Streaming services have welcomed a $600 million cultural funding package announced by the Canadian government which will seemingly replace the country’s controversial streaming levy.
Canada’s culture minister Marc Miller yesterday announced a plan to introduce “federal investments” of $600 million per year to “provide stability and immediate support to Canada’s audio and audiovisual sectors”. This seems to be an alternative to the previous plan to provide funding for Canadian creators and producers via a 5% levy charged on music and video streaming subscriptions.
The levies - and other proposed obligations on global streaming platforms to invest in Canadian-produced content - stemmed from Canada’s Online Streaming Act, which is currently being implemented by media regulator the CRTC. But the government now says that the CRTC's plan would “impose new costs” on the streaming companies which “could ultimately fall on Canadian consumers through higher prices”.
And, a government statement adds, “at a time when Canadians face cost-of-living pressure, now is not the time to make culture and entertainment more expensive”. Therefore, alongside the commitment to directly invest in Canadian content and culture, Miller’s department will also “develop new policy directions to adjust the implementation of the Online Streaming Act”.
The streaming services, including the music streaming platforms, have strongly opposed the levies ever since they were proposed and so, unsurprisingly, are very pleased with this latest development.
DiMA, which represents the music services in North America, says the new approach is a “welcome step towards ensuring Canadians retain access to affordable music streaming services, while still providing robust support for Canadian artists and culture”.
The trade body’s CEO Graham Davies adds, “Music streaming services have transformed how Canadians discover and enjoy music while helping Canadian artists reach audiences here at home and around the world. We are encouraged by the government’s clear recognition that championing Canadian culture must go hand-in-hand with protecting affordability, innovation and consumer choice”.
By both “directing the CRTC to review its framework” and “stepping up with federal investments for the cultural sector”, the Canadian government, Davies reckons, has “shown a commendable willingness to listen to the concerns of the digital industry, creators and everyday consumers”.
Within the music industry, the indie sector welcomed the CRTC’s levy proposal, with some of the money raised set to flow to existing schemes that support independent labels and artists.
However, the majors joined with the streaming services in opposing the plan, which - they said via trade body Music Canada - ignored the fact the music streamers were already supporting Canadian artists and music through various existing voluntary programmes and initiatives.
In addition to campaigning and lobbying against the levy, the music streaming services also began legal action through the Canadian courts in a bid to block the CRTC’s plan, which means the levy never actually went into effect pending the outcome of that litigation.
Meanwhile Spotify included its opposition to streaming levies in a ‘policy roadmap’ that it published earlier this year, in which it argued that governments should instead look for ways to support independent creators and performers through general taxation.
Although not specifically referencing the proposals in Canada, Spotify said that “new taxes or levies on streaming risk undermining the paid subscription model - by increasing subscription fees to consumers and therefore increasing subscriber churn - and reducing the funds available to creators overall”.
Therefore, it went on, “instead of reducing artists’ royalty pools through new streaming taxes or levies”, governments should “allocate a portion of existing tax revenues to support session musicians, emerging artists and local talent”. Which is basically what the Canadian government now seems to be doing.
Announcing both the new funding and new policy directions for the CRTC regarding the Online Streaming Act, culture minister Miller says in a statement, “Canadians should be able to see themselves in the films and series they watch and hear their lives reflected in the artists they listen to”.
“That’s why”, he goes on, “we are investing to support the audiovisual and audio sectors now, while bringing necessary stability as we develop new directions that will ensure Canadian content remains affordable and that our stories continue to shape our identity and how the world sees us”.