PxPixel
Moo - TvTechnology

Moo

How does it feel, getting milked? A friend who grew up in his father's dairy business in Maryland showed me just how contented those cows are with the process. Moo! And how do you like being a cash cow? Well, it may be comfy, once you've forgotten about those little new product and market development efforts you bir
Author:
Publish date:

How does it feel, getting milked? A friend who grew up in his father's dairy business in Maryland showed me just how contented those cows are with the process. Moo!

And how do you like being a cash cow? Well, it may be comfy, once you've forgotten about those little new product and market development efforts you birthed a while ago that are now...veal? For the kids' sake, should she ever remember them, Mama Cow hopes they made it all the way to roast beef. But that mechanical milker keeps her so contented, it's easy to forget. Moo!

The FCC's auctions of the biggest chunks of spectrum let loose for bid in many, many years are--at this writing in late August--through with Round 26. We have some provisional winners. Before we discuss who those winners are, it is important to understand the context in which this bidding has taken place.

Qualcomm and Crown Castle/Modeo are vying for U.S. supremacy in mobile TV. Intel and Motorola have bought into both Clearwire's and rival Sprint Nextel's rollout of IEEE 802.16e WiMAX service, which should also be able to provide TV over broadband. ("Should" is the word here. It may not work well. This technology could be another LMDS, which fell short of providing "wireless cable," as we used to call it, because rain got in the way. The frequencies allocated for WiMAX, many engineers believe, are not sufficient for national mobile service.) And this winter, the FCC is planning the mother of all auctions, broadcasters' former (really, current) 700MHz frequencies used for analog TV. Anybody looking for some early understanding of who is likely to bid big bucks in January has been studying the August auctions. These auctions are really about who is willing to step up to the plate and buy the future of the industry.

And now, with that drum roll out of the way, the winners are...

Not a single company that specializes in TV stations. The closest any broadcasters came were some high bids by a group backed by News Corp., which then let itself get overbid. Analysts guess that Mr. Murdoch may be preparing some partnership with Clearwire.

So who are the high bidders? Telcos and a consortium of Comcast, Time Warner, Cox, Bright House Networks and Sprint Nextel. Sure, there are a couple of TV stations in there, but not many.

In what other ways are TV stations investing in the future of broadcasting? Well, many of the parent companies have bought into Internet broadcasting. That's the enemy, if you look at where ad revenues are trending. They're not making many new-media investments through their broadcasting subsidiaries or divisions. Look at the public financials of the broadcasting companies, and they're all pretty happy that the digital-broadcast conversion is behind them. Capital expenses are down, dividends are up. There are a couple of share buybacks, some other uses of capital besides new technology or programming investment. Almost wherever you can find any budgetary information, all of technology, programming and overall operating costs are down.

Interestingly enough, much of the technology spending by stations measured by my research group is up. But this is because--from a bean counter's point of view--once you've stopped the hemorrhaging of money going to new transmitters and to all those VTRs you used to need to buy, the spending required for upgrading to workgroup production techniques using servers and PC-based software is comparatively minimal.

Want another point of argumentative illustration? Mike Silbergleid, I'm going to respond to your July editor's column here. (Yes, folks, this is the lag time between publication and delivery dates.) The federal government's only allocated some $5 million to letting viewers know about the DTV transition. And you're right, that's bad. But who's really got skin in this game? How much are broadcasters ponying up to sell this great product? And maybe the reason they're being tight with their wads is the rest of your column, Mike: Their kids don't even know what broadcast TV is. In other words, the future is apparent and it isn't broadcast.

So, back to my question. It's really a multipart survey: How does it feel to be milked? To know that the execs in charge of your company (which may mean you, yourself, reader) were put in place by the parent company (whose controlling shareholders probably still think of themselves--at odd moments when not yachting--as in the newspaper or magazine or radio or buggy whip business) to keep the lid on and take the profits out? That you are not there to grow anything new? That, when you get really great ideas for programs or ways of making programs or any other sort of new venture, you have a sinking feeling that there's no hope of getting budget for it...and you'd better either resign yourself to not doing it or to finding an investor someplace else?

Or maybe you work for a forward-thinking broadcasting company that has escaped my attention here, and want to refute all of my nasty inferences. Maybe, rather than feeling like a milch-cow, you're feeling bullish on broadcasting. In either case, please write in and share.

Because the flies are circling here and the straw is itchy, and the stall is feeling rather confining. And we all need to spread some ideas around so we can find at least some room to turn around.

Neal Weinstock is editor-in-chief of Weinstock Media Analysis and can be reached through www.weinstockmedia.com.