Web Extra: The State of the Media
By John Eggerton -- Broadcasting & Cable, 1/28/2007 7:00:00 PM
With President George W. Bush delivering his State of the Union speech last week, we thought it would be a good time to check with some of the presidents--and chairmen, CEO’s, executive directors and commissioners,, to weigh in on the state of the media.
Vice Chairman & Executive Officer, GE
Chairman & CEO, NBC Universal
The state of the media union is strong overall. If you’re a diversified media company with good results in most of your areas, you’re probably fine. There are areas of weakness, however. If you’re more narrowly focused, in an advertiser-dependent print business for example, you’re having a tougher time.
But I would suggest that even the healthy are infected with a low-grade fever of confusion, which needs to be closely monitored and treated over the next few years.
The confusion stems from the decline in revenues from traditional business lines coupled with uncertainty about the best strategy for replacing them with revenues from new, digital-based businesses with lower margins, principally the result of start-up and overhead costs.
This is the last business cycle in which a traditional media company can deliver good results without digital constituting 20-30% of its business.Three years from now, success will require your traditional areas to be performing at the top of their games while at the same time deriving significant income - not just revenues - from digital media.
The margins on digital activities will eventually rise.Until they do, average performers will be under pressure, since any weakness in their traditional areas will be difficult to fully recoup through digital activities.
FCC Chairman Kevin Martin
The date February 17, 2009, probably isn’t circled on most people’s calendars, but it should be. On that day, broadcasters will stop airing analog signals and go all-digital.
The Digital Transition is happening now, and it offers broadcasters and consumers exciting opportunities. In this digital world, broadcasters provide a better and clearer picture, as well as an over-all enhanced viewing experience for consumers.Broadcasters also have the opportunity to use digital technology to offer consumers new services, including providing several free programming streams at once and data services.Fully utilizing their digital spectrum opens new revenue streams to broadcasters, enabling them to better compete in the dynamic media environment in which local programming faces stiff competition cable, satellite and internet offerings.
One of the most exciting opportunities afforded by the transition could be the realization of mobile video. Broadcasters may choose to use part of their spectrum to transmit their unique local service to cell phones for instance. Local weather, traffic, and sports, or perhaps school closings during winter snow storms, is exactly the type of content viewers will want to watch on their handheld devices.
Policymakers should assist broadcasters to carefully manage the digital transition. Fostering new services while protecting existing ones from interference must be a priority.Equally important, however, is meeting the Communications Act’s basic requirements that the digital signal be viewable by all TV watchers, and that it not be materially degraded by a cable or satellite provider.Consumers should receive the benefits of improved services after the transition without losing access to the services they currently enjoy.
John Dingell, Chairman, House Committee on Energy & Commerce
"Today's multimedia environment is like nothing I've ever seen. The ability of consumers to access news and information at any hour of the day and from such a multitude of sources has greatly enhanced the power of the individual and, in my estimation, is serving our democracy well. The recent emergence of user-generated media will continue this important dynamic.
Even with these trends, however, we must not forget that large companies still control much of what we see and hear, and it is incumbent on all of us to remain vigilant such that a glorious diversity of voices remains the hallmark of our national and local media landscape."
Andrew J. Schwartzman, President and CEO, Media Access Project
We have the world’s best and most innovative media infrastructure. I think this is because of -- not in spite of -- regulation of the electronic media.
As in the past, media industries’ success depends on adapting to new technologies. Whoever figures out the best ways to integrate the broadband technologies into existing platforms will prosper.But, even as technological change drives decisionmaking, what hasn’t changed is that over the air broadcasting and daily newspapers remain the most influential, and irreplaceable, forces shaping public opinion. Broadcasting and newspapers are highly profitable industries. They are not at death’s door.
Kyle McSlarrow, NCTA President and CEO
"Competition and innovation are the hallmarks of the media landscape in 2007 and the foreseeable future. We have a large and growing number of companies crossing traditional boundaries to offer multiple services, more choice and a better value.
All of the players - cable, satellite, telephone, broadcasters, web video, wireless broadband and home video - are exploring new ways to reach consumers. Today's marketplace has more choice, more content and more services than at any time in history.
Whether it's wired or wireless, through your TV or PC, PDA or telephone, consumers truly are in control of their media experience. I can't wait to see what's next."
Jeff Chester, executive director, Center for Digital Democracy
The state of the media union, like our nation, is deeply divided. One the one hand, a few giants operate without regard to the public interest, the majority of radio and broadcast TV stations, cable/DBS channels and systems, and newspapers.
The focus on a narrow bottom line has brought misery to newsrooms across the country.America's crown jewels of the press--the Los Angeles Times, the San Jose Mercury News, and the Philadelphia Inquirer--now tarnished.The overall failure of the U.S. news media to warn the public that there were not weapons of mass destruction and that Saddam Hussein wasn't involved in 9/11 (as most people believed as recently as 2 years ago), helped lead us into a tragic war.
Bottom-line reality programming and new forms of entertainment fully embracing advertising fills network schedules.Fearful of the Internet's ability to challenge their monopoly business models, both the cable and telephone industry--in an act of digital violence to the Net here--succeeded in having the Bush FCC (with the help of some Dems) eliminate thenetwork neutrality safeguard.Old media and new merged, illustrating how traditional business models will also likely rule the digital roost as personalized interactive ads shape what we
see (Fox/MySpace; Google/AOL[TW}; Google/MySpace.
But the rise of new media and new platforms--as well as a growing movement for the public interest and media, show that it's also perhaps the best of times.It's currently a fast moving topsy turvy media world where change is a constant--perhaps even to help make media more democratic, diverse, and community oriented.
President, Parents Television Council
Technology today allows shockingly realistic entertainment content and a virtually unlimited means of distribution. Such developments are both blessing and curse.
Sadly there are many who utterly disregard the long-term irreparable harm being inflicted on children, on families, and on our society. And like most stages of history, the driving concern in today’s media is corporate profit and personal greed rather than public interest and enlightenment.
The ‘creative community’ seems more intent on shock and titillation than on good story telling; and those few good stories are regularly cheapened with gratuitous material. But there are solutions. Air graphic material later. Allow cable subscribers to select their network lineups. Content ratings must be accurate and transparent for viewers and for advertisers. And give parents real tools, even if it means less revenue.
The industry continues to thwart all reasonable efforts which would protect children and families while preserving creative freedom. If the industry refuses to govern itself better, it will inevitably lead to its being governed.
FCC Commissioner Robert McDowell
The state of our media union is dynamic.I am especially excited about the windows of opportunity that will open as a result of deployment in the 700 MHz Band.The auction for spectrum in the 700 MHz band is quickly coming over the horizon, and I am hopeful that we will wrap up our work on the rules regarding use of the spectrum this spring.
The 700 MHz band, the “Park Avenue” of spectrum real estate, holds great promise and roll-out there will inaugurate a new era of opportunity for media entrepreneurs of all stripes.
Similarly, the future is bright for technological innovation in the “white spaces” slices of the spectrum.The best part is, the government will not micromanage the use of this spectrum -- we're going to leave the decisions to the true experts and ultimate shareholders in this enterprise:American consumers."
Shawn Sheehan, VP, Tribune Co.
Broadcasting remains America’s best bargain- free to rich or poor, urban or rural. When disaster strikes -- be it 9/11, Hurricane Katrina or events as mundane as school closings -- thesignal gets throughwithout need of a wire or dish.Stations cancel their regularly scheduled programs and advertising while providing vital information.
Sustaining its viabilityis the intellectual rationale for § 202(h) of the bipartisan ’96 Telecommunications Act-- the quadrennial review of the FCC’s Broadcast Ownership Rules with the onus on the Commission to justify retention. Why? Broadcasting’s market share continues to erode. The audience is migrating to the pay media such as cable and satellite, and increasingly to new internet products.
If we want a free system, scale is important. Farfetched? Consider the struggles stand-alone stations are presently encountering post-Katrina in the Gulf Coast. For months-- no advertisers and not much audience--nothing but overhead. Irrespective, certain FCC Commissioners are crisscrossing the country—railing against so-called” media consolidation.”
The operative word is “media”. Yet the FCC’s review only affects broadcasting—no cable, no satellite and no internet. The label is a red herring. Ironically, the market trend is toward less broadcast concentration. In the past year, Emmis sold its broadcast TV stations. Clear Channel is exitingTV and has all of its smaller market radio stations for sale. The New York Times sold all of theirTV stations. Tribune, my employer for 21 years, is (as reported) exploring its options. The sheer size of these deals clearly establishes less not further consolidation. None of the big broadcast players appear anxious to buy stations. All growth aspirations point to the internet.
Historically, the FCC attempts to regulate and by the time it promulgates, technology has altered the core equation. That is precisely what is occurring today. Sadly, this crusade is being waged without a cause. America stands to lose its greatest bargain.
FCC Commissioner Michael Copps
Broadcasting is a truly special enterprise.At their best, TV and radio programming provide sustenance to local communities, reflect and nourish the diverse tapestry that is America, and cover the great issues and controversies facing our democracy.
I continue to believe, however, that excessive consolidation imperils these values.I also believe the FCC can do a far better job than it has in defining what broadcasters must provide the American people in return for free use of the spectrum.
At the end of the day, broadcasters are uniquely positioned to serve the common good and to help us all meet the many challenges our nation confronts.We can't afford to fail.
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