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Canada’s OTT bill could raise C$830 million for local content

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OTTs such as Netflix and Amazon are facing a new tax in Canada following the introduction of a parliamentary bill.

Intended to strengthen the national broadcast regulator - the Canadian Radio-television and Telecommunications Commission (CRTC) - if passed the bill could see online streaming companies paying as much as C$830 million ($630 million) in taxes by 2023.

The move would level the playing field between international OTTs and Canadian broadcasters, by making the OTTs pay towards domestically produced content.

Currently, Canada’s traditional broadcasters are obliged to spend a proportion of their budgets on developing Canadian programming and featuring Canadian artists.

The regulator said OTTs delivering services to Canadians should be bound by the same rules and that they too should contribute towards the creation of local content, however the specifics were not set out.

Canadians spent an estimated $1.5 billion on OTT services in 2019, according to market insight published in April by Convergence Research. Over the same period revenues grew 37% and, in its outlook for this year, the report predicted revenue growth of 36% and a market value of $2.07 billion.

On the other side of the coin, the same report said Canadian TV services saw a 283,000-subscriber decline in 2019, and Convergence expected a further decline of 388,000 this year.

August figures from eMarketer confirm that Netflix is the most popular OTT in Canada, despite the competition posed by newcomers Disney+ and Apple TV+, and the presence of domestic services like Bell Media’s nationwide Crave and Vidéotron’s Club Illico, broadcast in Quebec.

For 2020, the report expected 16.5 million Netflix viewers in Canada, reaching 18.4 million by 2024. Meanwhile, Amazon Prime’s viewership is expected to grow from an anticipated 6.5 million viewers by 2020-end, to 8.8 million by 2024.

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