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September 11, 2010

Bell Canada buys CTV

CANADA/ENTERTAINMENT - Yesterday Canada's largest telecommunications company, Bell Canada (BCE) bought an 85% stake in CTV Inc., one of Canada's leading broadcasters for a sum of $3.1 billion.

The monumental deal was made possible thanks to new technology, deregulation and changing consumer habits wherein more people now watch TV online or on their SmartPhones. These changing media landscape means Bell wants to stay competitive and offering video news, sports events, TV shows, etc. on cellphones is one way to get ahead of the competition.

COMPLAINT: However until they make downloading TV and using the internet on SmartPhones free and/or unlimited, I don't see the vast majority of people doing it. Only young yuppies with cash to spare will bother with paying for such services and the rest of us will continue using tradition television or downloading TV shows off the internet for free.

Sports and news shows were deregulated in late 2008 and thanks to the lack of regulation covering internet and mobile TV it means Bell Canada/CTV can reap some profits from the yuppies who are actually willing to pay for these services.

Meanwhile people are still waiting for a cellphone that has free WiFi and can connect to / piggyback on local WiFi networks just like a wireless laptop can. The technology is there and we've seen tiny personal computers that include free WiFi piggybacking just like a laptop, but they cost $600 currently. The technology could easily be adapted for cellphones.

The purchase of CTV by Bell Canada still has to be approved by government regulators. The deal also means spliting up CTVglobemedia and the Globe and Mail newspaper returning to the control of the Thomson family (Canada's richest family) and their holding company, The Woodbridge Group. Bell Canada is also maintaining a 15% stake in the Globe and Mail.

The ability of Bell/CTV to join forces and sell/market content to consumers via TV, internet, SmartPhones and iPad-esque tablets will be useful to advertisers wishing to brand themselves across multiple platforms.

Yesterday Bell's Quebec rival Quebecor’s cable company Videotron announced it would enter the wireless phone market in Quebec and include content from its TVA television network... and earlier in 2010 Shaw Communications bought Global TV. In 2007 Rogers bought City-TV for a mere $375 million.

The new deal also means Bell Canada now controls sports networks TSN and RDS, Discovery Canada, the Comedy Channel and 30 specialty channels.

The previous owners of CTV were The Woodbridge Group/Thomson family, Torstar Corportation and the Ontario Teachers Pension Plan.

NOTE: Deals like this are the future as companies become large conglomerates. For example the Hyundai corporation in South Korea doesn't just make cars. They also build ships (Hyundai Heavy Industries is the world's largest shipbuilder), build office towers, condominiums, industrial estates, Hyundai department stores, hotels, logistics, credit cards, insurance, banks, investment firms, game developers, civil engineering (bridges), tourism, cruise ships, elevators, shipping containers, oil and gas, merchant marines, etcetera etcetera etc... the point is they own almost everything.

In the future we will begin to see unusual alliances between big corporations as they group together for mutual benefit. ie. An oil and gasoline company buying an automotive company, then buying an insurance company, then having a merger with a bank, then an advertising firm, broadcasting and just expanding indefinitely to become huge umbrella comglomerates.

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