Warning to local TV: unbundled distribution is upon you

Will somebody PLEASE listen?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?

Comments

  1. We have a Fox affiliate here now? Seriously? I didn’t know that. LMAO.

  2. Hulu does not require user information for straight viewing, but does require a user/password account for ‘adult’ content, which does require location data.

    The interesting here is where they are getting the location data from, and how much data is available. An I.P address can get you a neighborhood, for localizing ads, but where will they stop in ‘tailoring’ ads based data mined from a users history or website visits?

    As for local news doing what you suggest with their video archives, what is the point? Running this day in history specials? Local TV has the same problem that print has, that being no follow through.

    Example, here is a story about folks who get ripped off by a scam artist who gets enough face time to say no comment, and the piece ends with some sonorous voice saying that the authorities are interested. Fade to commercial, on to next story.….

    Where is the follow up story where the guy gets convicted, or gets off on a technicality?

    Local news could be doing a lot more.

  3. alan: I am not a registered hulu user. I don’t have an account. I only watch one show, Hell’s Kitchen, because my 10-year-old stepson is into it, and we discuss it on his visits with us. I don’t know very much at all about the technical side of such things, but i can tell you that they don’t have any more information than they’re able to get from an unregistered person watching one show.

  4. Alan, off the top of my head, there’s revenue from selling it for repurposing, revenue from “what happened on your birthday,” follow up programs (as you state), repackaging “day in history” stuff, selling videos about years, new programs, search ads, the list is pretty significant.

    It’s not hulu’s data that matters so much as it is data assembled by the entity serving the ads.

    t

  5. Re: “Let’s be real; the day is coming when program makers will distribute their stuff directly to consumers and share money with NO network”

    That’s exactly what I thought when I saw the headline last week that Netflix is offering $70-100K per episode to studios for rights to stream current episodes (rather than waiting until the end of the season and packaging them up). No network or local broadcaster is necessary to monetize the content producer’s episodes.

    The day to which you refer comes when a) the content producer has enough of these revenue streams, b) these streams are sufficiently/increasingly rich and c) the current revenue stream (network model) is sufficiently diminshed by reflecting its dimished cost effectiveness.

    Any guesses on when the day arrives? Another decade?

  6. I don’t have an account. I only watch one show, Hell’s Kitchen, because my 10-year-old stepson is into it, and we discuss it on his visits with us. I don’t know very much at all about the technical side of such things, but i can tell you that they don’t have any more information than they’re able to get from an unregistered person watching one show.

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