We know from current statistics that a growing number of viewers in the United States are using cable and satellite through triple-play services (TV, high-speed Internet access and telephone). These bundled packages are becoming more and more financially attractive, especially when, in the larger cities at least, the telephone services include price-limited long-distance.
Consequently, off-air TV reception is for the financially strapped and for those — and I know at least one such family — who think having too many channels to choose from will make them addicted to the box.
With the current political attempt to marginalize public broadcasting — reducing public funding or placing people in a position to change the direction of both the TV and radio services — the last local offering of information is threatened. Member stations, often with unique programming, will be the heaviest hit by political games, while the network affiliates continue to offer only less-than-acceptable local news.
TV station ownership limits are only a cover story for a few individuals whose real interest is in trying to control the media. They already own the content channels they want to, and limiting the number of their terrestrial operations is no skin off the nose of their profits. Those who want the FOX News approach to the world can tune in all day (just as they do in the ready room of my local police department). Those who want something different know that Comedy Central's “The Daily Show with Jon Stewart” is probably the most serious approach they can get to fake news.
Just as TiVo has tried to change the world of TV reception by allowing us to skip commercials, there are other changes on the horizon, which, I believe, have far more monumental implications for the broadcast industry.
The first of these changes is happening in the radio arena, but it will be copied for video as technology catches up. The move to podcasting in the last year has been spectacular. Users can find aggregators, such as RadioTime.com, to put together the content they want to hear and have it all downloaded to their MP3 devices. Podcasting helps users personalize their own radio stations, whether their taste is in music, talk radio or news. Although podcasting was coined by combining Apple's iPod with the word broadcasting, an Apple device or software is not required — just RSS 2.0 software. In its latest version, RSS now stands for Really Simple Syndication. Some of the aggregators have a free level of service, but for real content, you have to be willing to pay — and people are.
Whether podcasting will challenge satellite radio is an unknown, but I am hearing smaller terrestrial radio station owners talking beyond their current formats and trying to address a type of listener rather than a type of music. This philosophy seems smart because the latter is going to be covered completely by podcasting and satellite. Drive time may continue to be a feature of the big city, but it is not going to pay the electric bill for 24/7 broadcasting.
The same thing has to happen with TV broadcasting. TiVo isn't for everyone because the sources available are limited to the package size being subscribed to on cable or satellite. Much more creative material is available. The success of Netflix (king of pop-up ads) in getting people to walk to their mailbox for rented DVDs instead of driving 10 minutes to the video store shows it. As the pipe to homes gets fatter and fatter — with some form of VDSL being realistic for most of the country within a year or two — there will be a place for aggregators of video as well as audio.
As long as they get the price model right — and they have only Netflix to beat — with no physical disk or mailing complications, the aggregator cannot lose. But the broadcasters will lose, unless they become an early part of it, as many radio stations are trying to be with podcasting. Any ideas for a catchy name for these video services?
Paul McGoldrick is an industry consultant based on the West Coast.
Send questions and comments to:paul_mcgoldrick@primediabusiness.com
