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Originally featured on BroadcastEngineering.com
Aug 3

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8/3/2009 10:00 AM  RssIcon

recession.jpgThe good ol' days aren’t coming back. Good!

Few would call me an optimist, but don’t put me in the sky-is-falling category either. Even so, trying to remain positive with negative economic headlines isn’t helping my attitude.

Never following the left’s mantra of bigger government is better than smaller government, practitioners of that philosophy were pretty much off my reading list. One of those people is Robert Reich, former Secretary of Labor under President Clinton. Now, however, I’m willing to give him an ounce of credit for sanity.

In early July he wrote, “In a recession this deep, recovery doesn’t depend on investors. It depends on consumers who, after all, are 70 percent of the U.S. economy . . . Until consumers start spending again, you can forget any recovery, V- or U-shaped.” He continues by saying, “This economy can’t get back on track because the track we were on for years . . . simply cannot be sustained . . . we should be asking when and how the new economy (my emphasis) will begin.”

I made the mistake of clicking on his blog’s print icon so I would have a hard copy of his post. Three hundred comments and a full ream of paper later I realized there are plenty of folks upset with today’s economy and eager to blame others.

Even if you aren’t being laid off, there is a good chance your hours have been cut back. At one industry trade magazine with which I am familiar, employees were recently informed they can begin applying for unemployment benefits because the company has reduced their work hours by 20 percent. The company is closed on Fridays. Oh well, even a part-time job is better than a no-time job.

A July 14 story from the “New York Times” says one out of every five people “who would like to be working full time” is not now doing so. The current unemployment rate is 9.5 percent, the highest level in more than 25 years. However, this number does not include those who have given up looking for a job and part-time employees who want to be working full time. According to the article, when Reich’s former employer, the Labor Department, includes these people, the true unemployment rate reaches 23.5 percent in Oregon, with many states’ rates exceeding 20 percent.

Are things going to turn around soon? No; not even according to Mr. Hope and Change. He said the nation’s unemployment rate will “tick up for several months.” It’s been predicted that California’s unemployment rate may reach 25 percent later this year.

Sure, you can find thousands of articles on the claimed benefits to be realized of his stimulus program, but consider this. While his spending on building bridges and roads may ultimately prove beneficial, laid-off, white-collar workers aren’t going to get jobs building bridges.

All this leads me to the point of this article. What does this mean for broadcasters? Would you encourage your teen to enter our industry?

There is plenty of research that predicts that broadcasters are increasingly seeing competition from a variety of new players. Let’s look at some of these new competitors.

According to the research firm In-Stat, the worldwide value of content delivery networks (CDNs) will nearly double over the next five years. IT technology will enable new methods of storing and playing back content. If you look at who these players are, it’s quickly obvious they don’t use $500,000 transmitters to move content to consumers. Instead, they rely on broadband networks and IT solutions — much of which they don’t need to purchase. This allows them to provide a variety of interactive services from a technology-agnostic platform. In some cases, these players control all parts of the content delivery path, unlike broadcasters who may struggle to get handset makers to cooperate by building OTA delivery into new handsets.

Who are these CDNs? The players include familiar names: Akamai, Limelight, DG Fastchannel, Level 3, Signiant, Cisco, Ascent Media, Envivio and the list goes on. Not one of these players is locked into lowest-common-denominator solutions. Instead, these competitors can quickly adapt to market conditions, often because they own most of the solution pieces.

Future competition was brought even more into focus during a webcast from In-Stat’s Gerry Kaufhold (a former Broadcast Engineering writer). Kaufhold divides content into three categories: professional, personal and communications. The latter consists of fully two-way interactive content. Think e-mail and IM.

Professional content is delivered by the traditional players: broadcasters, cable and the Internet. Personal content is handled by the well-known video outlets such as MySpace, YouTube, etc. Communications content is provided by cell phone companies and may include blogs, communities and online activities. His point is that all this content is “blending.” Because broadcasters do not provide the entire range of content, they may someday no longer be the primarily path for consumers’ selections.

Some consumers will be quite satisfied to cancel their paid TV services (cable, satellite) if much of the content they want is available via broadband. Granted, finding your favorite show on the Internet is currently a bewildering experience. But, new TV sets are making the process easier.

080309_barchart_fig11.jpgWith the expansion of Wi-Fi hotspots (See Figure 1 to the right), it becomes easier for consumers to get what they want, where they want it and when they want it. The missing element is portable receivers. According to Kaufhold, those mobile player solutions are just around the corner. (See Figure 2 below.)080309_linechart_fig2.jpg

In an article from InformationWeek, a survey revealed that 40 percent of U.S. consumers looking to make a mobile device purchase in the next three months want a single gadget that can handle a variety of services, with handhelds and ultra-lights topping the list.

What does this mean to broadcasters?

The mobile video market is set to explode. Almost 200 million viewers will soon be eagerly searching for content. Without a broadcast industry push, these viewers may not be tuning to your transmitter to get that content.

So where does this leave those employed in broadcast, cable and satellite?

First, it means we still have to do 100 percent of the work, but perhaps with only 80 percent of the staff. Management has no incentive to serve these new audiences or outlets if it means hiring more people. You’ll have to do it with the same number of staff, so look to technology for solutions.

Even though we more experienced workers may long for the “good ol’ days,” Reich is correct — they aren’t coming back. The solution is to maximize performance through technology. Fortunately, if I may add a commercial, Broadcast Engineering will be there to help you make that transition.

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Thursday 10:05 AM
NAB Requests Expedited Review of Spectrum Auction Lawsuit
“Broadcasters assigned to new channels following the auction could be forced to accept reductions in their coverage area and population served, with no practical remedy.” ~NAB


 
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