When we talk about Netflix in media studies we tend to focus on how its algorithms frame the user’s experience.  But there is more to the service as a cultural phenomenon than big data.  Think about when we study how different versions of format television programs are “localized.” We wonder about the politics – cultural and economic – involved in “Canadianizing” something like Idol or Project Runway. What if we gave Netflix the same treatment?

A striking feature about the Internet has been the absence of cultural nationalist rhetoric. No one was calling for Canadian editions of social networking sites like Facebook or suggesting that Google made it difficult for Canadians to “tell their stories.” While these platforms may have piqued the interest of privacy officials and the security establishment, Netflix has awakened those in Canada’s cultural industries. Representatives in the creative sector are concerned that Netflix operates outside of the policy framework that supports the production of Canadian television. Those in Canada’s highly protected broadcasting industry – that has companies with properties across media platforms from newspapers to telecommunications – are complaining that they cannot compete with Netflix because it does not have content regulations and other regulations that they have to follow.  The regulator (known in Canada by the acronym CRTC) is furious at Netflix for refusing to release subscriber information during a recent round of public hearings on the future of television (the company claimed it was not legally required to do so). With an election looming the ruling Conservatives – positioning themselves as “consumer-friendly” – have promised that they will not issue a “Netflix tax” any time soon, despite the efforts of one of the provinces to advocate for that very thing.

Canadians’ use of multiple versions of Netflix serves as a reminder of the cultures and practices of cross-border shopping that are part of Canadian life. During the 1990s some Canadian houses had satellite dishes and people would “know a guy” who could help them de-scramble services like Direct TV when substandard Canadian equivalents were on the marketplace. The same could be said for international broadcasters that were not otherwise available on Canadian cable broadcasting services, like Al-Jazeera, which received a license from the broadcasting regulator with conditions applied that all but guaranteed that no distributor would be able to reasonably carry the service.   Indeed, many of Canada’s mainstream media outlets – including the country’s largest newspaper – appeared to encourage VPN use by publishing the names of companies and services that permit its use and by suggesting that the company itself is not serious about cracking down on those working in grey zone. In the headier days when both countries currencies ran nearly at par, many living near the border rented U.S. post office boxes to avoid high shipping and customs rates.  This is to say nothing of the organized bus tours, shopping guides and special sales aimed at encouraging cross-border shopping.

All of this attention is coming at a time when Netflix’s moment in Canada may be at its apex.  Over the last few months, competing streaming services have entered the market.  Two major telcos, Rogers and Shaw, have teamed up to offer Shomi, signing exclusive deals with U.S. specialty stations and services like Amazon Prime to make shows like Transparent available to its users.  In addition, Bell now offers CraveTV and its libraries of HBO and Showtime programs to its subscribers for an additional cost. Both services are currently restricted to the company’s respective cable subscribers and are offered as part of plea to stop customers from cutting the cords but one can easily imagine that both services will be widely available at some point in the future even for those who are already adrift (a recent announcement by the CRTC signals this may be coming sooner rather than later). As the competition gobbles up streaming rights for popular programs because of their ability to expose it across different platforms will Netflix be a less and less desirable option unless its original content continues to shine? It is difficult to imagine that the company will not be brought to heel by Canada’s broadcasting regulator at some point that may nudge subscription rates higher.

Will Netflix have the stomach to stick it out if that happens?  It certainly has consumers on their side, fed up with expensive cable packages, restrictive contracts and lousy customer service that have historically characterized the  Canadian television experience.  Its current partnership with Shomi for the show Between points to a possible way forward.  Rogers will have the rights to air the show in Canada on its City television stations and on its streaming service, while Netflix will get distribution rights outside of Canada for a year before being able to show the series on its Canadian platform. It will be interesting to see how this “Canada first” windowing method plays out.

In the future we may see this moment as one of those blips in time when large numbers of Canadians engaged in a form of audio-visual media consumption outside of the policy framework. When thinking about Netflix outside of the U.S. then the big question is not how smart the algorithms are but how its entry into new locales encourages a range of cultural practices that test the political and regulatory contours of nations before they are eventually put into place.  This settles things just long enough for people to find new ways to get around them.

There is plenty to talk about regarding that future. Will audiences who currently subscribe to HBO be more likely to cut the cord if they could access (only select) HBO programming three years later than if they subscribed to the service? Probably not. Will existing—particularly young—cordcutters become more likely to subscribe to HBO in the future when they’re in a financial position to do so if they’re more engaged with the channel’s library? Maybe. Will HBO ever make current flagship series Game of Thrones available on Amazon Prime while it’s still airing? Doubtful.

As interesting as those questions are, I want to consider how this deal reflects the history of HBO embracing new forms of distribution in the interest of connecting with audiences unable to afford or unwilling to pay for HBO subscriptions. Although often marginalized within these conversations in the contemporary moment, both syndication and home video were once similar points of outreach for HBO and other cable channels, and they are implicitly a significant factor in HBO’s current streaming strategy even if they go unnamed in official press releases.

HBO’s decision may be primarily focused on the streaming future, but it is predicated on the home video past. In an age before streaming, DVD sets were how you caught up with a show like The Wire, and even in the wake of HBO GO it was how you caught up with The Wire without having to subscribe to cable (at least if you weren’t borrowing someone else’s HBO GO password). With premium price tags and elaborate packaging, sets for series like Six Feet Under, The Sopranos, Rome, and Deadwood were a key space where HBO could package their prestige programming for a different audience.

If that DVD market were still healthy, one imagines HBO might have been more resistant to signing streaming deals that will further limit the appeal of those library titles: although DVD/Blu-Rays of current series will retain value (both for collectors and those unwilling to wait three years for them to arrive to Amazon), I would be interested to see if the company’s print runs on legacy DVD sets begin to shrink even further. Without knowing the financial details behind the Amazon deal, it seems safe to say that HBO ran the numbers of how this might affect their DVD business, and that their decision to embrace off-channel streaming is a tacit acknowledgement that the TV on DVD bubble burst some time ago.

If the Amazon deal signals HBO moving past its legacy DVD business, however, it simultaneously signals their inability to completely move past its limited foray into syndication. Notably absent from the deal are three comedy series that were sold into both basic cable and broadcast syndication: Entourage, Curb Your Enthusiasm, and Sex and the City. Although the first two were quickly pulled from broadcast syndication after heavy editing gutted their appeal, edited episodes of Sex and the City had a stronger run on broadcast, a banner run on TBS, and currently air on E!, while both Curb Your Enthusiasm and Entourage retain cable syndication deals on TV Land and Comedy Central, respectively.

Although all three are offered as part of HBO GO, they are absent from the Amazon announcement, implying that the nature of HBO’s contracts prohibits their sale of that content to streaming services while existing syndication deals are in place. In the case of Sex and the City, which entered into syndication before streaming was even a thing that existed, its most recent deals have been explicit about the role of streaming: reporting about its current deal with E! suggests online rights were included in the deal. While streaming deals and syndication deals may function somewhat differently, more recent syndication deals would appear to have offered streaming as part of the package, which seemingly makes it impossible for HBO to re-license that content to a third party in any capacity while existing deals are in place.

Premium cable’s relationship with streaming has always been complicated: Showtime and Starz each ended content deals with Netflix in order to build greater value into their own subscription streaming services, with Showtime only recently returning to Netflix with Dexter following the series’ conclusion. None have jumped in head first because they run on business models that require careful cultivation of value centered on subscriptions but relying on these sources of ancillary revenue (and exposure). The delay in HBO’s case is tied to both their efforts to translate their library into a subscription incentive through HBO GO—which were clearly not so successful that HBO could refuse Amazon’s likely rich financial offer—and the fact that they remain linked to previous equivalents to streaming’s ability to extend their content beyond the premium cable paywall.

HBO’s deal with Amazon signals their willingness to move past one of those models, and their inability to move past another, at least until the current syndication deals run out. When that happens, though, we will gain greater insight into how these two forms of value compare. If cable channels remain willing to pay a premium for edited versions of Sex and the City, are Amazon’s terms lucrative enough to compete? While our focus on the future makes the choice of streaming seem like common sense, HBO’s focus on the bottom line could make a different decision with streaming than it did with its legacy DVD business when the time comes.