Proposed ISP Tax Shows Canadian Content Producers Do Not Understand the Internet

Decades ago in Canada, funds were created to encourage television production of Canadian Content. These programs were funded by the cable companies and regulated by the CRTC. These funds were created to share "Canadian Stories" in a sea of American television content that because of their inherent scale could be produced easier and cheaper.

The CRTC is now entertaining a proposal to create a similar fund through taxation of ISPs (and therefore all Internet subscribers) to fund Canadian television producers so they can continue to produce "Canadian Stories" created by Professional Content Creators. This proposal is supported by industry lobby groups such as ACTRA, Society of Composers, SOCAN, etc.

These folks want to tax every Internet subscriber (e.g. practically everyone in Canada) 3% of revenue (which of course means the price will go up by 3% to compensate) from the ISPs that provide us Internet Access.
This proposal shows a complete misunderstanding of the difference between a regulated, limited, and centralized Television Industrial Complex model and the Internet - a fundamentally distributed, decentralized and long tail model of content distribution.

Here are some fundamental differences that these lobbyists fail to acknowledge in their proposal:

• In the television age, the definition of "Content" was professional created, broadcast content. The assumption in this proposal is that Colin Mochrie, the CBC, and other CanCon stars own the culture and the MILLIONS of content creators on Facebook, YouTube, etc. in Canada are not qualified to tell their own stories.
• In the television age, the definition of "Content" is VIDEO content. On the Internet, there is no limitation and content can be everything from maps, images, videos, flash, applications, etc. Content can also be a mix from a wide variety of sources - how do you regulate content creation when it is mashed up collections from all over the world?
• In the television age, there were major barriers to content creators because of the limited shelf space. Canadians need a way to get on the air simply because they couldn't compete with American content producers. But on the Internet, this model makes no sense because anyone can put up a web site, the costs are cheap and the number of channels are unlimited. What is the barrier to making money on the Internet other that POPULARITY? There is a simple way for Canadians to support their own culture - visit the web site and support it through ad revenue like everyone else does on the Internet.
• In the television age, exporting content to other countries was extremely limited because the distribution channels were controlled by cable channels in the country. The Internet has no such barriers - if Canadians want to share their stories they can gain an audience world wide without any restriction.- In the television age, there is no integration of "Application" and "Content". Monetization of content was through a single model - distribution broadcast supported through advertising. In the Internet, the two are mixed together and there are many monetization models available. The monetization mechanisms are also distributed, e.g. I can be creating "Canadian" content that is monetized through Google AdSense in the United States. The selling, re-packaging and syndication of content through dozens of channels is both an opportunity and a challenge for Canadian content producers to claim for themselves. But the solution isn't to bypass these channels and simply tax the consumer - this is just a return to the simplified television monetization model.
• In the television age, the justification for this fund was that in order to compete with American content producers there needed to be funds to create a level playing field and encourage the telling of "Canadian Stories" because the distribution channel for content was limited both in capacity (number of channels) and revenue potential (only the top 10-20 television shows make the money). However, the Internet market is completely the opposite - the market is a long-tail, unlimited distribution channel and there are lots of examples where relatively small content distributors are making money by targeting micro-niche audiences by keeping their costs relatively low and providing a highly valuable target audience for advertisers or by providing content through subscription that funds the cost.

The CRTC is in the business of regulating traditional centralized content broadcasting and is therefore bought into the fundamental model assumptions of the television age. Canadian Television Producers who are in favour of this model seem to be wanting to keep their existing model and apply it to the Internet, because if they simply wanted to make money from content there are easier more direct Internet models available that do not require a tax on consumers. The Canadian Producers advocating for this proposal and the CRTC if it accepts it simply are trying to implement the old television age model and apply to the new Internet content model so that these folks do not have to migrate to a new way of creating, distributing, monetizing content. In addition, the entire proposal continues to question the fundamental value of funding "Professional Content Producers" as the bastion of Canadian culture when there are potentially millions of Canadians who are creating "Canadian Stories" themselves on a daily basis through blogs, Facebook, etc. Do we really need Gordon Lightfood, Colin Mochrie, the CBC, etc. to have a monopoly on culture creation when anyone in Canada can easily tell their own stories?