Weekly Column: Canadian Online Streaming Act set to Regulate Content

In his capacity as a Columnist for California Sports Lawyer®, Founder Jeremy Evans has written a column about the Online Streaming Act in Canada that will regulate American and other foreign entertainment content and streaming companies to focus on Canadian-based stories and talent.

You can read the full column below.

American content and streaming companies like Netflix, Amazon, Apple, YouTube, Disney+, and Spotify will now be required to create and/or promote Canadian content on their platforms and in theaters. The largest entertainment union in Canada, the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, Its Territories and Canada (IATSE) has publicly supported the legislation, entitled the Online Streaming Act, also known as Bill C-11, as it stands to benefit its 36,000 members. Global studios and streamers, a majority of which if not almost exclusively, are from the United States, have brought jobs while building a $5.3 billion dollar entertainment economy in Canada, which is more than double of local entertainment companies.

On the one hand, the law with bring Canadian stories and talent to the forefront, which is a good thing for their people. On the other hand, it forces foreign companies to pay-to-play in the country in a restrictive manner. These types of laws are not uncommon in the Middle East and China where the economies are more restrictive, but are not common in the Western World. It is the opposite of the laissez-faire, open market, and capitalist approach generally accepted in creating and promoting content. One can learn more about the Chinese and Middle Eastern entertainment investment restrictions and plans here and here.

Another issue is the idea of user-generated censorship on applications and platforms. As the public wishes to promote amateur content videos and works, Bill C-11 did address the issue by saying such content would not be regulated. However, it will be an issue worth monitoring as the legislation is implemented and enforced. Creators and legislators have concerns that the language in the legislation is unclear. The Canadian Radio-television and Telecommunications Commission (CRTC) is the government agency responsible for regulating and enforcing the Online Streaming Act in the country.

A question going forward is whether American and other international content and streaming companies will follow the restrictions willingly or look for ways to challenge the law through the court system or attempting to change the legislation by adding carveouts and exceptions. For example, a better approach might have been to mandate investment in Canadian content up until a certain dollar amount and then an open market system after the threshold was met. The mandatory investment requires that some money enter the economy to help with jobs and telling local stories, but equally important leaves the window open for change, dealmaking, liberty, and freedom in content creation and distribution.

It is of note that this is the first-time such rules and obligations have been placed on American digital platforms operating locally in Canada. American entertainment companies may have to reform their strategies on how to best compete. Meanwhile, the State of New York is set to increase its tax incentive program to attract more entertainment business, going from $420 million to $700 million in incentive allowances. According to The Hollywood Reporter, “The changes are aimed at luring productions back from areas, namely Georgia, New Jersey and Canada, that offer their own packages of offerings to host productions.”

About Jeremy M. Evans:

Jeremy M. Evans is the Chief Entrepreneur Officer, Founder & Managing Attorney at California Sports Lawyer®, representing entertainment, media, and sports clients in contractual, intellectual property, and dealmaking matters. Evans is an award-winning attorney and industry leader based in Los Angeles and Newport Beach, California. He can be reached at Jeremy@CSLlegal.com. www.CSLlegal.com.