Are media conglomerates ready for the real-world of convergence?

The CRTC may have abstained from regulating new media and the Internet – at least for now – but its policies continue to have an impact on how the online environment evolves in Canada. CRTC chair David Colville spoke to delegates at the annual Canadian Cable Television Association conference earlier this week in Toronto about the challenges facing the commission and the companies that fall under its regulatory umbrella as they prepare for the real-world interpretation of convergence. An extract from his presentation appears as follows: I don’t know about you, but I am having difficulty finding someone who can articulate in a clear and concise manner a definition of convergence, a description of how it is going to work, and an explanation of the sustainable business model. We have been asking that question at licence renewals for the major media companies, and the answers suggest that it is ‘early days’, and they do not really know themselves where the benefits will be. I’m no expert. I’m just posing the questions with, I hope, a healthy dose of scepticism. But I don’t think anyone has it really figured out yet. Major media players in the United States are paring down their Internet resources. All manner of "dot com" operations, which once thought they had the killer app, are either shut down, or are desperately seeking fresh capital from a cynical and spooked market. It would seem that I am not alone in my reservations. There are even those who suggest that content will not, in fact, be king in the Internet world. They suggest that it is email, the point-to-point communications capability that has driven the growth of the Internet, and the rest is just window dressing which will attract interest as long as it is free. The way the kids today are using email, instant messaging, and chat rooms, speaks to that thesis as well. To those who argue that the commission and its regulations are standing in the way of convergence, I suggest that you first tell us what it is, and what you see it becoming. Then we can deal with regulatory changes to help you make it a success, for both you, and the people of Canada. The commission has indicated it is prepared to evolve…. However, my firm belief is that no matter how market-driven the environment becomes, there will continue to be the need in our modest-sized country for a governance organization which has, as its primary raison d’être, the responsibility of ensuring that the public interest is addressed and supported in broadcasting and telecommunications…. A recent global study conducted by Cap Gemini Ernst and Young, reports that customer satisfaction levels with the communications, entertainment and technology sectors is on a steep downward curve. The point of view expressed in this report is that success won’t go to the distributor who has the biggest pipe. It will go to the company that provides the best customer experience. When cable’s primary product was the distribution of television signals, a service interruption was an inconvenience, not a catastrophe. But now that a growing number of your customers are also depending upon you for crucial services such as email and Internet access, a service disruption can create serious customer backlash with subsequent revenue ramifications. The winner in the convergence game won’t be the one who can send their customers a single bill for a wide range of communications, entertainment and information services. It will be the one who backs up that bill with a technically robust infrastructure, value-added content, and a well-informed and empowered front line staff, who can address the customer’s concerns quickly and efficiently. We all are optimistic that there will be broad take-up of these services, and that their introduction will spark increased demand from your customers for digital boxes. But whether that happens will ultimately depend on how attractive and exciting you can make this rollout. It is the consumer holding the remote clicker who will be the ultimate arbiter of success or failure of these new services, and your digital future.

Are media conglomerates ready for the real-world of convergence?

Broadcast | May 31, 2001

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