YouTube: Brief presented to the Standing Commiee on Transpo and Communications on theOnline Streaming Act,

An Act to amend the Broadcasting Act and to make related andconsequential amendments to other Acts (Bill C-11) YouTube in Canada Since 2007, millions of Canadians have relied on YouTube’s creative ecosystem to learn, be inspired andconnect with the creators that they love.

With 500 hours of video uploaded from around the worldevery minute, Canadians come to YouTube for content that responds to their diverse and uniqueinterests and needs, from watching the latestCharloeCardinmusic video to watchingAmandaRachLee, a Toronto-based aist whose videosabout doodling, journaling and a garnered hera loyal following on YouTube, which she has been able to leverage to launch a successful online shopselling stationery. At present, Canadians are in the driver’s seat when they come to YouTube.

For both viewers andcreators, YouTube is an interactive experience, where engaged, passionate fans are able to interactdirectly with creators by sharing, commenting and contributing. The personal, direct connectionbetween YouTube viewers and creators puts viewers at the centre, and Canadian viewers rely on us toserve them content that is relevant to their interests.

This individualized experience ensures that Canadian creators are connected to the appropriateaudiences who will watch and engage with their content, resulting in audience and subscriber growth.And this personalized viewing approach is helping many creators turn passion into prot. Canadianmegastars likeLilly Singh,Justin Bieber,Shawn Mendes,andthe Weekndall began their journey toglobal superstardom as individual creators on YouTube.

They all leveraged YouTube’s open plaorm tohone their cra, grow their audience and ultimately resonate with viewers all around the world -something that many say would have been very unlikely in the closed system of conventionalbroadcasting. And while not all Canadian YouTube creators are household names, their stories are no less poweul.Yolanda Gampp, Connie Contardi and Jocelyn Mercer collectively run one of the most successful foodchannels on YouTube.

Aer their show on cable television was cancelled, they moved to YouTube andquickly found an audience with Yolanda’s talent as a self-taught baker matched to Connie and Jocelyn’sdecades of experience as video producers.How to CakeIthas now become a global media empire thatincludes their wildly popular videos released every Tuesday, a new cookbook and a line of baking tools. Or former University of Guelph students and couple Mitchell Mot and Gregory Brown, who launchedAsapSCIENCEin 2012 and have grown to be one of thetop learning channels on YouTube with over 10million subscribers.

Their channel sits at the colouul intersection of a, science, and pop culture;there, anyone can learn, paicipate, and use their plaorm to speak on environmental change, queervoices in STEM, and how science can shape cultural movements.

These diverse voices can break through because of the openness of YouTube’s plaorm; with over 2billion monthly logged-in viewers, YouTube has helped these creators connect with audiences all aroundthe world who have the same interests. Today, Canadian creators are thriving. According to research done by Oxford Economics, YouTube’screative ecosystem directly contributed $1.1B CAD to Canada's GDP in 2021, and suppoed 34,600 fulltime equivalent (FTE) jobs in Canada.

YouTube’s own data shows that as of December 2021, the numberof YouTube channels in Canada making 100K or more in annual revenue (CAD) is up 35%, year over year. In addition, our panerships with traditional media companies and Canadian institutions have enabledCanadians to experience and enjoy local culture of the past, present and future. Today, HistoricaCanada’s channelhas over 34 million views, with audiencesaround the world learning about our historyand our cultural zeitgeist.

AndEncore+, a panershipwith the Canada Media Fund, has hundreds ofthousands of subscribers and tens of millions of views from within Canada and around the world ofclassic and culturally signicant Canadian lms and tv shows. Online Streaming Act: Overview YouTube is passionate about celebrating Canadian stories and bringing them to the world. That is whywe suppo the goals of C-11 and want to suppo the government in craing legislation that will achievethese shared objectives.

But we are concerned that the current text of C-11 would put at risk theexperience of millions of Canadians who come to the plaorm every day, as well as the livelihoods of thetens of thousands of Canadian creators on YouTube.

It inses the regulator between the organicconnection of viewers and creators today, which could negatively impact the experience of Canadianviewers, put Canadian creators at risk of losing international viewers, advantage large media companiesover smaller creators, and set harmful precedents for digital creators by applying provisions designedfor linear broadcasters to open plaorms.And because Canada is one of the world’s leading democracies, nations around the world will be closelywatching how it handles this issue.

With Bill C-11, Canada would begin a process of erectinginternational trade barriers, disrupting the current free exchange of cultural expos on open digitalplaorms that Canadian creators depend on. Andthepotential unintended consequences of evenwell-intentioned regulation here at home could be weaponized by illiberal leaders abroad as a roadmapto restrict access to information in their own countries. We appreciate the oppounity to share these concerns and the Commiee’s thoughul considerationof these impoant issues.

We believe that two simple changes to the text of Bill C-11 can resolve these issues, and achieve bothadditional suppo for the Canadian creative industries (paicularly, music) while preserving the creatorecosystem. They are: 1. Narrow the language of

Section 4.2 to only capture full-length, commercial musicuploaded to plaorms like YouTube and explicitly exempt other forms of user-generatedcontent from scope of the Act, as per the stated intention of the government.

2. Strengthen

Section 9.1 (8), to both prevent regulatory impacts to recommendationalgorithms and give plaorms the exibility to implement orders with the best protectionfor the user experience. In addition, we recommend that the broadcasting regulations in Sections 9.1 (1) and 10 (1) be appliednarrowly and beer reect diering technology and business models. Such tailoring is necessary toensure that open plaorms are not subject to provisions that are more appropriately applied to linearbroadcasters.

Our proposed amendments would codify what the government has always said—that it does not intendto regulate user generated content nor disrupt the positive experiences of users who come to our openplaorm, but that the commercial music content that may appear on those plaorms remains in scopefor applicable provisions. Online Streaming Act: Impacts and Recommendations Bill C-11 would grant the Canadian Radio-television and Telecommunications Commission (CRTC) a widerange of powers to regulate the content on open plaorms.

This includes the authority to determinewhat content should be promoted in Canada, how that promotion should occur, what type of adveisingshould run against that content and with what frequency and duration. Given the vast scope of thisregulatory authority, we believe close study and thoughul, open dialogue is needed before the Billpasses, especially to ensure that authority granted to the CRTC matches Parliament’s intent.

For example, although the Bill provides that the CRTC cannot require the use of a specic algorithm,recent testimony from the Chair of the CRTC underscores concerns about how the CRTC interprets thelegal text and how its authority will operate in practice. The Chair highlighted that achieving the Bill’sdiscoverability goals could entail the CRTC requiringchanges toalgorithms, testifying in regards toplaorms, “I don’t want to manipulate your algorithm.

I want you to manipulate it to produce a paicularoutcome.” Similarly, although the Government has repeatedly stated that the Bill is not intended to enable theCRTC to regulate user-generated content (UGC), the Chair of the CRTC hasconrmedthat, in fact, “Asconstructed, there is a provision that would allow us to do it as required”.

Section 4.2 (1) delegates authority to the CRTC to apply regulations to UGC, subject only to arequirement toconsiderceain “maers 1 ” in Section4.2 (2) before doing so. The current text wouldenable the CRTC to apply signicant conditions and regulations toallUGC—not just the commercialmusic content to which the governmenthas referred. Rather, how-to videos that incorporate 1 4.2

(2) In making regulations under subsection (1),the Commission shall consider the following matters:(

a) the extent to which a program, uploaded to an online undertaking that provides a social media service, directly or indirectlygenerates revenues;(

b) the fact that such a program has been broadcast, in whole or in part, by a broadcasting undertaking that(

i) is required to be carried on under a licence, or(ii) is required to be registered with the Commission but does not provide a social media service; and(

c) the fact that such a program has been assigned a unique identifier under an international standards system.

background music, fan mash-ups or dance challenges, cover songs, and more could be considered inscope of 4.2 (2), despite being radically dierent from the government’s stated intentions to regulate. Allsuch videos would almost ceainly generate revenue (even if only indirectly), would feature music thathad been broadcast on another service, and because most music has embedded International SoundRecording Codes (ISRC). Moreover, in the current text,the fact that CRTC merely has toconsidermaers versus maers being materially present in order to prescribe regulations means that there areno actual limitations to the content over which the CRTC may exe regulatory authority. In sum, thetextof

Section 4.2 (1) and (2) does not createanymeaningful guardrails for the CRTC. Not only would this imperil the Canadian creator and viewer communities, but it would also set globalprecedents that could lead to barriers to entry in international digital media markets for Canadian aistsand storytellers. In fact, when read in conjunction with the expansive order-making powers of Sections9.1 (1) and 10 (1) (described below), C-11 puts the entire creative ecosystem on YouTube at risk.

Unfounately, the oppounity to consider and address these consequences was cut sho in the Houseof Commons, when debate and discussion was limited on many proposed amendments to the Bill.There are numerous ways to capture commercial music in the scope of Bill C-11 while leaving otherforms of UGC untouched on plaorms like YouTube, and we suppo an approach that clearlyaccomplishes this distinction. We propose language below to achieve this objective.

Puing the Regulator between Viewers and Creators Aicially forcing an open plaorm like YouTube to recommend content based on government prioritieswould place the regulator between our viewers and creators and undermine the experience of Canadianviewers. YouTube is distinguished from conventional broadcasters because our viewers are in thedriver’s seat when they come to YouTube. Distinct from a traditional broadcast experience, our viewersare able to have a personal, direct connection with creators, which puts our viewers and theirpreferences in our central focus.

Canadian viewers rely on us to provide them with this experience and we seek to serve each viewer tothe same high standard when recommending content. Our recommendations system is constantlyevolving, learning every day from over 80 billion pieces of information we call signals. A number ofsignals build on each other to help inform our system about what you nd satisfying: clicks, watchtime,survey responses, sharing, likes, and dislikes.

Our system then sos through billions of videos torecommend content tailored to specic interests in a manner that respects the unique and diversenature of every individual coming to the plaorm. For example, two next-door neighbours in Montrealmay have very dierent interests and needs—one may love Bollywood content, and another may belooking to discover gourmet Quebec ‘foodies’, likeFromager Urbain, a Quebecois cheese acionadofeatured in YouTube’s Creator on the Rise—and our goal is to recommend videos relevant to their uniqueinterests.

Our recommendation system is built on the simple principle of helping people nd the videosthey want to watch and that will give them value. Bill C-11 puts that approach at risk. Instead of seeing content on your homepage that’s based on yourinterests, the Bill would give the CRTC the authority to shape what content is presented for you.Because there are no eective guardrails on the CRTC’s authority over plaorms like YouTube,

Section

9.1 (1) (

e) opens the door to regulation on how any or all content appears on the plaorm whenCanadians come to YouTube. This could include the home page and “Up Next” feed, where our systemrecommends content to viewers based on signals like what videos they’ve watched and time of day.This authority includes,but is not limited to, mandatingthe showcasing of Canadian and original Frenchlanguage programs.

The CRTC Chair’s recent testimonystating that under the Bill, the CRTC may requireplaorms to manipulate their algorithms to create a paicular outcome, even if the CRTC may notdirectly prescribe a paicular algorithm, fuher conrms these concerns. In sum, the CRTC—and notour Canadian viewers—would direct how content is discovered on YouTube. Canadian viewers righully expect thattheirinterests,not those of the government, will be at the centreof the equation on YouTube.

By applying discoverability provisions to all content on YouTube orotherwise authorizing regulation of how videos are presented to users, this legislation risks erodingusers’ trust in both the regulator and in YouTube. Careful consideration of the impact on users andfulsome discussion and adoption of amendments could ne-tune the Bill to beer protect the interestsof Canadian viewers.

Puing International Audiences and Revenue at Risk for Canadian Creators YouTube is deeply concerned that pushing or promoting content on the basis of its ‘Canadianness’ toviewers would likely backre for Canadian creators who rely on international audiences for over 90% oftheir watchtime. Canadians have an almost innite choice of content on YouTube, and as explained above, our systemsuse a variety of signals to recommend videos in which users will nd value across a global corpus ofcontent, without discriminating based on a creator’s country of upload.

Without a clear indication that auser seeks content from creators associated with a paicular nationality—e.g., a search query for“Canadian travel vlogger”—then promotion on the basis of a creator’s nationality is not likely to be agood t for the viewer. And geing that ‘t’ right is impoant, because viewer paerns impact theplaorm’s recommendations to them.

If the content presented to viewers is not based on their individualinterests or information-seeking needs, but rather a set of criteria or priorities established by the CRTC,it increases the chances that viewers ignore that content or indicate that they don’t like it via the dislikebuon or a negative response in a video-level satisfaction survey. If videos have low click through rates, or higher levels of ‘abandonment’—when viewers stop watchingbefore the end or use the “dislike” buon—those signals will have an impact across the globalrecommendations system.

It teaches our systems that the content is not relevant or high quality, whichwill have knock-on eects that harm global recommendations, international watchtime, and ultimately, acreator’s earnings. It means that creators aicially promoted by the regulator in Canada could bedemoted in search results around the globe. This, in turn, would have the eect of demoting preciselythe type of content the CRTC is hoping to highlight. Moreover, C-11 would set a harmful global precedent. No other democratic country currently applieslocal content promotion requirements to open plaorms.

If Canada sets this precedent, other countrieswith much larger markets may impose similar restrictions that disadvantage access for Canadiancreators. And illiberal countries could point to Canada's example to justify laws that try to restrict the

ow of information to their own populations. Canada would sta the process of erecting internationaltrade barriers to the current free exchange of cultural expos on open digital plaorms. That would bedetrimental to Canadian creators; according toOxfordEconomics, 78% of creative entrepreneurs agreethat YouTube helps them expo their content to international audiences they wouldn’t otherwise haveaccess to. 2 Giving an Advantage to Large Canadian Media Companies over Digital Creators Right now, digital creators on YouTube compete on a level playing eld.

But a regulatory requirement forceain programs to be promoted or ‘showcased’ on the basis of criteria dened by the CRTC, such asits eligibility as Canadian content, would eectively pick winners and losers between content creators.Some would be eligible, and some would be excluded. Some would get top billing, and others would not. Today, YouTube’s recommendations systems do not discriminate on the basis of whether content ismonetized or not, what geography it was uploaded from, or if creators have enough subscribers to be inthe YouTube Paner Program.

Rather, as described above, our systems seek to provide content that ismost relevant to the individual viewer in a given moment. Audiences determine how content peormswhen creativity breaks through and content resonates with viewers. The CRTC’sCanadian Program Ceicationregime,which establishes the numerous criteria that mustbe met for each piece of content to be qualied as ‘CanCon’, is complex and ill-suited for digital contentcreators.

Applying such a regime, or something similar, to Canadian creators on open plaorms wouldgive a distinct advantage to large, well-resourced media companies that have the necessary teams andexperience to navigate the system. It would impose a resource-intensive requirement on small creatorsto demonstrate to plaorms and the regulator that their content meets eligibility requirements andwould bureaucratize the creative process, huing the upward mobility of new, diverse and innovativecreators.

In addition, those creators would be tasked with gathering, managing, and protecting sensitivepersonal information from the individuals involved in developing their content for the purpose ofcomplying with the ‘CanCon’ requirements. This creates new privacy risks for Canadians as well as asignicant burden on emerging creators. Carefully Scoping the Bill to Address Commercial Music We believe it's possible to suppo Canadian musicians, aists and storytellers without puing thelivelihoods of thousands of Canadian creators at risk or inteering with the user experience.

At YouTube,we will continue to suppo the Canadian creator economy and the Canadian music industry. Ourpanerships with major and independent record labels across Canada continue to pay o—record labelearnings from YouTube on content with Canadian ISRC numbers grew by more than 35% year over yearfrom 2020 to 2021.

On the music publishing side, our payments to SOCAN increased by more than 50%during the same time frame. 3 Globally, in one yearalone from July 2021 to June 2022, YouTube paidmore than $6 Billion to the music industry, which was a $2 Billion increase from the prior year. 3 “$6 billion paid to the music industry in 12 months,”Lyor Cohen, Global Head of Music, YouTube, Sep.13.2022, available athttps://blog.youtube/creator-and-artist-stories/6-billion-paid-to-the-music-industry-in-12-months/ 2 From Opportunity to Impact: Assessing the Economic, Societal and Cultural Impact of YouTube in Canada in 2021, OxfordEconomics, July 14, 2022.

We are not at odds with regulating commercial music content on YouTube . The bill’s current text doesnot dierentiate, however, between commercial music content (i.e. premium music videos andcommercial sound recordings) and true user-generated fan content, nor does it adequately protect therecommendation algorithms fundamental to the Canadian music industry’s growth on our plaorm andexposure to international audiences: in 2021, more than 85% of record label earnings from YouTube oncontent with Canadian ISRCs came from international audiences.

As we provide below, there are multiple ways to capture commercial music in the scope of C-11 fordiscoverability purposes, while leaving the organic, fan content experience untouched on plaorms likeYouTube. By making clear that in-scope content is that which is provided to a plaorm by the soundrecording’s copyright owner (or its agent), plaorms can operationalize and identify which songs arecovered by the regulation and which are not.

At YouTube, our panerships with thousands of recordlabels, music publishers and collecting societies around the world enable us to distinguish between thecontent they are providing to YouTube, and the fan content they monetize through our leading copyrightmanagement tool, Content ID. Our proposed amendments would codify what the government has always said—that it does not intendto regulate user generated content nor disrupt the positive experiences of users who come to our openplaorm, but that the commercial music content that may appear on those plaorms remains in scopefor applicable provisions.

Suggested Amendments: Amend

Section 9.1 (8)9.1

(8) The Commission shall not make an order underparagraph (1) (e)this Actthat would require(a)changes to, orthe use of aspecic computer algorithmor source code, or (

b) specic changes to thefunctionality of a service operated by an online undeaking. Amend clause 4.2 (1) and strike 4.2 (2)4. 2

(1) For the purposes of paragraph 4. 1(2) (b), the Commission may make regulationsprescribingprogramsin respect ofwhich this Act applies. soundrecordings in which:(

a) the uploader of the program is the owner, or the exclusive licensee or agent of the owner, of thecopyright in the sound recording;(

b) the program has been broadcast in whole by a broadcasting undeaking that(

i) is required to be carried on under a licence, or(ii) is required to be registered with the Commission but does not provide a social media service; and(

c) the sound recording is assigned a unique identier under an international standards system. Appropriately Targeting Broadcasting Rules Bill C-11 goes faher than C-10 and applies several new provisions to open plaorms that are designedfor conventional broadcasters. YouTube believes that doing so would have harmful unintendedconsequences.

In many respects, the application of these broadcasting provisions would set negative globalprecedents. 9.1 (1)(l) 4 permits the regulator to order open plaormsto carry emergency messages. However,on-demand services do not have the technical capability to comprehensively distribute emergencymessages the way that linear television or radio do. Unlike conventional broadcasters, on-demandservices do not dierentiate based on granular location data and are not tethered to any paiculartelecommunications network. On-demand services do not own or operate the telecommunicationsnetworks on which they sit and therefore lack the requisite control to guarantee transmission of a signal. Notably, under

Section 10 (1) (d) 5 , the regulatorwould have the authority to determine the amount oftime and character of adveising on plaorms like YouTube. YouTube’s adveising business, bolsteredby its robust brand safety standards, is central to our YouTube Paner Program, which allows YouTubecreators to paicipate in adveising revenues. The majority of adveising revenue generated by acreator in the YouTube Paner Program goes to the creator. Enabling the CRTC to have jurisdiction overadveising in the manner contemplated by the bill would have a direct, immediate eect on thesecreators’ livelihoods.

In terms of technology and content, open plaorms dier from those of conventional broadcasters, andprovisions like this in the Bill should recognize these impoant distinctions. Recommendation: Return to the approach of C-10 and narrow application of broadcastingregulations in Sections 9.1 and 10 (1) to beer reect the diering technology, business modelsand content of open plaorms from those of conventional linear broadcasters. Suggested Amendments Add to

Section 9.1 (3)9 (3)(ii) Orders made under this section, other thanorders made under paragraph (1) (

e) or (o), do notapply in respect to an online undeaking that does not own or exclusively license programs. Amend

Section 10 (2): 10(2)ApplicationA regulation made under subsection (1) may be made applicable to all persons carrying on broadcastingundeakings or to all persons carrying on broadcasting undeakings of any class established by theCommission in the regulation.Orders made under this section, other than orders made under paragraph (1) (

i) or (j), do not apply inrespect of an online undeaking that does not own or exclusively license programs. Alternative Approach Lastly as yet another alternative, an amendment could address both of the above issues related to 5 (

d) respecting the character of advertising and theamount of broadcasting time that may be devoted to advertising. 4 9.1 (1)(

l) carriage of emergency messages.

application of broadcasting provisions and content in scope: Amend

section 4.1 (3) and strike 4.2 4.1(3) This Act does not apply in respect of online undeakings whose broadcasting consistsonly ofprograms in respect of which this Act does not apply under this section. of programs that are uploadedto an online undeaking that provides a social media service by a user of the service that is not theprovider of the service or the provider’s aliate, or the agent or mandatary of either of them, except(

I) with respect to orders made under

Section 11.1 and(II) for orders made under paragraph 9.1(1)(e), 10(1) (

i) and (

j) for programs where(

a) the uploader of the program is the owner, or the exclusive licensee or agent of the owner, ofthe copyright in the sound recording;(

b) the program has been broadcast in whole by a broadcasting undeaking that(

i) is required to be carried on under a licence, or(ii) is required to be registered with the Commission but does not provide a social mediaservice; and(

c) the sound recording is assigned a unique identier under an international standards system. CONCLUSIONEnsuring that Canadians can nd, enjoy, and create quality Canadian content is a priority for YouTube.We are not opposed to regulation, and we will continue to do our pa to suppo the Canadian creatoreconomy and to paner fuher with Canada’s music industry. Our proposed amendments wouldenshrine this commitment in legislation. Suppoing Canadian musicians and storytellers does not have to come at the expense of the viewerexperience, or the thousands of Canadian creators who earn a living on digital plaorms.

We know thatmore precision in the Bill can accomplish its objectives, while preserving the vibrant and authenticecosystem that Canadian creators and viewers enjoy on YouTube today. We urge members of the Standing Commiee on Transpo and Communication to amend C-11 and toadopt specic language to ensure open plaorms are not regulated like conventional broadcasters, tostrengthen limits on the CRTC’s authority to mandate changes to algorithms, and to narrow provisionson scope to explicitly capture commercial music content and exclude other forms of UGC from CRTCregulation.

We thank the Commiee for the oppounity to identify ways that the Bill can beer match theGovernment’s expressed intentions, and we appreciate the open, thoughul dialogue on theseimpoant issues. YouTube: General DescriptionYouTube’s mission is to give everyone a voice and show them the world. Launched in May 2005,YouTube allows billions of people to discover, watch, and share originally-created videos. The platformprovides a forum for people to connect, inform, and inspire others across the globe.

According to OxfordEconomics, YouTube’s creative ecosystem contributed $1.1 billion CAD to Canada’s GDP in 2021, andsupported more than 34,000 full-time equivalent (FTE) jobs in Canada.