JWR Articles: Commentary - NAB Show 2013 (Featured speaker: Gordon H. Smith, Chase Carey) - April 12, 2013

NAB Show 2013

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Change at all costs

Like a well-oiled political machine (which can hardly be surprising given NAB’s President and CEO, Gordon Smith, is a former two-term Republican senator from Oregon), the immediate tone of this year’s conference is one of forced optimism that the broadcast industry’s best years are not behind them.

Curiously echoing Joe DiPietro’s musical about the perils of relationships, I Love You, You’re Perfect, Now Change (cross-reference below), all of the speakers sang from the same collective songbook: NAB is going to bat and defending members' interests on Capitol Hill, but we need those voices added to ours to really effect change and fight off the largely unnamed others who feel that free enterprise needs (er, hello there Google, MSN, Apple TV…) a legislative push to level the increasingly complicated universe of content (as initially articulated by NAB Chairman of the Board, Paul Karpowicz while welcoming 90,000 participants from 150 countries) that is available “anytime, anywhere on any device.”

Of course, in times past, television and radio virtually had the over-the-air viewing/listening market to themselves: fortunes were made using the network/affiliate model. The explosion of digital media, the Internet and wireless networks feeding all manner of devices has created a new consumption model.

Before, if viewers wanted to see an episode of I Love Lucy, or watch Terry Bradshaw and his Steelers win the Super Bowl they would have to park themselves in front of a set at exactly the broadcast time. Highly rated shows made gobs of cash for the broadcasters, talent and production companies (the others—whether artistically meritorious or not—were cancelled).

Now the entire system has been turned on its head because the “power” to decide what to watch and when/where to watch it has unalterably shifted from big shot executives to any consumer that has a smart phone, tablet, Internet connection, PVR…

Naturally, advertisers are as concerned as those entrusted to deliver their messages. But what if—instead of reaching a general demographic that might be persuaded to buy—they could reach consumers that have already shown an interest in their wares? Enter one-on-one advertising. All of the “competitions'” Big Data is being turned into one-of-kind ad campaigns. If the resulting sales increase astronomically, then broadcasters will have a lot more to worry about than “voluntary incentive auction” (to release spectrum band) or the expiration of the Satellite Homeviewer Act (the 1988 statute needs a replacement by January 1, 2015).

To discuss all of these concerns and more, fellow Republican and current chair of Congress’ Subcommittee on Communications and Technology (amongst other responsibilities, charged with riding herd on the power-hungry Federal Communications Commission), fellow Oregonian Greg Walden gave a succinct analysis of the current state of the relevant legislation. As many in the room heartily agreed, the main challenge for the FCC (hilariously described as the Friendly Candy Company) is to win back the trust from those it regulates.

And if there weren’t enough right-wing movers and shakers in the Las Vegas Hilton’s Ballroom, Chase Carey (President and COO, News Corporation, aka Fox TV) sat down for a public discussion with Smith to add his what-does-the-future-hold views and also explain why, under Smith’s recent leadership, his affiliates were once again members of NAB. (Q1: If they hadn’t rejoined the mammoth trade association, would Carey have been invited?; Q2: Did Fox’s return to the NAB fold have anything to do with American Idol receiving this year’s NAB Television Broadcasting Hall of Fame Award?)

As Randy Jackson would say in just a couple of hours (“We are the gold standard”), Carey had not one iota of modesty regarding his company’s content quality: “We have the best programming; we have to be fairly compensated.” This comment was made regarding another huge issue for broadcasters: retransmission revenue from third parties. (A recent court decision in New York upheld the right of Aereo—an Internet TV company—to stream “free” broadcast signals to its customers without paying retransmission fees to anyone.)

Once again, Carey was unrepentant in pushing back on those who are “stealing our signal” from public airwaves. The threat was immediate: “If they persist, we might have to go to a subscription service.” To which Smith (with dozens of reporters in the room) glibly replied: “I think we’ve just made news here.” The irony escaped him (imagine: broadcasters making the news instead of reporting it), but I doubt the delivery went half as well at rehearsal.

Judging from this extremely scripted beginning, NAB 2013 may well be remembered as the opening foray for what promises to be a long, protracted battle between traditional broadcasting and anything-goes digital entrepreneurship. Happily, the ultimate judges in this case will be the all of those who own at least one “smart” device. JWR

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Featured speaker - Gordon H. Smith, Chase Carey
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