[Fwd: IP: NAB - the Super Nova is imploding]

From: Eugene.Leitl@lrz.uni-muenchen.de
Date: Sun Apr 29 2001 - 15:38:12 PDT

-------- Original Message --------
From: David Farber <dave@farber.net>
Subject: IP: NAB - the Super Nova is imploding
To: ip-sub-1@majordomo.pobox.com

>To: OpenDTV Mail List <openDTV@topica.com>
>From: Craig Birkmaier <craig@pcube.com>
>Sender: <openDTV@topica.com>
>NAB 2001 - The laws of physics still apply
>Throughout history we have seen examples of the role that technology can
>play in facilitating major shifts in power...those radical shifts that
>dislodge well entrenched interests allowing new "eras" of history to
>begin. One oft cited example is the invention of the printing press, which
>made it possible to break the stranglehold that the institutions of that
>time (principally the Catholic Church) held on the dissemination of
>information to the masses. Before the printing press, books were produced
>by hand, mostly by Monks - those who were privileged enough to own a book
>were among societies elite, but more important, they controlled knowledge
>and made certain that it conformed to the prevailing beliefs of the day...
>like the notion that the Earth was the center of the universe.
>In modern times we have witnessed major changes due to shift from an
>agricultural to manufacturing based economy; From horse drawn
>transportation to vehicles with "horsepower" to spare. And now we are
>seeing yet another sea change due to the ease with which we all can
>create, distribute and share information in the emerging digital world.
>Earlier this year at "Morning After" session at the ITS Technology
>Retreat, John Sprung created a mental picture of the current mess we are
>in with the transition to digital television broadcasting. John repainted
>the image we have all seen many times of Wiley E. Cayote, having run off
>the cliff, hanging in space, in suspended reality, just before the big
>fall. Sprung indicated that this is exactly where we "stand" today with
>the DTV transition.
>Well that was in February. As hard as it may be to believe, things have
>changed dramatically in just two months. The broadcasts business is no
>longer hanging in suspended animation...the bottom just fell out and Wiley
>and his ATSC standard have come crashing to earth.
>The irony of this is that it has absolutely NOTHING to do with technology.
>The bottom has fallen out of legacy broadcast business models worldwide.
>It matters not whether we are talking about ATSC or DVB-T, 8VSB, E-VSB,
>COFDM or ISDB-T. The fundamentals of the business are finally giving way
>to a new reality...
>TV Anywhere
>TV Anytime
>What You Want Is What You See
>The days of herding the masses round the TV set to drink the "kool-aid"
>from the government supported propaganda machines is finally coming to an
>end; in truth it has existed in suspended animation for nearly a decade.
>In the U.S. the broadcast establishment is fracturing from within. In
>Great Britain the grand experiment with DVB-T has hit the wall. The ITV/On
>Digital crowd has finally awakened to the reality that they are not
>competing with one another, but with the Death Star controlled by Rupert
>"Darth Vader" Murdoch and Newscorp.
>Everywhere one looks the reality is the same.
>Any business model based on trying to force people to sit down at a
>specific time to watch a program is withering. Meanwhile, business models
>based on accumulating targeted audiences over time are gaining momentum.
>In an era where we are constantly bombarded with messages that we don't
>want, people are willing to pay a premium for the content - AND THE ADS -
>that they do want.
>While I did not have time to attend the NAB keynote in person, I found the
>remarks of Eddie Fritts (which follow) to be quite revealing. Seems Mr.
>Fritts and company have finally discovered that broadcasting cannot defy
>the laws of the Universe forever, even with the help of their friends in
>Congress who have given them every possible competitive advantage.
>The "product life cycle" of NTSC has defied all logic. Somehow it has been
>possible to milk this business for more profits, even in the face of
>decline...a negative slope to the end of the product life cycle curve. But
>this time the bottom really has fallen out. Broadcasting has taken that
>final step off the digital cliff.
>The spin machine is busy trying to tell us that everything is OK now that
>that nasty modulation issue has been put behind us. But U.S. broadcasters
>know otherwise.
>There's a new atmosphere in Washington. It's deregulatory. We gave you
>what you asked for, and now we are going to watch as you feed upon one another.
>Craig Birkmaier
>Pcube Labs
>Edward. O. Fritts
>National Association of Broadcasters
>NAB2001 All Industry Opening
>State of the Industry Address
>April 23, 2001
>Good morning and welcome to NAB 2001.
>Let me tell you about three totally unrelated things that I've heard on
>the news recently, and then let me tell you what I think they mean to the NAB.
>Number one ... astronomers have made a discovery regarding supernovas.
>This discovery apparently could alter our very conception of the universe.
>Two S the president of Russia has changed the lyrics to that country's
>national anthem. In place of the old Soviet lyrics about Lenin and
>communism's triumph, the new lyrics instead celebrate a "holy country ...
>protected by God." Quite a change.
>Three ...in February, E-toys announced that it was seeking bankruptcy
>protection. Its stock, which had once been as high as $86 a share, was
>down to nine cents a share when trading was stopped.
>Now, here's my point S if scientists can alter something so basic as their
>conception of the universe, if Russians now sing of God rather than Lenin,
>if Internet high fliers can so quickly rise and crash to earth ... should
>we expect radio and TV broadcasting to be immune from such wrenching
>change? The answer, of course, is no.
>Broadcasting's universe IS changing. The real question is how we meet
>these challenges.
>On top of the technological, financial and political challenges
>broadcasters face, we now face the added challenge of division within our
>own ranks. Rather than focusing 100 percent on meeting the challenges from
>without, all of a sudden we are challenging ourselves from within.
>What I'm talking about, of course is the split between the affiliates and
>the networks. Never in our industry's history have tensions been so high.
>In the old Soviet national anthem that I just mentioned, they used to sing
>about, quote, "an unbreakable union of republics." The Russians removed
>that phrase in the new anthem.
>Some would suggest the concepts of union and unity have been removed from
>the NAB anthem.
>This is an unsettling time in any number of ways. There are those who
>worry about the future of our association and our industry. Well, I can
>tell you that I have total confidence in the future of the NAB. We will
>continue to be a vibrant, aggressive advocate for free broadcasting. We
>will remain strong, committed and effective ... with membership in all 50
>states and in every congressional district in this nation!
>Over the last decade, we have an enviable record of public policy success.
>We've had victories in the Congress, the FCC, the courts and even in the
>Supreme Court. These victories don't count the scores of other actions
>harmful to free broadcasting that we've stopped, sidetracked or finessed.
>We haven't succeeded, however, just because OF OUR political expertise. We
>have been successful because free, local broadcasting is a public service
>and a public good. Neither this mission nor our credibility is about to
>disappear. Our members, who are integral parts of their communities, are
>not about to abandon their commitment to localism.
>What we're experiencing right now is nothing new. I don't want to minimize
>the hurdles before us, but we've had discord in our ranks before. There
>was a time, for instance, when radio was deeply divided, but they came
>back together for the common good. The NAB is still here doing what we
>need to do ... and we will continue to do so.
>And it's a darn good thing we ARE here ... Because our industry DOES
>confront some big challenges. Since we met a year ago we have a new
>President, a new Congress and a new FCC. While we generally expect to
>benefit from a lighter regulatory touch, some issues will be more difficult.
>Additionally, our economic playing field has been reversed in the last few
>months. For example, this industry is in the most difficult advertising
>market since the late '80s, early '90s. Added to that economic reality, we
>are up against more competitors than ever before -- satellite, cable,
>broadband, the Internet. All this is occurring at a time when we're faced
>with the very expensive transition to digital. The very future of
>broadcasting rests on the successful completion of this transition.
>Tennessee Williams said, "There is a time for departure even when there is
>no place to go." Now ... we all know where we must go -- to digital. The
>hard part is the logistics of bringing it about.
>This country faces a choice between two timelines. Either marketplace or
>governmental ... We can follow the marketplace timeline ... in which case
>the transition to digital will be elongated over many, many years. Or, we
>can follow a government deadline that forces consumers to replace nearly
>300-million analog TV sets in just five years. I submit that if we follow
>the government timeline, there needs to be minimal government intervention
>to facilitate the needs of consumers.
>Today, for instance, if a consumer purchases a new digital TV set, takes
>it home, and plugs into cable, and turns it on, they will learn it doesn't
>pick up free, local broadcast channels. How does that benefit consumers?
>What's wrong with this picture?
>We contend there are three obstacles standing in the consumer's path to
>digital broadcasting. One, the cable gatekeepers must carry the local
>broadcast channels offering digital and HDTV programming. Two, TV
>manufacturers must put DTV tuners in every new set that is made. Consumers
>want and deserve sets that will receive both analog and digital. Three,
>the issue of DTV/ Cable interoperability must be resolved. It is not
>simple, but none of these issues are.
>Congressman John Dingell has said that the barriers to DTV transition may
>be "too great to overcome without additional government intervention." He
>is absolutely right. The transition to digital in this country has been
>handled about as effectively as California handled the deregulation of energy.
>WE are working to resolve these issues with the consumer electronics
>association. A sign of our partnership can be found at the DTV Store in
>the lobby of the Las Vegas Convention Center. On display there is a wide
>variety of DTV receivers available to consumers today. Most importantly,
>that display sends another important signal -- that broadcasters are
>committed to the DTV transition.
>On the other side of the aisle, Radio faces its own digital challenges but
>the signs look good for the iBiquity system providing in-band, on channel
>digital radio. We're excited about recent announcements from iBiquity
>denoting steady progress toward adoption of IBOC digital radio.
>Without a doubt, our biggest victory last year was in scaling back the
>FCC's Low-Power FM plan. This was a true victory for spectrum integrity.
>It was a tough fight. It took the entire year, but the NAB, the 50 State
>Associations and hundreds of local broadcasters protected the airwaves
>from increased interference.
>Battles such as this are why we exist as an organization. Unfortunately,
>all victories in Washington are temporary ... and nothing demonstrates
>that more clearly than the latest moves to reverse the LPFM legislation.
>Senator John McCain recently introduced a bill that would roll back the
>LPFM legislation of last year. So here we go again.
>Another challenge emanating from Washington is the so-called "campaign
>finance reform legislation. The truth is that it benefits the politicians
>but does nothing for the voting public. McCain Feingold is a clever means
>for politicians to buy even more air time for their negative ads. What's
>happening here is that the politicians have voted to give themselves the
>cheapest rates during the most valuable time slots. As Senator Don Nickles
>has said, "This is better than free time." They have granted themselves
>special privileges unavailable to the fast food restaurant or the auto
>dealership in the local marketplace. In the words of Chairman Billy
>Tauzin, "Why should a politician pay a lower rate than a Ford dealer?"
>The issues we face are indeed daunting. I call on broadcasters all across
>the country to redouble their efforts to meet these challenges. What we
>provide is a free, local service to the community. Broadcasters also
>provide over $8-billion a year in public service announcements and funds
>raised for local charities and disaster relief. What we provide is a
>public good, and that deserves defending.
>At the end of the day, our internal issues will be resolved, one way or
>another. Then what? Will the NAB remain an umbrella organization? You bet
>we will. Some say that this umbrella approach -- radio and TV, large and
>small, network and affiliate -- is our weakness. I believe it is our
>strength, a strength that has given us many victories over the years.
>And I publicly want to thank ABC for remaining with us. We value your
>standing side by side with us, in spite of your disagreement on the issue
>of the 35% ownership cap. We want to acknowledge your independence, your
>larger vision, your commitment to the long-term good of the broadcasting
>Ladies and gentlemen, everything is still in place to continue our record
>of success. We never like to lose a member, large or small, but we are
>neither diminished nor demoralized. I can say with absolute confidence
>that we have the means and the members to continue the fight. We know who
>we are and we know where we're going.
>We are going onward.
>We are going upward.
>And we are going forward.
>Thank you very much.
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