Media Convergence

Media convergence is an economic strategy in which communications companies seek financial benefit by making the various media properties they own work together. The strategy is a product of three elements: 1) corporate concentration, whereby fewer large companies own more and more media properties; 2) digitization, whereby media content produced in a universal computer language can be easily adapted for use in any medium; and 3) government deregulation, which has increasingly allowed media conglomerates to own different kinds of media (e.g., television and radio stations and newspapers) in the same markets, and which has permitted content carriage companies (e.g., cable TV suppliers) to own content producers (e.g., specialty TV channels). The strategy allows companies to reduce labour, administrative and material costs, to use the same media content across several media outlets, to attract increased advertising by providing advertisers with package deals and one-stop shopping for a number of media platforms, and to increase brand recognition and brand loyalty among audiences through cross-promotion and cross-selling. At the same time, it raises significantly the barriers to newcomers seeking to enter media markets, thus limiting competition for converged companies.

Keywords

Communications

Historically, communications companies have formed newspaper chains and networks of radio and TV stations to realize many of these same advantages, and convergence can be seen as the expansion and intensification of this same logic. AOL Time Warner in the United States is seen as a model for media convergence. Time Inc. and Warner Brothers first merged in 1989, creating the world's largest media and entertainment company with its complementary properties in magazine publishing, music recording, film production and distribution. AOL subsequently bought Time Warner in January 2001 in an attempt to expand the Time Warner synergies to the global computer network called the Internet.

A number of Canadian media companies have moved in the same direction since 2000. The telephone company BCE Inc., for example, has expanded into television, with the purchase of the national CTV network; newspaper publishing, with the acquisition of The Globe and Mail; and new media, with a family of World Wide Web sites. CanWest Global Communications Corp. has added to its national Global television network by acquiring television stations in Australia, New Zealand, Ireland and Northern Ireland, daily and weekly newspapers across Canada, film and television production and distribution properties in Canada, the U.S. and Great Britain, radio stations in Canada and New Zealand, and a national Internet portal. Quebecor Inc. has newpapers, magazines and book publishing companies, the cable TV and Internet service provider Videotron, six of ten stations in the TVA French-language television network, the Radiomedia radio network and the CANOE Internet portal. Besides being Canada's largest cable television provider, Rogers Communications Inc. is involved in television broadcasting, wireless telephone service, magazine publishing and video sales and rentals.

While most of the promised financial benefits of convergence have yet to be realized by media owners, some of the social costs are already apparent. Media content is increasingly treated as a product like any other, and notions of public service take a back seat to private enterprise. The substantial costs of corporate mergers have led converged companies to seek profits through cost-cutting rather than increased investment in communication services. The market power exerted by corporate giants such as BCE, CanWest Global, Quebecor and Rogers makes it increasingly difficult for new corporate players to compete and reduces the number of choices media consumers face in deciding among information and entertainment sources. In the news media particularly, newsroom staffs have been substantially reduced and journalists are being asked to produce more stories each day, stories which can be used by more than one news medium. This trend has the potential to reduce the quantity, the quality and the diversity of news coverage.

Author MIKE GASHER

Links to Other Sites

Canadian Journalism Foundation
The website for the Canadian Journalism Foundation.

Teaching Journalism Today
A blog hosted by Mary McGuire, journalism educator at Carleton University in Ottawa.

CTVglobemedia Inc.
The website for CTVglobemedia Inc., a Canadian multi-media company which owns CTV Inc., The Globe and Mail newspaper, and other media assets.

Canadian Media Research Consortium
The website for the Canadian Media Research Consortium.

newslab.ca
Newslab.ca offers news, commentary, and analysis on Canada’s media in an Internet age.The project is run by Alfred Hermida, a journalist who leads the ijournalism programme at the Graduate School of Journalism of the University of British Columbia.

The Canadian Press
The Canadian Press website offers the latest news headlines and information about the company's media products.

Mediacaster
The website for "mediacaster" offers the latest news about Canada's media sector.

Convergence fever buried CanWest
A news article about CanWest's financial difficulties stemming from previous media convergence initiatives. From thestar.com.