The problem with “half full”

Writing for Media Magazine, Peter Lauria correctly concludes that television will be around for a long, long time, and he also makes an excellent case that we really don’t have a workable definition anymore for what “television” means. This is an excellent article that fairly summarizes — from a positive perspective — what many observers (myself included) have been saying about the business decaying in the wake of disruptive innovations. It’s nice balance, in other words.

Clearly, television was a bit slow on the uptake in harnessing the power of new distribution technologies, but the medium wasn’t caught nearly as off-guard as its counterparts in the music business. Music labels are suing people, seeking to shut down Web sites, and withholding products — activities that antagonize and ultimately drive consumers away. When viewed through that lens, television’s tentative embrace of new media and alternative distribution platforms looks positively progressive.

Television, both conceptually and physically, isn’t leaving the scene. At worst, it is in a state of arrested development, and arrested development can continue for a long time. Consider, for example, that despite overnight mail delivery, UPS, FedEx, and e‑mail, Western Union only this year announced it would send its last telegram.

If the practice of sending telegrams made it until 2006, how long do you suppose it will take until television as we know it ends its broadcast day? The answer, quite simply, may be never. So stay tuned, the revolution will indeed be televised — ideally, in as many forms and on as many screens as possible.

His conclusions are backed by “half full” viewing of various statistics (88 percent of households don’t have a DVR, and 95 percent have not downloaded a TV show…only one clip on youTube has passed the six million views mark, etc.), and while the article admits that things are changing for “television,” it makes the case that TV is still the best bang for the mass marketing buck.

This is all well-and-good, and I appreciate the context offered by Mr. Lauria’s observations. But here’s the problem with the half-full approach. The investment community doesn’t give a crap about bangs for bucks, cultural phenomena or the amount of money still being made by the industry. These are mostly public companies, and bottom line GROWTH is what determines value. Fragmentation and advertiser concerns profoundly impact the growth potential of any media company, and that, my friends, is where the real problem exists. When the viewing universe for any program shrinks, that impacts ad rates, which impacts revenue. The only way these companies can produce growth, then, is by cutting expenses, and in the creative world, that is suicide.

Moreover, I think it’s important to acknowledge that the industry isn’t the bloody networks. While the nets are doing some creative and cool things, the reality is that the affiliate groups that ARE the industry are getting creamed. Broadcast company presidents and CEOs look at all of these network innovations and rightly ask, “What’s in it for me?” The answer is usually “nothing.”

I approach all these statistics from a warning perspective, because television is and was my life. I love the business and hate what’s happening to it, but there ARE things broadcasters can do to build growth businesses online. That’s where I want attention focused at the local level, because that’s where the real opportunities lie.

The multiple-platforms-for-content-distribution approach is, at best, a necessary evil for local television. Sales can sell it, and that’s important. The multiple platform approach insists that the “mass” is reachable through combining all of the various methods of viewing “television,” be it cellphone, PDA, iPod, DVR, VOD, or whatever. Moreover, the thinking goes, measuring all these “viewers” will reveal audience growth, which will lead to revenue growth, and so on. That’s a concept that TV salespeople can grasp.

The problem, of course, is the underlying assumption that one-way is THE way, and that is lunacy, especially for broadcast companies whose business is based at the affiliate level. The mass media model is what’s under attack by a personal media model (still being defined) that’s energized, in part, by a revolt against the hype and selling associated with the mass media model. We’ve only seen the leading edge of this, and as it accelerates, those who’ve bet the ranch of the multiple platform model alone will be in deep trouble.

Finally, one of the “Heatonisms” that I teach broadcasters is that they’re no longer JUST a television station. A local media company can do and be anything they wish online and use its existing mass marketing muscle to promote new business innovations. In the end, this is what will save these companies.

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