GATINEAU – The screen went black for about 15 minutes Friday morning at the CRTC’s Let’s Talk TV policy hearing when chairman Jean-Pierre Blais abruptly called for a break after Netflix’s director of global public policy, Corie Wright, repeatedly refused to agree to provide Canadian subscriber information in confidence. After the TV time out, Netflix was ordered to provide Canadian subscriber information without the confidentiality guarantee it was seeking.
The brouhaha started about 10 minutes into questioning when vice-chair of broadcasting Tom Pentefountas wondered aloud if Netflix would provide Canadian subscriber figures. After Wright responded that the company didn’t release data on customers outside of the United States due to its commercially sensitive nature, Blais weighed in, demanding that Wright provide the numbers in confidence as an undertaking.
“We’re having a conversation with your counsel to assure that information that for us is actually quite commercially sensitive, that we can guarantee that it will be treated confidentially and I think that those discussions have actually been very productive and I have every hope that they will continue to do so,” Wright responded.
After refusing two more times to provide the information, Blais appeared near the end of his rope.
“The CRTC protects confidential information every day”, he said tersely. “We have lots of confidential information, like many government departments. You coming here and suggesting that we don’t treat information confidentially is actually a bit offensive.”
"Let's take a break." – Jean-Pierre Blais, CRTC
Several more failed attempts to coax Netflix to agree to provide the subscriber figures in confidence caused Blais to pull the plug. “Let’s take a break,” he said, quickly rising from his chair and striding towards a back room.
But the timeout didn’t change Netflix’s view, with Wright continuing to insist on a guarantee that the company’s information be kept confidential.
“We were given to understand that if we submitted information that confidentiality couldn’t be guaranteed”, Wright said. “However, if the panel can guarantee that our sensitive and commercially sensitive information will have guaranteed confidential treatment, we would be happy to submit that information to you.”
That response didn’t sit well with Blais, who subsequently ordered that Netflix provide the requested information. “You operate under an exemption order that requires you to provide information. Failure to provide information puts at risk your exemption order. So the Commission is ordering you to provide the number of subscribers you have currently in Canada by 5:00 PM Ottawa time Monday,” he said.
Wright was still defiant, asking “Can the panel guarantee confidential treatment of that information?” Responded Blais: “You are not entitled to a special treatment. We are treating you like every other applicant, intervener, person who appears before the Commission. The vice chair will continue his questions. The order stands.”
The exchange was a big moment in CRTC history, marking the first time that a company appearing before the Commission was ordered to provide information after first refusing to do so in an undertaking. The streaming media giant was also ordered to provide information on other aspects of its operations, including Canadian revenue, Canadian production spending, and viewership, both domestic and abroad.
But Netflix’s appearance wasn’t all negative. The company noted that the new customer-driven, on-demand viewing experience provides a tremendous opportunity for Canadian content producers.
“It will mean that, as people are trying to make their service the best they can, Canadian content providers, I think, are going to have a lot more suitors,” said Wright. “For content that is just knock-you-on-your-butt awesome, you’re going to have people just competing which is going to result in, I think, more money paid to Canadian content providers.”
The Commission also quizzed Netflix on when Canadian productions on the same scale as its Emmy-nominated House of Cards series may see the light of day.
Wright responded that it’s not just about blockbusters, it’s also about niche content that will serve a particular audience. “I think you’re going to see a lot more exciting avenues as a content provider to find a home for really good content. And as long as it’s really good, there’s always going to be a market for it.”
The final day of the CRTC’s Let’s Talk hearing wasn’t all about Netflix, though. A group of U.S. border stations also appeared, arguing that the CRTC needs to adopt reforms that will result in fair and equitable treatment for their signals, essentially compensation for their programs that are being imported and retransmitted in Canada.
Under questioning, Blais noted that there is a regime for foreign over-the-air stations to get paid for their signals, and it’s under the Copyright Act. “What you’re asking is to create a regulatory proprietary right, so you can extract a rent from BDUs, a right you don’t otherwise have under the copyright legislation,” he said.
Jane Marshall, associate general counsel for the Graham Media Group, responded that the current system is broken and rather than getting paid, the channels are made to return approximately $8 million to the system. She added that the USTV Coalition simply wants a seat at the table to begin discussions on affiliation agreements.
“We’re asking to be able to get all interested parties to the table”, she said. “If we have the ability to consent or to not consent to have our signal carried, then we can get conversations started and then we can get all the different interests of the Canadian consumer addressed through what we want to have, which is affiliation agreements.”
