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Why convergence works in Quebec Add to ...

I spoke with Pierre Karl Péladeau, the chief executive at Quebecor, in mid-summer Montreal for this piece on the upcoming battle for Quebec. Part our conversation veered towards the Sun TV network, which is in the news again now, given that he's constantly pitching multi-platform ideas and is generally known as one of the only guys for whom “convergence” (between distribution and content assets) actually worked.

Here's part of our talk:

Iain: Does Sun TV fit into any of this (talk about the wireless)?

Péladeau: Sun TV is more about the media business and you know it’s true that what we can say, if we can say this, but convergence was successful in Quebec and combining the best distribution channels with the most interesting content, including technology like VOD on the Internet, the recent Web TV that we launched.

We don’t have any distribution network in the rest of Canada. But we have newspapers, we have Internet presence, and we want to make sure that our incumbent media business will remain strong. It is a little bit also of the same logic of trying to get as multi-platform as possible. So, we don’t know what the future is all about. This could be the beginning of something. But certainly right now we’re concentrated on the media business.





Iain: So there’s no plan to... I guess it would be available in Quebec, though, right?

Péladeau: Yeah.

Iain: But you would expect it to be more...

Péladeau: Well, it’s an English channel as you know. And Quebeckers have a tendency to watch television more in French. Even the Americans are good, but are far from sharing the... Well, it depends on the population. There’s many Anglophones here. And it’s probably a market that will continue to grow, but it’s certainly different than the French population in terms of size.

Iain: Were you pleased by the momentum this thing got by being called Fox News North?

Péladeau: Well, for sure there was a lot of noise! I think we have advertising for free. So somewhere, it’s not completely bad. Because that participates in a sort of public relations campaign. So we’re not there yet. And I think there’s a lot of Canadians are aware of what’s coming on.

Iain: Part of the thing I think a lot of journalists were fascinated by, was the fact that we’ve seen populist or right-of-centre media not do as well in English Canada, in central Canada and the liberal and NDP belts of Toronto, we’ve seen the Post lose money for ages – and I don’t know if it turns a profit these days. Did this ever factor into any of your discussions?

Péladeau: Well, for sure you try to identify a market, a niche, well it’s more than a niche. And you look at what’s taking place in the U.S., with Fox, it’s the most profitable specialty channel – or maybe behind ESPN – but, I mean, one of the most profitable.

Is that true that the actual media are positioned in one direction, what we would consider mainstream? I think the question can easily be answered by saying ‘Yes.’ Is there room to position your news channel differently? Our experience in Quebec has been successful. We were with LCN, more a newsgathering type of channel. And we introduced personalities after we were allowed, after we had asked for a license change, a license modification. We’ve been able to beat the Newsworld, in French, so we’re by far now in front of them whereas we were behind them before. So it shows there’s this kind of market that’s available, and is probably not properly served.

It’s the role of a media organization to find out what we can provide to this market.

Iain: Is there a sense that you couldn’t be a successful media company outside Quebec without some sort of broadcasting assets out there?

Péladeau: For sure, you know, as I mentioned earlier, being in the newspaper business and seeing the technology evolving, you can’t stay in the newspapers any more, as it is, so you need to go as multi-platform as possible. So, digital television is one of (them). And you have to also be accessible on the Internet, and wireless down the road. And you should optimize your capacity, you’re gathering forces that are spread out and this is also something behind the creation of Quebecor Media Agency (QMI), you know. Why would you buy service from an agency, when you have within your organization the capacity to have your own agency. You just need to work differently, and we’ve been introducing this and left the Canadian Press (national news agency), because you’re also subsidizing your competition which is kind of a weird business model.

So we’re having this gathering force and we need to make sure that we are reaching as much audience as possible. And the audiences are now going on different distribution channels, where they were previously in the newspaper business or on conventional broadcasting. So we’ve been seeing this in terms of content. If you’re buying content, I have this example which speaks a lot to me. Paul McCartney was in Quebec City two years ago for the 450th anniversary. If you want to capture Paul McCartney, they will certainly ask a big amount of money for it. Will you be able to afford paying for this if you only have one window of broadcasting. We were able to pay because we were able to deliver in many windows. First, on pay TV while the show was taking place. And then on VOD, for the coming weeks and months. And finally on conventional broadcasting at the end of the year. You’re bringing good content, and content has many definitions, but for a Beatles or a music fan, Paul McCartney is certainly something of great content. So you’re delivering it and put yourself in a better position to make it profitable, and get your business going. It’s the same thing for our different gathering of resources across Canada, you cannot just be in the paper the day after, they need to be on the Web, they need to be in video, they need to be on television. We have physical areas where we will build those studios, and gather reporters, and all the organization, will all be in an environment going multi-platform. It’s not always easy, to change the culture of a company.

Iain: Was hiring (former Stephen Harper communications director) Kory (Teneycke) a statement about the direction? He’s obviously associated with Harper.

Péladeau: Well, Kory is a very energetic guy. He certainly knows what he’s talking about. He’s been close to the media business for a long time. He knows all the political environment. And obviously, this is going to be about politics – in the larger sense. I remember going to college, my political professor was saying ‘Everything is politics!’ We’re going to raise social issues, and many others, differently. Certainly, Kory has the sense of getting this channel there.

Follow on Twitter: @iainmarlow

 

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