leading for growth in broadcasting’s changing space marcellus alexander, jr. executive vice...
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Leading for Growth in Broadcasting’s Changing
Space
Marcellus Alexander, Jr.Executive Vice President, Television
President, NABEFJuly 23, 2006
Free AirtimeAdvertising TaxSpectrum Fees
Indecency
Indecency
Spectrum Fees
Advertising Tax
Free Airtime
TelecomRewrite
Advocacy
1. Telecom Act Rewrite2. Ownership Rules3. Closed Captioning4. DTV Transition
OwnershipRules
ClosedCaptioning
DTV Transition
What To Expect…What To Expect…
1. Leadership
2. TV’s evolution as a business
3. What’s shaping today’s media space
4. Answer your questions
Why should anyone be led by you?
Why should anyone be led by you?
• Because you’re the Boss
• It’s on the org chart that HR put together
• You can’t be a manager if they don’t follow
• It’s a family business…your last name is the company’s logo
To be a leader, you need…To be a leader, you need…• Vision
• Purpose
• Energy
To be a GREAT leader, you need…
To be a GREAT leader, you need…
• Vision
• Purpose
• Energy
• Passion
• To know yourself
• To know your differences
• To know your weaknesses
• To know how to adapt
“Leadership is having an irrational sense of hope and optimism with a plan to back it up.”
"Those who cannot remember the past are condemned to repeat it."
George Santayana
(1863 – 1952)
Television’s evolution as a business…
(Late 60’s – Early 70’s)
Double digit revenue & profit growth
40-45% profit margins Healthy business/economy GMs played lots of golf Life was good!
“What a business!!”
“Our business is changing”
Competition from cable had begun Network audience share erosion Independent stations were
growing Many felt this was temporary Good times would return…
(Mid 80’s)
“Our business has changed”
Audience fragmentation continued GMs were attempting to protect
rather than grow profit margins Some long-time broadcasters felt
“good old days” would return…
(Late 80’s)
“Our business has changed and will never be the same”
People began to believe what they were seeing
Begrudgingly they came out of denial
Concerns led to expense cuts, restructuring/downsizing
Less golf for GMs…longer hours.
(1990)
“If we are to survive, we must make fundamental change to the way we
operate our business”
Two of the three largest networks lost money.
Network/affiliate compensation model is discussed
Network program expense sharing considered
“Smart Sizing” continues…
(1991)
(1992) Profit margins stabilize at better run stations
to 25 – 35% FCC regulations are changing Technology is no longer light years away…
it’s here now People who are comfortable with change are
doing well…others opted out or stressed out Innovation, alliances, joint ventures…
“It’s still a good business, but we must identify & usher in change.”
(end of 1994)Affiliation changes begin with Fox
setting dominoes in motionNetworks look to upgrade stationsBegin more aggressive acquisition
strategyViewers are confused and upset…don’t
understand why changes occurred…
“Who’s on first…and where is second?”
(Late 90’s)
Innovation becomes a necessity Flexibility increases in importance Strategic thinking/planning essential Deregulation embraced at the FCC Internet impact is felt…
“The information ‘super highway’ is here. We must build our lane or become
road kill.”
Perspective…Perspective…• Newspaper: 256 years before it reached
50 million readers
• Radio: 38 years before it reached 50 million listeners
• Television: 13 years to reach 50 million viewers
• Personal Computer: 16 years to reach 50 million users
Perspective…Perspective…
• The Internet: 4 short years to reach 50 million users• In fact, in the last two years alone, 25 million
users were added (185 million users total).
• iPods: 4 years to reach 37 million units sold• By end of 2006, Apple will have sold 1.37
billion songs through the iTunes Music Store.
(Today)
Consolidation for efficiency continues
Competition has stiffened TiVo, DVR and VOD usage grows DBS/Telco services are growing…
“We must push the advancement of technology and remain relevant.”
Museum of Media History
Portrays a series of ”What If…” factors Each ripples into possible alternativesPoints toward new convergent business
possibilitiesThe year is 2015…
A Parable of the FutureA Parable of the Future
M M H
Museum of Media History
Museum of Media History
Portrays a series of ”What If…” factors Each ripples into possible alternativesPoints toward new convergent business
possibilities The year 2015…
A WARNING or a ROADMAP into Convergence?
What’s shaping broadcasting’s
space?
Change
There will be more change in the next 5 years than there has been in the past 50.
Technology
“I was born when…hardware was a store on main street and software wasn’t even a word…”
- Don Hewitt @ NAB2006
Apple Unveils Video-iPod, Strikes TV Deal With ABC, Fox News, October 13, 2005
New Google Video and UPN's "Everybody Hates Chris" Premiere, Google, September 26, 2005
… NBC and DirecTV make popular shows available for those who prefer TV on their schedule, Red Herring, November 8, 2005
In a First, Drama 'Jack & Bobby' Will Premiere on AOL Broadband in Advance of Network Debut , TV Week, July 25, 2005
Peacock preening with iTunes presence, NBC offers 'Office,' 'Lazy' for iPods, Variety.com, January 2, 2006
NBC Universal, Wurld Media P2P Content, IMediaConnection.com, November 21, 2005
CBS, Yahoo Share Comedy Online, CBSNews.com, December 27, 2005
Comcast to Offer CBS TV On-Demand, CNET.com, November 7, 2005 AOL and Warner say "Wait wait, me too!“, tivotoday, November 14, 2005
Monetizing Technology
Belo, Meredith and LIN TV initiativesNews & Gas on the go…Hank PriceGary Arlen
Audience Measurement
Nielsen’s “A2/M2” (Anytime Anyplace Media Measurement)In All Markets by 2011“Follow the video” across platformsCreation of research measuring
“engagement”Diaries – out; All electronic measurement
– inOffering commercial ratings
DTV Consumer ConfusionMagid Study
Awareness of OTA digital broadcasts is low (25%)Viewers have limited knowledge about digital
broadcastsViewers are not aware of
Who is requiring the changeTimeline for the change
Most alarmingly, a large number of viewers don’t believe that over-the-air digital broadcasts will have any effect on them whatsoever
Acronyms Interpreted
CRT – LCD – SXRD –
DLP – HD-ILA –
LCOS –
Acronyms Interpreted
CRT – Cathode Ray TubeLCD – Liquid Crystal DisplaySXRD – Silicon X-Tal Reflective DisplayDLP – Digital Light ProjectionHD-ILA – High Definition Image Light
AmplifierLCOS – Liquid Crystal on Silicon
DTV Consumer Confusion
NAB Leadership EffortsHow to lead in your market
Evolving Local News
Content on every platformNew business alliances/modelsNewsgathering expense
challenges
Possible SolutionsSound, strategic planningCreating competitive advantageMaintaining credibility, dependability and
service to our communitiesBecoming “hyper-local”
Possible SolutionsStations can respond by improving the
product and its relevance to recapture the audience
Embrace digital technology and create multicasting business models that work.
Recognize that our news organizations must remain attentive, independent and accurate OR…
Possible Solutions
Just manage costs and let the audience continue to drift away.
Changing Revenue Sources
Retransmission ConsentStation Internet salesMulticasting niche channels
Changing Revenue Sources
$0
$200,000,000
$400,000,000
$600,000,000
$800,000,000
$1,000,000,000
$1,200,000,000
$1,400,000,000
Internet Ad Dollars - Local TV
2002
2003
2004
2005
2006*
2007*
2008*
2009*
Two Final Thoughts…
“The world is filled with two types of people.Those who want to be somethingand those who want to do something.The latter category is far less crowded!!”
“Some people succeed because they are destined to, but most succeed because they are determined to.”
-Roscoe Dunjee
Questions/DiscussionQuestions/Discussion