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The Netflix deal is a very sweet deal for Netflix, not Canada

Last year, Netflix executives said they anticipated that the streaming service would increase its original programming lineup to more than 1,000 hours in 2017. That's a lot of TV content that costs an awful lot of money. It just got a helping hand from the Canadian taxpayer.

That promise that Netflix will spend a minimum of $500-million (Canadian) over five years on the production and distribution of Canadian movies and TV shows is the attention-grabbing ploy to attract support and positive attention for Heritage Minister Mélanie Joly's long-promised, much-talked-about new game plan for backing Canadian creative content in this digital age.

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It's peachy that some creatives involved in Canadian TV and movies will have their work seen around the world via Netflix but that is neither new nor is it the rescue of Canadian TV that the federal government wants you to believe.

This is only a sweet deal for Netflix. Its estimated content budget for this year alone is $6-billion (U.S.). Investing $100-million (Canadian) a year to help out the production of TV and movies in Canada is the kind of figure Netflix shrugs off as the cost of doing business.

There is nothing in Minister Joly's proposals to suggest there will be less subsidy for the making of Canadian TV drama and comedy, whether by CBC or commercial broadcasters. In fact, there will be more money to nurture Canadian talent and the development of shows. But what it all means is Canadian taxpayers, through direct government support, tax breaks or fees accrued from their cable or satellite-service bills, will continue to fund Canadian TV content and Netflix, kicking in some money, gets to stream that content around the world.

Consider this scenario – Canadian TV viewers sit down to watch a new Canadian drama that has Netflix money behind it. They suffer through the usual array of commercials (or fast-forward through them) while Netflix customers in the United States or other countries sit down to binge-watch the same shows, commercial-free. It's a nice arrangement for Netflix and its non-Canadian customers. It would be jejune to think this deal is anything but highly advantageous for Netflix, a company that pays no taxes in Canada, has no offices or staff here and merely hires a Toronto PR company to issue press releases on its behalf.

Besides, as Netflix will tell you, it has been supporting Canadian TV for years. It spent millions to revive Trailer Park Boys. It spent money to acquire the outside-Canada right to Discovery Channel's Frontier, CBC's Anne and Alias Grace, the Showcase series Travelers, and other series. It has been behind Orphan Black, which in some markets is presented as "A Netflix original."

In fact, in Netflix's submission to Minister's Joly's consultation on a reset for Canadian culture in the digital age – a submission this writer has read – the company states, "In 2016 alone, we've commissioned hundreds of millions of dollars of original programming produced in Canada."

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That makes the Minister's Netflix announcement seem even more of a cunning ruse to attract praise and dodge criticism of an otherwise fuzzy, half-baked new plan. It looks like Netflix's submission was swallowed whole and presented as something new, when it isn't.

A further twist that punctures the balloon of Minister Joly's announcement is the fact that Netflix needs help. The service has not been having a great year. The gloss is gone from much of its original content – a string of new series, from Girlboss to Gypsy to The Get Down, have been disappointing, dismissed with derision by critics and met with disappointed disdain by subscribers. The service has allowed costs to bloat and has started cancelling series, largely because of out-of-control costs.

Netflix is a highly secretive outfit, one that believes its status as a disruptive force in the traditional TV arena means it doesn't have to supply ratings or specify the budgets of its shows to the public and the industry.

But, inside the industry, it's not hard for experienced hands to make a stab at what Netflix spends. The series it has cancelled incurred staggering costs. The trade magazine Variety reported earlier this year that the per-episode budget for The Get Down billowed from $7.5-million (U.S.) an episode to almost $12-million. Both Sense8 and Marco Polo are estimated by Variety to have each cost $9-million an episode. Bloodline, a popular series, cost a reported $7-million an episode.

To put this in context, it is commonplace for a scripted network drama to cost about $2.5-million an episode, and a high-grade, premium-cable drama to come in at about $3.5-million an episode.

The upshot is that Netflix's costs are out of control and it will gladly take Canadian content it does not have to fund from scratch. There's your sweet deal. For Netflix, not Canada.

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About the Author
Television critic

John Doyle is The Globe and Mail's television critic. His column appears in the Review section Monday to Thursday and on Saturday. He has been the paper's critic since 2000. More

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