Draft for Discussion

Data Errors and Deficiencies in the Global Media and Internet Concentration Project (GMICP)

Barry Kiefl, President, CMRI

2022

GMICP’s reports contain revenue, subscriber and other data about the Canadian mass media such as TV, radio,
newspapers, magazines, etc., plus distributors of content such as cable, internet and mobile phone companies, as
well as internet services in Canada such as Google, Facebook, Apple TV, Netflix, etc. The GMICP reports are riddled
with serious data errors and deficiencies relating to basically all the media and communication services covered.
The errors discussed in this document are but a fraction of the whole. GMICP urges policy makers and analysts to
use its data in proceedings before the CRTC and the Competition Bureau and GMICP reports go so far as to offer
policy solutions. But in our view the whole project requires serious review by experts in each area. Major
conclusions reached in the GMICP reports are undermined by the errors, e.gs., that the price of cable TV and
internet access has increased substantially in recent years and Canada lags in mobile wireless adoption. GMICP
reports can be found here: Canadian Media Concentration Research Project (cmcrp.org). GMICP received a $2.5
million grant from SSHRC in 2021.

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 Cable TV

GMICP says that “The price of subscriptions for cable TV and Internet access
have risen well above increases in the consumer price index, as Figure 15
below illustrates.” The dark blue line in the graph is labelled “BDUs and Pay
and Specialty TV.” But the underlying data are not for “BDUs and Pay and
Specialty TV.” According to Statscan, the data are for all audio and video
subscription services. Statscan confirmed that the data in the graph are not
just for “BDUs* and Pay and Specialty TV,” but also include all the new audio
and streaming services, such as Netflix and Spotify that have entered the
market the past decade. If one goes to the original Statscan table, the
correct label is used, i.e., Audio and Video Subscription Services.

(Email from Statscan Dec. 20, 2021: “We can confirm that “Video and audio
subscription services“ includes cable television as well as most video and
audio subscription streaming services.”)

There are in fact no data in the report on the price of cable but this
incorrectly labelled graph is referred to approximately half a dozen times to
make statements about cable price hikes.

*BDUs is industry jargon for cable TV

Internet Access

GMICP says the CPI for Internet access is “well above” the overall CPI but the
graph shows the Internet access CPI is lower than the overall CPI. Statscan
changed the methodology for the Internet Access index in 2015, which does
not seem to be referred to by GMCIP (Changes to the Internet Access
Services Index of the Consumer Price Index (CPI) (statcan.gc.ca).
GMICP has made the same labelling error in its reports for several years,
which has led to the misinformation about cable TV and Internet access..

2
 Cable TV

This same mislabelled graph appears in volume 2 of the GMICP report but is Figure 14 in volume 2. GMICP says in volume 2 of this year’s report, “Lastly, one
must note that the cable operators and telephone companies have been working hard to offset whatever losses they have experienced with rate hikes on both
BDU and broadband Internet services…In other words, companies hiked prices for both cable television and broadband Internet services in a bid to offset the
effects of cord-cutting. Figure 14 below illustrates this point.” Later in volume 2 there is a reference to the “soaring prices” of cable TV, yet there are no data
in the report on the price of cable. Statscan confirmed that GMICP data are not just for “BDUs and Pay and Specialty TV” but also include all the new audio
and streaming services, such as Netflix and Spotify that have entered the market since about 2010. GMICP seems here to conflate CPI with COLA (the cost of
living) and fails to recognize that the bundle of video/audio services has changed dramatically in recent years. The spreadsheet below contains data directly
from GMICP volume 2 versus the original Statscan data. The numbers match perfectly but the data labels do not. The incorrectly labelled data are used to
claim throughout the reports that cable TV has increased its prices. A major finding is debunked.

3
 Cable TV

The CRTC official data including smaller BDUs, shown below, says that in total there were ~9.9 million BDU subscribers in 2021. GMICP was
aware of these CRTC data; it used the revenue data but not the subscriber numbers (see Figure 14). A calculation of annual
revenue/subscriber shows that there has been little change in that metric since 2014, evidence that the price of cable TV has not increased in
recent years, contrary to GMICP’s repeated claims. Revenue/subscriber is not the same as pricing data but it is indicative. A major conclusion
of the GMICP reports is discredited by published CRTC data.

4
 Cable TV: References to Cable Price Hikes

“At the same time that people have been dropping their cable service to access online video
services directly, the price of Internet access has also jumped. The price of subscriptions for
cable TV and Internet access have risen well above increases in the consumer price index, as
Figure 15 below illustrates. The difference now versus time past, however, is that even the
steep increase in the price of cable service depicted in Figure 14 no longer offsets the
sizeable lost revenue that has taken place in the past decade as people cut the cord.” P. 18,
Vol. 1

“Lastly, one must note that the cable operators and telephone companies have been
working hard to offset whatever losses they have experienced with rate hikes on both BDU
and broadband Internet services.” P.51, Vol. 2

“We showed this in the last report, but it is worth repeating here that prices for both
communications services—which many people see as essential to their lives—are rising
faster than the consumer price index.” P.51, Vol. 2

“In other words, companies hiked prices for both cable television and broadband Internet
services in a bid to offset the effects of cord-cutting. Figure 14 below illustrates this point.
“P.53, Vol. 2

“Given the entrenched duopoly in traditional cable services, and soaring prices year-after-
year, there is also no doubt that consumers can benefit from the greater choices they now
have.” P.54, Vol. 2

“The streaming services could also, however, end up going through the new streaming
platforms now being set up by the BDUs,196 similar to the approach taken by Rogers here in
Canada and by Comcast in the US, for example, when placing Netflix on their set-top boxes
and services listing. At the same time, the traditional cable operators are also raising prices,
as we saw earlier in this report and in the first one in this year’s series, for Internet access
and cable television services as sources of revenue to counter the losses on the cable
distribution and media content side of their operations.” P.95, Vol. 2

5
Mobile Wireless

GMICP says, as it has in reports going back many years, that “…mobile broadband (i.e. mobile internet) adoption and usage in Canada is extremely low by international comparative
standards.” (see Figure 8). But the OECD, the source for these data, says “All statistical country comparisons should be undertaken with caution….” The OECD also says “All data are supplied
by member governments unless otherwise noted.” The U.S. raw data, not reported by GMICP but shown below (right), claimed over 550 million subscriptions in 2021, far more than the
population of the States. Each country was left to define what counted as a subscription. Had Canada used the same counting methodology, e.g., including smart watches, smart meters,
etc., subscriptions would be much higher. (Broadband Methodology - OECD) GMICP only includes the per/100 habitants data in its report, not the raw counts.

It is unclear why GMICP ignores the OECD caution about international comparisons.

Statistics Canada says adoption of mobile “smartphones” is much higher than GMICP says, estimating that ~85% of Canadians aged 15+ had a smartphone in 2020, which is described as “…a
mobile phone that performs many of the functions of a computer, typically having a touchscreen interface, internet access, and an operating system capable of running downloaded
applications.” ( Telecommunications: Connecting Canadians (statcan.gc.ca)

Figure 7 in the GMICP report says Canada ranks 6th in the world out of 36 countries measured by revenues of mobile services. This would seem to counter the GMICP claim that Canada lags
most countries in mobile adoption. Another major claim in the reports is debunked for lack of evidence.

6
 Mobile Wireless (con’t)

GMICP says “Mobile wireless represents the largest sector of the network media economy by far, with revenue having grown
more than five-fold from $5.4 billion in 2000 to an estimated $29.3 billion last year.” The revenue numbers for wireless appear
correct but the graph in Figure 6 shows wireline has grown, not wireless. The author mixed up the labels for the two.

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 Mobile Wireless (con’t)

GMICP says “Mobile wireless represents the largest sector of the network media economy by far, with revenue having grown more
than five-fold from $5.4 billion in 2000 to an estimated $29.3 billion last year.” But the graph in Figure 6 shows wireline has grown,
not wireless. The author mixed up the two. This labelling error is shown in the spreadsheet for Figure 6 below.

8
 Cell Phone Costs/Household

GMICP acknowledges in this year’s report that “…in some cases, prices have fallen (as is the case for mobile wireless services and the price of mobile data)….” Falling
prices for mobile is further recognized in the report, “prices for mobile wireless services in Canada have fallen steadily since 2016 when measured against the
consumer price index.…”

Yet the report contains a spreadsheet showing the opposite, a significant increase in the cost of cellphones to ~$1,500/household in 2020.

Further examination of the spreadsheet reveals this is not hard data but an extrapolation by GMICP based on 3-year old data (because Statscan didn’t survey
household spending in 2018 or 2020).

Ken Goldstein has pointed out that GMICP has not taken into account that in recent years more family members in Canadian households have been added to cell
phone plans, which results in household expenditures increasing, while the cost of cell phone plans has reportedly declined.

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 Facebook Monthly Users

GMICP says in a speadsheet that Facebook has over 20 billion Monthly Average Users (MAUs) or 3 times the world’s population; and says
Twitter has over 8 billion Average Monthly Users. Annual reports of the social media companies state that MAUs is <3 billion and 3-400
million, respectively.

10
 Facebook Subscribers

GMICP mentions Facebook 59 times in volume 1 of the report and states “For its part, Facebook had 22.8 million users in Canada in 2021 and
revenue of $4 billion.”

A spreadsheet note in the report says the source for the number of Facebook subscribers was Internet World Stats but their web site shows
Facebook subscribers at ~30 million in 2022 (North America Internet Usage Stats, Facebook and 2022 Population Statistics
(internetworldstats.com).

Statista, a recognized source for this data, says there were 27 million Canadian Facebook users in 2021.

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 Online Video (Crave TV)
GMICP says about online video services that
“Bell’s streaming service Crave is the second
largest SVOD service in Canada. Last year it had
2.9 million subscribers at year end and
estimated revenue of $513 million.” GMICP has
misread Bell’s annual report, its source for the
subscriber data. The subscriber number in Bell’s
annual report is not just for streaming
subscribers but also includes IPTV and DTH subs.
(Confirmed by email from Bell executive office,
November 21, 2022).
CRTC financial reports say 2021 revenue of
Crave’s 1.7 million IPTV/DTH* subs was $179
million, although this does not appear to include
revenue for Starz. It means that GMICP’s
guesstimate of Crave’s streaming revenue is off
by hundreds of millions of dollars.
*GMICP uses the U.S. nomenclature for DTH,
which is DBS.

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 Online Video (con’t)

GMICP says that “CBC Gem/ICI Tou TV (had)…335,000 subscribers on average for the year” and gives the source as CBC’s 2021
annual report. This number is not in the annual report and has never been reported by CBC anywhere. In its annual report CBC
will only say demurely “Subscribers to our digital platforms are increasing.” The corresponding revenue number, $20.1 million, is
in the annual report and demonstrates how little subscriber revenue is being generated by CBC digital services.

13
 Online Video (con’t)

GMICP says that DAZN, a sports streaming service had “estimated revenue (of)…$115.5 million” but the GMICP
spreadsheet says it was $150 million.

Likewise GMICP says that Corus had “estimated revenue of $64.3 million and 675,000 subscribers at year end for its STACK
TV service” but the GMICP spreadsheet says it had 487,000 subscribers.

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 Online Video (con’t)

GMICP says “Google’s YouTube Premium was the third largest online video service in Canada last year, with estimated
revenue of $290.9 million.” Yet the spreadsheet in the report says revenue for this service was ~4 times this amount, $1.139
billion. The data on online video generally is highly suspect and unreliable (see below).

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 Online Video (Netflix, Apple TV, etc. Revenues in Canada)

GMICP says in a spreadsheet note: “There are several ways to establish Netflix's (2021) revenues in Canada…

1. Based on revenue, subtracting US$ from the UCAN revenue leaves $872,000,000 for Canada. Multiply that by the average Canada-US exchange rate (Bank of
Canada) of 1.2535 and the total is $1,093.2 million

2. Based on subscribers, there were y-o-y average of 7,296.77 (i.e. 10.92% of UCAN subscribers) subscribers in Canada at the end of 2021. Multiply this by an ARPU of
$14.56 (Netflix AR 2021, p. 27), as reported in the company's annual report, leads to $1,274.89 million.”

But the numbers in the spreadsheet for 2021 do not match either of these estimates and the SEC reports do not appear to contain the data required to make the
calculations: NETFLIX INC (Form: 10-K, Received: 01/27/2022 17:04:52) (q4cdn.com)

16
 Online Video (Netflix, Apple TV,
etc. Revenues in Canada)

GMICP says in a spreadsheet

note: “In 2021, total Canadian
revenue for Apple… is assumed to
account for 9% of these revenues,
i.e. USD $2,585.98 millions….”

GMICP then goes through a series

of contortions to guesstimate the
revenue of Apple TV, provides a
source* claiming that Apple TV
represents .034% of the Apple
services revenue, adjusts for
currency rates, and then says the
2021 revenue is $120 million. The
estimate is based on a number of
assumptions that cannot be
verified.

(Likewise revenue estimates for

YouTube Premium, Disney and
others are based on assumptions
of the relative size of Canadian vs.
U.S. GDP and not actual data. As
discussed the Bell/Crave estimate
is based on incorrect data on the
number of Crave subscribers and
the Rogers estimate doesn’t seem
to be based on any information.
GMICP doesn’t explain what
Roger’s streaming service is.)

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*the source does not seem to
contain this data
 Recorded Music

GMICP says ““Recorded music” has largely vanished.” The report’s spreadsheets say recorded music revenue fell to $21
million in 2019 and guesstimated a further decline to $11 million in 2021. But Statistics Canada says in 2011 it ceased
publication of the tables cited by GMICP.

18
Recorded Music (con’t)

Ironically, another Statscan source referenced in the GMICP report shows that recorded music actually accounted for not $21 million but
~$90 million in 2019, including $32 million in sales of vinyl records and other rare sources. Another GMICP conclusion proven incorrect.
(Figure 31 forgets to include a label for recorded music.)

19
 Magazine Revenues

GMICP says “Similar to the press, magazine revenue also peaked in 2008 at $2.4 billion. Fast forward to 2020, and revenue has similarly
plunged to a third that level, i.e. $832.2 million (see the “Magazine” entry in the “Total Revenue (Millions)” sheet in the GMIC Project—
Canada open data set.” But the number shown in the spreadsheets is over $1 billion in 2020 and 2021. Another spreadsheet (for Figure 18)
says magazine ad revenue in 2021 was $109.7 million, coincidentally very much like the number of $1.097 billion.

20
 Newspaper/Magazine Revenue Sources

GMICP says “…by 2021, four media that have historically relied primarily on advertising have seen their collective revenues drop by $5.7 billion since
2008, to half of what it had been at that time: radio, broadcast television, newspapers and magazines.” The report says elsewhere that “While there
is a crisis of some media, it is limited to four media sectors that have historically relied almost entirely on advertising revenue: broadcasting television,
radio, newspapers and magazines.”

But data in GMICP’s Figure 33 and Figure 18 show that in 2021 newspapers and magazines do not rely “primarily” or “almost entirely” on ad
revenue. Yet another GMICP conclusion shown to be wrong. Circulation revenue for newspapers and magazines, according to GMICP’s spreadsheets,
play a very large role today. This is especially the case for magazines. Should this have been a major finding in the report?

21
 Newspaper Revenue Sources (con’t)

Figure 33 in the GMICP report doesn’t do justice to the finding that newspaper circulation revenue in 2020-21 is almost
equal to ad revenue.

22
 Newspaper Paywalls

GMICP says “Paywalls were erected so fast and extensively between 2011 and 2015 in Canada that they were more prominent in this country than in either
the US or the UK.” But the source for this data was a 9 year old article that predated most of the data. (Note that source in the graph mistakenly refers to
the wrong spreadsheet.) Shown below: Figure 34: Percentage of Newspaper Circulation Behind a Paywall, 2011-2018

23
 Radio Revenues

GMICP says in the spreadsheet for Figure 18 that Radio ad revenue in 2021 was $1.069 billion, giving as the source
a CRTC report.

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 Radio Revenues (con’t)

GMICP says in the spreadsheet for Figure 18 that Radio ad revenue in 2021 was $1.069 billion, giving as the source
a CRTC report.

But that CRTC report shows that about $50 million of the total was not ad revenue.

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 Online News

GMICP’s spreadsheet for Online News Media, based on Comscore data, says that CBC has a 7.7% market share. Share is calculated based on the
sum of every news outlet’s monthly unique visitors or reach. Visitors or reach is not defined by GMICP.

CBC has confirmed that the Comscore monthly reach is not just for news but also all its entertainment sites, so the data are wrongly depicted.

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 Online News (con’t)

GMICP’s spreadsheet for Online News Media, based on Comscore data, says that CBC has a 7.7% market share. Share is calculated based on the
sum of every news outlet’s monthly unique visitors or reach. Visitors or reach is not defined by GMICP.

This is not a correct way to calculate share. The sum used as a denominator equals over 300 million Canadians, a statistic that has no meaning,
as shown in GMICP spreadsheet below. Besides, CBC has confirmed that the Comscore monthly reach is not just for news but also all its
entertainment sites.

27
 Online News (con’t)

GMICP depicts the incorrect market share data in Figure

28 of the 2nd volume of the GMICP report.

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 Online News (con’t)

Comscore provided us with the speadsheet shown below. It depicts the average monthly Total Unique Visitors/Viewers for all News and Information sites
in 2021. The number is approximately 31 million, not over 300 million. Also shown is the proper way to calculate share using minutes spent on News and
Information compared to all minutes spent on the internet in 2021. News and Information represented only 4.9% of time using the internet.

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 Advertising Revenues

GMICP says “Figure 18 reveals this axiom by illuminating, first, the post-2008 drop in advertising spending…” But the graph and the
spreadsheets show no post 2008 decline in ad revenues. The spreadsheets confirm this. GMICP failed to read its own data properly.

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 Internet Advertising

GMICP says “Revenue for Internet advertising jumped from $9.6 billion in 2020 to an estimated $12.6 billion in 2021.” It is unclear why
the project refers to the IAB, the gold standard, as a source for this revenue number but then doesn’t use IAB after 2017.

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 Internet Advertising (con’t)

GMICP repeats that the source for internet ad revenues was IAB, the trusted source in Canada and the U.S. for this data, but for
unexplained reasons GMICP stopped using IAB in 2017.

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 Internet Advertising (con’t)

IAB, the gold standard, put the 2021 advertising number at $12.3 billion, a quarter of a billion less than GMICP’s guesstimate, and shows
that it is derived from several categories, including social media, search, internet browsing and other ways of using the internet. GMICP
reports group all of these ways of using the internet as “advertising.”

33
 Internet Advertising (con’t)

GMICP, as shown in Figure 5 from its report, lumps

together internet ad revenue from all internet
services. Then GMICP compares internet ad
revenue to the total revenue of other media. Total
revenue includes advertising, government grants,
subscriptions, audio and video streaming, etc. of
TV, radio, wireless and wireline phone services,
newspapers, magazines, etc. This is a classic apples
to oranges comparison.

GMICP’s Figure 18 correctly compares ad revenue

of various media, including internet advertising.

34
 Internet Advertising (con’t)

GMICP in Figure 23 then reverts to the

apples vs. oranges comparison. The
GMICP says “Figure 23 below depicts
the long-term growth of the content
media sectors over the period covered
by this project.” But this is a
comparison of internet ad revenues vs.
all sources of revenue for TV, radio,
newspapers, etc.

Figure 28 later in the report has the

same type of erroneous comparison,
that is, advertising vs. digital media
revenues, which are mostly
subscription revenues.

35
 Google, Apple App Revenues in Canada

GMICP says in one spreadsheet that 2021 revenue from Apple and Google’s app stores amounted to ~$2.5 billion. But in another
spreadsheet the 2021 revenue is shown as ~$2.3 billion. The market share for the two digital companies in the first spreadsheet totals 107%,
without explanation.

Likewise, in another spreadsheet the 2021 revenue of ISPs is shown as ~$12.9 billion but is contradicted in a second spreadsheet that shows
2021 revenue at ~$14.2 billion.
There are other examples of GMICP spreadsheets contradicting each other without explanation.

36
 U.S. vs. Canada TV

GMICP says U.S. TV broadcasting “is healthier from a commercial viability point of view in the US compared to Canada. Thus, for
example, revenue for broadcast television rose from $24.3 billion to $33.6 billion from 2013 to 2019 in the US.”

GMICP uses the FCC as its source on the U.S. No source is given to support the contention about Canadian TV. It is the case that U.S.
TV broadcasters have increased revenue in this period but most was because of “retransmission fees,” something the CRTC
considered but rejected in favour of other benefits, such as allowing Canadian TV stations to be made available in distant markets.

37
 U.S. vs. Canada TV

To bolster the argument that the U.S. broadcast TV market is faring better
than in Canada, GMICP says U.S. “Broadcast TV stations’ “total day share of
viewing” also increased from 30% in the 2012-2013 to 33% in the 2015-2016
season….”

These Nielsen data, from the FCC, are six years old.

Current Nielsen data show that U.S. TV broadcasters have shrunk to only a
22% total day share and that streaming now captures 35% of viewing in the
States. Viewing data for this year or this week are readily available.

GMICP betrays a limited understanding of the U.S. and Canadian broadcasting

systems.

38
 U.S. vs. Canada TV (con’t)

GMICP says “…broadcasters in the US are more eager to exploit the opportunities of putting their programming online to allow
audiences to watch programs from anywhere using any device and to engage in “catch-up” viewing without worrying that this
could undermine their parent company’s distribution operations. Consequently, putting programming online opens a new line
of advertising revenue that they have exploited to a far greater extent than Canadian broadcasters.” FCC is given as a source.

GMICP provides no evidence to support the contention that Canadian TV stations have been less active online than U.S.
stations. I believe CTV, Global, TVA and all Canadian TV stations would beg to differ.

39
 Summary
GMICP reports have such serious data issues that many of its conclusions and statements about Canadian
media can be rejected because the data are incorrect or incomplete and/or are lacking evidence. For example:
• Despite claiming approximately a half dozen times in its reports that cable TV prices have been
“soaring” the evidence does not support this. In fact, GMICP mislabelled a critical chart that appears
twice in this year’s reports and confused BDUs (cable TV) with Audio and Video services. The BDU error
has been repeated in reports going back years. It is also unproven that the price of internet access has
increased substantially.
• GMICP says repeatedly that the adoption of mobile wireless (including internet access) lags other
countries but the OECD data used to draw this conclusion are faulty and refuted by Statistic Canada
data. There is evidence that the cost of mobile wireless has been declining but GMICP presents
questionable data that contradicts this.
• The claim in the report that recorded music has “vanished” has been disproven using the same sources
as GMICP.
• The claim that newspapers and magazines depend almost entirely on advertising has been shown to be
wrong, using GMICP sources.
• The data generated by GMICP regarding online video in Canada has been shown to be wrong in several
cases (Crave, CBC Gem, YouTube Premium) and in the case of U.S. services like Netflix and Apple TV the
data is based on questionable or unsubstantiated assumptions.
• Market share data regarding online news has been shown to be erroneous, as has audience data on
Facebook and other social media.
• Comparisons of Canadian and U.S. TV have been shown to be faulty and unsubstantiated and betray a
limited understanding of the TV industry.
• GMICP data on advertising also shows a limited understanding of trends in advertising revenue and the
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difference between advertising revenue and other sources of media revenue.