BUSINESS

Netflix Should Report Subscription Data, Viewing Habits, NDP, Liberals Say

06/13/2015 11:45 EDT | Updated 06/13/2015 12:00 EDT
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The Netflix Inc. website and logo are displayed on laptop computers arranged for a photograph in Washington, D.C., U.S., on Tuesday, Jan. 21, 2014. Netflix Inc., the largest subscription streaming service, is expected to release earnings data on Jan. 22. Photographer: Andrew Harrer/Bloomberg via Getty Images

Netflix and other streaming video services should be required to report Canadian subscription data and customers’ viewing habits to regulators, the opposition NDP and the Liberal Party say.

It’s the latest salvo in a tug-of-war between Netflix and Canada’s media industry over whether -- and to what degree -- the service should be regulated in Canada as traditional broadcasters are.

The parties staked their positions in a review of the Canadian film industry issued this week by the House Standing Committee on Canadian Heritage.

“In order for public policy to be effective and well thought out, it needs to be developed on the basis of the most up-to-date and complete facts, data and statistics,” MP Pierre Nantel wrote for the NDP.

“It is vital for over-the-top services to be able to do what traditional platforms and media do, namely, provide government authorities with detailed information about their services, such as consumers’ habits, the Canadian films available, the revenues generated and the costs associated with such services.”

The NDP and Liberal opinions appeared in a supplementary annex to the report, and not in the main body of the report written by the Conservative-dominated committee.

Netflix has been reluctant to share this sort of information about the Canadian market.

Last fall, the CRTC announced it would ignore Netflix’s submission, along with Google’s, in the Let’s Talk TV hearings to plan a new policy regime for Canadian TV.

Netflix had asserted in the hearings that Canadian content was thriving on its network, but would not provide data to back up the assertion.

The CRTC accused Netflix at the time of “a direct attempt to undermine [the regulator’s] ability to serve Canadians, as well as impair the procedural fairness owed to all participants."

netflix subscriptions

Canada is Netflix's largest non-U.S. market, according to research from SNL Kagan.

Many consumer activists have opposed regulating streaming video services, fearing it would mark the expansion of government regulation into the internet. And there is the question of how much information over-the-top services should provide; they can in theory gather detailed information about each viewing household in a way traditional broadcasters cannot do.

Getting better information on the nature of Canadian film and TV viewing is important, e-commerce law professor Michael Geist wrote this week, “but the challenge is how to gather that information.

“Voluntary disclosure would address the issue, but if providers are unable or unwilling to comply, gathering such information brings up the thorny world of regulating online video providers….”

Many groups, including the Canadian Media Producers Association, the CBC and the government of Ontario have called on Netflix to be regulated, and called for the service to be required to pay into the Canadian Media Fund, which pays for the creation of Canadian content. Opponents referred to that as a “Netflix tax.”

The CRTC rejected the “Netflix tax” option in March when it set out new rules for TV regulation.

But the question of whether or not Netflix and other streaming services should report data to the government remains unresolved.

In its earnings reports, Netflix breaks out numbers for U.S. and international subscribers, but doesn’t offer greater detail than that about the Canadian audience segment. More specific information has come from market research firms that carry out surveys.

And in contrast to traditional broadcasters whose ratings are public knowledge, Netflix doesn’t provide viewership numbers for its movies and shows, and doesn’t plan to start. Management has expressed a disdain for entering the ratings "arms race."

In the committee report, Liberal MP Stephane Dion stressed the need for viewer data.

“Our ability to establish policies and programs that are relevant to current issues and cultural objectives relies on access to reliable and up to date audience data,” he wrote.

“Almost all of the witnesses we heard and briefs that were filed insisted that this is even more important now as new technologies have totally upset the way the public hears about film productions and consumes them.”

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