"The Future of Television"-Broadcaster Strategy
Wednesday, February 06, 2008SUSIE GHARIB: There appears to be progress in the ongoing writer' strike in Hollywood. The writers guild will meet with its members on Saturday to discuss where negotiations stand. The writers, the studios and networks want to end the strike before the academy awards on February 24. The dispute centers on how writers will be paid for their work now and in the future. As Scott Gurvey reports in tonight's installment of his series "The Future of Television," it's a battle to remain relevant in the face of the ongoing television revolution.
SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Is this the future of television? Apple's iTunes store rocked the music industry when it began selling songs directly to consumers. Now it is doing the same for television. But broadcasters have learned from the music industry's experience. They are not bucking the trend toward alternate distribution methods. But they are insisting on active participation and greater control. NBC Universal pulled its shows from iTunes in a pricing and marketing dispute. It now offers some programs itself for free download, with commercials. It will offer others, for sale on Hulu, a site it is developing in partnership with News Corp. Alan Wurtzel, NBC's president for research and media development, notes the network also makes programming available on demand through cable systems and has developed special programming for distribution through the Internet and on mobile devices.
ALAN WURTZEL, PRES., RESEARCH/MEDIA DEVELOPMENT, NBC UNIVERSAL: I don't think the average consumer will consume video in the next five years in any one way. I think they'll consume it in many, many different ways. It's just going to be how that all gets proportioned. Some people will still spend more time and energy going to the advertiser supported video. Others will spend more time going online. Others will spend more time downloading and paying for it.
GURVEY: Other broadcasters as well as cable channels which produce original programming, are experimenting with alternate distribution channels for their content. This has increased tensions between the content providers and distributors. And the content providers and the creators, the writers, actors directors and other creative talent who want a piece of the revenue no matter what distribution channels are used. Al Lieberman, director of the entertainment, media and technology program at NYU, says broadcast executives he talks to are embattled.
AL LIEBERMAN, PROFESSOR, NYU STERN SCHOOL OF BUSINESS: No one is going to give up their grounds. No one is going to walk away from these highly successful albeit declining shares in network television.
GURVEY: Which is not to say network television is about to be replaced by Internet downloads. Analysts say broadcasters will now sell TV-plus-web distribution as a package to advertisers. Consultant and author Shelly Palmer says traditional television has a built-in advantage it can continue to exploit.
SHELLY PALMER, AUTHOR, "TELEVISION DISRUPTED": You know what's not democratized? Promotion. Remember a full 25 percent of the ads you see on TV are for TV itself. As a matter of fact, the largest advertiser on television is television. Without the promotional engine, you just made a video for you and your close circle of friends.
GURVEY: And media analyst Scott Kessler of Standard & Poor's says the current shift to wide screen, high definition digital television also works to the advantage of the traditional broadcast companies.
SCOTT KESSLER, INTERNET MEDIA ANALYST, STANDARD & POOR'S: Internet content is a very compelling concept in terms of trying to marry that content with related advertising. The problem is, as companies try to provide more and more sophisticated video content on the Internet, people are kind of somewhat resistant to that. It's one thing to watch a three minute clip or a five minute clip on a 17-inch screen. It's another thing to ask folks to watch you know a 30 or 60 minute television show on that small screen.
GURVEY: Whatever screen size you prefer, your options will continue to expand. We'll take a look at some of those options and at the impact the television revolution is already having on the political process tomorrow. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.
