Ten years after unveiling his ill-starred vision for BCE Inc. former chief executive officer Jean Monty received an e-mail Friday morning from current CEO George Cope, indicating that he might be interested in the content attached.
Indeed, Mr. Monty was -_although he had resigned from the giant telecom holding company in 2002 amid blistering criticism of his stewardship.
Friday's message - that BCE was buying CTV for $1.3-billion - lifted a burden from his shoulders, silencing sneers that he had bungled BCE's plunge into the media world a decade ago, disastrously overpaying for assets based on a dreamy concept called convergence.
"I'm happy with the new deal because I believe in the direction," Mr. Monty said Friday. "It wasn't easy for George to go back and revisit all the stuff that was said. It took guts and character to go back to the board."
Clearly this is Convergence 2.0, another round in the dream of combining media content and delivery over multiple channels, and, astonishingly, BCE is a player again. This time, the driver is Mr. Cope, who having come to BCE from Telus Corp. in 2005, was not part of the BCE wars of a decade ago.
That was when Mr. Monty spent billions buying The Globe and Mail and CTV, and putting them together as Bell Globemedia. Then, he watched from the sidelines as his successor Michael Sabia divested most of its ownership of the media company.
Now, Mr. Cope is buying back the rest of CTV, in what Mr. Monty sees as a courageous act of reconsideration - and confirmation that his vision is still vibrant and vital for the Bell group of companies. He doesn't call it convergence, instead alluding to the "triple play" of putting the Internet, telecommunications and television together into one powerful entity.
BCE's move is part of a groundswell of recent activity, as cable and telecom companies in Canada and the United States add media offerings to their distribution channels. In that way, it does seem like a scary replay of 2000 when there was similar urgency to tie down valuable real estate and brand names in content.
That convergence orgy became a graveyard of executive dreams, and careers, at places such as AOL Time Warner, CanWest Global Communications Corp. and to some extent, BCE and Quebecor Inc.
So what has changed? The dollars being spent are clearly more restrained now, and the strategies are less grandiose. Also, the technological potential has now become a reality, in the capacity to deliver vast bandwidth in video images over wireless networks. Mr. Cope spoke Friday of the emerging battlegrounds in mobile TV and video over wireless, as technical capacity leapfrogs ahead.
"I think convergence has come of age," said Geoff Beattie, president of Woodbridge Co. Ltd., the Thomson family holding company which, in the unwinding of what is now CTVGlobemedia Inc., will reacquire majority ownership of The Globe and Mail, with BCE retaining 15 per cent.
The competitive landscape has changed dramatically over the past two years, Mr. Cope said Friday, as the three major Canadian cable companies - Rogers Communications Inc., Shaw Communications Inc. and Vidéotron/Quebecor - made big additions to their media holdings, forcing Mr. Cope's hand.
But the most frightening indication of a return to 2000 would be if CEOs started hugging again, as Gerald Levin, head of media-cable giant Time Warner Inc. and Steven Case of America Online did in announcing their monster $165-billion (U.S.) merger in January, 2000.
They were clearly overwhelmed by the potential of sending content from Time magazine and other media out over AOL's pioneering online systems, while leveraging Time Warner's cable networks.
That deal was the signature and the harbinger of an era, in its hopes and ultimate unwinding. In Canada, it was followed by BCE's $2.3-billion takeover of CTV. Contrast that with the $1.3-billion BCE is paying now for 85 per cent of CTV. (Still, Mr. Monty insists he did not overpay in terms of multiples to earnings, which were no richer, he says, than today's prices.) Cable tycoon Ted Rogers went after Quebec counterpart Vidéotron, only to see it end up in the hands of Quebecor Inc. and its boss Pierre Karl Péladeau for $5.4-billion.
Then Izzy Asper's CanWest bought Conrad Black's Southam newspapers for $3.2-billion, later adding the National Post to the fold. Along with the BCE purchase of The Globe and Mail, it put the focus on newspapers as content factories for online and broadcast media. But the timing was horrendous. High debt, the dot-com implosion and economic slowdown savaged many of the economic models. Izzy Asper died in 2003, thus spared seeing CanWest end up in bankruptcy protection with its newspaper and TV units split up. But the CanWest auction has allowed Shaw to emerge as a media force, thus hastening BCE's response.
The fallout from 2000 was resolved in different ways for different companies. Mr. Monty said Friday that it was not BCE's media ambition that did him in, but his $7.7-billion bet on Teleglobe Inc., a telecommunications network carrier.
After the Teleglobe acquisition went sour, he said, "I had to offer my resignation. The blunder was too big and so be it." But after that error, he said, "a lot of people just looked at everything else and said 'this is a mess and we have to clean it up.' " It was an allegation made without clear analysis of his strategic thrust, he insists.
In the rebirth of convergence, the cable companies have been the prime movers, perhaps because they are family-controlled companies that take a long view. Next week, Tony Viner steps away from the top media job at Rogers, where he helped the late Ted Rogers build a $1.6-billion media operation with extensive radio, TV and print offerings.
Mr. Viner said Mr. Rogers was a big believer in offering consumers choice that they didn't previously have. He understood such choice did not just come from technology and networks but "he was always a big believer in content."
"You wonder whether Ted consciously knew about the converged or the bundled world, or if it was subconsciously. But so many of the things he did proved in the end to be the right way to go," Mr. Viner said in a recent interview.
In the next round of convergence, new players will have to emerge. Mr. Cope's large hand was evident at the opening night of the Toronto International Film Festival on Thursday - even though he was not personally present. As festival-goers settled in for the opening flick, Score: A Hockey Musical, the TIFF brass paid lavish tribute to Bell Canada, lead sponsor of the festival and naming donor for the flashy new TIFF building down the street.
It was a big moment for movies delivered on the big screen, but for Mr. Cope, the more critical part of the evening was the post-gala party. Celebrities and wannabes huddled around tiny telephone screens, watching hockey games, TV shows and photos.
For BCE to survive, Mr. Cope has to dominate in that arena too, which is why, 12 hours later, he told the world that he was buying CTV and its 30 specialty channels. Let the new convergence games begin.
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