This could be a lethal blow

I’ve been telling you for years about the cracking foundation of the world of local broadcasting. Well, new FCC Chairman Tom Wheeler is asking his fellow Commissioners to vote March 31st on a proposal from him that would stick a rather large knife in the side of broadcast companies. TVNewsCheck describes it this way:

FCC Chairman Tom Wheeler will ask his fellow commissioner to vote March 31 on a proposal that will ban joint sales agreements and joint TV station retransmission consent negotiations, a senior FCC official told reporters Thursday.

The JSA and retransmission consent bans will become effective immediately, assuming a majority of the agency’s commissioners vote in support of the regulations, an FCC source says.

A senior FCC official also says the JSA crackdown will apply to pending station transactions at the FCC, and provide up to two years for existing JSAs to unwind.

The official also says Wheeler is proposing to adopt an expedited waiver review process under which broadcasters will be able to seek waivers for JSAs.

If a broadcaster can show that a particular JSA serves the public interest, it may be able to get a waiver to continue a joint sales sharing deal, the FCC said.

You need to go read the link, because the reaction in the comments and at the end of the article are worth much.

Here’s my take. Between Joint Service Agreements, Local Marketing Agreements, Shared Service Agreements, Transitional Service Agreements, shadow corporations and probably a host of others I can’t recall, it’s really hard to tell who owns the network affiliate down the street. These things have  so changed the face of broadcasting — by reducing the number of faces on the air in many, many markets — that the real losers have been the same public that broadcast spectrum is given to these people in the first place to serve. It’s all corporate doings nowadays, which makes the whole industry seem like greedy Wall Street monsters. Many more people will lose jobs, because these corporations exist to line the pockets of those who run them. Nothing wrong with that, of course, but it’s not, I suspect, what that spectrum was originally intended to create.

The upside is that this move will put pressure on broadcasters to participate in spectrum auctions, which will grow the mobile Web, while will continue to advance what Jay Rosen calls “The Great Horizontal.” One to one communications, without middlemen, is one of the beauties of the network, and broadcasters’ one-to-many model is increasingly archaic. Ahead lies a reworking of everything, including many laws that were created for the days of one-to-many, and frankly, I can’t wait. Broadcasting will continue, at the very least as cable channels, but this proposal, if approved on March 31st, means a major blow to certain groups of people who thought their money tree had permanent roots.

And think about it, one potential end to this is the irrelevance of Aereo, which requires broadcast signals in order to justify its business model.

The Obama Administration supports broadcasters against Aereo and then turns around and says, “We’ll eliminate your ownership loopholes and end consolidated retransmission negotiations.” Frankly, broadcasters would have preferred it to be the other way around.

Honestly, let the future in, people. Let the future in.

The power of personal media

I had the good fortune of spending a few minutes today with Amy Wood, the social media pioneering TV News anchor from Spartanburg, South Carolina (WSPA-TV). Amy has an enormous following online and was a very early practitioner of personal branding. Far more people in the market follow Amy than the TV station she works for, which is the point of working social media as a single entity over a “brand.” Her father recently passed away, and the outpouring of love she experienced online was absolutely overwhelming. Enjoy the next 16 minutes and learn a few of Amy’s secrets to success.

Broadcasters and Aereo: sometimes winning means losing

We have a lottery game here in Texas called “All or Nothing.” The point is that if you get ALL the numbers on your ticket, you win, but you also win if there are NONE of the numbers on your ticket. Hence, “all or nothing.”

I think the Supreme Court’s pending decision in the broadcasters versus Aereo case is a similar proposition for the broadcast TV industry, although the other way around. They will lose even if they win.

Historically, when given the opportunity — which this case does — to come down on the side of culture, the high court cannot resist, and culture — whether we like it or not — is moving to a one-to-one model of communications. There are exceptions, certainly, but the use of government resources, like spectrum, to enable old school thinking is up for grabs in the hands of the high court. What most people don’t realize is that one-to-one can mimic one-to-many in certain necessary situations, but one-to-many cannot mimic one-to-one. This is the essence of Jay Rosen’s “Great Horizontal,” and why this case is so fraught with danger for the status quo. You see, it isn’t about my ability to receive; it’s about my ability to send, and that’s why a whole host of laws have to be modified, including the use of the spectrum that’s owned by the people.

TVNewsCheck’s Harry Jessel published a piece last week that examined the question of what happens if the court sides with Aereo. As informative as the essay is, the comments are not only entertaining but also revealing regarding how broadcasters think in terms of defending themselves in the case. Here are six general themes:

  1. Its “unnegotiable” civil defense mission is what will sustain broadcast spectrum. The Telcos even now are working to develop a new system of civil defense warnings and assisting the government in real time and beyond.
  2. The question before the court can’t produce a loss for broadcasters. Since when has the “question before the court” prevented the Supremes from deviating? Sorry, I don’t view this as protection.
  3. Local bandwidth is too small to permit any significant competition to high quality OTA broadcast delivery. This is the same argument used by broadcasters when cable first came on the scene. Quality follows what culture wants.
  4. The most likely outcome would be for Congress to intervene, revising the Copyright Act to bring systems such as Aereo’s within the purview of the transmit clause. The Supreme Court doesn’t need Congress to make law.
  5. There is a finely balanced economic ecosystem going on here in which everyone thrives. But it’s an ecosystem that can be damaged if something disruptive, like a Supreme Court win for Aereo, took place. Nobody cares about our “finely balanced economic ecosystem,” except where it impacts their wallets, and that is a biggie that the court could impact.
  6. If the Supremes give the decision to Aereo, then broadcasters’ spectrum is safe, because Aereo depends on a broadcast signal in order for its antenna farms to work. Well, yes, and that’s a possibility, but Harry’s piece fully explores how that could be a net loss for broadcasters anyway.

If the broadcasters were to win, however, there’s a significant chance, in my view, that the price of winning will be its spectrum, because there is widespread and significant pressure to shift TV stations to cable in the name of spectrum use for the one-to-one world of the Web.

It is the law that gives broadcasters the spectrum. It is the law that says cable companies MUST carry the broadcast signals. It is the law says that broadcasters have a right to compensation for cable carrying their signals. And now broadcasters want the law again to boost their business model. Live by the law, die by the law, for the Supreme Court is the final arbiter of what is or isn’t law, and that’s why this case was such a crap shoot from the beginning.

Broadcasters are already acting as cable companies, and here’s the rub. If broadcast signals become cable channels, then must-carry laws are irrelevant, and retrains fees become renegotiable. Without the weight of law behind the broadcast companies, there’s little doubt in my mind that the networks will by-pass the local money tree in making their programming available via cable. Hence, the losing even if they win.

The problem for the Supremes — and the key reason I think they took this case — is the profound necessity of rewriting what copyright means, absent the immense Congressional lobbying power of the status quo. “Intellectual property” is an oxymoron created by the entertainment industry to give itself the weight of law in conducting its business throughout the world. It works fine in the one-to-many world of mass media, but it makes no sense in the Great Horizontal, and this is the conundrum for the court. Personal use of products must include sharing in a one-to-one universe, and every one of the old industries that thrived in a one-to-many paradigm must face this reality. It will take something like a court ruling to give the people formerly known as the audience (thank you, Jay Rosen) what they deserve.

The supermarket can’t charge me twice for a meal I share with neighbors, yet this is the absurdity of current copyright inside the network. The network is a cultural shift that’s here to stay, and its advancement is the duty of those in positions to make it so, such as our Supreme Court justices. Neither side in this case gives a ripple chip about consumers, the people, and that’s what the court will be forced to consider.

Folks, there’s much more riding here than the question before the court. In attempting to right what they view as a business wrong, broadcasters have opened Pandora’s box, and the chaos unleashed will likely produce a deleterious result for anything “business as usual.”

BONUS LINK, also via TVNewsCheck: Michael Berg’s legal view of the case (although tilted by an admitted bias towards the NAB).

What is a digital media company’s “inventory?”

Sorry, but I can’t resist.

In a press release this morning from IB (Internet Broadcasting Systems Inc.) announcing a new deal with the Journal Broadcast Group, IB CEO Elmer Baldwin said, among other things:

We’re helping them to discover new ways to monetize their growing digital inventory.”

This statement represents the group delusion under which legacy media companies operate, that an advertising “slot” on a website is inventory to be sold. The problem is that media companies don’t sell “inventory,” per se; they sell audiences, or more specifically, the eyeballs that might view that “inventory.” Many will accuse me of playing semantics, but it’s actually much more basic to business. The price for which this inventory is sold is based on CPM or “cost per thousand.” Thousand what? Thousand pairs of eyeballs. If, for example, the price the advertiser pays is “$10 per thousand,” then the media company gets 10-bucks when a thousand people view that ad as demonstrated by its logs. But the CPM model was created in the mass marketing days and works well when we’re dealing with significant numbers of eyeballs AT THE SAME TIME! It is a terribly inefficient and ineffective formula when applied to what is really a one-to-one environment as opposed to one-to-many.

I have stated ad nauseum that the only winner in these kinds of scenarios is the software serving the ads, because it captures and uses all of the data gathered while serving the ads. Eyeballs in the network increase in value in direct proportion to the data that’s attached to them. And so media companies play this “digital inventory” game as though it was the same game they play with their legacy properties. It’s understandable, of course, but that doesn’t change the reality.

Moreover, what this deal is primarily about is banner advertising. That’s the “inventory” — availabilities or “open slots” for banner ads on a media company website. The format has been dying for years, but if you’re a media company, it’s what you have, and so you make deals like the above and hope for the best. In addition, there’s the assumption that this “inventory” is growing, and that’s an important concept for mass marketers. We’ve never met a number that we didn’t think we could manage our way into making bigger. This is what leads media thinkers to ignore the invasive user experience in favor of tactics that produce more of that “inventory,” tactics like splitting web documents into multiple documents that challenge even the most patient consumer. The user experience MUST be number one, or the eyeballs that we think we can count on will go elsewhere.

The Web is NOT a mass marketing tool, despite what certain “experts” would lead us to believe. It certainly can mimic the properties of mass media, but the truths of everything important to business models lie hidden within the code that makes up the back end of what we offer. Silicon Valley knows this and is happy to play along with the “digital inventory” game, while picking our pockets at every opportunity.

It’s 2014: We need your Manifesto

Here’s the latest in my ongoing series of essays, Local Media in a Postmodern World.

It’s 2014: We need your Manifesto

We’re well into a new year, and I can actually feel the gap widening between those who are shepherding change and those who wish to maintain the status quo. Yet there’s a discernible sigh of relief in broadcast circles, because it’s an even-numbered year. That means political money, which along with TV Everywhere and retransmission fees, means it ought to be a pretty decent revenue year for broadcasters.

And revenue covers a multitude of sins…

Passages (again)

grappa4When my lease expires here in Frisco, Texas at the end of July, I will be relocating back to Huntsville, Alabama to be closer to my two daughters, my son-in-law and my granddaughter. I was the news director of WAAY-TV in Huntsville in the mid 1990s, when it was still family-owned and operated. I have good memories of that place and the people, many of whom still live in the area. I got sober in Huntsville a long time ago, so I have friends there outside the news business.

I’m going to continue working with AR&D and its clients in a variety of capacities including webmaster. We’re building a training portal for people in the TV News business, and that’s pretty exciting.

I went back to Huntsville at Christmas and knew that I had to move back. There’s nothing like being a “grappa” to a little girl. My other grandchildren all live in Amman, Jordan, and I miss them every day. I’ve missed watching them grow up, and I don’t want that to happen with this and future grand babies. As my fellow boomers know, there’s absolutely nothing like grandchildren in all of life.

The interesting thing about this to me is that Huntsville, like Amman, is just a node on the network. Geography doesn’t mean what it used to in terms of commerce or work, which means I can participate in what really matters — family — and still remain connected and relevant in the only space that’s essential for work anymore, cyberspace. We’re such infants here.

And so for the second time in my life, I’m leaving Texas. I will miss it. Despite a regrettable personal valley, North Texas has been good to me. I’ll be back to visit, and I don’t leave until this summer.

To my friends in Alabama and Tennessee, look out; here I come.