By Dom Serafini
The industry is crying wolf: The terrible economy, the bad new media, the finicky public, the unfair digital technology. You name it, and it’s got its claws in television’s back. The industry seems to blame everything and everybody, except itself. There is no need to, actually, because the entertainment business has never been so stable, easy going, predictable and rewarding as it is now. If something is in fact missing, it might be what George H. Bush called the “vision thing” when confronted with the accusation of having poor leadership vision by the opposing presidential campaign in 1988.
History buffs can appreciate how much more difficult the business was in the earlier years, particularly in the ’50s, ’70s and ’80s.
The difficulties encountered by Leonard Goldenson when he molded ABC from the 1953 merger of ABC and United Paramount Theaters (UPT) are legendary. ABC was the offspring of two government-ordered divestitures — the breakup of NBC’s two networks and the divorce of Paramount Pictures from UPT — and the network was struggling against its two larger rivals: NBC and CBS (Goldenson was president of UPT when the government ordered its divestment from Paramount Pictures).
And let’s not forget William S. Paley, founder and “monarch” of CBS, who came from the cigar manufacturing business (La Palina) and became a leading pioneer of world television in 1948, when he raided NBC’s stars with a $5 million loan.
And what about RCA’s David Sarnoff, founder of NBC? In order to introduce color television, he had to fight CBS and its non-compatible CBS field-sequential system, and then in 1951, was faced with the Korean War delaying the introduction of color TV entirely. It was only in 1953 that the FCC (the U.S. regulatory agency) approved RCA’s compatible NTSC color-TV standard. Yet, as late as 1965, NBC was still airing the bulk of color programming, with CBS providing only 800 hours a year and ABC just 600. Plus, it wasn’t until 1958 that manufacturers other than RCA started producing color TV receivers.
Life for the broadcast business has never been easy. The initial introduction of television was opposed by radio stations until 1939, when NBC started its regular TV service.
Then there were massive government regulations, three wars, financial crises and the struggles with new technology (at one time comprised of cable, satellite and VCRs). And don’t forget the 1973 oil crisis, stock market crash and political strife. Meanwhile, the ’80s saw stronger competition from cable TV, and Wall Street turned predatory.
Last May, at the 7th annual “All Things Digital or D7 conference in Carlsbad, California, NBC’s Jeff Zucker admitted that “television in the aggregate is actually in very good shape.” In VideoAge’s MIPCOM Issue, Disney-ABC’s Ben Pyne is quoted as saying that “up to 90 percent of American viewers still watch broadcast networks regularly.”
In my view, leaders today get too sidetracked by Wall Street and Silicon Valley, losing sight of Main Street. For example, at the D7, Microsoft’s Steve Ballmer acknowledged that “the mobile area is red hot, and the truth is nobody sells very much.”
Even the Wall Street Journal, which organized the conference, editorialized that “in truth, no one knows where [digital] will lead.”
I also believe that the broadcast model is not inferior to the dual revenue stream of cable and satellite TV, especially now that digital technology has made its role as middleman more valuable then ever (to buffer content owners from the consumers and thus protect their copyrights).
Plus, broadcast television could not only be a dual-revenue stream, but a multiple-revenue stream as well if its leaders embraced broadband transmission in an open IPTV standard, the same way past TV leaders took chances and gambled. As it is, broadcasters already receive retransmission fees from some cable and satellite operators. IPTV would add to that with more options. Imagine if they had a TV signal reach every corner of the country regardless of physical limitations. If they had a TV signal that was monetized even when it’s no longer broadcast and were able to offer VoD and interactivity. In my view, IPTV is one of the few cases in which broadcasters would not be replacing “analog dollars with digital pennies.”
I’m convinced that if television visionaries such as Sarnoff, Paley and Goldenson were alive today, they’d trip all over each other to be the first to migrate to IPTV.
Zucker said at the D7, “More businesses are needed to replace the losses of old ones.” Yes, and for that purpose one needs to acquire a retail mentality where if one store loses sales, more stores must be opened to compensate for the losses, since the products sold are the same (i.e., if fewer viewers are reached by terrestrial broadcasts and cable and satellite rebroadcasts, let’s open a new store for IPTV).
To me, it’s incredible how today’s industry leaders are learning to fear technology, when their predecessors were eager to embrace and leverage it.