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Monday
Oct222012

Television Market Shares

The CRTC rejected an application by BCE to acquire Astral Media in Broadcasting Decision 2012-574.  One element of that decision that is getting considerable attention is how to calculate the market share in television programming that BCE would control if the acquisition had been approved. 

There are a number of options for calculating market shares, depending on what is selected as the unit of measurement, the definition of the overall market and the attribution of units to specific parties, in this case, BCE+Astral. 

Two leading contenders for calculating market share in the case of television programming are revenues and viewership among Canadians.  The CRTC’s decision considered both, but provided the most detail on the market share based on viewership.  The importance of the calculation also derives from the CRTC’s market share thresholds set out in its Diversity of Voices ruling (Broadcasting Public Notice 2008-4).  In that case, market shares are based on shares of viewership, measured on a national basis, separately for Anglophone and Francophone viewers.  

BCE claims that the CRTC got the calculation of viewership shares wrong because it excludes viewing to non-Canadian programming from the definition of the overall market.  In BCE’s view, non-Canadian television programming, such as CNN or A&E, competes with Canadian television programming for Canadian viewers, and viewing to such programming should be included in the definition of the overall market. 

The CRTC publishes its Communications Monitoring Report each year that includes statistics on the number and share of viewing hours by language and type of television programming service (e.g., Canadian conventional, specialty, etc.) and by corporate ownership of the television programming.  Some of these figures were also provided in the background information released by the CRTC with its decision to reject BCE’s purchase of Astral. 

These sources provide enough information to calculate viewership market shares using the same method as the CRTC and then adjusting it to use the definition of the overall market that includes viewing to non-Canadian television programming, as well as viewing to third language programming services.  The difference is mainly with the Anglophone viewing shares since Francophone viewers have very limited viewing to non-Canadian television programming.

The two charts provide a side-by-side comparison of the market shares for television viewing in the Anglophone market using the different definitions. 

 

Sources: CRTC Broadcasting Decision 2012-574 and Background Information to the accompanying press release, October 18, 2012; CRTC Communications Monitoring Report, 2012, Tables 4.3.3, 4.3.9.

Under either calculation, BCE+Astral would have a market share that exceeds 35%.    The 35% threshold was established in the CRTC’s Diversity of Voices as representing the level below which a company could expect its acquisition to be approved, “barring other policy concerns”, as noted at paragraph 87 of that ruling.  

BCE claims that, in rejecting its acquisition of Astral, the CRTC changed its approach to calculating market share from that relied on in its Diversity of Voices ruling.

The CRTC’s Diversity of Voices ruling did not describe the specific methodology to calculate the market shares for assessing proposed acquisitions against the thresholds.  Although it did provide some television market shares for larger broadcasters based on information available at that time.  CTVglobemedia (CTV), which BCE took control of and renamed Bell Media in 2011, was stated to have a 37.4% market share in 2007, as noted at paragraph 80 of the Diversity of Voices ruling. 

The CRTC revealed more information on its methodology for calculating the market share values in its Communications Monitoring Report, 2009.  The CRTC discussed its Diversity of Voices ruling at pages 117-118 of that Report and gave updated market shares for CTV and the other major broadcasters.  CTV’s share was reduced to 34% for the 2007 broadcast year, and measured as 33.4% in 2008.  These shares correspond to those presented in Table 4.3.10 of the CRTC’s 2009 Report. 

The information provided in the Report indicates that the CRTC’s thresholds for its Diversity of Voices defined the total market for viewership based on viewing to Canadian services only.  If viewing to non-Canadian services had been included in the definition of the overall market, CTV’s share would have been 24.4% in 2007 and 24% in 2008, based on the data provided in Tables 4.3.4 and 4.3.10 of the Report.  The gap between these market share values for CTV and the 37.4% provided in the CRTC’s Diversity of Voices ruling provides further confirmation of the methodology used. 

The CRTC has consistently calculated market shares for the purpose of its Diversity of Voices thresholds based on excluding viewing to non-Canadian services from the definition of the overall market.   This is the same method the CRTC used to calculate the market share for BCE+Astral in its most recent decision.

The above analysis and opinion reflect solely the views of Giganomics Consulting Inc.

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