Broadcasting’s disruption on display in Raleigh

NBCWRALThe affiliate switch in the Raleigh market is BIG news and yet another harbinger of things to come for broadcasting. It doesn’t matter who initiated what in this remarkable event. WRAL-TV claims they did, because NBC is the best positioned broadcast network for the future. However, many observers, such as Al Tompkins at Poynter, are blaming the tough fiscal stance CBS is taking in affiliate renewal negotiations.

The switch was prompted by a disagreement between WRAL and CBS about how much revenue paid to WRAL from from cable companies should go to the network.

It would be easy to dismiss this as just another financial consideration on the bumpy road broadcasters are trudging, but that doesn’t go deep enough. The truth is that the broadcasting business model itself is hopelessly borked, and these kinds of events are simply guideposts along the way to its inevitable collapse. Nobody wants to talk about it, least of all owners, because there’s real money in maintenance of the status quo or at least the appearance thereof.

Local television is falling off the same cliff that destroyed newspapers, but it hasn’t shown up on the bottom line yet, because ever-increasing retransmission consent fees have shielded it from reality. There is no way it can continue for long. Consumers will simply refuse to pay for it when there are cheaper alternatives available. Mass marketing continues to take blow after blow from more cost-effective digital marketing, which is actually direct marketing disguised as mass marketing. Again, nobody wants to admit this, so we all just move forward basing our value on false assumptions of an archaic model. It helps no one except the executives charged with maintaining the hunky dory appearance.

How is anyone surprised that CBS wants top compensation for its top-rated programs? One day, CBS will be a kind of cable network, because it can gain the kinds of program compensation it deserves instead of splitting that money with local affiliates. TV program distribution doesn’t require broadcast affiliates anymore. Netflix and Amazon both won Golden Globes this year. This is all being forced by consumers who are now free to protest the gluttony of 5‑minute commercial breaks in “their” programs. Are we really so foolish as to think the era of audience captivity is still moving forward? So much has been written about how the people formerly known as the advertisers are now functioning as media companies themselves that it’s hard for me to believe there’s a single person left who believes the ad-supported content model remains viable as a growth strategy.

The ONLY thing local broadcasters have left is news, and it’s never been more important to be number one. These locally-produced programs historically have generated half of the typical station’s revenue. But half the revenue will never equate to 100% of the expenses, so even the viability of quality local TV news is problematic. There will be cutbacks galore, and some stations just won’t make it. 15 years ago, I suggested stations might want to spin off their news departments into wholly-owned subsidiaries and let them find their own economic justifications. At the time, this would’ve also given local news efforts an opportunity to actually compete with web companies instead of relying on the brands of the TV stations for complete sustenance. Competing as a TV station online has never made sense, and yet that’s as far as most have gotten or will ever get.

In conclusion, the event Friday in Raleigh is stunning no matter how you look at it. To me, however, it’s just further evidence of a predictable future that doesn’t look so bright for my many friends and colleagues still toiling in the trenches.

And to paraphrase George Carlin, “These are the kinds of thoughts that kept me out of the corporate board rooms.”

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).

Oh-oh! Press trust stays low.

The opening sentence in the press release from Gallup says it all:

The majority of Americans still do not have confidence in the mass media to report the news fully, accurately, and fairly. The 44% of Americans who have a great deal or fair amount of trust and the 55% who have little or no trust remain among the most negative views Gallup has measured.

Here is the new data from Gallup tacked on to old data from Gallup, so that you can get the big picture. This is in 3‑year increments going back to 1973. I’ve been updating and showing this image for ten years, because it immediately ends arguments about the viability of continuing down the same, tired paths.

Gallup press trust, 1973-2011

This slide evidences the insurmountable problem for media companies today, because it slams the door on any attempts by the press to right the ship doing things the way we’ve always done them. It ain’t gonna work. Period.

The standard journalist response to the decline in ratings or circulation is that we’re not doing enough “hard” news, whatever that is. Or we’re not doing enough “investigative” news, whatever that is. Look at that graph. The nostalgia with which most journalists sincerely believe will fix what’s broken has to go back a very long way, for the decline in trust goes back 35 years. Thirty-five years! It’s broken, and we need to start over, not go back to the good old days when the people were spoon-fed by our “expertise.”

This is why contrary opinions, like the one expressed by AP’s David Bauder this week in New life in television’s evening news, are so disappointing. Bauder takes a look at some numbers and concludes that the network evening newscast is back.

…the networks have just completed a TV season where all three grew their audiences for the first time since 2001-02, when terrorists struck and the Afghanistan and Iraq wars began. The growth is continuing for the first few weeks of this season.

The reason he and his list of experts cite is concern about the economy and what he calls “the curating function of the evening news,” which is necessary because, you know, the audience is incapable of figuring out anything for themselves.

People follow news, “but they want someone they trust at the end of the day to explain it to them, to show what it means to them. Somebody credible,” said Michael Corn, executive producer of ABC’s “World News” with Sawyer.

Brand name journalists mean something when people can’t trust the accuracy of what they see online, said Dave Marash, a veteran journalist who worked at ABC News and Al-Jazeera English.

What Bauder and those like him fail to do is overlay the Gallup graph onto attempts to justify the hole in which we find ourselves. Michael Corn apparently believes that people “want someone they can trust at the end of the day to explain it to them.” Right. Now take a look at that graph and repeat that to me.

Folks, let’s be honest. The rise of new media is, in part, a direct response to the Gallup graph, and we make fools of ourselves every time we try to explain it otherwise. Before we say people trust us, we’d better be sure of the facts.

Why Fox can’t just admit it

Fox News logoSlate has published a wonderful deconstruction of the lawsuit by Fox News to stop Missouri’s Democratic candidate for U.S. Senate, Robin Carnahan, from using Fox file footage in her ads. Fox argues that her use of the footage hurts the reputation of its news business for accuracy and objectivity. The problem is that Carnahan’s opponent also uses Fox News footage, but the Republican isn’t being sued.

I read this stuff and wonder again why Fox just doesn’t admit that theirs is a network that supports Republicans and issues of the right. That wonder doesn’t last long, because the reason is a familiar one (this was our view at CBN): Fox takes the position that the established press is biased and they are fair and balanced. To prove this proposition, Fox News believes that by simply including the point-of-view of the right, they’re providing “we report, you decide.” It may seem like “bias” to others, the thinking goes, because the average citizen is used to only hearing one side — the liberal side.

This is all well and good (and logical) until something like this lawsuit happens. Suddenly, the BS of it all is revealed, but Fox cannot risk simply admitting its bias, because to do so would disprove their marketing position. How? If Fox admits bias, then others can claim the middle ground. If Fox would admit a position of extreme on the right, it would be “balanced” by extremes on the left, and the traditional press could then claim the center. Fox cannot allow this to happen.

There’s also the matter of audience expectations. Your audience can’t “fight” on behalf of your position, if you admit it’s otherwise.

I don’t think there’s any question about what’s happening with Fox, but I don’t think you’ll ever hear anybody from Fox News admit it.

Here’s how to save ABC News

Jon Friedman asks a good question this morning: Can anything save ABC News from extinction? Friedman’s a smart guy, and like others who’ve asked this question, he points to the network’s lack of a cable channel as a reason for its decline.

Now, I have the audacity to ask: Can anything save ABC News from extinction?

Right now — and for the foreseeable future — the smart answer would be a curt “no.”

The question took on deeper resonance Monday night when David Westin announced his plans to step down after running ABC News for nearly 14 years.

What Friedman and others don’t consider is that there is a gaping opportunity for somebody at the network level to lead the way in developing an international real-time news service. The online audience for news is M‑F, 8am-5pm. We have discovered in working with our local media clients that there is a tremendous appetite for what we call “Continuous News” in that daypart. People are at the office or working somehow. They want to know what’s going on. They don’t need a neatly-packaged, finished service. They need real-time news, or as Dave Winer originally pegged it, “news as a river.”

CNN and the NYT both provide a version of this, off their main channels, but nobody says, “Stop the presses! We’re the real-time champion.”

And the ability to integrate such a feed (or portions thereof) into a local level feed is an opportunity just waiting to happen.

So my answer doesn’t involve old school competition but rather leap-frogging everybody and making a solid play for the future.

Hmm. Let’s see. Terry Heaton, president of ABC News. Nah. It’ll never happen. Friedman’s right. They just need a cable channel and everything will be fine.

The ambush of Craig Newmark

When we look around and try to figure out why people don’t trust us (the press) anymore, the first stop we need to make is the mirror. There’s no conspiracy. By our own actions and behaviors, we have made it nigh onto impossible for people to trust us. Witness the case of Craig Newmark and CNN.

Craig NewmarkI first met Craig Newmark in San Francisco in 2005. The occasion was a blog meet-up hosted by KRON-TV. Craig is “the Craig” of Craigslist, the free classifieds juggernaut that has had much to do with the financial woes of the newspaper industry. We spent time talking and have exchanged a few emails since, but I know enough of Craig to appreciate the gentle, self-effacing nature of his persona. He’s genuinely a nice guy, and I’ll admit an up-front bias about him.

Craig Newmark has very little to do with the operation of Craigslist, having hired a CEO, Jim Buckmaster, who has been running the company for the last ten years. Craig is on the board (of course) and hangs around in customer service, because — and again, this is his nature — he genuinely likes people and being in a position to help. He has used the resources given him in philanthropy, and not just because he can. This is simply Craig Newmark.

So it was with interest this week that I’ve read of an ambush interview by CNN’s Amber Lyon that Craig endured concerning the salacious story of people advertising for sex on Craigslist. There’s really nothing new about the story itself, but Ms. Lyon turned it into an “investigation” and cornered Craig after a speech in Washington on veteran’s affairs, one of his causes. Ambushing Craig Newmark is a little like deer-spotting, it shouldn’t be allowed, because it’s too easy.

She pummeled him with questions about why Craigslist supports sex slavery and child rapists. He froze. I’m not surprised, knowing Craig.

This week, he wrote about what the experience was like, and it’s a pretty insightful view of how it feels to have a camera stuck in your face.

As old time craigslisters know, I’m a hard-wired nerd with symptoms I’m told border on Asperger’s Syndrome. That means I’m too trusting, often socially inept, have difficulty shifting focus, and frequently am unsure what to do in situations others handle easily. And I don’t have a normal person’s ability to sense when someone might be looking to take advantage of these shortcomings…

…If Amber had done her homework, she would have known ambushing me with questions I am not qualified to answer, or even the right person to ask, would not get CNN’s viewers the accurate information they deserve.

So I should have said, “Hey, thanks, but Jim’s the guy your viewers should hear from.” Instead, I froze and looked clueless, and, worse than that, uncaring. Clueless I definitely am sometimes, but not uncaring…

…Amber, CNN, and others are depicting Jim and I as profiteers oblivious to the welfare of women and children. Anyone that’s followed us over all these years knows that’s not at all what we’re about. In reality, we’re both pretty obsessed with trying to make the world a better place, and neither have much interest in possessions or fancy lifestyles.

Ms. Lyon, meanwhile, has been bragging about the event as if she’d scored some major scoop. Here’s what her bio says on the matter:

Lyon also investigated the sex trafficking of minors on Craigslist. In a CNN exclusive, Lyon brought her findings to the “Craig” in Craigslist, founder Craig Newmark. Her interview left Newmark speechless.

In the minds of everybody who knows Craig, myself included, and those who’ve been following this story via blogs and Twitter, Ms. Lyon’s purpose in ambushing Craig was self-promotion, hyperbole to position herself as hard-edged. She may honestly feel that she did a great thing here with her “investigation,” but the lesson for us to learn is that just because we feel that way doesn’t necessarily mean that our audience does.

Craigslist CEO Jim Buckmeister later posted a blog entry of his own, taking Ms. Lyon and CNN to task. Apparently, she has now requested an interview with him.

You knew Craig was not in management or a company spokesperson, but setting CNN’s ethical code aside, you sidestepped company channels in favor of ambushing our semi-retired founder, complete with a misleading “set up” for your surprise questions. Now that CNN has aired your highly misleading piece dozens of times, mischaracterizing your stunt as a serious interview on this subject, and you’ve updated your “bio” to showcase this rare jewel of investigative journalism, you’re ready to try actually interviewing the company itself on this subject.

There is a class of “journalists” known for gratuitously trashing respected organizations and individuals, ignoring readily available facts in favor of rank sensationalism and self-promotion. They work for tabloid media. Your stunt has veteran news pros we know recoiling in journalistic horror, some of them chalking it up to a decline in CNN’s standards, which is unfortunate.

Seeing how you’ve pinned your career hopes on butchering this story, I’ll have to pass.

The decline in press trust in the U.S. began in 1976, after Watergate. I’ve said many times that the thirst to be the next Woodward and Bernstein has driven us to do some things of questionable ethics as we go about our daily chores, and this, perhaps more than anything else, has driven people away. Amber Lyon got exactly what she was seeking when she chose to ambush Craig Newmark, and it had nothing to do with reporting.

Shame on us.

(Originally published in this week’s AR&D’s Media 2.0 Intel newsletter)