It must have been the very early 1980s when the television station I then managed got out of the film business. The proximate cause? Our producer on a river rafting documentary lost her Bolex (I think it was) in a hole at the bottom of some serious rapids.
We are now at a point where the artistry and flexibility of film style production is available to web and broadcast producers again with digital SLR cameras. My stepson and his colleagues have been doing some very interesting work with an old Canon EOS 5D Mk II of mine tricked out with Magic Lantern. A number of public media organizations are using similar or less expensive equipment. The EOS 5D camera has even been used to shoot full-length feature films.
Slavik Boyechko, Digital Media Director of Alaska Public Media and writer of the Alaska Video Shooter blog, has written two terrific how-to posts for the PBS Station Products & Innovation Blog:
Attorney David Oxenford of Davis Wright Tremaine LLP has a good overview of what procedures broadcasters might expect from the FCC in the matter of repacking and auctioning of television broadcast spectrum. Link: Broadcast Law Blog. Trackback (posted 20 Feb. 2012).
Updated 22 Feb. 2012: Attorney Stephen Coran of Rini Coran PC also has a good overview of provisions of this legislation. It goes in somewhat different directions than the Oxenford post from yesterday. Link: TelecomMediaTech Law Blog (posted 21 Feb. 2012).
And Attorney Rob Schill of Fletcher, Heald & Hildreth also has a useful analysis of the provisions of this legislation. Link: CommLawBlog (posted 18 Feb. 2012).
There has been some talk within the television industry of giving up part of one’s spectrum for remuneration. It appears that the only way to accomplish that would be to forgo reimbursements for repacking costs or to consolidate operations with another station or stations on a single channel.
Updated 24 Feb. 2012: The legislation which created this spectrum auction authority is contained in H.R. 3630, the “Middle Class Tax Relief and Job Creation Act of 2012,” now signed by the president. Link: Library of Congress [pdf].
Here’s Kim McAvoy’s in-depth report on the legislation. Link: TVNewsCheck (posted 17 Feb. 2012).
Updated 25 Feb. 2012: VP Technology for NBC Stations, Doug Lung, takes up some engineering aspects of this in his regular column. Link: TVTechnology.
Updated 28 Feb. 2012: Here is another good legal analysis of provisions in this legislation in the form of Harry Jessell’s interview with attorney John Hane of Pullsbury Winthrop Shaw Pittman. Link: TVNewsCheck.
The following essay of mine was published in the public media newspaper, Current, on Jan. 30, 2012. It’s not yet online so I’m reproducing it here with a small update to call out the role of education. I currently do work for the Public Television Major Market Group and serve on the American Public Television board, but the opinions expressed here are my own.
The stations are here so they can understand and illuminate a community’s aspirations and concerns, engage people in the life of their community, and help people reengage and reconnect with one another.
The remark above reflects a way of thinking strategically about the institution of public broadcasting at this point in our history. Today, public media boards and executives face such strategic questions as:
What can we do to be a more significant and engaged institution in our community?
What should be our focus, and what does that mean for redeploying resources from current activities?
How can we help nonprofit and government entities be more effective when their missions are in greater demand?
How do we respond to disruptive changes in media usage?
Our web/social/mobile efforts don’t feel effective; can we change that?
How do we reach younger people after childhood?
Do we have the right internal leadership…the right strategic skills on our board?
What is the appropriate staffing mix between content and support specialists?
Can we achieve scale and lower costs through collaborations?
How can we deal with the loss in public funding for capital equipment at a time of more rapid replacement cycles?
What’s the best way to differentiate our station from channels?
What follows won’t answer these questions for your specific situation, but it is intended to give you a strategic framework from which you can derive them.
Most of the opportunities and threats we face today apply to both radio and television, as does much of this framework, but the title, of course, borrows the current PBS slogan. Feel free to substitute your national acronym.
The reality of our business
O wad some Pow’r the giftie gie us / To see oursels as ithers see us It wad frae monie a blunder free us / An’ foolish notion
– Robert Burns, “To A Louse,” 1785
We’re not the BBC or CBC with assigned remits; we’re a peculiarly American conglomeration of some 365 independent radio, television and joint licensees. The public tends shape its top-down view of us through NPR and PBS. The stations tend to shape their view from a community-up perspective, being in the same business as NPR and PBS, just on a more geographically-limited scale. Both views are incomplete and limiting.
A more useful way to model the local station is to consider it as having two distinct lines of business, one national and the other local. It’s common for us to view the two as a zero-sum game – the more we spend on national, the less we have for local and vice versa. But the evidence is that it is, or can be, just the opposite — a virtuous circle of mutual benefit.
National programming creates the financial margins in listener- and viewer-sensitive income that combine with grant and public funding and earned income to subsidize local programming. Local stations, in turn, provide significant financial resources to produce, market and distribute national programs.
The margins returned by national programming are substantial. Look at PBS in 2009 for example. Allocating viewer-sensitive revenue by audience, national programming returned $2.14 to stations for each $1 they invested, but other programming and production expenses returned only 12 cents per dollar.[ii]
The virtuous circle is completed if stations build multiple income streams and reduce production expenses in order to “be more local.” Strong local stations can invest in being more national, and the more predictable their revenue for national production will be.
In other words, the more we optimize each line of business, the more significant and sustainable we will be. If stations “be more PBS” (that is to say national — APM, APT, NPR, PRI), they can better “be more local,” too.
Public media are well-established in our communities and Are strongly positioned to serve their communities by bringing people together around their interests and giving them valuable, pertinent content.
Most foundations, many corporations and individuals, and even tax-based entities are looking to support innovation, partnership and positive change.
In public media we have strong, valued brands and competitive national programming generating billions of listener- and viewer-hours annually. Local stations are deeply rooted in the communities they serve, providing a strong foundation for public service hand in glove with other nonprofits with compatible aims.
The decline in journalism for print, radio and television is widely noted. New text-based online journalism efforts have been established in several cities, often with expatriates from city newspapers, and sometimes in collaboration with established public media. Few, if any, have thus far become profitable.
There are more than one million public charities in the U.S. — about 2,800 for each of the 365 public broadcasting entities. [iii] If you think public media providers are fragmented, the public charity space is much more so. And their effectiveness is limited by what John Kania and Mark Kramer of the nonprofit consulting firm, FSG, have termed the “isolated intervention of individual organizations.”[iv]
In 2010, the revenue for these charities totaled $1.4 trillion for these more than one million public charities, and they aggregated $2.5 trillion in total assets. Additionally, state and local governments collect tax revenue of $1.3 trillion collected for public service.[v] Together, these investments in public service were more than 80 times larger than the combined revenues of commercial television stations and the radio industry.[vi]
As natural conveners and media experts, public media seem ideally positioned to make a major difference in the work of the public service sector. But the “isolated impact” principle means we stand little chance of making a difference by ourselves, either; rather, as Kania and Kramer argue, our sector should be building “collective impact.”
As local stations, we have far greater opportunities in being the media arm of the nonprofit world than being the nonprofit arm of the media world.
We are dealing with fundamental long-term challenges in media usage and the media economy that are upending the entire media marketplace, including public media. Web implementation for most stations has been too limited and too often devoted to the wrong ends, failing at both its intended purpose (promotion and audience cultivation) and for the greater purpose it could serve (local content delivery). Mobile platforms are coming on fast, but local stations — with a few notable exceptions, mostly in radio — are deer immobile in the headlights.
Over-the-air television largely survived the last disruption of media-technology advance —cable and satellite networks — though with substantially diminished audiences — because the users of the new distribution platforms had approximately the same demographics as those who watched broadcasts.
The ongoing digital disruption, in contrast, actually holds greater opportunity for public media. The digital audiences are significantly younger and consumer media more friendly to their schedules than following those of any broadcaster or cable network. This is an opportunity for growth – if we take the right steps – because they comprise the demographic gap we’ve been underserving.
While most foundations and many potential major-givers are looking to support innovation, partnership and change, they also increasingly apply standards of accountability. Competition for this giving is growing because charities’ needs are growing, because government has less discretionary money to contribute, and because the charities’ fundraising is increasingly sophisticated.
Public media, especially in television, have way too little funding to replace their capital equipment with the shortened life cycles of digital technology and the loss of public subsidies such as the Public Telecommunications Facilities Program. And this will be exacerbated if we attempt to maintain what can be considered, given today’s media trends, an over-investment in capital facilities.
Strategic framework for change
The essence of strategy is deciding what not to do. --Michael E. Porter[vii]
So we have three profound pulls in the same direction of change, and each is motivation enough for decisive action.
The opportunities we have with the charitable and public sectors should compel us to action even if we didn’t face the challenges of funding and media change. Fortunately, accepting the challenges of community engagement will help address them.
Similarly, the funding challenges alone should compel us to action even if we didn’t face those of media change and nonprofit community service.
And the demands of media change would be sufficient to move us to action even if the other two weren’t in play.
To “be more” in both of public media’s lines of business – national and local —I believe we should follow the advice of Harvard professor Clayton Christensen and colleagues and effectively disaggregate them at the station level: Give them separate strategies and often separate leadership, enabling each to grow without the imperatives of the other. [viii]
Disaggregation at the station level means pursuing these lines of business separately — the national side operating largely through the most cost-effective outsourcing and “newco” collaborations, and the local side rebooted from the ground up to take advantage of journalism, education or community engagement opportunities, with much less need for expensive capital and support staff.
In that framework, the components typically have these characteristics:
National line of business
Feels comfortable in the traditional role, being the nonprofit arm of the media world
Attracts relatively broad audiences
Generates the largest audience and sum of user-sensitive income
Increases net unrestricted revenue
Permits greater spending on high return-on-investment programming
Expenses reduced through outsourcing and collaborations with “newco” services —startup and spinoff companies that handle functions such as master control, program acquisition and scheduling, interstitial production, and individual giving
Local line of business
Thrives by building engaged communities, usually by joining in collective impact with others in the public service sector
Serves as the media arm of the nonprofit world, enlarging its role as a civic convener, working strategically to multiply the impact of partner organizations (public television entities have been doing this for education partners since before there was a PBS); and/or
Focuses particularly on journalism, which fits well the traditional role as the nonprofit arm of media, but also builds community impact
Has targeted audiences
Net revenue from the national line of business
Project revenue from foundations, partners, tax-based sources
Broadens its output and reach by increasing its ratio of producers/journalists to support personnel
Uses smarter, “smaller-but-broader” facilities for content generation
Shares studios among television stations, with perhaps 30 to 60 sites in the country
Lowers cost using more digital-friendly production modus operandi (e.g., VJ techniques in television; Knight training in public radio)
Utilizes “Create Once Publish Everywhere” mode of production and distribution[ix]
Adopts “distributed distribution,” using multiple platforms, including partners’ and other community outlets.
There are, of course, many challenges in moving toward this framework.
One of the hardest is lack of strategic governance, or even governance that is directly involved with the station in too many cases. That’s beyond the scope of this essay, but the Station Resource Group has a good overview of this issue[x] and Bill Kling, former CEO of American Public Media, has persuasively described the limitations of universities and other institutional licensees.
Another significant challenge is lack of consensus, both within and among stations, on what they want to achieve and, especially, how they want to do it.
Many stations must significantly change course, something that will engender internal resistance. The shift will be especially significant in television stations with traditional production efforts that do not regularly produce news programming.
As a station manager, I admit, I succumbed to the temptation to “play the cards we’re dealt” — to accept past limitations as our destiny. That’s not strategic.
To “be more” locally, we must produce content that touches more of the community more deeply, that increasingly reaches listeners and viewers on their digital devices, that doesn’t require large capital outlays we can no longer afford or justify based on results, and that opens up new revenue streams.
Being more opens up a a whole new world of opportunity for public media.
[i] Richard C. Harwood & Aaron B. Leavy, Why We’re Here: The Powerful Impact of Public Broadcasters When They Turn Outward, Charles F. Kettering Foundation, 2011.
[ii] Programming from other sources like American Public Television likely provides a return similar to PBS’s but that’s masked in this analysis because they provide a smaller percentage of broadcast hours and because local programming is much more expensive per hour. Under-reporting of capital costs likely means that returns on local programs are even lower. Data are derived from PBS AFR Dataset reported in Booz&Co, “System Health and Sustainability,” 2010 PBS/CPB Round Robins.
[vii] Michael E. Porter, “What is Strategy?”, Harvard Business Review, Nov.-Dec. 1996.
[viii] Disaggregation is used to describe a tool of change management recommended by Clayton M. Christensen, Matt Marx, and Howard H. Stevenson in “The Tools of Cooperation and Change,” Harvard Business Review, October 2006.
... says Blair Levin, former FCC staffer who's described as the chief architect of the Commission's 2010 National Broadband Plan. The GOP version of this legislation:
... contains provisions designed to protect broadcasters who hang on to their spectrum. And they are what has Levin worried. ¶ "The legislation ties the FCC’s hands in a variety of ways," said Levin, who left the FCC following release of the broadband plan and is now attached to the Aspen Institute. "It opens it up to litigation risk, which then, in conjunction with the other handcuffs, makes it difficult to pull off a successful auction. ¶ "The nature of the bill dramatically increases the probability that there will be less spectrum recovered and less money for the [U.S.] Treasury."
Link: Article by Kim McAvoy in TVNewsCheck. Thanks to Joyce Herring for the tip.
Also see Jon Eggerton's Levin: Current Hill Take on Spectrum Auctions Likely Won't Work in Multichannel News. --Dennis
The prestigious James MacTaggart lecture is a fixture at the annual MediaGuardian Edinburgh International Television Festival. I’ve never attended one, but they’re always interesting and I look forward to catching up when they’re posted. This year’s lecture was given by Eric Schmidt, the Google Executive Chairman and, until this year, its CEO.
Here are some excerpts relevant to the focus of this blog:
Around 60% of Netflix rentals are the result of algorithmically generated recommendations.
What are the trends to watch? I can sum that up in three words: mobile, local and social. …¶… Reflecting on this, new genres of online content and services are emerging. If content is king, context is its crown – and one of the most important contextual signals is location. If you’re searching for coffee from your mobile,odds are you’re not looking for a Wikipedia entry, but for directions to a nearby café. ¶ Social signals are another powerful driver of behavior. If three of my friends highly rate a TV series, odds are I’d check it out even if reviewers say it’s rubbish. …
On TV viewing:
In fact, I don’t' expect TV viewing will ever switch to be entirely on-demand. There will always be a cultural pull, for some shows, on some occasions, to watch in real-time. Linear viewing remains remarkably robust – in 2010, over 90% of broadcast TV viewing remained ‘live.’
On four different occasions since early 2004, I’ve used information from the Television Bureau of Advertising web site (click “Cable & ADS” on the right navigation) to determine the number of households that use over-the-air reception (OTA) exclusively (that is, not counting antenna reception by secondary and tertiary receivers in wired cable and ADS homes). The term ADS refers to SMATV, MMDS, large-dish satellite, and DBS, and currently 30.6% of the 30.9% total ADS households are DBS subscribers.
On a tab labeled “ADS and Wired-Cable Penetration by DMA,” you’ll find for May 2011 a table of the 210 Nielsen DMA’s which contains a column labeled “% Cable and/or ADS” (there being a small percentage of homes that have both). If you subtract the numbers in this column from 100, you’ll get the OTA numbers for each market. No need to use some lame telephone survey to estimate this as the Consumer Electronics Association did in December 2010; TVB.org has it for just a little copy/paste work in Excel.
The first time I did this using November 2003 data, OTA-exclusives came up to 19.7M households. My most recent effort prior to this week used September 2006 data, and that showed 14.6M households (13.1% of TVHH). The one I did yesterday showed 11.1M households (9.6% of TVHH). ADS is now at an all-time high, so the addition of local channels to DBS has resulted in another decline in OTA.
So, yes, it’s falling and, yes, it’s gotten pretty low as a nationwide average. That’s some higher than the 8% in the CEA’s phone survey mentioned above that’s gotten some circulation (e.g., “Spectrum Reform Now” in The Technology Liberation Front blog).
From a public policy standpoint in a democracy, a national average of doesn’t mean a lot if there is a high “standard deviation” in the numbers that make up the average – and that’s the case here. There are 535 members of Congress who get to weigh in on what to do with spectrum policy, and when the Boise DMA has 30% OTA usage (antennas exclusively), four members of Congress get to have a vested interest. Ditto, when Los Angeles has 720,000 antenna-only households (13%), about 30 members of Congress have a vested interest. As L.A. proves, it’s not just rural markets – 15 of the top 50 DMA have 12.5% or greater OTA-exclusive usage. On the other hand, Congress members in New York City, Connecticut and Massachusetts might wonder what the fuss is about.
It’s that political complexity, fueled by the fact that OTA homes have a greater economic impact to stations (especially for public television which has underwriting and individual giving driven by viewing) than do homes with multi-channel programmers – perhaps double the value per household by my own guesstimate.
Don’t get me wrong, I think that freeing up additional wireless spectrum from broadcasters and others – voluntarily and properly compensated – ultimately is a good thing because services on multipurpose devices wireless and wired internet provides will be at least as important to broadcasters in the not too distant future as broadcast spectrum services will be. We broadcasters need it as much as anyone.
But let’s get our data right and make decisions based on understanding complexities, not over-simplifying for political expediency. Thanks to the TVB for their goldmine of information. --Dennis
When I was managing public radio and television stations in the Pacific Northwest, I used as a decision-making tool what might be the effect on the imaginary equity value of our organization of this or that significant decision. It tended to move me in a “build” or new product direction, sometimes to the patient consternation of my excellent team. I found it helpful as one of multiple indicators.
Equity values are determined by a lot of things, including market forces largely outside the control of management. We’ve all been concerned about declining television audiences while public radio audiences have continued strong, so I suppose it was inevitable that station equity values in the two media would meet at some point. There is now evidence we’re there and it has significant implications for the FCC’s effort to free up spectrum for wireless services.
Yesterday, it was announced that Nashville Public Radio has purchased a second station in Nashville for $3.35 million plus full time access to one of its HD Radio channels (congratulations to Rob Gordon, his board and team). Reports say it will be a classical music station. Link: Nashville Scene. In television terms, Nashville is the 29th market with just over 1 million TV households. It therefore paid $3.22 per household for Vanderbilt’s student-managed station.
In the recent past, we’ve seen the sales of public television stations for $3 million each in Pittsburgh (the 24th market with 1.16M TVHH) and Orlando (the 19th market with 1.45M TVHH). Pittsburgh’s was not the primary PBS station, but Orlando’s was – and that market had two secondary stations. So, the Pittsburgh station brought $2.58 per household while, more recently, Orlando’s brought only $2.06.
All of this may lead a gloomy television station exec to look at the possibility of a whole or partial sale to the wireless industry as a good thing. Perhaps that’s so if you’re sitting on a pile of debt you need to quickly liquidate, but these valuations wouldn’t produce much as an endowment investment. The median of 864 college and university endowment investment returns was –18.1% in 2009 (source: NACUBO). Things are up from there, of course, but even a long term average of +5% seems optimistic these days. So, if that $3M spectrum sale produces only $150,000 per year and you can’t net better than that with more traditional revenue sources from that spectrum, you’ve got some pretty serious problems.
There are other factors, too, that make a sale to wireless problematic. It’s likely, said the CTIA and CEA in an FCC filling, that they can get all the spectrum they need through repacking and will need to resort to auctioned spectrum only in the top 30 markets (full disclosure: I’m executive director of the Public Television Major Market Group, but the usual disclaimer about these being my own opinions applies). Further, one presumes that the marketability of your spectrum will vary by where you are in the UHF TV band, with a preference for spectrum that can be contiguously aggregated.