When last we left this blog, it was almost time for the NAB Show, the annual event produced by the National Association of Broadcasters.

NAB president Gordon Smith presented the keynote speech at the convention. As I’ve written before, I think Smith is perfect for the job, keeping various broadcaster constituents on the same page while using his Washington connections to lobby for the best possible deal for his members. Anyway, a few minutes in, a part of his speech gave my brain whiplash.

(W)e will continue to protect the rights of all viewers who depend on their local TV stations as a lifeline for news, emergency information and, of course, entertainment.

We’re also fighting to ensure that viewers continue to have dynamic content choices, by retaining a free market retransmission consent process.

Notice that there aren’t any ellipses in that quote. Smith really said in consecutive sentences that TV broadcasters are an indispensable lifeline for their viewers, but if the local cable system won’t pay broadcasters enough, they’ll feel free to cut off those viewers.

I don’t blame Smith for stating both of those positions; they highlight the conflict that broadcasters face when they alternately defend their free bandwidth and resist calls to fix the retransmission consent system. I just thought it was a little weird to juxtapose them. He wasn’t going for irony there.

Smith seemed a little distracted. He gamely read the speech from the teleprompters, and the next morning, he was caught looking by a change-up thrown by Betty White. (See next paragraph.) It’s as though he had been working on an important negotiation and had to fly in at the last minute.

Betty White at an NAB breakfastThe second day featured a morning breakfast with TV legend Betty White, who accepted praise graciously, then went to sit down and chat with Smith. They talked about how the industry had changed, about perseverance, that sort of thing. Then Smith, no doubt reaching for a note someone had given him said, “I hear that you’re quite a football fan.” White looked at him as if he had suggested that she kept a cage of squirrels in her house. “No,” was her simple answer. Smith recovered, but we all learned that Betty White does not suffer foolish questions.

There was a lot of other stuff, of course, mostly in the exhibit halls.

  • I met Crook and Chase at a booth for The Nashville Network (launching soon), and I told them about my First Rule of Programming, of which the original TNN was a prime example. (“We are going to have some cooking shows,” Lorianne Crook said in agreement.)
  • There was a big push for mobile DTV, mainly in the form of Dyle TV, but it remains a technology in search of an audience.
  • All the satellite delivery companies were there, and lots of streaming providers. I talked with TVU Networks, since I’m broadcasting a test channel through TVU, but they’re much more interested in selling IP-based newsgathering gear. Much more about that in a future post.
  • I ran into Alexander Wiese, the publisher of Tele-satellite magazine, at his booth. He dropped by FTAList world headquarters the next week and took some photos, but I haven’t seen them in virtual print yet.

Every year, I visit the NAB Show and the International CES. (Don’t you dare call it the Consumer Electronics Show, see the editors note here.) If you want to see the latest Dish or DirecTV receivers, or if you just want to see the latest amazing gadgetry, go to CES. If you want to learn the most about the cutting edge of TV and video delivery, nothing beats the NAB Show. I’m looking forward to it already.

Aereo logo

A new TV service, Aereo, formally launched this week. Aereo is the old Bamboom (previously discussed here) with a new name and deeper pockets. And those pockets are needed to defend against the inevitable lawsuits from broadcasters.

Aereo’s plan is to install a tiny over-the-air (OTA) TV antenna for each of its subscribers, then stream the programming from that antenna to only that subscriber over the internet. They’ll only stream within the subscriber’s market, so a New York viewer can’t buy anything but New York channels. But Aereo will be streaming those channels without anyone’s permission and without paying any retransmission fees. TV stations hate it when you do that.

Aereo’s paradigm is different from those of my beloved ivi.tv and FilmOn, which both lost all of their major OTA channels when injunctions went against them. I think it’s got a chance in court. But I’m not so sure how many viewers will want to pay $12/month for channels they can get for free OTA.

While the broadcasters’ case against Aereo is pending, both sides are also presenting their positions in public. The article that got to me today is in Multichannel News, in which a New York Latino community activist says that major networks won’t give as much support to Spanish-speaking communities if they don’t get retransmission money.

That doesn’t make sense to me. Any local viewer with a decent OTA antenna can watch these channels for free right now. That’s what Aereo says it’ll do: stream in-market from a rented OTA antenna. Aereo might make it easier to watch some weaker signals, which include a higher percentage of Spanish-language channels.

Broadcasters are looking for the younger, device-savvy, cord-cutting audience. Until OTA technology reaches devices (and it’s coming), this is a way to ensure that this new audience stays with OTA broadcasting. Fighting Aereo to prop up a bit of immediate cable/sat retrans cash is short-sighted.

Unless you consider that the parent companies of the big OTA networks are heavily invested in cable channels. The emerging OTT and OTA technologies are starting to pull customers away from those lucrative ventures. Could that be the real reason OTA networks don’t emphasize OTA reception? It sure would be a good reason to try to kill off Aereo.

Abstract green cash pillsJust so you don’t have to, I subscribe to a dizzying list of news streams about broadcasting. In today’s NAB SmartBrief, I saw a headline that stopped me cold: “Feds could benefit more by letting broadcasters lease spectrum, says Sinclair exec”.

The first part of that headline agrees with what I’ve promoted for years. Broadcast spectrum is precious and finite, and it would be only appropriate for anyone using public airwaves to pay rent for the privilege. If the fee were based on a small percentage of advertising sales, then non-profits (who sell no ads) get a free pass but commercial stations get dinged.

The second part of the headline was the punchline. The Sinclair Broadcast Group is a publicly traded corporation that believes strongly in its fiduciary duty to maximize profits for its shareholders. It’s not afraid to make controversial political moves to make sure that happens. It’s not afraid to get into hard-fought retransmission disputes to make sure that happens. From all appearances, Sinclair would rather be profitable than loved. That’s why I was mystified that someone there would agree with my idea, which would benefit society as a whole at a cost of slightly reduced profits.

Then I clicked through to the original TVNewsCheck article, which included an interview with Mark Aitken, Sinclair’s vice president of advanced technology. Aitken’s proposal is for stations to take some of their allotted bandwidth and lease it to wireless carriers. He says, “Currently, broadcasters are obliged to pay 5% of their revenue from supplying auxiliary data services. When you look at the immense capacity that broadcasters could make available to carriers, it adds up to big dollars in revenues for broadcasters and, as a result, big dollars for the U.S. Treasury.”

So rather than paying a tax on the bandwidth that stations use, the plan is for them to take the bandwidth they’re getting for next to nothing, lease it to a third party, then pocket 95% of the rent? Now that sounds more like a Sinclair Broadcast Group proposal!

What would make a better headline for that plan? Leave a comment if you’ve got a good one.

Soul of the South Network logoFolks who have watched satellite free-to-air TV for a long time, or long-time readers of this blog, will recognize the name Equity Broadcasting. The basic business model for Equity was to own a whole lot of little TV stations, create the programming for all of them in one centralized place (Little Rock AR), then beam it out for broadcast via satellite. For FTA viewers, the great thing was that those signals were (almost always) unencrypted, which meant that fun and funky programming from over a dozen stations coast to coast were available for viewing from one satellite position.

Sadly, that didn’t last. In December 2008, Equity Media (as it was known then) filed for bankruptcy. After a few months of negotiations, Equity’s TV stations were sold at auction to various new owners. And within another couple of months, all those stations disappeared from satellite.

One of those stations, KKYK of Little Rock, is one of four being sold to two former Equity executives, Larry Morton and Greg Fess. And according to The Hollywood Reporter, Morton is going to be president of a new network, the Soul of the South Network (SSN), which will use KKYK’s studio and production facilities.

Here’s the surprising news from the Hollywood Reporter story: “The new venture has acquired assets from Equity, including the C.A.S.H. system, which stands for Central Automated Satellite Headend. This allows them to program stations anywhere in the country from a single hub in Little Rock. … However, the signal will not actually be fed by satellite. Instead, it will use a computer server ‘cloud based system’ to deliver its programming 24 hours a day.”

So that means that SSN acquired all the equipment that Equity used when it beamed channels all over the country, but it has decided it won’t use satellite this time. There are at least two possible explanations for this:

1. Satellite TV distribution is slowly dying. Satellites are incredibly expensive, and the internet is pretty darned cheap, so IP-based distribution is the wave of the future.

2. SSN might have trouble finding transponder space for rent. Wikipedia says that Intelsat’s claim on Equity in bankruptcy court was over $580,000. Now SSN isn’t Equity, but some of the people are the same, and the headquarters is the same. Would satellite operators treat SSN the way a new landlord treats a prospective tenant who walked out on last year’s rent? I have no idea.

I hope that SSN succeeds. We can always use more digital sub-channels, and we can always use more diversity. SSN’s birthplace will be the same hub that launched the Retro Television Network (RTV), one of the first and best of the sub-channel breed, so that’s a good omen. It’s too bad that SSN won’t be matching RTV’s satellite distribution.

Hammer on televisionThe president of the National Association of Broadcasters sent a letter to FCC asking it to stay out of coming retransmission fee disputes. In other words, the NAB doesn’t want the government to interfere when one of its stations holds cable or satellite viewers hostage for a better contract.

Now it’s normal for the NAB to want as much leverage as it can manage so its members can get as much money as they can get. That’s the capitalist way. What galls me is that the letter said the member stations want their negotiations to “remain free and market-based.”

When it comes to any given cable system, there is no “market” for broadcast programming. If a local system wants to show NBC, it can’t shop around to see which broadcaster will sell it at the best price. Its choices are to pay whatever the local NBC affiliate demands or to cause mutually assured damage by dropping NBC. The trouble with the second choice is that it hurts a lot of local NBC viewers as well as the station and the cable system.

For the public good, the government ought to get the cable and satellite systems to sit down with the broadcasters and hash out one equitable retransmission fee formula to be applied to the entire country. Such a formula would probably include an over-the-air channel’s percentage of viewers and the system’s number of subscribers. When a channel’s ratings go up or down, the cable or satellite system would adjust its payments higher or lower. If a channel’s ratings stayed below a certain threshold, it would receive no cash but would stay in the channel lineup, as with must-carry stations now.

The parties could revisit the formula every few years, and that would be it. We’d never see another local station go off a cable system over a retransmission dispute. The broadcasters would receive a truly fair, negotiated fee. But it’ll never happen unless and until the government folks (you know, we the people) insist.