WEDNESDAY, NOVEMBER 7, 2007

THE WRITERS' STRIKE: THIS IS WHAT CHANGE LOOKS LIKE (Steve)
Hollywood writers on the picket lineThe massive shift that is going on in the media that we are always talking about? It's playing out right now on the streets of Los Angeles and New York City. The writers' strike is very important to note because it is all about the online world, and it will have a direct impact on your life at the local level.

The writers want a bigger share of new media. (Only Hollywood is so out of whack that it still considers DVD "new media.") The DVD residuals deal dates back to the '80s and was negotiated during the time of video tapes, which were more expensive to make. It costs about a quarter to make a DVD, which sells for $20 - $25 or so. The writers get a nickel. They want a dime. The studios are, predictably, outraged. The studios also want to apply the '80s formula to residuals from paid downloads. (Right now the writers get nothing when you pay and download a show they wrote.) On streaming, it's similar - except when the studios don't want to pay at all. Writes Jonathan Handel at the Huffington Post:

"(The studios) also reserve the right to deem any streaming (and even download) usages as "promotional" - even if the studio receives revenue - which means no residuals would be payable at all.

I could get into all the minutiae of the disagreement here, but it's not our place to comment too much on the matters of Hollywood. There are some basic points for us to note:

  • Given a chance to reinvent itself, a big company will instead try to apply old rules to a new situation.
  • The people who produce traditional content so misunderstood its value that they took years to put it online. Then, once they did, they argued that it has no value so they won't have to pay the people who wrote it.
  • The writers aren't in the same position of strength they think they are. This isn't 1988. Networks have reality programming and rely a lot less on traditional "writing." They, too, are going to need to look to the online universe for alternative outlets for their work.
The real problem here is that both sides are trying to negotiate like it's 1988. Writes Ben Grossman at Broadcasting & Cable, the strike might be just the thing for an industry that badly needs to get out of a broken model of bad advertising numbers and worse advertising sales deals:
"So what if a writers' strike came along and completely reset the mechanism? A strike lasting much longer than three months would begin to disrupt the fall-2008 cycle as we know it. It would leave networks little time to cobble together new projects to take out to advertisers in the spring.

That would give networks an excuse to dump the costly New York upfront shows in May that have questionable value at best."

There's a chance a lot of good will come out of a break from Hollywood's cycle of dependence. This is an opportunity for the web to shine. Your stations can fill the void with locally-generated content, something we have encouraged many times before. People will hunger for original content — and they want to help you create it as well. Hollywood still thinks it has the stranglehold on entertainment. It is wrong.

Prediction: A new YouTube star will pop up during the strike to fill the void left by the late night "fake news" shows.
Suggestion: Capitalize on the opening.

The 1988 strike lasted for 22 weeks and, essentially, killed a season of television. There's no reason to think this will be shorter, and every reason to believe it will go on longer. There is more at stake. In 1988, you couldn't see an industry changing the way it is now. In 1988, they were essentially arguing over your VCR. Now, they're arguing over every new way people consume media now and in the future. This strike has more at stake than what writers get paid. If any good comes out of it, Hollywood studios and writers will understand that the digital world is more complex than the old media world was, and that they can't simply reach an agreement on a huge money pie and keep dividing it.

The power has shifted. As long as Hollywood keeps fighting over old ideas, we can take the new model and run with it.   <Link>

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RADIOHEAD "FREE" DOWNLOADS CHALLENGE THE BASIC PREMISE OF THE STRIKE (Terry)
A new study by Comscore on the experiment by the rock band Radiohead to offer their new album "In Rainbows" online as a "pay what you like" download adds a wrinkle to the Hollywood strike that all parties would be wise to consider. While 62 percent of the downloads were made without a "contribution," the 38 percent who did pay paid an average of $6 per download. Of those who were willing to pay, the largest percentage (17 percent) paid less than $4. However, a significant percentage (12 percent) were willing to pay between $8-$12, or approximately the cost to download a typical album via iTunes, and these consumers accounted for more than half (52 percent) of all sales in dollars.

Statistics from the study

So what does this have to do with the writers' strike? Plenty, because the underlying assumption of the union — and likely management — is that life will continue as it always has for program development and production, and this is a dangerous perspective, because what Radiohead has done is eliminate the record company and its entire manufacturing and distribution paradigm.

From the Comscore release:

"...it doesn't bode well for the future of the music industry," says Michael Laskow, CEO of TAXI, the world's leading independent A&R (Artist and Repertoire) company. "Radiohead has been bankrolled by their former label for the last 15 years. They've built a fan base in the millions with their label, and now they're able to cash in on that fan base with none of the income or profit going to the label this time around. That's great for the band and for fans who paid less than they would under the old school model. But at some point in the not too distant future, the music industry will run out of artists who have had major label support in helping them build a huge fan base. The question is: how will new artists be able to use this model in the future if they haven't built a fan base in the millions in the years leading up to the release of their album under the pay what you'd like model?"
That's a great question, but it has been at least partially answered by Colbie Caillat's success as a MySpace artist and Madonna's decision to leave her record company and do a concert deal with Live Nation.

For Radiohead, it's likely they've put more money in their pockets selling their album this way than going through institutional channels, where revenue is split a hundred ways. That is precisely the money that the Hollywood community is arguing over today. The comparison may not be precise, but the general drift of all entertainment certainly is.

The problems that Hollywood faces are the same as those of the music industry and, frankly, all of us. The disintermediation and unbundling of media and the rapid growth of the personal media revolution are toothpaste that has already left the tube, and they call for new ways of thinking about everything. People can strike all they want, but it doesn't change the realities that we all face — as employers and employees.

As Steve noted above, perhaps the "good" that will come out of this is the reinvention of the industry. But as we sit in our offices today, let's ask ourselves this question: Must this reinvention take place while everybody is out of work?   <Link>

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DOING WHAT SHE'S ALWAYS DONE, ONLY ON THE WEB (Terry)
Life on the beach in the TV news business is never fun, but there are opportunities for such people today that didn't exist just a few years ago. So let's say you're an on-air meteorologist with over 16 years experience in your market, and your station decides not to renew your contract. Do you look for another job? What about your roots in the community and all the years you put into your "brand?" Do you throw that all away?

Why not join the personal media revolution and use your brand to compete with your former station online?

That's exactly what Terri Bennett has done in Charlotte. After six years with WSOC-TV and ten more with WCNC-TV, Terri was released this summer. Two weeks ago, Terri and her husband launched TerriBennett.com, a weather site for the Charlotte market and perhaps beyond. The site is fairly primitive but highly functional and imports data from Weather Underground for maps, forecasts, radar and even hyperlocal weather stations.

TerriBennett.com website

Terri does video forecasts every day, and the site has every intention of expanding that, involving viewers (the people formerly known as the audience) and building a community.

"I just want to continue doing what I love," she told me. "I really never enjoyed the glamorous part of TV but it did give me a platform to communicate and connect with people. Now I can do things the way that I want to, without a suit and layers of make-up! The internet allows me to have my own broadcast property without the "advice" of the consultants. My visitors love it, just check out the guest comments."

Terri said her husband bought the domain a few years ago anticipating that she might face being cut loose with a non-compete some day. She recognizes that outside companies are threatening the local weather franchise owned for so long by a market's television stations, adding that people now don't have to "keep waiting until the second quarter hour" to get the weather.

For her, the experience has been life-changing.

I am much less tired these days and I do have to pinch myself every once in a while. Owning your own business is very exciting but it brings on a different kind of stress. I'm still trying to figure out a work schedule that works for me. I've been working nights for so long that I'm still most productive after I put the kids to bed.
Terri Bennett has some advice for others who were in her position. It begins with making sure you have a plan. "Get out in the community," she said. "Make sure that viewers know you and have a connection with you so you become a "brand" in the viewers' mind. If you ever decide to strike out on your own, you'll have a built in product to sell. And buy a domain name, preferably your TV name, just in case!"

She acknowledges that stations will soon bring the Web into non-completes and that she may be one of the lucky ones. It will be interesting to see how the courts view that, but it's something that needs to be addressed.

At the risk of sounding like a broken record, the core of all that's disrupting local media these days is the triumph of personal media over mass media, and it's only going to accelerate. One of the unintended consequences of downsizing is that we're sending capable people into the world to compete against us on the Web rather than creating new media options for them from which we also benefit. In this sense, traditional media companies may be supplying a two-by-four that'll one day be smacking them over the head.   <Link>

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MSNBC.COM'S NEW LOOK: A PREVIEW (Steve)
MSNBC.com is about to launch a new look, and they're inviting comments. As terrifying as that may sound, it's a smart move and it's more proof why MSNBC is such a popular site even though its cable channel is well behind CNN in the ratings.

Check out the tour of the new MSNBC.com. It hasn't launched yet, but MSNBC has put up a demo of what the new site will offer. Among the most notable of features: the ability to change the look and feel of the front page as the news dictates. MSNBC describes this as "changing with the pace of news." I like that idea. Sites get locked into their one and only template, regardless of whether it's a busy news day or a slow news day. When the wildfires come, you want to be prepared with a look that says "This is big - this is important." MSNBC's dynamic ability to offer readers a look that flows with the news takes it in the right direction.

MSNBC.com's new home page

There are more customization choices here as well. A highly-placed, customizable area called "Explore" gives you the ability to search out the site by content type, not just by the traditional news section navigation.

MSNBC.com is blogging about the launch at its blog "Alpha Channel." Whenever you change a popular site, you get an earful. Kudos to MSNBC for its honesty in the blog, too. As a longtime Mac guy, I've had my gripes with the often PC-centric MSNBC.com. According to their blog, MSNBC is working on that with the new iteration:

"The news menu fly-outs now work in Safari mac/win and Camino. This was a recent update in our issue-tracking database by one of our star coders, letting everyone know that the left-side navigation will work as expected on Macintosh browsers when we re-launch the site. It doesn't sound like much, but that simple status change represents a sea change for msnbc.com.

"Itís no secret that in years past, we haven't always been the best online citizen when it comes to playing nicely with others."

There are more changes that we'll be finding out about in the coming weeks, and we'll let you know about. One note - it does appear the site is still very much 1.0. There's little to see on the "tour" that indicates much in the way of social tools. I can't see, for example, if the new MSNBC site will give me the ability to embed their videos on my blog. It's my hope MSNBC will offer these important tools and move itself away from considering itself merely a destination site.

What do you think? Check out the MSNBC.com demo and let us know.   <Link>