Quit Your Whining

Broadcasters don't embrace change; they work to stop it
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At any convention, you expect the opening speakers to set the tone. Last week, on Day One of NAB in Las Vegas, NAB President Eddie Fritts and the once-and-future broadcaster Barry Diller did just that. They set the tone—a defensive one. Neither offered a bold vision or new ideas for local TV broadcasting, just more calls for help from the federal government. They declared NAB 2003's unofficial theme: A good defense is a good offense.

Fritts called on the government to save TV-station groups from uncooperative cable operators and from overbearing broadcast networks. The government should force cable operators to carry broadcasters' DTV signals because, after all, the government is forcing broadcasters to make the transition from analog to DTV, Fritts said. Yeah, that's true. But Fritts conveniently forgets that NAB asked for the digital transition and practically wrote the rules for it through its always effective lobbying.

Fritts also said NAB has been working with the FCC "to protect the competitive balance in the broadcast marketplace." Let me translate: The NAB has been working to keep the 35% station-ownership cap in place and keep the big bad broadcast networks from getting bigger and badder. (Ironically, Fritts called for protective regulation right after noting that media outlets had grown by 200% and media owners by 140% over the past 40 years. You see, Fritts does want "reasonable and moderate deregulation" so that the non-network station groups can enjoy greater economies of scale.)

Diller seconded Fritts, saying the broadcast networks should be hobbled by a station-ownership cap and by some new rule limiting their ownership of their own prime time programming. This appeal for Fin-Syn II, I should note, comes from the same man who, as head of the Fox network, successfully fought in the early '90s to bring down Fin-Syn I and who has made repeated (mostly failed) attempts to own and control as many media properties as he could over the past dozen years or so. I guess his thinking is, if he can't have it, nobody else should either.

Diller's defensive posture was surprising, given his history of bold plays. But Fritts's was predictable. Playing defense is what NAB always does. Even its grab for the DTV channels in the '90s was mostly motivated not by a desire to offer news services and new businesses but to prevent others from walking off with the spectrum.

Defensiveness pervaded the convention, perhaps because business is bad and nobody has the time or money for anything new. Talk among broadcasters was about the wave of station consolidation that will follow that "reasonable and moderate deregulation" this spring.
Group executives say they will have to get big or get eaten. And, instead of looking to build new businesses on the foundation of DTV, they remain focused on ways of using technology to make their stations more efficient.

The membership meeting of the Association of Maximum Service Television was dominated by the fear that the consumer-electronics and cable industries may have cut a deal that cuts broadcast tuners out of future digital TV sets. It's a legitimate concern, but last week it seemed to be the only concern of the large station groups that make up MSTV.

At a panel session, Emmis's Jeff Smulyan once again complained that TV stations continue to be denied fees from cable operators that carry them. Perhaps stations should get paid for their programming. After all, cable networks that deliver a fraction of the audience get a cut of cable-subscriber revenue. But this isn't new business; this is simply squeezing more money out of the old.

The only one with the vision thing going at NAB 2003—at least publicly—was Michael Eisner. In acknowledging the induction of the Wonderful World of Disney
into the NAB Hall of Fame, Eisner said Disney will embrace digital distribution of the company's precious content, despite fears of privacy. In particular, he said, the company is moving ahead with testing a system for downloading movies to consumers via a digital signal embedded in TV stations' analog signals.

Hey, it's something.

TV broadcasters have a means for switching over to offense, the so-called Broadcast Labs. It could be the forum for developing new digital businesses, but broadcasters aren't putting much of their own money into it. They are forcing its champions, LIN's Gary Chapman and MSTV's David Donovan, to go, hat in hand, to consumer-electronics manufacturers.

Defense is said to win championships. That may be true, and the NAB has a great middle linebacker in Fast Eddie Fritts . But you need an effective offense, too. Broadcasters need to get one. Anyone know a good quarterback?

Jessell may be reached at hjessell@reedbusiness.com

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