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Spotify asks CRTC to reconsider Online Streaming Act’s financial framework

The commission is in a three-week public hearing examining financial contributions to Canadian and Indigenous content

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Spotify wants the Canadian Radio-television and Telecommunications Commission (CRTC) to change how it calculates financial obligations from foreign streamers under the Online Streaming Act.

The act aims to govern streaming and online media services similarly to traditional broadcasters. The commission is in the midst of a three-week public hearing examining how much foreign streamers should contribute to supporting Canadian and Indigenous content.

In its remarks, Spotify’s representatives argued looking at annual revenues to earmark contributions paints a “distorted picture.” The company said it pays roughly 70 percent of its revenue in royalties, pointing out a delicate business model that sees negative margins in hopes of ultimately making that money back.

Any additional costs subjected to the company could lead it to cut expenses elsewhere, such as promotional programming in Canada.

Representatives also told the CRTC they hope the concept of online streamers financially contributing to Canadian content doesn’t spread to other parts of the world.

“You are the only country in the world that is looking at those contributions, at least at this stage, and we actually hope that this is not going to spread to other countries because we will be in real difficulty,” Olivia Regnier, Spotify’s senior director of public policy, said.

While Regnier noted the company does “understand the situation,” she called the act an “exceptional situation.”

In its final policy direction to the CRTC, Canadian Heritage said social media creators, podcasts and video games are exempt from the legislation.

While the commission is still collecting feedback on the matter, it previously asked all streaming services making more than $10 million annually to register their companies.

Source: CRTC Via: Cartt

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