Netflix refuses CRTC demand to hand over subscriber data

http://www.cbc.ca/news/business/netflix-refuses-crtc-demand-to-hand-over-subscriber-data-1.2774921?cmp=rss

by randlet • 12 years ago

124 91 12 years ago

otoburb2• 12 years ago

It was also told to hand over information related to the Canadian content it creates or provides to subscribers.

The Canadian Radio-television and Telecommunications Commission (CRTC) has a mandate to determine whether broadcasters comply with their operating license via a set quota of Canadian-specific content, along with Canadian-content fees. This quote deals with the heart of the matter because Netflix was given an exemption from being classified under the Canadian Broadcasting Act, and one of the conditions to maintain this exemption was that the exempted entity would share Canadian subscriber data.

I don't believe that Netflix needs to release specific subscriber details (e.g. name, number), but would have needed to release anonymized details broken down by province and potentially city. Since Netflix is choosing not to comply at all will make an interesting test of the CRTC's powers (which are typically quite extensive). I wonder how Hulu and other streaming providers are handling this?

A Financial Post article provides a little more detail around this point[1].

[1] http://business.financialpost.com/2014/09/19/sparks-fly-as-n...

toomuchtodo3• 12 years ago

How can Netflix be described as a broadcaster? If I start serving streaming video to Canadians from my home do I suddenly fall under CRTC jurisdiction?

otoburb2• 12 years ago

That's exactly the issue at hand! To answer your second question first, streaming video over the Internet was at stake in a 1999 decision around the distinction and definitions of the terms "old" vs. "new media"[1][2], resulting in the "exemption" policy for new media that is now being revisited.

Getting to the root of your first question, the CRTC deems that any media delivered to residents of Canada (i.e. on Canadian soil) is within their jurisdiction. I believe most regulatory bodies operate on similar "boundaries" (e.g. United States FCC), other than maritime bodies that need to delineate a 12-mile radius from their coastline to make the distinction between "territorial" vs. "international" waters[3].

EDIT: If you happen to stream content to a private audience, I think you'd be exempt just because you're too small of a target to go after. But if you tried to scale your Canadian streaming operation up, you'll probably run afoul of the CRTC without obtaining either a license or at least applying for an exemption. IANAL.

[1] http://www.crtc.gc.ca/eng/archive/1999/PB99-197.htm

[2] https://en.wikipedia.org/wiki/Canadian_Radio-television_and_...

[3] https://en.wikipedia.org/wiki/Territorial_waters

a-priori• 12 years ago

Is Netflix a broadcaster? In some ways, they quack like one, so the CRTC is going to act like they are one until they're told otherwise by the courts.

It's in the nature of bureaucracies to attempt to expand their jurisdiction as far as the law will allow and, when a grey area exists, to err on the side of overreaching until they're specifically told they do not have jurisdiction.

bjelkeman-again• 12 years ago

Does this mean that YouTube needs to have a quota for Canadian specific content you need to watch in Canada?

wmil2• 12 years ago

No. Or rather not yet. The CRTC's position is that they have authority over Netflix, Youtube, Vimeo, Blip, etc but regulations aren't yet needed.

darryl42• 12 years ago

Hulu is not available in Canada so the CRTC should not be interested.

wmil2• 12 years ago

A blanket exception for all online services was issued in 1999, in 2007 it was amended to require financial reports when requested.

So there's nothing specific to Netflix.

However most streaming providers aren't available in Canada. Netflix is the only one who's gone to the trouble of acquiring streaming rights for Canada for major TV/Movies.

Google (Youtube) has adopted a similar position to Netflix, but they haven't faced any requests yet.

bryanlarsen• 12 years ago

As usual the best reporting of the issue is by Michael Geist:

http://www.huffingtonpost.ca/michael-geist/crtc-netflix_b_58...

fidotron2• 12 years ago

Canada has simply relied on supply side regulation of everything too long, while the Canadian market persists in wanting too many things which are not Canadian.

This applies to music, film, TV, aeroplanes, and in the case of Quebec even the spoken language itself.

Canada has to move to demand based thinking where if you want to sell Canadian content you have to have a need-or-wants end market for it, not simply force a quota of it on people that was produced with ever increasingly necessary subsidies thanks to how out of touch with the end market it becomes.

Make Canadian content more attractive to everyone (including Canadians) and the problem would solve itself.

smoyer2• 12 years ago

Maybe it's just a cultural disconnect but it's pretty rare that there's a Canadian television show I'm interested in ... though the number of U.S. shows I find interesting has dropped too.

This sort of regulation (eventually) does a serious disservice to the industry. I've replaced television (of all sorts) with streamed video content and/or on-line reading. It's not about the delivery method it's about spending my free time watching/reading the most entertaining content.

When I was little, if I hadn't brought books and magazines home from the library, the only "new" content I could be entertained by the television. New regulations on Internet content providers won't solve the CATV viewership problem it will simply push viewers from the (newly regulated) popular content providers to other providers. They're not going back to television unless someone dramatically improves the programming.

click1702• 12 years ago

One of the artifacts of this is that Canadian music can sometimes be segregated to its own station, as if "Canadian music" was a genre. XM did this for example.

As a Canadian though there are few Canadian shows I'm interested in. Maybe the occasional CBC DocZone, but that's about it.

I would like to see more of BBC model over here, it seems to work out swimmingly for them. (Doctor Who, Horizon, Top Gear, This World, and that's before you get to the one-off films)

ajlburke• 12 years ago

You might want to check out "Orphan Black" then - it's a Canada/BBC co-production and really really good.

timsco2• 12 years ago

But the only reason that half of the Canadian music we all know and love exists at all is because of the CanCon laws that regulate Canadian radio. FM and AM is forced to play a high percentage of Canadian music.

anigbrowl2• 12 years ago

Agree in principle, but the fact is that most American content is subsidized in one way or another, and most other countries also subsidize film and TV production. From an economic view I don't like subsidies, but as someone who works in indie film I'm not going to be purist about it if one helps me get paid, it's difficult enough to fund and sell film as it is.

Cultural material is not a simple commodity that you can apply laws of supply and demand to, because cultural products are not economic substitutes for each other. This is one of the few areas where I think some protectionism may be justified, because if you import all your media then it tends to crowd out one's domestic culture, which in extreme cases can lead to social fragmentation. If you don't have any kind of domestic media output then that also limits your country's potential for tourism and inward investment.

I grew up in Ireland and although I was very interested in film from an early age there was very little domestic film or TV production going on; maybe 30-40% of what was on TV came from the UK and >50% came from the US (cheap for programmers to purchase given the tiny size of the market, and for political reasons we did not wish to get too much of our programming from the UK). There was only one TV channel for many years and it was quite demoralizing to realize that how little cultural output of our own there was. Apart from a documentary shot in 1934 by an Irish-American filmmaker, there wasn't a single Irish-produced feature film for nearly 50 years, until 1982 (when I was 12), and even that involved an English director. The domestic industry didn't really get going until the early 1990s.

As a kid, I would borrow library books and read magazine articles about film production but even the notion of 'home movies' seemed impossibly remote - I literally never saw a video or film camera until I moved to London. It didn't occur to me to pursue a career in film as a youth because the domestic industry simply didn't exist. Even with cheap digital technology available today, making a film is quite an expensive undertaking - there's no guarantee that filmmakers will simply bootstrap themselves as the inevitable result of market forces.

drzaiusapelord• 12 years ago

Or every ethnic group isn't entitled to their own set of TV shows, movies, etc especially if there isn't enough demand to justify it.

I think your way of thinking ties too closely with the failed multiculturalism experiments of the 20th century. Trying to artificially make media fit for various demographics leads to low quality media, tax increases, and ultimately a certain level of isolation.

In the USA in the 70s and 80s, we tried this sort of thing. There was a cola for black people, urban newspapers for the black community, we encouraged them to go to traditionally black colleges, we encouraged them entering traditionally black jobs, staying in traditionally black communities, staying out of the suburbs, etc. Instead of trying to integrate them into the mainstream, we isolated them. It was a disservice. The same thing is happening all over the world, especially with Muslims immigrants. We can see the multicultural mindset causing problems in Europe, especially in the UK and France.

Even if we took your argument on face value, what then? Some kind of quota for Irish directors? So we turn down an English director with great ideas and lots of talent for some Irish director because you feel, as an Irish person, that somehow you can feel his "Irishness" via his directorial decisions? So if he made a sci-fi film about the future on another planet, you'll absorb some level of Irishness from this? That's absurd.

I think its time we put multiculturism down and accept that a certain level of assimilation is normal and healthy. If your entire cultural identity is at risk from a Michael Bay film, well, that sounds like it wasn't too strong to begin with. My parents were immigrants. I feel only a superficial connection to their culture. I don't see why that's so terrible. Their great grandparents came from another culture as well. The idea that we need to protect those from a certain culture from change is highly questionable.

serge2k• 12 years ago

I agree with you, but the laws shouldn't affect Netflix. The internet almost completely removes the need for enforced broadcasting of content. I can make a show and put it online and get a worldwide audience easily.

THe only problem is that if you don't put these restrictions on netflix then you have a harder time justifying it with legacy television providers.

timsco2• 12 years ago

The other argument here is that 90% of everything (including and perhaps especially American TV) is crap. Because Canada makes less of everything, there is less attractive content than the US. That said, there is also less crap content but no one cares about that stat.

There are some Canadian winners out there if you look for them.

fidotron2• 12 years ago

There certainly are Canadian winners, but they have a habit of rapidly turning into losers. There's even a reasonably well known book about this: http://www.amazon.com/Why-Mexicans-Dont-Drink-Molson/dp/1553...

And I don't believe RIM are in it.

There was a time around 2006 when I lived half in Montreal and half in Brixton, and at that point Arcade Fire could sell out the Brixton Academy (concert venue of about 4000 capacity), while simultaneously getting absolutely no attention in Canada at all. They aren't my taste, but it was curious that one of the great success stories of recent Canadian music was in spite of the fact they didn't secure Canadian radio play until they were popular elsewhere.

I can go on about the bad side of Canadian business, but there is a fear among the more intelligent side that unless Canada snaps out of this trap it looks a lot like a third world resource extraction economy. That this is at least discussed is a cause for some optimism.

Shivetya• 12 years ago

sounds all very similar to what Netflix found in France. Though since this is not broadcast over the air and user selectable I want to know how Netflix content differs from any other web content?

aqzman• 12 years ago

It really seems to me like the CRTC is going after Netflix because a lot of people watch it on their televisions in place of content they may have otherwise watched on their television.

noarchy3• 12 years ago

There is a substantial amount of pressure from Canadian telecom companies to get companies like Netflix and Youtube to conform to the same regulations that tv/radio deal with here.

scriptedfate• 12 years ago

They get paid.

To do business legally in a country, you need to abide by that country's rules. One of Canada's is the "Canadian Content" requirement of broadcasters that says that a certain amount of content being broadcast in Canada to Canadians must also be Canadian.

Whether the rule is dumb or counter-productive is immaterial at this juncture. Rules is rules.

Netflix quacks like a broadcaster so it falls under the rule, no? Not quite. There's a "new media" exemption that says, in return for giving the CRTC, when asked, statistics on the Canadian consumers of your service, you can be exempt from that particular scrutiny.

Netflix was asked. Netflix didn't give the information.

Now we see what the CRTC will do. It has every right to ask for an injunction from the courts to shut down Netflix's Canadian operations. But it doesn't want to, because Canadians like Netflix and bringing this to the courts might just be the opening Netflix needs to strike down the information requirement (allowing it to operate in the clear with no conditions until a new regulatory framework is built and approved).

msandford2• 12 years ago

Broadcaster? Not hardly.

If Netflix were a broadcaster then at 8PM local time, everyone watching Netflix would be watching the same show. Assuming that Netflix was only a single channel, anyhow.

But hey, let's suppose that Netflix has not a single channel but say, 1000 channels. That's way, way way more than cable or satellite or anything like that. Okay, but Netflix has nearly 7000 movies and a bunch of TV shows, so it's not a 1000 channel broadcaster.

Let's say that Netflix has one channel for every movie and every show in their collection. That's something like 10000 or more channels (which is way way way more than any other broadcaster in the history of the world has ever offered) and it STILL wouldn't work!

Why not? Because you can start watching a Netflix title WHENEVER you want. But let's be reasonable, let's say that they'll run as many channels as they need so that you never have to wait more than a minute to start streaming. Since most of their titles are movies and a movie is on average around 90 minutes long, that's 10k*90 = 900k channels.

There you have it folks! In order for Netflix to be a "broadcaster" you've got to assume that they're roughly equivalent to a cable company with in excess of 900,000 channels.

If that could be considered "quacking" like something then I quack like a billionare!

LukeB_UK• 12 years ago

Netflix's kind of late-1990s view of the internet as some unregulatable space was dragged into the 21st century and was put on notice," said Carleton University journalism professor Dwayne Winseck

This bit scares me. The view of an open internet isn't a 'late 1990s' view, it's the view it should always be.

abandonliberty5• 12 years ago

Yes, it's unclear.

The CRTC is arguing that Netflix is now a legitimate broadcaster subject to the same laws that govern traditional broadcasters.

Open internet doesn't mean unregulated and lawless.

In fact, we need quite a bit of laws and regulations to ensure an open internet.

wyager4• 12 years ago

In fact, we need quite a bit of laws and regulations to ensure an open internet.

Patently false in theory and extremely debatable in practic.

nickonline• 12 years ago

I'm not sure what Canadian content rules the CRTC is trying to enforce, but if it's anything like 5% of content shown must be Canadian I'm not sure how they can enforce that as a content provider where the consumer picks what they want to watch.

Additionally if noone is watching the Canadian shows how does the CRTC determine what % content they require netflix to provide.

AnthonyMouse• 12 years ago

The CRTC is arguing that Netflix is now a legitimate broadcaster subject to the same laws that govern traditional broadcasters.

Netflix isn't a broadcaster at all. Netflix is unicast. And yes, that matters in practice, because broadcast spectrum is finite and broadcasters have to choose content on behalf of everyone. With Netflix the users choose what content is transmitted and can choose from arbitrarily many alternatives.

mindslight• 12 years ago

Well to be fair, Netflix has as much relation with the Internet as Amazon has with asphalt.

rtpg3• 12 years ago

It's not the idea of an open internet that he's alluding to, it's the idea of a place that goes beyond the laws of the land.

The obvious big ones are Uber and Airbnb, but then we get into things like amazon and sales tax.

And then there are companies like Aero , who construct elaborate legal fictions (having a million different antennas does not change much if your service is functionally equivalent to any VOD service by cable companies).

godzilla82• 12 years ago

Oh. The laws of the land! Dont use phrases like that as if they are some sacred scriptures from god. They were put together by a committee. Grow up. Do what is in your best interest and the laws of the land will be forced to change to the best interests of the people.

caf• 12 years ago

Aero's setup isn't a legal fiction, it's the exact opposite - they really do rent out a different individual antenna to each user.

A legal fiction is a legal story that doesn't actually match the literal facts.

srcmap• 12 years ago

Agree, it is just simply the big government v.s. Big corporations.

When the new company is small, everyone love it. Once it get big and more powerful, government will like to have more control over it and get/use/blackmail some of the power. It is power struggle.

Mikeb855• 12 years ago

Broadcasting over the internet is still broadcasting...

patrickmay2• 12 years ago

Does Netflix have a physical presence (servers) in Canada? If not, isn't it the Canadian ISPs who are technically "broadcasting" by allowing their users to stream Netflix' content?

scott_karana• 12 years ago

That probably wouldn't be a good precedent to set. :P

patrickmay2• 12 years ago

True. I was trying to think like a lawyer. That never ends well.

jmreid• 12 years ago

I know that Canadian ISPs have the Netflix appliances located in their data centres, so technically yes they do serve content from within Canada sometimes.

crazy1van• 12 years ago

"Netflix's kind of late-1990s view of the internet as some unregulatable space was dragged into the 21st century and was put on notice," said Carleton University journalism professor Dwayne Winseck, who characterized Wright's appearance as "theatre."

Yes, those terrible 90's where a massive industry was born thanks to the internet. An industry that continues to enrich the lives of the entire civilized world while creating tons of wealth. This nightmare must be stopped! Seriously, there may be reasons for a regulated internet, but this particular argument seems silly.

johngalt• 12 years ago

Would politicians care about regulatory control if the internet wasn't generating wealth?

adventured2• 12 years ago

Wealth, free speech, financial transactions, encryption, communication, broadcasting, new forms of currency, data, spying, politics, public awareness, social networks, file sharing, open exchange of ideas.

So many reasons for the modern, massive welfare state to hyper regulate the Internet. They've resented the freedom it represents almost since the day the Web was born.

smoyer2• 12 years ago

Is Netfix really a broadcaster? In the cable television industry, sending content to a single subscriber or identified group of subscribers is often called narrowcast.

yawaramin2• 12 years ago

Bewildering. Netflix isn't broadcasting any programming at prearranged times. They should be completely outside CRTC jurisdiction. As a Canadian subscriber, I applaud their guts and hope they keep protecting my privacy.

hughdbrown• 12 years ago

It does not sound to me that Netflix is interested in protecting your privacy. If that happens, well, that is an incidental benefit.

"Wright said Netflix was concerned that private corporate information submitted to the commission might later find its way into the public sphere, which could make the service vulnerable to exploitation by its competitors."

yawaramin2• 12 years ago

But that's the beauty of market competition: those who protect their clients, get loyalty from their clients.

roberthahn• 12 years ago

I fear my comment will be lost in the weeds but here goes:

Why exactly does the CRTC need subscriber data? If it's Canadian content they're worried about then maybe they should look at the content not the subscriber?

And hey: I'm a subscriber. Don't I get a say in whether anyone but Netflix gets to have access to it?

I probably wouldn't be so bothered if the CRTC wasn't made up of people who used to work for Bell, Rogers etc… (conflict of interest?)

merrua• 12 years ago

The set quota of Canadian-specific content being required to sell to Canadians seems like a good idea.

Netflix refuses CRTC demand to hand over subscriber data

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