LAS VEGAS — For broadcasters, figuring out how to be a player on the information superhighway is a lot like Dorothy’s efforts to go home in “The Wizard of Oz.” At last week’s National Assn. of Broadcasters convention, telco wizard Ray Smith, the Bell Atlantic topper, told the industry it has had the power to be a player all along.
You couldn’t have convinced broadcasters of that six months ago. Ad dollars were still in scant supply. Local TV stations — finally given the right to charge cable systems to carry their signal — were unable to use retransmission consent as a second revenue stream. The merging of cable and telephone company giants left broadcasters wondering if there was a lane for them on the infopike. Even the White House seemed unconcerned about the future role of the nation’s most powerful medium: It didn’t bother to include a broadcaster on its info highway advisory board.
But a lot can happen in half a year, as last week’s NAB convention proved. Now broadcasters believe they won’t have to hitchhike on the infopike. Traditional over-the-air broadcasting will remain a dominant force in the multimedia world of tomorrow, NAB president Eddie Fritts promised in his convention-opening speech.
“To paraphrase a prominent broadcaster, I predict that in tomorrow’s race for the gold, Marconi will give Alexander Graham Bell a real run for his money,” said Fritts.
While Bell Atlantic’s Smith did not concede the race for the gold, he made it clear that no one industry can make it on the highway alone. In his keynote address to the confab — which drew a record attendance of over 70,000 — Smith said he expects broadcasters to play a key role with a limitless future.
“With all the proliferation of new channels in the last 10 years, yours is still the most-watched form of television today, and will remain so for a long time to come,” he said.
And while broadcasters have had bad relationships with cable operators, Smith made it clear that the telco-broadcaster relationship won’t be a repeat. “Even if we develop our own programming capability, we still won’t be able to duplicate the infrastructure of news, weather, sports and public-affairs programming that makes you such an indispensable part of the daily fabric of your viewers’ lives.” It is clear, Smith added, that “we want to deliver your programming over our video distribution networks.”
Ironically, while the premise of the information superhighway is to erase geographical boundaries to telecommunications, it is the broadcasters’ ability to provide local programming and coverage that makes them so valuable.
“You’re the source a viewer looks to when he wants to know why there was a traffic jam on the expressway this morning, or whether the 13th snowstorm of the winter of ’94 will close her kid’s school the next day, or what the local congressman’s position on health care reform is. We won’t be able to meet our customers’ need without that kind of product.”
But broadcasters had more than Smith’s observations to get excited about. Thanks to Congressman Billy Tauzin (D-La.), there is a good chance that TV operators won’t have to rely solely on their programming expertise to survive.
Under Tauzin’s amendment, added two weeks ago to info highway legislation, broadcasters may provide supplemental services such as delivery of data transmission, electronic publishing or other programming on secondary channels. Broadcasters, said NAB’s top lobbyist Jim May, not even a part of infopike legislation when the process started, are now being given the greenlight to be major players.
Can’t be ignored
But events of the last six months have already alerted the telecommunications industry that the power of over-the-air television is not to be ignored.
ABC News prexy Roone Arledge made that point at the NAB convention, noting the massive ratings success of CBS’ coverage of the Winter Olympics would never have happened on cable.
All these factors have contributed to an increase in station sales that was noted at the NAB confab. The banks are lending to broadcasters now, in part because of the cable industry’s woes and in part because of broadcasters’ strengths, said Jeanette Tully, VP of Communications Equity Associates Inc.
Buying into television may have gotten a bigger boost at NAB last week when two FCC commissioners said the commission would review TV ownership regulations in the near future.
FCC ownership rules prohibit a broadcaster from owning more than 12 TV stations or reaching more than 25% of the country. Both those limits are expected to be liberalized and the commission may even clear the way for a broadcaster to own more than one TV station in a market.
“Clearly, changes should be made,” said FCC commissioner Andrew Barrett. “The question is, how far do you go?”
Fellow commissioner James Quello agreed, although he predicted an easing of the rules will be “more evolutionary than revolutionary.” Quello said he will meet with House Energy & Commerce Committee chairman John Dingell (D-Mich.) to sound out congressional concerns on the subject.
Hundt a no-show
That’s not to say that everything is coming up roses for the broadcasting industry. Most attendees at last week’s convention were disappointed that new FCC chairman Reed Hundt was a no-show. Hundt, who skipped out to join Vice President Al Gore at a world telecommunications summit in Buenos Aires, did offer his apologies but shed no new light on what the new FCC has in store for the industry.
And while TV station sales may be on the rise again, broadcasters at NAB warned of a disaster if there is a repeat of five years ago, when deals done at high prices failed to pay off. “The business will not support sales of such magnitude,” said Barry Baker, chief executive of River City Broadcasting, which owns five TV stations and is out looking to buy network affiliates.
And on Capitol Hill, the industry is under fire for violent programming, with the possibility of content regulation looming. Such regulation, presumably at the behest of the public, could actually drive viewers away from over-the-air TV to cable or their videostores at a time when the share of the big three networks is actually on the rise. But First Amendment attorneys at the confab were confident that content regulation could successfully be challenged in court, said New York University law professor Burt Neuborne.
Still, considering the industry’s uncertainty about its future just six months ago, this convention reminded broadcasters that they remain the key to reaching the consumer — who will ultimately drive the info highway.