The Italian media environment was used as a cautionary tale in an advertising campaign organized by three Canadian media companies against Bell Canada’s proposed acquisition of Astral Media.
In one of the ads published in large Canadian newspapers, the three companies — Cogeco Cable, Eastlink and Quebecor — pointed out that Bell Canada already owns CTV (the largest commercial TV network in Canada) and cable channels such as the Discovery Channel and MuchMusic. With the purchase of Astral Media, Bell Canada would control another five major TV networks and myriad smaller ones. The ad also states that, “Allowing one company to attain such a dominant position would move Canada in the direction of countries like Italy, Brazil and Mexico.”
Bell Canada is a public company based in Montreal with annual revenues of C$18 billion that operates in the areas of telephony (fixed and mobile), satellite TV (BellTV), broadband (Bell Internet) and media (Bell Media, as well as CTV). It controls 30 TV channels, 35 radio stations and 15 percent of the principal Canadian newspaper Globe and Mail.
Bell Canada is looking to buy Astral Media for C$3.38 billion. Astral, also a public company headquartered in Montreal, owns two over-the-air TV channels and 18 niche cable channels (including the country’s main pay-TV service), in addition to 83 radio stations and Astral Media Outdoor (billboard). Astral’s annual turnover is C$961 million.
The three companies that actively oppose the Astral acquisition also made public a letter sent to the Minister of Telecommunications, James Moore, in which Italy is described as exemplifying the type of situation Canada should try to avoid.
In a chart called “G8 Market Concentration in Television Broadcasting,” Italy tops the list with Mediaset Group controlling 45 percent of the “market share.” In a post Bell-Astral acquisition, Canada would follow with 37.6 percent (in the current pre-acquisition model Bell Media controls 28.6 percent).
The Italian TV data come from a 2007 study by the CRTC, the Canadian authority for telecommunications.
The letter to the minister accuses Bell Canada of already using anti-competitive practices that would only increase after an Astral acquisition.
The three companies that oppose the acquisition are all in the multimedia business: Quebecor, the largest of the three, with annual revenues of over C$9.8 billion, operates in the field of broadcast, publishing and cable TV; Cogeco, which like Quebecor is also based in Montreal, generates revenues of C$747 million and is primarily a cable-TV operator owning some TV stations; Eastlink, the smallest of the three with revenues of C$310 million, is based in Halifax and is a cable TV operator that provides telephony and digital TV channels.
According to one of the many ads created by the protesting group, by merging with Astral, Bell could force consumers to buy unnecessary (bundled) services. Plus, the costs of services would increase dramatically, domestic production of TV programs would be reduced and advertising rates increased.
