Canada Requires a 5% Cut from Streaming Revenues of Netflix, Spotify, and MORE—For What?

A new order from Canada will now require streaming platforms operating in the country to give off five percent of the revenue earned from its operations to be paid to the government. In this latest demand from Canada, it aims to raise $200 million annually, profiting from the operations of the likes of Netflix, Spotify, Apple, Disney, Google, and more, despite initial complaints.

No other countries have imposed this on streaming platforms, but Big Tech companies are known for this, especially with the controversial App Store commission rate.

Canada 5% Cut on Streaming Revenues From Netflix, Spotify, and MORE

Canada and its Canadian Radio-television and Telecommunications Commission (CRTC) announced their latest decision to require streaming platforms to pay a five percent fee to the country from their revenues in the region.

This requirement was established under the Online Streaming Act of the Great North to improve the Canadian broadcasting framework.

CRTC's new regulatory plan now dictates that online services such as Netflix, Spotify, Apple, Google, Amazon, Disney, and more are compelled to support Canada's broadcasting system.

Through this, Canada and CRTC look to make as much as $200 million per year from the five percent cut from these companies.

Canada's Streaming Revenue Commission is For What?

Canada's streaming revenue commission rate of five percent will take effect in the 2024-25 broadcasting year. The country will use the projected $200 million per year to improve local news and content development.

The country will require any company or online streaming service, focusing on music and video only, that makes at least $25 million annually in Canada to pay up.

Commissions, Cuts, and Fees for Services

One of the most infamous cases regarding commission rates and cuts from subscription revenue is against Apple, particularly with its App Store policy and agreement with companies that charge 30 percent. Last year, it was known that top executives from X, with its CEO Elon Musk, and Spotify, headed by Daniel Elk, called Apple "absurd" for its strict rules.

However, while Apple is the most controversial case regarding this matter, it is not alone in facing massive complaints from companies that use its services. Google was also slapped with an antitrust suit. Apart from this, Epic Games, which both went against Apple and Google, claimed that the Mountain View internet giant has a secret deal with Spotify that gave them zero percent commissions on the Play Store.

With the subscription business going strong and proving to be a long-term setup for providers and customers, it is no longer unheard of for governments and their agencies to look to take a cut from these services. Canada is now requiring streaming platforms to take a further 5 percent cut from their revenues in the country, one that would help improve its local news and content growth further.