Global streaming companies have challenged new rules in Canada that force them to share a part of their local revenue for local news.
Streaming giants said Canada’s federal government had acted unreasonably and provided no legal basis for the demand to share their revenue, Reuters news report said.
In June, Canadian Radio-television and Telecommunications Commission (CRTC), the broadcasting regulator, said major online streaming services (SVoD) must contribute 5 percent of their Canadian revenues to support the domestic broadcasting system, including news generation.
Canada’s video streaming market is expected to reach $2.53 billion by 2024 with an annual growth rate (CAGR 2024-2027) of 11.42 percent. The size of the video streaming market in Canada will be reaching $3.50 billion by 2027, says Statista.
Motion Picture Association-Canada, which represents Netflix, Walt Disney and other video streaming companies, has filed applications in a federal court for leave to appeal the rules and ask for a judicial review.
“The decision does not reveal any basis for the CRTC’s conclusion that it is appropriate to require foreign online undertakings to contribute to news production,” it said in a legal filing.
“The CRTC acted unreasonably in compelling foreign online undertakings to contribute monies to support news production.”
CRTC earlier said the funding from video streaming companies though revenue sharing would be directed for supporting broadcasting system, such as local news on radio and television as well as French-language and Indigenous content.
The regulator has previously said the rules, which are due to become effective in September, will raise roughly C$200 million ($146 million) a year.
CRTC introduced the measure as part of a law passed last year by federal government to ensure online streaming services promote Canadian music and stories and support Canadian jobs.
Other streaming platforms in Canada are Paramount, Sony, NBCUniversal and Warner Bros Discovery.
