The (Sorry) State Of The Industry
I write this in September, as I prepare for IBC. With the first issue of DigitalTVTelevision Broadcast having hit the streets, I've gotten a lot of phone calls from manufacturers, analysts, and regular TV industry people wanting to chat. Inevitably, the conversation turns to what I think about the state of the industry.
Here's the obvious: the industry is on hard times. We all know that. Just look at the page count of this magazine as well as that of TV Technology, Broadcast Engineering, and Broadcasting & Cable. A little thinner than usual aren't they? What everyone wants to know is...when will it turn around? And they want me to tell them, because, in their eyes, I should know.
I'm Not That Egotistical
The reality is that I have no idea. I don't even think Alan Greenspan has any idea. But people want hope, and they usually turn to trade press editors to get it. But do I have any hope to give? Is it time for a sermon on the mount or should I just take my loaves and fishes and go home?The reality is that all trade magazines are thinner because manufacturers, their sales declining, have cut back on advertising. The bigger reality is that people buy equipment and technologies for only three reasons: replacement, expansion, or to cut costs.
Replacing equipment. Manufacturers have become victims of their own success. Designing better digital systems means those systems work better and last longer. Which means they don't need to be repaired or replaced as quickly as their analog counterparts. No wonder manufacturers push service contracts. Expansions. Yes, there are some expansions. But overall, expansion is not a major driving force. Even industry stalwart Conus has imploded.
Cutting costs. This seems to be the thing, especially if youâre a network or group owner. NBC has been exploring new technologies. It has broadcast hubs with master control operations in Los Angeles, Miami, and New York City, and is beta-testing the centralization of graphics in Fort Worth. The results for the network will be decommissioned master controls, repurposed equipment, and the potential for staff reductions (someone has to pay for all that fiber connectivity). Of course, the two questions for NBC are: Is it technically possible and does it make economic sense? Just because the answers might be "yes," doesn't mean it is necessarily a smart idea.
Case in point: news editing. I've been told that the folks at 30 Rock are considering centralizing news editing. On paper, this might look like a great idea: someone shoots a story, drops off a tape, and goes right back into the field, shooting a lot more stories.
NBC O&Os will have a lot more news packages. But since you can only report so much news in an hour, Iâm sure they'll trim the number of news crews. NBC will have efficiencies. Bully for them and GE. What NBC wonât have is a local feel for the stories their local folks shoot. The city, the people, the issues...none of that will matter. I'm sure the ABC, CBS, and Fox O&Os in NBC O&O markets can hardly wait. I can hear the news promos now: "More news crews and stories made right here in your town, USA·Do you really want your news edited by someone in New York?" Brilliant. But I digress. I'll pick this editorial up after IBC.
Well, it canât get much worse...I hope. At IBC, I wrote the financial recovery story for The IBC Daily. The gist: companies are positioning themselves saying they have the resources to survive and prosper (read: buy from us, weâll be here for a while), companies announced that they would concentrate on their core competencies (read: we know what we're good at, and since you didn't buy the other stuff, you probably know too), and lower-cost offerings (read: OK, so we would like you to spend $100,000 for our system, but weâve got lower priced versions that are almost as fast).
Now that manufacturers have trimmed down and refocused their businesses, they only need to do one more thing: sell product. Weâll see that too. Not that it canât get any worse. The question is when will buying pick up?
The unknowns: digital transmission, high definition, must-carry, the economy, and ownership caps.
Question: If broadcasting is in the toilet, why did Arlington Capital Partnersâ New Vision Group just buy KSBY-TV (NBC, Santa Barbara, CA), with plans to buy KVII-TV (ABC, Amarillo, TX) this month, and more middle-market stations in the future? The answer comes from Perry Steiner, managing director at Arlington Capital Partners: "We believe the fundamentals of TV are strong today. With the advertising economy stabilizing and regulatory and ownership restrictions under review by the FCC, we believe this is an attractive time to enter the broadcast industry in partnership with experienced operators." At least someoneâs buying something.
Michael Silbergleid is the editor. He can be reached at: email@example.com