An Unlearned Lesson from NAB
I've just returned home from the NAB, the National Association of Broadcasters annual meeting. As usual, it was at the Las Vegas Convention Center. Happily, it was very well attended and, even more happily, everyone I spoke to seemed genuinely upbeat about the future. All good!
There were hundreds of thousands of square feet of exhibits. You can see a nice recap of the week-long event at www.nabshow.com. Lots of great stuff, really.
But … and you knew there was a "but" coming, there was a pervasive and overwhelming amount of disrespect for the emergence of empowered consumers and what impact that empowerment will have on the incumbent broadcasting value chain. Sure people were talking about social media. But it is uniformly considered the enemy of the status quo, as opposed to a paradigm-shifting trend with three years of geometric increases in participation. The only thing more blatant than this disconnect was the unwillingness to think about, understand or articulate the non-trivial changes to the competitive landscape. It shouted volumes.
Apple vs. Sony
Here's how to think about it. Do Sony products compete with Apple products? Of course they do. Both companies make music players, video monitors, computers, etc. On the surface, it is very easy to say that Sony and Apple compete for hardware dollars. They do. But does that mean that a Sony product with more features at a better price will effectively compete with an Apple product? That's a harder question to answer — and it's also the wrong question to ask. Why? Because:
- the hardware does not exist in a vacuum, and;
- the feature comparison has very little to do with the consumer value proposition of either product.
Sony uses an army of paid software engineers to create 100% of the software's contribution to the value of its products. Apple uses a similarly sized internal army of software engineers, plus a vastly larger army of third-party developers whose economic interests are exactly inline with Apple's, to add value to its products. The size of the force is overwhelming. Sony has no chance.
I'm not singling out Sony and Apple. You can substitute any two organizations where one is a traditional competitor and the other is a partner-driven, social network of enlightened self-interested parties. The two models demonstrate a remarkably different approach to the doing of business. One is quite modern, the other … not so much.
At each booth I visited, I was regaled with lists of features that made one product or another better than a competitor's product. But almost no manufacturer acknowledged the need to work together or conscript a developer army to move their businesses into the future. This was pretty astonishing.
I asked a long-time friend who works for a very large TV manufacturer why all of the Internet-ready TV systems on brand-name television sets were incompatible? After all, they uniformly display ATSC standard signals, why was there no standard way to display Internet Television? It was a rhetorical question. Right now, every hardware manufacturer is doing its own thing; each one believing that their method will become the standard. Some are even more delusional and believe that their hardware and software will ultimately be killers of Apple products. iPad killer, iPhone killer, iPod killer, etc.
The thing is, they are missing the point. They are not competing with Apple, they are competing with Apple plus a conscripted army of social media-empowered rebroadcasters and developers. It's not an unfair fight, it's no contest.
One of the key take-aways from this NAB should be that workable standards are not the true enemies of walled-gardens and profitability, they are a 21st century requirement.
Another key take-away is that a frighteningly large number of organizations at NAB are still focused on delivering content in real time, when only news and sports are produced that way. It is as if they believe that kinescopes are for storage and all TV must be live. In the 21st century, stations and networks should be thought of as permission-based databases with a plurality of ways to access the content, not linear playout systems.
How rapidly does the infrastructure of the TV business need to change? Your guess is a good as mine, but this much was clear: a remarkably large number of manufacturers and suppliers to the broadcast television industry are making 21st century tools to solve 20th century problems.
Coincidently, Michael J. Fox was honored at the show this year. He didn't bring the Flux Capacitor with him … so, how will we move the industry "Back To The Future?" Did anyone see a DeLorean in the parking lot?
About the Author: Shelly Palmer is the host of "Digital Life with Shelly Palmer," a weekly half-hour television show about living and working in a digital world which can be seen on WNBC-TV's NY Nonstop Tuesdays at 10p Eastern and online, and the host of "MediaBytes," a daily news show that features insightful commentary and a unique insiders take on the biggest stories in technology, media, and entertainment. He is Managing Director of Advanced Media Ventures Group, LLC an industry-leading advisory and business development firm and the President of the National Academy of Television Arts & Sciences, NY (the organization that bestows the coveted Emmy® Awards). Mr. Palmer is the author of Television Disrupted: The Transition from Network to Networked TV (2008, York House Press) and the upcoming, Get Digital: Reinventing Yourself and Your Career for the 21st Century Economy (2009, Lake House Press). You can join the MediaBytes mailing list here. Shelly can be reached at email@example.com For information visit www.shellypalmer.com