TV stations and professional staffs — commercial and noncommercial alike — have been around for more than a generation. Television started in the middle of the last century and since then thousands of people across the country have built careers upon the technologies, processes and the advertising dollars that flowed freely for decades. A complex art and science, TV demanded workers develop expertise with an arcane and complex set of tools for their unique work. Creating a high-quality TV show was impossible without armies of specialists to turn all the required knobs and punch all the required buttons at synchronized moments.
Money from national and local advertisers flowed easily to television stations — the mass medium of choice that gave advertisers access to an impossibly huge audience; an audience bigger than the daily newspapers; an audience bigger than any single radio station. Advertising money built the industry, dollar by dollar, viewer by viewer. It’s been a great ride.
But those days are coming to an end. Actually, they’ve already ended. Advertisers and TV execs have simply been slow to realize it and are only now starting to act. (Think of it as the music industry, circa 1995.)
Why? What’s happened in the TV market to make stations swing from cash-rich to cash-poor in just the last 10 years? What’s bankrupting the system? And is this a permanent trend or just a temporary blip? Here’s the answer in less than 5 minutes:
The economic model of traditional TV has imploded as the viewing options have exploded (not to mention all the competing technologies that have emerged in the last 10 years, exacerbating the problem). And as the money for TV broadcasting goes away, the ability to produce programming similarly dries up.
For small and midsize public television stations (not the rich behemoths like WGBH) that want to produce original programs of public value, the path ahead is actually pretty clear and comprises two primary modes:
- Big TV. Large-scale high-end TV productions will be few and far between. They will be funded as independent projects, will mostly involve outside contractors rather than inside employees, and will draw most of their funding from external one-off granting sources. Public media companies might manage or “host” these projects, but we won’t fund them from operating cash. When 1 or 2 hours of “PBS quality” video costs $250,000+ to produce, it’s clear the economics are beyond the meager budgets of smaller stations.
- Small video. Ongoing local productions must scale back to one person + camera + laptop, in variations of the VJ (video journalist) model, as espoused by Michael Rosenblum and others. These small productions must be aimed at multiplatform niche distribution rather than mass entertainment. Plus — an important second fact — we won’t produce all this content by ourselves. We’ll curate and collaborate in ways that will make the traditionalists scoff and sputter. In the end, “TV” folks will either become multifunctional “video” folks or will have to leave for production jobs at specialty video houses.
And that’s just the short-term transformational model (up to 5 years), focused on video content production. It’s quite possible that owning an actual television station (the licenses, the towers, the impossibly heavy technical infrastructure) will become economically unsustainable rather quickly as new technologies chip away at TV’s traditional dominance. Indeed, owning a local over-the-air TV station is likely to be financially dangerous to all but the most efficient regional or national network owner-operators by 2015.
If we in public media believe it’s our mission to serve the public interest using digital media, then video must be part of the equation. But does “TV” have to be in the mix? In the short term, definitely. In the long term, maybe, but probably with significant strategic changes.
For now, we may not know the fate of local TV stations, but traditional TV production models are already dead. The revolution is underway. Click below for another 90-second forehead slap:
So these are the market realities. It’s up to us to decide whether these are exciting or threatening developments. Should we engage and evolve or should we hunker down and hope for a different future?
I know my answer. What’s yours?
Gravity Medium 
John
This is so compelling
r
Hi, my name is Vincenzo and I am a Tv producer and head of coproductions for a major Italian company called Lux Vide (http://www.luxvide.it); I found your above post so interesting and in line with what I have been thinking and observing in my 20-year long carreer. Big TV event shows are becoming the only way to fund prime tv, but it look shrinking…I look forward to sharing views with you if you want.best Vincenzo Moscahttp://www.linkedin.com/in/vincenzomosca1958
Hi, my name is Vincenzo and I am a Tv producer and head of coproductions for a major Italian company called Lux Vide (www.luxvide.it); I found your above post so interesting and in line with what I have been thinking and observing in my 20-year long carreer. Big TV event shows are becoming the only way to fund prime tv, but it look shrinking…I look forward to sharing views with you if you want.
best
Vincenzo Mosca
http://www.linkedin.com/in/vincenzomosca1958
Thanks for stopping by, Mr. Mosca. I wasn’t expecting international readers, but it’s great to have you here.
I know nothing about Italian television, but I suspect the same economic issues apply in Italy as they do in the United States.
HI John
Needless to say, could not agree more, but keep your eye on the local newspaper. Those who survive will become, i think, ironically, a far more efficient and productive creator of video content. and as web and tv merge, who can tell the difference? They have been working on a far smaller scale since the 1960s.
John — interesting post and I agree with much of what you are saying. The only part that I would disagree with is your giving a free pass to major producers to the challenges that you lay out. While major stations may have more money and people, the economic challenges are in at least as severe. An article I wrote for Current not long ago, points out the challenge that the current corporate sponsorship model is facing is but one example. The very high cost of production is another.
One of the issues that public broadcasting stations will soon have to deal with (if they aren’t already) is that of scale. Many public radio and television stations are too small or weak financially to do anything more than just pass through PBS, NPR or other product. Scale is going to need to be achieved, particularly around terrestrial broadcast distribution, in order to provide the margin needed to truly achieve a significant, locally-based public service mission.
@Rosenblum — Agreed. Newspapers, in some cases, are making major strides. In the local markets, I think it’ll be a battle between the incumbent TV folks (who are still largely blinded by their advertising revenues) and the newspapers (who aren’t blinded by revenues, but by inertia). Newspapers are, ironically, better suited to move to the web because they’ve got the text and photo thing nailed down (skill-wise) and can learn video. TV folks, it seems to me, will have a much harder time learning text and photos.
Public media outlets actually have some real opportunity here. However, we may be too cash-poor to take advantage of the situation. We’re very trapped in the old models and are emotionally attached (nonprofits seem to do this more than for-profits). I could easily see developing an “NPR of video” for local / regional / national news and doing it on the web. That could be a killer service. Deadly, perhaps, to the incumbent cable “news” channels.
In any case, thanks for stopping by and commenting. I’m a huge fan of your blog and hope, one day, to send some journalists to one of your VJ boot camps. Someday…
@Steve Bass — You know, I focus so much on the environment I’m in (small- to mid-market) that I’m not as well-versed in the big market situation. It’s hard to wrap my head around how a comparatively large company like OPB or WGBH or WNET or KQED or others in the top-tier markets could really be facing the same issues. But of course you are, and I appreciate you sharing the insight and correcting that part of my thinking.
Plus, I think your scale comments are right on. As Mark Fuerst said recently at the IMA conference, there seem to be two successful kinds of scale in media (new media especially) — huge and tiny. Folks in the middle are getting squeezed from each side as small players have virtually no overhead to support or legacy to protect, and the largest players can leverage mass audience economics.
I didn’t think of OPB being in the middle, but in the grand scheme of things I suppose it is. As Fuerst also likes to point out, the entire public media industry in the U.S. is only about as big an economy as the National Hockey League. Compare that to the rest of the media world and yeah, it’s not that big.
And I remember your Current article. For other folks out there, you can read it here…
http://tinyurl.com/2pvypb
I wish I’d been blogging back then. That’s a great article. Hopefully it’s gotten some traction (it may have — I don’t travel in the fundraising circles).
For me the real question is: Does one have to be huge (eg., WGBH) to survive and prosper as a professional production company? I agree that “small video” offers the right approach. 20 years ago, the pubTV station I worked at (Twin Cities PTV) was shooting dramatic works in the field with single cameras, 3/4″ recorders and a cuts-only editing system. They garnered a good audience and won all kinds of awards. We did it because we didn’t know you couldn’t. Just as CNN needed to teach CBS News that there was a future for news that was less expensive than CBS’s approach — and as cable has shown PBS that it can poach on the public television franchise — we either learn these lessons or we become extinct.
Bottom line: there is a bright future out there for imaginative program makers who can revolutionize their behavior and the scale of producing to what is now possible … and REQUIRED.
Cheers,
Jim “The Program Doctor” Russell
Sorry for the delayed approval on your comment, Jim. And I think you’re totally right. It seems like we have to unlearn things in order to change. I’m thinking about new modes of production (both live and recorded) that require less gear, less editing, less people, less cost across the board. It will mean we won’t win Emmys for production quality, but we might just make a real connection with our community. I’m hoping it’s the right approach.
And by the way, you may remember Duncan Moon from your past work — he certainly remembers you. His office and mine share a wall and he has said lots of kind things about your work and your methods. If you ever want to do some free consulting (ha!) we sure could use your experience and smarts in Alaska!
An interesting read on this comes from Jim Cooper in the March 31 issue of Mediaweek, (you can find it online at the mediaweek.com site by going to their opinion section). Cooper focuses on commercial media only, but it raises interesting questions about public media as well. He argues that the ad dollars will continue to flow to the big media in the foreseeable future; the “big guys” will certainly take advantage of the growing dollars available from advertising revenue from on-line distribution, but the big dollar deals for advertising will continue to flow to the programming that’s seen on big boxes in homes:
Says Cooper:
” But while those [on-line viewer] numbers chart impressive audience growth, based on some research that recently came across my desk, I’m of the mind that online video will be mostly additive to viewers and incremental to programmers for at least the next five to 10 years. Here’s why.
As an ad sales business, per eMarketer, Web streaming will pull in about $1.35 billion in 2008. That grows to $4.3 billion in 2011. To put that in proper perspective, the Big Four broadcast nets drew about $17 billion in prime-time dollars for calender year ’07. So while it’s a business—and a growing one at that—Web video will be a budget line for the media industry and not an event horizon. ”
So at least on the commercial side – that FCC license in most markets will continue to be a license to print money. The bigger question is why this economic model does not hold for public television (which I agree will face much bigger challenges maintaining audiences and revenue).
Greg — I totally agree that traditional TV and media remain dominant from an ad-spend perspective to date, and will likely remain that way for a while. Old models that involve ingrained behaviors on the part of the public die slowly, not quickly. Cooper’s right — there’s no singular event horizon that will define the shift.
That said, I think the value of the FCC license for local over-the-air broadcasting has rapidly declining value. It’s not dead, and will never fully die, but it’s declining. And it’s probably worst for “traditional” pubTV operators and any local network affiliate that has a weak local operation.
I think four things make it worse for pubTV stations:
1. They’re not generally run by hard-nosed numbers/business people. When you have a literal bottom line and cash-hungry investors, it tends to focus your goals and activities. PubTV is a softer business with softer goals. Don’t get me wrong — you can make money, even good money, with a pubTV local license. The leadership is not arrayed to solve business math problems, but community service problems. As the TV market has fractured, most of the pubTV system has missed the boat financially and strategically.
2. Many stations, through declining revenues, have slashed local operations, shrunken their local engagement activities, and basically become glorified repeaters for the national outlets (e.g. PBS). That’s a commodity move, and commodity businesses are margin businesses. See #1. And in this commodity business, costs are going up, viewership/revenue is going down. That doesn’t last.
3. Cable TV has created a large and growing number of niches for viewers, allowing folks to find content categories on demand. PBS still plays a grab-bag game, smashing together all kinds of different content. Aggregated quality is good, but findability and meeting my needs when/where I want them met trumps quality. The only thing PBS has broken out in the last few years are some kids services, and that was a battle. In a world of niches, PBS is still playing a walled-garden portal game.
4. Local TV businesses, even more than nationals, have been slow to adapt to changing TV production models (smaller, lighter, faster, more naturalistic, local, cheaper, etc.). Speaking from where I sit, I work with people that openly long for the 1980s TV world, when the money flowed easily and the staffing and equipment were plentiful and cutting-edge. They all want to win an Emmy with every production. They pooh-pooh projects that are “too small” for their own professional goals. PubTV incumbents are kind of stuck because of this mismatch of talents and goals compared to strategic requirements. In that way, pubTV is just like commercial TV, newspapers, and so on.
Advertising dollars will continue to flow to the big boxes in the living rooms that are hooked up to traditional video sources. But that money is moving away, diversifying, shrinking as audiences similarly fracture. As a single outlet of advertising cash, TV is likely to remain dominant for many years, and no other single outlet will challenge it — perhaps ever.
Perhaps that’s the biggest takeaway: the future does not offer a singularly dominant medium through which all ad dollars will flow.