Brad Danks | CEO, OUTtv Media Global
Part 1 of 7 – CARTT Series: Beyond the Walled Garden
Canada’s media system is rich in creativity, talent, and public support. The real challenge isn’t a shortage of resources – it’s market design. Policies and industry structures have fallen out of step with how media value is generated and sustained today.
Canada’s media policy was designed in the broadcast era. Imagine: a relatively small number of channels, set schedules, and not much choice for viewers. This period formed what we now call the Walled Garden. The system, referred to throughout this series, took shape over four decades: from the CRTC’s establishment in 1968, through the refinements of the 1980s and 1990s.
It was built on a specific bargain: distribution rights – controlled through CRTC licensing of cable and satellite carriers, known as BDUs (Broadcast Distribution Undertakings) – would be leveraged to cross-subsidize Canadian content production. Broadcasters were permitted to profit from carrying largely American programming, on the condition that they funded and commissioned Canadian content; BDUs contributed through regulatory requirements that flowed into Canadian production funds.
At its peak, Canadian broadcasters were paying US networks and studios more than $1 billion a year in licensing fees. That money flowed south while the cross-subsidy kept Canadian production alive at home. The technology gate – control over who could reach Canadian audiences – made that bargain enforceable. Every major policy instrument that followed – certification rules, expenditure requirements, funding envelopes – was designed to sustain that cross-subsidy mechanism.
For more than thirty years, that model mostly worked. But then Netflix landed in Canada in 2010, and streaming started to break down the old system. The walls didn’t hold the future out. Over the next decade, the old structure weakened, but not enough to force a complete rethink. Richard Stursberg traced this unravelling in The Tangled Garden (2019). Now, the window for real change is closing quickly as global platforms and AI accelerate disruption.
In Canada, the majority of entertainment viewing time still flows to traditional linear television – but for the first time, that majority is slipping below 50%, and it won’t come back. In the US, streaming overtook broadcast and cable in 2025; Canada typically lags by a few years, putting the crossover here somewhere between 2028 and 2030. AI is accelerating the shift – pulling audiences faster toward on-demand, personalized viewing and away from scheduled channels.
C-11 was a start, but the underlying problem is a system out of sync with where Canadian media’s real opportunities are heading. The question isn’t whether to intervene – Canada already does, extensively. It’s what the intervention is optimised for. Right now, it’s solving for a scarcity problem that is fading, not the opportunities that streaming and AI are opening.
Canada’s broadcasting and media system is already shaped by policy at every turn. Certification rules, spending requirements, funding envelopes, and endless reporting all signal what’s rewarded, what’s worth pursuing, and what’s worth repeating. The real policy question isn’t, “Should we shape the market?” It’s, “What behaviours is our current system actually rewarding?”
Right now, the system mostly rewards spending, hours produced, and creative jobs filled. That made sense in a Walled Garden – but does it still, in an era defined by global streaming and AI?
But here’s the catch: the system doesn’t reward (and sometimes actively discourages) the things that actually build lasting strength. Owning your content. Building real distribution power. Connecting directly with audiences. Sustaining Canadian media choices. Growing beyond our borders. Canadian companies are capable of all of this. But the system points them toward production spending requirements as its only priority and, increasingly, is indifferent as to who does the spending or benefits from it. That was rational in the Walled Garden. In an era of global streaming and AI, it’s a competitive liability.
Canadian media policy was built on the idea that making content was both crucial to sovereignty and too risky for private investment without structural support. In a small domestic market, the economics didn’t work on their own – production costs couldn’t be justified by Canadian revenues alone, and the Walled Garden cross-subsidy made it viable. The whole system was designed around that constraint.
But both of those assumptions are under pressure now. AI is starting to bring down production costs, and fast. It’s early days, but the momentum is real and it’s fueling a deeper structural decline. The commercial engine that co-funded production (through broadcaster triggers and BDU contributions) is already weakening. This means that the system is losing its financial base just as its main reason for existence is being challenged.
Sure, as costs drop, we should see more Canadian content in the next few years and a lot more after that. But if we don’t change the system, much of that value will slip away and accrue to non-Canadian entities. Money and rights could end up in the hands of platforms outside Canadian control, and there will be less capital available to invest in building the distribution infrastructure and IP ownership that actually create lasting value. A system built for scarcity doesn’t just become obsolete when scarcity ends, it ends up supporting the wrong parts of the industry with less money every year.
The Illusion of Neutrality
Markets don’t emerge from nature, they are designed. As Chris Hughes argues in Marketcrafters, every market is the product of deliberate choices about rules, incentives, and institutions; the question is never whether to shape a market, but how. Canada’s broadcasting market was no exception, and the original design worked. The problem is that it was never recrafted when the logic that created it changed.
In practice, today’s incentives funnel money and opportunity to organizations that are best at navigating rules and regulations – usually big, established players. Not because they’re more creative, but because the system rewards size over experimentation, and old players over new learning.
Large incumbents are structured around domestic regulated markets, not built to compete globally. For Canada’s largest vertically integrated players, media is increasingly a secondary business. Their scale, profits, and growth come from communications – and there is little strategic incentive to build globally competitive media operations when the regulatory system rewards domestic compliance over international ambition. The result is a funding system that routes a large amount of public and private capital through institutions whose primary interests lie elsewhere. When media is no longer the core business of the largest players, the system loses its primary engine of reinvestment.
The companies best positioned to build what the system actually needs – direct audience relationships, owned IP, niche distribution at scale – are either outside, or poorly supported by, the existing funding architecture. They don’t qualify, or they’ve learned not to rely on it. The system isn’t neutral about this outcome. It produces it.
CRTC data shows profits in Canadian TV have dropped sharply over the past decade, even as programming spend stays high. We’re funding activity, but weakening the very institutions we’re supposed to support. Keeping things the same isn’t progress. The more we make, the more value – audiences, data, IP, distribution connections – flows to platforms outside Canada.
When streaming came along, it didn’t smash through Canadian media’s walls, it just sidestepped them, pulling in audiences and revenue with new content people were eager to pay for directly.
The system didn’t adapt; it just shrank and settled for a smaller role. That was fine as long as linear TV was dominant, but now everything’s shifting. Streaming is set to become the primary way we access content, and AI is accelerating this shift.
The system functions as originally designed, but it was built for a context that no longer exists.
The Right Question
The current debate clusters around how much streamers should pay and how content should be promoted. This series argues both questions are downstream of a more fundamental one: what is the system actually optimising for? If Canada wants a domestically strong and globally competitive media sector that owns its IP, what behaviours should the system actually reward? That’s urgent now. Streaming started the decline; AI accelerates it. Canada has the talent and capacity to be a leader in these emerging markets, but only if it seizes the opportunity. The honest answer is that the current system is optimised for managed decline – extending the life of a model whose commercial foundations are giving way, rather than investing in the architecture of what comes next.
If IP retention, distribution capability, and export performance are the true objectives, incentives must align accordingly. Increasing funding for a misaligned system exacerbates the problem. This is not a call to end cultural policy, but to update it so the value created by Canadian creators remains in Canada and supports a Canadian media economy. We are no longer just subsidizing culture, we are subsidizing the balance sheets of global platforms.
IP and distribution aren’t just strategic, they’re economic essentials. Licence fees bring in money once. But audience relationships, IP catalogues, and distribution infrastructure build value that compounds year after year. That’s where policy should be aimed.
Jim Balsillie, former BlackBerry co-CEO turned IP policy advocate, who spent a decade making the same case about Canada’s tech sector, nailed it back in 2020: “Innovation without a national IP strategy is philanthropy. You invent it, and invest in it, and others get the benefits.” The same logic applies to content. Canada funds creation, but doesn’t have a system to ensure the value we create stays here.
The system as designed was a rational response to real constraints. Those constraints are dissolving. The question now is whether Canada will redesign around the opportunity – or keep optimising for a problem that no longer exists. Policy environment is not the only constraint Canada faces: scale, capital markets, and geography all impose real limits. But the evidence from comparable markets consistently shows that policy choices at the margin determine whether creative sectors build ownership-based businesses or remain permanently dependent on foreign financing. Canada can change its policy. It cannot change its geography.
In Brief
The Walled Garden bargain is breaking down. Streaming eroded the walls; AI is collapsing the timeline. Canada’s real media problem isn’t a shortage of creativity or funding – it’s a system optimized for production volume when the value now sits in IP ownership, distribution capability, and audience relationships.
Brad Danks is CEO of OUTtv Media Global and an Adjunct Professor of Law at the University of Victoria. He is a frequent writer and speaker on the evolving media landscape. He represents OUTtv’s interests as a member of industry groups, including Beyond Mainstream – a global alliance of independent streaming companies advancing innovation and competition in digital media, and Streaming for Australia. Brad also sits on Numeris’ Board and is a faculty advisor at the Center for Digital Media in Vancouver.
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