At 11:18 AM -0700 4/23/05, John Willkie wrote: >One is reminded to consider what happened to the value of the (once labeled >as worthless) radio licenses when TV took over. Sure, there was a dip of a >few year's duration, but when one looks at the strip chart, it's hard to see >the dip now, considering the essentially contiunally uphill trend in the >value of radio licenses. > >As we discussed at lunch the other day: the majority of the value of >broadcast licenses is the programming contracts, the local content, and the derived goodwill. Unfortunately, comparing radio and TV broadcasting is like comparing apples and orange elephants. These world have little in common, as one would quickly understand by listening to the radio promo ads - the ones that tell us that radio is the ONLY free entertainment medium today. The dip in radio listening was primarily caused by the migration of entertainment programming from radio to TV. When all of the radio stars moved to TV so did the audience; at that point radio had to evolve to find its true audience. One of the most important aspects of that evolution turned out to be mobile/portable reception. While radio still serves fixed receivers, the major source of revenues is drive time, when the audience is very large. The growth of talk radio seems to fly in the face of the long term trends for radio, as it is a move back to a program format (you must tune it a a specific time) rather than a generic vertical market format such as rock, country, hip-hop etc. TV Land is very different. Back in the days when we had only 4-5 program choices (all OTA broadcast) television thrived. But the ability to bypass the broadcast gatekeepers changed the TV medium forever. Multi-channel TV services provided something that TV broadcasters could not: CHOICE. And they provided something that TV broadcasters cannot: easy plug and play installation with a consistent quality of service (not as good as a perfect NTSC broadcast, but on average, much better than typical off-air reception). This works for many reasons, but one of the most important is that most televisions are used in a fixed location. Portability and mobility are possible, but not critical to the success of the medium. To make things worse, TV broadcasters have become reliant on their competitors to deliver their programming. As a result, the use of the spectrum for the delivery of TV programming is now a huge waste of a scarce resource. Ironically, technology has now evolved to the point that what we believed to be "the rules of the game" have now changed. Satellite radio is now beginning to challenge terrestrial radio broadcasts in much the same way that cable challenged TV broadcasts. The satellite services offer improved reception in areas that are poorly served by terrestrial broadcasts, and they offer improved choice and NO COMMERCIALS on many channels. Terrestrail radio broadcasters are responding in a highly visible way - with the PR ads about radio being free. But MORE important, they are responding in a competitive way, cutting back on the number of commercial minutes per hour. Meanwhile, the technology now exists to make mobile and portable reception of TV and data broadcasts both feasible and reliable. This represents an opportunity for terrestrial TV broadcasters to serve a market that the multi-channel services cannot. In the end, most of the recent criticism of broadcasting (both radio and TV) is centered on the business model, not the technology. Both media are said to be dying, because the advertiser supported model for paying for content is dying. I am not among those who beleive that the advertiser supported model cannot be sustained. What cannot be sustained is the notion that we must pay twice for advertiser supported content, with the ads, and subscriber fees as well. We are seeing a resurgence in interest in terrestrial TV broadcasting in Europe, when viewers are offered reasonable choice WITHOUT subscriber fees. ON the other hand, the USDTV model is predictably failing here in the U.S., just as On Digital failed in the U.K. There is little interest in a paid service that does not deliver sufficient choice. People who are willing to pay, will pay a bit more for a service that offers the content they want to watch. Broadcasters have lived in a world that has been largely devoid of real marketplace competition. They still queue up to the microphones to plead with the Congress critters to protect them. "Make those satellite radio broadcasters live up to their agreement NOT to provide local content." "Make the cable and DBS services carry our DTV multicasts." And make competitors PAY for the content that we offer for free to consumers who are willing to buy an OTA receiver. This is why broadcasting is dying. Regards Craig ---------------------------------------------------------------------- You can UNSUBSCRIBE from the OpenDTV list in two ways: - Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org - By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word unsubscribe in the subject line.