Catching up on MediaPolicy – Bell cuts newscasts – post Peak TV is a downer – a sports streaming mega app?

February 9, 2024

The media headliner this week was yesterday’s report of 4800 layoffs at BCE, a follow up on 1300 layoffs from June. Bell’s layoff announcement was paraded as a contribution to the good news of increased profitability and a higher shareholder dividend.

As was the case in June, the vast majority of the layoffs are on the telco side of the Bell ledger, not media. Less than 10% of the 4800 cuts are in media, according to a Bell spokesperson (there are, or were, about 5000 Bell Media employees in total).

The media layoffs will be driven by CTV eliminating television newscasts: weekday noon and all weekend newscasts are gone, except for Toronto, Montréal and Ottawa. The investigative journalism show W5 is cancelled, two years short of its sixtieth anniversary. Bell is also selling off 45 of its small market radio stations, half of its overall network.

The Globe & Mail report pegs BCE’s motives. The cuts are a response to escalating pressure on profit margins and the domino effect on share price. Defending that share price is job one and ninety per cent of the company’s activity is broadband and mobility, not media.

While Bell spun the cost savings to Bay Street in one direction, it spun them another direction on the political front by grumping about the federal government and the CRTC’s indifference to the case they want to make for regulatory relief on broadcasting Canadian content and local news.

Bell’s biggest grump however is over the CRTC’s decision to force it to sell wholesale access to their latest generation fibre networks to independent telcos. That ruling hits Bell amidships, dead centre in their growth strategy. MediaPolicy wrote about that issue here. 

On Parliament Hill, Heritage Minister Pascale St.-Onge was asked by journalists how her government reacted to Bell punking the Liberals with the layoffs, given that Bell had been handed $40 million annually in licence fee relief in Bill C-11 (actually a Conservative amendment) and another $12 million from its share of compensation flowing from the Online News Act, Bill C-18. The $40 million savings on licence fees matches the $40 million Bell loses annually on news casts. I estimate this round of media layoffs will save them a further $40 million (of a company-wide savings of $250 million).

Previous Heritage Ministers might have deflected the question, but as a rule this one does not. She pointed out that her government toughed out the Big Tech news throttles to salvage $100 million in Google money for news (no thanks to the Conservatives). She also said that the CRTC “made changes to help company facing challenges.”

On the first point, the Minister neglected to mention that her government shortchanged news broadcasters including Bell on their pro rata share of the Google $100 million. Bell’s rightful share was about $28 million, not $12 million.

On the second, the CRTC has not as yet made any changes to support news broadcasting: the option of foreign streamers being required to contribute to a broadcasting news fund will not be determined by the CRTC until the spring or summer.

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Every year the Canadian Media Producers Association convenes “Prime Time.” It’s the free-wheeling marketplace where television and film producers hawk their goods and story pitches to broadcasters and streamers. In addition, the CMPA puts on a series of speaker panels pronouncing on the state of the industry. If you can afford a hotel room in Ottawa, it’s the industry event of the year.

By all accounts, it was a gloomy affair this year. The cause of the gloom is not just the usual dread over the future of Canadian content made by independent Canadian TV and film producers. It’s the dimming prospects for lucrative “service” productions made by Canadian producers for the US market. Now that we are on the wrong side of “peak TV,” Hollywood studios and US networks are cutting acquisition budgets. That will hit Canadian producers; we will see how much in the next two annual reports from the CMPA (usually released in November).

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Last week I flogged Doug Shapiro’s four part series on the future of media. He’s published parts two and three since then.

His analysis could be summarized by the aphorism “data is everything and Big Tech has all the data.” But Shapiro is also a bit of a futurist which lead him to speculate about the potential impact of Artificial Intelligence on how money will be made in a media world that looks nothing like today:

AI agents could intermediate platforms. The idea of autonomous agents that can understand and fulfill open ended natural language requests has been around for decades (“open the pod bay doors, HAL”) in science fiction. Following the launch of ChatGPT, plug-ins, various co-pilots and customizable GPTs, it’s a lot easier to see how this would work in reality. (Or, see the rabbit r1, an AI mobile device unveiled a few weeks ago.) Imagine that everyone has a personal AI agent that they grant (highly secure, encrypted) access to personal data, like online activity, content consumption, health history, financial information, etc. It could even have access to your wearable for a real-time understanding of your mood or, as Bill Gates suggests, an earbud that hears everything you do. Such an agent could act as a universal media aggregator and suggest content based on your prior preferences and its perception of your need state. For instance, let’s say it pulls up all the social posts that it anticipates you might find interesting, aggregating from X/Twitter, Instagram, Facebook and a potentially unlimited number of decentralized social networks. At that point, you would become indifferent to where something was posted, where you post and where your friends are or aren’t. A lot is unclear how these kinds of agents evolve (do you have one or many? what’s the UI? how do they monetize? are they created and owned by the largest platforms themselves? are platforms able to block or prohibit them?), but in theory they could insert a new layer between consumers and platforms and undermine the platforms’ network effects.

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In the short run, media companies that enjoy the scale and wealth to protect their market power will find new ways to keep the engine of their business model turning over.

An example would be this week’s announcement from Fox, Disney and Warner Discovery of a new sports streaming consortium. The idea is to combine their impressive suites of major sports content on one platform. Fox’s Lachlan Murdoch insists it’s an expansion into the younger cord-never market, rather than a defensive strategy to contain cord-cutting (despite the risk that it may cannibalize its cable business to feed its streaming audience).

Whether this new consortium succeeds may require a few years’ grace while it attempts to consolidate existing broadcast rights, poach new rights from competitors, and woo major sports organizations with the kind of stupid cash that allowed sports streamers DAZN and FUBO to gain a foothold in the TV world. We are probably not past Peak Sports.

The American announcement also begs the question of whether Rogers and Bell could follow with their own sports streaming consortium. Old timers will recall that back in 2014 a tentative deal between Rogers, Bell, Shaw and Cineplex to collaborate in a Canadian-styled Netflix fell apart. Afterwards, the Rogers-Shaw Showmi platform went bust within two years while Bell went its own way with Crave, dependent upon renewals of its content deal with Warner Discovery’s HBO.

But that was 10 years and 2.5 million lost cable subscriptions ago. And arguably Rogers and Bell are now in a stronger position with their own sports content —controlling NHL rights and several sports franchises owned by the two companies— than they are in entertainment.

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Here are three recommended reads for your weekend:

University of Calgary professor Emily Laidlaw published a critique of Bill S-210, legislation that would criminalize online platforms that “make available” pornography to minors unless the platform employs a rigorous age verification procedure. 

Laidlaw makes sensible recommendations to fix the flaws she sees in the Bill. But even more usefully to the layperson, she maps out some of the design challenges for the forthcoming Online Safety Bill that, according to Laidlaw, ought to make Bill S-210 redundant and unnecessary.

If you don’t know much about the regulatory path for online harms that we are about to embark upon, you’ll be much better primed after reading her post.

Second read: Harrison Lowman from TheHub has a post on what bugs him about today’s journalism students. He might be painting a whole generation with the same brush, but there are some intuitively valid points made. At the very least you will have a strong opinion on what he’s written.

Thirdly, a podcast. I will tout just about anything Paul Wells puts out and his podcasts are terrific. His latest is an interview of Canada’s foremost expert on international relations, Janice Stein, with an insightful look at the situation in Gaza. 

What I liked especially about the podcast wasn’t specific to Gaza, however. It was at the 27 minute mark where Stein summarizes the roles of commentators and politicians.

Commentators, especially those on the university payroll, should prioritize insight and intellectual humility, not activism. Politicians, she says, should be candid with Canadians about what we know, what we don’t know or can’t predict, and why the government believes it is offering the best policy choice in the circumstances.

Right on, professor.

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