Yesterday, I highlighted a long story by Ned Soseman of Broadcast Engineering in which he discussed the reasons why broadcast TV was bound to change. But into what? Soseman didn’t really say. So let me fill in the rest of that story – some wild speculation about what broadcast TV might look like 20 years from now.
What will happen to broadcast TV when a new generation of viewers becomes too used to always getting content on demand? For an answer, let’s look at the last time a major media source was forced to overhaul itself. Let’s look back at the late 1950s, when TV ended episodic programming on radio.
I wasn’t there, but every indication is that radio was really hot stuff when it was first commercially available. Newspapers, which were also still around, ran radio program listings the way the internet lists TV network listings now. Dramas, comedies, musical variety shows, even kids’ programming followed half- and quarter-hour schedules that look like most network TV schedules today.
Then came TV, and families discovered that it was more fun to watch Jack Benny and company than it was to listen to them. Episodic, block-formatted radio withered. Todd Storz, Gordon McLendon and others invented the Top 40 radio format, sometimes called contemporary hit radio. Listeners could tune in at any time and stay as long or as briefly as they wanted without feeling as though they missed something. Other stations picked up other genres, and by the end of the 1960s, radio had turned itself into the music and talk service it is today.
Maybe that’s the eventual destination for broadcast TV – as an as-needed, available-anytime service. A few digital sub-channels already indicate some possibilities such as music videos, weather forecasts, and 24-hour news. Viewers can check in for a few minutes without worrying about the program schedule. As a side-benefit, these formats are DVR resistant; few would want to watch a recorded block of something when the same stuff is on now, only fresher. The public stations might continue to serve up educational fare much as National Public Radio stations broadcast today. And there would be other formats that aren’t used yet, like a 24-hour sports talk channel with highlights and the occasional live event.
There you have it, my conclusion to Soseman’s fine article. Will broadcast TV really turn into something like 1970s radio? We’ll know more in about 20 years.
“Broadcasters haven’t reached a fork in the road; they’ve reached a tangled multi-spoke hub. In one direction is the well-traveled old-school way, over-the-air broadcasting. … But that idea seems to be withering under the intense heat of the Internet.”
That’s just one small part of a long report by Ned Soseman, writing in Broadcast Engineering. Soseman uses the occasion of the NAB Show to summarize the current state of the broadcast industry. “The one point nearly everyone seems to agree on is that NAB isn’t just for broadcasters,” he wrote. Video technology advances apply to everyone because anyone can be a broadcaster, if you count the internet.
From the customers’ perspective, there’s the stuff that’s available for free over the air, and there are the channels we actually watch, and there’s the huge cable/satellite bill that supports them. There’s Senator John McCain’s a la carte bill (going nowhere, by the way) and a cable spokesman’s claim that a la carte wouldn’t lower cable bills. Soseman summarizes the way it all looks today and then sums it up by saying, well, broadcasters need to try something different. It all reads like something I would have written, except that I would have tried for some crazy guess about the future. Anyway, I’m happy that Soseman did the work, and that it gives me an excuse to run one more NAB Show photo. Now go read it!
DirecTV announced this week that it was exploring the possibility of adding an over-the-air receiver to its set-top box. That part isn’t new; some DirecTV boxes had OTA capabilities over a decade ago, and my Dish Network receiver has an OTA adapter. What’s new is the reason DirecTV is re-exploring this addition: It wants to avoid retransmission fees.
As TVBlog writer David Goetzi wrote, this tactic would be unquestionably legal, although that doesn’t mean the broadcast networks wouldn’t question it. And as Goetzi put it, this should be a scarier prospect than the Aereo streaming service that’s got the networks filing lawsuits. If every cable and satellite company started using OTA to circumvent retransmission fees for a large percentage of its viewers, those networks might find themselves cut off from revenue they’re now depending on.
If this scenario ever looked imminent, what would the networks do? My guess is that they would pull back on their retransmission fee increases in exchange for promises to keep OTA out of the cable set-top box. Surely cable companies would prefer a known, lower retransmission payment rather than the upfront cost, uneven OTA experiences and service calls that would result from thousands of OTA antennas. Still, a new upper limit on retransmission money would wreck some of the business plans networks have been showing investors.
The deeper question is whether retransmission fees are appropriate. Broadcasters have a monopoly on the public airwaves they occupy. The ability to send ads, with a few intervening programs, over the air to every TV set used to be quite valuable all by itself. When cable companies made it easier to pick up OTA channels, broadcasters wanted a piece of that cable bill, and they persuaded Congress to see it their way. Now at each renewal, each station gets to wrestle with each cable system, often as part of the inevitable parent company’s desire to add more of their cable channels to the lineup at higher prices. That doesn’t sound like it’s in the public’s interest.
Just imagine if anyone was free to retransmit any OTA signal using the Canadian model of royalty payments. With today’s connected world, soon anyone would be able to watch any station. Royalties would flow to the content producers according to the popularity of their programming whether they’re in New York or Billings MT. The viewing public would benefit from an incredible cornucopia of choices. The only folks who would get less money would be those folks who negotiate ever-escalating retransmission agreements. Everybody else would be happy. Wouldn’t that be nice?
The Las Vegas Convention Center during the NAB Show. If you look closely, you can see the monorail passing by the North Hall.
For over a week, I’ve been wrestling with the question: What’s it like to visit the NAB Show? Let me try to make the answer manageable by breaking it into four parts: the education sessions, the general sessions, the exhibit floor, and the stuff behind closed doors.
The education sessions, often part of conferences, contain some interesting talks from experts, along with a fair number of sales pitches by folks trying to get you to hire them or start using their products. They’re not free, but some of the topics may be worth it. The best ones to visit are those that are a tight match for what you’re interested in, and they’re even better when they take place during the quieter couple of days before the keynote. Check out the NAB Show conference schedule and pricing to see what’s available.
Virtual sets and green-screened weather services were demonstrated for buyers from TV stations.
The general sessions are free, and unlike the general sessions of some conventions, they’re often worth attending. The keynote, just before the exhibit floor opens, often contains real news. This year, Chase Carey, the president of News Corporation, fired off a warning that Fox could leave over-the-air TV if Aereo continues to prevail in the courts. That’s pretty unlikely, but it sure has started a lot of people talking about it.
If you really want to know what the NAB Show is like, the centerpiece is the exhibit floor. It’s free, and it’s where to find a lot of interesting stuff.
The first thing to keep in mind is that the exhibit floor is populated by companies with something to sell to broadcasters. Or to aspiring filmmakers. Based on what I see here every year, I’m convinced that half the film school graduates in America find themselves working for a TV station news department, and most of them still have a great movie bouncing around in their heads.
A row of small booths at the NAB Show.
The booths tend to cluster by theme. Most of the radio gear was near the front of the Central Hall this year. Production music and stock video were just past the middle stairs in the South Lower Hall. The largest exhibitors stake out the same spot on the floor year after year.
And the booths come in all sizes. There are the behemoths, such as Sony or Harris, that can’t fit into a single photo. There are middle-sized booths, the majority of them, with plenty of room for displays and conferences. And there are the small-sized booths, barely the length of a long folding table with room for just a couple of chairs behind it. Those tiny booths sometimes contain just derivative, cheap products, but sometimes they’re the home of the most interesting new technologies.
Part of the row of satellite news gathering equipment on display along the green carpet between the South and Central Halls at the NAB Show.
If you’re a satellite fan, this is a much better place to visit than CES. There’s a whole aisle of satellite equipment outdoors, between the South and Central halls. It’s probably not as good as Satellite show held every March in Washington DC, but I haven’t been there yet, so I couldn’t tell you.
And what about the stuff behind closed doors? That’s where the really big deals get made, but with rare exceptions, they never let me in, so I can’t tell you what they’re like. And if you already attend those secret meetings, then you don’t need me to tell you.
While I continue to put together way too many NAB photos to tell you what the show is like, I’ll mention what Chase Carey, president of News Corp., said at the keynote. Carey wasn’t on board with the “embrace the future” theme; he said that if Aereo survives and folks continue to watch for free (without retransmission consent money), he’ll convert Fox to a cable network.
This pronouncement caught the attention of a lot of TV people, but I think it’s only saber-rattling. If Fox and its other network friends fail in the courts against Aereo, they’ll go straight to Congress to change the rules. The threat of pulling the Super Bowl off the air will give representatives cover for doing what the networks’ money asks them to do, and there you’ll have it.
Consider that Fox could decide to go cable tomorrow. It could have made the switch years ago, when retransmission money was a tiny fraction of what it is now. But it didn’t and it won’t because it just doesn’t make sense. The end, at least to me.
On the other hand, Broadcasting and Cable’s Jon Lafayette presents a more nuanced examination of what Fox would gain and lose by taking themselves off the public airwaves. In particular, doing so would negate the argument broadcasters have been making about needing all that spectrum they’ve been fighting to keep. So go read that.
Once upon a time, this already sort of happened. WGN and WTBS converted from distant over-the-air superstations (from the perspective of most cable TV systems) to cable channels. In both cases, they continued to locally broadcast most of the programming they sent to the cable systems, with just enough difference to make it count. The easiest way for Fox to convert would be to pick a few of its most popular shows and substitute reruns or infomercials over-the-air for an hour or two a night. To watch next year’s “House” or “24″, you’d need to watch it on cable, but local news would still be over-the-air. I still don’t think it’ll happen, but if it does, see if that’s the way it plays out.
I’m safely back at FTAList / FTABlog World Headquarters in Denver after another interesting, fun time at the NAB Show in Las Vegas. While I re-acclimate to the glorious lack of oxygen up here, I wanted to share with you the most entertaining session I saw this week.
Part of NewTek‘s Broadcast Minds series, the topic was Internet Content Creators Talk What’s Next Online. Never mind the title; I saw that Penn Jillette, one of my favorite author/comedian/magicians, was going to be on the panel along with Tom Green and other fun people. (If Jillette was cheesed that the moderator’s introduction started by mentioning his appearance on Celebrity Apprentice, he didn’t show it.) The video lasts an hour, which went by much too quickly, and it contains a few naughty words if that’s a problem. Enjoy!
There are all kinds of fun stories coming out of the 2013 edition of the NAB Show, but what I heard this morning was not fun. During a session called Mapping the Future of Broadcast Television, one of the co-general managers of the company behind Dyle, the mobile TV system, revealed what it plans to do once the service is on its feet. Dyle viewers will be “authenticated,” and if they subscribe to a service that pays retransmission fees to local broadcasters, their device will be turned on. Left unsaid was what would happen to those poor souls who dare to watch over-the-air TV at home for free with an antenna.
Erik Moreno, co-general manager of Mobile Content Venture, was one of the panelists in the session, and he said a lot of things that made sense. There was a lot of talk among panelist about the tension between cell phone companies providing on-demand digital content and TV broadcasters, both grabbing for the same spectrum. Moreno correctly pointed out that this shouldn’t be an either-or question. “If I were God,” he said, “I would make sure to have both.” Broadcasting is the best delivery method for live and popular programming, and on-demand is great for individualized and long-tail requests.
Moreno made note of a simultaneous announcement at the show that Fox was launching a streaming app similar to that available from ABC. He said that mobile users will appreciate being able to watch the stream over their cell phones, then will be disappointed by the data usage bills they’ll get. At that point, mobile TV will have a great opportunity to catch that audience and switch them to Dyle, which would presumably need to be included in their cell phone hardware.
As I’ve pointed out before, Dyle’s press releases had been careful to note that subscriptions weren’t necessary … yet. Moreno made it clear that this was only because there are so few Dyle-compatible stations that they needed to grow the market before beginning to monetize it.
If I needed someone to create and implement a successful business plan, Moreno would be high on my list. But listening to such a casual, naked rejection of free TV over the public airwaves left me shaken and sad.
Instead of ending on such an unhappy note, let’s look to the future. In my next post, I’ll try to give you an idea of what the NAB Show exhibit hall is like. Spoiler: It’s fun, interesting, and even inspiring.
NAB president Gordon Smith made a surprising appeal to TV broadcasters at the NAB Show keynote this morning. “The time has come for us to unite in our embrace of new technology,” Smith said, “and to realize the consequences if we don’t.”
I had expected that this NAB keynote address would be similar to those of years past, when speakers extolled the virtues of letting the marketplace work for retransmission consent (meaning that the stations have cable systems over a barrel and should be allowed to continue to take advantage), and that non-broadcast alternatives were inferior and should be fought with whatever means are available. Not this year.
Smith prepped his audience by quoting Winston Churchill, “Tact is the ability to tell someone to go to hell in such a way that they look forward to the trip.” Then rather than rail against Aereo and other threats to TV broadcasters’ second revenue stream, he seemed to suggest that the folks in the room should get out in front of streaming trends.
“For television, our future lies in our willingness to embrace new platforms, and to go where our viewers want to go,” Smith said. “Emerging technology presents a great opportunity for broadcasters to provide viewers with our highly valued content anywhere, on any device, anytime they want it.” Then he started talking about mobile TV, which is getting pushed harder this year. More about that in a later post. You can read a transcript of his prepared remarks here.
Smith was followed by Greg Walden (R-OR), chairman of the US House Subcommittee on Communications and Technology. Walden threw some red meat to the crowd, chastising the slow deliberations or overreach of the FCC. Mentioning the Satellite Television Extension and Localism Act (STELA), Walden said he’d have several more hearings and that he’s “not convinced that retransmission consent need reforming”.
After Walden was through, Smith returned to the podium and went off script. Not looking at the teleprompters, Smith told the broadcasters in the room that they need to reach out to their representatives so they’d become as informed as Walden. “Democracy goes to those who get involved,” Smith said.
I’ve said before here that Gordon Smith has been a much better spokesman for the NAB than his predecessor, even when he’s said things I disagree with. Today, he was more than a spokesman; he was a leader.
Once upon a time, there was a baker of cherry pies. There were dozens of fresh cherries in each pie, which were very popular with his customers, and his bakery prospered.
Then one day the baker was visited by an accountant, who examined the baker’s finances. “You’re doing well enough,” the accountant said, “but look at what the cost of all those cherries is doing to your bottom line. You could double your profit on each pie sold if you just reduce the cherries by 20%.”
The baker listened to the accountant and followed his instructions. Sure enough, in the first week, his profits doubled. But starting in the second week, his customers noticed the change, and a growing number of pies went unsold. Total profits slid to where they had started, then continued lower.
The baker called the accountant to ask what to do next. “To get those profits back to where they were, I calculate that you’ll need to cut another 30% of cherries from those pies,” the accountant replied. The baker agreed, and again, his profits rebounded for a week before sales slumped even further. These cycles continued until the pies contained almost no cherries, every customer abandoned them, and the baker went out of business.
The moral of this fable is that you can’t grow your business through austerity. As Yogi Berra once put it, “If people don’t want to come out to the ball park, nobody’s gonna stop ‘em.”
There are a lot of business people today who don’t understand this. Or perhaps it’s fairer to say that to them any short-term gain is worth losing an unknown percentage of the customer base. In particular, a lot of over-the-air TV stations don’t get it.
The Pew Research Center’s State of the News Media laid it out last month. “The effects of a decade of newsroom cutbacks are real – and the public is taking notice.” Stations are programming larger blocks of news but with a smaller budget, and the resulting filler is driving away viewers. But stations are reacting to these shrinking audiences by, you guessed it, cutting back even further on news budgets.
TV news departments should see the decline of newspapers (another austerity failure) as an opening to ramp up coverage and become the trusted beacons of local journalism. When audiences learn where to turn for the inside scoop on what affects them at home, the ratings they’ll drive should reward any station bold enough to make that investment.
Or all the corporate-thinking news departments will continue to care only about meeting their next quarter’s numbers by trimming a couple more staff members. That’ll work only as well as did for the baker, until there’s no one left to buy what’s left of his pies.