An updated chart can be found here.
It probably doesn’t matter to most people that Bell Canada’s parent company BCE announced on Friday that it was buying 100% of CTV. Bell already owned 15% of it, and had previously acquired CTV back in 2000 as part of a similar convergence play.
Ah, convergence. It’s been the buzzword in the big media companies for the past decade or so, with all the acquisitions that have taken place. Bell, a phone company, started up a satellite TV service, a DSL Internet service, and got into the broadcasting game in one giant swoop by acquiring CTV the first time, along with a growing number of TV specialty channels.
Rogers, which had a head start on the convergence business being a broadcaster, cable provider and wireless company, added a baseball team, other cable and wireless providers, and broadcasting assets including the sloppy seconds of the CTV/CHUM acquisition.
Quebecor, once a commercial printer and newspaper owner, bought a TV network, a cable and Internet service provider, and an entire newspaper chain.
Canwest, once a small television broadcaster, built up a national television network, bought a high-profile newspaper chain and a media company with a truckload of specialty channels. Now it in turn (minus the newspapers) has been bought up by Shaw, a cable provider that acquired a satellite TV provider.
With Shaw’s acquisition of Canwest and Bell’s acquisition of CTV, a pattern is emerging where each of the corporate empires has a TV provider, a wireless service, an Internet service, a national broadcast network, TV specialty channels, and maybe some radio and print assets on the side.
||TVA, Sun TV
||CTV, A Channel
||Shaw Cable/Shaw Direct
||Bell TV, Bell Fibe TV
||(Coming in 2011)
||Bell Mobility, Virgin Mobile Canada
||Rogers Wireless, Fido, Chatr
||Shaw cable VOIP
||Videotron cable VOIP
||Rogers home phone
||Sun Media, Osprey Media
||Globe and Mail (15%)
||Report on Business Magazine
||Rogers Publishing (including l’Actualité, Maclean’s, Chatelaine, Canadian Business)
||DejaView, Fox Sports World Canada, Global Reality, MovieTime, Mystery TV, TVtropolis, BBC Canada, BBC Kids, Discovery Health Canada, DIY Network, Food Network Canada, History Television, HGTV Canada, IFC Canada, National Geographic Channel Canada, Showcase/Action/Diva, Slice**
||LCN, Argent, addiktv, Yoopa, Les idées de ma maison, Prise 2, The Cave (51%)
||Business News Network, Comedy Network, CTV News Channel, TSN/TSN2, RDS, RIS, ESPN Classic, Discovery Channel (and related networks), BookTelevision, Bravo!, CP24, Comedy Gold (80.1%), FashionTelevision, MuchMusic (and related networks), Space, Star!
||Biography Channel, G4 Canada (66.67%), OLN, Rogers Sportsnet, Setanta Sports Canada (53.33%), The Shopping Channel
||CHUM radio network (about 35 stations including CKGM Team 990 in Montreal)
||About 50 stations
||12 assets, including sweetspot.ca
||TVA Films, Archambault, Super Club Videotron
||Toronto Blue Jays, Rogers Centre
*For the purpose of this chart, we’ll assume that the Bell purchase of CTVglobemedia goes through as advertised.
**Many people point to the Shaw family’s control of Corus Entertainment to suggest that Corus is unofficially a subsidiary of Shaw Communications. But if you think that way, you can add a bunch of specialty channels and radio stations to the Shaw column.
Filling the holes
Rather than worry too much about a telecommunications company wanting to spend billions on media assets when just about all media assets are falling in value, the business world is wondering: What’s next? Where is the next big acquisition or merger that puts a fifth column on that table?
Telus is the big name on everyone’s lips, because they have the audacity to just be a telecom company at the moment and therefore have a “content gap”. But Telus says they won’t get in this game.
Besides, there are other options. Just connect the dots as you like:
- Telus (wireless, home phone, TV, Internet)
- EastLink (cable, Internet)
- Jim Pattison Media Group (TV, radio, advertising) – currently a division of the giant Jim Pattison Group
- Newcap Broadcasting (TV, radio)
- Astral Media (radio, TV, specialty)
- Corus Entertainment (TV, radio, specialty) – would be kind of awkward if it was owned by anyone but Shaw
- RNC Media (TV, radio)
- Remstar (Remstar Productions, V)
- Channel Zero (CHCH, CJNT, specialty)
Telecom and broadcasting
There’s also plenty of regional telecom companies, small newspaper publishers, book publishers and specialty TV channel owners that can be scooped up and disappear into the large conglomerates.
How this screws us over
“Today our three largest cable competitors are fully integrated and clearly we are not prepared to buy our content from our competitors”
That quote comes from a conference call that Bell had shortly after announcing the deal to buy CTV. The basic premise behind this deal isn’t that CTV is going to make Bell a lot of money by being a profitable business unit, but rather that CTV’s content will be a bargaining chip to get people to use Bell’s services.
Recently, Rogers launched a new TV channel called Sportsnet One. Even though it’s only available on Rogers cable (it hasn’t negotiated carriage on the other providers yet), Rogers decided to move Toronto Blue Jays games to Sportsnet One in order to get people to subscribe to the new channel. Since Rogers owns the baseball team, the television channel and the cable provider that carries it, it’s the ultimate convergence play.
And it’s royally screwing over Blue Jays fans.
Analysts don’t think Bell will be using blackmail to get people to switch over to its services. But they could. Want to watch NHL games on your mobile phone? You can’t unless you’re with Bell. Want TVA shows on demand? You can’t unless you have Videotron illico. Anything these companies can buy exclusive rights for, they will do it. The only things keeping them from forcing you to subscribe to a particular telecom in order to get some content are the CRTC (which doesn’t regulate mobile or online content) and business models that see more profits in maximum exposure than short-sighted consumer blackmail.
It’s not out of the realm of possibilities for one of these companies to pull some move that, like Sportsnet One, requires using a particular service to get something that used to be widely available. And if one company does that (and it’s successful), the others would probably follow. We could be a couple of years away from a country where you need to buy redundant services in order to get the content you want.
Save our local TV from … us?
Remember that “Save Local TV” campaign by the broadcasters who wanted us to convince the CRTC to force the cable and satellite companies to give money to TV broadcasters? And the corresponding “Stop the TV Tax” campaign from the cable and satellite companies to pressure the CRTC the other way? Well, since that campaign, Shaw took control of Global TV and BCE is about to take control of CTV. Quebecor, which owns both TVA and Videotron, didn’t participate in either campaign.
Bill Brioux remembers those campaigns, and is particularly pissed that a TV network with a “broken business model” just sold for billions.
They’re still arguing against each other at the moment, but how long can we expect that to last?
And there’s other concerns too. John Bowman points out that there’s little incentive to invest in quality broadcast equipment. And Iain Marlow suggests this may make it easier for the government to relax foreign ownership restrictions.
This kind of stuff will come up at the CRTC hearings into the takeover, though I’m doubtful that the commission will put up a major roadblock to it, despite opposition from opponents to media concentration.
It won’t work … or maybe it will
The biggest negative opinion about this deal is the simple argument that CTV won’t be a profitable venture for Bell any more than it was a decade ago. That’s what David Olive says, it’s what Howard Bernstein says, and Torstar (which sells its stake in CTV) is playing this up as a win for them, as is the Globe and Mail, which is breaking off (mostly) from the empire.
To be fair, some like the Globe’s Derek DeCloet believe this might make sense, pointing out that the price isn’t as ridiculously high as it was 10 years ago. Other analysts agree.
One of those sides will be proven right in a few years. Let’s hope, for the sake of consumer choice and healthy corporate competition, that bigger isn’t better.