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.

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).

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!

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

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).

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…

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.

I know nothing about Italian television, but I suspect the same economic issues apply in Italy as they do in the United States.