Popular streaming platforms have vehemently opposed the law requiring them to pay a portion of their revenue to support media outlets in Canada, according to a report by Reuters.
The Online Streaming Act, which was passed last year, requires global streaming giants such as Netflix and Disney to pay 5 per cent of their revenue generated in Canada to support local broadcasting system, which includes news production.
At the time of its passage, proponents of the legislation had said that it would ensure promotion of Canadian stories and music in addition to jobs in the domestic market.
In April 2023, the Canadian Radio-television and Telecommunications Commission (CRTC), the lead broadcasting regulator, had laid out the demand of sharing 5 per cent of revenue generated by streaming services, which also include YouTube and Spotify, with the local media industry.
The streaming companies, however, are taking the rules to court, accusing the Canadian government of acting unreasonably and claiming a lack of legal basis for revenue sharing with local media outlets.
The Motion Picture Association-Canada, which represents Walt Disney and Netflix in Canada, is a now seeking a judicial review over the revenue-sharing rules. It has lodged applications in a federal court to appeal the requirements as laid out in the Online Streaming Act.
“The decision does not reveal any basis for the CRTC’s conclusion that it is appropriate to require foreign online undertakings to contribute to news production,” the association says in its complaint. “The CRTC acted unreasonably in compelling foreign online undertakings to contribute monies to support news production.”
The CRTC said the funding from streaming platforms would be spent on sectors that are in immediate need of financial support in the broadcasting industry. They include local news on radio and television, French-language, and Indigenous content.
