Canada loses terrestrial ground as biz consolidates to face future.In terms of available terrain, each Canadian could live on a 302,565 square meter Noun 1. square meter - a centare is 1/100th of an are
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area unit, square measure - a system of units used to measure areas plot of land (roughly 30 soccer fields), but in terms of airwave space, the country is shrinking. The Canadian broadcast industry is bracing itself for an upheaval as it waits for two of the biggest entertainment mergers the country has seen in years. Although the bids by CanWest Global for Alliance Atlantis Alliance Atlantis Communications Inc. (formerly traded as TSX:AAC) is a Toronto-based media company, which now operates primarily as a specialty service operator in Canada. Communications (AAC (Advanced Audio Coding) An audio compression technology that is part of the MPEG-2 and MPEG-4 standards. AAC, especially MPEG-4 AAC, provides greater compression and better sound quality than MP3, which also came out of the MPEG standard. ) and Bell Globemedia (BGM) for CHUM are still awaiting approval by the Canadian Radio-television and Telecommunications Commission The Canadian Radio-television and Telecommunications Commission (CRTC, in French Conseil de la radiodiffusion et des télécommunications canadiennes) was established in 1968 by the Parliament of Canada to replace the Board of Broadcast Governors. (CRTC CRTC Canadian Radio-Television & Telecommunications Commission
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CRTC Continuously Regenerated Trap Column ), the offers are already turning Canada into a two-company country.
Bell Globemedia, a multimedia company with ownership interests in Canadian terrestrial CTV CTV Canadian Television (Network Limited) and national newspaper The Globe and Mail (among other entertainment entities), was the first conglom to throw its hat into the merger game in July with a C$1.7 billion (U.S.$1.5 billion) purchase offer for CHUM. The Toronto-based radio and television broadcaster, which owns 33 radio stations, 12 terrestrials and 21 specialty channels, started accepting buy-out offers following the December 2005 death of Allan Waters Allan Waters (born August 11, 1921, died December 3, 2005) was a Canadian businessman and media icon. Waters was one of the founders of CHUM Limited, a Canadian media corporation. , CHUM's founder and controlling shareholder.
Just six months after BGM's proposal for CHUM, CanWest Global and GS Capital, a Canadian private equity affiliate of U.S. investment banking firm Goldman, Sachs & Co., announced it would spend C$2.3 billion to take over specialty channel broadcaster and CSI CSI Crime Scene Investigator
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CSI Crime Scene Investigation (CBS TV show)
CSI Christian Schools International television franchise co-producer, Alliance Atlantis. CanWest currently owns the Global Television Network, the smaller over-the-air CH networks and daily newspaper The National Post. If this bid is approved, CanWest will add Alliance Atlantis's 13 cable nets to its remit and Goldman Sachs The Goldman Sachs Group, Inc., or simply Goldman Sachs (NYSE: GS) is one of the world's largest global investment banks. Goldman Sachs was founded in 1869, and is headquartered in the Lower Manhattan area of New York City at 85 Broad Street. will take over AAC'S interest in the CSI series, as well as 51 percent of its movie distribution business. CanWest will also forge relationships with AAC broadcasting partners BBC BBC
in full British Broadcasting Corp.
Publicly financed broadcasting system in Britain. A private company at its founding in 1922, it was replaced by a public corporation under royal charter in 1927. , Scripps, National Geographic and Discovery Channel.
So, why are these proposed mergers happening now? Peter Lyman George Peter Lyman (September 13 1940, San Francisco – July 2 2007, Berkeley, California) was an American professor of information science who taught at the University of California, Berkeley, and was well known in U.S. , media and communications expert and senior partner at Toronto's Nordicity Group, said the sellers had owners who wanted to monetize, and didn't want to grow through acquisition themselves. "The timing is right because broadcasters fear the future to some extent, unless they aggregate enough clout to keep their positions vis-a-vis BDUs [cable broadcasting distribution undertakings, such as cable and digital TV distribution systems], and enough scope to invest in the transition to digital and other platforms," he said.
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3. Lyman, the growing power Growing Power is an urban agriculture organization headquartered in Milwaukee, Wisconsin. It runs the last functional farm within the Milwaukee city limits and also organizes activities in Chicago. of the BDUs in Canada is significant to the deals. Cable television distributors such as Bell ExpressVu, Rogers and Telus are going directly to program suppliers to fill their video-on-demand and PPV Positive predictive value (PPV)
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PPV Positive-pressure ventilation pipelines. To obtain leverage over advertisers, broadcasters are in a new position to gain access to programming, and also need weight to access the BDUs for standard and high-definition services. "The media industry is consolidating because they need more shelf space for product ... for various conventional and specialty windows," Lyman said.
While there is a need for more product in light of competition from new broadcasting players, the Friends of Canadian Broadcasting Friends of Canadian Broadcasting is a Canadian public interest group.
The group monitors developments in the Canadian television and radio broadcasting industries, and organizes action campaigns when broadcasters take actions which are deemed contrary to the public interest. , a watchdog for national programming content, said these deals could spell bad news for U.S. distributors. Spokesperson Ian Morrison said if the deals go through there will be fewer Canadian customers for popular entertainment programming from the States. But, since it will be unlikely to see supply-and-demand bidding wars for top series, an increased price for American programming could result for these newly-merged companies.
As for Canada's stance on the international market, Lyman said these mergers will be the country's best bulwark in an era where regulation of linear channels will not be as effective as in the past, thanks to a growing market of on-demand distribution systems.
While U.S. distributors will have fewer options to sell into Canada, local producers such as Arnie Zipursky, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. at CCI CCI Chambre de Commerce et d'Industrie (France)
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CCI Chamber of Commerce and Industry (Western Australia) , anticipate that broadcast amalgamations could trigger more independent productions. When media companies combine forces in Canada, the CRTC policy mandates that 10 percent of the transactions' value go towards public policies, such as local production, to help strengthen the Canadian industry. Friends of Canadian Broadcasting's Morrison said the policy has worked in the past, when CTV was consolidated with Bell half a decade ago for C$2.3 billion. The money mandated to public benefits resulted in one of Canada's most popular half-hour comedies, Corner Gas. "Producers have a good crack at benefits from the federal public benefits," he said.
Lyman hopes the CRTC will impose conditions of license with these mergers that will guarantee competition and investment in Canadian programming, as well as a policy to push the broadcasters faster into high-definition. The move into high-definition hasn't happened as quickly as anticipated in Canada, with 41 percent of high-definition television buyers opting against purchasing the set-top boxes to receive better picture quality due to insufficient HD content.
In reviewing competition, the CRTC will likely require CanWest and Bell Globemedia to sell off some of its newly acquired assets. Although it's crystal bailing at this point, Morrison predicted that CTV will be forced to sell off CHUM's Citytv channel in Toronto due to its overlapping terrestrial news programs for the City of Toronto. For Canwest, he believes some specialty channels may be mandated for sale because of its partnership with a U.S. investment company. "Why did they go to Goldman Sachs? It may mean they first went locally but they weren't going to get enough money," Morrison said, adding that companies such as Corus and Rogers would be happy to pick up any AAC properties if they were to go on sale.
There is a lot of time to predict conditions of license since the CRTC has a deliberate process of reviewing these mergers. Morrison doesn't expect an announcement on CHUM until at least September. "I know from intelligence that the application hasn't even been formally received for the CTV deal," he said, adding afterwards that the proposal will first be gazetted (or published), then there will be calls for comments, and finally a public hearing. "Here is something that was announced in July and it will only start to be considered in May," he said. Friends of Canadian Broadcasting has also learned from its insiders that CRTC has yet to receive anything from CanWest Global for its bid on AAC.
Under this period of uncertainty, which could last approximately 15 months, the networks operating under the CHUM and Alliance Atlantis umbrellas are under the control of a trustee. "They'll continue to exist, but they won't be making any daring decisions," Morrison warned. LS