According to TVWeek, NBC affiliates are preparing to pay the network for the privilege of being a part of the network. Thus, the Peacock Network becomes the first of the original “big 3″ to go this route, joining Fox and the CW. ABC and CBS won’t be far behind, and soon we’ll have a whole new industry in terms of delivering network television to local markets.

For those who haven’t been around all that long, the networks used to pay the affiliates to carry their programming. It was called “network compensation,” and it’s been shrinking every year. When the nets discovered they didn’t need the affiliates to distribute programming, the day of “reverse-compensation” was inevitable.

It comes at a time when affiliate groups can least afford it, and you have to ask yourself where it will all end. One thought about that is to examine the world of syndicated programming, where the best options go to the highest bidders. If affiliates have to pay for their programming, they ought to have the right to shop for the best that’s available, and that would mean, among other things, that broadcasters with deep pockets could improve their lot in local markets simply by buying the best line-up. Contrariwise, the networks could shop their wares to the strongest stations and negotiate the compensation.

In the long run, however, this is mostly irrelevant, for the direct-to-consumer model is here to stay. Personally, I like to surf, but I know people who only watch that which they obtain online, whether through options like hulu.com or iTunes.

Viacom is now distributing its hit shows “The Daily Show with Jon Stewart” and “The Colbert Report” via Hulu, the NewsCorp, NBCU portal for television shows online. These two shows are but a crack-in-the-door to all that is Viacom, and one day CBS will get on board, too. Hulu has also announced that it’s adding some PBS shows later this month.

I’ve said all along that the only way this really works is if everybody’s along for the ride, because in this way, Hulu becomes “spectrum with spectrum” — a special corner of the Web that’s used for TV shows. It lets the shows compete with each other as if they were competing on cable or over-the-air. It’s the proper use of the Web for this kind of content, and Hulu is establishing itself as the leader in creating an internet conduit that’ll one day (hell, it already is) be served to your TV set, too.

I’m a regular Hulu user, and I think the experience is great. The emotional season-ender of House tugged at my heartstrings as I watched on my laptop just as it would’ve done in my living room.

I also think that local stations should consider doing something similar for news programming, and with the success of Hulu, we may actually see that kind of cooperation some day. I’m not, however, holding my breath.

I’m coming up for air from a few days of writer’s block, and I think it’s because there’s just so much to write about these days. The moment I start concentrating in one area, something even more compelling pops up. The bane of bloggers isn’t a lack of things to say; it’s having too much to say.

So I’m just going to go through some things quickly, beginning with the networks getting together to offer a video-on-demand service that encourages people to not use TiVo. The point? They want those same people to watch the ads! Call me a nut, but this is too little, too late.

The business of The New York Times offering an API for its content is intriguing and smart. I hope it sends a message to other companies, and while I fully endorse the concept, it’s still about keeping users inside the walls of The Times. We’ll see.

One of the brightest minds in media, Jack Myers, took a shot at media company ownership this week in his Media Business Report. I’ve been saying this kind of thing for a long time, but Myers is above my pay grade, so his commentary carries significant weight.

…most executives remain committed to outdated and dangerous mass-media-dependent economic models. Media companies today - even the largest digital media companies - are in danger of following the railroad industry model and becoming Industrial Age mass distribution vehicles rather than Relationship Age™ interactive brand and human connectors.

Nice, and absolutely spot-on.

The L.A. Times painted a chilling picture of the future of television in an article called Broadcast Networks Under Siege that examines the shocking ratings’ declines in May.

Broadcasting, simply put, isn’t casting broadly anymore. As the sweep suggests, the TV networks are losing not just their viewers but also their sense of specialness. They’re becoming just the lowest numbers on the multichannel dial, rather than the last outposts of mass culture. It’s true that this evolution has been happening for years, but this year a tipping point was reached, a Rubicon crossed. Broadcast exceptionalism — its supposed immunity from the market forces afflicting all other media — is finally dead.

Right, and the problem is that tipping point is, while acknowledged, problematic in terms of reacting, because we’re deep into a cycle of expense reduction. Broadcasting still makes a lot of money ($70 billion last year?), and more eyes are focused on salvaging that than actually responding to technology and changing consumer behavior. It’s a tough place to be.

Finally, there’s this gem from Robert Lichter in the American Journalism Review:

“I think there’s a feeling that journalists have overstepped their boundaries,” he says. “People don’t look on [journalists] the way journalists like to view themselves – as the public’s tribune, speaking truth to power, standing up for the little guy. They don’t look like the little guy anymore. They’re part of the celebrity culture.” Increasingly, he says, “people like the news but hate the news media.”

Go read the whole article by Paul Fahri. It’s filled with lots of good stuff that I’d love to comment about. However, I’ve got this writer’s block, see?

It’s been an interesting couple of weeks for CBS. First, its local station group reduced expenses by cutting 150+ people, including some very well-paid anchors. Observers expressed astonishment, and overnight, every local news anchor began to squirm just a little bit and discover that those expensive office chairs at the anchor desk aren’t quite as comfy as they used to be.

Then this week came word that the network is continuing talks with CNN to take over some of its newsgathering. Observers gasped again. “What’s the world coming to?” they may have asked. Jeff Jarvis, on the other hand, cut to the chase with the provocative headline, “CBS is leaving the news business.”

We don’t need three evening newscasts exactly alike except as a repository for erectile dysfunction commercials. So let one or two networks win the ratings. Let CBS put more resources into investigations on 60 Minutes. Let CNN cover breaking news — with more help from witnesses with cameras.

Ouch! And now comes word that CBS appears to be giving up on Katie Couric, something that 99% of Americans have seen coming since the day she was first brought into the fold. CBS is denying the CNN and Couric stories, but people view that with the same raised eyebrow that accompanied “I didn’t inhale.”

And so the entire tribe of media observers stands poised to pounce, because CBS seems to be blazing a trail that others will have to follow, and everybody’s got an opinion about that.

Meanwhile, Philadelphia TV columnist Laura Nachman writes of a panel discussion in Philly involving the state of local television news, quoting WCAU-TV news director Chris Blackman.

“In my 26 years in news, I’ve never seen things as dicey as they are now. With layoffs, shrinkage, and downsizing, we need to reinvent ourselves.”

“We are not relevant the way we used to be because viewers don’t need us anymore,” Blackman said referring to mobile devices and the internet.

Blackman proved his point when only a handful of people in the audience of around 150 television professionals raised their hands when he asked if anyone needed to watch local television stations to get their news.

What Mr. Blackman is feeling is the same thing that the CBS observers are feeling, and that is the enormity of the disruptive innovations brought about by technology and a shift away from the modernist, colonial culture that spawned traditional media in the first place. Put a fork in it; it’s done.

Oh, mass media will be with us for a long time yet, but it will never again enjoy the status it once held, and to think otherwise is just nostalgic denial. And I would add that the reinvention process is so pressing that we don’t have time for blame assessment, nor do we have time to do a lot of research. An industry run by bean counters has little chance when entrepreneurship is what’s required, so we need to take a few chances along-the-way.

I’m reminded of the wonderful lament by Henry Adams, “The law of nature is change (chaos), while the dream of man is order.”

Embrace the chaos of change; it’s our best hope for tomorrow.

So I got home last night and my cable wasn’t working. Not to worry; there’s always hulu.com.

I watched a couple of episodes of House and then searched for an episode of Law & Order, SVU that my daughter had recommended.

Imagine my surprise to discover that only “clips” are available from the Law & Order franchise — no full episodes.

So now I know that hulu isn’t what it could or perhaps “should” be, and I’m altering my view of its potential for success. If Fox can satisfy me with House, why can’t NBC do likewise with L&O? I’m sure they have their reasons — perhaps even legal — but it undermines the value proposition of the site and casts doubt on how serious NBCU is about it. You can’t pretend to provide a portal for professionally-produced information and entertainment programming and then withhold the best that you’ve got.

It would be like Disney deciding they wouldn’t provide any coverage of football on ESPN.

Sorry, folks, but in this case, it’s all or nothing.

I spent a part of the day playing with HULU and can honestly say it’s an enjoyable experience. Whether choosing a clip from Saturday Night Live or watching an episode of House, everything about the site works really well. It was nice to watch a 44-minute episode of House in, well, 45 minutes with “limited interruption” from one sponsor (15 second ads). One wonders, of course, if that won’t change, assuming popularity increases.

One thing — and it’s a little thing, I’ll admit — really bothered me. The image below is the player during an ad. Note the language at the top that I’ve circled. In players from start-ups created in Silicon Valley, this same information is communicated with a simple countdown clock. With HULU (and one expects those from other mainstream media companies) it’s all spelled out. In my view, this is typical broadcast thinking, where the audience is too stupid to intuitively figure it out for themselves. Imagine how annoying this will be after months or years of use. Perhaps then, they’ll change it. Along the same lines, when you choose the full screen mode, the player notifies you to hit “escape” to get back to the skin. Um, does that really need saying in this day and age? Less is more.

Overall, though, this is a great site for viewing media clips. The user experience is excellent, and it could become THE go-to site for this, if only the other networks would all come aboard. Will that happen? I say eventually yes, because it makes business sense to put all of these types of programming in one place.

HULU is still in Beta with invitation-only access, but it’s expected to go public this spring.

CBS’s long-running hit “Survivor” posted its worst fall premiere ratings ever last Thursday, barely beating a rerun of CSI for the top spot of the night. According to Wayne Friedman at MediaDailyNews, the show had a “4.9 rating among 18-49 viewers, almost a rating point and half less than the show did with a 6.3 a year ago; and nearly a full rating point off its 5.8 rating of this past spring’s premiere edition.”

This surprised me, not because of the numbers, but because I wasn’t aware that Survivor was debuting last week, and I think this, more than anything else, states the ultimately conundrum for those who live in the mass marketing world. For those who use the mass need the mass to promote their wares, and what happens when the mass breaks apart?

The networks are running spots for their shows on other channels and in other places, but those spots cost money — real or otherwise — and that eliminates the competitive advantage of owning your own television network. The only time I watch network television anymore is sports, and I flip to other sports programming during commercial breaks. Hence, I’m not exposed to their promos, and I don’t think I’m alone.

Folks, this is serious stuff, and it just can’t go on much longer. In Friedman’s report, he notes that with ratings plummeting, CPM ad rates are skyrocketing. Ad inventory is tight, because the nets have to run make-goods based on up-front obligations. It’s not a pretty scene.

Mass marketing needs mass, and when that disappears, there’s no amount of multi-platform distribution that will make up the difference. We are in a new world, and television is trapped in that awful spot of trying to reinvent itself while continuing to milk the mass market cow for as long as they can.

…but does anybody else see the humor in NBC hiring a guy named Death to run their digital entertainment division?

I’m just sayin….

There’s plenty of buzz today in the trades and online about new distribution deals by NBC and ABC. NBCU has announced a new ad-supported download service that’s described in detail by Staci Kramer at PaidContent:

If all goes well, viewers will be able to sign in at will and download current episodes of NBC Studio-owned prime-time and late-night shows. It’s an example of increasingly ubiquitous professional video—and of a strategy being embraced by NBC and others that makes the network provider, distributor and retailer.

Meanwhile, ABC is delivering a shift in strategy to stream its shows via AOL. Here’s David Kaplan, again from PaidContent:

The shift reflects the stepped up syndication moves from rivals CBS…which created its online distribution network this past spring, and NBC Universal…which earlier countered its outside distribution deals by saying it would beta test its own desktop video download service called NBC Direct starting next month. Also in October, NBC and News Corp. will release the private beta for their online video jv Hulu.

So the turd in the punchbowl in all of this is what it means for the affiliate system of television distribution. It’s in a death spiral, folks. Put a fork in it.

And here’s the thing. Everybody in the business knows it, but we all seem to be paralyzed, frozen in space as we await the next knife in the back from “our” network.

This seems somehow trite at this point, but the only option that local television stations have is to be local. The sooner, the better.

Now that the hoopla is over, some very interesting observations are popping up about the NBC/Fox “YouTube killer” announced yesterday (see below). The most provocative — and, I think, insightful — comes from Michael Arrington of TechCrunch. Michael pulls no punches in calling a spade a spade. Go read his whole take, but here’s the crux of it:

The two key messages Chernin and Zucker were selling were (1) a focus on respecting copyright, and (2) the fact that they were creating what they called “the largest advertising platform on earth.” That may be good messaging to stockholders, but it isn’t what the public cares about.

I think a better approach would have been to focus on the user experience, but this was hardly mentioned (except at one point when Zucker said “we are shocked at the willingness of the consumer to sit through the whole show with ads on NBC.com”). It’s either arrogance or it’s blindness to the reality of this Bittorrent and YouTube world. Either way, it suggests they are in over their head.

There are really big challenges ahead for this company. First, the fact that only two networks joined is a really bad sign. Viacom at least should have been willing to join. Second, this group has little experience in creating web applications, and no experience building the kind of stuff, like YouTube, that users get seriously passionate about. Third, the track record of major media companies working together to deal with this kind of viral attack on their business is not good. As Valleywag pointed out today, EMI, BMG, and Sony Music banded together in 1999 to deal with the Napster situation and created Musicnet, which was a dismal failure and was named by PC World as one of the worst tech products of all time.

I think this is absolutely spot on analysis, and the more I think about the deal, the less I think of it. The biggest problem is not that there are only two partners (and that’s huge); it’s the way they seem to have ignored the real trends in video CONSUMPTION that are central to the business disruption attacking the industry.

TiVo allows people to skip ads and why? Because time is the new currency, and those consumers that “shock” Zucker don’t have as much of it as they used to. People skip ads, because they don’t have time for ads, and it’s a foolish assumption to think this would be any different via the web.

I’m also hearing the words of business disruption guru Clayton Christensen in my ears.

(I)f you’re looking to start a new-growth business, very often, the most important customers to understand, are non-customers. Because if you figure out why it is they’re not customers, and then bring an innovation that allows them now to become customers, that’s what growth comes from.

On the upside, one of Christensen’s core recommendations is at play here, because the joint venture announced yesterday is the creation of a new business.

A company can survive a disruptive attack and remain as the leader, but evidence is overwhelming that the only way to do that is if the leader in the industry that’s being disrupted sets up a separate organization. The separate entity then needs the freedom to create a business model that is tuned to that new disruptive business and gives it a charter to kill the parent.

Does this new enterprise have that kind of authority — from the top? In the answer to that question lies the future of the project, and frankly, I’m not holding my breath.

Meanwhile, there’s another aspect to this that bears noting. Some observers are calling this “the new cable TV.” I don’t know if that’s the case, but if it is, it will be similar to satellite in that it’s delivered directly to consumers from points outside their local geography. Why is this important? Because as broadcast affiliate and local cable distribution fall (cable penetration in February was at its lowest level since 1990), the marketplace for local advertising has fewer options. All that money will dramatically move to the internet and those media companies able to do geo, behavioral or contextual targeting.

This is why I tell clients that we must begin to view ourselves as enablers of commerce, not merely purveyors of advertising. This is the real opportunity for local media companies in the years ahead. Databases and database marketing — like Obi Wan Kenobi — are our only hope.

And if you want to know more about that, call me.

The television and internet worlds are abuzz with today’s announcement from Fox and NBC of a joint effort to provide TV shows and films via the internet. Via Lost Remote:

MySpace, Yahoo, MSN and AOL have signed on as distribution partners, and each site will carry embedded video players customized to their look. “This is a game changer for Internet video,” said Peter Chernin, President and COO of News Corporation. “We’ll have access to just about the entire U.S. Internet audience at launch. And for the first time, consumers will get what they want — professionally produced video delivered on the sites where they live.”

Well isn’t that special? And let’s hope Peter has solid research to back up that “want” from consumers.

Chernin says this will be the largest advertising platform on earth and it’s hard to doubt that. There’s apparently not going to be a standalone site per se, but the content will be distributed by partners. Hence, the Chernin statement that people will get this where they live.

While everybody’s whooping and hollering, it cannot go unnoticed that the affiliates take it in the shorts on this deal (again). Oh, they have protections built in (the delay window will be several hours after shows air in Hawaii), but this is certainly a play that by-passes the affiliate system. I suppose the next move would be for broadcast companies to get in on the deal and provide their locally produced content in a similar manner.

This is a move to create the “new spectrum” for broadcast programming, but this time, it’s owned by the private sector. How will that go over with the public? Not as well as you might think.

Oh oh! Better pay attention to this: FOX on demand has a MySpace page and it’s pretty darned cool. Who needs a TV anymore?

Think about this for a minute. Fox has been able to integrate its on-demand products into the biggest gathering place of young people in the world. This is why aggregation (MySpace IS an aggregator of individual websites) is so important in the Media 2.0 space.

Gee, ya think Rupert may have thought of this before he signed the check?

Is your station’s player portable enough for you to embed it on your station’s MySpace page? What? Don’t have one?

Well, it was a weekend of NFL playoffs and relentless commercial breaks, so here are a few observations.

The broadcast version of targeted advertising means every pod in an NFL broadcast contains at least one truck commercial. Men buy trucks. Men watch football. Presto, whammo, bring on the truck ads.

I got so sick of Chevy’s “This is our country” song that the mute button became a dear friend. And, of course, living in Texas means the super manly “Texas version” of all these ads during local and cable breaks. The screen virtually drips with testosterone during the truck ads, and the manipulation is so obvious. And if I see the Loch Ness monster spit that Toyota truck one more time, I’m going to hurl. It was great the first 100 times, but c’mon.

Truck ads in NFL games are a caricature of themselves, a parody in sincere clothing, and they’re so 20th Century.

This is why God made TiVo.

After a score, there’s a commercial break, followed by the kick-off and another commercial break. AUGH! Sonic needs a new ad agency. McDonald’s needs a new ad agency. The rubber floor is fun, but who needs the silly Bud logo ads? A little Viagra goes a long way. And then there’s those damned truck commercials!

Give me more of the Geico cavemen.

I watched nearly the entire two-hour pre-show on ESPN yesterday. I think that Boomer, the coach, the pimp, the player and the mouth make the best NFL analyst team on the air (wait a minute, ESPN isn’t on the “air”). The show, however, splits its time with commercials and pre-produced (with a deep-voiced, macho announcer, of course) teases. I swear the show has more marketing than content, but what do I expect?

This is the sad reality of the end of the blockbuster advertising economy, for there are few blockbusters these days. The NFL playoffs still qualify, I guess, and that’s why traditional advertisers still want to spend their money here. But hold on, fellas! Jamming nine pounds in an eight pound bag is a sure sign that the end is near, a hatchet aimed at the neck of the goose that laid the golden eggs.

All of my teams lost, BTW.

A dinosaur appeared on my TV last night. There I was watching the 20/20 special report on internet TV (which was quite good, I thought), when they went and executed Saddam Hussein. The bulletin was appropriate; it was big news.

But then ABC preempted the 20/20 special to provide us with 40 minutes of canned historical crap and pre-produced “reaction” that caused me to change the channel.

I wanted to watch the regular program. I did not want to watch the “breaking news” report. This is why God made cable news channels, and if I’d wanted more information, I could’ve switched to one of them or turned to the very entity that the 20/20 report was about in the first place.

I realize it’s heresy to suggest that the news division of a broadcast network NOT interrupt programming for such, but what ABC did last night was to further alienate viewers who are increasingly able to make their own viewing choices. Hello! This is the new world of media, not the broadcasting days of old when networks had to be all things to all people.

ABC should at least make the 20/20 program available online, but that’s not the point. Broadcast network news becomes a net liability when it does things like this, because the entire world is moving in a different direction. 20/20 is produced by the news division, and I guess somebody thought the interruption was more newsworthy. Unfortunately, the process that makes those decisions appears to be living in the distant past.

And the sad thing is that the more this kind of thing happens, the faster it moves everybody to the tar pits.