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Buy Buy Bell

Posted: March 19th, 2012   |   Category: Blog | Industry News

bell cash cowBell to Become Canada’s Largest Media Conglomerate

It was announced Friday that Bell Canada, Canada’s largest media conglomerate, would purchase Astral Media Inc. for nearly $3.4 Billion.

Wow.

There are so many thoughts swirling about this story, it’s hard to focus on which element is most important, but I’ll take a stab at it.

Fail:  Media Concentration

The Bell purchase of Astral would defy all anti-competition regulations and conventions, but I don’t think these trifling details will stop the machinations from taking place.

Bell will buy Astral and Canadians will fall victim to one less media giant to run our lives.

With this monopoly environment surrounding us, the cost of access will continue to increase and we’ll have our current Conservative government to blame for preventing it from happening.

Fail:  Media Evolution

The assets of Bell cover a wide range of points of contact for Canadian media consumers, but the addition of Astral simply doesn’t make sense.

The majority of Astral’s assets come down to radio and TV, two dead to dying industries in Canada (and the rest of the world).

Consider TV:  many people are canceling cable and satellite TV subscriptions in favour of online distribution networks like Hulu and NetFlix (and thousands of others that we haven’t even heard of because our media giants want us tuned to them).

Or radio:  who actually listens to ‘drive time’ programming any more in Canada?  OK … lots of people, but that medium is long overdue for a radical change in the status quo.  Online radio stations, apps and other points of access to local news and information are just starting to gain a foothold, so why buy old-school access when you should be building new-world platforms?

Fail:  Media Regulation

It’s very unlikely that the Bell merger (assuming it happens) will result in positive change for the Canadian regulatory framework concerning media ownership and, more importantly, the opportunities for Canadians to access new media and content.

Of course, I’m optimistic and will be more than happy to revisit this issue if the CRTC and our government chooses to take the high road and considers a few simple ideas to foster some competition in Canada:

  • Open the market.  Allow all Canadians to access whatever kind of entertainment, news, sports and other information without Bell, Rogers and our other media conglomerates getting in our way.  Hulu, Netflix, YouTube and other online media giants are dying to give us access, but can’t because of antiquated laws related to content.
  • Put an end to the fantasy known as ‘Cancon’, particularly when it comes to paying media conglomerates billions per year to produce crappy TV productions.
  • Eliminate the billions in subsidies that are transferred to our private media companies, partly to appease the complaints about the government support for the CBC, but more likely to keep them in the black as advertising scales back.
  • End the bottomless pit of propaganda and subsequent billions in advertising dollars that comes from our current government about programs like the ‘Action Plan’ or other programs that they’re foisting on Canadians with our tax dollars.

Fail:  Consumer Pricing

What’s frustrating in all of this is that the proposed merger will have to be financed by something.

How about an Internet Tax?  Local police forces are already calling for an ‘internet tax’ to pay for Stephen Harper’s ridiculous plans to monitor every single keystroke on the internet, so why don’t we just plow on extra fees for our most vital form of modern communication so that Bell can continue with their buying binge?

It would be something like the ‘debt servicing charges’ that we see every month on our electricity bill as reminders of the stupidity associated with investing in non-functional nuclear plants.  Only, in this case, it would be non-functional media investments that have fallen apart because no one in there organizations took a few moments to understand that the digital world is changing the need for all of these analog assets.

Fail:  Stock Value

I’m sure I’ll call this wrong, as most of Canada loves ‘Ma Bell’ and capitalists love monopolies even more.  In summary, it’s a match made in heaven.  However, I can’t help thinking that the proposed merger will prove to be a massive fail for the stockholders of Bell.

Buying another media conglomerate that focuses on non-digital and non-technology assets is a step backwards.

Everything I’ve read about the merger and the companies fails to indicate what the new entity will do to encourage innovation in this marketplace.  Canadians will suffer for it through cost, bland content and control on what actually gets reported.

Summary:  Fail

There are so many things wrong with Bell buying Astral, but I’m honestly not complaining.  My initial thoughts are just the tip of the iceberg, but I’m optimistic:  Bell’s foray to buy everything will likely lead to a super-nova failure akin to AOL’s purchase of traditional media giant Time-Warner.  Too many egos, too many traditional formats doomed to fail and not enough investment in the digital universe.

So go ahead … but don’t think for a second that you’ve got approval to raise my cost of internet access to subsidize your largesse.

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