Execs learning how to stop worrying, love gadgetry explosion

Time to ankle tech angst?

The TV biz has to keep up with the Joneses, which is tough because the Joneses have come a long way from appointment television on a 13-inch console. They have high-def TV, mobile video and broadband Internet that lets them download or stream a near-infinite array of content to watch in any number of ways on any number of devices.

Such rampant change has induced thoughts of doom and gloom in some TV execs used to the stable world of networks, syndication and homevideo. But those on the front lines are coming to NATPE with words of comfort filling an agenda that says the promise of possibilities outweighs the fears of the unknown.

From a technology standpoint, many pieces are already in place.

Brian Cooley, an editor at large for tech site CNET.com, says, for example, that Apple’s expected phone product could finally crack open the mobile video market by connecting wirelessly to content in the iTunes store.

Big things are expected from the Venice Project, a hush-hush venture from the founders of Skype that is expected to deliver HD-quality video via peer-to-peer technology.

And WorldNow, which provides video streaming to more than 285 local TV stations, is announcing a low-cost technology for streaming HD-quality video.

However, content remains the key to driving eyeballs to the new media, says WorldNow prexy-CEO Gary Gannaway.

“We’ve got to treat this digital media as a great opportunity to give content that can’t be seen in any other place, that’s timely, that’s relevant, that’s compelling to the consumer and advertiser,” he says.

That’s good news for companies with a deep catalog of content.

“We’ve made a decision to take our content and make it as available as possible,” says Andrew Perlman, head of digital media for Classic Media, owners of such family shows as “Rocky & Bullwinkle.” The company has struck deals to get its cartoons on such services as InfoSpace and MobiTV, where the short-form nature of its toons plays well.

The most successful models seem to be ad-driven ones, with quantity key to success.

“For every user we are making less money than on traditional media, but there are more users,” Perlman says. “We can expose consumers to TV shows we would never be able to get on the air anymore.”

Studios and networks have also been quick to jump into the fray, offering streaming versions of their current programs on their Web sites, selling shows on iTunes and making classic shows available on the likes of AOL’s In2TV service.

Marc Graboff, West Coast president of NBC-U TV, says those outlets bring in new revenue streams: “We can immediately see the benefits of backend type sales right from the get-go.” But Graboff adds that the studio-network relationship is not immune to change, either. Networks are going to find that the licensing fees they’ve been paying for shows — based on the old model of one original showing and a few repeats — are too high, because few shows generate as much ad revenue on initial airings and repeats as they did in the past. 

“You’ve got to find different ways to generate revenues that helps you continue to afford those productions,” Graboff says.

Just what rights are included in licensing fees is one area Graboff says could become a “tug of war,” as both the studio and the network will want the rights to revenue from the streaming of shows.

In the meantime, few contend that network-style TV is going anywhere anytime soon.

“Mass-market hits, (the networks’) specialty, will always be with us,” says NATPE keynote speaker Chris Anderson, editor in chief of Wired Magazine. “But those hits are increasingly forced to compete with a nearly infinite number of niche products enabled by ‘slivercast’ distribution, and there the network assets are not as powerful.”

Anderson’s article and book, “The Long Tail,” says that in digital markets freed from the restraints of schedules and shelf space, every piece of content will find an audience and the market for niche items will be twice as large as that for the hits – offering a huge opportunity for the networks.

“Figuring out how to unlock it — bringing the cost of everything from rights clearance to digitization as low as possible — is one of the most interesting challenges around,” he says.

That makes video search features vital, says Fred McIntyre, senior VP for AOL Video.

“There will not be a single network that has all the video online,” he says. “And that’s a big reason why video search is such a big part of AOL’s strategy.”

While investment in digital rights management has been key, real success online comes from giving the consumer the best possible experience. “Right now, users are really most interested in what they can get really fast and on demand,” McIntyre says.

Mobile phone content could finally take off this year, thanks to the technology of networks and handsets finally catching up with the potential. Once the technology is in place, says GoTV COO Tom Ellsworth, all that’s needed is compelling content.

Ellsworth adds that the TV business is a natural partner, but the industry needs to start thinking of mobile content as something more than promotions for standard TV content.

All in all, the final hurdle in the tech transition — corporate culture and institutional resistance — might be the most difficult to overcome.

“Culture changes not at the pace of technology but at the pace of people, and people rarely change at all,” says Wired’s Anderson. “The speed at which generational change can happen in any industry depends on how much pressure it’s under. In music, it’s happening pretty quickly. In TV, I imagine that will depend on how quickly the current ad model loses steam.”

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