Greed is good, as the oft-paraphrased Gordon Gecko saying goes, in these heady days of Canadian media. The acquisition of Astral Media by Bell for the eye-popping sum of $3.38 billion further cements the popular notion that a consolidated Canadian media is a strong Canadian media.
Not long ago, convergence was a dirty word but the emergence of powerful new entrants like Google has changed that for many. Media analyst Kaan Yigit, president of Solutions Research Group says the global media landscape has changed with new players like Facebook, Netflix and YouTube, and while may $3.38 billion sound like a lot to pay right now, the real value of Astral’s assets won’t be determined until multi-platform media consumption across TV, mobile and online really goes mainstream.
“In Canada, iTunes has about 7 million accounts, Netflix has about 1.5 million accounts, so the definition of what media competition is has shifted from domestic players to include this extra layer of international or global Internet players,” he says. “That’s pushing our domestic players to go for it and snap up more rights holdings. And maybe you won’t be able to draw a premium from it today, but three to seven years out when the multi-platform piece really engages, you have the assets to be able to drive that more competitively.”
Sunni Boot, president and CEO of marketing and media services giant Zenith Optimedia in Canada, says it’s now more important than ever to have strong domestic media companies to compete globally. “Years ago I would’ve said it’s too much concentration,” she said. “Now, I want the strongest possible Canadian media owners to go up against the global behemoths of Google, Microsoft and everyone else, and compete for content. I’m no longer worried about pricing because there is so much competition out there. What I want is content I can be participatory in for my clients at the most favourable price and where I have influence to work with our vendors.”
Obviously Astral’s portfolio of English and French-language pay TV and specialty TV channels, as well as Canada’s largest network of radio stations, go a long way to lock up more content. But it’s what Bell does with it that will really determine if it’s been money well spent.
Yigit says it will be interesting to see how Bell utilizes assets like The Movie Network and HBO Canada, which he says have been slow off the mark with an online strategy. Astral did announce late last year a plan to adopt the popular HBO Go service to Canada later this year. “What could be good for consumers is that after this deal Bell is able to refashion TMN into a domestic Netflix competitor,” he says. “Whether or not it can do that will be a good indicator on the success of this deal.”