At the dawn of the age of television, Daryl Zanuck, movie industry icon and head of 20th Century Fox, declared “Television won't be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” Zanuck's rigid views about the side of the entertainment business he was in kept him from seeing where it was going.
Looking back, Zanuck's lack of insight on this aspect brings a smile. But while much has changed in our industry, we still have blind spots that keep us from seeing what could be instead of what is. One of these blind spots has to do with technology.
Despite the dizzying rate of technological innovation during the last two decades of the 20th century, the adoption rate of leading-edge broadcast technologies lags. Many stations haven't significantly changed the way things are done since the 1970s.
New technologies have been adopted, but the resulting changes have generally been more incremental than revolutionary. This is because it takes more than new broadcast technology for stations to make a quantum leap forward. New kit and software can only get you so far: Operational changes that reflect the rapidly evolving competitive landscape of digital television are required. To remain viable, broadcasters must embrace a new business model that reflects the fragmentation of their audience and offers the ability to target multiple market niches simultaneously.
You say you want a revolution…
While I'm not advocating change just for its own sake, sometimes it takes a revolution to bring it about. We're on the threshold of a revolution that will alter the way broadcasters operate. Back in the old days content was broadcast over one of three networks. Since then, we've added cable and satellite as content delivery channels. From a broadcasting perspective, the market becomes increasingly fragmented with each new delivery channel. Now we have the Internet, and broadcasters are trying to figure out how to respond to it — as well they should, since it's here to stay.
What about the Internet? Technically, what broadcasters need to focus on is Internet Protocol (IP), not the Internet. IP is a new transport mechanism for broadcasters that represents the potential to increase or at least maintain revenue streams. It is part of the evolution of broadcast.
Whether broadcasters embrace or reject IP as a transport for their content, this much is clear: Availability and cost of bandwidth, as limiting factors to IP broadcasting, will soon go away. When they do, and the content is available via this method (using either a push or pull model) consumer demand for delivery of content through these pipes will increase. How do broadcasters position themselves to view IP as an opportunity, not a threat? Station automation solutions put all content on a server, making it simple to serve content up through an IP pipe, or any pipe, to rapidly cater to changing viewer patterns.
The biggest threat to the future of almost any enterprise is the complacency that assumes tomorrow will be like today, and today will be like yesterday. Broadcasters must assume that their station's market will change, but broadcast's history shows resistance to change. We were happy broadcasting in black and white until NBC and RCA broke from the pack. We saw similar internal debates over broadcasting in stereo. Now, the area of resistance is digital broadcasting. What does a broadcaster do with all these new channels?
Perhaps the easiest way a broadcaster can exploit these new channels is to create a “favorites” channel for soaps, game shows or sports for rebroadcasting previously aired content. Such an initiative doesn't take much in the way of resources or capital. Timeshifting represents another use for a new channel that doesn't require the creation of any new content.
Interactive TV is another possible use. For example, the BBC broadcast this year's Wimbledon interactively using a station automation system. Viewers had the option to see the spool feed, or select a view from any of Wimbledon's six courts. New broadcast technology allows stations to be nimble in this regard.
Most broadcasters agree that there is a far keener focus on money in the business now. It's all about ROI and doing more with less, or more with the same — a reflection of an increasingly fragmented and competitive market. In this environment, new broadcast technologies provide a means to compete more effectively, to be very agile with respect to changes, and to be well positioned to take every opportunity that comes about.
Andy Ioannou is CEO of OmniBus Systems.