The 2012 NAB Show kicked off it’s four-day event in Las Vegas, NV, on Monday, April 16th with a keynote speech by Gordon Smith, NAB President and CEO. Mr. Smith’s State of the Industry address was to set the tone of the entire convention, the theme of which being “The Great Content Shift,” referring to the mobile technology phenomenon that has forced content creators to reevaluate how they create, distribute, and market original entertainment.
I went to NAB excited to find out how industry big-wigs were planning to adapt with the unstoppable changes that are occurring in how we as a society consume entertainment. So it was a surprise to me when I realized that the powers-that-be in the broadcast industry don’t see the need to change their business model very much, if at all. When the rest of us see a tidal wave of change on the horizon, the Networks see it as a small splash against the iron hull of their aircraft-carrier-sized business model, which has worked very well for over 60 years.
In his keynote speech, Gordon Smith pointedly admitted, “We need to be realistically engaged in the issues confronting us,” referring to the mobile technology frontier. “On the TV side,” he added, “we need to be aggressively pushing mobile and ultra HD.”
So what does mobile mean to the Networks? Does it mean that the mobile revolution is forcing the Networks to rethink how and where they deliver original programming? Well… not so much. Although today’s consumers want their entertainment at their fingertips whenever and wherever they want, the truth is that the tradition model for broadcast TV (simultaneous mass viewership) is still the most reliable, accessible distribution platform for top-quality programming. Why would the people at the top of this food chain want to do anything different? Mobile, therefore, is simply seen as an additional distribution point to add to their post-broadcast ancillary markets. Smith summed this up by saying, “delivering live, local and national news, sports and our great shows to viewers on the go — this is where our business is going.”
The broadcast industry has no incentive to embrace what developments may be around the corner in the mobile content future. While independent producers and private technology companies are busy thinking outside the box to develop new business models for original entertainment distribution in this multi-platform reality, broadcasters are thinking inside their own box… their very old fashioned box that categorizes “mobile” as simply a new term for an old idea. “I have always heard broadcasting described as ubiquitous,” Smith said. “But ubiquity yesterday meant a radio being on the dashboard, in the kitchen and on the nightstand. Ubiquity meant a television in every living room — these days, almost every room in the house. But ubiquity tomorrow must mean broadcasting’s availability to all people at all times in all places and on all devices.”
A nice sentiment. And a necessary one, to be sure. But I think that the revolution that is happening right now in mobile entertainment is far more fundamentally disruptive than the TV industry is willing to admit. I think the shift is happening: consumers are moving away from the idea that the television and movie screens are the primary destinations of the entertainment they consume, and shifting to the idea that the “first screen” is the one in the palm of their hand. Our whole world revolves around our social networks, status updates, news feeds, text messages, and sharing our lives with our friends on an almost minute-by-minute basis. That is where we want our entertainment to be, as well. The person or company that figures out how to efficiently and profitably create a system of entertainment for that reality, will be the winner, for that is where the tide is moving. And there are plenty of innovative companies out there racing to figure out the best business model to meet the needs of this evolving new marketplace.
Yet, the Networks dismiss these efforts as a futile waste of time, maintaining their supremacy as the tried and true standard. I couldn’t help but detect a tone of condescension from Gordon Smith as he touched on this topic in his keynote speech. He said, “The wireless industry wants to replicate what we do. In fact, they are developing their own mobile TV network… but they say they need more spectrum. And they could get what they want… pending approval from the government. So let me get this straight. Wireless carriers want to roll out a mobile TV service, just like ours. And they are asking the government for more of our spectrum to do it. And their service, most assuredly, would not be free. It seems to me that the government could be in the position of picking the wireless industry as the winner and the consumer as the loser. Here’s the problem: even with all the spectrum in the universe, the wireless industry’s ‘one-to-one’ architecture could never match our ability to broadcast voice and video to the masses.”
I feel like I’m watching the first contact with a species of giant aliens: You feeble creatures… you are no match for our superior technology. Resistance is futile!
Regardless of how Gordon Smith views the situation, he is right about one thing: the Networks have the advantage of nearly 80 years of technological development in the broadcast industry, and they have developed a VERY efficient system for distributing high-quality content. They still rule that realm. And although they do not see the mobile shift as a threat to their well-established system, they are at least aware that something is happening… and it can’t be ignored.
Broadcasters know that they will need to adapt to an ever-changing landscape. “Our greatest challenge is to have the courage to challenge ourselves,” Smith declared in his closing remarks, “challenging our existing business models, looking around the corner and adapting to a media marketplace where only the technologically nimble will survive.”
The question is, once technology catches up with the demand of consumers, how much will broadcasters really be willing to adapt? Will they shift with the paradigm, or will they be left behind as they stubbornly clutch to their own legacy of supremacy?
I have a feeling we will find out soon enough.
By Chris Coy
Staff writer for JD247