When you cut the cord, are you killing TV?

In the 24 hours after specialty channel HBO aired the premiere of season six of Game of Thrones, the episode was downloaded over one million times and evidence suggests a disproportionate number of those torrent-based downloads went to a hard drive in Canada.  

Increasingly, Canadians are cutting the cord, abandoning cable TV and getting their content from other sources.

And TV writer Denis McGrath says that could lead to a world with nothing but re-runs. 

"Within five years, you will see a significant constriction in the types of shows that are getting made," he tells host Brent Bambury. 

McGrath says there is a limited number of ways to finance the massive budgets of television production and that the choices we're making as consumers are grinding down revenue that used to go to making TV. 

"Either you, as a consumer, pay the full cost of it or … it gets amortized some other way. That was the old system. You watched advertisements, you paid for cable." 

In that system, a percentage of revenue from the cable companies went to the Canadian Media Fund, which is how many TV shows get funded in Canada. But as consumers move away from cable, or choose skinny basic cable packages, or web-based streaming services such as Netflix, McGrath says there's no model to replace the lost funding. 

McGrath says the Netflix model is unsustainable and calls it a "parasitic service."

"There are a lot of disruptive technologies that are coming along that are making it worse. Probably chief among these are streaming services like Netflix. You pay $8 or $10 a month now and you get to watch all these goodies but those shows were made under the very system that Netflix is actually destroying. And even Netflix knows this." 

The implications for Canadian content

Netflix has no Canadian staff and internet-based businesses don't pay into the Canadian Media Fund. 

Says McGrath, "A lot of people who sell them television shows are starting to push back because it is like– we are helping you to kill us". 

McGrath says the Canadian production industry, with revenues of about $5 billion, could see job losses in the immediate future and that's creating anxiety.

"There's a game of musical chairs going on and it's like the music is playing and everybody's dancing really fast, but everybody is really worried when they look two to three years ahead ... because you can't make the financing, because you can't make enough selling it, because people expect that it should be free." 

Now, the federal government is getting involved. Last week, Canadian Heritage Minister Mélanie Joly waded in, announcing the launch of a consultative process on how to "strengthen the creation, discovery and export of Canadian content in a digital world." 

It could have wide-reaching implications for the regulatory structure governing broadcasting and the internet, and McGrath says it need to. 

"It literally needs to be every aspect of the industry. It's a conversation that's needed to happen for 25 years. The Broadcasting Act was last updated in 1991. It's pathetic. I honestly think that what needs to happen is the bigger conversation reforming the CRTC. It means recognizing that television, communications, cable and internet and broadcasting are not separate anymore."

Episode two of Game of Thrones season six airs Sunday night on HBO.