[opendtv] News: "Network and local TV stations ad revenue is weakening"

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
  • Date: Fri, 27 Oct 2006 08:14:59 -0400

These guys still don't get it!

Now Bob Wright of NBC is acknowledging that the traditional business model of broadcast television is "weakening." At the same time Wright suggests that there is a significant opportunity for growth in the "digital space," but warns that piracy threatens the economic health of Hollywood and the nation.

I guess this is just Hollywood doublespeak for:

Viewers are "turned-off" by mediocre content that is constantly interrupted by mostly irrelevant ads, so our future is selling content direct. But this may turn them off even more, especially if we try to make even higher profit margins via subscriber fees or paying every time they view the content. So, the only way we can make this new business model work is to:
1. Make it nearly impossible to bypass our Digital Rights Management technologies;
2. Work with our friends in government, both here in the U.S. and internationally to criminalize attempts to use content that viewers have paid for, on devices that we do not control;
3. Characterize the sharing of content by consumers as piracy, rather than the effective form of content and brand promotion that it actually is;
4. Use our armies of lawyers to threaten consumers via "broadcast litigation."
5. Fight attempts to legislate "network neutrality," so that we can disadvantage would be competitors and peer-to-peer sharing technologies by forcing consumer to pay a premium to use these services.

Perhaps Wright needs to go back to elementary school and study basic arithmetic.

Potential global audience for the typical Television program = 100,000,000 - 500,000,000 views

Revenues if we don't use all of the techniques above and simply charge a fair price for the content:

        $0.25 per 30 minutes    X 100,000,000 = $25,000,000
                                X 500,000,000 = $125,000,000

In practice, much of the potential audience cannot afford even $0.25 to watch 30 minutes of content. But who cares if they don't pay, as there are enough people who will to make this an extremely lucrative proposition.



Wright on Piracy: This Is War
By John Eggerton -- Broadcasting & Cable, 10/26/2006 2:15:00 PM

"Network and local TV stations ad revenue is weakening," says NBC Universal Chairman Bob Wright. "The syndication marketplace is flat. DVR penetration is growing, leading to contentious debates about audience measurement and metrics for advertisers," a reference to the balking by numerous network at Nielsens new commercial ratings system.

That gloomy picture of the TV business was painted Wednesday for the Los Angeles World Affairs Council, and comes just a week after his company announced a restructuring and job cuts do deal with a dramatically changing marketplace.

But in his speech to the group, Wright was not all gloom and doom. He said there were also "huge opportunities for growth," particularly internationally and in the digital space, the latter which is what drove NBC to its announced shift in priorities last week.

But Wright's ultimate point was that both those growth areas are threatened by piracy, which he called on his Hollywood audience to fight as though it threatened the economic health of not just their industry, but the entire nation.

Wright has become the CAE (chief anti-piracy evangelist) for Hollywood, arguing that the TV and movie production industries are on the front lines of a battle for our economic security that he likens to the one the nation is currently fighting for its physical security.

In fact, Wright invoked Bob Woodward's appearance before the group earlier in the day.

"I began these remarks with a reference to Bob Woodward's latest book [State of Denial: Bush at War, Part III], which draws some strong conclusions about the state of our nation's physical security," said Wright. "What we know now is that our economic security rests on the shoulders of the intellectual property industries."

Wright said that when he suggested the connection between physical and economic security to some executives at NBC U, "I was accused of being melodramatic. Wasn't I overdoing it a bit? To which I responded: 'No, I'm not overdoing it.'"

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