After a decade-long slide into semi-irrelevance, it's now being announced that the major television broadcast networks are considering leaving behind the "free TV/advertiser supported" business model in order to turn themselves into something more closely resembling a cable operation; the idea being that they could create a second revenue stream from the same "subscriber fees" that are paid by cable and satellite operators to all the other channels those operators carry.
This has become necessary, according to the networks, partly because the market has become so fragmented...which, naturally, is cable's fault-and presumably the fault of the disloyal viewer, as well.
Another reason driving the change is related to the desire of the networks to have a source of revenue that's more reliable in times of economic downturn, when advertisers often try to husband scarce resources by cutting back on all their expenses, particularly advertising dollars.
Will this new change in the business model reverse the fortunes of the networks?
Is it possible that the networks are simply poor business managers?
And what about...Krystal Carey?
Tune in for the rest of the story-and we'll find out.
My bullshit detector was triggered by paragraph five, which reads
One major cable operator in talks with Google says it has been reluctant so far to strike a deal because of concern it might violate Federal Communications Commission guidelines on network neutrality. "If we did this, Washington would be on fire," says one executive at the cable company who is familiar with the talks.
Yeah, right, the cable guys want to preserve Network Neutrality, while Google wants to violate it. That **would** be a boy-bites-dog story, if it were true.
Cable company lobbyists are among the most conservative and dishonest group of business lobbyists outside of the energy and defense sector, so Isenberg is right on with this. Still, I'm not sure this disagreement can be papered over as a pure media driven hit job. There really are disagreements here about regulation between different groups of advocates for net neutrality who found themselves on the same side from 2005-2008. I wouldn't be surprised to see the tech companies in Silicon Valley departing from the broad consensus view that fiddling around in a non-neutral playing field is dangerous. They might think, unwisely, that a non-neutral internet just has to be managed competently.
That said, I'm still making calls and trying to figure out how much of this was pure media nonsense and how much represents real disagreements.
I had earlier sniffed some smoke signals about telecom lobbying influence at what will soon be Obama's FCC, but those have apparently been snuffed out. Henry Rivera, a former FCC Commissioner and lobbyist who had been rumored to handle the shift has been moved away from the FCC, and earlier names have been withdrawn from consideration. In their place, Susan Crawford and Kevin Werbach are running the FCC transition. Both are highly respected academics who understand the policy issues at hand, and will make decisions without reflexive ideological baggage.
I've spent a bunch of time bashing telephone companies over net neutrality, wiretapping, and just generally being horrible control freaks. Cable companies though are just as unethical and bent on controlling access to content. Harold Feld is bringing word that the FCC is about to rule on regulating cable monopolies to force them to include more independent and minority-owned stations.
The agency is also preparing to adopt a rule this month that would make it easier for independent programmers, which are often small operations, to lease access to cable channels.
And Mr. Martin has been circulating a plan that would use the finding on cable television dominance to set a cap on the size of the nation's largest cable companies so that no company could control more than 30 percent of the market.
When cable was deregulated in 1984, few believed it would become the dominant way that Americans would receive video. In case it did, to prevent cable from having ridiculous market power, Congress wrote that if 70% of Americans subscribed to cable, the FCC would regulate cable in the name of diversity. Cable is fighting tooth and nail, with both anti-regulatory arguments and disputes over the number of Americans who have cable (though of course they won't release numbers of their own subscribers).
It's a complete bad faith assault from the cable industry so Time Warner and Comcast can get bigger and control more content.
The politics here are interesting, and winnable. FCC Commissioners Kevin Martin and Michael Copps want to regulate the industry, but Democrat Jonathan Adelstein and Republican Deborah Tate are unsure, and Robert McDowell is opposed. This is the single best opportunity to break up the power of the cable companies and get more progressive content on TV.
I'll be watching to see how Adelstein votes. FCC politics is byzantine, but it's not always partisan and the amount of power they wield over the information channels Americans have is simply immense.
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