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Can a Strike Save TV?

Many people who work in the television industry right now might wonder why the industry hasn't taken a cue from WarGames, the 1983 Cold War drama where Matthew Broderick and Ally Sheedy almost blow up the world.

The end of the movie has a national defense computer running simulations of nuclear attacks by both the Americans and the Russians, and realizing that there can be no winner if the world inevitably gets nuked into oblivion.

With a writers' strike threat now real, many in the network television industry believe there will be no winner in that game either, given the fragile state of the business.

They're wrong, at least in the case of the broadcast networks. A long, drawn-out strike could be a de facto resetting of a failing mechanism. And while that will be ugly for the next year, in the long run it is exactly what the network television industry needs.

The first thing that needs to happen is an admission that no one who collects a network TV paycheck really, truly likes to say out loud: The model is broken. If you built the television marketplace from scratch today, it would look nothing like this, given what is happening in technology and viewing patterns.

The younger generations just aren't turning on broadcast television like they used to, and they certainly don't know the difference between network and cable. To them, there isn't one.

And with DVR penetration at 20% and climbing fast and content providers putting their shows on every distribution channel possible, network scheduling is going the way of the evening news: It will just become increasingly irrelevant, and younger viewers won't know it is there anyway.

While the play now is to make your content increasingly ubiquitous from a distribution standpoint (and I'd be doing the same thing, for the record), that doesn't mean the industry has any idea how to monetize it. That obviously becomes crucial once new platforms really start to cannibalize the network ratings—assuming that hasn't happened already.

But perhaps the biggest problem with network television is an annual development cycle that is completely counter-intuitive both from a creative and business standpoint. The cycle means everyone is fighting over the same writers, directors, actors, sets and everything else to get their pilots shot at the same time in the hopes they can launch them in the fall. You know, that first week of the season when the networks smash every new project and tens of millions of dollars in advertising into the same week and few come out of it alive.

If the film industry did the same thing—shot every movie at the same time and for the most part opened at the same time—can you imagine how silly that would be? Sure you can; we work in television.

With that system, it's no wonder new hits from the fall season are becoming fewer and farther between.

During the season, measurement and accountability for advertisers—let's just be honest—are a joke right now. Nielsen is a monopolistic mess with many questionable data streams. The only rating we really should care about is C3—the figure advertisers actually buy, on a three-week delay.

I didn't pay much attention back in business school, but I do know that if I am a brand manager, there is only one number that matters: how many people watch my commercial during the live airing. But the networks pushed hard enough to get three days of DVR playback included, even though I don't think I have ever watched a single commercial when I have viewed a show on TiVo.

Looking in the mirror, the media has no idea how to cover ratings this year, present company included. And the networks are spinning the numbers like crazy to try to make things look OK, which is what I'd be doing as well. But even I can figure out that a press release saying a show's ratings are up 100% in the homes of short, fat, unfunny Minnesota ex-pats just means I started watching this year.

Now, the entire industry is not about to fall off a cliff tomorrow, but it is hard to argue that the model is not gradually and fundamentally breaking down. So why isn't there more swift and bold evolution of the model if we all know this is happening? As always, just follow the money.

Massive change is easier said than done for both advertisers and content providers when the sides can still make deals for $9 billion in the upfront and only relative pocket change on the digital side. TV is still the biggest and best buy for advertisers, and the networks are still doing enough to keep the dollars steady for now.

And follow the paychecks.

“Everything about what we are doing is broken, and everyone knows it is, but everyone is fearful of being the first to change,” says a high-ranking network executive. “This is a defensive business.”

Especially with the networks having to cater to Wall Street every quarter, the impetus to take that risk just isn't there. After all, a network exec's bonus is based on a company's performance this year, not five years from now when a gutsy move may pay off.

But the faux sense that everything is OK can't last forever.

So what if a writers' strike came along and completely reset the mechanism? A strike lasting much longer than three months would begin to disrupt the fall 2008 cycle as we know it. It would leave networks little time to cobble together new projects to take out to advertisers in the spring.

That would give networks an excuse to dump the costly New York upfront shows in May that have questionable value at best. Remember: Fox's nightmarish upfront presentation two years ago didn't hurt its selling season whatsoever.

When the writers did come back with pilot season come and gone, that could lead to a fall season with returning shows but little new scripted fare. The networks would just develop and launch new shows when they were ready throughout the year, instead of all at once. Costs would drop and the creative side would only be helped.

Which is exactly what should be happening.

“It won't be the way it was, and it would be a tough year, but that's probably good if it changes things,” says one network chief.

A long strike could also help the content owners and providers better monetize digital. If advertisers become more comfortable diverting money to digital video offerings during a strike, that could actually help the networks long-term. They will just have to make better content than the competition. If the 1988 strike made cable television, there is the chance this strike could make digital.

The networks could also end up with more ad dollars from unscripted series. While scripted fare has always commanded better rates than reality, that gap has been shrinking. A run without scripted television could shrink that gap even more.

Now, I am not pulling for a long strike for selfish reasons, although I am in the market for a new house and a long strike could add some inventory (still, if you need to dump a clean four-bedroom in Beverly Hills, my e-mail address is listed below.)

All of these changes would not be easy, and there would be heavy casualties in the short term. A long strike obviously would decimate many businesses and put people out of work, and for anyone who's been out of work, you know what an awful experience it is.

But few will argue that the network television business model isn't broken, and no one is going to fix it on their own. So a little game of Global Thermonuclear War may be just the thing to get network television headed in the right direction.

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