Bell Levels Playing Field with CTV Purchase

by Jordan Richardson on September 13, 2010

BCE Inc. is set to change the game once again in Canada’s telecommunications sector. Friday saw the company strike a $1.3 billion deal to purchase CTV Inc. The move will break apart CTVglobemedia, sending control of The Globe and Mail back to the Thomson clan and releasing the Torstar Corp. from the arrangement.

The sale marks how the battlefield is changing as media companies converge with distributors of content. Cable and phone companies want to control the very content they distribute on their networks, so the fight for territory is turning into a sort of positioning process as the carriers start to angle towards charging for the content.

There have been quite a few examples of this convergence lately. Take Quebecor Inc.’s telecom subsidiary Vidéotron Ltée with its use of French content as the key selling feature for its newly-launched wireless venture. Or Shaw’s $2 billion purchase of CanWest Global Communications. And let’s not omit Rogers’ rather frequent use of bundling broadcast media content with its own wireless service plans.

It’s abundantly clear that the carriers are backing content in hopes of distributing more smart phones because of the content available on them. The proof is in the pudding: nearly every major telecommunications provider in Canada now also owns a major broadcaster. Telus is, at least for now, the odd man out in terms of significant assets with respect to content.

Does this make Telus a target for acquisition? Anything’s possible, especially with the telecom sector undergoing so many changes. Telus’ lack of content provisions, coupled with a recent rash of regulatory defeats, could make them a weaker fish in an increasingly changing pond.

With those changes, too, come a slew of regulatory possibilities that could pose some interesting problems in light of the now-moot fee for carriage hearings. In fact, every single major broadcaster with the exception of the CBC is now owned by a rival. That’s enough to give rise to a new phrase in the sector: “If you can’t beat them, own them,” says Brahm Eiley, a principal with Convergence Consulting Group.

Some final questions: what do these acquisitions mean for the federal government? How should the Harper government respond to the “potential political fallout” with respect to the Broadcasting Act and how the convergence between broadcasting and providers looms heavily over the industry? Is the spectre of corporate-controlled media distribution something Canadians are ready for? Does it even matter anymore?

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Written by: Jordan Richardson. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >

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{ 2 comments }

Mark Evans September 13, 2010 at 11:22 am

I’m just puzzling about why “pipe owners” need or want to own content in a world in which content is coming from thousands of places. It’s convergence all over again, and we all know how well convergence worked the first time around. My take is this take at convergence will be more disastrous than the first round because there are more content options for consumers than ever.

Mark

Jordan Richardson September 13, 2010 at 12:07 pm

Agreed. The carriers seem misguided about how customers get content these days. Greed is blinding their logic, I think, and I fear more of these nonsensical “decisions” are to come.

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