The Future of Television
As told by its past
What business are you in?
• Are you in the broadcasting business? Video
provision business? Something else?
• Who are your competitors?
• Specific challenges and opportunities
• Challenges
• License requirements
• Limited scaling
• Opportunities
• Established relationships
• Geographic proposition
History Lesson #1
The history of television in three eras
• Network Era
(1952-mid 1980s)
• Multi-channel Transition
(mid 1980s-mid 2000s)
• Post-network era
(mid 2000s-)
The Network Era
• Technology: Just a TV set, maybe an antenna
• Production: Deficit financing sets production rules
• Distribution: Limited content through bottleneck of
three networks, clear windows of availability
• Advertising: :15 and :30 advertisements in
“magazine” format, sold in “upfront” market
• Audience measurement: Audimeters, diaries,
sampling
The Multi-Channel Transition
• Technology: VCR, remote control, analog cable
• Production: Fin/Syn, surge of independents,
conglomeration, co-production
• Distribution: Cable increases possible outlets but still
a bottleneck
• Advertising: same, plus subscription and experiments
with alternatives to :30 ads
• Audience measurement: People Meters, sampling
The Post-Network Era
• Technology: DVR; VOD; portable devices; mobile phones;
Slingbox, digital cable
• Production: Multiple financing norms, variation in cost
structure and aftermarket value; opportunities for amateur
production
• Distribution: Erosion of time between windows and
exclusivity. Content anytime, anywhere.
• Advertising: Co-existence of multiple models--:30, placement,
integration, branded entertainment, sponsorship; various
transaction and subscription models
• Audience measurement: People Meters; census measurement
Key Items of Lesson #1
• The network business was built on the norms
of the network era.
• The multi-channel transition brought choice
and control and subtly adjusted the business.
• The post-network era expands choice and
control to make convenience, customization,
and community key attributes of television in
the new era.
• These changes are bigger than you.
Truth about Media Industries
• Creative industries are fundamentally different
• Characteristics of Media Industries
•
•
•
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“Nobody knows”/ intentionally over-produce; formatting
High “first-copy” or production costs / artificial scarcity
Public or at least semi-public goods / artificial scarcity
Imperfect relationship of additional costs in production relative to
revenues
• “Art for art’s sake” and service of the public interest
• Other General Responses of Media Industries
• Economies of scale
• Conglomeration and concentration
• Vertical integration, horizontal integration, and synergy
History Lesson #2
• Radio didn’t die
– What was radio before television?
• What happened to radio in the post war era?
– Television did everything it could do, but with pictures.
– Radio stopped being a network system, emphasized its
strengths--local variation. Capitalized on its distinction--a
medium for use while doing other things.
• Another Lesson: Magazines--survival despite
fragmentation
• Key differentiation: No emergent mass medium
Key Items of Lesson #2
• This moment is not without precedence.
• Death of media are almost always forecast
preliminarily, rarely occurs
• Vital new stage of media can be found if rely
on core attributes.
• Difference of the current situation (no new
mass medium) an advantage.
History Lesson #3
• Why do we have a network system?
– Technologically required for distribution first in
radio, then early television.
– Economically powerful economies of scale.
• Do we still need a network system?
– Not for reasons of distribution
– Broad-based content the most challenging to
produce in the niche environment of the postnetwork era
History Lesson #3 Continued
• Does it make sense for the network to be in the
network business?
– Not really--revenue is local
• Why do I watch Local 4 Detroit?
– In the network era, because of network
programming.
– In the post-network era, because I need a local
link.
Key Items of Lesson #3
• The future of the “network” is not your
concern.
• Where are you without it? What are you
without it? What is your place in the “primary
media community”?
Rethinking Programming in the
Post-Network Era
•
•
•
•
Network Era
Linear
Content is pushed
TV is: Whatever is on
What wins: Whatever
comes on next;
whatever is least
objectionable.
•
•
•
•
Post-Network Era
Non-linear
Content is pulled
TV is: What I can
access when I want it
What wins:
Programming of
distinction
– Worth pulling
What is your place in your viewers’
Primary Media Community?
• Usually media that maximize psychographic
specificity
• Other media serve this well, but sacrifice
geographic specificity--an open niche
– Local media portal
Local Media Portal
• The destination for local information and
advertising
• Must be built for the pull environment
– Cross technology--particularly Internet and TV
• Expand where it makes sense (weather, traffic, alerts on
portable)
Monetizing the LMP
• Think outside existing paradigm for broadcast;
borrow heavily from existing successes while
adding a local angle
– Efficient search functions
– Opportunities for participation
• Requires primary attention to value
proposition
Responses to Background
Assumptions
• Digital transition is not about 2009
– Many have already begun the move, traditional
views will continue to apply, process of
generational change
• Let the advertisers sort out their businesses
• Embrace the complexity of the consumption
space
– Think broad long-term strategy, not short term
response
Challenges to Project 1
• What happens if you think about
comprehensive, adaptable and deliberate
instead of “profitably, quickly, and easily?”
– The evolution of a medium is a marathon not a
sprint
• Key idea: What does it mean to become the
local aggregator of news, media, and shopping
information?
– If you build the first, the rest will follow (applies
to content, not technology)
Challenges to Project 2
• Provision and delivery are different issues
– You sacrifice brand and identity distinction if you abdicate
being news provider
– Don’t mistake consumer’s desire for flexibility in accessing
content with desire for a different news product
• News identity is channel identity, as network identity
wanes in importance, this is your key attribute
• Attend to your value proposition:
– Telecomm Act lesson for radio: 13 million new NPR
listeners (from 2-30M since 1980)
Challenges to Project 3
• What about the user?
– Start at experience, ritual, use--then work backward
– Figure out user needs and problems with current situation,
solve the problem and think about how to monetize that
• Just because you build it, doesn’t mean they’ll come-be wary of technological determinism
• Consumers aren’t unreasonable, develop a fair and
consistent value proposition; make sure they know
about it and give them time to evolve
• Cable carriage as a revenue stream; an on demand
channel?
Finding Your Way
• What business are you in?
• Why?
• Challenges
– Gradual, can’t wait until new conditions are firmly
in place to respond
– When and what of “mature” behavior unknown
• Don’t get sidetracked by the buzz of the
moment
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