Is the fate of CanCon worse than imagined?

Two weeks ago, American media giant CBS announced it was launching its new video streaming service “All Access” in both the US and Canada in 2018. More pointedly, CBS gave notice it would phase out the time-honoured practice of big American media companies licensing hit American shows to Canadian broadcasters. CEO Les Moonves told Wall Street analysts it is ogling Netflix’s 50 million international subscribers, figuring CBS can exploit that market with its rich portfolio of hit shows.

In fact CBS is betting heavily on internet TV replacing conventional TV. They own a lot of prime content, for example the wildly lucrative Star Trek franchise. Their plan is to broadcast the pilot of its next series (Star Trek: Discovery) on their conventional CBS TV network, and then sell the rest of the series only on its All Access subscribers.

Following the CBS announcement, Greg O’Brien (who publishes CARTT.ca, Canada’s go-to website for the broadcasting industry) immediately predicted a watershed in the fortunes of the Canadian industry. If American media companies like CBS, Hulu, and Amazon are going to join Netflix in the Canadian market AND shut out Canadian broadcasters from licencing top American shows, then CTV, Rogers, Corus and TVA are in serious trouble.

Our reality is that Canadian broadcasters make money selling hit shows, mostly American, to Canadian subscribers and advertisers. Without those shows, they would likely lose those audiences in droves, whether its over-the-air TV, cable or their own Internet channels. Not only would they lose revenue, they might even go out of business if they don’t find a way to adapt.

You don’t have to shed a tear for big Canadian broadcasters if you don’t want to, and maybe you don’t care about the thousands of good jobs involved. But if you care a whit for Canadian content, you should be deeply alarmed.

Canadian TV news and “Canadian content” dramas and documentaries are not profitable any more. But thanks to CRTC regulations, Canadian broadcasters annually allocate billions of dollars, at least 30% of their budget pie to Canadian shows, including large slices for local news (11%) and Programs of National Interest (5%).

But as the CBS announcement indicates, there is a big shake-out coming in the competition for live streaming subscribers. We might see a huge array of US video streaming services similar to TV channels with exclusive content. Or consumers may resist multiple subscriptions, forcing Internet broadcasters into bundled content similar to what we now get on cable TV.

Either way, if the Canadian government stubbornly maintains the current exemption of Internet TV from CanCon regulations, the future is a domination of the Canadian market by American media companies that don’t exhibit Canadian content or local news, and don’t contribute a cent towards anyone else doing it.

Unifor and its many allies in the creator community have been telling the CRTC and the federal government for years that if they fail to create a new regulatory regime for internet broadcasting, a regime that allows Canadian broadcasters to keep airing CanCon, we are in for a cultural apocalypse in this country.

Next month Heritage Minister Mélanie Joly releases her game plan for Canadian Content in a Digital World. Here’s hoping for good news.