PBMA

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PBMA

• 5/31/2001

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• Were all at various points on the learning curve
• There are no dumb questions
• There are no easy answers

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• CAVEAT 1
• Those who say they know how the transition to
  digital broadcasting will come out dont know
  what theyre talking about.

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• CAVEAT 2
• Three months from now, these will be the old
  days, technologically speaking

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• CAVEAT 3
• If some aspects of the transition to digital
  broadcasting dont make sense to you . . .

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• CAVEAT 3
• If some aspects of the transition to digital
  broadcasting dont make sense to you . . .
• . . . it could be that they dont make sense.

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WHAT WERE GOING TO TALK ABOUT

• The Rocky Road to Digital Broadcasting
• The Strategic Inflection Point
• Why We Think the Way Broadcasters Think
• Whats Different Now?
• Implications for Public Broadcasters

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• THE ROCKY ROAD TO DIGITAL BROADCASTING

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• Much is being made of the transition to digital
  broadcasting, with HDTV, widescreen,
  multicasting, datacasting, 5.1 Dolby Digital
  audio
• DTV has enormous service potential for public
  broadcasters
• But consumer market has been very slow to develop

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• original 2002/2003/2006 timetable wont be met
• broadcasters must build DTV transmitters to keep
  licenses for analog stations
• new FCC Chairman Michael Powell taking
  marketplace approach

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• obstacles
• more than 1200 stations not yet on air
• very high cost of sets and receivers (check the
  ads)
• reception problems
• no cable must-carry
• no cable-ready DTV receivers
• chicken and egg problem no killer app content

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• 250,000,000 analog sets in USTVHHs
• 27,000,000 (est.) to be sold in 2001
• every analog set purchased now is a DTV receiver
  which wont be purchased in the next few years
• 35-50,000(?) DTV receivers in USTVHHs
• Beware of industry reports!

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• analog TV getting better, less expensive
• 85 rule
• 85 of the homes in a TV market must be able to
  receive and display a broadcast DTV signal before
  analog stations go off the air
• analog broadcasting will remain our principal
  distribution platform for the next 5 - 10 years

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THE ROCKY ROAD TO DIGITAL BROADCASTING

• Will cable rescue the broadcasters?
• cable could permit viewers to watch DTV stations
  on their analog sets
• Time Warner Cable agreement for PTV DTV
• discussions with other MSOs underway
• No current discussion of DBS carriage of DTV
  stations

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• THE STRATEGIC INFLECTION POINT

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THE STRATEGIC INFLECTION POINT

• Intel Chairman Andy Groves strategic
  inflection point
• Thats the point in the life cycle of an
  organization, business, or individual, when fewer
  and fewer of the old rules apply, and the new
  rules are being made up as you go along.

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THE STRATEGIC INFLECTION POINT

• Intel Chairman Andy Groves strategic
  inflection point
• Organizations which fail to change their ways in
  order to navigate through the strategic
  inflection point go out of business. Grove goes
  on to say that in a few years, there will be no
  Internet companies - companies will either be on
  the Internet, or they will be out of business.

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THE STRATEGIC INFLECTION POINT

• Much of what we do is based on the legacy of
  where weve been, where weve come from.
• If we were starting over today, what would we do
  differently?

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WHY WE THINK THE WAY BROADCASTERS THINK

• Marshall McLuhan (paraphrased)
• We are speeding into the future at 90 mph with
  our eyes firmly fixed on the rear view mirror.

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WHY WE THINK THE WAY BROADCASTERS THINK

• We are accidental broadcasters
• Broadcasting was the only mass communications
  technology available when we started out as
  educational television stations
• At the time, there was no cable, satellite, home
  video, the Internet, DVDs, etc.

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WHY WE THINK THE WAY BROADCASTERS THINK

• We were conditioned to think of our audience
  members as being largely anonymous to us - and to
  each other - because broadcasting is a mass
  communications technology

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WHY WE THINK THE WAY BROADCASTERS THINK

• In the past, competition was limited by the small
  number of broadcast licenses in each community,
  which created a high threshold to entry, limited
  audience fragmentation
• Educational and public service organizations
  without broadcast stations had to come to us to
  to reach viewers and listeners.

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WHY WE THINK THE WAY BROADCASTERS THINK

• We controlled what programs would be made
  available, and when, and how they would be used,
  releasing them in real time, beginning on the
  hour and half hour.
• Over the years, we became used to a predictable,
  steady rate of change, and behaved accordingly.

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• WHAT'S DIFFERENT NOW?

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WHAT'S DIFFERENT NOW?

• On the Internet . . .

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WHAT'S DIFFERENT NOW?

• On the Internet . . . no one knows youre a dog

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WHAT'S DIFFERENT NOW?

• On the Internet . . . no one knows youre a dog
• . . . or a radio station, TV station, newspaper,
  library, museum, school or individual

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WHAT'S DIFFERENT NOW?

• The digital continuum
• text/audio/graphics/moving images
• where does print end, radio begin, radio end, TV
  begin?
• radio and TV stations, newspapers producing and
  distributing print, audio and video on the
  Internet

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WHAT'S DIFFERENT NOW?

• The Internet lowers threshold to entry - no
  broadcast license required
• other public service media providers, e.g. public
  libraries, museums, colleges, universities moving
  out on their own
• (see A Digital Gift to the Nation - Fulfilling
  the Promise of the Digital and Internet Age by
  Lawrence Grossman and Newton Minow - especially
  essay by Richard Somerset Ward Public Television
  in the Digital Age)

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WHAT'S DIFFERENT NOW?

• shift from mass communications to mass
  customization
• Jeff Bezos - Amazon.com is a store for one
• Internet facilitates relationship building
• the audience need no longer be anonymous to the
  communicator, nor to each other

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WHAT'S DIFFERENT NOW?

• While waiting for digital broadcasting, good
  enough technologies are proliferating in the
  marketplace, offering features of broadcast DTV
  at lower cost to consumers
• More to say in next session at 1030 A.M.
• Digital Conversion for Public Broadcasting
  Funding Technology
• (Pine Room)

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• IMPLICATIONS FOR PUBLIC BROADCASTERS

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• Organize around core competencies
• content creation
• content packaging
• content distribution and access
• providing content-related services
• developing individualized customer relationships

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• We have to learn to be platform agnostic
• developing parallel production techniques
• ideal is to Create Once/Play Everywhere (COPE)
• how much of our programming needs to be provided
  in real-time to the end user?

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IMPLICATIONS FOR PUBLIC BROADCASTER

• We need to learn to speak the new languages of
  increasingly customized and interactive media
• look at job descriptions and training
• look at work flow processes
• look at interdepartmental relationships - are
  they conducive to working across media platforms
  toward a common vision?

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• As control shifts to the user, we are
  transitioning to digital libraries, providing
  both scheduled program services as well as direct
  access to content, on demand
• The editorial content we create, acquire and
  package is one of our stations most valuable
  assets

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• We need to manage and organize editorial assets
  strategically to derive maximum value from them,
  make them easily accessible for use today and in
  the future.
• Need to do this as a system, so we dont create
  175 independent versions of the Dewey Decimal
  system.

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• The global -reach euphoria created by the
  Internet has been tempered by the realization
  that because almost everyone lives someplace,
  geography doesnt go away as a market criterion.

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• All local public broadcasting stations are under
  increasing pressure to demonstrate their
  relevance to their local constituents
• If local PTV stations are so important, why are
  we so afraid of the Discovery Channel?
• If local public radio stations are so important,
  why are we so afraid of the deathstar DBS
  services?
• In most communities, the local PTV station is the
  last locally-owned station.

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• Need to optimize the role of the local station in
  the community as the local retailer of content
  and services
• link national programs with local community
• link outreach and fundraising

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• Invest in building relationships with viewers and
  listeners
• Hypothesis The more engaged the viewer and
  listener, the higher their lifetime value as a
  contributor to the station

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• How do we free up the resources to pursue new
  opportunities, focus on strategic opportunities?

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• centralcasting
• 350M problem/opportunity (est. cost of
  individual DTV master controls)
• new PBS interconnection system in 2006
• state nets as models
• joint master control operations in Denver, NYC
• Northwest ADDE project
• NPR content depot

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• Develop alternatives to real-time delivery of
  recorded content to stations, to end users
• use of the Internet for feeding content
• Program scheduling services
• Backroom fundraising services

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IMPLICATIONS FOR PUBLIC BROADCASTERS

• Build partnerships with other community
  institutions
• access new sources of funding
• change perception of station from broadcaster to
  locus, catalyst and collaborator with other
  public interest information providers

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WHAT WEVE TALKED ABOUT

• The Rocky Road to Digital Broadcasting
• The Strategic Inflection Point
• Why We Think the Way Broadcasters Think
• Whats Different Now?
• Implications for Public Broadcasters

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PBMA

• 5/31/2001