News of the video bizarre: According to a just-released survey by Scientific-Atlanta, millions of people who have HDTV sets apparently think they are watching high definition television, but aren’t. The survey was spurred by an earlier Forrester Research projection that by the end of the year some 16 million U.S. households will have HDTV sets, but only seven million wll have HDTV reception. The Scientific Atlanta survey found that, yes, some 49 percent of households were not taking advantage of their HD equipment. About a quarter found that their HD set itself provided better reception, without taking the additional steps necessary to view HD. Eighteen percent said they didn’t even know needed additional equipment, such as a set-top box or antenna. A quarter admitted they thought they were watching HD video because, after all, the programs said at the beginning that they were broadcast in HDTV.
The survey confirms the long-standing prejudice of many of us non-videophiles that HDTV really isn’t all that impressive. Still, it is milding shocking that so many people plunk down money for an HD set, but never catch on that it isn’t actually turned on.
This could open up a slew of innovative policy options for the digital transition. Perhaps, instead of actually allocating spectrum to HDTV broadcasts, the FCC could just say it has done so, saving the spectrum for more valued uses. And instead of requiring HD tuners on sets, the FCC could just require a sticker saying the set has an HD tuner. The possibilities are endless.
With a la carte regulation in the news again, I have penned a short new paper on the “Moral and Philosophical Aspects of the Debate over A La Carte Regulation.” In this PFF Progress Snapshot, I set aside the economic issues at stake in this debate and instead focus on the moral arguments that are really driving this debate today, namely: (1) that consumers have a “right” to video programming on any terms they wish; and, (2) that a la carte regulation will help “clean up” indecent programming on cable and satellite television.
To see why neither is the case, read my paper.
The news just keeps getting worse for old media sectors and providers. Almost every Wall Street report or consultant survey that comes out these days predicts a dire situation for old media operators in coming years. New technologies, distribution outlets, the digitization of all information, complete media portability, and rapidly changing consumer expectations are combining to undermine the hegemony of the old media guard.
The latest report echoing this theme comes from a Kagan newsletter entitled, “Media Giants Cling To ‘Growth’ Label Even As Their Core Businesses Plateau.” This sobering report, which is based on a much longer study due out shortly, notes that the media industry’s “self proclaimed ‘growth stocks’ no longer show impressive growth.” “Over the past five years, [the share prices for] Disney, Comcast, News Corp., Time Warner, Viacom and other big names have underperformed the broad stock market, and their organic revenue gains are nothing special.
As a result, the Kagan report predicts anemic growth for old media operators in coming years. From 2005-2015, they project the following compound annual growth rates for various media outlets / services:
1% for daily newspapers;
2% for premium pay TV channels;
2.3% for TV stations;
2.3% for networks;
3.9% for movies;
4.4% for basic cable;
This echoes what Daniel English and I revealed in our recent analysis of the financial performance 5 leading media company stocks. In “Testing ‘Media Monopoly’ Claims: A Look at What Markets Say,” Daniel and I found evaluate the market performance of Time Warner, News Corp., Clear Channel, Comcast, and Viacom over the past five years and show that they have lost a whopping 52 percent of their market value (in terms of market capitalization). Moreover, we charted the performance of the entire Dow Jones U.S. Broadcasting & Entertainment Index and showed that it is down almost 45 percent below where it stood in 2000.
Meanwhile, Google’s over $400 a share and the Internet continues to steal away countless consumers of old media services. An yet, there are some people in this country who still lose sleep at night about the supposed big, bad “media monopolies” that supposedly rule the universe and control our thoughts! Give me a break.
Seriously, is there a week that goes by these days that we don’t hear about another stunning innovation on the media front? In his recent essay on “Migrating Video Content,” Daniel English points out that “Media is shifting to a digital architecture where media is a continuous, ubiquitous experience and content is decoupled from any one particular distribution channel or device.” He goes on to cite numerous examples of this from just the past few weeks.
Continuing this theme, today’s big news was TiVo’s announcement that they plan to let users download onto an iPod ANY television show that they’ve recorded at home. What we have here is the marriage of two of the most disruptive media technologies the world has ever seen. What makes a “disruptive technology” truly disruptive, in my opinion, is the way it completely changes consumer expectations such that the old ways of doing business suddenly become increasingly difficult and then quickly impossible. That’s what TiVo and iPod are doing to the world of entertainment media delivery and use. The old mass media playbooks are being torn up and throw out the windows.
TiVo revolutionized the video experience by changing consumer expectations regarding when and how we viewed video programming. We no longer have to be sitting in front of the TV at a specific time just to catch a certain show we like; that show will now wait till we’re ready to watch it. Similarly, Apple’s iPod has revolutionized our listening experience by doing the same for audible media. We now expect our entire music collection (and all new music we buy) to be (a) digitized & intangible, (b) perfectly portable, and (c) playable on multiple devices. And iPod is in the video deliver business now too helping to change expectations in a similar way.
In sum: TiVo and iPod’s appearance on the scene have shattered the old “you’ll get it when we send it, however we want to send it to you” model and replaced it with an “anytime you want it, any way you want it” mentality. Media operators who buck this trend are probably doomed in the long run.
Oh, by the way, TiVo said today that they were going to offer all these new video space-shifting services for PlayStation Portables (PSPs) too. In my new book on the futility of trying to regulate content in a world of media abundance and convergence, I kick off the introduction to the book by asking the reader to imagine a future where every possible piece of content–videos, music, news, games, websites, photos, etc., etc.–is available for instantaneous use on their mobile media devices. And then I tell the reader to open up their eyes and take a look at what their kids at doing at this very moment. Chances are, they are already using their iPods and PSPs to do all that and more. The future is now, and I am enjoying the ride.
This week, newspaper giant Knight Ridder announced that it was putting itself up for sale. In a sign of just how much the media universe has changed in just the past few years:
(1) the announcement received almost zero front-page attention in other papers; word of the sale was buried in the obscure back pages of most papers; and, more importantly,
(2) almost no one in the media business community expressed any interest in buying the giant paper chain.
Five years ago, such an announcement would have made front-page news and been greeted by a wave of offers from other media operators. Today, by contrast, the “ho hum” reaction is another indication that the Internet / media revolution is set to claim another old media victim.
For many years, newspaper industry analysts have predicted a contraction in this sector. As circulation continued it long, steady decline, and papers slowly began losing their lock on classified ads, market watchers have argued that consolidation would be the likely end result. If smaller papers were to be saved, bigger ones (owner by the biggest chains) would likely need to come to the rescue.
But it may be too late for that scenario now. In this weekend’s Wall Street Journal, venture capitalist John Ellis, who was also formerly a columnist at the Boston Globe, argues in an editorial entitled, “For Sale–Mostly Second-Rate Newspapers,” that “The consolidation everyone expects may in fact more closely resemble a break-up of the old order, and the selling-off of its assets, piece by piece.”
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Each quarter, the Federal Communications Commission (FCC) releases a report documenting the number of complaints that the agency receives. The numbers that they gather for “indecency” related complaints are increasingly drawing the most attention. Indeed, these numbers are mentioned frequently in news reports and are also cited by many lawmakers as the driving force underlying federal efforts to crack down on unseemly broadcast content.
But what do we know about these numbers and how they are gathered? Like most people, I’ve always just taken it for granted that most government statistics are accurate and can be trusted. I know there are flaws in some statistically gathering efforts (consider inflation or productivity numbers), but at least the government is doing it’s best to accurately gauge those trends. And, so, I figured the same was true of FCC indecency data.
Sadly, however, that doesn’t appear to be the case. Indeed, as my new paper “Examining the FCC’s Complaint-Driven Broadcast Indecency Enforcement Process” shows, the FCC now measures indecency complaints differently than all other types of complaints and does so in a way that artificially inflates indecency tallies relative to other types of complaints.
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Last minute addition to the schedule for tomorrow’s event at Heritage on digital television: Ken Ferree, former FCC media bureau chief, and–until last week–COO of the Corporation for Public Broadcasting. Ferree led the Commission’s DTV efforts during the Powell era, and is known for his outspoken views (of broadcasters: “They’d rather eat their children than give up their spectrum.”)
Ferree joins Tom Hazlett of George Mason University, Peter PItsch of Intel, former Ass’t Attorney General Chuck Cooper and New American Foundation senior fellow Jim Snider in what promises to be quite an interesting discussion. Stop by if you can, or watch it on the Internet. Details here.
By now you’ve heard that Apple is launching a video-capable version of its wildly popular iPod. Apple is a real trailblazer, obviously, when it comes to innovative mobile media applications, but they’re not the only one.
For example, take a look at EchoStar’s incredible new application, the “Pocket DISH.” The PocketDISH allows consumers to access video, music, games and photos all on one small device. PocketDISH owners will be able to transfer programs from DISH Network receivers to the player and then enjoy their favorite programs on the go. It’ll be like having a TiVo in your pocket.
And the PlayStation Portable offers most of the same capabilities too. After enterprising hackers modified the PSP to do a heck of a lot more than just play games and watch movies, Sony decided to offer PSP owners downloadable software “patches” that expand the PSP into the ultimate all-in-one multi-media device. For example, click here if you’d like to find out how to watch TV using a PSP.
These amazing innovations once again illustrate the challenge lawmakers will face in the future regarding media regulation. Indeed, as I will argue in my next book, content controls are essentially doomed in our new world of media convergence and rapid technological innovation.
Think about it… how do you regulate devices like Apple’s video iPod, the PocketDISH, and the PlayStation Portable when consumers can use them (and modify them) to do just about anything and receive any type of media they want, wherever they want, whenever they want? Broadcast era content controls just won’t work in this environment absent extremely intrusive measures. But I’m sure that won’t stop lawmakers from trying.
In past years, when debating media issues and media power at various events, a lot of critics use to laugh or scoff at me whenever I suggested that new media operators like Google and Yahoo were forces to be watched since they really could start to eat into the power of traditional media companies.
Well, it’s not just me saying this anymore. Read this great column by Mark Glaser of Anneberg’s Online Journalism Review entitled “Is Yahoo Public Enemy No. 1 for Big Media?”
I TOLD YOU SO !
Believe it or not, cell phone movie makers now have their own Academy Awards, at least in Europe, that is. The BBC reports that Europe’s first film festival for mobile phone movies will open this week in Paris.
While mobile video is just starting to catch on here in the U.S., it is all the rage over in Asia and Europe since citizens have been quicker to jump on the wireless bandwagon there. As a result, cell phone “art” has been quicker to develop and is now even the subject of contests and awards.
I find this particularly interesting in light of Europe’s ongoing efforts to expand media regulation. You will recall that Patrick Ross released a short paper last week about efforts underway in the European Union to grapple with media convergence and the challenges it poses for traditional media regulation. In “Regulation Without Frontiers: Europe Shows U.S. Policymakers How Not to Embrace Convergence,” Patrick notes that European regulators are foolishly looking to impose outmoded, broadcast-era regulatory mandates of the fast-paced, borderless new world of online media.
So what do the EU regulators plan to do about all these mobile media movies and videos that are now winning awards?!? How are they going to regulate all this stuff? If, for example, someone creates an award-winning but very controversial film and makes it widely available via mobile devices, how are regulators going to bottle that up? Are they going to fine that person directly (assuming they can find them)? Or are they going to force mobile media network providers to police their networks and censor on behalf of government? Are they going to require all this stuff to be rated or filtered? Regardless of the enforcement path they choose, I just don’t see how it could work.
Of course, we can expect this same debate to come to America very soon. We’re already seeing early proposals to extend broadcast regulations to cable and satellite, so it wouldn’t be surprising to see regulators target mobile media next.
The Technology Liberation Front is the tech policy blog dedicated to keeping politicians' hands off the 'net and everything else related to technology.