It all changed: a breakdown by industry and how to win

Steve Safran September 19th, 2006

BY STEVE SAFRAN
MANAGING EDITOR
LOST REMOTE

It’s been eight years of preaching convergence here at Lost Remote, and the changes just in the last several months finally have us heaving a sigh of relief. Hearing “it will never happen” for this long can make it tough to stick to your beliefs. We’re just as plagued with naysayers as any website. Now there are so many convergence developments that it’s time to put them into context and look at exactly how your business and your life as a communications consumer is changing.

I don’t deal in predictions. There are too many people out there doing that, and they have long since been discredited. Instead, this is simply the logical scenario based upon the current and developing technologies, along with some common sense.

CABLE AND ISPs: Free WiFi changes your life forever. The monopoly or virtual monopoly you have providing web service is gone. The high prices are gone. The very high prices of access via laptop cell cards are gone. Instead, look at Pittsburgh where WiFi is free for two hours a day, and you can get it unlimited for $14.95 a month or $119.99 a year.

Free and cheap tubes aren’t the only change in your model. Televisions are coming out in 2007 that will have broadband access. Video is moving to the web. Networks will start to compete directly with advertisers for distribution of content. The 500 channels model gets some serious competition. Perhaps a broadband-only company comes along and offers its own package of channels for less than what you charge. Perhaps packaging channels goes away altogether. We’ve already heard rumblings for a la carte programming.

Your two primary businesses, delivery and packaging, are now seriously threatened.

TELEVISION NETWORKS: You have a tremendous number of problems now. You want to put your shows on the web, but the affiliates that make you possible are pissed. Even revenue sharing models are unlikely to help the locals. After all, they depend on highly viewed network shows for their local ad inserts. They get some national advertising, but they’re in the local ad business.

You pay way too much for programming, most of which fails in its first season. The studios are providing you with awful programming because they still have the grip on production and you have few other choices. You have opportunities on the production front by the lower costs of production, but you’re hamstrung by incredibly bad deals and high contracts. You have so many people on the payroll that I recently saw six guys sitting on a microphone jib. Six guys. Sitting. On a glorified mic holder.

And then, of course, you can fix all of that and you still lose. With production costs way down, and laptop editing available to everyone, our choices explode. Forget “broadcast quality.” Movies are now shooting on HD cams. And HD cams are coming way down in price, with pictures that will be better than “broadcast quality.” Don’t believe me? Look at your video from a decade ago, and then from the ‘80s. The stuff we accepted as broadcast quality looks cheap now. Reality shows shoot on handhelds. Not that you should be obsessed with that, anyway. YouTube’s video is decidedly lo-fi. 100,000,000 viewers a day anyone?

CABLE NEWS CHANNELS: You’re positioned well, and you’re starting to catch on. You recognize the value of producing original content, and you’re putting more and more video online. Still, you’re not taking advantage of social networking. And you still think it’s about distilling information. Share all the information online and give the people a choice of how they want to consume it.

You need to YouTube your video. Make it possible for anyone to embed it on their site. That way, every niche site can put up your story. If they’re anti-GOP, they put stories that spin that way. Ditto anti-Liberal, pro-choice, anti-gun, pro-vegetarian - whatever. Making people link to your video is a pain in the ass. Not gonna happen. Especially when the link goes to a page where you need to hit a secondary link to watch the video. Syndicate like crazy. OutTube YouTube.

Then you have to bring in the user-generated-content. Everyone calls it something different, and I go with “participatory journalism.” You can still be the centralized location for the information. Become known as the participatory journalism hub, enable conversations and you will beat the other guys.

STUDIOS: You’re screwed. My God you’re screwed. And it’s not even because your stuff’s that bad (which most of it is). You’re screwed because you keep fighting technology. You hated the idea of TVs in the home. You went to court over VCRs. You delayed DVD. You’ve waited years to give us “the privilege” of downloading movies. And even then, you want to charge the same as a DVD, despite the absence of costs from production, shipping, and retail markup. You want people to go to theaters. You think you’re in the theater business. It costs me around $100 to take my wife to the movies, buy snacks and pay for a babysitter for the evening. It costs me $3 - $4 to watch the movie on DVD. You will have to do a damn sight better convincing me Ashton Kutcher can only be experienced in full on a big screen at that price.

The theaters get screwed on your rev-share, too. They’re in the popcorn and soda business, and - oh - there’s a movie here, too. They don’t need your prints, anymore. They can take a digital file and show it on the silver screen. Wait until they start holding hyper-local movie festivals. Even if they half-fill a theater, they do better than they do with a full theater of “Star Wars” watchers. Heck against a studio’s 80-20 rev share, they can one-quarter fill a theater and beat you guys.

RECORD LABELS: Circling the drain and good riddance, too. You have a few years left, so enjoy the ride. But you’re terminal. MySpace is making it possible for artists to sell directly to their fans. Do you think it’s that long before bands break out and start selling huge numbers of songs that way? You say you want to promote and protect the artists. Liars. Your contracts actually penalize successful artists. Artists can have a Gold record and lose money because you make them pay a ridiculous amount for studio time.

You think that studio time cranks out a more professional sound than I can on a laptop? Nope. Remember that Sgt. Pepper was recorded on a four-track. And then look at the 99 track software I have on my Mac. Pick up a few mics, a mixer and some good software and I have a high-quality studio. My band (“The VoSots!”) could put out a song in short order, sell it on MySpace, and make far more money than you would ever give us.

There will continue to be a niche for you for a while. Several years, certainly. But the artists are going to win and you will pay for your decades of abusing them.

CELLPHONE COMPANIES: You’ve got some interesting competition now with free WiFi. A Vonage phone will be all I need. It’s $14.95 a month. You’re aggregating video content, which is good. But it’s not long until those WiFi phones don’t bother with VCast-style aggregation and simply allow me access to the same video I can see at home.

NEWSPAPERS: You have a shot here, an outside shot, but it’s a shot. You have the most information of any source. More than local TV. Your only impediment to taking a commanding lead is your own intransigence.

Your toe-dipping into video has to become a full-on swan dive. The newspaper reporters you currently have do not make for good video reports. But they’re a start. WKRN hired an investigative reporter away from a newspaper. Why not start hiring reporters with TV experience?

As Adrian Holvaty writes, you need to stop the model of collecting a lot of information and then distilling it by the column inch. Share the information you’ve gathered. Have a report, yes. But also have the research available. The PDFs you have of the indictment? Put them up. Look at how The Smoking Gun made its bones, simply by posting police arrest reports. Do that.

Put crime and fires into context for us. Instead of the one-day “someone was stabbed” report, show us how that fits into a whole. Map out crime by each city section. Show me where I should buy a home, and where things would be a little dicey for my kids to play. Update that with every crime and fire, and suddenly your already-gathered information tells me why I should care. Otherwise, I don’t.

Invite tons of local content and contributions. Have sites dedicated to local bands and let them sell their music right there. (See “Record Labels: Weasels” above.) Make your classifieds more than text. If someone is selling a car, let them show it in motion. Then charge them more. THAT ad will get a hell of a lot more attention. Have realtors buy video walkthroughs. Have local restaurants buy video ads for their place.

Your commodity is local information now. Buy, sell, trade.

LOCAL RADIO STATIONS: I’ll start by arguing in the negative. I’ll tell you what your savior is not: HD radio. I am the most gadget-addicted freak I know, and I’ve never even heard HD radio. Plus, there’s no public demand saying “I really like this station. If only it had crisper highs and deeper lows.” Your savior is also not streaming your radio station online. Forget it. I can listen to whatever song I want on my computer. I’m not listening to your station.

Your ad breaks are absurdly long. You are invading my time. Satellite radio gives me digital delivery and does it without ads or with minimum ads. I know you need to make money. But your competition doesn’t have any ads. Your competition lets me listen to whatever song I want, when I want and where I want. And it lets me buy the songs too. It’s the iPod. And you can’t possibly beat it at its own game. Forget the “Jack” or “Jane” or “Mike” or whatever formatting. It’s no iPod shuffle. There is no one-size-fits-all model.

Now the positive: you are still a vital, local resource. As I pointed out last year - during Hurricane Katrina, the most reliable source for information in New Orleans was the radio. For all the self-congratulation we webbies gave ourselves about internet coverage during the storm, nobody in the flood had a laptop. Or a TV. Radio is a vital local service.

It just needs to understand that. Local is where it’s at for radio. So go crazy local. Produce local programming, and you won’t even have the headache of dealing with the RIAA and the labels. Find great local bands. Produce easy, cheap local shows. Think true alternative radio. Stop trying to be a homogenous, same-in-every-freakin’-market station. You’re now a music (or news, or religious programming, or whatever) producer. Best of all, the programming can be syndicated, podcast, put on mobile. You win.

LOCAL TELEVISION STATIONS: You have the best opportunity of the whole bunch, you just don’t know it yet. You need to understand that you are no longer in the “big tower” model and the “1/2 hour newscast production” business. What you can do, better than anyone, is produce, produce, produce. You have entire studios at your disposal. You have big staffs. And you put out a couple of lousy, disposable newscasts?

Stop it. You’re in the local production business now. Remember those networks that are going to start abandoning you? Beat them. Produce lots of local content, the way you used to. Don’t shoot a minute and a half story about a local hero - make them a reality show. Stop throwing out all the information you gather in the course of a day and put it online instead. Tell your audience to send in their videos. They’ll get better exposure in their community than they ever would on You Tube. Then produce a show with their videos.

Tell your sports department to stop trying to fill two minutes in a newscast with highlights I already saw on ESPN. They’re now in the business of telling great stories about local sports teams and heroes. Every story you gather becomes an online showcase. And it builds to regular programming that beats the hell out of another damn sitcom.

Your websites should be more than local - they should be micro-local. Invite everyone to share their local stories, tips, hotspots - and make it all searchable. What do I trust more? One movie reviewer (not that stations have them anymore) or 150 community reviews aggregated and summarized? A lot of what I wrote for newspapers above applies to you, too. They are your competition now.

Lower costs of production mean more efficiencies for you. Take advantage of them. Become local information providers again, not just mouthpieces for the networks and syndicated shows. Produce, cheaply and effectively. Local station could win this whole thing. That is, if they want to.