Broadcasting fights back

WRAL-TV, owned by Capitol Broadcasting in Raleigh, has been pioneering new innovations in Media 1.0 distribution for decades. Capitol president and CEO Jim Goodmon prides himself in being first to market with any innovation that will further enhance the business reach of his company. It’s a gonzo station that delivers news in high definition and is widely recognized as a leader in the world of broadcasting.

That’s why the industry is all atwitter over last week’s announcement by Mr. Goodmon and Jack Perry, CEO of Decisionmark Corporation, that the two companies will work together to provide WRAL programming via the internet. They will use Decisionmark technology that restricts the “view” of the programming to only those within the station’s broadcast footprint. For those interested, I recommend viewing the press conference (about an hour) via WRAL’s Website.

The logic of this is understandable. Broadcast licenses are distributed based on a geographic reach and limited to certain transmitter power ranges so as not to interfere with the rights of other nearby broadcasters. The whole industry is built on this formula. The fact that the internet is not bound by the same restrictions has been problematic, because stations outside such a footprint would pitch a fit if the lines were crossed. WRAL, for example, is a CBS affiliate. If they were able to stream CBS programming outside their broadcast reach, other CBS affiliates would be hurt. Hence, the technology being provided by Decisionmark. And since they’re now able to provide their programming only to people they’re already licensed to “serve,” the company feels the networks will have no objection.

While exciting for pure broadcasters, it’s a long way from being the answer to audience erosion via current disruptive innovations.

One, Mr. Goodmon says in the press conference that people want to be able to watch television on their computers, so that’s the demand they’re meeting. Well, that’s something you can already do quite easily, so this isn’t much of an argument. How many people really want to watch programming via an internet stream isn’t known.

Two, Decisionmark will require a credit card and e-mail address from users to determine if they live within the footprint. It’s wise not to underestimate the public’s unwillingness to share such information. Not only are there security implications, but it will feel — to many — that they’re walking into a situation where they’ll ultimately end up paying. Requiring an e-mail address isn’t a problem, because people can simply create a hotmail, yahoo or gmail account with which to receive the confirmation e-mail.

Three, WRAL can already stream any of its own content, so this is really about streaming network content. CBS hasn’t given its permission to WRAL to do this. In fact, the station hasn’t even talked with them about it yet. And assuming the networks gave the green light (a substantial assumption, imo), there are still significant copyright and other rights issues that would need to be hammered out before you can watch Survivor on WRAL.com.

So why have the press conference? Firstly, Capitol Broadcasting likes to be first, and this is another opportunity for them to do so. But they’ve also fired the opening volley in what is likely to be a difficult process in trying to extend their broadcast footprint to the internet. This puts the networks in a position of having to respond, which is a pretty smart move.

So while I think it’s a great play for pure broadcasters, I’m not sure how soon it’ll happen, if ever. The networks are drooling over new revenues from the on demand sale of programs via downloads, and the role of the middleman is shrinking, albeit slowly. While Mr. Goodmon makes a good argument that local stations should be a part of this, because they can drive sales, the question remains whether the networks will view the downside (sharing profit) as too great a liability to justify mollifying the affiliates in this way.

The plan announced last week, however, is for live streaming of programming. Won’t that interfere with network revenues in the download world? No, because you won’t be able to record this stuff, or if you do, you won’t be able to fast forward through the commercials, which is a key factor in the success of program downloads in the first place.

But the bigger issue to me is the potential of this to divert attention away from the realities of the Media 2.0 disruption. Broadcasters want so badly to find a way to defeat the disruption using their traditional revenue model, but it’s not going to work.

This plan is to show the commercials along with the programming, which theoretically will boost ratings and therefore justify higher ad prices. If this were still a 1.0 world, I’d agree that this is smart strategy, but the truth is top-down media distribution is headed for the tar pits, driven by the scent of food. Let’s look at how this plan runs contrary to Media 2.0.

  • The user is not in charge.
  • The user’s role is entirely passive.
  • The user’s experience is hierarchical.
  • The content is pre-bundled.
  • The distribution is top-down, one-way.
Media companies need to understand that the real opportunities for business lie within the disruption, not in fighting against it. This is where stations like WRAL should be focusing resources, and knowing the company, my guess is they’re probably already looking here.

(Disclosure: I’ve done work for WRAL.)

Comments

  1. Then Mr. Goodman goes off and complains against Slingbox (B&C Daily)….

    Is he afraid of giant banks of Slingboxes located around the world?

Speak Your Mind

*