Media & Telecom:
A Canadian Perspective
October 24, 2013
ABOUT CORUS
Corus Entertainment is a Canadian media company
• Very successful – focused on specialty broadcast
• Valuable audiences – Women & Kids
• Canadian ecosystem is protected and profitable
But … we are in a period of unprecedented change
• Technology
• Consumer consumption patterns
• Deluge of content
New broadcast models (for example Netflix) threaten to upend and
destroy the old model before the ecosystem can react and change
Content consumption anywhere, anytime has become a consumer
requirement
How do broadcasters
react?
2
THE CANADIAN ADVANTAGE
Broadcasting in Canada, both radio and television, is
highly
highly regulated
• Canadian Radio-Television Telecommunications
Commission
(CRTC)
• Recently in the news with hearings (and decision) on Bell’s acquisition of
Astral
Among other things, CRTC regulations focus on the creation and broadcast of
Canadian content
• Rules define what is Canadian – creators, funding, producers
• Most broadcasters have both significant spend and exhibition obligations
Canadian Content (Cancon) enjoys significant benefits
• Access to higher tax credits
• Access to CMF (Canadian Media Fund) and other funding
• Better broadcast placement
3
THE CANADIAN DISADVANTAGE
✘ Complex and occasionally arcane rules; compliance essential to achieving
Canadian advantages
✘ Canadian Content regulations protect small producers; negotiated Terms
of Trade are difficult for producers and broadcasters alike
✘ Canada is a small market
• Good content of any form is difficult to exploit/profit (Canada = 10% of
U.S)
• Regulations prevent entry of some US content; Terms of Trade make it
difficult to export content south
✘ CRTC regulates spectrum – important for OTA TV, Radio, phone service but
meaningless to the internet
• Canadians compete on a level playing field against global entities far
larger than domestic players
• Netflix commands significant viewership but is NOT regulated in
Canada
4
WHO IS OUR AUDIENCE?
Average Age
of Viewers
60
CHEX Peterborough
Sundance Channel
CKWS
CHXD (CHEX Durham)
50
TLN
Encore Ave 2
HBO Canada West
Encore Ave
Movie Central 2
40
TSN
40%
CMT
W Network
Cosmo TV
ABC Spark
60%
50%
30
Teletoon E*
Cartoon Network
OWN
Movie Central 1
Movie Central 3
Male
30%
W Movies
YTV*
YTV Family
Female
70%
80%
Teletoon Retro E
Treehouse
Nickelodeon
20
10
Source: BBM Canada TV Meter – 2012/2013 BY, Total Canada, M-Su 2a-2a.
Teletoon*=M-Su 3:30a-9p, TAN=M-Su 9p-3:30a, YTV*=M-F 6a-6p, S-Su 6a-4p, YTV
Family= M-F 6p-6a, S-Su 4p-6a.
Bubble Size=Ind.2+ AMA, X Axis= Gender Skew (F2+ AMA of Ind. 2+ AMA), Y Axis =
Weighted Average Age (Ind. 2+).
5
WHO IS OUR AUDIENCE?
Average Age
of Viewers
60
Sundance Channel
CKWS
CHXD (CHEX Durham)
50
TLN
Encore Ave
40
TSN
40%
CMT
YTV*
YTV Family
70%
80%
Teletoon Retro E
Treehouse
Nickelodeon
10
Female
ABC Spark
60%
50%
20
W Network
Cosmo TV
30
Teletoon E*
Cartoon Network
OWN
Movie Central 1
Movie Central 3
Male
30%
W Movies
Encore Ave 2
HBO Canada West
Movie Central 2
Women
CHEX Peterborough
Kids
Source: BBM Canada TV Meter – 2012/2013 BY, Total Canada, M-Su 2a-2a.
Teletoon*=M-Su 3:30a-9p, TAN=M-Su 9p-3:30a, YTV*=M-F 6a-6p, S-Su 6a-4p, YTV
Family= M-F 6p-6a, S-Su 4p-6a.
Bubble Size=Ind.2+ AMA, X Axis= Gender Skew (F2+ AMA of Ind. 2+ AMA), Y Axis =
Weighted Average Age (Ind. 2+).
6
HOW IS OUR AUDIENCE CHANGING?
TOTAL TUNING BY OWNERSHIP INCLUDING CONVENTIONAL (18-54)
700.0
-9%
634.2
AMA Cume 18-54
600.0
Sources: BBM Canada TV Meter, Total
Canada, * Netflix tuning based on
MTM spring ‘13 survey: Netflix average
wkly hrs Total Pop (A18-64) converted
to AMA.
577.8
+2%
500.0
433.7441.6
400.0
-11%
-11%
300.0
198.1
175.4
200.0
302.3
267.7
-4%
+1%
257.0260.0
224.6216.5
159.0
100.0
0.0
Bell Including
Conventional
Shaw Including
Conventional
Rogers Including
Conventional
Corus
F'10
CBC & CDN
Conv/Spec Other
US Services
Netflix*
F'13
7
WHAT IS OUR CONTENT?
Most broadcast content is licensed from Canadian or international
producers, limiting our ability to exploit beyond our television services…
but Corus owns Nelvana Limited, an integrated kids entertainment
company
• 40+ year history as a producer of animated content for kids
• Content library of 4,000+ half-hour episodes
• Merchandising success with brands like Beyblade and Bakugan
• Content is sold in 100+ countries in dozens of languages
8
CORUS & THE INTERNET
New Media is where the action is ….
• Fastest growing “consumer” segment (time spent, impact, reach, analyst
coverage)
• Advertising dollars are moving online
• The change is even more pronounced amongst younger audiences
• The rise of “Big Data”
… but Corus is a small player in New Media
• Total revenues less than 5%; total profit less than 1%
• Mixed bag of assets – websites, apps, social media, streaming
• Category grouping (ie kids, family, women) to create scale and relevance
New Media strategy attempts to serve multiple interests
• Are we driving viewers to traditional media OR driving new revenue?
• Do we want a direct relationship with consumers OR support traditional
partners digital expansions (i.e. MSO TVE)?
 We
want everything.
9
WHAT IS THE INTERNET FOR?
Network Websites
Twitter
Show apps for
TV Networks
Facebook
ENGAGEMENT
Video Games
Video Apps
Website Video
Streaming
MSO VOD
IP Experiments
PRODUCTS
DISTRIBUTION
eBooks
Game Apps
MSO Broadband
10
OPPORTUNITIES
Digital-first brands to test audiences
• Advantage of using shorts and a strong digital campaign to test audience interest in a
brand before developing a TV series
“Hot housing” product and marketing strategies in Canada before launching internationally with
key partners
• Product strategies (pricing, promotion, game balancing) can be ironed out in 1 territory
before key market distribution like the US and UK
Owning the relationship with the audience
• Canada is catching up to US and UK models where broadcasters manage channel apps and
users can authenticate into their MSO
• During 2014, multiple MSO authentication will likely be available, resulting in the growth
of video TV-Everywhere options in Canada.
Analytics drives the content and product strategy
• The content offering and available platforms change based on how kids watch or play the
games. Compiling provider data and analyzing results has been a challenge.
• It has required changing our team culture from manufacturing to servicing, from product
publishing to product iteration
11