Is Shaw’s Proposed All-News Channel Good for Investors?

Technology is transforming the media industry, especially in content distribution.

The Motley Fool

As part of the Canadian Radio-Television and Telecommunications Commission’s “Let’s Talk TV” consultation process, Calgary-based Shaw Communications (TSX: SJR.B)(NYSE: SJR) has submitted a proposal to create a national news channel called Global News 1.

So what do investors need to know?

These are not uncharted waters

Over the past few years, Shaw has acquired various media assets. In 2013, it launched BC1, a British Columbian all-news station focused on attracting more regional advertising. Shaw could leverage the best practices from this station and apply them on a national scale.

The under-35 market is tough

There has been a tremendous shift in viewing habits from traditional television to mobile platforms, especially for those under 35. The British Broadcasting Corporation tried to cater to the under-35 market by creating “BBC Three” using UK content and talent. Earlier this year, it was axed as part of cost-cutting plans and will be moved entirely online. Investors should applaud Shaw for not catering only to this segment.

It’s about engagement

Technology continues to transform the media industry, especially in content distribution and viewership. Over-the-top content providers such as Netflix continue to grow while traditional networks try to engage their customers through a “TV everywhere” strategy that allows customers to stream TV anytime and anywhere as long they have an account with their provider. While people may prefer to stream their television shows, they also have a tendency to want the latest news. A national news channel may provide Shaw with a more attractive value proposition.

Currently, BCE (TSX: BCE)(NYSE: BCE) operates CP24, a Toronto-focused news channel with some national and international coverage. Rogers (TSX: RCI.B)(NYSE: RCI) failed to compete with its own CityNews channel because it did not differentiate enough. The success of Global News 1 will be determined by a combination of applying best practices from its regional affiliate, engaging customers through a compelling viewing experience, and differentiating itself from similar competitors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Patrick Li has no position in any stocks mentioned. David Gardner owns shares of Netflix. The Motley Fool owns shares of Netflix.

More on Investing

Hour glass and calendar concept for time slipping away for important appointment date, schedule and deadline
Dividend Stocks

This 8% Dividend Stock Pays Cash Every Month

Earn monthly cash of $154 with this 8% dividend stock.

Read more »

A miner down a mine shaft
Metals and Mining Stocks

Should Investors Buy the Correction in Lundin Mining Stock?

Lundin (TSX:LUN) stock has fallen by 10% in the last few weeks, but so has the price of copper. Coincidence?…

Read more »

Metals and Mining Stocks

Best Stocks to Buy in May 2024: TSX Materials Sector

A TSX materials sector ETF could help investors gain cheap diversified exposure to the hot sector's stocks – so will…

Read more »

man is enthralled with a movie in a theater

Should You Buy Cineplex While it’s Below $9?

With analysts expecting a significant recovery in the second half of 2024, is this the last chance to buy Cineplex…

Read more »

oil tank at night
Dividend Stocks

Think Oil Is Going Higher? 3 Dividend Stocks to Buy Now

Looking for steady dividend growth? These three Canadian oil stocks could provide substantial dividend income in the coming years.

Read more »

Profit dial turned up to maximum
Dividend Stocks

This 7% Dividend Stock on the TSX is Worth Watching

With this superb TSX stock now trading at the bottom of its 52-week range, it's certainly a dividend stock you'll…

Read more »

Dots over the earth connecting the world
Dividend Stocks

1 Magnificent Dividend Stock Down 23% to Buy Right Now Near a Once-in-a-Decade Valuation

Patient investors could be happy with this dividend stock a few years down the road.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 TSX Dividend Stocks to Buy While They Still Offer Great Yields

These top dividend-growth stocks now offer 7% dividend yields.

Read more »