So good morning, members of Parliament and committee staff. My name is John Levy, and I am the chairman and CEO of Score Media Inc.
I'm here to talk about developments in emerging and digital media, how they are affecting Canadian cultural industries, and what federal institutions can do to assist Canadians and Canadian cultural industries to benefit from these developments.
Before I do so, I'd like to tell you a little bit about my background and about Score Media, because it's entirely relevant to why I'm here today.
I'm one of the few people in the Canadian communications industry who has had the privilege of being both a small cable system operator and a small broadcaster, thus bringing a unique perspective to this hearing. Before founding Score Media in the late nineties, I was the controlling shareholder of a company called Cableworks Communications, which was one of Canada's first cable TV systems. Cableworks was in fact founded by my father in 1959, and it grew to serve over 65,000 subscribers in the Hamilton area. I literally grew up in the Canadian cable and broadcast industries, and experienced first-hand the growth and transformation that was spurred by the introduction of specialty and pay-TV services and new technologies, including microwave transmission, fibre optics, and satellite communications.
At Cableworks, we were also one of the first Internet service providers. We launched a dial-up ISP business to prepare for the rollout of high-speed Internet over cable, which has become ubiquitous in less than a decade. As I will discuss later in my remarks, the proliferation of Internet access and the resulting ability of individuals to connect and share content instantaneously is, in my view, the most fundamental technological shift we will ever experience in our lifetime.
At Score Media we have invested heavily to make sure we are present and relevant at every important media platform, because that's largely where our 18- to 34-year-old fan community lives. Our core assets include The Score Television Network, which is a national sports, news, and information specialty service available in 6.7 million homes across Canada; Hardcore Sports Radio, which is a sports talk radio channel distributed across North America on Sirius satellite radio; and Score Media Ventures, our digital media division that operates our website, thescore.com, our mobile applications, which we're going to talk a lot about, and our interactive TV applications.
While we've enjoyed significant growth from all of our new platforms and from our TV network, we are particularly proud of our mobile application. In June 2009 we launched ScoreMobile for BlackBerry smartphones, a product that has significantly propelled our brand both at home and internationally. A huge success in North America, with over 70% of our ScoreMobile users now coming from the U.S., our BlackBerry edition of ScoreMobile now has over two million downloads, which is a significant milestone for a Canadian corporation playing in this highly competitive industry. In fact, ScoreMobile on BlackBerry is currently the number one free sports application on BlackBerry anywhere in the world--and we're obviously very proud of that.
We have also had great success with our iPhone application, which has generated over a million and a half downloads since we launched it in July 2008, with over a third of these downloads coming from the States.
Combined, the applications generate--this is how we're measured, and this is how we sell advertising, which we'll talk about in a second--more than 1.3 monthly unique visitors, and we have over 50 million monthly page views.
Our new media platforms are an integral part of our operations and of our growth strategy. We very much consider them as independent platforms for growth in their own right, both inside and outside of Canada.
In addition, from a financial perspective, our revenue growth is reflective of our focus on these platforms as meaningful businesses. Nearly 10% of our advertising revenue is currently generated through our new media platforms, and we expect to grow and accelerate these exponentially in the years ahead. Our new media platforms are also meaningful, positive contributors currently to our operating profit.
We're an innovative company that is constantly moving and changing to stay ahead of the curve. In order to compete both internationally and globally, we have chosen to focus on digital and emerging technologies as the touchstone for our growth strategy.
I've taken the liberty of looking at a couple of the questions that were asked, and in advance of questions, I'll try to respond to some of them.
First, how are developments in emerging and in digital media affecting the Canadian cultural industries? Of course there are countless ways in which new media affects all industries, but we believe that the most important of these, with respect to Canadian cultural industries, is that technology has democratized the distribution of knowledge and of authority.
It is axiomatic that the barriers to entry for content producers have been eliminated. Anyone who has a desire to become an expert online and develop an audience can do so without a need to convince a traditional middleman--i.e., the broadcaster. That person can directly access his or her own audience and build trust and authority independent of mainstream media. This is unprecedented in modern history.
The key is for cultural businesses and industries to find ways to take advantage of these opportunities that afford this opportunity, rather than remaining mired in old models. For example, The Score has leveraged this phenomenon by using the Internet as a discovery mechanism for new and emerging talent. Some of these examples are The Basketball Jones, which is a group of four comedic basketball experts who have developed a substantial online following for their clever, cutting-edge video and podcasts; Paul Brothers, an individual who won a contest we ran called “Drafted”, which was an innovative cross-platform search for Canada's next top sportscaster, and we did this in partnership with Procter and Gamble; and lastly, the bloggers in The Score Sports Federation, which is an aggregation of the best sports blogs all across this country.
These individuals, whose offerings now form the core of our web content, were brought to The Score because they used the Internet to grow their own brand and their own profiles. The reality is that we, as the broadcaster, need them more than they need us; I hope they aren't listening to this. But this represents a fundamental shift in the balance of power and this is why we say that knowledge and authority have become democratized in a totally whole new way. This shift must be recognized and in fact embraced by all cultural institutions. Any institution that does not embrace the web as a wide-open democratic playing field will, we believe, quickly become irrelevant, and those who have learned to how to maximize the opportunities afforded by this new openness will take their place.
New technology has transformed media into a utility. Specifically, technology now allows media to be manipulated and shared. Traditional media that, via passive consumption, cannot be manipulated is quickly losing its appeal to today's audiences. For example, the Internet is a perfect environment for reward and response. At our company, we can track who “fans” us, who shares the content the most, and which Score talent has the most engaged followers. Technology turns media into a two-way conversation. It's a current. Our fans can become talent, and our talent become our fans. This, again, is a phenomenon that needs to be embraced by cultural institutions if they want to remain relevant.
Finally, we would like to comment on the policies that the federal government might adopt to help Canadians and Canadian cultural industries benefit from developments in emerging and digital media, and we've talked about this in front of our regulator, the CRTC.
Specifically, we believe that net neutrality must be a cornerstone of the Canadian communications and regulatory policy so that a level playing field exists for all content producers, whether they're vertically integrated with Internet service providers, ISPs, or not.
As a small, independent Canadian sports player, we have learned how to be nimble in a business where our competitors are huge sports media giants and vertically integrated distributors, and with businesses where sports leagues often hold most of the bargaining power to operate their own platforms.
In this environment, our success has come from respecting our audience, tapping into communities, and providing honest, authentic content. But we would have had no opportunity to succeed if we didn't have access.
When life began for The Score over 10 years ago as a speciality service, it was the CRTC's access and must-carry rules that ensured that this upstart sports network had a chance to find its voice. If our right to carriage 10 years ago had been left to the discretion of the BDUs, the distributors, this independent voice would not be participating at this hearing today.
In the new media world, the organic and explosive growth of the Internet has created an environment where small companies like Score Media can, with a little creativity, create a global business. Anyone anywhere with access to the Internet is a potential fan. However, as they say, the more things change, the more things stay the same. Today, again, access is critical to survival. In recent years, the power to grant access to the Internet has become increasingly consolidated in the hands of a select few. These ISPs have the power of life or death over every content creator who relies on the Internet to access the users. Many of these ISPs are integrated with content providers, and they have every incentive to use the power they have.
In conclusion, our goal through this presentation was to give some insight into our experiences with emerging and digital media and how we might help foster innovation within Canada.
In summary, our recommendation to the federal government is simple: embrace the democratization of information and authority that the media engenders, and please help keep the Internet open. We are very concerned about the ability of Internet and wireless service providers to act as gatekeepers, either because they are vertically integrated and have an incentive to prioritize their own content, or because they are partnering with major media players and providing preferred access. If we seek diversity of Canadian voices in new media, the Internet cannot become a pay-to-play zone.
Thank you very much. I'd be delighted to answer any questions.
