Forecasting the future at CAB

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Forecasting the future at CAB

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Here are my notes:

How are companies reacting?

• Media stocks are down on average about 47% in Canada
• CanWest is down 90%
• Eyeballs are moving from conventional TV to pay TV
• Consumer sector was down at the beginning of the year
• US trends on ad dollars are getting negative on radio and print
• Multiples across the US have contracted too
• Canadian companies are valued at a lower multiple than their US counterparts
• The credit crisis really began last year - not this year
• Media stocks tend to mover earlier than advertising numbers

• In spite of this we are seeing investment in infrastructure and spectrum
• Wireline side is more susceptible to downturn
• May see less investment in bandwidth capacity
  

• Investment in triple play services has been made
• Has changed the video / TV market
• This spending will slow
• But consumer demands are still evolving
• Therefore the competitive dynamic is still very much in play
• Companies like Rogers can survive a liquidity wall because they've already converted the customers
• May see more introspective innovation

What are consumers adopting?

• 25% of people will choose Internet over TV
• Particularly true with 18-34 demo
• Social networking
• 400k people in Calgary are on facebook (out of a population of 1 milion)
• MSM has done a poor job of getting into facebook communities
• Mobile data users are using social networks more than other things

Is social media competitive or complimentary?

• Depends on how media companies react.  Do they embrace it?
• A lot of online video is from broadcast sources for example
• Meet your viewers where they're at
• BBC has done a great job of going online with iPlayer
• Iplayer has actually driven viewership to TV
• Companies like BSkyB are considering building the iPlayer into their set top boxes

• The newspaper dynamic is an ugly prescedent for the broadcast business
• They have seen their top line drop off dramatically

• People may let go of their fixed telephone line and keep their mobile

What should Canadian Broadcaster do?

• Online strategy - put stuff online - meet your viewers where they are
• Online ad economy is more likely to be sheltered in this economic environment
• Radio must make a strong case against increase copyright fees
• Need to find complimentary online strategy soon
• Mobile is a growth area (laptops as well as cell phones)
• Communication is changing dramatically.  There are generational shifts