
Broadcast TV Struggles to Stay Viable - ksvs
http://www.nytimes.com/2009/02/28/business/media/28network.html?_r=1&partner=rss&emc=rss
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ShabbyDoo
It seems that broadcast TV and the newspapers have the same problem: their
business models were based on the once natural coupling of the generation,
aggregation, and syndication of content. While the economies of scale of
printing and delivery naturally coupled these roles, the 'net allowed for
their disbanding.

When I have a spare hour, I want to take a couple of copies of my "local"
paper, the Cleveland Plain Dealer and cut out each individual non-advertising
piece of content. Then, I want to separate them into piles: (1) locally-
generated content with a local perspective, (2) non-local content with local
interest, and (3) non-local content.

#1 = Story on some local crime that doesn't affect people who aren't
Clevelanders

#2 = Stories about KeyBank. Although they might be written by the AP, they are
of special interest to Clevelanders. This probably doesn't include the local
movie reviewer unless the film was shot in Cleveland or something like that.

#3 = The AP article about what Obama ate for breakfast today.

I'm pretty sure that the portion of the paper that falls into pile #1 and #2
is pretty small. I skip over #3 because I've already read a better article in
The Times. The PD, like almost all local papers, relies on the artificial
coupling of generation, aggregation, and syndication to justify its business
model. Interestingly, the PD has a terrible internet presence (cleveland.com),
but it at least seems to filter out the unique, local content.

How are the broadcast networks different? Youtube has proven that consumers
prefer to consume the good content from the broadcast networks at their
leisure even if the video quality is sub-standard. So, the big networks'
broadcast/syndication capabilities are no longer the value they once were. The
NetFlix Roku has proven that the internet is good enough to publish high-
quality content cheaply, and it costs only slightly more than a digital TV
converter box!

The network's role as aggregator of content has never been seen as a
significant benefit -- Who chooses which shows to watch based on the network
showing them?

So, what value is left for the networks? They are better than just about
anyone else at identifying and producing top-tier content. No one has done an
internet-based ER or Friends (yet). Is it the network's ability to use its
large audience to market new shows that provides its remaining value? By
knowing that they can get people interested in the next ER, they can afford to
throw $5M at a pilot. Can alternative methods of producing and marketing high-
quality content compete? In the short-term, perhaps. But, when mainstream,
entertainment-related content providers (sites about TV, magazines about
entertainment and celebrities, etc.) start to talk about the last episode of
the new internet-only show right along with a summary of last night's Grey's
Anatomy, the networks' last remaining source of power may decompose.

I was surprised that the NYTimes article didn't make a better comparison of
the networks' fate with that of the newspapers as their plights are not so
different.

Questions I have:

1\. How can a business be made of local news production? I'd be willing to pay
for it, but I'm not sure that enough people would be.

2\. It seems that iTunes, etc. provide a good means of charging consumers for
video content. How can the funding/publicity model be changed to allow an
internet-only ER to happen? Am I wrong to presume that consumers want top
production quality?

I almost pitched this post because I wasn't sure that I'd said anything that
hasn't been said over the past few years, but I decided to keep in hopes of
sparking some discussion.

------
markessien
The key is in switching to an actionable ad model. Let's say I'm watching TV,
and I know I'm going to have to buy toothpaste anyways. Then an ad comes up
that says: Try this new toothpaste, it tastes like pork mixed with vanilla,
and it just so happens I like pork mixed with vanilla, I click a button and my
order of toothpaste is in. Or I'm watching a TV show, and then a 10 second Ad
about the new Lexus comes up. I'm interested, so I hit the interest button and
when the show is over, a browsable website is available with more information.

But this will not work on the current broadcast system. It only works on the
web, and that's why TV is going to have to merge with the Web. The
infrastructure is almost all in place, it's just a matter of switching. This
is the real shake-up that is about to come, not gradient borders on todo
lists.

Some TV shows are good, but they are expensive. But people pay for
entertainment. There will always be an audience for Battlestar Galactica, and
if the networks cannot offer it, someone else will offer it by making it
cheaper and make the profits.

~~~
thwarted
Dish Network already does this, but I've only seen it during commericals for
PPV content or (periodically) cars. It displays a little "Hit Select for more
info" text/icon. It makes sense to do it for PPV, since the thing being
advertised can be provided right there. For real-life goods, I've never wanted
the show I'm watching to be interrupted so it's never made sense to me why
they'd take you away from the reason you're watching TV to begin with. Your
idea of showing it afterward, or adding it to a list of things you're
interested in so that you can review them at your leisure is interesting
though.

------
timr
Something smells funny. We're supposed to believe that tiny, cable-only
networks can afford to produce high-quality content (i.e. AMC could afford to
create "Mad Men"), but that the major networks are so strapped that they would
no longer attempt to pilot shows that are demonstrated to be cash cows (i.e.
"Lost")?

I understand that cable providers gain extra revenue by charging for the
delivery, but this explanation still sounds bogus. Could it be that the
networks are simply _unwilling_ to pay for decent content, and are instead
trapped in a cycle wherein they must settle for crappy "reality" TV that's
cheap to make, but has the half-life (and revenue-generation potential) of
dead fish? Advertisers like to have their name associated with brands like
"Friends" and "ER" -- even in re-runs. I'm not sure they're as willing to pay
to be associated with re-runs of "MILF Island".

