June 20, 2024

Netflix, Spotify, Max and other online streamers could soon have to pay a fee to the Canadian government to help support Canada’s broadcasting system.

The Canadian Radio-television and Telecommunications Commission (CRTC) this week announced the new rule, which requires online streamers to contribute 5% of their revenues generated in the country to support content produced in Canada.

The commission said the rule would go into effect starting with the 2024-2025 broadcasting year, which starts this fall. The fees would provide an estimated $200 million in new funding every year.

The CRTC said in a news release that the extra cash would be used to fund “areas of immediate need in the Canadian broadcasting system” such as local news, content in French, and indigenous content. Streaming companies will also have some say in where their contributions are directed, according to the release.

The new rule applies to online streaming services that generate at least $25 million in revenue in Canada and are not affiliated with a Canadian broadcaster. Revenue derived from podcast, video game, and audio book services are exempt.

“Today’s decision will help ensure that online streaming services make meaningful contributions to Canadian and Indigenous content,” CRTC CEO and chair Vicky Eatrides said in a statement. “The CRTC will continue to move quickly, listen carefully, and take action as we implement the new legislation.”

The rule follows up on the Online Streaming Act that was passed by the Canadian parliament in 2023 and tasked the CRTC with modernizing the country’s broadcasting system.

Netflix, Warner Bros. Discover, Amazon and Spotify did not immediately respond to requests for comment.

The Motion Picture Association-Canada, which represents Netflix, Disney Plush, Paramount, and other streamers has has already opposed the fee.

“We are disappointed in today’s decision that reinforces a decades-old regulatory approach designed for cable companies,” said MPA-Canada president Wendy Noss in a statement. “Today’s discriminatory decision will make it harder for global streamers to collaborate directly with Canadian creatives and invest in world-class storytelling made in Canada for audiences here and around the world.”

The industry group added that global studios and streaming services have spent $6.7 billion annually in producing Canadian content.

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