Cable and Broadcasters: Post-NAB 2010 Challenges

by Jimmy Schaeffler

For the 88,000-plus at the 2010 National Association of Broadcasters show in Las Vegas last month, they attended one of the more interesting and, indeed, provocative confabs of recent years — if for nothing else to see broadcasters grappling with truly important issues.

These were the type of “survival” issues that now put them in a category similar to their sibling telecom platform providers, such as the cable, satellite, and telco distributors, as well as some newer relatives, including mobile and Internet providers. Yet there is growth perceived for cable operators, as well, as noted below.

Rob’s Reasoning

Hubbard Broadcasting’s Rob Hubbard, head of its TV stations group, laid down a gauntlet, telling a full-room session crowd of his and fellow broadcaster’s concerns about recent U.S. government, i.e., FCC, efforts to highlight the future growth and development of broadband and Internet products and services, while likely not going out of its way to nurture the future of broadcasters, in particular.

Many in the room took that to mean broadcasters and their brethren fear the FCC is not focusing on what it is tasked by law to do, i.e., enhancing and encouraging localism, competition, and diversity.

Added Hubbard, “At the end of the day, no one can be sure of a business, or an investment, on that level, one based on something like a price-per-megahertz.”

Put another way, the government and the broadcasters have a lot of work to do in the decades ahead, which will inevitably also involve the foremost carriers of local signals in the pay TV realm, those of the cable franchisees.
Local Laments

More locally focused, in my own Monterey County, Calif. backyard, NAB attendee and NBC Hearst Argyle affiliate, KSBW co-anchor, Dan Green, lamented what he believes the NAB show has become.

“The real issue is excessive emphasis on reflecting that NAB is becoming more of a tech exposition, rather than a place where broadcasters and the like can find sources to grow their business,” he noted.

Green sees stations everywhere struggling with HD and 16 x 9 formats, and now along comes something even more challenging. In this economy, to focus on a 3D technology that is at least 10 years down the road, for almost every engineer, is just wrong.

Put another ways, there’s just no shortage of technology on the show floor and in sessions that can be put to use today. “Local stations need to maximize the potential of digital before we go wholeheartedly into 3D. 3D is maybe OK today for ESPN, but for local news?” Green asked rhetorically. That said, 3D, as noted below, remains a rare special opportunity for cable providers.

Cable’s Rep

A well-known cable executive (but one preferring anonymity), noted that NAB this year was “…a chance to walk in the other man’s shoes for a while. Indeed, it was so interesting to see the immense amount of pressure from the feds and to watch NAB and broadcasting industry try to react in a constructive manner.”

The cabler also noted a floor-touring contingent from would-be convention rival CES, noting with optimism that NAB now has not only the empathy of both the cable and consumer electronics industries, but also a better chance in the future to work with (and speak a common language with) both groups.

The cable exec cited one of broadcasting’s top priorities, i.e., retransmission consent (AKA the negotiations over the carriage of local broadcast signals by pay TV operators), as an area where cable and broadcasters can speak together informally, well in advance of (and hopefully to the preclusion of) later, nasty, in-public debates.
Broadcasting’s Rep

A well-known broadcasting executive (but also one preferring anonymity), agreed with his cable brethren that one of the better pay TV opportunities ahead lies in the development of 3DTV. As content switches to 3D, cable needs to work closely with commercial broadcast and local TV stations. Yet, bigger concerns turn on standards and capacity, placing local broadcaster-to-cable franchisee talks on a back burner, for now.

Conversely, land-based cable and telco operators are not cheered by the concurrent development of new “over the top” Internet and broadcast content providers, such as L.A.-based Sezmi, which act to remove cable and telco middlemen from the delivery of broadcast content.

Indeed, as good as this new model of “seamlessly integrating broadcast TV and broadband video options” might be for broadcasters, it might also be just this bad for cable- and telco-casters.
Jimmy Schaeffler is chairman and CSO of The Carmel Group, a Carmel-by-the-Sea, Calif.-based consultancy, event organizer, author, attorney, and publisher.