Thursday, October 1, 2009

How Well Do You Deal With Change?

No Networks on Free TV?

There was a time, not that long ago, that we made appointments with our TV. We’d watch Walter Cronkite at 5:30 p.m. followed by some local news. Then, we’d anticipate our favorite network shows: “Saint Elsewhere”, “Hill Street Blues”, “Thirty Something”, or decades ago it might have been a variety show like “Garry Moore” or “Perry Como”.

We didn’t need a TiVo or DVR. We knew the times and the networks by heart. For most of us, those times are ancient history. There are some who may have read the above paragraph and said, “Uh?”

I’ve been sitting on this topic since at least June, but the news of the day dictates that I write about the very live possibility that we’re about to see the beginning another rather wrenching change in television programming. We’ve already waded through the DTV transition twice.

Now, think of what it would be like if there were no network programming on the local TV stations, with the possible exception of news. Unfortunately, I do not have local sources for this post. In June, I floated email to local general managers and the Texas Association of Broadcasters (TAB) asking what would happen if networks took their programming to cable. Only Ann Arnold at the TAB responded saying that they had no position on the issue at that point. What could this mean to you local, free, off-the-air TV stations? Read on.

Networks in all likelihood might continue providing news programming, but all of the rest of it would move to cable TV. Why not news too? Two of the networks, Fox and NBC, already have several news streams on cable TV. That’s the idea, though—create more revenue streams. Rather than filtering the revenue through local TV stations, the networks would have their own channels for various programming old and new on cable.

What precipitates the discussion today? At least in one case, a cable company might even own a network. The Washington Post, Broadcasting and Cable Magazine, and the Associated Press (AP) say thatNBC Universal executives declined to deny a report Wednesday night that Comcast, the cable giant, is in talks to buy the television and movie company from General Electric.” The Washington Post story cited sources and a Hollywood blogger, TheWrap. Attorneys for Comcast and NBC University also reportedly met Tuesday night. Broadcasting and Cable writer Claire Atkinson is more confident in her wording. “Comcast is discussing the formation of a new joint venture company in partnership with General Electric, according to executives familiar with talks. The B&C report indicates that Comcast would own 51% of the network if the deal goes through.

“If the reported discussions led to a sale, it would give Comcast an enormous amount of content for its distribution pipeline. The take-over would also mean a new owner for NBC News, MSNBC, CNBC, as well as the Spanish language Telemundo network and USA and Bravo cable channels,” the Washington Post reports.

According to the AP, “Comcast Corp. is in negotiations to buy 20 percent to 50 percent of NBC Universal, according to people familiar with the negotiations. The deal hinges in part on whether French conglomerate Vivendi SA decides to sell its 20 percent stake in NBC Universal. General Electric Co. owns the rest.”

Such a deal would send shockwaves through the industry. Note that Time-Warner, not Comcast, is the primary cable provider in Central Texas. Advertising Age Magazine reported last April that NBC had been looking for options (AKA new revenue streams) for some time. “NBC feels it's taking proactive steps and keeping costs in line as consumer habits shift with technology. ‘We absolutely believe in the future of broadcast TV,’ NBC Universal said in a statement. ‘But to be truly successful we need to take into account the contemporary media environment and all the different ways viewers today are watching TV.’"

For instance Bloomberg News reports that Time Warner is announcing Enhanced TV. Its features that allow customers to watch shows without planning ahead, said Peter Stern, Time Warner Cable's chief strategy officer. Subscribers can restart programs if they missed the beginning, watch shows up to three days after the air date, and eventually view programs older than three days. If you have digital cable, you don’t need no stinkin’ TiVo or DVR. The company is enhancing the value of its bundled services, said Chris Marangi, an analyst with Gabelli & Co. It's been at the forefront of creating on-demand features that can't be duplicated by satellite, he said.

"Cable's always had the platform to deliver the largest library of content to its customers, and they're really now beginning to exploit that," Marangi said. This also allows viewers to see the shows they want on TV rather than the Internet. NBC and other networks regularly supply programming online. “Enhanced TV is not yet available in Austin. Time-Warner is the #2 cable company behind Comcast.

“NBC has made moves in recent months that some consider shocking,” Advertising Age writer Brian Steinberg says noting the network’s move to run Jay Leno five nights a week, considerably cheaper programming to scripted productions. “Jeff Zucker, NBC Universal president-CEO, continues to play up the importance of his company's broader cable assets, warning that the broadcast medium faces wrenching technological change. Radical shifts in business practices are essential, he has suggested.”

And what would your local television station’s programming look like if they no longer had network programming? Parsimonious programming. Cheap stuff. Some of it might be good and lots of it might be bad. Without a network at least one station in the market might look a lot like News 8 with 24/7 news containing recorded segments interspersed with live updates. Another station might look like KEYE’s 4 O’clock as one prescient reader said in a comment to an earlier post. Stations would find usable syndicated programs. Some stations might return to the practice of signing off the air in the overnight hours.

Oh well. There is always the DVD player. Does the VCR still work?

© Jim McNabb, 2009


Anonymous said...


Since you brought up reports that Comcast may buy NBC Universal, I thought I'd provide you with this additional information.

Comcast has been busy buying back 141 million shares of its own stock for about $2.8 billion to help reduce the number of shares and help increase earnings per share. Such a move would improve the company's financial posture when it asks banks to finance any major purchase, such as...oh,let's say for something like NBC Universal.

But alas, not all is sugar and spice in Comcast land, as the company makes itself more financially appealling.

Some stockholders think company CEO Brian Roberts is overpaid. Last year, Roberts total compensation was $23.7 million. A group of stockholders noted that Roberts' compensation was 563 times the pay of non-supervisory employees (call center workers, technicians and maintenance workers). The Shareholders group said, "shareholders are entitled to an explanation of why the ratio is so large between the highest and lowest paid at Comcast and what steps, if any are being taken to reduce that ratio, especially because we believe that a company's success is driven not merely by the CEO, but rather by the whole workforce."

Lance said...

NBC LA has a 24/7 "spot news" cast called "NewsRaw", on one of the OTA splinter digital assignments. One Anchor presents a recap of all the spot news that's fit to view from the past 24 hours or so. It consists of Anchor VO over non-recut video from KTLA's newscast. It has no live shots or network material. It's a way of inexpensively filling the assignment.
Of course I think it's charming..wish they would flesh it out with a crew or two and they might have something.
One of the problems for news/ratings is the constant balkanization of sources. I have to wince at the constant affiliate references to "our web site."
There is somewhat hopeful talk out there of "some day, all television will come over the web". OK, then we will have to boot up (if you don't want to eat drives) and select, then walk over and turn on the monitor. Still the same selection habit, with a few more steps.
By dividing the ways news is transmitted, and increasing the ways it can be received, television is eagerly destroying itself, and the role it played in information and education. If it was the cool fire, it is much fainter than in previous decades. McLuhan remarked on the "waterhole". The community gathering on one or a few channels in the cool of the evening to "watch". In a very tertiary and distant way this is what we've done at twilight for 7 million years. To exchange news. To learn. To maintain a culture. Now were gathering at a thousand different pools, at different times.
Is there any value to a "dominant" network or local newscast? Where 60% to 70% of the people are exposed to the same information at the same time.
Did that have a cultural and political effect, and was that good or bad? Will there be a Cronkite in the future than can shift opinion away from an ill thought war?
Something to consider.

Anonymous said...

LIN TV, the parent company of KXAN,
says NBC, CBS and ABC will eventually stop paying compensation to LIN to carry the network's programs on 20 of the company's stations.

LIN's recent compensation agreements with networks already reflect a reduction in compensation. In some cases, LIN has to pay networks for programming.

Like all other broacast companies, LIN stations like KXAN are looking for ways to increase revenues and reduce costs.

One-man band journalists could be in LIN's future.

As the company puts it,"We are transitioning to journalists that have a wide range of skills, including video camera operation, writing and editing. Multitasking is an important component to the modern newsroom and allows our journalists to connect better with the final product and claim more responsibility, resulting in a higher-quality story and more content at a lower cost than the traditional approach."

Everyone who works at KXAN should bone up on multi-tasking to help protect their employment.

NewsMcNabb said...

Editor's Note: "Anonymous" #2 (3rd comment). Thank you for your comments. They are correct.

I have written just about the same words in posts in the past year. "Doing More With Less" is one of them. They are archived.

Again, thank for reading and responding.