After many years of trying to figure it out, I think I've finally put the finger on who is responsible for our general ho-hum-ness, or our companies' collective inability to compete and succeed on a global level. And the award goes to: our national telecommunications and broadcasting regulator, the CRTC. How is the Canadian Radio-television and Telecommunications Commission to blame? Well, to get there, let's first examine Canada's relative lack of commercial success in the rest of the world.Few, if any, Canadian companies have been able to succeed internationally for very long. There was, of course, Nortel, the telecom equipment maker that rose spectacularly and then failed just as awesomely. Today, we have Nortel's second coming: Waterloo, Ont.-based BlackBerry maker Research in Motion. RIM did very well when its only competition in smartphones was Nokia, which hails from Finland, a country that has produced even fewer notable success stories than Canada, if you can believe it (trust me, I checked). Now that RIM is competing with the likes of Apple and Google, well, not surprisingly its outlook is getting more grim by the day.
We've had a few other international successes outside of the technology world, but their fortunes generally can't be attributed to merit. Our natural resource companies have fared well, but hey, they just happen to be sitting on land that is rich in rare, high-demand materials such as oil and natural gas. You'd have to try really hard to screw that up. Bombardier, our aerospace/train manufacturer, is also well known around the world - which probably wouldn't be the case without a whole raft of government subsidies. Cirque de Soleil is also pretty cool, but we can't really count them as there really isn't a "circus industry" for them to compete in (or is there?). Manulife is a successful financial services firm, and to be honest, I know zilch about the field, so let's just chalk them up as a Canadian company that has perhaps truly succeeded internationally. Are there others? Possibly, but these are the ones that come to mind.
Stepping down a level, we have had some companies make it to a certain medium level, then sell out before they got to competing with the big boys. This happens fairly frequently in the technology world: graphics chip maker ATI (bought by AMD), software maker Cognos (bought by IBM), video game designer Bioware (bought by Electronic Arts). The reasons why have been speculated about ad nauseum, and the general consensus usually comes down to Canadian companies lacking access to the sort of capital they need to compete against the world.
I'm sure part of that is true, but I'm also convinced there's more to it. I think it's because, deep down, Canadians don't want to compete with the best, or we don't know how. We don't have the same killer instinct that Americans do and, for the most part, we're proud of that because it differentiates us. It's a double-edged sword because it's part of why Canadians are generally liked in the rest of the world, while Americans are greeted differently depending on who is currently president.
But on the downside, that's where the CRTC comes in. This attitude of accepted mediocrity - where we accept our fair share and avoid reaching for the brass ring - is cultural. And since the regulator is our appointed cultural guardian, the buck must stop there. For as long as I can remember, the CRTC has been responsible for enforcing rules that ensure we have enough Canadian-ness going on in Canada, a tough task given that we live next to the world's biggest cultural exporter. If it wasn't for the CRTC and its cultural protectionism, then 100% of the music we listen to would be American, and 100% of the movies we watch would be American, and 100% of the books we read would be American, and so the argument goes.
Canadian content rules dictate that a certain percentage of our programming must be Canadian produced, and it's here that mediocrity begins. Thanks to CanCon, millions of Canadians believe The Tragically Hip to be a great band, rather than a really low-rent Pearl Jam. For me to suggest that is tantamount to heresy, although the almighty "market forces" seem to back me up on this one: the Hip couldn't sell out a flea market outside of Canada, and indeed they haven't.
Don't get me wrong - we have many, many artists who have succeeded internationally (alas, Celine Dion and Nickelback are among them), but they have all left Canada and done so largely without the aid of CanCon rules. The only thing the rules do is prop up otherwise mediocre talent within Canada. That actually has an effect on the general, non-artist population - it sends a message to Canadians that yes, you can get by with only marginal ability because the state will be there to help you out regardless.
The CRTC also coddles Canadians in other ways too, although this is usually the result of outdated or just-plain-dumb laws that it is stuck enforcing. In both broadcasting and telecommunications, foreigners aren't allowed to have any meaningful ownership stakes in the companies that supply the pipes over which our culture is beamed out. Somehow, preventing a foreigner from owning the fiber cable in the ground is supposed to protect Canadian culture. The rules are even stupider when it comes to bookstores. Yup, no foreign ownership there either. In fact, for the longest time a foreign website that sells books (Amazon) couldn't even locate servers or warehouses on Canadian soil. Figure that one out.
This all came up because of yesterday's announcement that Netflix, the popular video-streaming and DVD-by-mail service, is finally coming north from the United States this fall. It's funny that more Canadians know about Netflix than our own domestic alternative, Zip.ca, which has been around for years. The difference between the two companies, though, is that Zip - for whatever reason - has resisted getting into offering people a download service on which they can get movies and television episodes on demand. Netflix's download service, meanwhile, is available on just about every piece of hardware you can connect to your TV, including video game consoles and Blu-ray players.
Despite Zip's supposed plan to offer a download service this fall, you'd best believe this is a company that is dead in the water now that Netflix is on the way. They had years of opportunity to duplicate Netflix's business here and they didn't. As a result, corporate Darwinism is about to take effect.
Netflix and Zip are just one example of just how globalized the world is, and just how ridiculous - and potentially dangerous - cultural protectionism is. Canada became an economic power in an era where countries were considerably more isolated. That's not the way the world works anymore, and continuing to instill a culture of mediocrity is likely to have a significant effect on whether we can maintain that standing.
It's about time we rid ourselves of these rules that were designed to isolate us. If Canadian culture really is so fragile, where we can't even buy books from Americans for fear of losing our identity, then perhaps it deserves to be crushed. Somehow, I think it's a little stronger than that.
6 comments:
Yeah, I'd say the Zip observation is pretty accurate. However, a bunch of that will be due to name recognition and branding: I mean, I've only heard of Zip now, though this article, so what's the chance the average consumer has, as well?
The disappointing fact with tech is that whoever grows biggest, fastest, seems to have an iron grip on future customers and innovation. Anyone new to the scene wkll have to work ten times as hard, as they will have to try to supplant a service or company that people have been using for years, or have heard amazing things about.
That's true Matt. One definite factor I've heard is that American companies have more access to cash so even if a Canadian firm jumps out to an early lead, Americans can catch up quickly (or buy the Canadian company). That seems to be happening to RIM - don't get me wrong, I'd love to see them succeed and kick everyone's butt, but it looks like the early leadership position they cultivated is slowly and surely slipping away.
Pete
During the Olympic opening ceremonies an awful lot of my US Facebook friends--including journalists--kept posting comments that "I didn't know Michael J Fox, Donald Sutherland, etc etc were Canadian."
So your comments about the CRTC are really a chicken and egg argument. What set the ground work for that situation was
1)it was the majority of Canadian business leaders who are mediocre and wanted to sit on their asses and live off foreign investment rather than taking risks here. That was especially true of many in broadcasting who wanted nothing more than to do nothing and get profits from buying American programming. If it wasn't for CRTC and Cancon those Canadian artists who now compete world wide wouldn't have had the opportunity to reach the "level of excellence" demanded by US immigration. (talk to all those actors who took extended "vacations" in the US to try to get around the rule).
2. American cultural parochialism. Unlike tech hardware and software, it is hard for anyone no matter where they're from to break through the cultural wall that surrounds the United States...e.g. all those Cdn and other stories that have to be transferred to the US before being marketed there (a couple of recent cop shows may show a trend in a different direction but I doubt it)
Good points Robin, although individual and company success isn't all that different. Many of Canada's most talented individuals - I'm thinking people like Jim Carrey, Mike Myers, Rush, Shania Twain - succeeded without any help from the CRTC. They had talent and won out the old-fashioned way: rather than coasting along in Canada, buoyed by domestic rules that help them (as many of our businesses do), they instead took the risk and expanded internationally. Their unsubsidized "product" was good enough to be accepted by American (and other) audiences, and so they succeeded. It's all a question of risk - Canada makes it too easy to mitigate, which is why we have relatively few who are willing to go all the way.
Pete
Maybe it's a generational thing (and the rise of the net) because I can remember the time when Canadian musicians, actors and filmmakers complained that no private station would play work by any Canadians, no matter how good they were, the only place something could be played was on the good old CBC (and there wasn't room for everyone on the Corp airwaves) Now, of course, anyone can get work from anywhere on the net (even if most of it is downloaded and the artist isn't paid)
The argument went like this -Canadians aren't any good, so we won't play their work because no one will listen/watch. Answer if you don't play our work, how will anyone know if it's any good? Cause it's Canadian, it can't be any good. Go work for Harveys (Timmys wasn't that big yet)
Under US immigration rules to get even a temporary visa, somehow had to reach a level of excellence internationally (winning an Oscar or Grammy) or nationally in their own country -which wasn't that possible in Canada in the old days, if the Catch 22 applied of no one was playing Canadian work.
Those who expanded internationally and took risks (including friends of mine, who I won't name, which is how I know these stories) weren't accepted in the US as Canadians. They went across the border, waited on tables for cash (illegally) and went to auditions in NY, LA or Nashville. If they won an audition then they'd gotten around the excellence rule (by winning an audition they proved they were better than a competing American) they'd come home, get the passport stamped and then head south. That system died after 9/11 with tighter immigration rules (which is why some prominent Canadian artists who did that to get started have erased those episodes from their resumes)
The following generation did succeed with help from the CRTC, because once CanCon was mandatory, their records, videos or whatever were played in Canada and then with the help of a smart US immigration they claimed national excellence and then took on the world. And at the same time because these people succeeded, then no one could go to a CRTC hearing and say we won't play Canadians because Canadians aren't any good.
And I disagree that we have few going all the way, now since 9/11 it's harder to get a visa for US or UK, so its even more crucial that the artist gets gigs in Canada so they can prove both to Canadians and the world that they are that good.But if the Canadian business beancounters (not the CRTC) don't want to invest it won't happen. Fortunately because of a legacy of CRTC rulings, there is a lot more opportunity than there once was.
Zip.ca said at one of the CRTC hearings that they ship by mail because it is to expensive to buy broadband in Canada.
I also dont think netflix will do all that well here myself if the incumbents continue with their ever shrinking caps and growing overage fee's.
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