I’m safely back at FTAList / FTABlog World Headquarters in Denver after another interesting, fun time at the NAB Show in Las Vegas. While I re-acclimate to the glorious lack of oxygen up here, I wanted to share with you the most entertaining session I saw this week.

Part of NewTek‘s Broadcast Minds series, the topic was Internet Content Creators Talk What’s Next Online. Never mind the title; I saw that Penn Jillette, one of my favorite author/comedian/magicians, was going to be on the panel along with Tom Green and other fun people. (If Jillette was cheesed that the moderator’s introduction started by mentioning his appearance on Celebrity Apprentice, he didn’t show it.) The video lasts an hour, which went by much too quickly, and it contains a few naughty words if that’s a problem. Enjoy!

Erik Moreno speaking at NABThere are all kinds of fun stories coming out of the 2013 edition of the NAB Show, but what I heard this morning was not fun. During a session called Mapping the Future of Broadcast Television, one of the co-general managers of the company behind Dyle, the mobile TV system, revealed what it plans to do once the service is on its feet. Dyle viewers will be “authenticated,” and if they subscribe to a service that pays retransmission fees to local broadcasters, their device will be turned on. Left unsaid was what would happen to those poor souls who dare to watch over-the-air TV at home for free with an antenna.

Erik Moreno, co-general manager of Mobile Content Venture, was one of the panelists in the session, and he said a lot of things that made sense. There was a lot of talk among panelist about the tension between cell phone companies providing on-demand digital content and TV broadcasters, both grabbing for the same spectrum. Moreno correctly pointed out that this shouldn’t be an either-or question. “If I were God,” he said, “I would make sure to have both.” Broadcasting is the best delivery method for live and popular programming, and on-demand is great for individualized and long-tail requests.

Moreno made note of a simultaneous announcement at the show that Fox was launching a streaming app similar to that available from ABC. He said that mobile users will appreciate being able to watch the stream over their cell phones, then will be disappointed by the data usage bills they’ll get. At that point, mobile TV will have a great opportunity to catch that audience and switch them to Dyle, which would presumably need to be included in their cell phone hardware.

As I’ve pointed out before, Dyle’s press releases had been careful to note that subscriptions weren’t necessary … yet. Moreno made it clear that this was only because there are so few Dyle-compatible stations that they needed to grow the market before beginning to monetize it.

If I needed someone to create and implement a successful business plan, Moreno would be high on my list. But listening to such a casual, naked rejection of free TV over the public airwaves left me shaken and sad.

Instead of ending on such an unhappy note, let’s look to the future. In my next post, I’ll try to give you an idea of what the NAB Show exhibit hall is like. Spoiler: It’s fun, interesting, and even inspiring.

Gordon Smith at NAB Show keynoteNAB president Gordon Smith made a surprising appeal to TV broadcasters at the NAB Show keynote this morning. “The time has come for us to unite in our embrace of new technology,” Smith said, “and to realize the consequences if we don’t.”

I had expected that this NAB keynote address would be similar to those of years past, when speakers extolled the virtues of letting the marketplace work for retransmission consent (meaning that the stations have cable systems over a barrel and should be allowed to continue to take advantage), and that non-broadcast alternatives were inferior and should be fought with whatever means are available. Not this year.

Smith prepped his audience by quoting Winston Churchill, “Tact is the ability to tell someone to go to hell in such a way that they look forward to the trip.” Then rather than rail against Aereo and other threats to TV broadcasters’ second revenue stream, he seemed to suggest that the folks in the room should get out in front of streaming trends.

“For television, our future lies in our willingness to embrace new platforms, and to go where our viewers want to go,” Smith said. “Emerging technology presents a great opportunity for broadcasters to provide viewers with our highly valued content anywhere, on any device, anytime they want it.” Then he started talking about mobile TV, which is getting pushed harder this year. More about that in a later post. You can read a transcript of his prepared remarks here.

Smith was followed by Greg Walden (R-OR), chairman of the US House Subcommittee on Communications and Technology. Walden threw some red meat to the crowd, chastising the slow deliberations or overreach of the FCC. Mentioning the Satellite Television Extension and Localism Act (STELA), Walden said he’d have several more hearings and that he’s “not convinced that retransmission consent need reforming”.

After Walden was through, Smith returned to the podium and went off script. Not looking at the teleprompters, Smith told the broadcasters in the room that they need to reach out to their representatives so they’d become as informed as Walden. “Democracy goes to those who get involved,” Smith said.

I’ve said before here that Gordon Smith has been a much better spokesman for the NAB than his predecessor, even when he’s said things I disagree with. Today, he was more than a spokesman; he was a leader.

cherry tart

© Depositphotos.com / Bedolaga

Once upon a time, there was a baker of cherry pies. There were dozens of fresh cherries in each pie, which were very popular with his customers, and his bakery prospered.

Then one day the baker was visited by an accountant, who examined the baker’s finances. “You’re doing well enough,” the accountant said, “but look at what the cost of all those cherries is doing to your bottom line. You could double your profit on each pie sold if you just reduce the cherries by 20%.”

The baker listened to the accountant and followed his instructions. Sure enough, in the first week, his profits doubled. But starting in the second week, his customers noticed the change, and a growing number of pies went unsold. Total profits slid to where they had started, then continued lower.

The baker called the accountant to ask what to do next. “To get those profits back to where they were, I calculate that you’ll need to cut another 30% of cherries from those pies,” the accountant replied. The baker agreed, and again, his profits rebounded for a week before sales slumped even further. These cycles continued until the pies contained almost no cherries, every customer abandoned them, and the baker went out of business.

The moral of this fable is that you can’t grow your business through austerity. As Yogi Berra once put it, “If people don’t want to come out to the ball park, nobody’s gonna stop ’em.”

There are a lot of business people today who don’t understand this. Or perhaps it’s fairer to say that to them any short-term gain is worth losing an unknown percentage of the customer base. In particular, a lot of over-the-air TV stations don’t get it.

The Pew Research Center’s State of the News Media laid it out last month. “The effects of a decade of newsroom cutbacks are real – and the public is taking notice.” Stations are programming larger blocks of news but with a smaller budget, and the resulting filler is driving away viewers. But stations are reacting to these shrinking audiences by, you guessed it, cutting back even further on news budgets.

TV news departments should see the decline of newspapers (another austerity failure) as an opening to ramp up coverage and become the trusted beacons of local journalism. When audiences learn where to turn for the inside scoop on what affects them at home, the ratings they’ll drive should reward any station bold enough to make that investment.

Or all the corporate-thinking news departments will continue to care only about meeting their next quarter’s numbers by trimming a couple more staff members. That’ll work only as well as did for the baker, until there’s no one left to buy what’s left of his pies.

closeup of a court gavel on cash

© Depositphotos.com / Tom Schmucker

This morning, the U.S. Court of Appeals for the Second Circuit upheld a lower court ruling denying a preliminary injunction against Aereo, the streaming service for over-the-air TV.

Two of the three judges found that the TV networks that filed the lawsuit are unlikely to prevail when the case is brought to trial. The third dissented, and I find his reasoning a little twisted.

Recall that, in order to obey copyright laws that each viewer access his own physical TV antenna to stream over-the-air channels, Aereo installed large banks of dime-sized antennas. Each subscriber gets access to one of those every time he watches something.

Judge Denny Chin wrote, “The system is a Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act.” Well, yeah. It would have been a lot simpler to use one common antenna and copy the signal to everybody, but Aereo was forced into that “over-engineering” to make sure it obeys the law. What’s the problem with that?

I wonder if this comes too late to work into the keynote speech at next week’s NAB Show. Broadcasters are not happy about the possibility of some of their lucrative retransmission consent fees to viewers with OTA antennas. In a statement, NAB Executive Vice President of Communications Dennis Wharton said “NAB is disappointed with the Second Circuit’s 2-1 decision allowing Aereo to continue its illegal operations while broadcasters’ copyright actions are heard. We agree with Judge Chin’s vigorous dissent and, along with our members, will be evaluating the opinions and options going forward.” So I guess that next week, we’ll all have more to talk about.