Mediacaster March 2009

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Special Report: Private Equity Firms Looking to Invest in Canadian Interactive and New Media Companies

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Live: 7 in

WIDE APPEAL. IT’S LIFE OR DEATH.

Live: 10 in

Gene Simmons Family Jewels™

Criss Angel® Mindfreak®

Intervention

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bits & bytes tools of the trade

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people, places and players making news on the Canadian digital media scene Announcements of interest and relevance to the Canadian digital media and content creation industry may be submitted to Mediacaster for possible inclusion in the magazine.

Send your announcements to: editor@mediacastermagazine.com

Television Fund Ups Contributions to Digital Media The Canadian Television Fund has increased its program commitments for 2009-2010 by almost 14%, including $10 million for digital media development.

The 2009-2010 program commitments include increases to key programs as follows: • The main program through which the CTF allocates funds to productions, the market-driven Broadcaster Performance Envelope (BPE) stream, has been allocated $285 million in 2009-2010. This 7.2% increase year over year includes $194 million to English BPEs and $91 million to French BPEs. • The CTF has increased the funding allocation for the French-language Projects Outside of Quebec (FLPOQ) stream from $9.3 million to $10.2 million in 2009-2010.

• Funding to the Aboriginal-language

Projects stream has increased from just over $3 million to $4 million in 2009-2010 in response to requests for additional support for a number of years from the Aboriginal production community.

• As a result of high demand for Digital Media Pilot funds, and as demand for the Bell New Media and Canada New Media Fund were oversubscribed, the CTF says it will increase the allocation for the Digital Media Program to $10 million in 2009-2010.

• The Production Incentive Pilot Program has been doubled to $10 million in 2009-2010.

• The CTF has increased the budget for English development projects from $9 million to $10 million in 2009-2010.

Corus iPhone App Tunes in Radio Station Content Montreal’s StreamTheWorld helped Corus Entertainment become one of the Canadian radio broadcaster to feature a native streaming application for the iPhone.

The portable digital device software application lets users search Corus stations either by call letters or by city, and a quick shake triggers a shuffle program to offer a random Corus radio station. The application also leverages the Advanced Audio Coding (AAC) codec, providing high quality audio with low data consumption.

“Our radio stations need to be available wherever our listeners are, and on any device they choose to use,” said David Huszar, Vice President and General Manager of Corus Radio’s interactive division. “With the increas-

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ing popularity of the iPhone and iPod touch as the device of choice for portable entertainment, we’re thrilled to offer our listeners the convenience of accessing their favourite Corus radio station through them.”

“StreamTheWorld is committed to continuously serving Corus with new user experiences for its audience,” added Samuel Sousa, Solution Engineer for StreamTheWorld. “The native Corus iPhone application that we designed offers a richer experience since it leverages its touch screen and interaction capabilities, enables the AAC codec for outstanding sound quality and facilitates usage over the 3G network due to low data consumption.”

Canadian Audiences are Multi-Taskers, Multi-Platformers A recent study released by Ipsos Reid says Canadians are multi-tasking — and multi-platforming — half of the time they’re online.

On average, online Canadians spend almost equal amounts of time on major media platforms like television and the Internetapproximately 15 hours each, every week.

Both measures remain essentially unchanged from early 2007.

Online Canadians spend an additional 10 hours each week listening to the radio, while only three hours-or less than 30 minutes a day-reading the newspaper.

Calgary-based study author Mark Laver noted that “Online Media: All Change!” contained very interesting findings, particularly from an advertiser’s perspective. “With such a high degree of multi-tasking occurring, how can an advertiser (online or offline) be sure their message is getting through? Keeping this in mind, advertisers and media companies need to ensure that they have the appropriate tracking mechanisms as well as unique and different material in order to break through in this cluttered environment,” he said.

The ‘net generation’-those that have grown up with technology-should be of particular concern to advertisers and traditional media.

This segment of the population is spending significantly more time online and significantly less time watching television than their older counterparts. Those aged 18-34 are spending 18.4 hours online each week, compared to 13.6 hours and 14.2 hours for those aged 3554 and those aged 55+, respectively. Further evidence as to some of the struggles being faced by traditional media companies in the Internet age: 40% of online Canadians do not read magazines, 19% do not read a newspaper and 15% do not listen to the radio.

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people, places and players making news on the Canadian digital media scene VersaPay Partners with New Media BC

New standards for the delivery of next generation 3D content on cable will be investigated by the American National Standards Institute (ANSI), and accredited Standards Program of the Society of Cable Telecommunications Engineers (SCTE).

The cable networks’ standards organization has approved a project to examine the delivery of 3D content over cable networks.

The 3D project has been assigned to SCTE’s Digital Video Subcommittee (DVS),

Preferred rates for businesses that accept Visa, MasterCard and Interac payments are available to new media companies in British Columbia, following announcement that VersaPay, a Canadian credit, debit and gift/loyalty card transaction processing company, has partnership with industry association New Media BC. New Media BC represents over 300 digital media companies in British Columbia, including businesses, educational organizations, government agencies, and individuals whose core products and services include e-commerce, eLearning, Web development, electronic games, digital

chaired by Paul J. Hearty, Ph.D., of Ryerson University in Toronto.

DVS says it will consider not only cable industry activities but also standards work being conducted in other organizations such as the Society of Motion Picture and Television Engineers (SMPTE) and the Consumer Electronics Association (CEA).

Almost 160 cable operators, vendors, and allied organizations are SCTE Standards Program members.

animation, digital film, visual effects, software and tools, interactive products, and many more.

Members will also be offered preferred rates on all the company’s additional products and services including the VersaCard stored-value card, gift cards, point of sale terminal leasing, rental or purchase as well as installation.

Ryerson Prof Looks at 3D Delivery for SCTE

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the people, places and players making waves in broadband and content Digital Media Corridor Awarded $10 M The digital media sector is one of the fastest growing industries in the knowledge economy, expected to reach US$2.2 trillion worldwide in the next five years.

In Canada, that’s due in part to a new $10.7 million award from the Minister of State (Science and Technology) to establish the Corridor for Advancing Canadian Digital Media (CACDM).

Communitech and the Stratford Institute of the University of Waterloo have received the award.

The CACDM, which will provide a common space for the corporate and

academic communities to come together around digital media, will have hubs in Kitchener and Stratford, ON: • The Digital Media Convergence Centre, based in Kitchener, will help generate new digital media products, applications and businesses. The centre will house digital imaging, projection and studio technologies that previously have only been available to large companies and institutions.

• The University of Waterloo’s Stratford Institute will draw leading researchers, businesses and entrepreneurs to create, examine and commercialize opportunities in the digital media field in a global economy

Maybe You Do Need a Weatherman.....

Canadians see the weather as one of the most important kinds of online information, visiting portals like The Weather Network and the federal government’s Weather Office more frequently than many other online news destinations, according to recently published comScore results.

Visitors (000) Visitors (000)

December 2008 January 2008 1 THEWEATHERNETWORK.COM 2 CBC.CA 3 CANADA.COM 4 CANOE.CA 5 CTV.CA 6 AOL.COM 7 WEATHEROFFICE.GC.CA 8 BBC.CO.UK 9 CNN.COM 10 METEOMEDIA.COM 11 TSN.CA 12 THESTAR.COM 13 RADIO-CANADA.CA 14 NYTIMES.COM 15 GLOBEANDMAIL.COM

6,859 4,461 4,364 3,936 3,235 2,852 2,667 2,275 2,024 1,784 1,662 1,515 1,478 1,285 1,177

5,334 4,121 3,828 3,898 3,043 3,315 1,978 1,950 2,049 1,864 1,651 1,205 1,539 1,367 1,219

(1) comScore, “News and information” category, December 2008

Twitter Connect with Bell Tweets Short and sweet, Twitter is in the Top Three. It ranks only after Facebook and MySpace among the most popular social media sites.

Twitter usage increased some 900% in the last year, the company says, driven

by Tweets, and the ability to send receive those text based posts of up to 140 characters.

Now, Bell Mobility is letting Canadians join in, with full SMS (Short Messaging Service, or mobile text messaging) support for interacting with Twitter.

Messages are displayed on a users profile page at Twitter.com and delivered in real time to those who’ve signed up for them. Twitter updates can also be received through integration with other social networking sites, including Facebook, MySpace, Linkedin (using Twhirl software) or via SMS, RSS or Twittermobile.

Bell Mobility’s SMS Twitter charges for each message sent or received.

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Digital Signage on the Go Omnivex Corporation, Toronto’s digital signage software provider, received the Environmental Design Integration Award on behalf of United Mobile Broadcasting Corporation (UMBC).

UMBC was contracted by GO to implement and manage the digital signage system on the trains, using Omnivex software.

Passengers on GO Transit’s commuter trains in the Greater Toronto Area have wireless access to information, entertainment and advertising content on the system’s broadcast network.

Each of some 400 bi-levels passenger railcars is outfitted with eight 15 inch LCD monitors (four per level) as part of the digital signage network, which also delivers audio available by FM radio.

Driving Canadian Mobile Ad Revenue Mobile advertising revenues continue to grow in Canada, according to the Interactive Advertising Bureau of Canada, and its first Canadian Mobile Advertising Revenue Report.

Almost all forms of Mobile advertising are growing rapidly year-over-year: • $1.1 million in 2006 • $2.7 million in 2007 • $5.2 million in 2008 Standard SMS ad programs currently generate about 75% of the total, with the remainder from Premium SMS, Mobile Content, Mobile (Display) Advertising, Mobile Search and Mobile Applications.

Mobile Ad revenue grew exponentially compared to other major media -- 143% between 2006 and 2007, compared to the 5% of all major media and Online’s 38% -- due mostly to Mobile’s relatively small and nascent advertising revenue base, the Bureau said.

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the people, places and players making waves in broadband and content Canadian Women in Communications (CWC) Awards Women working in radio and TV broadcasting; telecom, cable and Internet service provision; interactive and social media development and more will be honoured by the CWC (Canadian Women in Communications) at its Annual Awards Gala.

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The CWC 2009 Woman of the Year is Susanne Boyce, president, creative, content and channels, CTV Inc.

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The inaugural Excellence in Leadership Award Winners are: Nyla Ahmad, vice-president, new venture operations and strategic partnerships, Rogers Communications Inc.

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Rochelle Grayson, president, Work at Play Social Media Agency

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Robin McIntyre, regional president — Ottawa, Rogers Communications Inc.

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Margot M. Micallef QC, chair & CEO, Vista Radio Ltd. (profiled in Broadcaster Magazine, Feb 2009 issue)

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Susan Wood, manager, partnerships and sponsorships, CBC British Columbia

Lesley McFarlane, director, network services business planning and operational performance, MTS Allstream Inc.

Annie Ménard, vice-president, Expertech Network Installation Inc. (a Bell subsidiary)

FremantleMedia Invests in Ludia’s Video Games FremantleMedia, the global entertainment company, has made a strategic minority equity investment in Ludia, Montreal’s interactive casual games publisher.

The deal is seen as part of FremantleMedia’s ongoing expansion into the high-growth video games market. It represents the division’s first equity investment.

FremantleMedia’s cash and rights investment will help Ludia expand its portfolio of branded, IP-led casual games and broaden its international business. FremantleMedia Enterprises (FME) already licenses formats such as American Idol, and Press Your Luck to Ludia; meanwhile, Ludia recently debuted The Price is Right for PCs, gaming consoles and the Apple iPhone and iPod Touch.

The casual segment of the interactive games market is thought to be worth $2.25 billion, according to the Casual Games Association and is expected to grow by 20% year over year for

Social Media Agency Work at Play’s Rochelle Grayson Honoured by CWC

Trace Finds New Talent Online Trace Pictures has added Motionographerfeatured Vancouver Film School grad Yaniv Friedman to their creative team, as full time designer/animator.

“Our first intro to Yaniv’s work was a short film we saw on Motionographer called ‘A Brief Guide about Bridesmaids,’” recalls Daniel Luna, Associate Creative Director and Justin Stephenson, Creative Director at Trace. “His work was unique — we saw some serious talent and we wanted to work with him”.

Since then, Trace has hired Friedman to work freelance on many projects including a pitch for a network re-brand, which Trace was awarded, and an interactive project for New Balance.

“I like working at Trace because I feel there is always room for creative exploration and I get to work with talented people that share the same passion,” he explained.

Trace is a Toronto-based design firm and a full service production company working in live action and all forms of animation.

established markets.

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Multi-screen Video Services Attract Viewers, Broadcasters, Cable Operators, Digital Service Providers Online and mobile video consumption is moving breakneck speed, driven primarily by the next generation of hardware and software innovation, making for an enjoyable & engaging, anywhere & anytime experience for consumers of digital media.

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op-rated broadcast television programs, international sporting events, live music & special entertainment shows, educational content for young people and much more are becoming the standard — if not the exclusive — domain of today’s evolving multi-screen media ecosystem.

The environment is not only constructed with a new generation of media delivery technologies, it’s populated by a whole new generation of consumers.

The audience is very comfortable moving among large-screen home HD theatres, desktop PC-based video streams, as well as the small screens on smart phones or gaming devices. This audience loves its ‘media snacks’, but it’s quite content

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being served more filling long form content, too.

Not surprisingly, more than half of the audience watching the multi-screen world today is between 25 and 44 (folks between 18 and 24 are even more enthusiastic). But they are not just ‘bleeding edge tech geeks’ — they are well-paid and well-motivated career professionals as well. Mainstream audiences, too, are engaging with new media tools and technologies. More than 92 per cent of those who can, according to one survey, watch online video at least once a week — usually more.

Even as traditional broadcast structures stumble their way through the economic downturn, their online proper-

ties continue to show growth! CTV, for example, called 2008 a record-breaking year for its online properties. At the time of this writing, a debt financing extension promised only more time, not more TV revenue for Canwest Global, yet its canada.com network posted a 39 per cent growth, and its new-look newspaper sites claimed a 54 per cent growth.

Media Usage Stats Confirm Mobile Movement

So far, the0 most popular live TV streams seem to be news and sports (NBC’s Olympic coverage was the largest streaming event of 2008, unless you count the U.S. Presidential election, with online and mobile media platforms providing

both coverage of, and input to, that historical event).

Not surprisingly, a lot of weather-related content is watched online, as well.

Music videos and movie previews have been popular among video downloaders.

But with many first-run and archived broadcast TV programs now delivered online, with new content being produced exclusively for online and mobile viewing, and with user-generated video — also called ‘mobile lifecasting’ — drawing audiences to multiple screens, there’s lots of choice.

That’s why finding the right price point, one that makes sense for content creators, consumers and providers March 2009

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TVO’s Chief Executive Officer Lisa de Wilde, pictured in one of the broadcaster’s new digital production facilities. More than 500 hours of digital content for TV and the Web will be produced here this year.

alike, is crucial for continued growth and industry success. The business side of the industry must also figure out copyright issues, geographic restrictions and demographic responsibilities. The creative side is struggling with new narrative structures, new program styles (shortform, episodic, long-form, interactive or enhanced) and a new creative lexicon that must work in several new shapes and sizes. Advertisers are coming to grips with the dynamic inter-relationship of emerging multi-screen branding opportunities and new ways to capitalize on increased user engagement, identifiable physical location and viewer-specific targeting technologies.

So it’s no wonder that expanded multi-screen TV services are actively being developed and offered by major broadcasters, cable, satellite and mobile operators, content creators and advertisers alike.

They’d be foolish not to.

Young as the movement to mobile media is, useful consumer consumption statistics can be tracked, analyzed and quantified by service providers and their partners.

For example, recent stats (December, 2008) from Internet research firm comScore showed that online viewers in the U.S. watched a record 14.3 billion videos that month. That’s an increase of 13 per cent over the previous month.

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In Canada, one of the better-positioned mobile TV and video service providers to provide comparable measurements is a Toronto-based company called QuickPlay Media. It provides video and TV over broadband wireless networks for some of the most popular and most successful broadcast and content companies around the world.

(QuickPlay itself is a popular item — it regularly takes home industry awards for its products and service developments. For example, it was named winner of the Best Video Service Provider category for its OpenVideo media management platform by U.K.-based Mobile Entertainment (ME).

“We are thrilled to be recognized for the market leading capabilities of our media management platform,” exclaimed Wayne Purboo, the company’s CEO and co-founder. “With the introduction of flat-rate data plans, a new breed of multimedia devices and a wider selection of content, we are beginning to see an increase in adoption of mobile TV and video services in every corner of the world.”

He went to cite analyst forecasts that mobile TV and video will generate more revenue than mobile music and mobile games combined, as much as $6.5 billion (CDN) in just two years. “QuickPlay will enable our customers to realize this projected revenues,” Purboo committed.

QuickPlay will do so by helping companies manage, distribute and monetize mobile TV and video services, as they do now. Companies like Sprint, Alltel, AT&T, Telus, Rogers and Bell. Moving live and on-demand content from CBC, The Score, HBO, the NBA, WWE and Universal Music, among many others.

As such, it has been able to aggregate quarterly usage statistics from 15 representative QuickPlay-powered services like these; the numbers demonstrate mobile users continue to show tremendous interest in streaming and downloading mobile TV and video content.

In fact, served streams more than doubled in the last quarter of 2008 from the previous quarter. Downloads also experienced momentum over this timeframe, with the average number of downloads increasing by some 50 per cent per user.

Mark Hyland, QuickPlay’s VicePresident, Marketing, says the company anticipates continued overall growth, particularly in the mobile video market, based on such stats.

“Partly, that’s because it is a small user base right now, small but growing. Just five per cent of the cell phone user base uses digital video in any given month,” he says. “The evidence shows that the subsets of cell phone users on advanced 3G networks (that can most easily access bandwidth intensive video) is high, and Continues on page 14

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TVO’s Online Content is for Kids and Adults

tVo channels youtube, Partners with itunes If someone said you could get a great education on YouTube, you’d be forgiven for a look of disbelief and bemusement.

Up until now, that is.

With the recent news that TVO and YouTube are now live with their new website partnership, there’s no excuse to not believe the importance and impact of online video and social networking.

The partnership puts the public educational media organization’s branded content online for millions of users around the world to see and share. A dedicated YouTube channel hub brings TVO’s issue-and-ideabased programming to the Web, while at the same time presenting branded sub-sites that reinforce the network’s most popular and successful shows, including flagship current affairs program The Agenda with Steve Paikin, Allan Gregg in Conversation and Your Voice.

The companies have a Premium Content Partnership, whereby TVO shares revenue with YouTube based on display advertising shown on the channel.

Completely programmed by TVO, the ‘homepage’ lets users get to different program streams, including kid-friendly and parent-supportive content. Visitors can subscribe to their favourite TVO-produced programs, and play and share content from selected playlists.

“This exciting partnership with YouTube lifts TVO’s strategy in the digital space to a whole new level,” said Lisa de Wilde, TVO’s Chief Executive Officer. “We control our own content, so this significantly extends our impact and reach. There’s no geo-blocking, so this allows a global audience to discover our content. Having a dedicated space on YouTube also opens up new and incremental revenue streams for TVO,” de Wilde added, noting that 80% of its budget comes from government.

It’s just one in a series of major steps TVO has taken on the road from a traditional broadcaster to a fully digital, multiplatform media organization. TVO has also developed distribution arrangements with major online content providers like Yahoo!

Canada, where 16 to 18 million monthly visitors are exposed to highly-focussed lifestyle content that TVO provides to the consumer portal.

TVO also has a dedicated ‘micro-site’, and like the lifestyle content on Yahoo, it is a very efficient way to reach an established audience with a demonstrated appetite for specific content, as Winnie Wong, Director of Corporate Development and Strategy, explains.

“The content is very ‘sticky’, and users are spending six to nine minutes, as opposed to two or three,” she says, citing page visits and video stream stats.

“They’re often watching multiple videos, and engaging with the other content that fits the specific demographics and relevance. Our partners, like Yahoo, provide us with monthly reports, tracking user behaviour, page views and video views — our Lifestyle homepage is hard real estate!”

So, too, the new YouTube channel, and its “power byte size experience.”

Wong is speaking to making the content even more palatable for the YouTube audience, with chunked down version of shows and an extended brand that’s now open to the world. “The industry will look at long form content, and how best to deliver and engage with it,” Wong notes. “We are maximizing the short form approach now.”

Of course, the educational broadcaster is targeting kids, too. They’re the ones growing up digital, after all.

So the availability of popular songs and music videos from TVOKids on the incredibly successful Apple iTunes online media store, as announced recently, makes perfect sense.

It’s going to make money, too — TVO and iTunes will share in revenues generated on a per-download basis.

“Partnering with iTunes offers TVO new potential to significantly increase the impact of our unique made-in-Ontario content in the borderless digital space,” de Wilde explains. “Now a whole new audience of parents and their kids around the globe will discover TVOKids’ fun and creative approach to educational media.”

The TVO-iTunes partnership encompasses four international contracts, including North America, Japan, Europe and Australia-New Zealand. Preschool favorites like the ABC Song with Gisèle and

Letterella and Use Your Words as well as school-age selections like Keep on Movin’ and Nounin’ Around will be available to own. Kids can continue to view TVOKids videos for free at tvokids.com.

“Developing partnerships that enable TVO to tap into new sources of self-generated revenue is an important strategy in developing a sustainable business model for TVO,” de Wilde states.

“We own the content we create, for digital, TV and the Web,” she explains.

“That allows us to be really bold about using the digital platform to extend our reach. We can show how publicly-funded educational network can leverage digital to do more things that really help us meet mandate and reach more people. That’s a key part of our business plan going forward.” (The broadcaster received a full seven-year term renewal late last year.)

What’s more, she says, “It’s vitally important to all of us that there be Canadian content — Ontario content — on the digital highway. It’s great to have government support, because we believe it is crucial that Canadians have access to Canadian content, in all its breadth and depth.”

TVO has some recent stats that illustrate that depth of content, and the audience it garners, be it on TV or online: • 85% of the people of Ontario (over 10 million people aged 2+) tuned in to TVO programming in the last broadcast season • TVO has a 2 per cent viewership share in prime time for the broadcast year to date, higher than all Canadian specialties except TSN and History Television.

• TVO had 4 million current affairs downloads in 2008 (no podcasts were even offered just two years before.)

• TVOKids.com: 300,000 unique visits and 4.5 million page views each month • This year TVO will produce more than 500 hours of digital content for TV (as well as a huge volume of web exclusive resources) in its new digital production facilities.

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Introducing AOV Mobile, AOV on Demand an Adults Only Video, better known as AOV, has been a pioneer in offering premium adult entertainment to Canadians for over 20 years. Established in 1986 as the first chain of adult video stores, we have continued to evolve and break new ground in the Canadian adult industry.

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Adults Only Video,

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**MDC_March 09 2_24.indd 13

3/11/09 3/5/09 2:16:27 3:02:18PM PM

Stephan Argent CTV Vice-President, Digital Media.

Continued from page 11 the subset of users with advanced smartphones (that display video on larger, high resolution screens) is higher still, and that will grow.”

He says QuickPlay sees the devices, networks, and payment plans are all starting to align, so that it becomes easier for people to consume mobile media. From the company’s perspective, consumers remain willing to pay for high-quality entertainment services, even in a downturn.

In 2009, Hyland says, QuickPlay expects to see broadcasters and mobile operators continuing to focus on mobile data services. Operators get a way to protect ARPU by delivering added value to cost-conscious and media-savvy subscribers. Content creators can get increased promotional activity and cross-platform audience awareness as broadcast programs attract new audiences across multiple platforms.

QuickPlay has initiated a regular series of quarterly stats reports about video stream and video download habits. The most recent, compiled from October 1 through December 31, 2008, show a doubling of the number of streams viewed.

Downloads also experienced momentum over this timeframe, with the average number of downloads per user increasing by approximately 50 percent.

The growth in consumption of streams can be largely attributed to the launch of popular new services, QuickPlay says, citing the fact that YouTube content became available on Telus Mobility. A decline in streams per user, the company says, can be linked to the growing adoption of live TV services that tend to generate longer views but fewer streams.

Video Streams • Total live TV and video streams viewed grew 118% from Q3 to Q4 2008, compared with a 27% increase from Q2 to Q3 14 www.mediacastermagazine.com

**MDC_March 09 2_24.indd 14

• Total streams per user dropped slightly to 17.4 in Q4 from 19.3 in Q3 • Average stream duration in Q4 2008 was slightly longer at two minutes and 48 seconds when compared to two minutes and 47 seconds in Q3 Video Downloads • Average download per user experienced its best quarter of 2008 with an average of 6 per user vs. 4.1 per user in Q3 • Total video downloads showed an increase of 73% from Q3 to Q4 vs.

87% from Q2 to Q3 Hyland explains that as time goes on, usage statistics will reflect even more widespread adoption, and therefore these advanced services will become an increasingly appealing vehicle for advertising. He feels the mobile media model will still work a lot like TV does today, “where you’ve got a good mix of free, ad-supported content, being broadcast, but also new premium content offerings that people will subscribe to, like the cable channel tiers or pay-per-view offerings today.”

The broadcasters are realizing their own benefits, and releasing their own alternative media statistics.

Online Presence Brings More Viewers, Ad Revenues

CTV, for example, called 2008 a recordbreaking year for its online properties, saying that a total of 337 million video streams were served up in 2008, more than doubling its previous year’s total.

More to the point, perhaps, the online network experienced double digit growth in both revenue and traffic throughout 2008.

“Our audience has spoken and these latest numbers confirm that they like what they see,” enthused Stephan Argent, CTV’s Vice-President, Digital Media.

“CTV will continue to build on our win-

ning strategy in 2009, and we are wellpositioned to be successful across both the traditional and online platform.”

Argent sees the different strengths attached to the screens and platforms.

The online video strategy, he says, is to allow viewers to play catch up, to watch a program they missed in its on-air slot, but one that is still important enough for them to watch on their own time.

“It’s a symbiotic strategy,” Argent continues. “In terms of what’s programmed online, our approach is to follow our success in our broadcast TV strategy. By working hand-in-hand this way, it enables us to capture new viewers online, and gets them to watch on TV”, he explains, referencing popular shows like Grey’s Anatomy, Desperate Housewives, ER, Mad Men and more.

Likewise, he recommends, advertisers should leverage a variety of factors in the multiple world. “Online venues offer highly-targeted and immediate response solutions for advertisers; traditional media can serve a sustained brand development campaign, building brand awareness and communicating product values. Broadcast is excellent for brand recall; online or mobile is excellent for immediacy and interactivity.”

As such, advertisers can now consider a number of factors in their ad buys, including overall campaign length, desired audience, new ad units and inventory coordination, as well as onscreen placement.

Argent cites the newly developed CTV Video Player as a specific tool that can empower his advertisers. “Static ads and banners are well and good for brand engagement, but the real traction will be had as we roll out new ad units, particularly in online video,” he says. “We can sync up pre-roll advertising in the video player with the ‘big box’ ad alongside, but we will go beyond that.”

By strategically positioning on-screen elements, like putting the big box next to the video player, content distribution platforms can foster customer engagement for the advertiser. Many online TV clips or ‘webisodes’ have a 15- or

March 2009

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30-second commercial attached to the front-end, and most viewers say that’s still better than the ad-to-show ratio on broadcast TV. But viewers will be engaged by screen design and entertained by content elements that encourage them to click on attractive ads and help them drill down in the overall brand experience, bringing an immersive value-add to the table.

CTV’s newly revamped online Video Player was developed using a combination of internal and external resources, the result of collaborative activities among software developers, broadcast engineers, ad executives and traffic managers. A period of beta testing and user feedback was also incorporated, Argent describes, one that led to the incorporation of certain ‘social networking tools’

increase your internet spending The Interactive Advertising Bureau of Canada advises media buyers to increase their Internet spending in line with ever-growing consumer usage of the medium in Canada.

In a recently-released study (based on data from PMB, NADbank, BBM RTS and comScore, and prepared by Rob Young, senior VP of planning services for PHD Canada), IAB projects the Internet will eventually become the dominant medium in terms of reach and timespent.

The IAB also says that: • Time-spent on the Internet by adults 18+ increased its market share from 14% to 23% between 2001 and 2007.

Market share for magazines in the same category decreased from 5% to 4% over the same period, with the average minutes per week declining from 120 to 99.

• The Internet will become the number one medium for time-spent among 3554 year olds over the next eight years.

• Women and adults over 55 are considered “underdeveloped demos” in the study. * The Internet now has broader reach than newspapers and magazines and is gaining ground on TV and radio.

that further viewer engagement, like clip sharing, commenting and a personal favourites list.

The branded player also uses underlying technologies to improve and enhance both its viewer experience and advertiser results. “We do use cookies for IP targeting,” Argent explains, “primarily for what we call prime time content. Of course, we have to balance the desire of consumer for accessing ‘anywhere, anytime’ content, with ways to ensure that program creators are appropriately compensated for the use of their content. Regionalization is one way to monitor that. For certain live sports, like our TSN regional content, we have to follow broadcast rules.”

It’s a successful strategy so far: CTV. ca alone served up 58 million video streams last year, more than four times that of 2007; the entire online network served up more than 330 million video streams. Unique visitors to online properties are also tracked and quantified, showing more than 7.2 million uniques at TSN.ca and more than six million at CTV.ca. The BNN.ca business site, while highly targeted to a specific audience, nevertheless doubled its monthly visitor total over 2007.

Multi-Screen Publishing — Creative Disruption

Last year, some 200 media, marketing and advertising executives were asked about mobile content and advertising developments they had their eye on.

Nearly half of them told industry research and financial services firm KPMG that the most disruptive force in media today is the pullback of ad dollars from traditional to mobile media platforms.

(They also said the transformation of mobile devices into personal computers was the next most disruptive development out there.)

This ‘techno-fear’ or concern is typical with the radical changes brought about by the world of multi-screen technology.

But it belies the enthusiasm and excitement others feel when making similar observations.

Included in that group is Joe Strolz, the Vice-President of Canwest Digital.

He’s perched at the intersection of the traditional media worlds like broadcast TV and print publishing (Canwest owns several properties in each category) with new media worlds of online content delivery and mobile connectivity (Canwest owns, operators or has invested in several such properties recently).

Are the multiple screens a ‘win win win’ situation for advertisers and broadcasters, or are they chipping away at each other? Canwest has broadcast, digital and print vehicles — as well as some heavy debt and financial commitments — so what is its position?

“It’s an interesting question,” Strolz replies, acknowledging that “we’re all in a tough time in the market; advertising not a big win overall right now. But it’s tough times for every industry. So you have to take a down market with a grain of salt when looking at that question.

“All things being equal, what our planners and customers say is that digital is completely complimentary to the mix. I definitely believe it is win-win. If a publisher or broadcaster has the right combination of platforms, including print, specialty and broadcast TV, and now the digital screens, they can take those pieces and command more share. Working in a partnership with these platforms, advertisers can have a single voice Continues on page 20

Mark Hyland Vice-President, Marketing, QuickPlay Media March 2009

**MDC_March 09 2_24.indd 15

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3/11/09 3:02:21 PM

Employee Buyout Outright Sale Recapitalization

Family Succession

Growth Capital

elevated to run the company or management will be brought in. A transition period may be required to train replacement management and provide for a smooth transition of key relationships.

Employee Buyout - PEGs can partner with key employees in the Media companies that seek equity from these eager groups should acquisition of a company in realize how widely the strategy and focus of investment which they play a key role.

Employee philosophies and transaction structure preferences vary.

Key employees receive a Buyout generous equity stake in the in a downturn, but just which sectors of But PEGs also tend to have certain conservatively capitalized the media spectrum do they represent, things in common. company while retaining daily and do the best investment opportunities “They typically target companies operating control. lay there today? with relatively stable product life cycles Family Succession - This type of “Sure, there are a lot of discouraged and a strategy to overcome foreign transaction often involves backing cerfaces out there,” Borkowski acknowl- competition,” Borkowski outlines. tain members of family manageedges. “They’ve been to the bank, and “They avoid leading-edge techment in acquiring ownership the banker’s go ‘We can’t lend any more nology (this is what venture capifrom the senior generation.

Family - our covenants are at the max’. IN some talists want) and have a preferBy working with a PEG in a Succession ways, banks just don’t get creative. They ence for superior profit margins, a family succession transaction, don’t understand IP, and they do not fol- unique business model with a susactive family members secure low the same development and market tainable and defensible market niche operating control and significant cycles as many new media firms do. It’s and position.” equity ownership, while gaining a finanjust not the predictable business they are Other traits that appeal to PEGs are cial partner for growth. used to.... strong growth opportunities, a compelRecapitalization - This is an option But the PEGs are educating them- ling track record, low customer concen- for an owner who wants to sell a porselves, they’re buying the research, trations, and a deep management team. tion of the company for they’re studying the surveys (he notes Most prefer a qualified management team liquidity while retainthe recent CIAIC, as one example). I that will continue to run the day-to-day ing equity ownership think the interactive community can operations while the group’s principals to participate in the Recapitalization help them, and that greater understand- closely support them on the Board of company’s future ing between the two groups will help Director level. upside potential. everyone concerned.”

Borkowski has seen private equity buy- This structure allows Media companies that seek equity outs take many forms, including: the owner to achieve from these eager groups should realOutright Sale - This is personal liquidity, retain ize how widely the strategy and common when the owner significant operational input and responOutright focus of investment philosophies wants to sell his ownership sibility and gain a financial partner to Sale and transaction structure preferinterest and retire. Either help capitalize on strategic expansion ences vary. existing management will be opportunities.

Continued from page 22 their growth projections.

Lessons from depressed economic days gone by show that some media and entertainment companies actually thrive

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**MDC_March 09 2_24.indd 16

Some prefer complete ownership, while others are happy with a majority or minority interest in acquired companies.

Some limit themselves geographically while others have a global strategy.

March 2009

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Growth Capital - Growing a Borkowski maintains, whether they business often strains cash flow fit into one of those categories and requires significant access or not.

Growth to additional working capital. A “PEGs are scouring the counCapital growth capital investment pertry looking for these projects,” mits management to focus on runhe says. As ‘old’ media takes its hit ning the business without constantly on the financial and equity markets, having to be concerned with cash flow new media companies are the attractive matters. alternative. m Whatever the structure, the opportunities for equity investment in media and communications continue to grow, despite the harsh economic climate that surrounds us.

The economic downturn will slow growth and innovation in many areas but will create attractive investment opportunities in the communications and media sectors in 2009.

U.S.-based M/C Venture Partners underscores that stance, and its annual Top 10 list of communications and media industry trends to watch includes the observation that increased adoption of personal mobile services will also be at the forefront of the industry next year.

The leading trend going this year, according to the firm’s list, will be an accelerating shift in consumer spending toward wireless services and replacement of landline services.

Among the media trends on the M/C Venture Partners’ list include: Driven by the success of smartphones like the iPhone, Samsung Instinct and Blackberry Curve, consumer adoption of mobile data services will continue to accelerate. ‘Personal wireless broadband’ will become more widespread, and consumer and mobility-driven video content consumption will drive network operators to revise their network deployment strategies to profitably accommodate changing usage patterns.

Ever-increasing enterprise consumption of bandwidth will highlight the need for more reliable and diverse network solutions, and out-of-home media will become more local and direct as technology improves and efforts to tailor out-ofhome advertisements to smaller, more specific consumer segments continue.

Private Equity investors and buyers have taken a keen interest in investing Canadian interactive media concerns,

Mark Borkowski is President, Mercantile Mergers & Acquisitions Corporation. Based in Toronto, he’s been in the mergers & acquisitions business for the past 23 years.

March 2009

**MDC_March 09 2_24.indd 17

I King Street West, Suite 714, Toronto, Ontario

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tools of the trade Envivio’s 4Caster ‘Multi-Screen’ Encoding Platform

Pharos Promotions Workflow

Envivio 4Casts Multi-Screen Delivery

Graphics workflow and playout for multichannel promotions is supported in Pharos’ new Event Templates, Mediator and Playtime.

Envivio’s 4Caster convergence encoding system can help standardize fixed line and mobile network operators audio and video encoding tasks across a single flexible platform, enabling the delivery of Mobile TV, Internet TV and IPTV to virtually any device.

The 4Caster is able to take multiple channels of content and encode them simultaneously with its tiered compression levels and the multi-profile support.

The 4Caster C4 supports digital, analog and MPEG-2 Transport Stream over IP inputs and a range of video and audio encoding options to enable efficient delivery of content to the Three Screens.

The 4Caster C4 supports one channel of high definition or multiple

Event Templates’ frame-accurate markers can be added at any stage in the Mediator workflow to assist graphics design and trigger playout events such as ‘coming up next’ graphics, credit squeezes and promotions.

These are co-ordinated greatly reducing the risk of on-screen errors when scaling up for Multi-channel and multi-language management is co-ordinated by Pharos Mediator and Playtime into a single business process, managing all file transfers between central storage and any number of third party graphics playout devices.

Pharos Event Templates are compatible with third-party graphics creation tools and stand-alone server and graphics air-chains as well as an increasing number of channel-in-a-box graphics servers.

channels of standard definition encoding for IPTV with support for Picture in Picture. It also offers multi-profile encoding support for Internet TV up to VGA resolution, and for mobile TV streaming.

For IPTV applications, 4Caster C4 can be delivered in either Premium Compression or Extreme Compression encoding configurations using Envivio’s flexible encoding core. For Internet TV applications, 4Caster C4 can deliver content for playback in Windows Media Player, QuickTime and Flash. For Mobile TV applications, 4Caster C4 can deliver 3GPP, 3GPP2 compliant streams for playback on a wide range of mobile devices.

Pharos Event Templates for promotions and delivery.

EVS Toolbox for Tapeless Production EVS Broadcast Equipment is introducing

grams, including recording multiple feeds,

Insio, its latest software application for

instant review, clip management, metadata

pre-recorded TV programs, to coincide

creation, clip transfer and feed streaming to

with its release of the EVS Silverline, a new

post-production.

brand for near-live and pre-recorded studio productions.

The tapeless solution is designed to enhance and speed up studio production

Insio is a new software application

workflows, and can integrate with exist-

for pre-recorded program production.

ing post-production infrastructures. Insio’s

Combined with any EVS production server,

touch-screen interface supports clip man-

Insio is a toolbox for controlling each pro-

agement with several options, including the

duction phase of pre-recorded TV pro-

addition of production notes.

Insio software from EVS Broadcast Equipment

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**MDC_March 09 2_24.indd 18

March 2009

3/11/09 3:02:37 PM

tools of the trade Panasonic Debuts 10-bit, 4:2:2 P2 HD Camcorder Panasonic will deliver its new P2 HD camcorder in April.

variations in lighting; a waveform and vector scope display; and two focus assist functions.

Equipped with two P2 card slots and new 64GB P2 cards, the AG-HPX300 offers

The AG-HPX300 features: individual frame AVC-Intra recording and variable frame

recording capacity can exceed tape-based camcorders. The camera also features an SD

rates; 1/3” 2.2-megapixel 3-MOS imagers; standard interchangeable 17x HD Fujinon lens

memory card slot for saving or loading scene files and user settings, or proxy data (optional

in a 3.6 kilograms (eight pounds) shoulder-mount design.

AJ-YAX800G Proxy board required).

The AG-HPX300 imager captures full native resolution (1920 x 1080) HD images, while an on-board 20-bit digital signal processor (DSP) also image performance.

The AG-HPX300 records individual frame images in 100Mbps DVCPRO HD and in stan-

The AG-HPX300 is equipped with a widescreen 1.23 megapixel LCOS colour viewfinder and a widescreen 921k 3.2-inch LCD colour monitor. It features a low-power consumption of 18 watts.

dard definition in DVCPRO50, DVCPRO and DV. The AVC-Intra 100 and 50 codecs can allow recording in a choice of HD video formats: 1080/59.94i; 1080/29.97P and 1080/23.98P (native 24p/30p); and 720P with variable frames in 23.98pN, 29.97pN and 59.94P. The output of the camera can be set for down-conversion or cross-conversion with letterbox, 4:3 crop or squeeze.

The camera is equipped with numerous features including: Chromatic Aberration Compensation (CAC) to maximize lens performance; built-in scan reverse for use with a variety of film lenses; a Dynamic Range Stretch (DRS) function to help compensate for wide Panasonic’s New 10-bit, 4:2:2 P2 HD Camcorder

Zaxcom’s New Digital Audio System

Combat Sports Tracked by VDS Ticker System VDS has provided a suite of sports graphics applications for The Fight Network in Toronto.

The suite of products is made up of the VDS GameTrak Client/Server

Zaxcom’s New Digital Recording System

suite that parses data from various sports data providers, VDS’ SportBase database, a VDS graphics engine that will make use of the Chyron CAL pro-

Zaxcom’s TRX992 is a new

gramming interface and will be under the control of the VDS Ticker Playout

digital audio transmitter, monitor

Controller, and a Ticker Authoring and Data Entry Station application used by

return receiver, backup recorder,

production personnel to author content for the ticker.

and phantom power supply in one compact system.

Transmissions

Using the Ticker Authoring application, production personnel can select games and schedules to be displayed, enter game notes and statistics, insert

can

be

backed up to a removable mini

promos and sponsors, and enter generic news into one or more playlists to be displayed in the ticker.

or micro SD card for up to 24

The Ticker system supports two modes of operation - Manual Control

hours of audio recording. The sys-

Mode, where GPI Triggers from a “button box” in master control are used to

tem features a user-selectable power output ranging from 10

pause / restart the Ticker, and Automated Control Mode, where GPI Triggers

mW to 100 mW, and the audio output has a dynamic range

from the Automation system are used to pause / restart pre-scheduled playl-

of 106 dB.

ists and to control the ticker coming in and out of commercial breaks.

The TRX992 can be used for critical monitoring applica-

Additional features of the ticker include the ability to insert live, break-

tions, with a 2.4-GHz digital monitor return receiver that relays

ing news immediately,

return audio, time code reference, and RF remote control

while the main ticker

commands. Alternatively, TRX992 users can elect to transmit

continues to display its

high-resolution IFB audio instead of time code and remote con-

information.

trol signals. The system’s internal monitor mixer allows users to mix transmitted audio and a monitor return together, controlled by a pan pot on the top of the unit.

The TRX992 also features mic/line level input and a balanced XLR input with 48-V phantom power. It operates on the VPX rechargeable battery system, supporting more than 500 recharges.

VDS On-screen Graphics and Ticker at The Sport Network ­

**MDC_March 09 2_24.indd 19

March 2009

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3/11/09 3:02:43 PM

Continued from page 15 across them all,” he concludes.

Canwest recently unveiled a redesigned and revamped canada.com portal site, building on its redesigned newspaper sites and bringing a more familiar look and feel to both audiences and advertisers. The canada.com network posted a 39 per cent growth overall in unique visitors, according to December year over year stats. Its new-look newspaper sites achieved more than 54 per cent growth, comScore results indicate.

So Strolz talked about the online service that Canwest and its partner ShopLocal are offering. It’s a unique multi-platform approach that can turns those familiar print shopping flyers, filled with retail coupons, into digitally accessible online ads in just minutes.

He describes how the new ShopLocal site brings together content from newspaper circulars and display ads, and turns them into SmartCirculars, or online

flyers. The ad content is clickable and searchable, and it can be found on sites like Facebook, MySpace, Lycos and more, owing to Canwest’s partnership with Oodle, a U.S.-based aggregator of online ads and classified listings.

Another new online ad venture will see Canwest represent advertising inventory for both myTELUS.com and GlobeTrotter.net. myTELUS.com is TELUS’ English portal, with approximately 2 million Canadian web users and TELUS subscribers surfing on the site every month. myTelus.com reaches an average of 10 per cent of Internet users in Canada.

“We are very excited to work with TELUS in this capacity,” said Graham Moysey, senior vice-president and general manager Canwest Publishing, Digital Media. “The myTELUS and GlobeTrotter portals serve approximately four million unique visitors across Canada and this audience is a great

complement to our existing portfolio of 80 destination sites.”

Such corporate partnerships reflect the internal growth at the new Canwest Digital operations, building on its revamped configuration announced last fall. Strolz himself joined the team last November, coming from the online Sympatico/MSN portal.

“There’s been a lot of talent attracted to Canwest,” he itemizes, including the hire of Graham Mosley, Senior Vice President and General Manager, Digital Media.

With some ten years’ executive experience in both vertical and mass digital media, Moysey also serves on the national board of directors of the Interactive Advertising Bureau of Canada. Also joining the Digital Media team, Paul Burns as Vice President and General Manager, Mobile, and Jeff Coleman, Director,

sports scores with the iPhone Sports are one of the more popular categories for mobile media applications.

Dozens of dedicated software titles for cell phones, smart phones and portable devices are available for download.

One of the most popular is the Score Mobile iPhone Edition (now in V 2.0) from Score Media and The Score sports specialty service, first released last summer.

Describing the positive reaction to its mobile offerings, during what must be called the world’s shortest AGM (held in the station’s new HD headquarters in Toronto and punctuated by tongue-incheek humour and other activities), The Score noted some great scores — financial and operation, that is.

CEO John Levy highlighted that some 300,000 downloads of the app had been recorded, and that some 5 million page views had been tallied since its release less than a year earlier.

Interestingly, some 65 per cent of those downloads took place in the U. S., and Score Media has tapped a New York mobile ad firm, Jump Tap, to sell inventory on the app. Volkswagen Canada was 20 www.mediacastermagazine.com

**MDC_March 09 2_24.indd 20

among the official Canadian launch partners; Budweiser and Sony Pictures have also made specific mobile buys, and multi-platform campaigns are part of the revenue strategy as well.

“When we look at our ability to get into the States, iPhone is really leading the way for us now,” Levy confirmed, adding that mobile is expected to eventually generate the same kind of revenues as the Web, which grew in just one year from about a quarter of a million to upwards of $7 million in revenue generation.

“ScoreMobile iPhone Edition gives fans what they want — constant access to major league scores, player stats, standings and league headlines in a user-friendly format,” describes Dale Fallon, Score Media’s Director of Mobile. “It’s a natural fit for people who want to stay up-to-date with sports while they’re on the move. We started with a Web app, and that drew a lot of attention.

The iPhone wasn’t even out yet (in Canada).

But that’s where our audience started to build. Then, when the iTunes app store

opened, we were ready to go, and we went out the door as soon as possible.”

Score Media is supporting the application across all of its media platforms with promotions created in-house, described Levy, adding that local Toronto company Unspace Interactive helped supported development of The Score’s mobile and sports ticker platforms.

ScoreMobile has several device and platform specific offerings including ScoreMobile iPhone Edition, ScoreMobile 2.0, ScoreMobile Video, Score Predictor and Score txtTV.

March 2009

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Local Digital Products.

“All these new roles reinforce the commitment here that delivering compelling content to people where, when and how they want it is the way forward,” says Strolz. “That’s including in-print, online and on-the-go.”

Strolz says the ability to identify and target just where, when and how consumers get their media is one of the things that has really changed in digital, and for the better.

“The granularity of measurement detail is for the good, it helps us all understand how the user is engaging with our content and message,” he explains.

“Tools like IP tracking and cookies are easy to use, and it brings huge richness into the media mix. We can see how long the user is exposed to a message, how they respond to the ‘ask’ in digital creative, the list goes on and on in terms of what the granularity can bring.”

Digital tracking and user details can help answer the question ‘Is click through a meaningful measure?’ (“It might be,” Strolz answers. “It depends what you are intending to do with your investment...”) ‘Is colocation of the creative message along side highly relevant content of value?’ (“It can put your audience and your product together in the sweet spot!”)

“Customers, partners and agencies show a huge appetite to understand more and more about the detail we can provide,” Strolz says. “And which of those details helps the client pint their compass in the right direction.”

The Sky’s No Limit for Media Delivery

So which way is the compass pointing? Does anyone have a magical liquid crystal screen that shows where media is headed?

Content distributors see enabling

technologies like wireless real-time video services, wireline broadband and IPTV as expanding their opportunities for increased revenues across multiple platforms. Platform operators and equipment vendors are also supportive of the move to multi-screen real-time video, seeing both a way to differentiate their products and provide new services that can increase ARPU. Wireless operators and content distributors also see new technologies impact their businesses. The newest 4G, WiMax, LTE or Docsis platforms will enable the next level of high definition video on demand services, along with mobile

media that rivals Blu-ray DVD in quality.

And there’s a growing constituency that’s watching the emergence of viable video production and multi-screen distribution capabilities for 3-D content.

Recall the first few online videos you watched: not much larger than a postage stamp, slow and herky-jerky. That was probably ‘94 or ‘95. It took a decade or so for the online media phenomenon to even coming close to establishing itself.

How long until mobile reaches the same heights?

The answer, based on demand and capability, has to be much faster. m

broadcasters delve into 3-d game development Broadcasters and specialty channels already have a good reason for a strong online presence. Now, some of the more visionary companies are making a play in portable gaming.

Astral Media already owns some 20 specialty channels, and it operates nearly 100 websites (in addition to being one of the country’s largest radio broadcasters). Now, it is leading the way in game development for popular portable digital devices like the Apple iPhone.

“We are excited to extend Family Channel’s engagement with young Canadians to include the development of innovative gaming on this highly interactive platform,” said Barbara Bailie, Director, Interactive, Astral Television Networks. “Gaming remains the most popular activity on our website, Family.ca, so we’re keen to extend our reach into gaming by having our Ontario-based Interactive team work closely with cutting-edge developers to deliver Family’s experience to kids on the move.”

With seed money from the Ontario government, and help from developers at Spatial View and the Sheridan College Visualization Design Institute, a new glasses-free 3D mini-game is in development for Family.ca, to be called Carnival Craze.

Family provided sponsorship, creative and brand direction based on their familiarity with online game-play content for audiences aged eight to 14.

The game is played and viewed in natural 3D using a 3DeeShell from Canadian manufacturer Spatial View.

More than a protective iPhone case, the 3DeeShell has a special polarized 3D viewing lens, letting users see specially-encoded media with an apparent third visual dimension. Spatial View is also making the special autostereoscopic screen overlay for desktop PCs and home TVs. Spatial View is also working with high-tech manufacturer Texas Instruments on 3-D mobile solutions. Spatial View 3D prototype will enable TI’s OMAP development platform to playback and vivid glasses-free 3D images and videos. The high-performance, low-power consumption OMAP processors are said to permit manufacturers like SpatilView and others to bring to market new, multimedia-rich handheld devices.

Spatial View also provided advisory and collaborative support to the project. The Sheridan Institute helped design the game, working with Spatial View’s development team.

March 2009

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3/11/09 3:02:48 PM

Outright Sale

Employee Buyout

Recapitalization Family Succession Growth Capital

Private Equity Firms Looking to Invest in Canadian Interactive and New Media Companies

by Lee Rickwood with Mark Borkowski

P

rivate Equity Groups have not been hard-hit by the credit crunch or the stock market decline.

At times like these, that may sound unbelievable. The economic rules are changing daily. Credit has seized up, observers say. Debt financing is nonexistent, advertisers are missing in action.

But it’s true. What’s more, many private equity firms are looking to Canada, and to its creative community of interactive and new media companies “Private Equity Groups (PEGs) have capital to invest and are looking for business acquisitions,” says Mark Borkowski, president Mercantile Mergers & Acquisitions Corporation. Torontobased Mercantile specializes in the sale of mid market companies sold to strategic buyers or private equity firms.

“In fact, one of the major market shifts for the acquisition of privately held companies has been the growth in the number of PEGs over the last decade.

These organizations number in the thousands - in both the United States and Canada. Despite the downturn in the 22 www.mediacastermagazine.com

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Canadian economy, the buyout market for mid market companies — and a high proportion of interactive media businesses — is hot!”

Borkowski has been in the mergers and acquisitions business for more than two decades, as principal of his own firm.

He also pays particular attention to the interactive media industry here, attending events and participating in community activities.

His company represents many large European and US companies in the interactive media markets, and his clients are actively seeking acquisitions in Canada.

They are not alone.

Wynnchurch Capital for example, has just opened an office on Toronto. The company, based in Chicago, currently manages a number of private equity funds with over $500 million in capital.

With a declared interest in new media, Wynnchurch’s strategy is to partner with middle market companies in the United States and Canada that possess the potential for substantial growth and profit improvement.

PE companies like these are among some 2,500 such firms on record, and they are now key players in many business acquisitions, as Borkowski explains. They generally manage money for insurance funds, pension funds, charitable trusts and sophisticated investment groups, and they seek to acquire ongoing, profitable businesses that demonstrate growth potential.

There are still questions to be answered, of course, and efforts to bring the PE and new media communities together must provide some answers. Borkowski hopes that a greater understanding between the two camps, and a dialog that addresses needs on both sides, will develop here.

Interactive companies can help the PE investor understand in greater detail where advertising revenues are headed, and how that direction may favour or hinder certain media segments.

So, too, companies that have evolved from ‘traditional’ to ‘new’ media can also help explain how transitioning their businesses to digital platforms has affected Continues on page 16

March 2009

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