Thank you, Mr. Chair, and good afternoon, members of the committee. My name is Mirko Bibic, and I'm senior vice-president of regulatory and government affairs at BCE.
First, thank you for providing this opportunity to present our perspective on the important changes taking place in broadcasting. By looking closely at the profound and fast-paced changes under way, we're confident you will see the tremendous benefits for Canadians. More specifically, we're sure you will recognize that our resumption of a controlling interest in CTV, building as it does on a long-standing relationship between BCE and Canada's number one media company, will benefit consumers and add huge value to the broadcasting system in terms of investment and innovation.
The communications landscape has changed dramatically over the last five years. Even over the last 24 months we've witnessed unprecedented developments. Consumers today are able to receive digital content on multiple screens from multiple suppliers through multiple networks.
A seemingly infinite number of choices with respect to content are now available, whether it's for a TV, a laptop, a smartphone, or a tablet. As a result, consumers now have the ability to easily program what might best be described as their own perfect media mix. Our world is changing, posing huge challenges, but at the same time presenting big opportunities for communications and broadcasting companies.
For Bell, video has been an important part of our business for well over a decade, and it remains a key imperative for us today. Since 1997 we have brought tremendous value to the Canadian broadcasting system. Our Bell satellite TV business opened up the 500-channel universe to thousands of rural communities across the country and introduced competition to a sector still largely dominated by cable companies.
Today, video accounts for approximately 40% of Bell's residential wireline revenues, more than our home phone service, quite a story in itself when you think of this company's long history and roots. Just as we led the way there by propelling competition and innovation with the introduction of satellite TV, including the shift to digital, high definition, and personal video recorders, as well as by contributing over $100 million each year to the production of Canadian content, we continue to see ourselves as a leader when it comes to enabling consumers to create their own perfect media mix.
We are achieving this by continuing to invest billions in network infrastructure and by continuing to be a national leader in R and D spending. Over the last two years alone, we have invested over $6 billion. We are continually enhancing our national Bell satellite TV service, we continue to upgrade our world-class wireless high-speed broadband network, and we are well on our way toward connecting more than five million homes using an advanced fibre-based Internet network capable of supporting our recently launched IPTV service, Bell Fibe TV.
As a direct result of the ever-advancing state of our infrastructure, Canadian consumers are truly at the centre of the new dynamic that is emerging. It was reported earlier this year that each month more than 30% of Canadians are choosing to watch a 30- to 60-minute TV show on a website, and more than 20% of Canadians with cellphones or smartphones watch a video clip. The direction is plain to see.
For Bell and CTV, as Paul mentioned, the 2010 Winter Olympics experience demonstrated beyond a shadow of a doubt that by working closely together Canadian distributors and broadcasters can achieve amazing results. But a major question we have to ask is how do Canadians continue to distinguish themselves and be a part of the shifting media mix every day?
The challenge is particularly acute for Canadian broadcasters, especially because of the massive disparities in scale between themselves and similar companies in the U.S., where consolidation is well entrenched. Disney and ABC, Universal and NBC, Sony and Columbia, Viacom and CBS, Fox and News Corp., each of these companies produces popular content and makes it available around the world.
At the same time, a spate of companies, some massive and some relatively small but all unregulated, are entering the Canadian video space. Netflix and Apple TV, the latter part of a $280-billion company, are stockpiling huge catalogues of TV programs and movies and making that content available online via streamed video.
Canada's leading cable companies and Bell's main competitors are also acquiring content. Vidéotron has owned TVA for years, Rogers purchased Citytv in 2007, and Shaw of course recently purchased Canwest.
The key point is that our transaction will enable Bell and CTV to achieve a measure of scale and scope that will support further network investment and innovation. It will also help to ensure the production of more and even better Canadian content. Producing high-quality, popular content can be expensive. The more screens on which that content is available, the more chances you have of attracting the largest possible audience. And the greater the audience, the larger the advertising revenue.
As this unfolds, consumers continue to be in control. They can watch their favourite show at the scheduled time on TV or record it for viewing later. They can subscribe to video-on-demand. They can stream the show on a laptop or tablet when they want to watch it, or they can watch it via a mobile phone.
There are even more options, such as downloading shows from iTunes or buying an entire season at a local retailer. The fact that so many choices exist indicates that today's marketplace is clearly working. And it will remain a dynamic marketplace.
In such an environment, innovative niche content and applications could well be what consumers rely on to differentiate one company from another. And service differentiation has many proven benefits—it enhances competition across the board, forces all players to innovate and provides better choices for consumers.
As an example, Bell is offering customers who are Montreal Canadiens fans access to a half-hour reality show about the players. Starting this weekend, the show will first be available to Bell customers on all three screens—mobile, online and TV—before it is more widely broadcast on TV networks in January. This enhances the viewer experience, gives them more choice and stimulates competition in the online and wireless markets.
It is good for fans, as well as the producers of the show and all those who work behind the scenes.
Another example is a new partnership Bell has with Radio-Canada to offer leading French-language content on Bell Mobility smartphones, Bell Fibe TV On Demand and the Sympatio.ca Internet portal. It is a commercial arrangement that offers clear benefits, especially for consumers.
By combining assets and expertise from two distinct areas of business, Canadian broadcasters and distributors can continue to do more of these things, experimenting with initiatives that help Canadian companies stand out in a world of near-infinite content.
The changes to the broadcasting landscape are therefore certainly positive and should be encouraged. And if any regulatory or competitive issues were to arise, the CRTC retains all the power it needs to respond as required.
In conclusion, committee members and Mr. Chair, broadcasting today stands in stark contrast to the days when Canadians were limited to a few channels delivered to a finite set of receivers, televisions, and radios. Consumers are driving the content bus, stopping at the destinations they choose. But how far that bus travels within Canada and how large the map will be with respect to Canadian points of interest depends on whether or not Canadian broadcasters and distributors have the flexibility and scale to build the destinations Canadians want to visit.