Speech to the Broadcast Education Association at NAB

Transcript of my speech to the Broadcast Education Association’s session at the National Association of Broadcasters annual conference, Las Vegas, Nevada, Friday, April 22, 2005.

[In his introduction, Max Grubb of Kent State University’s School of Journalism and Mass Communications provided my newspaper industry credentials, which isn’t surprising because those are what I’d provided to the NAB/BEA months ago.]

Thanks, Max. The beauty of that is those credentials don’t necessarily appy here. Why is a guy with largely newspaper industry credentials here at the world’s largest broadcasting conference?

Because eleven years ago, when I stopped working in the old media and began working full-time in the new medium, print was about all that you could realistically put online. In a world of 300-baud or 1200-baud modems, you couldn’t really deliver video online.

How the world has changed since then! According to the latest figure, 56 percent of the American homes that are online now have broadband connections. Most American corporations already do. Video has become as easy to deliver online as is print.

And what a phenomenal latent market for online video news! According to the Pew Internet Study, 83 percent of Americans say that they get most of their news and information from television. They are going to want that news & information online, too.

During the past decade, more than 600 million consumers — including 167 million Americans — migrated online, even though the Internet really gave them only text and still photos. What if they could have just as easily gotten their favorite medium — video — online?

And video news had better get online. According to the investment bank Veronis Shuler, the ratio of time they spent watching TV against the time spent on the Internet, in households that had both, was 8:1 in 2000 but is 4:1 today. To keep what’s left of its share of Americans’ attention, TV news must be delivered online rather than just on cable or over the airwaves.

The fact is that television, not magazines or newspapers, is the news medium that’s lost the most of consumers’ spare time and attention to the Internet, according to survey of consumer media usage.

The conference program says the title of my speech today is Challenging the News Establishment. Well, this is the challenge: Video news must go online or else.

Indeed, it’s somehow appropriate that this Broadcast Education Association session is held at the end of the NAB conference, when all the exhibits are being torn down. There is a visual metaphor occurring outside: Look outside and you’ll see the broadcast industry being disassembled. That’s what’s actually happening to the broadcast industry.

And I’m glad to be the opening speaker on a panel entitled Reinventing the Local TV Station; Ground-Breaking Ideas from Innovative Thinkers. Why? Because it’s the local stations that will win or lose the future for the broadcast industry.

We’ve heard at NAB what the national networks are doing in the face of the major changes the broadcast industry faced. But they’ve got enough staff and money to do whatever they want (even if they don’t know what they’re doing). The real challenge in the broadcast industry is what can local TV station can do faced the major change in the industry?

And you broadcast journalism educators in the audience have the hardest challenge of all: You’ve got to teach the future, literally teach the future. You’re students are the future, and the future is what you must teach them.

Are there major changes occurring? Of course, there are. Everyone now realizes it. Everybody.

For example, Rupert Murdoch last week gave a speech in which he said about the changes, — as an industry, many of us have been remarkably, unaccountably complacent. Certainly, I didn’t do as much as I should have after all the excitement of the late 1990’s. I suspect many of you in this room did the same, quietly hoping that this thing called the digital revolution would just limp along.

Well it hasn’t — it won’t. And it�s a fast developing reality we should grasp as a huge opportunity to improve our journalism and expand our reach.

And what’s remarkable about that speech isn’t what was said but who said it — Rupert, the wizard of old media. He’s finally got the new medium religion. In media, that’s like the Roman Emperor Justinian converting to Christianity. It’s a baptism. What was subversive has now become the accepted status quo.


Broadcast is migrating online. ABC this month launched it 24-hour news channel only on broadband, not cable or terrestrial broadcast. CNN and CBS have similar broadband channels in the works.

Another example of how the industry is migrating online? The John Stewart clip, in which he demolished CNN’s Crossfire show got 400,000 viewers on TV but 5 million online. According to Veronis Shuler, the ratio of TV to Internet, in households that had both, was 8:1 in 2000 but is 4:1 today.
And what are these major changes the broadcast industry faces? I’ll outline six of them, then we’ll let the following speakers suggest ways that local stations can deal with the changes.

Here, in no particular order, are some of the changes that local TV stations face:

* On-Demand. Less and less will programs be viewed only in a program schedule set by the networks or the stations. More and more will people view programs when they want. It’s already happening. Look at Tivo users. Look at how cable operators themselves are beginning to install cable boxes that have built-in Digital Video Recorders (DVRs). Although broadcasters might release new programs at pecific times, consumers will view those programs more and more whenever they want.

To quote Om Malik: “We can pick and choose what foods we eat, what car we drive, what clothes we wear, but some guy in New York decides when we watch the news?” Or a guy at the local station guy. Well, no longer.

For an example of a specific effect of this, consider program schedules that have involved lead-ins. If you’ve had Oprah scheduled just before your evening news program, it’s been a good lead-in that drives more viewers into your evening news. But now when consumers’ digital devices will be recording shows and later playing them whenever those consumers want, they’ll be recording just Oprah and not your following local news show. The ‘art’ of program scheduling ceases to exist.

* Another major change, and related to on-demand, is Customized Programming. Indeed, no more network.

For example, a consumer named Wilma will no longer watch the ABC network shows or the Channel 11 shows. She’ll be creating and watching the Wilma network, a network just for herself. She’ll pick her favorite shows, favorite actors, and favorite genres, and then have her digital TV device find those shows from among all networks and assemble those shows into a customized network just for her. Even if some of those shows otherwise run at the same time on competing networks.

A TV network or a local TV channel will no longer necessarily be a network or channel, but just pieces for assembly into almost as many networks as there are viewers themselves. Particularly when TV migrates online into IP TV.

No mass, no more. TV networks and local TV channels will no longer be mass media, but ingredients for a massive number of very personal TV networks.

* Another change is Pervasive Mobility. You’ll no longer need a TV to get TV.

Part of this change is that every digital device will accept video. For example, Korean TV next month will begin satellite broadcasting of 13 channels of digital TV directly into Koreans’ cell phones. Of course, they’ve got the Third-Generation (3G) broadband cell phones there. Likewise soon, iPods and similar digital music devices will begin playing video as well as audio.

* Another part of this change is that every surface can become a display. All e-paper — the flexible electronic paper — under development can accept video, not just text. The printing industry has developed electronic displays that don�t require screen-printing in a computer ‘clean room.’ In seven to ten years, your local print shop will be able to go out and screenprint a computer display onto anything. Walls, trucks, refrigerators. You’ve seen giant electronic displays here in Las Vegas, but you’ll soon be seeing them on the sides of delivery trucks in your local town. And those will be displaying video.

* Another change is that Bandwidth & Memory are No Longer Problems. Broadband consumers have hundreds of thousands of kilobytes per second of download capacity, if not already megabytes. And it’s hard to find a hard drive of less than 10 or 20 gigabytes nowadays, except digital still cameras.

* That everyone can webcast is another change. Thank broadband and inexpensive, even free, video apps. And that webcasting is taking three forms:

Individuals are webcasting or video blogging. That can range from 11 year-old Dylan Verdi, whose videos are seen by thousands of people per day, to fifty-something Jeff Jarvis, whose office webcast was seen here during the Radio & Television News Directors Association.

Non-video media is now webcasting. Newspapers are clamouring to add video to their online offerings. Even radio is. Last week, the Clear Channel company announced that 200 of its radio stations will start offering live video online.

Everyone is becoming a broadcaster online. And many of them are beginning to trade videos online. Peer-to-peer video networks are beginning to form. Or sites like OurMedia.org, which is provides free storage and free bandwidth for trading people’s own videos, audio files, photos, text or software.

Face it, with all these changes, much of the broadcast industry that you’ve long taught no longer exists. It’s being disassembled almost as quickly as the teamsters and carpenters outside can disassemble the NAB display floor.

Now, the bad news. As Rupert said, the broadcast industry didn’t do as much as it should to deal with these changes. Still largely isn’t doing what it should. Five years ago, many broadcasters dismissed these changes when the dot.com boom ended. But it was simply a case that they could no longer see the forest because of all the trees.

Many pundits nowadays are fond of quoting Harvard Business School Professors Clayton Christensen, of The Innovator’s Dilemma, or Clark Gilbert. I instead prefer to cite Professor Donald Sull, who studies how legacy companies or legacy industries react to major changes. He found that the reaction isn’t paralysis but what he calls ‘active inertia.’ Companies or industries tend to react to change by doing what they’ve always done, only more feverishly, even though doing so no longer makes sense.

Don’t do that in broadcast education.

Many, such as Ad Age magazine columnists Bob Garfield, are predicting a meltdown of the broadcast industry, predicting that the transition won’t be happy or pretty but will be chaos and disaster. I agree.

* The advertising industry won’t be subsidizing traditional broadcasting much longer. For example, Proctor & Gamble now advertising most of its new products off the airwaves. Seventy-five percent of ad spending to launch Prilosec OTC was off the airwaves. American Express now does 80 percent of its advertising off airwaves. Pepsi One won�t use TV advertising.

Likewise, 70 percent of Digital Video Recorder uses skip commercials.

* And more and more advertising revenues are going to new competitors that didn’t exist a decade ago. For example, Google earned $3 billion in ad revenues last year. That more than The New York Times Company or Dow Jones & Co. earned. Google earned as much in advertising as not just The New York Times newspaper, but that paper plus The Boston Globe plus 23 regional daily newspapers plus the NYT TV and radio stations, all combined. Google did that just with text search. What happens when it also gets video search?

* As for paid subscription broadcasting, remember that more efficient technologies more efficiently reduce what consumers are willing to pay.

* Similarly, the economies of scale, all built atop the mass medium business model, are going to disappear.

* And here’s a final, dark note for you broadcast educators: The seventeenth-century English author John Donne sermonized that ‘No man is an island.’ But Customized Programming in which viewers can see only what they want to see will create large numbers of insular viewers.

That some may want to see only Britney Spears news may be their democratic right, empowered by new medium technology. But how do you responsibly inform the public without contravening that right?

I don’t think this insularity will create a new Dark Age, but it could very well create a Gray Age of ignorance. Some say that is already happening.

What can you do to make it otherwise?

In the interest of time, I’ll yield to my fellow panelists. Among them, Jerry Condra, who helped organize this panel, had asked me to talk about what broadcasters can do now to make great websites. If anyone is interested in that, we can talk about it in the question & answer period.

Thank you.

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