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).

The times they are a-changing have changed

Steve Denning's newest bookHere are a couple of great lines from a Forbes article by Steve Denning, “Resolving The Identity Crisis Of American Capitalism:”

Once making money becomes the goal of a firm, companies and their executives start to do things that not only lose money for the firm but cause problems for the economy…

…Customer capitalism involves a shift (of) the focus of companies to delighting the customer and away from shareholder value, which is the result of delighting the customer.

The shift to customer capitalism doesn’t involve sacrifices for the shareholders, the organizations or the economy. That’s because customer capitalism is not just profitable: it’s hugely profitable.

The shift to customer capitalism does however require fundamental changes in management. The command-and-control management of hierarchical bureaucracy is inherently unable to delight anyone—it was never intended to. To delight customers, a radically different kind of management needs to be in place, with a different role for the managers, a different way of coördinating work, a different set of values and a different way of communicating.

The shift to customer capitalism also involves a major power shift within the organization. Instead of the company being dominated by traders and salesmen who can pump up the numbers and the accountants who can come up with cuts needed to make the quarterly targets, those who add genuine value to the customer have to re-occupy their rightful place.

What I love most about Denning’s approach is the use of the word “customer,” when many others would use the term “consumer.”

Burn this into your mind and into the minds of those around you: We have entered a new era. Period. It’s not on the horizon; we’re already there. Those who take a leadership position and beat their competitors to the punch are GUARANTEED the top spot in this new era’s business infrastructure. It’s all about the customer today. Making money is the end, not the means anymore. It has to be that way. The beancounters and manipulators are lesser players in the new status quo, because, as Steven Covey wrote many years ago, “You can’t talk your way out of something you behaved your way into.”

Umair Haque wrote in 2004 that in a networked world, the emphasis must be on the product, not marketing. Jay Rosen says basically the same thing in his brilliant thoughts about “The Great Horizontal” and “Audience Atomization Overcome.”

Dylan’s classic song noted that “The Times They Are A-Changin’,” but I’m much more inclined today to say that they’ve already changed. When the brightest business minds of the day — and I certainly include Steve Denning in that group (John Hagel, too) — shift their thinking from hard core making money to hard core customer service, it’s time to give up on an agenda that only defends the past.

Yeah, but just wait

The discovery that GM — the country’s 3rd largest advertiser — pulled its ad money from Facebook, because Facebook said “no” to its splashy take-over ads (a.k.a. “creative”) is more evidence that the User Annoyance Issue is a significant culture war issue. AdAge brought the back story about what happened.

GM wanted to brand Facebook. And Facebook wasn’t selling.

In a now-notorious meeting between General Motors Global CMO Joel Ewanick and other top marketing brass and Facebook sales executives, the automaker’s team asked whether it was possible to run bigger, higher-impact ad units than the current offering, according to people familiar with the discussion…GM asked if it could take over a page. It was told no.

The AdAge story goes on to suggest that this stance by Facebook has long frustrated the “deepest pocketed marketers” and that Mark Zuckerberg will have trouble maintaining such a position now that his is a public company. You can almost see the smoke-filled conference rooms of the “Mad Men” filled with gloating harrumphs of, “Cough-cough, That punk kid will learn, cough-cough, the realities of the, cough-cough, REAL world soon enough!”

Be very, very careful, here people.

You see, Madison Avenue is built on big money’s ability to “move” people who don’t necessarily want to be moved. Never forget the words that Edward Bernays, the father of modern public relations, wrote in The Engineering of Consent:

If we understand the mechanism and motives of the group mind, it is now possible to control and regiment the masses according to our will without their knowing it.”

Or, as Ries and Trout demonstrated in Positioning, The Battle for Your Mind, you can “Make and position an industry leader so that its name and message wheedles its way into the collective subconscious of your market-and stays there.” I’ve always liked the word “wheedles.” Such a nice, friendly thought, eh?

This is both the success and failure of mass marketing, but times are changing. ESPN had the clout to say no to online ad networks, because they wanted to control the advertising on THEIR site. You may not like some of their ads, but you’ll never be confronted with a 30-second preroll on Facebook is now saying “there’s got to be a better way.” The jury is out here, but I applaud their position.

Meanwhile, Doc Searls continues his efforts to generate ad messaging from consumers-to-businesses as a way to generate commerce (Project VRM), which is one of the most revolutionary concepts in modern history.

I’m want to quote Dylan here, but I won’t. I’d just like to offer to those who sit back and say, “Yeah, but just wait” that you might be waiting for a very long time.

Viva Le Revolution!

Where have all the hippies gone?

Mickey MantleForgive me for repeating this story, but I recall reading an early edition of USA Today many years ago, the cover page of which featured Mickey Mantle and a quote that was life-changing for me. The sub-headline read:

The people taking over the world grew up on me.”

That hit me like a ton of bricks, because I grew up with Mickey Mantle as a hero, so he was talking about me and people like me. We were taking over the world. What would we make of it? This was a significant passage in my life, because if you’re taking over the world, you’d damned well better act responsibly about it, and my generation wasn’t exactly known for that. I graduated high school in 1964 and was thrust into the middle of the Vietnam War, the peace movement, rock-n-roll, civic violence, and the love of the counterculture.

It wasn’t until I read “What the Dormouse Said” a few years ago that I began to realize the extent to which all of that was wrapped up in the creation and development of both the personal computer and the Internet. I think it’s why I’ve felt such a kinship and cosmic connection with all of this “new media” stuff. But, alas, today I am sad.

Two web heroes of mine — both old revolutionary hippie types — have written about the same subject: what’s happening to our beloved Web. I strongly recommend you read both:

Doc Searls: Edging toward the fully licensed world

Dave Winer: What comes after the post-PC?

Dave’s is a bit more upbeat, but I wonder. It’s not about us anymore, for the people now taking over the world grew up with the fruit of our passion but not necessarily the kind of leadership the world really needed. I regret that, but let me warn those who’ve moved into the “taking over” role today:

Do not let “the man” take away that which we’ve given you. Do not trust that private sector efforts to take over the Web and turn it into their profit machine based on old models of scarcity will do anything other than destroy the freedom you now possess. Don’t trust the lawyers. Don’t trust the lawmakers and policy overseers. Don’t trust the Zuckerbergs of the world, nor the Apples, Googles, Amazons and others. This is about you, young Jedi, and YOUR freedom.

I sense in my spirit the old empire stirring. The status quo is about to launch a major offensive on all fronts. Maybe Dave’s right. Maybe people WILL stand up and say “no” and demand the freedoms we’ve enjoyed over the past 15+ years.

I certainly hope so, for the older I get, the more I realize that this is our legacy.

Where have all the hippies gone?  We’re still here, watching and waiting for people to wake up. Some of us may feel the pending call of the rocking chair, but the light still shines brightly within. We’ll keep an eye on them, but our progeny is going to have to take up the cause.


A bluegrass miracle to start the new year

The Heaton Brothers in Neal Lynch's basementA few days ago, something remarkable happened that I thought I’d share. It’s a testament to the wonder of hyperconnectivity for my generation. I think this kind of thing will only be experienced by those who’ve not grown up with the Web, so these kinds of stories will gradually disappear, but that’s just a guess. Here’s what happened.

Neal Lynch, the brother of a high school girlfriend contacted me via Facebook inquiring if I had been a member of the River City Singers from Grand Rapids, Michigan during the 1960s. Facebook is the source of reconnections so plenty these days that this one would simply blend in with the others were it not for the fact that I’m able to pass it along to you. Neal lives in California, and the circumstances under which he contacted me are remarkable all by themselves, but The Great Horizontal — the connected culture we’re just beginning to know — is what made this possible.

I wrote back that I was indeed a member of that band, whereupon he sent me two photographs of myself and my two brothers playing our music in his basement. He was 12-years old at the time and shortly thereafter picked up guitar and has been playing ever since. The photos were made from old Kodak slides and are the only high-resolution, digital color pictures of the three of us playing together. The ONLY ones, and I’d never seen them before. These pictures blew my mind, because I was able to zoom in and closely examine facial expressions. The experience really took me back to when I was 18-years old. All that I am, I was back then. The experiences I’ve had in the last 47 years have shaped only what I do, but all that is really me — the gifts, the spirit, the emotions, the soul — can be seen in these pictures.

I sent copies to my two brothers and heard back from older brother Jim (the guitar picker). He told me that he was so blown away that all he could do was go sit in his back yard alone and think about our lives as a bluegrass band. I knew exactly what he was talking about.

The Heaton Brothers in Neal Lynch's basementWords cannot express my appreciation for the way Life has engineered this and especially to Neal for contacting me. In the picture to the left, you can see me, as my daughter told me via Facebook, “lost in the music.” This is true, but “lost in the music” can also be a form of “hiding from everybody,” which took a big emotional toll on me over the decades that followed.

My two brothers and I are not close. The Vietnam War broke up our band, and we all went our separate ways. It has been one of the biggest regrets of my life, because I really did and do love my brothers. That fact is inescapable when examining these pictures. We were really good, and to quote Marlon Brando, “I coulda been a contender.” Bluegrass is a music meant to be played, not just listened to. I haven’t had a banjo in many years, but this may inspire me to find something at a pawn shop. I’m playing an old Gibson Mastertone in the pictures. That instrument is worth a lot of money today.

This event in my life has reinforced everything I believe deeply about the enormity of this “second Gutenberg moment” in the history of Western Civilization. We may spit and snarl and fight it all the way, but this “Great Horizontal” is transforming everything about our culture. The more open we become, the harder it is for anybody to live a double life and to present bullshit as a cover story for one’s life. We have to rethink everything, and I envy those who are just entering adulthood, for life will be very different for them when they reach my age. The naysayers shout down change, usually because they have something to lose in terms of their position vis-a-vis everybody else.

I’m incredibly hopeful for tomorrow, because truth weighs far less than falsehood, and we’re all ridiculously overweight. That’s what my view of postmodernism is all about. These pictures have helped me in the ongoing journey to find my truth, and I am forever grateful.

Dean Starkman and the FONers

Captain J fights the FON dragonBack when Dean Starkman first struck out at those who present a view of the future of news (FON) other than his, I wrote a scathing retort but never published it. Others were saying the same things, and besides, I went after him for lazy intellectualism, which is always hard to prove. So I stayed home and let the FONers speak for themselves.

But wait! I’m a FONer myself, and now Mr. Starkman has struck out again, this time choosing to “interact” with one of his chief targets, Clay Shirky. Shirky had responded to his rant, so Mr. Starkman chose to engage Shirky and clarify his disregard for the FON crowd. After conceding four points that Shirky made, Mr. Starkman boiled his concern down to one simple thought — the story.

But all of this misses the point; the talk here is all about process and structure. I’m talking about great stories. As I said in the piece, I care about institutions only to the extent that they can produce them.

…I do kind of believe that newspapers must find ways to blah blah and whatever, but in fact I care far less about that than that they produce agenda-setting stories.

And this leads me to what seems to be a gaping hole in FON theory, and that is this: It doesn’t have any great stories, and, worryingly, it doesn’t seem to have any way to produce them.

There are many ways to go in response to this thinking, but let me state just three.

  1. The problem with news in the future has nothing to do with content; it’s in how we get paid for making whatever content is required. News institutions aren’t really in the content business, they’re in the advertising business, so the argument about stories is irrelevant to the problem facing organizations that shoulder a free press responsibility.
  2. The story” is a product of production processes and schedules. Many of us have written about this extensively, myself included (News is Not a Story). I think I know what Mr. Starkman means by “the story” in the above, and it’s more about the process than the product. He’s speaking of delving into some heretofore untold or hidden narrative and bringing it into the light of day through good old legwork and other journalistic practices. Clinging to this, however, as a justification to strike out at the FONers is problematic, because the very process that Mr. Starkman holds dear is being disrupted by the next factor.
  3. Communications is now horizontal and in real time. This completely destroys the top-down framework within which Mr. Starkman’s story paradigm works. He proposes that the world needs educated and experienced professionals to generate and follow-up on their leads, knowledge and suspicions, and to do it in such a way that follows the ethical and legal requirements of the profession. The results are then turned over to another even more educated and experienced group for vetting and final preparation before being dispatched to a large audience for maximum effect, thereby engaging with the issues of society. It’s neat. It’s ordered. It served us well for centuries. But the world itself has changed, and in a horizontal, real time communications paradigm, no feed is special.

Mr. Starkman is asking for a replacement for that concept within the new, and there isn’t any so far. I’m not sure there ever will be, due to factor number one. Moreover, I don’t think this is the only or even the preferred way for journalism to function by default, because it produces inertia and inefficiencies along with the occasional, “agenda-setting” story.

And if we’re really going to be honest, we must ask ourselves, too, if the hiding of the various facts that make up “the story” before it’s deemed ready to publish is really always necessary in a horizontal world. If the newsgathering process is made public, we can all participate, including those who can advance “the story” separate from the person or organization who first started the snowball on its downhill adventure. I realize this may not be applicable to every situation, and that there may be times when keeping quiet is necessary. In those cases, however, I believe the new culture will figure out ways to do it without breaking the bank.

Then there’s this: Mr. Starkman’s piece in the Columbia Journalism Review — a highfaluting industry institution — is broken into two pages, presumably to play the old media game of page views. You won’t find anything similar among the FONers or their responses to Mr. Starkman. Not Mr. Shirky, not Jeff Jarvis, not Jay Rosen, not Mathew Ingram, not the host of others who fit the definition. This is itself a clue about tomorrow, for those who consume digital media are not unaware that the companies who practice such irritating tactics are merely raising the cost they have to pay for interaction. This won’t be tolerated forever. Scrolling is much more user-friendly than clicking.

The FONers know this. Mr. Starkman and those of his ilk either do not or don’t care.