Author Archives: Frank Capria

Everything you know about media is changing dramatically

I mean it. Everything. The media and entertainment industry as we have come to know it is being disrupted, and so is this blog, more on that later. Where to start? Because I did say everything is changing.

Broadcast is dead

Until I spent time this week wandering the exhibit hall and attending talks at INTX 2016 this week, broadcast’s obituary was going to be buried a little deeper in the post. I frontload so heavily because I know how long the average reader spends here. Although I am tempted to name my posts something like “20 things are changing in the media and you won’t flippin’ believe number 19” and then present it as a slide show, I respect your time enough to make but the important stuff first.

We’ve been declaring broadcasting has been braindead for years, but now it’s time to start harvesting the organs. Sports and regional news won’t cover the bill to keep the ventilator pumping indefinitely.

The spectrum currently used by digital television would be put to better use quenching consumers’ insatiable thirst for wireless bandwidth. To that end, the FCC has allowed broadcasters to opt into the Broadcast Incentive Auction. The idea here is simple. Give up spectrum so it can be licensed to wireless providers for 5G service and make some money. As a disincentive to hoarding and holding for a higher price, the first part of the auction is a reverse auction, so it pays to get in early.

As infuriating as it might be for a taxpayer to watch broadcasters profitably sell back to the public airwaves they lobbied so hard for and swore they could not live out, you have to feel a little bit sorry for the dinosaurs now that the asteroid is in sight. I’m partial to the EU’s approach of reallocating the spectrum over 700 MHz for wireless and simply assigning new VHF channels to broadcasters, but here in the US corporations are people too, so we just can’t act in the public’s interest for the sake of the public interest. We have to think of the lobbyists.

Variety had a great explainer on the auction in March. My favorite numbers gleaned are below.

info graphic

The final act of this play will be streamed

Once the video over IP’s latency problem with live events is solved broadcast will have completely outlived its usefulness. We will have reached a point where even the Super Bowl can’t save it. Currently IP network latency delays live events up to thirty seconds. As an MLB.TV fanatic, I have to put the mobile down to enjoy a game otherwise I’ll witness the Twittersphere lighting up before I even see the batter step into the box to crush the game winning home run. For sports to remain a communal activity in the age of social media, latency has get down to about two seconds.

That date is very near. Using a combination 4G LTE bonding and some really nifty video file wrapping tricks, the Israeli startup Zixi has reached that bar with image quality that rivals today’s Xfinity and FiOS pictures. It’s just a matter of adoption. I put it at 24 months for Zixi or a rival technology to make broadcasting over the air obsolete.

The passing of traditional broadcast is interesting enough. In fact, I could stop here and call it a post except that I said everything was changing. And, dammit, everything really is.

Move over Viacom, Fox, and Disney

Amazon, Netflix, Google, Apple, Netflix, Facebook, and Microsoft all want to steal your lunch money. Wall Street believes they will, and these things become self-fulfilling prophecies in short order. They all already own or aspire to own a significant portions of the entertainment value chain. Microsoft and Facebook are longer shots but somewhat more interesting because they are not just looking at the traditional media value chain, but are approaching M&E through significant investment in gaming and VR. For them it comes down to whether VR technology will be ready for primetime soon enough. If one of them wins, just read Ready Player One to see how the story ends. Google’s gotten into VR as well, but it gets lumped it with the others due to its ownership of the world’s most successful online video platform. And how many OVPs does the world really need? Hint: The answer is not greater than two. One rare bit of investment advice from this publication… short OVPs and go long on CDNs.

It going to come down to who can afford to front the large sums of money to create tent pole content, who can store and protect it throughout its lifecycle without losing it to theft or in a theme park fire, who can monetize it effectively, and who can deliver it efficiently. That’s what will determine the winners. Amazon with Elemental and Apple with all its video expertise are positioned for an epic battle. Apple has the edge in video smarts while Amazon has the edge in distribution, pricing, and packaging smarts. How will Apple compete against free two-day shipping for underwear and great programming for $99 a year? Whatever the tech giants come up with will certainly beat a $300 a month cable bill.

Where’s Google in all this? I can’t help but feel that Google will mess it up. Media and entertainment is all about user experience. Google simply doesn’t value design and user experience enough. YouTube and Gmail are still ugly after all these years. While an email client can be ugly and a little clunky as long as it’s free and the user never loses anything, the presentation layer for the night’s entertainment should be inviting.

IaaS the big play

The real money in media then is infrastructure as a service. What Avid, Grass Valley, and the like have done in the past must now become exponentially bigger, more robust, and more open. Avid is right. The industry is crying for a platform. Unfortunately for Avid, it’s crying for a platform a mid-sized tech company doesn’t have the resources to provide. Amazon with Elemental is already closer to realizing Avid’s dream than Avid is. A lot of small players have the necessary pieces built to connect to a network, a larger company, not viewed as  a direct competitor by potential partners is better positioned to roll them up into a unified platform offering.

Simplifying it a bit, whoever can provide the storage, rights management, and monetization tools will win. Dell-EMC is extremely well positioned to contend in that space with its hardware, virtualization expertise, and storage smarts. It makes the servers and intelligent storage. It owns VMware and Virtustream, so it will be able to provision data centers like no one else. Dell-EMC should be able to take a commanding early lead repurposing hardware in real time as audience usage patterns change. Add an acquisition like Telestream or Harmonic, and we have a new media and entertainment powerhouse.

IBM is the cicada in all this. Once every few years IBM shows interest in M&E only to shift focus shortly thereafter. With the right timing, IBM could get lucky.

Over the next few years, the remaining media-specific tech companies will have to become more focused on their core competencies. Their customer bases are buying less, forcing them to compete in a race to the bottom in a shrinking pool. While all are moving as nimbly as they can to make the transition from signal-based to IP video, they are faced with R&D resource limits and the drag of legacy customers such as large state broadcasters moving more slowly to the future.  These legacy customers account for significant portions of media tech’s revenue stream and cannot be ignored until the business transformation is complete.

Acquisition and Post are about to be disrupted too

Camera evolution is the total wildcard that can change the whole production and post process dramatically. When light field cameras get high enough resolution and come down in cost, the cost of shooting will drop dramatically due to shorter set up time and the need for fewer cameras. Composition, focus, lighting, tracking and green screen will all be handled in post, much of it algorithmically. Editing becomes a smaller part of the post process with DPs, directors, and VFX taking on larger roles once shooting stops. As post production for the 2D display requires more 3D capabilities, look for the post solutions market to bifurcate with Adobe taking the lion’s share with a combination of Avid and Autodesk tools owning the extreme high end. Don’t be surprised to see Media Composer land at Autodesk, or Autodesk’s media and entertainment business go to Avid. A number of former (and extremely talented) Avid engineers are now in Autodesk’s media and entertainment development organization.

Adobe has a leg up in the light field world. These cameras have been in development for some time. Light field still image capture is already available to the market, and Adobe has tools under development to enable Photoshop, Lightroom, Premiere, and After Effects to thrive in this new world.

How media is created, distributed, and consumed is all changing. No career in media will be untouched. No company will be sheltered from the disruption. Be agile. Embrace the disruption.

Everything includes this little nook in the internet

I will follow my own advice by embracing disruption and becoming more agile. It will no longer be focused exclusively on media and entertainment technology. Instead I will draw upon my experience of the past fifteen years in technology design, development, and product management. I will adjust my gaze away from LA and put more focus closer to home in the technology hotbed of Boston.

A framework for evaluating asset management needs

A robust media asset management (MAM) strategy is universally understood as mission critical, but often neglected in today’s small and medium sized media enterprises. The implementation challenges can be daunting, but if approached methodically they can be managed by taking a phased approach to meet the most immediate needs first while building a foundation for the end game. I recommend these three phases as a framework for the approach to MAM adoption.

  1. Protect the assets you need today and in the short term to meet your deliverables deadlines.
  2. Preserve media and metadata with an understanding of how you will use these assets in the future.
  3. Optimize your asset management workflow to streamline complex, non-creative processes. If it doesn’t need thinking, automate it.

Protect: Always have a backup plan

Your media asset management strategy should be in gear before first camera card is removed from the camera and handed to the DIT. Scores of documents and images are created during pre-production and production. Relative to the media files and proxies used in post, these are small files and are only a few gigabytes. Back everything up. Storage is cheap, doing it again isn’t.

A common misconception is that having critical files in Dropbox, Box, Google Drive, or iCloud negates the need for a dedicated backup. The primary job of a sync services is to provide the latest version of a file to multiple devices so everyone with access to the file has the most current version. In a collaborative environment it’s important everyone be working with the latest version of the file, but at some point work on that file is complete and must be protected from further modifications. Leaving it in the collaboration space is a risky proposition. That file is only one careless mouse click away from ruin.

Each of the aforementioned services excepting iCloud feature version control, but for version control to be useful the document owner must know to revert to a previous version prior to the expiration of version control, and has to figure out which version to restore. Often the dicovery that a file has been damaged occurs after the 30 day window these services provide for version control. So, just back it up already.

Cloud backups make the most sense (and are fully buzzword compliant). Since the backup resides offsite it is immune to floods, fire, and physical theft. Cloud-based back up services such as CrashPlan, iDrive, and Carbonite have been around for some time, and they share near feature parity. All of them work and are reasonably priced. My personal preference is CrashPlan. It is the only vendor to offer a free option (provided you supply the remote storage and computer). The remote host can reside on the LAN or WAN and is simple to set up, or you can just pay an annual fee to CrashPlan to backup to their cloud. I have about a terabyte of personal photographs on CrashPlan and mirror what I backup to the cloud to an external drive on a local Mac. If my main drive becomes corrupt, I have a backup a few steps away. If the worst happens, and I lose my photos to flood or fire, CrashPlan will ship me a USB drive with my files (for a fee) so I don’t have to wait for my files to download and I maintain the original directory structure.

Don’t stop using Dropbox and the like. Implement a backup plan to complement it. The moment any asset is in a state that should be preserved, remove it or copy it out of Dropbox and copy it to a backed up directory.

Asset preservation

Post production is another story. There are the native media files from the camera, the proxy editing format files, rendered effects, and the final distribution masters. Backing up everything takes up a lot of storage. Let’s take the example of a season of reality television. The example below illustrates how much storage space is required to preserve a season’s worth of footage. For those with standard business bandwidth, cloud storage is not an option. It would simply take too long to get everything up to and back down from the cloud. I’ve made the spreadsheet available here. (For those interested learning what going all 4K will cost in storage, change the bit rate to something around 600 mbps.)

The workflow is simple.

  1. Bring in the native media on card or USB disk.
  2. Convert it to the edit proxy format.
  3. Park a copy of the native media on a NAS or LTO.
  4. Edit with the proxy material. (Don’t forget to backup your project files daily until you are ready to proceed to a full media asset management solution.)
  5. Bring back the native and convert it to the master format as needed.

The most crucial factor to consider is, like nearly everything else in business, price vs. performance. These most come into play in steps 3 and 5. The cost per terabyte of LTO 7 is about half that of spinning disk (~$40/TB in early 2016). The time required to pull material off LTO vs. spinning disk can be significantly higher. Below is what to consider in your nearline/parking decision:

  • The initial hardware outlay. Using the example above for a 13 hour season of reality television, about 100 TB will be needed. A 25-slot LTO library that will allow the whole season to be loaded will run just under $40,000. An inexpensive 100 TB NAS will cost around $16,000.
  • Performance. LTO 7 has a maximum throughput of 300 MB per second. Tape has come a long way, but the NAS is up to 10x faster.
  • Some inexpensive LTOs do not support partial restore of media file. That means that it doesn’t matter whether 10 seconds or ten minutes of the original clip is needed, the whole clip gets restored. That can eat up storage space and take serious time. Some cost effective LTO solutions, such as StorageDNA handle partial restores to the editing environment quite well.
  • Options proliferate for proxy creation and parking. My personal favorite is Root6’s ContentAgent. It works with every NLE, and can work in standalone, shared storage and project environments, and full asset management systems. Other reliable solutions include Telestream Vantage, and MOG mxfSPEEDRAIL.

Both ContentAgent and Vantage have robust orchestration capabilities that in many facilities delay the need for a full blown asset management solution.

Optimize: The case for full asset management

A backup and preservation plan assists the facility’s current workflows, but does very little to streamline them beyond the orchestration of backup and media transcoding. For five years as product manager for the most successful media asset management systems in the history of the planet, I saw a lot of asset management systems sold. I also saw a lot of unhappy customers. Did our products do everything we claimed? Unequivocally, I say yes. Were all our customers satisfied? Most were, but many weren’t. Every asset management system promises to streamline workflows, connect disparate systems, and cut production time. Profits will increase. For the most part, I found that asset management worked best in fast turnaround broadcast or broadcast-like environments such as recorded studio productions. They were not nearly as successful in traditional post, both scripted and unscripted. Going into the assert management selection and deployment process with clear goals and expectations will greatly increase the odds of success.

Ask yourself the following questions. The answers will help you determine what you need from an asset management system.

Do I own my content?

This is the most important question in the process. If you don’t own the content, there’s a good chance you don’t need an archive. Without the ability to repurpose the content for your own needs, the only reason to maintain an archive is as a client service. Odds are the content owner already has an archive solution for redistribution and repurposing. You likely won’t need to store finished masters. Perhaps you’ll be asked to store the production assets for future re-edits or for use next season. Tread carefully. Many clients think they want that option, but are unwilling to pay enough to make it a worthy investment for you. At 400:1 shooting ratios, storing production assets is far more costly than maintaining an archive of masters. Even at the lower shooting ratios of news, most operations only saw the raw footage from the most important events.

It comes down to this: If you own the content and are looking to repurpose it for future monetization, you’re going to be most interested in media asset management, an enterprise system that connect your library to your OTT, VOD, web CMS, and other enterprise systems. If you don’t own the content, you’ll be exploring production asset managment (PAM) solutions. Its role is limited to the production of the work-for-hire piece, so you are tracking much more granular metadata with less need for complex rights management and hooks into the enterprise systems.

Does my staff consist of full-time employees or freelance contractors?

This is the number one contributing factor when asset management doesn’t deliver to expectations in post. Post workflows are most often executed by freelancers. They work for you for six to twelve weeks, and they’re gone. No matter how intuitive vendors have made asset management systems, they are different from the standard Media Composer / ISIS (Unity) workflows that permeate greater Los Angeles. Change is tough. People resist. And training people is neither easy nor cheap. The more invisible the system is to editors and assistants, the higher the likelihood of success. Solicit input from editors, assistant editors and producers.

Where is my workflow bottlenecked?

Look for manual, serial processes that can be automated and parallelized. It’s not just the raw time saved by a performance boost that benefits the workflow. The lower error rate will save additional time and valuable online storage space. Typical areas in need of optimization include transcode and ingest, logging, and review and approval. Each of these problems can be alleviated without a full asset management solution. Sometimes one or two point products targeted at the issue will be a better value than complete system. We’ve already discussed transcode. Other point solutions such as Media Silo and Aframe for logging and review and approval might fill the gap and save tens of thousands of dollars doing so.

Do our needs fluctuate from week to week?

Asset management systems are typically deployed to solve specific workflow challenges. The traditional transcode and ingest server is not easily repurposed as a logging station when shooting is complete and everyone is ramping up for editing, but an asset management system whose components can be virtualized affords the flexibility to put more compute horsepower behind the services that need it when they need it without complex installs. Even a facility looking for an entry level asset management system should only consider solutions that can be deployed in a VM.

Final Words

After a long evaluation of your workflow and a look at the various vendor offerings, you have decided you need a digital asset management system. I leave you with these final words of advice.

  • Keep it small. All modern MAMs are modular. You can always add capabilities later. Don’t overwhelm your team with too much change all at once. Settle on one or two pain points to ease in the first phase.
  • Minimize customizations. They are expensive to build and always take longer than expected. The cost is not just in the professional services, though those hourly rates add up quickly. Customizations are costlier to support, and add complexity to staff training. If the out of the box solution is almost what you want, it’s probably all you need.
  • Have a bake off. Insist on seeing your current workflow demonstrated live, every aspect of it. Allow a vendor to show an alternative approach, but make sure fully they understand what you need to get done at every phase of production.
  • Go over the statement of work thoroughly with the vendor prior to your first payment. Insist on a single point of contact on the vendor team, and only allow a sinbgle point of contact on your team to sign off on change orders.
  • Don’t skimp on training. This should go without saying, but it always needs saying. MAMs are damn expensive, even “small” systems can run into the six figures. It’s very tempting to scale back on the training, especially in an industry with such high turnover. But it is crucial good habits are instilled from Day One. Also, have one person on staff trained extensively enough to train others and write the production bible for the facility.

Implemented properly, a MAM will increase productivity by eliminating mistakes and increasing the number of people able to access and work with the content in real time. If you have questions or comments send them my way, and I’ll do my best to answer them promptly.

The death of big broadcast iron

gearsIABM DC releaed its 2016 Global Market Valuation and Strategy Report February 24, and the news for media technology companies was not good. Overall spending for media technology products and services was down 4.3% year over year. The report also noted that product revenues have been in decline since 2012, but this is the first year since the report shows a decline in services spending as well.

Much of the decline can be attributed to disruption from the bottom of the market. What were previously considered lower end tools, such as Adobe Premiere Pro in editing and Axle in asset management have matured a surprisingly brisk pace and have proven themselves ready for prime time.

Technology disruption also plays a part in the overall decline. As IP-video takes hold, the need for satellite links can be replaced by bonded 4G connectivity. “@Home” production of live sports is also lessening the demand for infrastructure. A sign of things to come is Boston-based NESN (MLB Red Sox and NHL Bruins) and LiveU’s announcement in December that portends the demise of the OB truck.

The network will utilize multiple cameras feeding back to NESN’s Boston-area studios via bonded cellular technology.

NESN plans to use multiple LU500 portable transmission units to pilot live “@Home Productions” on the majority of Red Sox home and road spring training Games in 2016 as part of a new innovation and business model for sports coverage. NESN and LiveU successfully developed and tested this new means of remote event coverage last spring during Red Sox Grapefruit League games in Florida and during the summer from minor league baseball AAA Red Sox games in Pawtucket, Rhode Island.

If the experiments continue to show progress by the 2018 season these major market franchises might be leaving the heavy iron in the garage. Be assured, sports broadcasters throughout North America are watching this closely as they begin their own cost-cutting efforts.

There’s a case to be made that the news is not as bad as it seems for the larger media tech players such as Avid, EVS, and Belden (Grass Valley). Budget pressures are spurring consolidation of independent broadcasters. These large station groups are likely to settle on a single vendor in each product category. Though the industry is notoriously conservative, all it takes is one disruptor to win a deal to get everybody looking at the new, more cost effective solution. Over the past year there has been a perceptible uptick interest in connecting the Adobe Creative Cloud tools to existing shared storage and asset management infrastructure.

Adobe Creative Cloud Market Size 2018 (projected)

Adobe’s estimated Creative Cloud 2018 revenue projections by segment ©2015 Adobe

Though it’s difficult to extrapolate media technology spend from Adobe’s reported growth in enterprise term licenses, Adobe has pinned much of the growth in Creative Cloud adoption of enterprise term license agreements (ETLAs). These licenses typically have a 36 month term with each customer, giving competitors a very small window once every three years to make a play to convert the enterprise to its solution. Adobe is projecting success in the enterprise, projecting $3.8 billion in recurring revenue from Creative Cloud for teams and enterprise by 2018.

Adobe has been well-rewarded for its brave decision to migrate all Creative Cloud customers to a subscription model, but it will run into some headwinds among some of the large station groups. As one station group executive told me, “Everyone thinks we’re eager to jump to OPEX from CAPEX with our technology spend, but that’s not true. We’re focused on keeping OPEX down.” In a consolidating industry, acquisitions are funded by stock transfers. Share price is tied to operating margins, hence the desire to keep OPEX down. Offering a choice between SaaS and perpetual license models, Avid should be able to maintain its current position, and perhaps grow it, in the station group segment.

Consolidation won’t last forever. There are a finite number of independent broadcast stations remaining ripe for purchase, and nobody is launching new ones. What we’re seeing is similar to the consolidation of newspapers during the 1990s in the early years of this century. As customer bases shrink and profits sink, cost cutting through consolidation takes hold throughout a market segment. No one was buying up newspapers for the long haul.

There is one significant difference between broadcasters and their newspaper cousins that makes a broadcast station a better long term investment. Spectrum, a finite resource. Its value will increase over time. Broadcasters aren’t in the broadcast business as much as they are in the spectrum investment business.

The place to be in media technology these days is IP-based video cloud-based SaaS offerings that multi-platform and OTT delivery. The days of big iron in broadcast, like the days of big iron in post are over.

The Netflix effect

Since this blog’s humble little following is consists of media and entertainment professionals, many may have bypassed Farhad Manjoo’s column, “Why Parallels Between Netflix and Amazon Should Worry Media Titans in today’s New York Times. The first couple paragraphs come straight out of 2007. But if you stick with it, you’ll find some a pretty decent presentation of the situation big media finds itself in.

The parallels between Netflix and Amazon extend beyond the ostentatious aspirations of its founders.

On paper, Mr. Hastings’s plan to take on the traditional TV industry has long sounded slightly nutty, as delusional as Jeff Bezos’s strategy at Amazon to overrun retailing once seemed.

We know how that turned out for mall owners. Manjoo presents cases for both Netflix’s eventual dominance from bullish analysts and its potential to become just another mid-tier media company from Netflix skeptics. It all comes down to who ends up with pricing power.

  • Will producers be able to limit Netflix’s ascendency by maintaining high prices, thus preventing Netflix from stealing away traditional broadcast and cable viewers because Netflix will have to raise its subscription fees significantly?
  • Or will Netflix be so dominant that content producers will have to grant it pricing concessions?

The latter will be the case. It’s only a question of when that day comes. Put simply, it’s the day that the audience values the Netflix model above the traditional broadcast and cable model. No commercials. Binge watching. No need to set the DVR or pay TiVo to do it. The scenario is illustrated below. Once the Netflix model becomes the preferred model, as it already has to the fast growing cord cutter population, along with millennials who would never lease a cord to cut in the first place, it becomes the content owners’ most valuable distribution channel.


To those skeptics who believe broadcasters can go toe to toe against Netflix and come out ahead, I ask: Do you believe they will also emerge victorious against Amazon, Google, and Apple? Someone is going to break the old model.

For a much more in depth analysis of the future of television over IP, read Ken Auletta’s February 2014 New Yorker article on Netflix. In it he quotes Marc Andreessen, who co-invented Mosaic, the first commercial Internet browser.

“TV in ten years is going to be one hundred per cent streamed. On demand. Internet Protocol. Based on computers and based on software.” He said that the television industry has managed the transition to the digital age better than book publishers and music executives, but “software is going to eat television in the exact same way, ultimately, that software ate music and as it ate books.”

Even the Beatles surrendered to iTunes, and then again to Spotify because people were going to stop buying. Your content has to be where the audience wants it or they will live without. She may have crow’s feet by the time it happens, but Taylor Swift’s catalog will be available on Spotify someday.

Netflix customers may cheer this vision of the future, but as surely as night follows day when that moment comes, Netflix streaming will no longer cost them a paltry $8/month. Pricing power cuts both ways.


Broadcast, Broadband, and OTT


Last week the Pew Research Center published its findings on Americans’ broadband consumption. The tectonic plates defining the digital divide have shifted somewhat over the past year.

..home broadband adoption seems to have plateaued. It now stands at 67% of Americans, down slightly from 70% in 2013, a small but statistically significant difference which could represent a blip or might be a more prolonged reality. This change moves home broadband adoption to where it was in 2012.

This trend has accompanied an uptick in Americans whose only broadband access is delivered via smartphone. The Pew article goes on to note pertinent demographic trends as well.

  • People still overwhelmingly prefer to watch video content on a larger screen through a standard in-home broadband connection when possible.
  • A significant proportion of smartphone-only access people cite cost as the major reason they do not have a home broadband connection

This portends several possible outcomes.

  1. Some people will shift viewing from traditional cable and OTT to IP-delivered content over LTE.
  2. These customers will often face data limits imposed by carriers, excepting the T-mobile binge plan.
  3. The LTE-only demographic may be less desirable to advertisers than other OTT viewers, and may cause content distributors to shy from advertising models to paid subscriptions when accessed via LTE.

The study also counts 15% of Americans as “cord cutters.” Not surprisingly, this market segment skews young, so it’s reasonable to assume the cord cutting trend to accelerate as the millennials start their own households. Hold that thought.

Broadcast trends

Some have spoken about the consolidation in the broadcast industry as a parallel to what happened around the turn of of the century in the newspaper business. That’s an over simplification. Broadcasters have one significant business advantage over their print media counterparts. They hold licenses for access to a very valuable and finite resource, spectrum. Local broadcasters have also fared better than print brethren at stemming the tide of disintermediation by the Internet. Broadcast TV, even when delivered via cable, is less expensive to the consumer than streaming services on a per minute basis. Further, broadcasters have done a very good job of maintaining their brands on the Internet, breaking the story online and adding depth (to the extent one can in two minutes thirty seconds or less) on air at 6 PM.

Rather than a pure play for synergies and operational efficiency, broadcast consolidation in the US is mostly a spectrum grab. Now that the FCC is planning the first Incentive Auction permitting channel sharing among broadcasters and wireless Internet providers, that spectrum is only likely to go up in value.

Make no mistake. The broadcast industry is experiencing a sea change. Less emphasis will be placed on traditional broadcast operations with more emphasis on multi-platform distribution. Everyone participating in the value chain will need to adapt.

The irony is that although more bandwidth will be available to consumers for broadband, enabling them to cut the cord, less over the air content will be there for free.


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