Extinction-Level Television Event

This is a must read editorial by Alan Sepinwall in the NY Times. Sepinwall, a television critic for the Star Ledger, has a keen sense of the direction that broadcast TV is taking. I too miss the quality dramas that once filled prime time. But as broadcast begat cable TV, broadcast is now acting more and more like cable children. This downward spiral begs the question, with nothing to watch on broadcast today, what will cable TV have in the next 10 years to fill its air waves. If it's user generated videos, I'm gone.

The article is copied below:

I’M a runt of Generation X, which means 1) I’m supposed to define myself entirely through ironic references to pop culture, and 2) as a member of the last generation to come of age in an era of only three TV networks, I assume everyone will understand when I drop a quote from “Scooby-Doo” or “The A-Team.”

But the generation immediately after mine has never known life without cable, and the generation after that won’t know a life without streaming video. Having only three TV channels to watch must sound as quaint to them as radio plays do to me. Today’s entertainment universe provides endless variety for every demographic and taste, and the things that everyone actually wants to watch together are few and far between.

That’s what makes NBC’s decision to surrender its weekday 10 p.m. timeslot to a new Jay Leno talk show as inevitable as it is sad.

NBC at 10 p.m. was once the birthplace of dramas like “Hill Street Blues,” “St. Elsewhere, ” “L.A. Law, ” “Law & Order,” “Homicide: Life on the Street" and “E.R.” These were groundbreaking shows and, for the most part, mass successes — the kind of hits that plenty of people at any school or office would be able and eager to talk about. Now, because the expanding television universe is shrinking individual audiences, and because NBC has shown depraved indifference to the idea of program development for the last decade, the network has no better option for the hour than moving Jay Leno from late night to prime time.

Next fall, when Mr. Leno assumes his new timeslot, NBC will continue to schedule football on Sunday nights and repeats on Saturdays. That leaves only 10 prime-time hours for original programming, and knowing the way NBC operates these days, at least four of those will likely go to super-sized editions of “The Biggest Loser” and “Deal or No Deal.”

This reminds me of a joke Tina Fey told at the Television Critics Association awards ceremony. She thanked us “for making ‘30 Rock’ the most successful cable show on broadcast television,” and added: “Oh, it’s a great time to be on broadcast television, isn’t it? It’s exciting! It’s like being in vaudeville in the ’60s!”

We all laughed, but it was the sort of laughter designed to fight off tears, you know? The big networks have all been trending inexorably downward for years. Shows that pulled in an audience of 20 million or more viewers only a couple of years ago are now happy with numbers in the mid-to-high teens, and the acceptable slice of the demographic pie is getting ever narrower. (Expect a press release someday soon boasting that a reality show won its timeslot among redheaded girls ages 11 to 11 ½.)

As the audience shrinks and the networks increasingly program for niches instead of the general public, they resemble cable channels more and more.

There’s a lot to be said for the cable model, where lowered expectations and a smaller inventory of original programming has led to instant classics like “The Wire,” “The Shield” and “Mad Men.” But while “Mad Men” is a wonderful show, it gets two million viewers when the winds are calm and the planets are aligned. It’s in no danger of becoming such a big hit that people at the post office will laugh at your Freddy Rumsen impression.

We’ve been heading to this point for decades, long before NBC picked Conan O’Brien to take over “The Tonight Show,” even before Jay Leno was chosen to succeed Johnny Carson.

In the late ’80s, Fox recognized the financial advantages to looking like a network without being one: the fledgling channel deliberately didn’t program the 10 o’clock hour because that would have made it, under the F.C.C.’s definition at the time, a broadcast network and subjected to much stricter regulations. (Back then, Fox couldn’t have owned its own shows, for instance.)

The F.C.C. has since relaxed those rules, and Fox is now technically a network. But the very concept of a network has lost much of its meaning.

Of course, the networks still do good work — even in its end-of-empire days, NBC has given us “30 Rock,” “The Office” and the deliriously funny “Chuck” — and on occasions like the Super Bowl or an “American Idol” finale, they even bring in big ratings that evoke the good old days of a mass medium for a mass audience. But several generations now think of NBC, ABC, CBS and Fox as just four channels in a 500-channel spectrum. Really, the only thing that distinguishes them from the cable channels is that they still try, most nights, to be broadcasters, generalists in an age of specialization.

To use a pop culture metaphor that everyone should (I hope) understand, the networks are Wile E. Coyote running off a cliff. So long as they pump their legs and assume there’s solid ground beneath their feet, they get to keep moving. But as soon as one of them gives up and looks at where it is, as NBC has with the Jay Leno deal, there’s nowhere to go but way, way down.

Digital Media - Local Becoming Personal

It is not enough to be local anymore. Sure it's nice that a website can capture your zip code and demographics and provide potentially locally relevant content and ads. But for content and advertising to be most effective and efficient. It must be able to understand the users' interests, needs, and wants as well. Let me give a few examples:

1. Your zip code may tell you that you live in the NYC metro, but it doesn't tell where you are going. Learning that you are seeking weather information in Southern Florida could lead to multiple relevant info to be pushed to your screen including airline and rental car information, dining and tourist suggestions, and packing tips including buying sunscreen, new bathing suit etc.

2. Searching for information on having a baby might just bring up information on buying a minivan for a new family. And once you've perhaps made a minivan purchase, that content would shift to service, after market devices for the car, or perhaps car information for a smaller second car.

3. Lastly, local news may not be relevant to you. Living in the market doesn't necessarily mean you care for the local info from that market. As an out of market sports fan, I would prefer to receive sports information for my teams and not just the area sport teams. I may live in NJ and prefer that any news only include NYC and NJ and exclude Westchester and Long Island. The content must be customized for my interests.

Websites are moving in that direction. As you search on iTunes or Amazon, you are presented with options and recommendations that may be of interest to you. It is becoming clear that all media content and advertising must continue to be personalized for the users' experience. Assuming that all local is relevant may be missing valuable opportunities to effectively reach them with information and messaging that will be of interest to them. We cannot continue to inundate the user with messages that may not be of interest to them. Too many non relevant messages cause us to turn off entirely and not see anything. Staying personal to the needs of the user will make the interaction, whether it is through the TV, web, or mobile phone, more valuable and more effective.

Stars send anti-strike letter to SAG

Finally some dissension in the ranks as some notable actors try to bring a rational voice to the discussion. Recognizing how bad the economy is, they are urging their fellow actors to call off the strike vote which is scheduled for January 2. If SAG thinks that a strike authorization vote will give them more leverage and legitimacy at the negotiation table, then they are poorly mistaken. The writers strike hurt everyone; AFTRA, the other acting union, has an agreement, as do the DGA and other unions. SAG is not about to get a better deal. And as the current economic situation is proven, it is still about pennies and not dollars. Arguing over distribution models that aren't yet proven is not seeing the forest through the trees. yes, distribution of content is changing; but, it means negotiating a shorter agreement till a winning economic model emerges. "'None of our friends in the other unions are truly happy with the deals they made in their negotiations,' the missive said. 'Three years from now all the union contracts will be up again at roughly the same time. At that point if we plan and work together with our sister unions we will have incredible leverage.'" Now that is the voice of reason.

Pew: Most Will Access Internet Via Mobile By 2020

Our cell phones have become our mobile computers. Sure, we can still make calls with them, but they are our lifeline to content - information and entertainment. Feel lost when our cell phone has lost power, or worse still, we left it behind. Today, our cellphone takes pictures, plays our songs, locates where we are going, and gets us scores, stock prices, Facebook updates, and tons of other information. The more we use it, the more valuable it becomes.

And so the Pew Research does not surprise many. "Wireless devices will be the primary means of connecting to the Internet for most people worldwide in 2020, according to a new report by the Pew Internet & American Life Project." In fact, it is more likely to occur far sooner.

What is next for the cell phone is easy to predict: convergence. "Others believe the limitations of the mobile screen will remain a barrier to wider types of use. According to Hal Varian, chief economist at Google: 'The big problem with the cell phone is the UI (user interface), particularly on the data side. We are waiting for a breakthrough.'"

Apple's iPhone has already brought a better UI to the masses and more innovation should be on its way. What I expect is that the cell phone must more easily "talk" to the PC and TV. Watch an ad on TV or PC or mobile screen and interact with it through your phone. Capture a coupon to virtually bring to your supermarket. Get the closest car dealership to your GPS location. Play games between your mobile screen and the PC or TV. Vote, collect a recipe, share a show with a friend.

Advertising is moving toward more interactive capability. Add to that the mobility of the cell phone and let these devices interact with one another. Who needs a TV remote when your cell phone is by your side. Yes, we want to use the phone to access the internet, but we also want the phone to interact with the other devices in our lives!

Entertainment Weekly Considering Going Online-Only?

How can a weekly entertainment magazine compete when its information is being seen and consumed on a daily basis online. And while subscription may have dropped in 2008, EW says publicly that they have no plans to drop their print edition. The challenge is that subscriptions will continue to drop as their consumers stop renewing. In fact their audience seems to prefer consuming their content on the web, as their traffic their actually grows. Consumers may enjoy the content that EW offers, but their consumption patterns are changing and so must EW.

First, stopping a print subscription does not necessarily mean stopping a digital subscription. Using digital readers like Kindle and Sony will save printing costs. perhaps consider bundling your subscription with others in your family of "magazines" and offer a free reader with a 2 year subscription to three digital mags of the consumers' choice. Bundling has worked for the cable industry, it might just work for digital magazines.

Otherwise, the path seems clear. EW, like the Christian Science Monitor before it and others soon after, will be announcing the end of their magazine subscription. With online competition from its own web site as well as others like Perez Hilton and TMZ, delivering the latest entertainment news on demand, technology is killing the print edition.

CBS May Drop Affiliate TV Stations, Les Moonves Says

While Marketwatch didn't quote Les Moonves directly, this is a CBS site and it makes the news much more credible. The comment reads "that in 10 years, CBS may no longer have traditional affiliated TV stations, but could offer its feed straight to cable and satellite operators. For now, however, the network has contracts with local stations that are binding for several years." But is 10 years too soon or too long. Today, the networks are having a hard time filling their current air time. To be responsible for 24/7 programming may be a bigger financial issue than they can already afford. NBC has already announced that they are replacing 5 hours of prime time programming with Jay Leno. How would they fill the off prime hours, too?

Technology has changed the game. Already we are seeing local affiliate news teams dismiss anchors, reporters, and staff to remain lean and mean. Cable distribution will enable local advertising breaks and access to interactive applications. Local affiliates may have to either combine into more regional than local nets or morph into stand alone networks. For WCBS and others, it means negotiating a separate channel on the cable line-up from the CBS national feed.

It seems that localism is losing to regionalism. Cable companies are closing local offices to compete more regionally against their distribution rivals. Other companies are also consolidating operations to handle more activities with less labor. Technology has had a hand in this too. Need support, your phone call to a company support desk might just be handle across the continent. Where local once mattered as a competitive distinction, cost efficiencies mean regional or even global matters more. For the local TV station, Les Moonves may just be right and their days are numbered.

Actors Union Urges Members to Approve Strike Authorization

Strike, strike, strike. Is it just talk or is it a serious threat? Yes, people are watching the web; Comscore just released its latest metrics and they show huge year over year growth. Hulu has jumped up to 6th place and average usage per viewer has increased. But advertising revenue is dropping and online media has been difficult to fully monetize. As Jeff Zucker has said that he fears they are turning TV dollars into digital pennies. The unions are fighting for a bigger share of the digital world when they are ignoring the fact that their bread and butter revenue is drying up more quickly. "Bill Ratner, a voice-over actor who records commercials and teasers for television programs, said he will vote against authorization “partly because of the economy” and also because not enough is known about the value of online programming." Instead of following the trend, SAG needs to look at the aggregate of usage, regardless of where the content is being consumed. Take a percentage of the whole revenue, not a percentage of each distribution piece; otherwise, they will find themselves on a wild goose chase.

Back to a potential strike, with so many layoffs being announced, cities in economic hardship, and company's revenue down, now is not the time to strike. It may be an idle threat, but if it becomes reality, it will be the final straw. NBC is already reacting to the high costs of TV programming; with the announcement of Jay Leno taking 5 hours of prime time programming, they have reduced their costs tremendously. Talk shows pay very little. Inexpensive programming that can be repurposed cheaply for the web. That is how NBC will beat SAG. Add more game shows and reality programming and the unions will be fighting for non-existent jobs. And as for the movies, independent films, foreign films, and non SAG productions will find consumption. You may kill movie theater business, but viewers will find it on the web and push it to their TV.

Prime Time on NBC is Changing - Can It Work?

Imagine this scenario: The writer's strike stopped production of broadcast content, TV advertising revenue, like other media is down, and forecasts are for more decline. The actors union is threatening to strike which would shut production again. Costs are going up and revenue is going down. With NBC, repeats haven't been working, new shows haven't been working, old shows are getting more expensive to produce and are seeing their audience declines. Solution, talk show programming weekdays on prime time!

When the announcement was made that Jay Leno was being taken off the Tonight Show to be replaced by Conan O'Brien, the speculation was where Leno was going. To ABC to compete against his former show? Or to Fox (which has had a lousy history with talk shows - remember Joan Rivers and Chevy Chase). Well today's announcement by NBC essentially kills two birds with one stone. They keep Leno and they fill the primetime with cheap programming. "Interesting how this news comes right after NBC Universal chief Jeff Zucker told an investors conference today that he's considering cutting the number of hours and even the number of nights that the network airs programming. Since The Tonight Show is a cash cow, Zucker no doubt figures that Leno at 10 PM could be another."

But can a talk show/variety show work on prime time, 5 days a week? I personally am a fan of seeing a variety show come back to prime time. And while Rosie Live was a fiasco, a polarizing host with frenetic pacing, the concept has potential. But it is not a five night a week show, nor should it be a talk show. Five nights will kill this experiment....FAST. And what will it do to a Conan hosted Tonight Show? I'm afraid, it will be viewed as competition and could actually kill the Tonight Show franchise once and for all.

Let me propose to NBC how this show should be developed. First, pick one night. Second, move it to the family hour - 8pm. Next, relocate the show to Vegas to utilize a different talent base. While some of Jays bits should transfer, the new local provides an endless resource of Vegas talent to draw from as well as tourists to make fun of. You also benefit by getting audiences interested in attending the show. Live or taped, your call, the viewer won't object to either. Lastly, make Jay more the master of Ceremonies and less the centerpiece. One bit a show is fine but the remainder should be the acts onstage. These changes will provide you with an inexpensive program, a greater chance of ratings success, and won't damage the Tonight Show brand.

Don't follow this advice and lets count how many shows air before this 10pm fiasco fades to distant memory.

Once Something Is Free, It Is Hard To Start Charging A Subscription

Free samples have proven a great marketing tool to get customers to try something before they buy it. But in the case of online content, when content has been given and consumed for free, it is hard to convince the user to start to pay a subscription fee, even with the incentive of no advertising. Perhaps it is that the consumer has got hardened to the fact that there is always advertising. And in most cases, even with a subscription (newspaper, magazine, cable TV, etc.), there is both subscription AND advertising.

In the case of Facebook looking to offer a premium subscription model, ad free, a paltry 2.4% would be willing to pay about $40 a year. There is some elasticity in the model. As the proposed price point is reduced 25%, another 2% would be likely to pay. And likely to pay and actually buying a premium subscription is most likely much lower than that. Linked In has tried a premium model as well, offering additional services and better information for a fee. Whether they are successful or not, only they can tell us.

Still this was an interesting study by Ad Age. In the case of the internet, the revenue is still in authorizing the connection to the web. The cat seems out of the bag to try and convert free content into paid content. With barriers of entry onto the web so low, anyone can author a website and deliver content, content can be copied and share easily, and free content has become the status quo. Today, it seems that advertising and e-commerce are the best way to produce revenue.