Fading broadcasters

Tim_robbins_2Quickly: The Internet will squeeze broadcasters into a slim niche.

I've often wondered whatever happened to two parts of public discourse: 1) eloquent speeches, and 2) truth-telling. I have been helping my son study American history and the other night we read two famous statements from the debates surrounding the 1850 Compromise: John C. Calhoun's defense of the South and Daniel Webster's response. Both men spoke in passionate but reasoned phrases -- one threatening secession, the other advocating union. Marvelous reading.

I'm not equating him with Calhoun or Webster, but Tim Robbins, the activist actor, employed passion and reason to recently appeal to the National Association of Broadcasters (NAB) to be, "...guardians of the human spirit." Agree with him or not, he bravely layed it on the line before a potentially hostile audience (as it turned out, he received a standing ovation).

All of this got me thinking about the broadcasting business. There are certain industries that are still in digital denial. They believe that their tomorrow will be like their yesterday, despite the rush of technology. I'd put the broadcasters in this group. So while Robbins is advocating reform, his speech is like an impassioned 1902 advocacy for seat belts in horse and buggy carriages -- good thought, but ultimately pointless.

Broadcaster's business model rests on control of their channel -- carried on a cable, satellite, radio, or terrestrial signal. The problem is that many of those channels will be replaced by the Internet. In the future, a fat pipe running at 44 mbps (30 times faster than a cable modem) or higher will hit your basement and be routed to your TVs, radios, and every other information appliance in your house. When you turn on your TV, you're going to have access to any content you want, at any time. Think high definition YouTube with every movie, every TV show, and every shred of content ever produced available with one click. TV channels, radio channels, and cable channels will still be around for a small number of households, just as a shrinking minority of households still use dial-up connections

There's a very recent example of this phenomenon: America On-Line. Why did AOL go from buying Time Warner to becoming a third tier, minor portal? Because it formerly controlled a channel (dial-up) that was ultimately vaporized by the Internet. When that happened, its $20.95 per month model collapsed.

What will the wane of broadcasters mean? 1) Internet advertising is not even in its infancy, it's embryonic. 2) Marketing power will shift from channel owners to content players and carriers (telecom and cable). 3) Ultimate choice will further splinter society -- the "kitchen hearth" provided by ABC, CBS, or Clear Channel will dissolve.

So Tim, you can rail on about how broadcasters should "lead" consumers to a better world. But broadcaster's diminishing power will mean that consumers will take themselves wherever they want to go. To restate a 1996 cliche: content will be king.

Let me know your thoughts, especially on timing -- when/if you think this will all happen.

George

Comments

re: Fading broadcasters

Forrester's Eric Steele referred me to your excellent blog and this post. I am writing from Princeton, where I served as a panelist today at a conference called "The Future of News." You are spot-on. After a hiatus of over a century, news will once again resemble a multitude of voices competing in a freewheeling marketplace of ideas, which is what consumers really want and what the Founding Fathers really intended. The limits of printing and broadcast technologies have inadvertently suppressed the number of alternative political voices, but now the Internet will unleash them. My blog is at TheFutureOfNews.com, where you will also find daily commentary and 3 "Permanent Articles" that lay out the vision I've developed while conducting research for "The Future of News" class I teach at Washington University in St. Louis. Note that my contact information is also there -- would be delighted to chat with you about my work and my learning.Steve Borisshttp://www.thefutureofnews.com

re: Fading broadcasters

Steve:I will definitely check out your blog and your three articles.My question to you: why do the broadcasters not see this change coming? And when they do see it, what will they do? Perhaps CBS buying CNET is an early indicator.George

re: Fading broadcasters

George,These are good questions. In order to give you good answers, it would be necessary to chat -- please feel free to get in touch with me using the contact info on my blog. Meanwhile, here's some things to consider:-- The networks do now seem to "get it." With convergence onto the Internet, they will lose the outrageously profitable advantage of having one of a limited number of pipelines into our homes. They are preparing to run all their programming over the Internet, even cutting out local affiliates who will no longer be needed for that "last 50 miles" to reach homes. I don't really get the c|net acquistion. Perhaps you view it differently, but it seems to me they just bought a once, but no longer great enterprise with a now questionable business model.-- The networks never really did care about making money on evening news. It was invented as a way for networks to produce evidence to politicians that they were "responsible corporate citizens" for that time every few years when they had to apply to have their valuable broadcast licenses renewed. For decades, these programs were unprofitable, yet the networks did not seem to care. This is the reason their news content is so establishment-friendly (compare how much less "hot" the political talk is on the networks to relatively unregulated cable).-- A highly-dysfunctional, change-resistant journalism culture has developed over the last few decades in an environment devoid of competition. There are lots of things about journalism and the news business that do not make sense, and they will not withstand the powerful new forces of competition.

re: Fading broadcasters

I like the discussion, Steve & George. May I point out that while I agree with Steve's notion that there will once again be a marketplace of ideas in the gathering and dissemination of news, one thing that has also occured and will only deepen is the complete erosion of what were once called "journalistic standards."While any student of the press will tell you those standards have not always been maintained, they have generally informed and guided news creation until the 1990s when increased news competition from CNN and Fox, and later, the Internet, created a much more pressing need to capture attention first and get the facts right second.This leads to today's "caveat lector" situation in which you as a reader are expected to have the intelligence to discern information from disinformation (often because the journalists can't tell themselves or didn't even try). What if you're not smart enough? Can anyone be smart enough in a world of such deep specialization in important areas such as environmental science, nuclear physics, cultural politics and more? The likely answer is no, leading us to rely on personal information filters born of prejudice, limited experience, and dogmatic conviction. These are the same factors that gave us the Spanish inquisition, the Salem witch trials, McCarthyism, and more recently, the anti-intellectual debate over the evidence for global warming where by decree of "scientific consensus" certain topics are taboo, regardless of the evidence for or against them.So while an open marketplace erodes the power of dysfunctional corporations, it does not guarantee that what replaces it will be "better" in any objective sense. CBS's acquisition of CNET, seen in this light, simply shows that a big media organization has seen the light: it understands that in the end, it won't matter which issues you present or how you discuss them, it will just matter how many people watch, read, or listen so you can send the bill to the advertisers. A bigger network = bigger audience = more ad revenue.What could be more objective than that?

re: Fading broadcasters

James:An open marketplace will be better because it guarantees that high quality, objective voices can be heard above the din of celebrity news and obvious partisanship. These voices may not be the most popular, but they will have high influence in society.George

re: Fading broadcasters

JamesActually, I think in many cases the new marketplace may be superior to the old journalism model in getting to the truth. Facts may start out sketchy, but they will be refined by other voices in a methodology of attack and defense. Thomas Jefferson thought this was nature's best way to get to the truth in religion, law, and politics. Also, reporters' abilities to present verified facts have been overstated, given their generalist nature and working conditions. They are no competition for historians and think tanks. Even Walter Lippmann, the founder of modern journalism in my view, eventually concluded that the best journalists could do was serve as "searchlights" calling our attention to one important issue after another.