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Public TelevisionStrategic Investment Scenarios
Digital Distribution Implementation Initiative
NETA 2003 ConferenceSan Antonio, January 9, 2003
Participants
Work scope involved both radio and television scenarios. The latter covered in this report.
Core Working Group & CPB
Ed Caleca, PBSJeff Clarke, KQEDDennis Haarsager, KWSU, NW Public Radio (DDII consultant)Byron Knight, WisconsinDavid Liroff, WGBHPete Loewenstein, NPRAndré Mendes, PBSJim Paluzzi, Boise State Radio
Ted Coltman, CPBAndy Russell, CPBDoug Weiss, CPBAlison White, CPB
R/TV Radio
Television“Civilian”
Multidiscipline Experts Group
Jon Abbott, WGBHBrenda Barnes, KUSCRod Bates, NebraskaJoe Campbell, KAETScott Chaffin, KUEDBeth Courtney, LouisianaVinnie Curren, WXPNTom DuVal, WMRATim Emmons, Northern Public Radio
Fred Esplin, U. of UtahGlenn Fisher, KTCAJack Galmiche, OregonJohn King, VermontTed Krichels, WPSXJon McTaggart, Minnesota Public RadioPaige Meriwether, KUEDSteve Meuche, WKARPeter Morrill, IdahoMeg O’Hara, WNET
Multidiscipline Experts Group
Maynard Orme, OregonAllan Pizzato, AlabamaLou Pugliese, onCourseDon Rinker, AlaskaMeg Sakellarides, ConnecticutBert Schmidt, WVPTJonathan Taplin, IntertainerKate Tempelmeyer, Nebraska
Tom Thomas, SRGMike Tondreau, OregonDavid Wolff, FathomArt Zygielbaum, Nebraska
Current Environmental Scan
Public Broadcasting Today
“Everyone is baking their own cookies”“Hail Mary” method of funding depreciationUsage strong compared to other public service providers, not so (TV) compared to other broadcastersPolicy support of pub’casting less assuredOur esteem is an asset that can be leveraged or squanderedOther public service entrants entering electronic media
The Electronic Media Today
Conglomerates dominate ownership and control diverse distribution outlets, with both “horizontal” and “vertical” operations and pricing advantagesUsers are beginning to take control of when they access programmingSubscriber-based economic models (e.g., HBO) are competing with ad-supported ones
Television Today
Cable/DBS are gatekeepers for the main receiver in 85% of homesCable/DBS increasingly deliver original progr.Cable/DBS focus is on quantity vs. qualityNon-broadcast channels are on threshold of overtaking broadcast channels in viewingTelevision advertising may erode as cable & DBS develop greater advertising options No federal support for multicast; no active support for non-HD models
Diverging Fortunes of Public R/TV
Terrestrial digital transition is mandatory for TV, voluntary for radioContent production entities are generally licensee based (with major exception of NPR)Public TV viewing and number of members is steadily declining, while public radio listening and memberships have increasedPublic radio players have explored alternative distribution platforms to a greater degree than have PTV’s
Five-Year Horizon
Most Probable Outcomes
Television In Five Years
Terrestrial will be of minor consequence as last-mile distribution to mass audiencesViewers will choose from incr. customized, personalized programming optionsRevenues from other than spot advertising will become significant and competitive“Must convince” replaces “must carry;” some stations will be shut out of cable/DBS
Television In Five Years
Erosion of audience and revenue threaten existence of many licensees; may be fewer licenseesA variety of technologies, wired and wireless, to compete for delivery of servicesAudiences will still value storytelling, but truly compelling content will continue to be scarceFirst stations in the new mobile video/multimedia service will begin operation
Five-Year Horizon
Plausible But Less Probable Outcomes – Wins and Losses
Unexpected Wins
DTV killer application – content or service – that accelerates adoptionDTV universal set-top box works with a wide variety of digital services, including DTTNew broadcast models (rich media, mobile) prove economically viable
Closet of Our Anxieties
DTV DOA with stranded $1B+ investment; diminished credibility with fundersNo federal funding for public TV NGIS – capabilities drastically reducedEarly surrender of analog spectrumContinued reduction of funding for public broadcasting
Strategic Investment Scenarios
Investments may be individual or collective
Collective Investment Modalities
Toolkits – activities or tools licensees can use to achieve best practices without need for collaborationService Clouds – stations outsource significant activities created for specialized purposesColonizers – efforts to operate public broadcasting mission elements independently with or without station involvement
Scenario 1 – Sustaining
Make strategic investments in initiatives that sustain the legacy (broadcasting) businessTends to maintain operational independencePreserves as much “gross tonnage” of public service as possible, at least in near term; lengthening the “glide path”High investments in “toolkits,” somewhat lower investments in “service clouds,” little in “colonizers”
Scenario 2 – Repositioning
Make strategic investments in initiatives that reposition public television in new directions consistent with historic missionCapacity and scale created at collective levelEmphasis on editorial (programming) rather than operational independenceAccepts the current “glide path” but creates new “climb paths”Increased investments in “service clouds” and “colonizers”
Innovation Modality1 Tool Kits
Innovation Modality 2Service Clouds
Innovation Modality3 Colonizers
Public Television Investment ScenariosDiverging Investment Possibilities
DLH, 1/7/03, p. 1
Strategic Investment Scenario 1 — Sustaining
Strategic Investment Scenario 2 — Repositioning
Diminishing ability to make parallel strategic investments within both scenarios
Incr
easi
ng m
agni
tude
and
ris
k
Innovation Modality 1Tool Kits
Innovation Modality 2Service Clouds
Innovation Modality 3Colonizers
Public Radio Investment Scenarios:Parallel Tracks Possible
DLH, 1/7/03, p. 2
Ability to make separate strategic investments within both scenarios
Strategic Investment Scenario 1 — Sustaining
Strategic Investment Scenario 2 — Repositioning
Incr
easi
ng m
agni
tude
and
ris
k
SustainingScenario
RepositioningScenario
Col
lect
ive
Indi
vidu
al
Toolkits
New ShelfSpace
Colonizers
Colonizers
ServiceClouds
ServiceClouds
Generally lowerper-licenseeinvestments
Generally higherper-licenseeinvestments
Public BroadcastingInvestment Modalities
Provocations
From the consultant…Scenarios Provocations
Television Provocations
Form “virtual broadcast groups,” digital distribution companies that operate key functions of current stations across marketsProvide elective, centralized station operations services through PBSCreate public service “digital condominium association” with other state, national and international advanced networksTask system economics panel with devising strategies to redeploy [insert ambitious amount here] to priorities
Virtual Broadcast Groups
Repositioning service cloudsProvides competitive (to commercial group stations) scale and cost savingsCreate common technical standards and best practicesLicensees freed to concentrate on things not transparent to viewers, on building new constituency relationships, and fundraisingGroups could aggregate for multiple reasons
PBS Station Operations Services
Repositioning Service CloudProvides similar functions to VBGs, though perhaps more oriented toward technical opsNatural extension of NGIS role and missionServices could also be provided with VBG affiliates
Digital Condominium Association
Builds on blossoming relationships with Internet2 and affiliated state networks (e.g., IA, MI, TX, WA)Scale saves substantial dollars on capacityEnables public television to serve emerging communications needs of education, libraries, museums, et al.Multiplies political capital for interconnectionPeering provides collaborative environment for all “condo” residents – “the pool”
Redeploy $ To Key Priorities
Wide agreement on unnecessary expenditures at your station (not mine)Unnecessary = expenditures transparent to our viewersPerhaps we really can afford our service prioritiesSet an ambitious goal and task a panel with the task of identifying where and how – with proceeds redeployed to programming, capital needs and repositioning colonizer investments
DDII Scenarios Documents
www.technology360.comScroll to “Documents”
Contact Information
Dennis L. Haarsager, DDII Consultant1019 Border Ln., Moscow, ID 83843-8737208.892.9445 | e-fax [email protected]
Associate Vice President, Educational Telecommunications & Technology, Washington State University
Box 642530, Pullman WA, 99164-2530509.335.6530 | e-fax 888.455.1070 | [email protected]