My friend Holly hasn’t had a TV in years. She was also the first friend of mine to give up a land line telephone, and I can’t even remember how long ago that was. So she’s “one of those.” She’s been without TV or cable for many years, and her favorite source of programming is hulu.
So she wrote me the other night that she was watching Hell’s Kitchen when an ad for Alabama Power appeared. Holly is my editor, so she’s read everything I’ve ever written and knows what that means. Hulu is serving local advertising based on the geographic location of the person watching the program. Holly lives in Huntsville. Oh no!
Hell’s Kitchen is a Fox program, and there’s a local Fox affiliate in Huntsville. Fox is a partner in hulu. Figure it out. Fox can distribute Hell’s Kitchen — and serve local ads — directly to Holly without using its affiliate in the market. This is the end of the network. In the old days, of course, all networks paid their affiliates to carry their programs, and life was good for broadcasters. Now, the affiliates pay their networks, and the only thing saving them is must-carry fees from cable operators. But wait! Cable has nothing to do with hulu either. Oh my.
So local broadcasting is in the midst of a perfect storm with only two opportunities for tomorrow: a successful MDTV strategy with the digital broadcasting chip in smartphones, and figuring out how to monetize local unbundled, on demand content. Let’s be real; the day is coming when program makers will distribute their stuff directly to consumers and share money with NO network, and we’ve got to be ready.
Local broadcasters don’t realize it, but they’re sitting on a pot of long tail gold in decades of video archives from their markets, content that is just sitting there in analog form waiting for some smart people to come along, digitize it and tag it for search. I’m convinced there’s a significant business model waiting for those who unlock all that video. Will broadcasters do this? Not likely. It’s too expensive, and public companies have bottom lines to serve.
I also think the cost of programming is going to come down, which will open doors to local people, and that we’re on the cusp of a revolution here. Local media companies need to be at the forefront of this.
Meanwhile, it’s the networks that are fighting Google TV, and we should be bold enough to go it alone on that one. We want anybody to distribute our original and unbundled content, and the we’re going to be waiting for awhile before our networks — our “old” networks — jump aboard that train.
Of course, all of this has been coming for a long time now, and I have an enormous bruise on my forehead from frustrating meetings with media companies unable to receive the warning. You care about me, right?