Frozen Assets


once this was a solid investment….

There is an old expression that says ‘necessity is the mother of invention’.

Nothing could be further from the truth.

What happens in fact is that invention comes along, and it messes up everyones way of doing things, so they want it to go away. They bury it. It wrecks their lives. Executives in corporations put off dealing with new inventions until their tour of duty is over. “Leave it for someone else… I don’t really understand it” they say.

Ice, of course, is our classic example.

Once a massive industry, it was rendered obsolete in a stroke when refrigeration was invented.

No one in the ice business wanted refrigeration, and almost no one in the ice business ‘got’ refrigeration.

All they ‘got’ was unemployed.

Now the video comes to the web – or rather, the web starts to attack video.

TV network executives didn’t ask for the web. They would rather it went away, and like ice executives faced with refrigeration, they don’t ‘get’ the web.

In today’s New York Times, columnist David Pogue has a wonderful piece about TV Networks attempting to grapple with video on the web:

Music and TV were lazily paddling their canoes down Prosperity Creek when Music suddenly heard a deafening roar ahead. “Help! What’s happening?” cried Music — but it was too late. The canoe tumbled over the Internet Falls, knocking Music upside-down into the churning vortex.

TV, following at a short distance, was determined to avoid Music’s fate. “I shall go with the current and not fight it,” vowed TV. And with only seconds to spare, TV threw every shred of brainpower and muscle into avoiding its doom.

TV networks are responding by ‘allowing’ viewers to see some shows online.

This is predictable, but wrong.

It’s a bit like using the new invention of refrigeration to keep those ice blocks cold so you can sell them later in the season.

The networks have a great asset – all the TV shows they have ever made. All of them.

They’re still pretty watchable – by someone – at some time.

The ‘long tail’.

Put them all on a server – all of them – and let people access and download them whever they want – any time, any place.

And pay, say $.99 a show.

That’s how the web works.

eBay – all the junk in the attic all the time finds the folks who want to buy it.

Amazon – all the books in the world find the folks who want to read them.

Network TV – all the shows in the library find the folks who want to see them.

Linear is gone – and so are a lot of jobs.

It makes about as much sense to have an ‘Programming VP’ at a network as it does to have a Programming VP at eBay (“we’re gonna lead with Barbie Dolls, and then follow with toasters”)

The web will tell you what people want to see.

Let the free market ride!

Scary? You bet.

A future for the networks? I think its the only one they’ve got.

And your career as a Programming Executive?

Pretty much on ice.


6 responses to “Frozen Assets

  1. The Internet is not attacking video.

    It needs video.

    What the Internet IS attacking is the delivery system of the video. Not the video itself.

    Two different things.

    To use your ice analogy.

    Ice is still being made and needed. It’s just going into a different style icebox.

  2. Ice = cold.

    Ice was replaced by a different “supplier.”

    Networks were the main supplier of video. Then came cable. Both were limited.

    Now comes the internet. An unlimited supply.

    Supply and Demand = Economics.

    Will the demand for video increase? The supply will increase. The revenues are predicted to be split into smaller bits. Video will be produced for every single website in the future.

    I think the distinction between “networks” and 1,000,000 other websites will not be “video” per se. It will be Content, Craft, Creativity and Commitment. Those are the elements, I think that hold value.

    Value = Jobs.

  3. Hi Eric
    I certainly agree that there will always be a demand for quality, and a top price paid for it. And in the rough and tumble world of internet video, the need for a few quality spots will be even greater than in the closed circle of networks.

    I am just not convinced that it will be the networks that will provide the quality. I am not sure the economics work out for them anymore, as they don’t bring much to the table in an online world.

    That does not mean that we all won’t tune into (how archaic) Google Newsnight to find the smartest and best people.

  4. Michael,

    I agree.
    I need to clarify my last post. I was not trying to make an argument that networks will have any advantage in quality. (It is certainly something they should be striving for now.)

    I can see how the last section I wrote “the distinction between the networks….” could be interpreted two ways. I was trying to state that the distinction between “any supplier” will be quality. Networks are just one supplier, and the internet is providing thousands more.

    I agree… networks are not guaranteed any seat at any table. Right now, they have the infrastructure, and access to talent (video storytellers.) But I have always felt they take video journalism for granted. Local affiliates certainly do (in general.) Now is the time to be agressive. But networks are still counting on “personalities” to drive viewership.

    Thanks for the discussion. I find it interesting, obviously.

  5. Two comments with questions.

    1. Count me among those who would watch older material for a fee – I’ve been waiting years for ‘Max Headroom’ to be available on DVD or download. With their constant emphasis on making money, why do you think networks are so slow to take advantage of their back catalog?

    2. Quality and reputation rule for sources on the web to some extent – so talented show producers will still make money. It’s the commissars at the networks who will be out of work. What’s the best guess for a timeframe? My totally uneducated guess says it’s less than 5 years before one network goes down the Internet route and drops over-the-air distribution.

  6. Once again, someone who thinks it HAS to be one or the other. Broadcast or the Internet.

    It does not. Why kill an already proven revenue maker? The fact is it will be BOTH because there is always an audience for BOTH.

    At present, the Internet doesn’t cut it. That’s why it has to rely on real broadcast networks when it comes to daily local news coverage.

    Now if you want to talk about inane Youtube silliness, gosh go ahead and produce product for that. It isn’t competition for anything. Nor a paycheck.

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