Wednesday, October 07, 2009

Converging on zero

David Olive's take on the fall of the House of Asper is, I think, spot-on: an obsessive quest for convergence (which turned out to be disastrous everywhere it was tried, as intelligent observers realized years ago) and a reckless collection of vanity projects doomed CanWest. The only thing I think Olive underplays is the purchase of Alliance-Atlantis. While there's no one thing that you can point to and say, "that was what killed CanWest", the purchase of AA is the single biggest source of debt on the company's books.

This is an all-too-common sentiment among CanWest's supporters, and it's kind of funny:
"There is no doubt that in this environment, CanWest had too much debt," Asper said. A seismic understatement. "However, you should not confuse operational excellence with our balance-sheet issues."
As if there's a bright line between the operational side of the company and the balance sheet. The debt was piled on to the company expecting "operational excellence" -- massive profits extracted via efficiency and reduced consumer choice. You can't say the company has too much debt without saying what "too much" means, in this case: the company isn't making enough money. In turn, the company isn't making enough money because... not enough people are reading the newspapers and watching the TV channels.

It's not fair to say that CanWest is doing much worse than any other network -- indeed, BBM data suggests that CanWest is doing pretty well in terms of nightly viewership, thanks to its heavy spending on US programming -- its just that competitors like CTV or, yes, CBC either didn't get in to the convergence game or got out of it much, much earlier before doubling down on the stupid.

And you all caught the bit about CBC and the National Post sharing content, right? If the Public Broadcaster had reached a similar deal with either the Globe or Star, wouldn't we expect the Post to describe the agreement as... welfare? A government handout to a business that's failing in the market?

Okay, so a lot of this is schadenfreude on my part. But I lost all respect for the NatPo when they reprinted Jonah Goldberg's "Bomb Canada" screed in 2002, which was tasteless and should have been beyond the pale even for the Post. Goldberg, you'll recall, was saying that the US should slap Canada around to man us up -- nevermind that Canadian soldiers were already fighting with the US in Afghanistan, and we had already suffered casualties... at the hands of the US Air Force.

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