Netflix, Inc. Tells Canadian Regulator Not To Subsidize ‘Old Media’

Netflix, Inc. (NASDAQ:NFLX) on Friday, conveyed a message to Canada’s broadcast regulator that it is against the subsidies to support “old media,” and it’s that its own commercial interests, as well as market scenario, ensure that it will distribute Canadian content, says a report from Reuters.

Netflix enjoys advantage over traditional mediums

The online video-streaming service took its stand on the last day of a two-week hearing on the future of the Canadian television, where Netflix is considered as a disturbing challenge to the domestic companies and against broadcast television interest. Corie Wright, director of global public policy at Netflix, said, “We are moving from a period of broadcast scarcity to one of Internet abundance,” and added that it will have a deep and very positive impact on consumers as well as the marketplace for content.

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Wright said that traditional players relied on advertising that requires them to attract widest possible audience and thus gives way to bundling of channels. On the other hand, Netflix has more flexibility to offer niche or experimental content. Wright said that Netflix’s business model does not require millions of audiences to watch a “single show at once and at a predetermined time.”

In 2010, the online streaming company expanded in Canada, and has a subscriber base of 50 million all over the world, who can watch on-demand programming minus commercials by paying substantially lower than cable TVs.

Domestic broadcasters want same rules for all

Netflix along with other online-only services do not come under the Canadian Radio-television and Telecommunications Commission (CRTC) rules that offer a minimum level of financial aid and air-time for Canadian program on traditional TV. Although few politicians said that streaming services like Netflix should be subjected to the same rules and regulations as traditional Canadian broadcasters, Federal Conservative government has made it clear that they are not interested in implementing this. Domestic broadcasters argued that if Netflix will not come under the same ambit then they too should be offered greater flexibility.

Consumer choice has been the center of Let’s Talk TV hearing, with the government trying to trim the channels offered by CRTC force distributors under each package. Government wants the Canadian viewers not to pay for the channels that they don’t watch. Regulators have made it clear that any modification in rules will not come before 2015, and also it will not be in favor of specific channels or business models.