And then there’s Telus, the Vancouver-based wireless giant that has been pushing into the television business with an Internet protocol TV product. It’s taken Telus a while, but it is finally picking up momentum and has gained more than 266,000 TV customers in Shaw’s territory. Telus, though, has a problem. Rogers and Quebecor have long had broadcasting properties. Now that Shaw has bought CanWest, and BCE Inc. owns CTV Inc., Telus is the only major telecom company without a significant shop of home-grown content to lure customers. Jim Shaw, who expects Bell and Telus to merge, says he’ll happily sell his content to Telus. But he thinks its TV presence is simply insignificant when weighed against Shaw’s millions-strong base. “Shaw has a huge presence in their marketplace,” says Iain Grant, an analyst with the SeaBoard Group telecom consultancy.
“The future may not be quite so friendly for Telus.”
Leaving as CEO at 53, Jim Shaw can say he steered the company into new lines of business and then set it up to enter the biggest growth area in the telecom racket: wireless. The purchase of CanWest, which will give people something to watch on their smart phones, was a sort of grand finale. The day it was approved by regulators, he also announced he would resign on Jan. 13, 2011. The date was moved up to mid-November after Shaw harshly criticized investors at a luncheon. Like his father before him, he’s handing the reins to a fresher Shaw—in this case, his younger brother Brad, who has headed the cable business. But this is no time to sail off into the sunset. “I’m not going anywhere. I’m still there. So’s my dad,” says Shaw, who remains vice-chair. “I always say to my brother that you still work for me, so just be careful.”
It’s unlikely that anyone within the Shaw organization is especially worried. It appears to be pretty clear prairie skies ahead. The company is the undisputed cable king in Western Canada, has eaten Telus’s lunch in the home phone and Internet markets, and appears set to do something similar in the wireless game. And Shaw’s purchase of Hamilton’s Mountain Cable in 2009, which violated the gentleman’s agreement between the Rogers and the Shaws to stay out of each other’s turf, shows there’s still room to expand—or swap properties with other cable owners eager for deals, like the Bragg family in Halifax. “You should put in there that the environment’s changing, that consolidation is inevitable,” Shaw says helpfully. Even if integrating what he calls a “threadbare” CanWest into Shaw’s family-oriented company presents some challenges, it’s still a new source of revenue and a new opportunity to lather video and advertising across more platforms—from cable to Web to wireless.
“With Global, it’s a whole new era. And does Jim want to start all over again at 53?” asks Shaw’s father, JR. “We’re just changing seats a little bit.” Of course, all cable companies face a threat from a new generation of video-streaming sites such as Netflix, which recently came to Canada. But Jim Shaw made sure the family business is ready: He has bulked up the company’s Internet network, continued to jack up prices and locked content-providers like CanWest in-house, all while spinning off dividends that have made Shaw Communications a favourite of Bay Street. “Nobody can ride on a network for free,” Shaw says. “The customer will pay for the network. Whether it’s our service or Netflix, they will have to pay.”
