CanWest aims to leverage content as the consumer becomes king

On March 11 before the Vancouver Board of Trade, the president and CEO of CanWest Global Communications Corp. discussed how the customer has finally become king in the digital media revolution. The speech by Leonard Asper echoed some of the comments made by Louis Audet in Montreal earlier this year (CCR, Jan. 30/04). Asper also discussed his company’s strategies for operating in a more consumer-driven media world. …The basic premise for today is that the new digital technologies have now established the consumer as King. People used to say that content is king, but content is now the gold that the King consumes. And let’s replace the word "King" with Boss. Most of you have already seen how digital interactive media have changed your businesses. …For media companies this technology has created fragmented markets. Competition has multiplied exponentially. The concepts of geographic territories and distinct markets are being rendered irrelevant. …Today, one of the biggest challenges facing media companies is fragmentation. For consumers it means an explosion of choice. Our market was fragmenting before digital technology came along but now it gets exponentially more fragmented with digital. …The new media world is a series of media realms that are overlapped or joined by the Internet and other digital communications technologies. So newspapers are online and so are broadcasters. The Internet has video and audio. Traditional media forms break down. It is a complex world. People consume multiple media simultaneously - this is known as stacking. We will all need to learn how to operate across these multiple layers of consumer activity. ...In TV, to achieve the equivalent viewing to one spot on Friends on Global, a media buyer must buy 51 spots on five specialty channels. So advertisers will pay a premium to be on Global to achieve the mass audience with minimal transaction costs and bother. This is why conventional media continues to perform reasonably well. That said all media companies continue to seek to re-aggregate the fragments in order to compete and to maintain economies of scale. This is what consolidation is all about and there will be more to come. CanWest’s strategy in this new world is to operate in five media - television, print, outdoor, radio and online. This provides consumers with CanWest content anywhere they might be, anytime. This is how we will provide advertisers with the best opportunities to reach their target markets. And we will aspire to do it around the world. …Owning assets and building powerful brands in these five categories allows us to leverage the sales, cross-promotion and content creation opportunities in order to gain market share. It provides us with the ability to invest in top quality content because we have more places to use it, pay for it, and earn from it. …At the end of the day we believe that CanWest’s model is the most robust strategy for success in a digital world. Under this broad strategic umbrella we intend to do three things differently: 1. Own more of (our) own content, not rent it. 2. Develop new revenue streams from that content - DVD and CD products, books and other merchandise. And 3. Re-purpose our content across multiple media platforms...The development of these non-traditional and ancillary revenues is essential to maintain the profit margins of even five years ago. Today a program like Popstars must have, in addition to advertising revenues, a DVD, a soundtrack, merchandising sales and if possible event related revenues and transaction fees. …I ask you to think about everything that you have heard or read about the technologies of the future. If the TV service expands from 325 to 5,000 channels will people’s desires really change? They will still look for the best content. If the viewer can pick any show on a pay-per-view basis does that change things? Not really. Media companies will still be doing what we should be doing now - but in more sophisticated ways and on different media devices. We will be selling eyeballs and data to advertisers. We will sell subscriptions to our services. We will continue to try to pick or make content that consumers want to watch, read or buy. We will give it to them, when they want it, where they want it and how they want it.

CanWest aims to leverage content as the consumer becomes king

News | 03/25/2004 5:00 am EST

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