1. The Future of Television As told by its past

2. What business are you in? Are you in the broadcasting business? Video provision business? Something else? Who are your competitors? Specific challenges and opportunities Challenges License requirements Limited scaling Opportunities Established relationships Geographic proposition

3. History Lesson #1 The history of television in three eras Network Era (1952-mid 1980s) Multi-channel Transition (mid 1980s-mid 2000s) Post-network era (mid 2000s-)

4. The Network Era Technology: Just a TV set, maybe an antenna Production: Deficit financing sets production rules Distribution: Limited content through bottleneck of three networks, clear windows of availability Advertising: :15 and :30 advertisements in “magazine” format, sold in “upfront” market Audience measurement: Audimeters, diaries, sampling

5. The Multi-Channel Transition Technology: VCR, remote control, analog cable Production: Fin/Syn, surge of independents, conglomeration, co-production Distribution: Cable increases possible outlets but still a bottleneck Advertising: same, plus subscription and experiments with alternatives to :30 ads Audience measurement: People Meters, sampling

6. The Post-Network Era Technology: DVR; VOD; portable devices; mobile phones; Slingbox, digital cable Production: Multiple financing norms, variation in cost structure and aftermarket value; opportunities for amateur production Distribution: Erosion of time between windows and exclusivity. Content anytime, anywhere. Advertising: Co-existence of multiple models--:30, placement, integration, branded entertainment, sponsorship; various transaction and subscription models Audience measurement: People Meters; census measurement

7. Key Items of Lesson #1 The network business was built on the norms of the network era. The multi-channel transition brought choice and control and subtly adjusted the business. The post-network era expands choice and control to make convenience, customization, and community key attributes of television in the new era. These changes are bigger than you.

8. Truth about Media Industries Creative industries are fundamentally different Characteristics of Media Industries “Nobody knows”/ intentionally over-produce; formatting High “first-copy” or production costs / artificial scarcity Public or at least semi-public goods / artificial scarcity Imperfect relationship of additional costs in production relative to revenues “Art for art’s sake” and service of the public interest Other General Responses of Media Industries Economies of scale Conglomeration and concentration Vertical integration, horizontal integration, and synergy

9. History Lesson #2 Radio didn’t die –What was radio before television? What happened to radio in the post war era? –Television did everything it could do, but with pictures. –Radio stopped being a network system, emphasized its strengths--local variation. Capitalized on its distinction--a medium for use while doing other things. Another Lesson: Magazines--survival despite fragmentation Key differentiation: No emergent mass medium

10. Key Items of Lesson #2 This moment is not without precedence. Death of media are almost always forecast preliminarily, rarely occurs Vital new stage of media can be found if rely on core attributes. Difference of the current situation (no new mass medium) an advantage.

11. History Lesson #3 Why do we have a network system? –Technologically required for distribution first in radio, then early television. –Economically powerful economies of scale. Do we still need a network system? –Not for reasons of distribution –Broad-based content the most challenging to produce in the niche environment of the post- network era

12. History Lesson #3 Continued Does it make sense for the network to be in the network business? –Not really--revenue is local Why do I watch Local 4 Detroit? –In the network era, because of network programming. –In the post-network era, because I need a local link.

13. Key Items of Lesson #3 The future of the “network” is not your concern. Where are you without it? What are you without it? What is your place in the “primary media community”?

14. Rethinking Programming in the Post-Network Era Network Era Linear Content is pushed TV is: Whatever is on What wins: Whatever comes on next; whatever is least objectionable. Post-Network Era Non-linear Content is pulled TV is: What I can access when I want it What wins: Programming of distinction –Worth pulling

15. What is your place in your viewers’ Primary Media Community? Usually media that maximize psychographic specificity Other media serve this well, but sacrifice geographic specificity--an open niche –Local media portal

16. Local Media Portal The destination for local information and advertising Must be built for the pull environment –Cross technology--particularly Internet and TV Expand where it makes sense (weather, traffic, alerts on portable)

17. Monetizing the LMP Think outside existing paradigm for broadcast; borrow heavily from existing successes while adding a local angle –Efficient search functions –Opportunities for participation Requires primary attention to value proposition

18. Responses to Background Assumptions Digital transition is not about 2009 –Many have already begun the move, traditional views will continue to apply, process of generational change Let the advertisers sort out their businesses Embrace the complexity of the consumption space –Think broad long-term strategy, not short term response

19. Challenges to Project 1 What happens if you think about comprehensive, adaptable and deliberate instead of “profitably, quickly, and easily?” –The evolution of a medium is a marathon not a sprint Key idea: What does it mean to become the local aggregator of news, media, and shopping information? –If you build the first, the rest will follow (applies to content, not technology)

20. Challenges to Project 2 Provision and delivery are different issues –You sacrifice brand and identity distinction if you abdicate being news provider –Don’t mistake consumer’s desire for flexibility in accessing content with desire for a different news product News identity is channel identity, as network identity wanes in importance, this is your key attribute Attend to your value proposition: –Telecomm Act lesson for radio: 13 million new NPR listeners (from 2-30M since 1980)

21. Challenges to Project 3 What about the user? –Start at experience, ritual, use--then work backward –Figure out user needs and problems with current situation, solve the problem and think about how to monetize that Just because you build it, doesn’t mean they’ll come-- be wary of technological determinism Consumers aren’t unreasonable, develop a fair and consistent value proposition; make sure they know about it and give them time to evolve Cable carriage as a revenue stream; an on demand channel?

22. Finding Your Way What business are you in? Why? Challenges –Gradual, can’t wait until new conditions are firmly in place to respond –When and what of “mature” behavior unknown Don’t get sidetracked by the buzz of the moment

23. Gratuitous Video Clip