Fragmentation is the cause, consolidation is the effect: O’Farrell

Canadian Association of Broadcasters (CAB) president and CEO Glenn O’Farrell told the Senate Committee on Transport and Communications in an appearance before it on February 23 that the broadcasting industry in Canada has never been less concentrated than it is today. The Senate committee is studying media concentration in Canada. Below is an excerpt from O’Farrell’s presentation. Today, broadcasters operate in a highly de-centralized media environment, characterized by more choice, more sources of information and entertainment than anyone thought possible in 1970. Yet, it has become an article of faith among certain commentators and observers that Canadian broadcasting has become more concentrated over the past generation. Seldom, however, is that assumption put to any scrutiny. Simply counting the number of outlets operated by any one owner in one part of the overall media market tells us nothing about the overall amount of diversity in the Canadian media market. We must consider the sheer volume of fragmentation in the broadcasting market today – because there has not only been an increase in the number of broadcasting outlets, there has been an increase in the number of owners/operators of those outlets, each of which reaches smaller audiences today than at any point in the history of our broadcasting system. A "concentrated" broadcasting market in Canada would imply that Canadians, as a pool of broadcasting consumers, receive common information from a common pool of sources. This is clearly not so.I refer again to the statement by the chair of the CRTC (Charles Dalfen), quoted in this committee’s interim report, to the effect that there is a larger number of owners, and a larger number of outlets today than there were in 1970. To that I would add that each of those outlets is generally achieving smaller audience shares today than at any point in the past. Fragmentation is the new reality of Canadian broadcasting. More choices, more voices, smaller audiences. As Mr. Dalfen stated, it may be counterintuitive, but the numbers don’t lie. Yet in many circles we continue to hear unchallenged assertions about "increasing concentration" in the Canadian broadcasting market – assertions that simply do not stand up to empirical analysis, and that simply do not reflect the economic reality of fragmentation within the Canadian broadcasting industry today. It is important for this committee to understand that where broadcasters have consolidated their holdings, it is in response to the current trends in broadcasting: fragmentation and the erosion of fragmenting resources. It is a response to the erosion of borders, as broadcasters seek to "re-aggregate" audiences that have been splintered by the increasing volume of American and other foreign channels in our broadcasting system. It is a response to the evolution of our country that has led Canada’s private broadcasters to spearhead an unprecedented initiative to deal with the fair and accurate portrayal and representation of Canada’s cultural diversity on television screens. …Today, Canadians have more programming choices from more sources than at any other point in our history – increasing Canadian choices, increasing international choices, shrinking audiences. Today, Canada’s broadcasting companies have to compete for every viewer, every minute of every hour of every day. And unlike in 1970 when a few U.S. border stations were available to anyone with a strong enough antenna, today that competition includes the world’s largest media conglomerates…I hope that this commission, in considering the question of media concentration, will bear in mind the data presented in our brief, and also that fragmentation is the cause, consolidation is the effect.

Fragmentation is the cause, consolidation is the effect: O’Farrell

News | 02/25/2005 5:00 am EST

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