In one of the biggest ownership changes in Canadian history since CTV bought CHUM in 2007, Bell Canada’s $1.3 billion takeover proposal for CTV has been approved by the Canadian Radio-television and Telecommunications Commissions (CRTC) last week, raising concerns about vertical integration in the television and networking industry.
The bid was first proposed in September last year for Bell to buy out the shares in CTVglobemedia currently held by The Woodbridge Company, Ontario Teachers’ Pension Plan and Torstar, which would bring Bell’s share in the company from 15% to 100%. CTVglobemedia is the company which owns radio stations, the CTV and A networks, and a majority share in specialty channels such as TSN and Discovery Channel. It also owned The Globe and Mail until the bid was proposed. Part of the deal was to give The Woodbridge Company an 85% share in the newspaper, with Bell Canada owning the other 15%. This part of the deal was accepted relatively quickly. This is the second time Bell will have control of the CTV division, as they previously had a majority share from 2000 to 2006 when the division was known as Bell Globemedia.
Bell’s worry is that if they don’t move to buy a major content provider now, they will have to buy most, if not all, of their content from competitors with entrenched media strongholds. They’re also worried about the exclusive content agreements other wireless providers have, which could put Bell in an unfavourable position. Rogers and Shaw are already experimenting with mobile video and Bell wants in on the mobile action. Bell’s purchase of CTV means every major broadcaster is now owned by a service provider, with Rogers owning Citytv, Shaw owning Global, and Quebecor Media owning French megaton TVA.
As a result of recent purchases like this one, the CRTC has made a move to temporarily stop media companies from publishing their content exclusively. The CRTC is holding a set of hearings in June to hear opinions on how vertical integration affects the communications industry and on content exclusivity for mobile devices. After these hearings, the CRTC plans on holding discussions on TV content exclusivity for mobile devices.
The CRTC also made a provision in Bell’s purchase that they must make a $239.3 million tangible benefits package which includes guidelines on where those benefits should go. Bell is to fund new morning and afternoon news programs in Western Canada, maintain programming on CTV’s A network for at least three years, and produce independent Canadian programming. Bell is also to increase the Bell TV carriage of smaller stations. Bell’s benefits package for CTV was most notable for funding the development of Corner Gas, which ran for five years and is one of the most successful Canadian comedies in recent memory.
When Bell completes the deal with CTV, it will rename the CTVglobemedia unit to Bell Media, which will include the CTV network, CTV radio stations and Bell’s Sympatico.ca Internet portal. Bell plans to expand their Internet and mobile programming through their new CTV content and will charge competitors to use that content. BCE CEO and president George Cope believes that mobile video could be negotiated the same way specialty TV stations are with service providers now.
Why should you care? Many of you probably catch old TV shows on CTV’s site. If you missed shows like The Big Bang Theory or The Amazing Race, CTV posts the most recent episodes up on their site. With Bell’s purchase of CTV and other providers purchasing content creators, expect this content to be dealt with in a more financially minded manner. Instead of going online to watch them from any network, you may end up logging into an app on your phone or into a website online using your service provider account to access content, in a similar vein as to how Rogers on Demand works for TV. The possibilities are endless for content delivery, but expect things to change. It might not be a change you easily accept, as your monthly phone, Internet and TV bills could shake up in the next few years, and the way you digest your content could completely change. The only way to find out is to wait for all the corporate deals and purchases to go through and see how their services affect the way you talk to your friends, check your Facebook or watch that show you missed last night.
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