Technology360

AT&T’s acquisition of T-Mobile more about market share/pricing than spectrum

Yesterday’s surprising (maybe) announcement of AT&T’s acquisition (pending regulatory approval) of T-Mobile is being billed as a spectrum play for 4G, a move in response to the U.S. Administration’s goal of covering America with wireless broadband.  See the Wall Street Journal’s interview with Kevin Werbach for a perspective on this.

However, one analyst says that 70%-90% of AT&T’s current spectrum currently sits unused.  AT&T acquired two nationwide aggregations of spectrum that lie mostly unused for roughly one-twentieth of the price they paid for T-Mobile.  Interestingly, this (the 1/20th figure) is what the NTIA and CEA said in a recent white paper that broadcasters would need to be paid to clear enough spectrum to meet FCC goals.

You pay a 20-fold premium over bare spectrum because this spectrum – all of which they won’t use – comes with customers and this new customer base will make them the largest wireless provider (they and Verizon will control 70%).  So this is really about that market share and the control over pricing this will give them.

In addition to the links above, also see Om Malik’s, What AT&T and T-Mobile Merger Means for Innovation.  --Dennis

Preparing for Unbundled Television [@terryheaton, #pubmedia]

Terry Heaton is a consultant primarily to commercial television who in my view has a great track record of anticipating disruptive change for broadcasters and recommending responsive strategies.  His latest essay  titled above is right on, for both commercial and public television.

Terry writes:

Unbundled television is the polar opposite of the broadcast model, and media companies aren't prepared whatsoever to compete in this new universe. Everything that we know, everything that we practice, everything that we believe in is tied to that which bundles the content we create or distribute to the infrastructure that's doing the distributing. Separate the two, and we are fish out of water, flopping helplessly on the dock of user demand.

Don’t miss this essay, especially his eight recommendations.  The only one I’d amend is the 7th on RSS, to which I’d add API distribution.

Link:  Local Media in a Postmodern World.  --Dennis

Stephen Hill: Six steps to a user-supported #pubmedia system

The following quotes from a dear colleagues email sent by Hearts of Space producer, Stephen Hill, earlier today.  See also this related post.  --Dennis

SIX STEPS TO A USER-SUPPORTED PUBLIC MEDIA SYSTEM

FOR STAKEHOLDERS
1. Re-define the role and identity of stations as "locally-focused public media network nodes."

2. Extend the Public Media Platform to every station web site as a matter of system policy, so all public media content is available at every point of entry to the network. This can be as elegant as a single Public Media Player on mobiles or the web, or a full service embedded "site-within-a-site."

3. Re-align the financial relationships and incentives between networks, stations, content producers and affiliates so everyone has a stake in the success of the network as a whole.

4. Define a practical set of revenue-sharing policies between stations, networks, producers and affiliates. (For example: ultimately stations might not pay dues and program fees to NPR, but receive a net revenue share from it.)

FOR THE PUBLIC
5. Create a comprehensive set of free, voluntary and paid digital service models for the public as a means of attracting significant new revenue for the system.

6. Create a national Public Media Network membership for end users, with multiple tiers of service and access to premium digital services and archival content as benefits of paid membership.

Funding the future of #pubmedia - a new proposal from Stephen Hill

Stephen Hill, whose Hearts of Space program is familiar to public radio listeners, is out with a new proposal for funding public media.  Stephen has built a successful online and radio business in a "niche of a niche" and has learned a lot along the way about content economics.  This is a long document but well worth your time to read and discuss.

The following quotes from an email he sent out today:

Colleagues:

I've posted the paper I've been working on since June 2010 to my blog and sent a text version to the Pubradio list. (The list appears to be down at the moment due to a hosting change, but it should show up soon.)

The ideas I'm advancing in this paper for reform of the business and service models of public media have taken on added relevance in recent weeks, and have convinced me that now is the time to go public with it. It is very strange to find myself ready to agree to phasing out Federal funding, but for the radically different reasons than those who are pursuing a partisan political agenda. I am convinced that

If public media is to secure its future, it must be with the public.

You may have received a draft in the past. I've revised the paper substantially, and I hope the attacks on public media will encourage you to reconsider it in the light of the challenges we face. Frankly, it's a long and demanding read, but there is nothing like being threatened to focus the mind.

I solicit your comments and criticism. Please email me links to any blog or public forum in which you post responses.

Web version:  http://heartsofspace.typepad.com/spatialrelations/2011/03/funding-the-future-of-public-media.html [or http://tinyurl.com/66xmrhu]

Printable PDF: Funding the Future of Public Media.pdf

Regards :: SH

--Dennis

Development continuity at NPR (not) | #pubmedia

Counting whoever just picked up the marker for this in the wake of Ron Schiller’s departure from NPR, since I joined its board in mid-2005 (I retired as an SVP there at the end of 2010), there have been six “permanent” or interim heads of fundraising development.  NPR will now be recruiting a 7th.  Development is also a major task of the CEO and in that same time, there have been five such CEOs (I was one of the interims). 

NPR just can’t catch a break in this, leaving what should be one of the most compelling philanthropic cases greatly under-achieving.  Lack of continuity in leadership leads to “coin-us interruptus.”

Major gifts fundraising is more important now – when  tax-based sources are under assault – than ever.  It’s a high-touch, long-term relationship activity.  In NPR’s case, there is also a volunteer NPR Foundation board and the sometimes difficult relationship with 280 or so station managers to manage.  Ron, and also-departed CEO Vivian Schiller (no relationship), were making what is probably the first real progress in both those sets of relationships when Ron announced his original May resignation before the now-infamous Georgetown videotaped lunch.  That progress is now problematic.

Journalism is Job One at NPR, but development has to be Task One for the new interim and permanent executive teams.  Stations (where I spent 38 years) also need to coalesce around the need for collaboration and new fundraising models.  It will be tempting in a financial squeeze to throw up the barricades and stick to what’s safe.  Wrong, wrong, wrong.  I’ve seen one interesting proposal in draft form (which I hope will be released soon) and I hope others will get creative also.

For the 7½ years I’ve been doing this blog, its masthead has quoted Jerry Garcia:  “Somebody has to do something, and it’s just incredibly pathetic that it has to be us.”  Never more true.

--Dennis

My take on the NPR situation | #pubmedia

Not sure if this is an effort to relieve or relive my sadness over the events of the past few days at NPR.  Or, it may just be a way to answer the dozen or so people who wrote or called yesterday to ask what I thought of Vivian Schiller’s departure as president & CEO, Ron Schiller’s (SVP development and no relation) videotaped meeting with bogus potential donors and subsequent departure, and what it all means for public broadcasting.

By way of disclosure, I was a senior VP at NPR until retiring at the end of December and, although I’ve gone on to work half-time for a public television organization, I still have a big part of my heart living there in the person of friends and colleagues and their daily work.  By way of further disclosure – and more significant for what I’m writing here – I was chairman of NPR’s board three years ago this month when we had a parting of ways with Vivian’s predecessor, Ken Stern, and I took over for 10 months as interim CEO and later interim president & CEO.  I wrote about it at the time on this blog.  I’ve been on many other boards over the years, including the executive committee of the PBS board when we had a parting of ways with its then president.

Having communicated with no one on the NPR board or with the executives directly involved, I can say I know nothing about the specific circumstances of the current NPR situation.  I’m going to write instead from the perspective of one who’s seen how many boards work and how public broadcasting functions over 41 years.

First, if you don’t know about this situation, here are links to some good coverage:  David Folkenflik at NPR.  Mark Memmott at NPR.  Karen Everhart in Current.  Staci Kramer in paidContent.  Ben Nuckols for Associated Press.  Jeffrey Brown for PBS NewsHour.  Or, browse Google News on the subject.  Update 3/11/11: Also see a review of the week's news at Nieman Media Lab.

Boards and CEOs rely on mutual trust and confidence.  Boards and CEOs part ways when this is out of whack.  It’s that simple and that complicated.  It’s tempting to speculate beyond this, as the Washington Post did when I took over in 2008 and as Jeff Jarvis, who I highly regard, did in a post today (by the way, I think his interview by APM’s Marketplace tonight was good).  But this speculation is almost always wrong.

In his post, Jeff stated, “The board fired the last station because he pissed off the stations” and implied this was true of Schiller’s departure as well.  In March 2008, Paul Farhi wrote in the Post that the “Stern and the…board had clashed repeatedly over several of Stern’s initiatives, including NPR’s expansion into new media.”  From personal first-hand knowledge, both statements are just flat wrong.  As CEOs, Ken, myself as an interim, and Vivian were all strong proponents (most effectively Vivian) of digital investments and there was an acceleration of those investments throughout three administrations of NPR because it was and is the right thing to do.  The board supported each of us with leadership and approved budgets.

I have never seen, in the case of NPR nor any other board on which I’ve served over many years, a split in policy between station managers and lay reps.  It doesn’t happen that way.  And it’s been my experience that lay reps are especially valuable because of their corporate experience when it comes to making a leadership change.  So what’s the significance of station managers having a slight edge in representation?  It’s a non-issue in the governance of our national public broadcasting organizations.

Yes, any organization’s leader in a similar situation has some stations that push back and some stations that love them.  It’s impossible to generalize.  By the way, commercial broadcasting networks and retail franchise operations experience the exact same push and pull.  That’s life in the real world.

Jeff is absolutely right to say, “There is a strategic cliff ahead.”  Vivian saw it – so did Ken – so did I.  We invested in solutions which the board supported.  But NPR isn’t going to make the jump to internet distribution without writing off 90% of its listeners and be forced to win them back over the long slope of wireless growth.  The audience isn’t ready for it; the mobile internet won’t scale to that level of use (just do the math) for many years, if ever; and local journalism and community outreach – plus more mundane but necessary things like local traffic and weather – depend on tax-based support and the income that audiences attracted to NPR programs voluntarily subsidize.  The reality of operating public radio in the 200 or so markets in fly-over country is probably not apparent from our major cities, but it’s arguably more important to citizenship and quality of life in those communities than it is, because of alternatives, where Jeff and I live.

So, was the NPR volunteer board “ball-less” when it did whatever it did – appearing to some as dismissing its CEO to appease Republican critics?  No, I think they were working to regain confidence in their ability to govern the organization and move it and public radio forward in the face of “Christensen disruptions” and challenges to funding.  That is their tough job.

--Dennis