Writers, producers warn streaming content boom is squeezing out Canadian creators

Scroll through your favourite streaming service and you're likely to come across some Canadiana, whether homegrown hits like Schitt's Creek and Kim's Convenience, or shows filled with familiar landmarks like The Expanse and The Handmaid's Tale.

But amid the tidal wave of content coming from an increasing number of streamers, members of the Canadian film and TV industry are expressing concern about local storytellers being left out.

This week, a government-appointed panel is set to release a long-awaited report on recommendations to modernize Canada's broadcasting laws. Industry veterans are eager to see if it will recommend that Netflix, Amazon Prime and other foreign companies streaming programming to Canadians contribute a portion of their revenues directly to funding Canadian-made projects. 

"We're now really focused on a lot of international content and that is fantastic — provided you can still provide some balance with your own stories and your own culture. That's really what's missing in the tale of all the new streamers," said Maureen Parker, executive director of the Writers Guild of Canada (WGC).

According to the guild, scripted programming — such as dramas, sitcoms and kids' shows — commissioned by the major English-language private broadcasters has fallen significantly since 2014.

The total hours WGC members were commissioned to work on scripted Canadian shows has plummeted since 2014, by between 61 and 82 per cent, depending on the broadcaster. Meanwhile, the production of U.S.-led film and TV shows in Canadian cities has skyrocketed, attributed in part to new programming for streaming services.

Production by services such as Netflix and Apple TV Plus has increased 298.8 per cent since 2014, the WGC said.

The Canadian Media Producers Association (CMPA) has seen a similar trend. In its 2018 annual economic report, for instance, it said Canadian television production dropped by $309 million and in-house productions by Canadian broadcasters, specifically, decreased $201 million. 

Foreign service productions have become "the largest single segment of the Canadian screen-based production sector," said the CMPA report. They jumped by 26.3 per cent to $4.77 billion in 2017-2018. 

About three-quarters of these productions come from the U.S., where the copyright resides, the CMPA noted.

As it stands now, the Broadcast Act requires all traditional broadcasters, cable and satellite providers, and others to contribute to the Canadian Media Fund (CMF), a key source of funding for Canadian content creators. The act currently does not require foreign streaming services to contribute. 

"The private broadcasters feel like they're up against the streamers, who have no regulatory requirements," Parker noted. 

Watch | We ask Canadians how much more they'd pay to fund Canadian content:

Would you pay Netflix more if it boosted Canadian content?

5 years ago

Duration 1:26

CBC's Eli Glasner asks people in downtown Toronto whether they'd support paying Netflix a bit more each month if the money was earmarked for Canadian content.

Netflix, the current streaming leader, argued against paying into the CMF last January in its submission to the broadcasting review panel. In 2017, the company vowed to pour $500 million into original, made-in-Canada programming and noted last year that it would "significantly exceed" that earlier pledge. 

A Netflix spokesperson declined to offer additional comment to CBC News, beyond referring to its review panel submission a year ago.

"Netflix is not reporting how they're spending whatever they're spending," Parker said.

Foreign productions shooting in cities like Toronto, Vancouver and Calgary are a boon for the service economy in those respective cities, but they don't inject actual content by Canadian creators into a streamer's lineup, Parker said.

'Branch plant' vs hub of creation?

Some industry veterans see a danger of the Canadian industry becoming "a branch-plant economy" rather than a hotspot where quality programming originates. They believe compelling foreign streamers to directly contribute to funding structures like the CMF is a key way to combat this.

"[If] you're just working on someone else's show and, one day, if it's cheaper to produce in Mexico or in the Ukraine, the production will get up and move to those studios. And you'll be left without a base of production, a base of intellectual property, a base of ownership that can carry on," said film and TV producer Martin Katz, a former chair of the Academy of Canadian Cinema and Television.

"Netflix didn't makes Schitt's Creek ... Netflix bought Schitt's Creek after it was a beautiful, successful, smart, innovative and groundbreaking show. Same with Kim's Convenience. Same with Workin' Moms."

From Amazon Prime to Apple TV Plus and more, streamers are definitely spending to create their own original content. A new report projects that streaming leader Netflix, for instance, will invest more than $17 billion US overall on content in 2020, including on its original productions.

Most often, however, "we discover things on Netflix that were funded and supported by someone else," Katz noted.

"All those great Danish noir shows? Those weren't created by Netflix. They're created by a whole infrastructure in Denmark that is government-supported, local content creation."

Streamers "are getting a great deal with access to our market," said Katz.

"All we're saying is they should be leaving something here and that thing that they leave here isn't an amount that they should make up on their own."

Worldwide calls for local investment

It's an argument that the U.S.-led streaming companies are also facing elsewhere.

In Australia, officials have questioned whether streamers should be required to support local productions and operate under content quota rules closer to those followed by Australian TV networks.

France is pondering legislation requiring foreign streamers to invest 25 per cent of their revenue from French subscribers into local content production. The European Union has given foreign video streamers until September 2020 to ensure that a minimum of 30 per cent of content available to EU subscribers is from the EU. 

In response, Netflix has been vigorously expanding its European operations, including opening a large, 40-employee office in Paris this month (its fourth in Europe) and touting new French projects and partnerships. 

While Prime Minister Justin Trudeau had previously dismissed the notion of taxing digital services, during the last election campaign he and all the major party leaders seemingly embraced the idea that international tech giants should contribute to Canada's economy. 

The chair of Canada's broadcast and telecom regulator called it "inevitable" that foreign streamers will have to contribute to the production of Canadian content.

"Companies who are extracting a profit — they are participating in the Canadian market and deriving revenues — should be contributing," Ian Scott, chair of the Canadian Radio-television and Telecommunications Commission, told The Canadian Press in a recent interview.

But, the situation is not as simple as Canada introducing a so-called Netflix tax, he said.  

"The manner that they contribute is what's at issue."

The CRTC's Communications Monitoring Report, released this week, estimated that subscription-based video-on-demand services — including Netflix, Crave and Quebec-based Club Illico — had an estimated revenue of $2.5 billion Cdn in 2018. Netflix was by far the biggest player, representing 65 per cent of the pie, while Amazon Prime Video was second with an eight-per-cent share of that revenue total.

Netflix has said Canada represents roughly 10 per cent of its overall North American business and it counts about 6.5 million Canadian subscribers. On Tuesday, the California-based company's latest earnings report revealed it generated $20 billion US in revenue globally in 2019, with about $10 billion coming from its U.S. and Canada division.