RandomSouthHall“Broadcasters haven’t reached a fork in the road; they’ve reached a tangled multi-spoke hub. In one direction is the well-traveled old-school way, over-the-air broadcasting. … But that idea seems to be withering under the intense heat of the Internet.”

That’s just one small part of a long report by Ned Soseman, writing in Broadcast Engineering. Soseman uses the occasion of the NAB Show to summarize the current state of the broadcast industry. “The one point nearly everyone seems to agree on is that NAB isn’t just for broadcasters,” he wrote. Video technology advances apply to everyone because anyone can be a broadcaster, if you count the internet.

From the customers’ perspective, there’s the stuff that’s available for free over the air, and there are the channels we actually watch, and there’s the huge cable/satellite bill that supports them. There’s Senator John McCain’s a la carte bill (going nowhere, by the way) and a cable spokesman’s claim that a la carte wouldn’t lower cable bills. Soseman summarizes the way it all looks today and then sums it up by saying, well, broadcasters need to try something different. It all reads like something I would have written, except that I would have tried for some crazy guess about the future. Anyway, I’m happy that Soseman did the work, and that it gives me an excuse to run one more NAB Show photo. Now go read it!

Coins dropping into a TV set

© Depositphotos.com / Pixelery.com

DirecTV announced this week that it was exploring the possibility of adding an over-the-air receiver to its set-top box. That part isn’t new; some DirecTV boxes had OTA capabilities over a decade ago, and my Dish Network receiver has an OTA adapter. What’s new is the reason DirecTV is re-exploring this addition: It wants to avoid retransmission fees.

As TVBlog writer David Goetzi wrote, this tactic would be unquestionably legal, although that doesn’t mean the broadcast networks wouldn’t question it. And as Goetzi put it, this should be a scarier prospect than the Aereo streaming service that’s got the networks filing lawsuits. If every cable and satellite company started using OTA to circumvent retransmission fees for a large percentage of its viewers, those networks might find themselves cut off from revenue they’re now depending on.

If this scenario ever looked imminent, what would the networks do? My guess is that they would pull back on their retransmission fee increases in exchange for promises to keep OTA out of the cable set-top box. Surely cable companies would prefer a known, lower retransmission payment rather than the upfront cost, uneven OTA experiences and service calls that would result from thousands of OTA antennas. Still, a new upper limit on retransmission money would wreck some of the business plans networks have been showing investors.

The deeper question is whether retransmission fees are appropriate. Broadcasters have a monopoly on the public airwaves they occupy. The ability to send ads, with a few intervening programs, over the air to every TV set used to be quite valuable all by itself. When cable companies made it easier to pick up OTA channels, broadcasters wanted a piece of that cable bill, and they persuaded Congress to see it their way. Now at each renewal, each station gets to wrestle with each cable system, often as part of the inevitable parent company’s desire to add more of their cable channels to the lineup at higher prices. That doesn’t sound like it’s in the public’s interest.

Just imagine if anyone was free to retransmit any OTA signal using the Canadian model of royalty payments. With today’s connected world, soon anyone would be able to watch any station. Royalties would flow to the content producers according to the popularity of their programming whether they’re in New York or Billings MT. The viewing public would benefit from an incredible cornucopia of choices. The only folks who would get less money would be those folks who negotiate ever-escalating retransmission agreements. Everybody else would be happy. Wouldn’t that be nice?

Landscape photo of the Las Vegas Convention Center

The Las Vegas Convention Center during the NAB Show. If you look closely, you can see the monorail passing by the North Hall.

For over a week, I’ve been wrestling with the question: What’s it like to visit the NAB Show? Let me try to make the answer manageable by breaking it into four parts: the education sessions, the general sessions, the exhibit floor, and the stuff behind closed doors.

The education sessions, often part of conferences, contain some interesting talks from experts, along with a fair number of sales pitches by folks trying to get you to hire them or start using their products. They’re not free, but some of the topics may be worth it. The best ones to visit are those that are a tight match for what you’re interested in, and they’re even better when they take place during the quieter couple of days before the keynote. Check out the NAB Show conference schedule and pricing to see what’s available.

Weatherman in front of green screen

Virtual sets and green-screened weather services were demonstrated for buyers from TV stations.

The general sessions are free, and unlike the general sessions of some conventions, they’re often worth attending. The keynote, just before the exhibit floor opens, often contains real news. This year, Chase Carey, the president of News Corporation, fired off a warning that Fox could leave over-the-air TV if Aereo continues to prevail in the courts. That’s pretty unlikely, but it sure has started a lot of people talking about it.

If you really want to know what the NAB Show is like, the centerpiece is the exhibit floor. It’s free, and it’s where to find a lot of interesting stuff.

The first thing to keep in mind is that the exhibit floor is populated by companies with something to sell to broadcasters. Or to aspiring filmmakers. Based on what I see here every year, I’m convinced that half the film school graduates in America find themselves working for a TV station news department, and most of them still have a great movie bouncing around in their heads.

A row of small booths at the NAB Show.

A row of small booths at the NAB Show.

The booths tend to cluster by theme. Most of the radio gear was near the front of the Central Hall this year. Production music and stock video were just past the middle stairs in the South Lower Hall. The largest exhibitors stake out the same spot on the floor year after year.

And the booths come in all sizes. There are the behemoths, such as Sony or Harris, that can’t fit into a single photo. There are middle-sized booths, the majority of them, with plenty of room for displays and conferences. And there are the small-sized booths, barely the length of a long folding table with room for just a couple of chairs behind it. Those tiny booths sometimes contain just derivative, cheap products, but sometimes they’re the home of the most interesting new technologies.

Row of satellite equipment

Part of the row of satellite news gathering equipment on display along the green carpet between the South and Central Halls at the NAB Show.

If you’re a satellite fan, this is a much better place to visit than CES. There’s a whole aisle of satellite equipment outdoors, between the South and Central halls. It’s probably not as good as Satellite show held every March in Washington DC, but I haven’t been there yet, so I couldn’t tell you.

And what about the stuff behind closed doors? That’s where the really big deals get made, but with rare exceptions, they never let me in, so I can’t tell you what they’re like. And if you already attend those secret meetings, then you don’t need me to tell you.

Chase Carey, speaking at the NAB keynote

Chase Carey, speaking at the NAB keynote

While I continue to put together way too many NAB photos to tell you what the show is like, I’ll mention what Chase Carey, president of News Corp., said at the keynote. Carey wasn’t on board with the “embrace the future” theme; he said that if Aereo survives and folks continue to watch for free (without retransmission consent money), he’ll convert Fox to a cable network.

This pronouncement caught the attention of a lot of TV people, but I think it’s only saber-rattling. If Fox and its other network friends fail in the courts against Aereo, they’ll go straight to Congress to change the rules. The threat of pulling the Super Bowl off the air will give representatives cover for doing what the networks’ money asks them to do, and there you’ll have it.

Consider that Fox could decide to go cable tomorrow. It could have made the switch years ago, when retransmission money was a tiny fraction of what it is now. But it didn’t and it won’t because it just doesn’t make sense. The end, at least to me.

On the other hand, Broadcasting and Cable’s Jon Lafayette presents a more nuanced examination of what Fox would gain and lose by taking themselves off the public airwaves. In particular, doing so would negate the argument broadcasters have been making about needing all that spectrum they’ve been fighting to keep. So go read that.

Once upon a time, this already sort of happened. WGN and WTBS converted from distant over-the-air superstations (from the perspective of most cable TV systems) to cable channels. In both cases, they continued to locally broadcast most of the programming they sent to the cable systems, with just enough difference to make it count. The easiest way for Fox to convert would be to pick a few of its most popular shows and substitute reruns or infomercials over-the-air for an hour or two a night. To watch next year’s “House” or “24”, you’d need to watch it on cable, but local news would still be over-the-air. I still don’t think it’ll happen, but if it does, see if that’s the way it plays out.