Home > Internet > Media and Internet Concentration in Canada, 1984 – 2010

Media and Internet Concentration in Canada, 1984 – 2010

The Network Infrastructure Industries

All sectors of the network media industries are highly concentrated and pretty much always have been, although Internet Access is a partial exception. (Some readers have told me that the column for 2010 on this chart and another below is not visible on their screens. If you’re having difficulty, please click for the full chart here)

Table: CR and HHI Scores for the Network Infrastructure Industries, 1984 – 2010

CR

1984

1988

1992

1996

2000

2004

2008

2010

Wireless

100

97.3

100

99.8

96.4

Wired

96.7

95.6

96.2

89.3

83.8

86.3

81.9

79.5

Cable & Sat. Dist.

35.3

54.1

69.1

78.9

80.9

85.6

85

84.2

Internet Access

33.6

54.2

53.8

54.6

56.1

HHI
Wireless

5591.7

5050

5238.7

2675.6

3379.9

3246.6

3041.3

Wired Telecom

5,034

4,431

4193.1

3,333

2,617

1,883

2,725

2,855

Cable & Sat. Dist.

848.4

1189.3

1780.6

2288.2

2008.7

2130

2051.4

1984.1

Internet Access

591.9

974.5

1239.4

926

967.7

CR4 (65.3) and HHI (1883) measures for wired telecoms scores fell during the late-1990s as greater competition in wired line telecom services took hold. They reached their lowest level ever in 2000 before the TMT bubble burst and took out many of the new rivals with it (CRTC, 2002, p. 21). Competition grew more and more feeble until decade’s end as a result.

Much the same can be said with respect to wireless services: they have consistently been highly concentrated, and still are until this day, despite the advent of three newcomers in just the last year: Mobilicity, Wind Mobile and Public.

Two competitors – Clearnet and Microcell – emerged in the late-1990s and managed to garner 12 percent of the market between them, but were then taken over by Telus and Rogers in 2000 and 2004, respectively. Whether the newcomers of last year will fare any better it is still too early to tell, but with only .6 of the market as of 2010 they are a long way from the high tide of competition set a decade ago.

As the telecoms and Internet boom gathered steam new players emerged to become significant competitors in Internet access, with four companies taking more than a third of the ISP market for themselves in 1996: e.g. AOL (12.1%), Istar, (7.2%), Hook-Up (7.2%) and Internet Direct (6.2 percent) (based on 1996 figures).

The early ‘competitive ISP era’, however, yielded to more concentration in the next decade. Although the ‘big 4’ ISPs accounted for a third of all revenues in 1996, by 2000 the number had grown to 54 percent and a few percentage points higher over the decade since, according to the CRTC 2011 Communications Monitoring Report (p. 138).

HHI scores move upward between 1996 and 2000, but are still low relative to most other sectors. However, this is probably more an indicator of the limits of the HHI method in this particular case, since 94% of high-speed Internet subscribers rely on one or another of the incumbent cable or telecom companies’ ISPs to access the Internet.

ISP provision in Canada is effectively a duopoly, with the left over 5-6% of the market not dominated by the incumbents scattered among the 400 or so independent ISPs that still exist (CRTC, 2011, p. 138). That is an index that Canada has, in general, developed a framework where it is mostly the incumbent telecom and cable companies that compete with one another, not just for Internet access but for video distribution, too.

This, of course, means that there is some competition. Yet, it is revealing of how limited that competition is once we realize that cable and satellite distribution is one of the only segments assessed where, instead of some early years of falling concentration and more competition, concentration rose steadily from low levels in the 1980s (850) to the top of the scales in 1996 (2300), before drifting downwards by the turn-of-the-century to the low 2000s where it has remained ever since.

The Content Industries

Until the mid-1990s, all aspects of the television industry were moderately concentrated by HHI standards and significantly so by CR measures. Competition and diversity made some modest inroads from 1998 to 2004, but the trend abruptly reversed course and levels have climbed steadily since.

Table: CR and HHI Scores for the Content Industries, 1984 – 2010

CR

1984

1988

1992

1996

2000

2004

2008

2010

Pay & Spec. TV

61.6

61.8

62.8

51

67.6

71.3

84.5

Conv. TV

67.2

66.7

65.8

67.9

79.9

81

80.6

81.1

All TV

64.1

61.3

57.5

56.9

64.1

61.2

71.1

77.5

Radio

49.6

44.8

50

47.9

52.2

55.5

58.8

56.4

Press

66.1

68.3

70.3

74.3

73.9

73.1

77.3

77.1

Mags

38.8

46

40.9

30.4

32.1

24.8

20

20

HHI
Pay & Spec. TV

1140

1306.7

1390.4

857.6

1385.1

1588.3

1945.1

Conv. TV

2554.1

2066.9

2001.1

1819.4

1840.8

1939.2

1929

2080.7

All TV

2307.5

1799.8

1522.1

1328.8

1243.7

1207.1

1519.4

1705.8

Radio

1257.3

935.7

1171.9

1042.6

924.3

961.1

1006.6

922.6

Press

1451.3

1487.3

1536.9

2183

1791.1

1643.7

1819.3

1861.8

Mags

490

684

563

335

383

217

160

160

The largest four commercial television providers now control about 78% of all television revenues. This is up from 71% two years ago and the low 60s for the rest of the decade, indeed mostly since 1984. Shaw’s take over of Canwest’s television assets and Bell’s buy-back of CTV pushed the levels to new extremes by 2010. (If you’re having difficulty seeing the column for 2010 in the above chart, please see the full chart here).

The next largest four players after Bell and Shaw in the television sector are: Rogers, Astral, the CBC and QMI. respectively. Together, the top six groups account for just over ninety percent of the entire television industry, with each of its sub-components (conventional television, pay and specialty channels) each also having high levels of concentration. The run of HHI scores reinforces the view that the television industry is highly concentrated.

Like the cable industries, there has never been a moment when diversity and competition flourished in the newspaper sector. Consolidation rose steadily from 1984, when the top four players accounted for two-thirds of all revenues, to 1996, when they accounted for nearly three three-quarters – a level that has stayed fairly steady since, despite periodic shuffling amongst the main players at the top.

Of all media sectors, magazines are least concentrated, with concentration levels falling by one-half on the basis of CR scores and two-thirds for the HHI over time.

Radio is also amongst the most diverse amongst all of the media sectors according to HHI scores, but slightly concentrated by the C4 measure.

Online Media

So far, there’s little reason to believe that core elements of the Internet are immune to high levels of concentration, as measures of the ISP segment showed. But what about other core elements of the increasingly Internet-centric media universe, such as search engines, social media, online news sources, browsers, and smartphone operating systems?

The trends are clear. Google dominates the search engine market, and this dominance is growing. By 2010, it accounted for 81 percent of searches. Microsoft (6.8%), Yahoo! (5%), and Ask.com (4%) trail far behind, yielding a CR4 of 97% and an HHI of 6,713.

Figure: C4 Scores for the Search Engines, 2004 – 2010

Social media sites display a similar trend, with Facebook accounting for 63.2% of time spent on such sites in 2010, trailed by Google’s YouTube (20.4%), Microsoft (1.2%), Twitter (0.7%), and News Corp.’s MySpace (.6%) (Experien Hitwise Canada, 2010). Again, the CR4 score of 86% and HHI score of 4426 reveal that social networking sites are highly concentrated.

Similar patterns exist with respect to the top ten websites in Canada, with the amount of time spent on such sites nearly doubling from 20 to 38 percent between 2003 and 2008, and with most of the top 15 online news sites belonging to established media companies: cbc.ca, Quebecor, CTV, Globe & Mail, Radio Canada, Toronto Star, Post Media, Power Corp. CNN, BBC, Reuters, MSN, Google and Yahoo! account for almost all of the rest (Comscore, 2009; Zamaria & Fletcher, 2008, p. 176).

Similar patterns emerge across the layers of the media ecology. The top four web browsers in Canada – Microsoft’s Explorer (52.8%), Google’s Chrome (17.7%), Firefox (17.1%) and Apple’s Safari (3%) – have a market share of over 90 percent (Comscore, 2011).

There is no data available for Canada with respect to smartphone operating systems, but US data shows that the top four players in 2010 accounted for 93 percent of all revenues: Google’s Android OS (29%), Apple’s iOS (27%), RIM (27%) and Microsoft’s Windows 7 (10%) (Nielsen, 2011).

The Network Media Industries as a Whole (excluding wired and wireless telecoms)

Adding the network infrastructure industries and the content industries together provides a particularly good map of long-term trends. Across the network media as a whole, the HHI score is not high, although the long-term upward trend is clear.

Figure: HHI Scores for the Network Media Industries, 1984 – 2010

 

Throughout the 1980s and early 1990s, the HHI for the network media fell, but by 1996 trends had reversed and levels were right back to where they were a dozen years earlier. Thereafter, the number rose steadily to 667 in 2000, where it hovered for most of the decade, until rising significantly again to 780 in 2010. New technologies have most definitely added to the size of the media but they have not rendered them more diverse and competitive.

The CR4 standard shows the trend more starkly, with the big four media conglomerates – i.e. Bell, Shaw, Rogers & QMI – accounting for more than half of all revenues last year, a significant increase in a far larger media universe from the forty percent held by the ‘big four’ media companies in 1984. Although still only moderately concentrated by the CR4 standard, this cannot obscure the conditions of the parts that make up the whole, or that the long-term trend is up, not down.

Figure: CR Scores for the Network Media Industries, 1984 – 2010

Concluding Thoughts 

Several things stand out from this exercise. First, theoretically-informed and empirically-driven research is badly needed.

Second, the trajectory of events in Canada is similar to patterns in the United States. Concentration levels declined in the 1980s, rose sharply in the late-1990s until peaking around 2000, where they stayed relatively stable until rising significantly again between 2007 and 2010. All of this took place amidst a major increase in the size of the total network media economy, meaning that the biggest players obtained a larger slice of a bigger pie.

Third, media concentration levels in Canada are roughly double those in the U.S. and high by global standards.

Fourth, the decades old vision of convergence, where a small clutch of large media conglomerates straddle both the network and content sides of the media industries, appears to be more prominent in mid-size markets such as Canada, Brazil and Spain versus countries with large media markets, notably the U.S. Germany, Japan, China and the UK.

Changes in media ownership during the past two years have mainly been about shuffling the assets from one large but bankrupt company (Canwest) and a few new players have emerged (Channel Zero, Post Media, Remstar, Teksavvy, Netflix), but the long-term trend has been for a substantial rise in concentration levels across the network media as a whole.

Post Media’s take-over of Canwest’s newspapers means that there is a new name on the ownership papers, but it does not add to diversity to the field because there has been no net increase in the number of publishers. It does add, however, a new voice to the overall media economy, although in terms of market share, that benefit has been submerged by trends elsewhere, notably in television.

Concentration in conventional as well as pay and specialty cable and satellite channels has also grown significantly since 2008, mostly because Canwest’s television holdings were acquired by a company that was already a big player in the industry: Shaw media. Bell’s take-over of CTV in 2010/11 pushed market share of the four biggest commercial television companies (Bell, Shaw, Rogers and Astral) to 68 percent in 2010, from sixty percent two years earlier.

The big four media conglomerates in Canada — Bell, Shaw, Rogers and QMI — are all vertically-integrated, meaning that they operate in distribution (telecom, wireless, cable & satellite, Internet) and broadcasting, and in magazines and newspapers in the case of the latter two, respectively. There is no debate in Canada about whether these companies use their control over the medium (networks) to influence the flow of messages through them. They do.

Near universal bandwidth caps and throttling hobbles World of Warcraft players as much as is does the ability of OVDs such as Netflix to survive. Online video services offered by Bell and Shaw are exempt from the bandwidth caps, in contrast. The only debate is now whether this should be the case.

One cannot help but have a sense of deju vu that the CRTC now stands in place similar to that occupied by its predecessor, the BRC, a century ago, albeit with far less inclination to act.

If media history tells us anything, it is that once the structures of a new medium ecology are cemented into place they stay that way for a long time.  Indeed, the structure of the ‘industrial media age’ set down in the late-19th and early-20th centuries has only begun to give way to the network media ecology of the 21st century in the past decade – with no small amount of resistance from entrenched interests all along the line.


[i] Also see the Senate Committee’s Interim Report, which has much more data than the 2006 final report.

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Pages: 1 2

  1. December 13, 2011 at 10:41 pm

    Ya, sure! How’s that for start?

  2. September 3, 2011 at 10:00 pm

    Thanks for this invaluable research and analysis. I’m posting on FB. Are there any sources on the owners and Board of Directors of these mega corporations?

  1. November 26, 2012 at 8:33 pm
  2. November 12, 2012 at 3:06 pm
  3. November 29, 2011 at 2:09 am
  4. September 3, 2011 at 9:18 pm

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