Streaming giants challenge Canada’s new content funding rules

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Global streaming companies are pushing back against new Canadian regulations that require them to contribute a portion of their Canadian revenues to support local content production, including news.

In June, the Canadian Radio-television and Telecommunications Commission (CRTC) announced that major online streaming services must allocate 5% of their Canadian revenues to support the domestic broadcasting system. This decision, set to take effect in September, is expected to generate around C$200 million ($146 million) annually for local content creation.

However, the Motion Picture Association-Canada, representing industry heavyweights like Netflix, Walt Disney Co, and others, has filed legal challenges against these rules. The association argues that the CRTC has not provided a sufficient legal basis for requiring foreign online companies to contribute to news production in Canada.

“The CRTC acted unreasonably in compelling foreign online undertakings to contribute monies to support news production,” the association stated in its legal filing. They’re seeking both an appeal and a judicial review of the decision.

The CRTC has defended its decision, explaining that the funds will be directed towards areas of immediate need in the broadcasting system. This includes local news on radio and television, as well as French-language and Indigenous content. The regulator aims to ensure that online streaming services promote Canadian music and stories while supporting Canadian jobs.

This regulatory move is part of a broader effort by the Canadian government to modernize its broadcasting laws in the face of rapid changes in the media landscape. As streaming platforms continue to gain market share, policymakers are grappling with how to maintain support for local content creation and news production.

The outcome of this legal challenge could have significant implications for how digital media companies operate in Canada and potentially influence similar debates in other countries. As the September implementation date approaches, all eyes will be on the courts to see how they balance the interests of global media companies with Canada’s cultural policy objectives.

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