Canada demands revenue cut from Netflix, Spotify, and other streaming services

The Canadian Radio-television and Telecommunications Commission (CRTC) wants streaming services to contribute five percent of their revenue to the Canadian broadcast system.

The CRTC is “taking a major step forward in implementing the Online Streaming Act,” which aims to modernize the Canadian broadcasting framework.

By modernizing this framework, streaming services can now “make meaningful contributions to Canadian and Indigenous content.”

“Based on the public record, the CRTC is requiring online streaming services to contribute 5% of their Canadian revenues to support the Canadian broadcasting system. These obligations will start in the 2024-2025 broadcast year and will provide an estimated $200 million per year in new funding,” the Government of Canada said.

This funding will be “directed to areas of immediate need” such as local news on radio and television, French-language content, Indigenous content, and content created by and for equity-deserving communities, official language minority communities, and Canadians of diverse backgrounds,” the Government of Canada said.

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

Other world governments have implemented these types of revenue cuts for big streaming services.

In South Korea, the government used “network use fees,” which enabled internet service providers to charge foreign services like Twitch, Netflix, and YouTube for using its country’s networks.

The popular live video streaming service Twitch announced back in December 2023 that it would be shutting down its South Korean business due to these high operating costs.

Twitch’s CEO, Dan Clancy, announced that the company completely exited South Korea on February 27th, 2024. The company could no longer support working at a loss due to high network fees.