Netflix, Inc. (NFLX) Has Standoff with CRTC Over Transparency, Confidentiality

Netflix, Inc. (NASDAQ:NFLX)’s global public policy director Corie Wright testified this morning at hearings being held by the Canadian Radio-television and Telecommunications Commission (CRTC) in Gatineau, Quebec. As the CBC reported today, Wright told the assembled gathering that consumers should be allowed to vote for the content they want to watch with their wallets, as opposed to having it regulated by the CRTC.

The hearings, which have been conducted throughout the past two weeks, are to determine the future of television and internet streaming in Canada. The U.S’s northern neighbor has long struggled with how to balance Canadian content alongside the overwhelming amount of entertainment coming out of the U.S.

However Netflix, Inc. (NASDAQ:NFLX) has also come under fire in Canada over the fact it does not pay any taxes in the country, and is essentially taking money out of the Canadian economy. It’s estimated by Convergence Consulting Group that while Netflix, Inc. (NASDAQ:NFLX) spends approximately $150 million licensing Canadian content, it generates about twice as much money in revenue from its approximately four million subscribers in the country, effectively removing $150 million from the Canadian economy. It’s an argument that’s also being levied against Netflix, Inc. (NASDAQ:NFLX) in Australia, where they are being urged to shut down VPN access to their service so that the approximately 200,000 Australians who subscribe through those means would be forced to use local services.

Things became particularly tense at the hearings when Wright balked at providing the CRTC with data relating to their Canadian operations, including subscriber and viewership numbers, revenue data, and money spent on Canadian productions. CRTC chairman Jean-Pierre Blais bristled at her fear that the information would be leaked to the public and demanded that Netflix, Inc. (NASDAQ:NFLX) hand over the information, reminding Wright that they are operating in Canada under a special exemption which requires such disclosures.

Wright stated Netflix, Inc. (NASDAQ:NFLX) is ultimately good for both consumers and content producers in Canada, giving consumers choice, while allowing Canadian content to be licensed in other markets outside Canada which they might otherwise not have access to. Blais countered that while that sounded good, he needed proof in the form of their data to support those claims.

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