ministry of culture’s 2% VOD tax for revenues above 10 million Euros and agreed not to show films less than three years old.
“As you can see, other nations around the world have these cultural concerns – you should not be surprised,” he said.
Netflix entered the Canadian market in 2010 – its second market after the U.S. – and has repeatedly stated that it a key market. While Netflix does not disclose subscriber numbers, some studies have suggested that nearly one third of Anglophone Canadians (32%) currently use the service.
While noting that there is no regulation requiring Netflix to provide Canadian content, Wright said that its library currently offers a variety of programming from the CBC, the National Film Board and several Canadian producers.
“Regulation was not a factor in this decision,” she said. “Serving our members’ interests was.”
She said that its U.S. library also includes several Canadian titles, including Murdoch Mysteries and Caillou, and that the service focuses on acquiring local content in each market it enters.
What was not made clear was how much of that Canadian content is being viewed. While Netflix’s much-vaunted data analytics are at the heart of its success in creating and offering content that consumers want to watch, the Commission was visibly upset by Wright’s reluctance to provide numbers relating to the consumption of Canadian content.
“You paid for rights from producers in Canada, and you know if those shows are being watched or not being watched, when they’re being watched, how often they’re being watched and who’s watching them,” said Pentafountas.
“To the extent that we are able to submit this confidentially, and we can enjoy confidential treatment from the Commission, we obviously want to be helpful in your undertaking in this process,” responded Wright, eliciting a heavy sigh from the vice-chairman.
“I’m sure you track that content – all we’re asking is to see,” said Pentafountas. “Given that, in your own words, Canadian programming is highly popular, show us how and where it’s popular. It’s not as if you don’t have that information, because you’ve identified some films as Canadian, and some series as Canadian.”
Blais subsequently ordered Netflix to provide the confidential information by 5 p.m. Monday, to which Wright responded that compiling such data would require more time.
Asked by Blais to at least provide an update by Monday as to how long it would take to provide such information, Wright responded in true lawyerly fashion: “I’d be happy to undertake to understand exactly how much time we would need to provide data that would be responsive.”
Her response prompted a stinging rebuke from Pentafountas: “It’s a heck of an answer for someone that takes perhaps hundreds of millions of dollars out of the Canadian economy. If you can help us, we’d appreciate it.”
All that was missing was the “bong bong” of Law & Order, one of several mysteries currently streaming on Netflix.
