Monday, November 21, 2016

Canadian Content Creators harmed when Netflix claimed to be a "broadcaster"

A few people have posted a similar message with the #DigiCanCon hashtag.

(Barbara Worthy is a writer, performer and producer primarily for CBC. Heather Knox is a Toronto based actor.)

While their intention might have been to add some money to a funding source, ideas within this tweet threaten funding for Canadian creators as well as threaten their creativity in other ways.

Funding issues

I discussed a number of the funding issues in an earlier article on making sense of the Netflix, ISP, ICT DigiCanCon tax. That was a summary of some of the most visible proposals, and a suggestion that funding through general revenue is the least risky to the interests of content creators. The posting didn't put these proposals it in the larger context of other funding programs as Michael Geist did in The Billion Dollar Question: How to Pay for Melanie Joly’s Digital Cancon Plans.

This context is critical.  While Heather, Barbara and others want to add some money to the millions involved in the Canadian Media Fund, what their campaign will likely do is put at risk the billions of dollars of support that the cultural industries already receive from Canadian taxpayers. The more the cultural industries want to extract money from communications infrastructure used for far more than communicating cultural works, or tax services that make content easier to legally access, the more likely the new generation of online activists will start to highlight, scrutinize and target all subsidies to the cultural industries.

This is a very risky scenario for the cultural industry, especially if any of the larger players in the ICT industry feel threatened or are lobbied into action by their customers.  I once gave my technology property rights talk at a technology conference. After the talk someone who worked at Intel came up to me and said that I shouldn't be concerned about the content industry trying to influence features in or having control over communications technology.  He said that if the content industry were able to change policy in ways that didn't benefit Intel that they would purchase them: purchase the major studios and record labels, and ensure that these industries continued to promote ideas that were to Intel's benefit.   This of course didn't reduce my concern as I believe citizens and not third parties (device manufacturers or content industry) should be in control of the technology that intermediates more and more of our lives.  It was an important reminder of the relative size of some of the companies in the ICT industry compared to the content industry.

Rather than increasing cost through levies or taxes, we should be subsidizing services like Netflix as a measure to reduce copyright infringement. While broadcasting is a very different market, lawful content libraries like Netflix exist in the same space as unauthorized content libraries. The more we can drive Canadians to non-infringing content libraries like Netflix, the less infringement will happen in Canada. Moving Canadians away from infringing sources of content, sometimes the only content library source for specific content, represents a far more important source of funding for Canadian creators than anything that can be extracted via a levy on Netflix.

Spectrum of Canadian content freedom.

While the ideas in those tweets put funding at risk, they also cause risk to creators beyond funding.

To understand this you need to picture a line which can represent the spectrum of Canadian content freedom.

By spectrum I am referring to a classification in terms of its position on a scale between two extreme or opposite points, from one end being absolute control and the other end being content freedom.  I am not speaking of a set of transmission frequencies.

To avoid any confusion, freedom is a question of liberty and not price: content freedom is about removing barriers to audiences accessing the content that they want while continuing to ensure creators get compensated.

From the controlled end of the spectrum

  • One extreme is when an individual or entity unilaterally decides what content people must watch at any given time.
  • One step towards freedom from this is when audiences are allowed to opt not not listen or watch.
  • One further step towards freedom from this is when audiences have more than one stream of content to choose between.  Even though what is on the stream is still fully programmed by someone else, the ability to choose between streams allowed for some minimal content freedom.

This is the world of broadcasting.  What is on each stream is programmed by someone, but there are choices of streams.  I grew up in a smaller town in an area not serviced by cable television where there were a handful of radio stations and 4 over-the-air television stations.  Those 4 television stations (A French and English CBC affiliate, a CTV affiliate, and TV Ontario) were the fully programmed video streams that we could watch.

What makes something broadcasting is not whether sound, video, or even text data is communicated "by radio waves or other means of telecommunication for reception by the public" (Broadcast Act) but the fact that this communication is programmed.  The broadcast act regulations are intended to be targeted at the programmers, to ensure among other things that these programmers weren't unduly filtering or dictating what content Canadian audiences are able to enjoy.

As these streams were fully programmed they delivered what the programmers wanted people to see, not necessarily what Canadian audiences wanted to see.

One obvious thing missing was that Canadians wanted to hear and view some of our own music and stories told by fellow Canadians.  It was cheaper for the programmers at the broadcasters, especially for television, to license Canadian rights to US shows than to license (often fully finance if there weren't additional markets) Canadian content.
  • To bring Canada one step further on the content freedom spectrum, Canada introduced Canadian content quota requirements.
While some may feel content quota system exists to serve content producers, the policy can primarily be justified as a mechanism to better enable Canadians to access the content they want and not have the programmers at a broadcaster dictate what they can and cannot enjoy.  I believe we need to recognize the high value of Canadian content to Canadians, and recognize that we do not need to force Canadians to view or listen Canadian content. We only need to regulate intermediaries which might otherwise not be offering Canadians access to content created by fellow Canadians.

The date you first came across cable television depended on where you lived in Canada.  As early as the 1950's there was experimentation with the reception and redistribution of distant television stations. At this point there weren't many Canadian stations, so it was US stations that were being redistributed to Canadians.

While this retransmission was originally an instance of copyright infringement, this activity was eventually legalized and what the CRTC now calls Broadcast Distribution Undertakings (BDU) became a legitimate and regulated industry.

While there were now more channels to choose from, we still needed to strongly regulate the BDUs.
  • To bring Canada further towards content freedom, BDUs are actively regulated to ensure that their influence over the choice and placement of channels didn't negatively impact the rights of Canadians.
As one small but critically important example, local Canadian stations within a geographic region must exist in the basic cable package and must be conveniently located within the channel lineup (with Analog BDUs that was channel 13 and below).

An additional aspect of content freedom is for content to be available on "reception" (access) devices chosen by the audiences.   Unfortunately the BDU industry was allowed by the CRTC to take a major step backwards with the digital transition.  With analog cable there were vendor-neutral standards used to communicate channels, allowing audiences to buy televisions of their favorite brand and they could receive analog cable channels.  The CRTC mismanaged the digital transition in many ways, and one was they allowed the BDUs to move from that vendor neutrality to a system where only specific technology brands -- often only supplied by the BDU -- can be used to receive digital BDU retransmissions. This is an error I hope the Canadian government will quickly correct to benefit those still using BDU services.

There are also growing concerns about media concentration, with BDUs owning most of the Canadian television stations (as well as other media).  Whether we will advance along the spectrum of Canadian content freedom, or retreat towards more centralized control, is a matter of active public policy debate. This debate, rather than narrow and ephemeral funding issues, should be at the heart of the Canadian Content in a digital world consultations.

From the freedom end of the spectrum

Lets look at this line from the other end for a bit.

  • Imagine a utility which offered audiences a library of all audio and video content ever recorded, easily searchable to quickly find anything someone would want, and that was accessible at any time, location, and on any reception device of the audience's choosing.  The creators of this content are all compensated appropriately for their creativity through a variety of mechanisms that ensure that the means to pay is never a barrier to access, and there is no longer any incentive to infringe copyright as there is no possibility that infringement could be easier than accessing the content library.

Services like Netflix and Google (YouTube, Google Play Movies and TV, etc) are by far not this utopia. They are, however, much closer to this end of the spectrum than they are to the fully programmed end of the spectrum.

  • Netflix offers subscribers, for a reasonable fixed monthly fee, access to any content in its catalog to view at a time of the audiences choosing.  There are limits on what devices can be used, but it is far less restrictive than nearly any other (legal) service which offers access to content still under copyright. For content which Netflix funds, or where the copyright holder allows, it is entered into the catalog on release date.

While Netflix does not program the content (meaning, doesn't decide what content and at what time it is communicated to audiences), and thus broadcast-style regulation is entirely inappropriate for a service that has little in common with a broadcaster, there is still a need to apply regulation.

Netflix has choices it makes about what content is available in its catalog, and for how long. This is often a complex negotiation with content creators (for the production of new content) or copyright holders (for the licensing of existing content).  Sometimes (some suggest most often) it is the creators and copyright holders which are denying licensing to Netflix for some reason, and sometimes it is Netflix deciding to not bother to attempt to license a specific title. In any case, these negotiations should be monitored by governments.  Parties which are through their actions reducing Canadian's ability to access content through content catalog services should be regulated.

One problem area is exclusive regional licensing.  Content is licensed exclusively for a region, and then only offered through the distribution channels controlled by that licensee.  One of the problem cases can be seen when a broadcaster or BDU licenses content and then denies access to that content other than through a broadcaster (specifically, not offering via any legal content library service similar to Netflix, as well as blocking Netflix from being able to license).

The broadcasting industry and the content library services are different markets, and trying to force audiences back to broadcasting (backwards along the content freedom spectrum) is an inappropriate abuse of exclusive licenses.  Like a BDU denying access to a local channel, or a broadcaster denying access to Canadian content through their channel, other company policies which restrict Canadians access to the content of their choice should not be tolerated.

An important thing to note is that while Netflix is no utopia, I suspect adequate monitoring would reveal than any lack of Canadian content accessible through content libraries is more likely to be the anti-competitive efforts of Canadian broadcasters and BDUs than it is any choice on the part of content library services like Netflix.  Even when it comes to the Netflix catalog it is the actions of Canadian broadcasters and BDUs that require the regulation.

  • A few step away from freedom are the second-run content catalog services run by Canadian BDUs such as CraveTV and Shomi.  The catalog is smaller than Netflix, the service is available on far fewer devices, and is second-run in that content is first made available via other media (such as programmed broadcast television) before entering the catalog. (See: CraveTV not competitive with Netflix, or even DVD's)
While second-run streaming services have an important place in the market, just as second-run movie theaters do, there is a conflict of interest when these services are run by broadcasters or BDUs. Granting access to older episodes of series, but denying access to new episodes, appears to be an attempt to drive people back to cable to watch the newer episodes.  When a BDU has an exclusive license to first-run content in Canada, they have that disincentive to actually offering access to the content through their own streaming service.

Unfortunately, the reality is that this business practice ends up driving people to copyright infringement which exists in the same space as lawful content catalogs, not to broadcasters or BDUs which represent a quite different market.

Wwhen it comes to issues like copyright, the broadcasters and BDUs try to (ab)use the content industry as pawns in their desire to stop people from moving closer to the content freedom end of the spectrum I describe.  It has become clear to me that BDUs have a stronger preference for  Canadians to infringe a creators copyright than for Canadians to learn about legal alternatives to the broadcaster or BDU distribution platforms.

With the vertical integration and media concentration we see in Canada there is a strong need for the government to be monitoring and regulating the broadcasters and BDUs to ensure that they aren't able to unduly influence what Canadians are able to access.
  • Further steps away from freedom are the steaming services available from Canadian broadcasters.   These services offer a tiny catalog of content where episodes of series are only available a week or two, but never entire seasons available for audiences to watch at their own pace. These services are most often available on even fewer devices than CraveTV.

In the context of technological progress

I hope the idea of this spectrum is clear, and is a good starting point for comparing the growing variety of content distribution mechanisms available to Canadians.  While we can have an important debate about the type of regulation that is needed for various content catalog services, it should be obvious that content catalog services have very little in common with broadcasting, and that blindly applying broadcast-style regulation would be entirely inappropriate (and counter-productive).

It should also be obvious that Canadian content creators benefit when they are able to meet up on the platforms chosen by audiences, and that audiences are moving away from centralized control to content freedom.  Creators who are enabled to move with audiences by having their content unbundled from any content distribution platform will benefit the most.
We should note that there has been a progression over the decades from limitations in technology that kept us closer to the centralized-control end of the spectrum to more and more content freedom. Anyone who is thinking towards the future should be thinking about technologies that grant audiences more freedom, not looking backwards to technologies, business models, or government policies that restrict content freedom.

Greatest barrier to moving closer to Canadian Content freedom

The greatest barrier to moving closer to Canadian Content freedom, where greater freedom would have a positive impact for both content creators and Canadian audiences, can be seen in the tweet.
"If we want CDN shows on *all* our screens"
The notion is that who provided licensing fees, or who the copyright holder of Canadian content is, should be tied to which screens the content is allowed to be viewed on.  This is a concept which Canada must quickly reject, especially for any content that receives any type of public subsidy.  Once video is released it should equally be accessible on any screen, and distribution platform dependencies should be disallowed.

This is a concern I have had for a very long time.  It is a notion that only benefits those specialized companies that exist in the post-convergence overlap between the telecommunications and BDU sector.  For these companies, cultural content only exists to benefit their special economic interests. In their mind content and their proprietary content delivery platforms are a bundle, and some in the sector have offensively said that a specific show no different from a specific Happy Meal toy

This is exactly the type of inappropriate control over culture that required Canadian content regulations to exist. Canadian content regulation is needed because specific shows have connection to us as people in ways that are entirely different than a "Happy Meal toy".  These stories form part of who we are as individuals, as communities, and as a country.

A world where Canadian creators are mere employees or in some other subservient role to a specific content distribution platform is not one that can offer any respect for Canadian creators, Canadian audiences, or Canadian culture.

Unfortunately far too many creators have a Stockholm syndrome relationship with broadcasters or BDUs, agreeing to and/or promoting ideas which are contrary to their own best interests.  This is a serous problem that will require government intervention to protect the cultural sector -- sometimes from individuals alleging to represent the interests of the cultural sector.

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