Who could have predicted all this? If you consider how Canadian media has evolved in the past 15 years – the technological innovations, media globalization, the restructuring of domestic and international regulatory regimes and the demographic diversification – it’s a wonder that the industry was able to muddle through. All of these things have collectively transformed the Canadian media scene. And, given the speed and magnitude of these changes, it’s understandable if those at work in media were leery about what the next 15 years might bring.

Charles Dickens may have got it right with the famous opening line of A Tale of Two Cities: ‘It was the best of times, it was the worst of times.’ The future is hard to predict, but looking forward to this transitional period, some things are certain. Canada’s media industries will be forced to adapt their offerings, services and business models to conform to the emerging environment – while also attempting to steer a course through a volatile, highly competitive domestic and international marketplace.

And that’s just the known. It will also be an era where novel and hybrid forms of content and distribution will be tested and refined. The migration of media from linear to multi-platform, technology-driven is now just in its earliest stage, and it will undoubtedly remain one of the primary forces shaping the Canadian media scene until 2025 and beyond.

The 2006 Telecommunications Policy Review Panel Final Report got it right when it identified three major technology-related factors propelling Canada’s Digital Age transformation: Internet Protocol-based networks, broadband and wireless technologies, and the convergence of previously distinct information and communications technologies.

It is hard to fathom that less than a decade ago, many of today’s must-have communications tools had yet to materialize – the iPod debuted in 2001, followed in quick succession by MySpace (2003), Facebook (2004), YouTube (2005) and the iPhone (2007). These tools have revolutionized the production, distribution and consumption of media.

And, as media has transformed, it’s also become more global. On one hand, globalization expedites the opening of new markets and market niches worldwide. On the other, it introduces new competitors in the media marketplace. For better or worse, the globalization process, especially of the communications and economic systems, is likely to be a phenomenon that will have an enduring effect upon the Canadian media scene.

Media ownership and regulatory oversight

The CRTC has a statutory obligation to watch over Canada’s historic Digital Age transition. Among the many other duties on its plate, in coming years the commission will have to harmonize regulation across different platforms; balance economic, cultural and social imperatives; protect consumer interests; and afford media companies sufficient flexibility to remain competitive both at home and abroad.

Domestic and international deregulation and market liberalization efforts in recent years have promoted extensive consolidation and conglomeration of the Canadian and international media industries. As a result, only a handful of large companies now own the majority of newspapers and radio and television stations in Canada. Similar consolidation is also occurring online as traditional and new media entrants vie for control of popular Internet-based services and portals.

But, the Internet, mobile and other new media platforms are complicating the already contentious debate over media conglomeration and its implications. The Internet, for example, affords virtually anyone the unprecedented power to create, distribute and promote audiovisual content worldwide.

The rise of new media thus begs the question about how much power traditional media conglomerates will be able to wield in this emerging environment. Ben Compaine, a prominent scholar and commentator on media ownership and competition in North America, suggests that contrary to the widely held view of increasing media consolidation, the media industries may, in actuality, be undergoing deconsolidation.

‘Assertions of media concentration perpetuates a myth,’ asserts Compaine. ‘The evidence does not support the assumption (at least in the U.S.) that there is greater media concentration than 20 or 30 years ago.’ Instead, he asserts, ‘by many measures, there is less.’

Kenneth J. Goldstein, president of Communications Management and also an expert on media ownership-related matters, echoes Compaine’s views. ‘Media ‘concentration’ is one of the first great myths of the 21st century,’ Goldstein declared in a May 2008 lecture – ‘The End of the Century of Mass Media, 1912-2012: What Happens Next’ – delivered at the Media School, Bournemouth University in the U.K.

Compaine stresses that traditional media conglomerates will adapt as their business model begins to deteriorate. ‘Naturally, they will try to invent, create, acquire or merge with newer forms that will keep their businesses healthy.’ In due course, Compaine predicts, ‘some will be smart and successful, while others will make wrong bets and wither away.’

That trial and error will lead to market fragmentation, and opportunities will arise for both existing and new players. Goldstein likewise anticipates that as markets become more fragmented, traditional media conglomerates will ‘seek to re-aggregate fragments in order to compete and to maintain economies of scale.’ However, he notes, ‘consolidation rarely creates market shares as large as they were before fragmentation.’

Regardless of how much market share they manage to retain, traditional media conglomerates will remain a power to be reckoned with, even in a multi-platform mediascape. In The Future of Video: New Approaches to Communications Regulation (2007), Philip J. Weiser believes media conglomerates will retain a competitive advantage over smaller rivals in both the traditional and new media realms. Their edge, he explains, lies in their ‘channels and content strategy’ – they have the ability to play content over many distribution channels, and offer it free marketing support on outlets they already own.

This multi-platform strategy allows conglomerates to maximize cross-promotion opportunities and, more importantly, to derive revenues from an array of traditional and new media sources. Furthermore, Canadian-based media conglomerates have an added incentive to pursue this multi-platform approach since the CRTC currently has no policy regarding the cross-ownership of licensed broadcasting undertakings and new media broadcasting undertakings.

As noted, over the past few decades, the CRTC has, as a general rule, embraced a regulatory philosophy favoring deregulation and market liberalization. This philosophy is reflected in the Governor in Council’s December 2006 directive to the CRTC ‘to rely on market forces ‘as much as possible” in order to implement Canadian telecommunications policy objectives.

The CRTC has also extended regulatory forbearance to Internet-based activities. On Dec. 17, 1999, the commission issued CRTC-197, an order exempting new media broadcasting undertakings that operate ‘in whole or in part in Canada’, ‘from regulation, without terms or conditions.’ The CRTC order also recognizes new media broadcasting undertakings as a distinctive class of services. (Though the exemption does ‘not apply to the licensed broadcasting activities [e.g. television] of a company that also operates a new media broadcasting undertaking.’)

In a December 2008 submission to CRTC secretary general Robert Morin, Canadian Association of Broadcasters VP regulatory and policy Jay Thomson urged the CRTC to retain those media broadcasting exemptions: ‘The CAB submits that the manner by which the CRTC can best contribute to the above objective is to refrain entirely from attempting to exercise its broadcasting regulatory mandate on online content generally, as well as from imposing any new reporting or other regulatory obligation on traditional broadcasters with respect to their own online activities.’

Thomson argues that regulatory forbearance helps foster Canadian competitiveness in the online world. ‘The CAB’s only prediction in this respect is that maintenance of the current hands-off regulatory approach to new media will generate more creativity and innovation than will the imposition of any regulatory measures,’ writes Thomson.

Compaine also credits that hands-off approach with stimulating the development of the Internet and its multiplicity of services. Reflecting on the past and future of new media, Compaine asks, ‘What could any ‘Gosplan’ have charted a course to today’s landscape 15 years ago? Consider that when thinking about the next 15.’

Despite the beneficial aspects attributed to regulatory forbearance, a number of Canadian media guilds and organizations are urging the CRTC to regulate new media. For example, the CFTPA and the Directors Guild of Canada are among the groups lobbying for mandatory levies on Internet service providers to help subsidize the creation of Canadian digital content.

The regulatory issue may be resolved sooner rather later, given that the CRTC begins to address new media in hearings beginning on Feb. 17. The CRTC’s ultimate decision regarding forbearance and other related matters will certainly have long-term consequences for the Canadian media scene.

Content distribution

Since the earliest days of mass media, content has been transmitted to audiences via a limited number of distribution channels. Today, Canada’s film and television industries still derive the lion’s share of revenues from traditional pipelines such as theatrical, or broadcast, cable and specialty channels.

According to Statistics Canada, in 2007, Canadian public and private conventional television broadcasters earned revenues ‘just under $3.5 billion,’ representing 55.9% of the sector’s total revenues in 2007. Compare that to 64.4% in 2002 and 79.4% in 1997. Meanwhile, pay and specialty television 2007 revenues rose 9.1% to $2.7 billion.

Broadcast television’s diminishing revenues notwithstanding, the medium will likely remain a primary distribution channel for the immediate future. Nevertheless, Internet-based distribution poses an ever-growing threat.

The quickening pace of broadband diffusion is fueling Internet distribution of content. According to the September 2008 Canadian Internet Project report, Canada Online!, between 2004 and 2007, Internet penetration levels in Canada increased from 72% to 78%. Moreover, 54% of all Canadian homes now have broadband access, representing a 13% increase since 2004.

Clearly, Canadian broadcasters face an especially challenging task in this emerging multi-platform environment. They must repurpose programming formerly designed to reach mass audiences via television to a form that is capable of reaching fragmented audiences across a wide range of platforms. In addition, they must create and promote ancillary and original online content. Finally, broadcasters’ professional online content must compete against a burgeoning array of high-quality, semi-professional and amateur content.

In a December 2008 report, A Study of Private Broadcasters’ New Media Activities: ‘Hitting the Right Notes’, prepared for the CAB, Maria De Rosa and Marilyn Burgess point out that while broadcasters ‘are the most important players in the creation and distribution of Canadian radio and television content in the traditional media environment,’ they ‘stand to be one group of many in terms of offering professional quality new media content.’

Broadcasters will face increased competition online, and greater costs – including digital storage and streaming, bandwidth and licensing costs. Furthermore, they must also take into account possible future increases associated with the delivery of high-definition programming.

The end users

And it’s not just media that’s changing. The Canadian marketplace is also steadily expanding and diversifying.

According to Statistics Canada, by 2026, Canada’s population is expected to reach between 35.7 million and 39.9 million. The race and ethnic makeup of Canada’s populace is also changing. In 2006, a little over five million Canadians were members of a visible minority – 16.2% of Canada’s total population. StatsCan expects that population to increase, and by 2017, that segment ‘could account for roughly one-fifth’ of the total population. In addition, StatsCan reports that Canada’s population ‘is gradually greying’ owing to declining fertility rates and increased life expectancy.

As the above statistics suggest, Canadian audiences of 2025 will reflect an unprecedented diversity of ages, races and ethnicities. They will also be geographically dispersed across Canada and throughout the world. Choice, interactivity and personalization will be integral components of their media experience. Audiences will want to listen to and/or view media content 24/7/365, on their platform of choice.

Final impact

Canada’s mediascape epitomizes the complex and somewhat fragile economic, technological and cultural synergies that make up 21st century global media, and the future development of Canadian media industries will depend upon a complex and ever-changing array of factors.

Media will unquestionably bear some semblance to its present form. Large conglomerates will still wield considerable power over Canada’s media industries, although they will face ever-increasing competition. The market power of traditional distribution platforms such as television is apt to be greatly diminished. The CRTC will also still have an important role to play in the Canadian mediascape of 2025, since the cultural, political, social and economic interests of Canada and its populace transcend time and technologies.

But Canadian media in 2025 will likely represent an amalgam of old and new technologies, platforms, content and regulations. It’s apt to be a complex, dynamic and challenging media environment. And, given the rate of change we’ve witnessed in the previous decade, it’s impossible to predict with ironclad certainty how media will evolve.

The one thing that is certain, however, is that the journey to 2025 will be equally complex, dynamic and challenging.