JWR Articles: Commentary - NAB Show 2013 (Featured speaker: Gordon H. Smith, Lowell McAdam) - April 16, 2013
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NAB Show 2013

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Two Architectures

The second general plenary session of NAB Show 2013 was a fascinating tale of “Two Architectures.”

Primarily concerned with broadcasting, NAB President and CEO, Gordon Smith, tellingly invited wireless broadband mogul Lowell McAdam (Chairman and CEO, Verizon) for a one-on-one interview/conversation. Introduced as the head of “America’s leading wireless provider,” both men agreed to be “very candid.” Somewhat like the feeling at a presidential debate where the stakes are high and the final outcome not yet certain, the hour-long chat gave the edge to the master distributor over the grand dame of content.

Curiously, the crowd was sparse but just as polite as the speakers.

Having gambled big time (so appropriate for the venue of the Las Vegas Hilton) on home fibre (aka FiOS in Verizon-speak), the first issues dealt with the future of subscription TV (“It will be around for a long time”) and consumer/political unrest with bundling and pricing of those packages. With broadcasters producing the shows and Verizon (along with others) distributing them to TVs and all manner of other devices, the thorniest challenge (as was mentioned frequently during the opening session—cross-reference below) is retransmission fees. McAdam’s remark, “We’re sort of in it together,” spoke volumes.

As the conversation continued, it was clear the broadcasters are eying these retransmission fees very carefully: no longer does the TV business model depend virtually exclusively on advertising revenue. Time and time again, McAdam replied to a covey of questions (notably the lack of prominence for radio on Smart Phones—“I don’t get customers asking us [for radio] a lot”) with “We’re in the business of giving customers what they want; it’s about control [by the customer].”

Therein lies the friction between the two enterprises. In general, broadcasting’s one-to-many delivery over the air (and via cable and satellite when third-party distribution deals are struck) is advertiser driven. BIG EVENTS, such as sudden natural disasters and sports championships are what broadcasters do best and acknowledged as such by the likes of Verizon.

Wireless broadband (with its multitude of delivery options, including fibre) is one-to-one delivery, which truly empowers the end user to wag the supplier’s tail in a way that traditional television and radio audiences never could. “Ignore the masses at your peril” was never said aloud but often heard in the subtext.

The chat ended with both parties vowing to “coexist peacefully” as they work towards the shared goal of prosperity and shareholder value.

Yet the elephant (Republican by all accounts thus far) may well be Verizon’s participation in Super Bowl 2014 where it will launch its LTE Broadcast Service. No doubt many broadcasters will be tuned in, but more concerned with the outcome of their game than football’s premier event. JWR

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Featured speaker - Gordon H. Smith, Lowell McAdam
Further information, future screening/performance/exhibition dates,
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National Association of Broadcasters
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