Corus Entertainment’s woes foretell a dark future for Canadian content

Dvai Ghose is the principal at Ghose Investment Corp. His clients include Telus Communications Inc. He is the former head of global research and strategic development for Canaccord Genuity Group.cut 35 jobs at Global News last week. That came after Rogers announced that it had won from Corus multiyear Canadian rights deals for leading U.S. lifestyle content including HGTV, Cooking Channel and Food Network.

Corus’s challenges come down to a combination of consistently bad regulatory decisions that have favoured behemoth global content providers, such as Netflix, over domestic players: changing viewership, rising U.S. content costs, the questionable acquisition of Shaw Media in 2016, poor execution and a lack of substantial cost cutting.

Even today, as the federal government tries to level the playing field, these non-Canadian content distributors only contribute 5 per cent of revenue toward Canadian content. In January of 2016, Corus announced the acquisition of Shaw Media for $2.65-billion financed by debt. The deal raised eyebrows as the Shaw Family controlled both the buyer and seller.

Corus has also suffered from the necessity to secure U.S. content through multiyear deals, often with annual price increases. This makes it very difficult to offset declining advertising and subscription revenue. Avoiding U.S. content would only deliver lower viewership.

Source: News Formal (newsformal.com)

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