The Walls are Coming Down - NBC No Longer in TV

November 19, 2007 at 5:14 pm · Filed under Enterprise 2.0, John Wallace, NBC, Social Media, TV

I was sent this email from a client. It comes from John Wallace, NBC executive VP, television operations and production services (TOPS), the head of what was NBC TV - It’s our new reality - No matter how faulty the steps and the tools - one way broadcast TV is DEAD.

I’m extremely pleased to announce an exciting next step in our evolution as local content providers …we’re changing our name. As of today, our group will be known as the NBC Local Media Division. This is a much better reflection of who we are as an organization and a greater indication of the full scope of our capabilities.

Our stations already produce local content for a multitude of media platforms beyond our primary television channels. These include our diverse broadband offerings, like digphilly.com and yourLA.com; our multicast digital products; our growing presence in mobile distribution and multiple media platforms outside of the home. Our old name - the NBC Television Stations Division - just doesn’t do all of this justice.

Our stations are the core of what we do. They provide a platform in terms of our credibility, our service and our community connection. Re-branding our group is not about moving away from the traditional broadcast medium, but more about putting an equal value on all of the other mediums with which we are involved.

Our new name also sends an important message to the marketplace. Our clients are asking for integrated marketing solutions that incorporate television, broadband and other emerging platforms. That’s exactly what NBC Local Media offers. We can grow our clients’ businesses by delivering the power of GE and NBCU combined with local content, customized messaging and marketing solutions that engage consumers where they live, work and play.

This is an extremely exciting time to be a part of the NBC Local Media Division. Whether you’re an employee, a consumer of any of our products on any of our growing platforms, or an advertiser looking to reach your customers in new and different ways, NBC Local Media is the place to be.

As part of our focus on local media expansion, I’d also like to highlight two key leadership roles that we’re announcing today. Brian Buchwald has been named Senior Vice President, Local Digital Media and Multiplatform, and Mark French, Senior Vice President and General Manager of NBC Everywhere, a new unit focusing on our growing digital place-based network, available on numerous out of home media platforms. They will work closely with our stations to ensure the division’s continued expansion beyond the limits of the traditional television space.

In his new role, Brian will be responsible for developing new business models and enterprises with a focus on local video content that extend NBCU’s knowledge of local media to a broader geographic footprint. He will also explore alternative content production models, as well as new formats and channels for content distribution.

As General Manager of NBC Everywhere, Mark will focus on expanding our presence on alternative distribution platforms through content and advertising partnerships with a focus on our local markets. He will also work closely with NBCU’s sales and marketing groups to integrate place-based opportunities into their 360-degree offerings and with the NBC Agency and the local stations to program the various out of home channels.

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TV - Moving to online - Hulu.com?

October 29, 2007 at 9:15 am · Filed under Blue Monster, Chris Anderson, Enterprise 2.0, Fox, Gaping Void, Hugh McLeod, Hulu.com, Long Tail, NBC, NPR, News Corporation, PBS, Public Media, Social Computing, Social Media, Social Objects, Web Advertising, Wired

Hulu.com is an important experiment for how TV will shift from being available only when the broadcaster schedules it to when we want it - Having it My Way!

(From the NYT) Hulu is the new-media creation of two old-media rivals, NBC, which is owned by General Electric, and Fox, owned by the News Corporation. Since March, when the broadcasters announced their joint effort to bring free, ad-supported television shows to the Web, critics have pounced, predicting the venture would be doomed by diverging agendas, technical challenges and an all-powerful enemy: YouTube.

Skeptical bloggers even slapped Hulu with a derisive moniker: “Clown Co.”

Now the defense is ready to present its case.

Today, Hulu, now an independent company with more than a hundred employees and its own offices in Los Angeles, will begin privately testing its new service with select users at Hulu.com. It will also begin sending its videos to the sites of five distribution partners, Microsoft, AOL, MySpace, Yahoo and Comcast.

Hulu is presenting select episodes of some 90 television shows, including new and old programs from NBC (“The Office,” “The A-Team”), Fox (“24” and “The Simpsons”) and an assortment of smaller broadcasters like USA Networks. It has also added two new partners, Metro-Goldwyn-Mayer, which distributes programs like “Chapelle’s Show” and “Reno 911,” and Sony Pictures Television, which will make selections in its archives like “I Dream of Jeannie,” available on Hulu.com.

All the shows are viewable inside a Web browser and festooned with advertisements.

However Hulu works out - they are on a track that is clear - people want video as they ant their music:

• Easy to find
• Available in chunks
• Available ON THE WEB - when they want it and usable on a variety of platforms such as an iPod and a 50inch HD LCD screen

Who pays and how will still be settled.

Also what I think Hulu has missed is the value of creating community around a show - this is Hugh’s great insight about Social Objects - it is the Conversation around the object that is more important than the object.

3. The Blue Monster wine is also part of the “Smarter Wine” conversation. The main thesis is that it’s not the wine per se that is interesting, it’s the conversations that happen around the wine that is interesting. And that is true for all social objects. People matter. Objects don’t.

The advertising money is shifting to the web - so will the content - it will go there faster than we imagine. For the laws of exponetial growth are in force. I think that the Tipping point is here:

I think that Broadcast TV is now in the Titanic Mode - It is large and feels unsinkable - BUT - the ship has grazed the ice - at the moment no one feels anything - but the wound is fatal and it is only a matter of time before the ship sinks.

The Iceberg is the weight of money that is leaving conventional media and going to the web. My forecast is that 2008 will be the year - 2008 will be the year where the web/digital will become where the ad money will go - the work for all providers of all types of content then will be to reset their universe.

Today most people in TV and radio see the web as a growing and important channel. In 2008, the smart people will see the web as the primary channel and that their old channel is now the supporting channel. Of course most will not see this and they will be lucky to find a life boat.

You think I exaggerate? Here is Chris Anderson on the “Music Industry” I quote him in full:

At a speech last week I was asked a question that has come up every day since the Radiohead (and Madonna, NIN, Prince, etc, etc) announcement: What’s going to happen to the music industry?

To which I answered “Which music industry?” You don’t mean just the one that sells CDs, do you? Because it’s a big mistake to equate the major labels and their plastic disc business with the industry as a whole. Indeed, when you stand back and look at all of music, things don’t look so bad at all.

Indeed, it appears that every single part of the music industry except the sale of compact discs is up.

• Concerts and merchandise: UP (+4%)
• Digital tracks: UP (+46%)
• Ringtones: UP (+86% last year, but probably just single-digit percent this year)
• Licensing for commercials, TV shows, movies and videogames: UP (Warner Music saw licensing grow by about $20 million over the past year)
• Even vinyl singles (think DJs): UP (more than doubled in the UK)
• And, if you include the iPod in the music industry, as I’d argue a fair-minded analysis would: UP, UP, UP! (+31% this year)

Only CDs are down (-18%). They’re around 60% of the industry not including the MP3 players, but just around 25% if you do include them.

So the problem with the music labels is not that music is an industry in decline, but that they have a too-narrow view of what business they’re in. Madonna’s switch from a label to a concert promoter should be a clue. This quote from an excellent article (it’s worth reading it all) in Entertainment Weekly says it all:

”Soon a lot of these companies won’t define themselves as record companies,” says Steve Greenberg, the former head of Columbia Records who now runs the independent record company S-Curve. ”They’ll define themselves as artist development companies. If you’re involved in an entire career with an artist, then everyone’s interests can be aligned.”

I think most music will soon be free, as artists give away the product as marketing for their performances and licensing, and as a celebrity accelerant that creates more opportunities to make money than just from the sale of a record.

And for those who say that this avenue is only available to artists at the head of the curve, such as Madonna and Radiohead, I’d point out that the other group poorly served by the labels are those at the bottom of the curve, the many thousands of bands who fall below the radar of the hit-driven majors. I’d argue that they, too, have nothing to lose by letting their music go free, nothing to lose but the prospect of becoming indentured to companies stuck in last century’s model of monetizing music.

Most people see TV and Radio like the people who make CD’s. All the forces that are turning the music industry upside down are coming to TV and Radio - for after all - a video and an audio file are the same as music - they are in reality all digital now.

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The New Business Model - The day of reckoning is here

September 20, 2007 at 6:43 am · Filed under 2.0 Design Thinking, Enterprise 2.0, NBC, NPR, PBS, Public Media

It’s official - the traditional broadcast mass media business model is dead. Today NBC opened its own direct to viewer store. It had no choice. (NYT)

NBC Universal said yesterday that it would soon permit consumers to download many of NBC’s most popular programs free to personal computers and other devices for one week immediately after their broadcasts.

The service, which is set to start in November after a test period in October, comes less than three weeks after NBC Universal said it was pulling its programs out of the highly successful iTunes service of Apple Inc. That partnership fell apart because of a dispute over Apple’s iTunes pricing policies and what NBC executives said were concerns about lack of piracy protection.

NBC’s move comes as companies throughout the television business search for new economic models in the face of enormous changes in the business. Networks continue to lose audience share, and viewers — especially many of the highly prized viewers under 30 years old — are increasingly demanding control of their program choices, insisting on being able to watch shows when, where and how they want.

At the same time viewers are finding more and more ways, like TiVo machines, to avoid watching the commercials that have long provided the bulk of television revenue.

Jeff Gaspin, the president of the NBC Universal Television Group, said, “The shift from programmer to consumer controlling program choices is the biggest change in the media business in the past 25 or 30 years.”

NBC makes many of its popular shows available online in streaming media, which means that fans can watch episodes on their computers. Under the new NBC service, called NBC Direct, consumers will be able to download, for no fee, NBC programs like “Heroes,” “The Office” and “The Tonight Show With Jay Leno” on the night that they are broadcast and keep them for seven days. They would also be able to subscribe to shows, guaranteeing delivery each week.

But the files, which would be downloaded overnight to home computers, would contain commercials that viewers would not be able to skip through. And the file would not be transferable to a disk or to another computer.

The files would degrade after the seven-day period and be unwatchable. “Kind of like ‘Mission: Impossible,’ only I don’t think there would be any explosion and smoke,” Mr. Gaspin said.

The programs will initially be downloadable only to PCs with the Windows operating system, but NBC said it planned to make the service available to Mac computers and iPods later.

In a second phase of the NBC rollout, customers would pay a fee for downloads of episodes that they would then own, and the files would be transferable to other devices. NBC hopes to offer this service by mid-2008, depending on how quickly the company can put in place the secure software necessary to allow payment by credit card.

The latter system is what is already available through iTunes.

Like Wile E Coyote, the affiliates have not hit the canyon floor yet - but gravity has an inevitable force. So the local stations in commercial and in public media are going to die or create a new model for themselves. It is no longer possible to make money by having a local monopoly on content. Nor can the affiliate depend on the national producer like NBC to protect them.

Both the National Producers and the Affiliates are going to face a crisis before all of this works it way through.

I work with and talk a lot to public radio and TV stations that have long been aware of this inevitability. They have plans well under way along the lines that I have described here. But many have had their head in the sand and may find that they are too late. The real challenge is first of all ‘Mindset”. It takes time to imagine an entirely new way of being.

Think of a habit that you have in your life - one of mine is indolence and sloth. I knew for ages that I was really over weight and weak. My Dad died at my age partly because of this. But in spite of my wife pleading for me to take care, I refused. It took over a year for me to take charge myself, and then only because a dear client, who is in the business of helping the unwilling, took me by the hand. Now, my new habit has taken hold and I feel so much better. I can now experience the improvement and I think I am on my way. It has taken small steps and lots of encouragement and lots of time.

Most stations have none of this. It takes special circumstances to change your whole way of life - even if death is a consequence. Many stations will not have the benefit of a loving and capable friend to help them change. Now they do not have the time either. It’s going to be ugly for many but the aware will pull away and do well.

It’s going to be very rough as well for the national producers. Will their revenue from selling direct, keep up with the losses that they will experience as stations push back on the price for programs that are no longer exclusive?

The fact is that there will still be traditional viewers and listeners but not enough to pay either the station or the producers way.

My bet is that NPR is especially vulnerable here. NPR fees are a very significant cost to stations that will be starving for revenue. NPR’s costs are high. They are also in need of a new building just when the crunch will hit. I think that there is a way though of NPR and PBS and the local stations all starving to death.

What if NPR and PBS had a central site that sold you their content for a very small fee. I click to buy a Nova Program or Morning Edition for a month. I pay a small fee on my credit card as on iTunes or 1 Click on Amazon. My IP forces a choice immediately - which station I will support. The national producer and the station get fed. I get what I want - my content “My Way”.

The affiliates and the producers in Public Media have to get together and do something like this soon. If they don’t the entire system of Public Media will die, leaving only a few local stations.

What will you say when your children ask you why America lost its last place where civic discourse could take place? What then will be lost? Whose fault will it be? It will be the fault of every station leader and NPR and PBS executive who thought that someone else would do their work. It will be the fault of every person in Public Media who refuses to see crisis that confronts them. It will be the fault of every leader who thinks that they can do this on their own.

I beg you all to act together. It just needs a few of you to take the lead and the rest will follow.

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