Is Canadian broadcasting entering its final act?
Bell, Rogers and Corus all appear to be scrambling to pivot toward digital streaming
Is this the end of Canadian private broadcasting as we know it? Anyone who has been following the recent cuts at Bell Media might think so.
The BCE division’s new head, Wade Oosterman, seems to have taken over with a mandate to slash costs, and slash he has, starting in early January with an overhaul of executive ranks that included the ouster of Mike Cosentino, president of content and programming, and Tracey Pearce, president of distribution and pay. The cuts then moved to TV and radio, with dozens and dozens of on-air and behind-the-scenes workers let go, followed finally by the shuttering of three sports radio stations last week.
In a memo to staff, Oosterman cited “extraordinary” revenue losses and the need to trim expenses so the company can invest in content and building “nextgeneration delivery platforms.”
Meanwhile, Rogers Media, citing the “seismic shift in the media industry from traditional to digital,” conducted a round of layoffs in November, cutting something like 200 workers, according to two sources with knowledge of the cuts. The cuts affected radio stations and morning TV programs across the country, as well as staff on the business side. (Rogers says a “small percentage of our team members left the company.”)
On top of that, Corus Entertainment’s Global News underwent a “significant” restructuring last summer, eliminating teams that worked on lifestyle, entertainment and social media.
Media job cuts, sadly, are not uncommon, but with the latest round of restructuring, all three companies appear to be taking a big step away from traditional radio and television broadcasting and scrambling to pivot to digital.
It’s not hard to see why.
Even before the impact of the pandemic, advertising dollars were in steep decline, threatening the main source of revenue for over-the-air television and radio stations. Live sports is still a bright spot, but subscription revenue for specialty stations has also been at risk as
Canadians increasingly cut the cord on cable and shift to Netflix or Amazon Prime.
For Bell and Rogers, broadcast operations are useful as an advertising platform for their cellphone and internet packages. But media is less lucrative than telecom, where the amount of profit for every dollar of revenue is often between 40 and 50 cents. To boost profitability, long-time telecom operators such as Oosterman cut costs, often in a ruthless fashion.
Industry insiders say leaders at Canadian media companies have missed opportunities to innovate. Initially, all of the country’s major media players — Rogers, Bell, Shaw (which still owned Global TV at the time) and even movie theatre chain Cineplex — were in talks to launch a joint video streaming service. But the talks broke down and the result was a fractured response. Rogers and Shaw launched the joint venture Shomi in 2014 (which they would shutter two years later) while Bell followed a few months later with Crave.
Bell does not disclose details on Crave’s profitability, but it has 2.8 million subscribers. Corus launched StackTV in 2019, packaging many of its TV channels up for Amazon Prime subscribers, and attracting about 300,000 subscribers to date. Amid that splintering of the domestic market, Netflix has grown to about seven million Canadian subscribers.
There have been other fumbles. When Rogers bought the Score in 2012, it picked up the TV station that competed with Sportsnet for $167 million.
But Score Media and Gaming held on to its digital assets, including its popular app, and later branched into sports betting. The Score’s market capitalization has recently hovered around $2 billion, boosted by the potential legalization of single-sport betting. Following November’s layoffs, Rogers Media is looking to hire up to 100 people for digital and data-focused jobs; and recent job postings indicate the company’s “strategic initiatives” now include sports betting.
As well, Canadian broadcasters don’t own much of the original content that attracts subscribers to streaming platforms, typically renting out the right to stream or televise TV shows and movies in Canada (though Corus does produce a steady stream of reality and home improvement shows).
Ottawa has proposed changes to the Broadcasting Act that would force streaming services to contribute to Canadian content. The details have yet to be finalized, however, and the government’s bill also removed an explicit reference to Canadian ownership and control, prompting speculation that foreign ownership of broadcasters could be on the horizon.
In December, TD Securities said if that were the case, a U.S. buyer could snap up Corus for $3 billion to $4 billion. But TD said it’s more likely Ottawa would allow consolidation of domestic broadcasters before relaxing restrictions on foreign investment. It’s possible we could see Bell or Rogers try to acquire Corus, an outcome that might have been called outrageous half a decade ago. Failing a tie-up, one of them could spin out their media assets or find a private equity buyer.
As they wait for a clearer picture from Ottawa, broadcasters are trying to keep costs down and hoping automated ad buying and data science to support personalized ads can help win them new sources of revenue.
Scott Moore, the former president of Rogers Broadcasting, says changes can’t come soon enough. “Innovation and disruption in the broadcast industry has been moving at warp speed in the last decade, where government policy has moved at the speed of a glacier.”
The Weeknd’s massive Super Bowl halftime show is taking centre stage once again in a new behind-the-scenes documentary.
U.S. channel Showtime says it’s planning to release “The Show,” a 90-minute look at how the Toronto-raised singer’s spectacular Super Bowl concert came together.
Bell Media confirmed the film will also be available on Crave, the Canadian pay TV and streaming service, sometime “later this year” under a distribution deal with Showtime.
“The Show” was compiled by filmmaker Nadia Hallgren, who previously worked on Michelle Obama’s Netflix doc “Becoming.”
It’s produced by the in-house content studio of Pepsi, which sponsors the halftime show.
The Weeknd, born Abel Tesfaye, capped off a massive run of chart success for his latest album with the 13-minute Super Bowl concert last Sunday. The showcase included performances of his many hits, “Blinding Lights” and “Starboy” among them.