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    Canada Imposes 5% Levy on Streaming Giants to Fund Local Content

    What’s the news: The Canadian Radio-television and Telecommunications Commission has ordered that streaming services (like Netflix, Spotify, or Amazon Prime) making more than Can$25 million in annual contribution revenues and that are not affiliated with a Canadian broadcaster will have to pay a 5% levy. This levy would be used to fund local news on radio and television, French-language content, Indigenous content, and content created by and for equity-deserving groups, official language minority communities (OLMC), and Canadians of diverse backgrounds. The levy is expected to take effect starting September 1, 2024, and is expected to raise an estimated Can$200 million per year.

    Similar to this levy, in 2021, France came out with a directive that required streaming services to pump 25% of their revenues from the country into local content.

    Streaming companies’ perspective on the levy:

    This follows a commission consultation requiring online platforms to contribute to Canadian and Indigenous content. Responding to the consultation, Netflix had argued that such contributions fail to “recognize current contributions and would introduce additional and potentially discriminatory burdens – particularly if such a requirement were mandated to be directed to specific legacy funds to which contributors would not have access, or to new funds directed to support ‘market failures’ such as news or services of exceptional importance.” Netflix and Amazon also argued that if a fee is to be levied, their current expenditures on Canadian programming should be deducted from it.

    Other streaming platforms also argued against the levy, preferring to make direct expenditures into Canadian productions. Paramount Global, for instance, said that imposing such a levy would result in shifting direct expenditures that foreign online undertakings make to Canadian content and the Canadian creative economy to indirect and less efficient vehicles such as legacy production funds.

    Some context:

    This isn’t the first time that Canada has asked tech companies to pay a fee to local content producers. Last year in June, the Canadian Government passed the Online News Act, which requires tech companies like Meta to pay Canadian publishers for the news content shared on their platforms. The Act had some major repercussions, with Google and Meta arguing that they would pull news content out of Canada if asked to pay a fee. While Google eventually agreed to pay the fee, Meta has not reached a similar agreement. 

    Interestingly, this act led to Indian news broadcasters demanding a similar revenue share system.  With a new levy being put in place for streaming services, broadcasters in other countries (like India) could demand the imposition of a similar fee here as well.

    Also read:

    The post Canada Imposes 5% Levy on Streaming Giants to Fund Local Content appeared first on MEDIANAMA.

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