Wednesday, November 29, 2006

An unexpected roadbump on the road to HDTV

Globe and Mail: No business model for HDTV, CBC tells CRTC reported in CE Pro

As television shifts towards high-definition channels and programs, broadcasters are finding no business model for HDTV and are instead being forced to foot the massive bill, the head of CBC warned Monday.
Speaking on the opening day of a two-week regulatory probe into the state of Canada's television sector, CBC president Robert Rabinovich said advertisers are not willing to pay more for commercials on high-definition channels or during HD programs.
That has left Canadian broadcasters struggling to figure out how the industry will pay for the massive shift towards high-definition, which requires new infrastructure and programming costs that are roughly 25 per cent higher.
“There's no evidence either in Canada or the United States that we have found for advertisers willing to pay a premium for a program that's in HD,” Mr. Rabinovich said. “So basically they're saying if you want to shoot in HD, that's your business, we're not going to pay you more.”

Bearing in mind that I'm no broadcast guru, I see that there are two industries that are interlocked, and dependent upon advertising revenue: the broadcasters who sell the airtime to advertisers, and the ad agencies that generate the ad content. Without actually getting off my ass and doing the research to determine what the advertising industry is doing to promote HD, I am going to take a wild swing and suggest that broadcasters and ad firms need to partner up, develop a value proposition to sell HD advertising to the sponsors, and tag team them to make the sale. The CE industry has so far borne the burden of selling HD to the consumers, now other partners in the chain that delivers content need to pull their weight and get the sponsers to open their chequebooks and make their contribution.

Especially at a time when broadcasters complain of declining ad revenue, and new media outlets are rapidly eroding the relevance and importance of broadcast, the television industry seriously needs to saddle up and get creative with ways to a) get more eyeballs on their screens and b) make more money.

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Anonymous said...

All this at a time when the broadcasters seem more inclined to drive eyeballs away by ensuring that it is often difficult to find the programs one does want to watch. So who or what is really at fault for declining revenue?

Flatland Pastor said...

I have a BellExpressvu dish and ALL I want to watch is HD. And I can find HD stuff in prime time every day of the week - just not stuff I'm always interested in. And I'm no heavy TV consumer. If even a portion of the number of folks who have ponied up for an HD TV are becomming as picky as I am then I think the premium model is building itself.

Bill O'Reilly (not THAT Bill O'Reilly) in his radio program "The Age of Persuasion" observed that the birth of commercial broadcasting was founded on the tacit agreement between the advertiser and the consumer, that the consumer would tolerate the ads if the advertiser paid for quality entertainment to offer to the consumer/listener/watcher.

Has everybody forgotten this agreement? If the advertisers would help the networks and production houses create some stuff worth watching, I think the elusive business model the head of CBC is looking for would walk right up and kiss him on the mouth. But he may still not recognize it.

If the networks in the USA and Canada are having a hard time raising the capital for HD production based on current ad revenue and viewer stats maybe that's what we all get for a decade (almost) of reality (bites) TV.

The viewers are going elsewhere looking for something to care about. HD could bring everyone back to TV big time but it will take the courage to create some excellent programming. Having said that, I am encouraged by some new stuff this year, especially "Heroes" and "Studio 60 on the Sunset Strip"; the first stuff I've cared about at all on broadcast TV in years.

I doubt that "other" media outlets could really beat HD TV at the entertainment for advertising deal beause my techno-savvy PC loving son would rather watch "Heroes" on our 50" Hitachi than on his video ipod. We are creatures with nearly 180 degree peripherial vision. Watching stuff on a screen the size of a postage stamp or a sheet of paper just doesn't cut it.

So TV execs - QUIT WHINING!! Roll out the production values and hire back a few of those writers you let go when you decided all you needed was a premise, three cameras and some amateurs who would do anything in front of a camera for $50K, and make some killer TV!

I'm your demographic and I'm in front of my HD TV waiting.

Anonymous said...

Flatland Pastor's primary point fits nicely with Doyle, the Globe and Mail TV columnist, who has been attacking the BBC of late for abandoning creative programming. (Yes, he is also enormously critical of North American networks for what passes for programming.) Since the head of the BBC has just walked to an independent anything is possible at the BBC. The current arguments before the CRTC, however, do not bode well for improvements here.