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August 18, 2005

Renovation as Innovation

Oftentimes, we arbitrarily restrict the working notion of innovation to a certain idea about what matters. This is a bit of myopia that fuels hype, and past the point of raising awareness, hype is not especially a good thing. Hype discourages looking at a problem from more than one perspective, which increases the chance that a related decision will have more risk than is perceived.

For example, a recent article on Doug Kaye's great weblog Blogorithms talked about how podcasting is allowing music lovers to get more of what they really prefer at a hugely increased level of convenience, which threatens the traditional radio broadcasting companies. This is a heavy-duty general warning for businesses pondering the industrial changes underlying their futures.

But too often in the coverage of pod-vs.-broad, the suggested counsel -- change or die -- is cast very two-dimensionally as "innovation in distribution", leaving out several other factors that distinguish the potential of broadcasting and might account for a positive future of broadcasting.

Note that Doug's article does not have that problem; and meanwhile, there is no prediction right here that broadcasting (including TV and radio) has a rosy future. As a TV guy, I'm way more interested in what TiVO will cause than I am in what podcasting will cause, but I think that good cheap digital video cameras combined with streaming files and RSS over the internet is far more important than TiVo or iPods.

So does broadcasting need innovation? Or maybe just renovation? It's easy to call any new change "innovation", but it's more important to get a grip on where the change is coming from, than it is to automatically indulge the mystique of innovation. I'm looking at the way that we could segment and rearrange the factors important to broadcasting that could make it financially viable on a continuing basis.

Here are a number of touchpoints where, hypothetically, change can occur.

It's probably safe to say that broadcasting needs to find new consumers; it is not necessarily the case that the new consumers should be like the old ones, although they need not necessarily replace them.

Broadcasting is expensive. The reason why broadcasting's expense was tolerated is because it delivered something of equal-to-greater value. But what made its content valuable was a business partner. In radio, the partner created a lot of the buying interest in the product, selecting and positioning it. In the future, new partners might be needed. It's not necessarily the case that the new partners should be the same type as the old ones, although they need not necessarily replace them.

To consumers, the role of broadcasting has been not merely "distribution" but "discovery". In the United States, discovery during the 1960s and '70s culture had radically different performance requirements than it does in the current culture. It's role was always to promote and reflect popular awareness -- and now the question is really one of what awarenesses are most valuable when they are popular (i.e. widespread).

And broadcasting has not been an interactive mode, often held now to be a fatal flaw; the flip side of the coin is that content is more secure in a non-interactive environment. If secure content is "reliable" and in that way more credible, then this is a major value point, although I make no attempt to put a dollar amount on it. Instead, note that news organizations suffer more from their credibility failures than from other competitive media.

Finally, also note that "quality" is not the same thing as "taste". Gathering content according to taste may indeed be more convenient that ever now, thanks to media other than broadcasting. However, transcending one's current taste requires exposure and research. There, the idea of quality is represented by objective insights. Delivering objective insights confidently, under widespread scrutiny, can be the basis of offering a trust relationship that supercedes mere willingness to immediately gratify personal taste. This is really about the producers who put content into the channel. Future producers need not be like those of the past, although they need not necessarily replace them.

Yet what's interesting about that last point is that it is not even a new value proposition, but instead one of the oldest ones of broadcasting. Let's talk about TV: expertise has always been a differentiating key ingredient of produced content -- whether it was authentic or just staged -- and whether the show was Masterpiece Theatre with Alistaire Crowley, the Evening News with Walter Cronkite, Monday Night Football with Howard Cossell, or early veejays at MTV. Where there is no explicit host, the expertise may still be implicit in the production values, the credits, the sponsor, and/or the branding.

However, the broadcasting landscape has morphed to where there are several different camps, and the issue posed in that is one of where consumers should expect their desired kind of value, not just the desired kind of content, to be delivered. For example:

- Non-profit Alternative: this is the camp usually thought of as "public broadcasting", but that label is confusing. PBS was seen as a non-profit station presenting alternative content, with "alternative" contrasting the content typically subscribed by commercial advertisers. But public subscription of content does not necessarily result in different content. And government-supported advertiser-free stations, including local "public access" channels, are in this category as well. This category changes as much as people or commercial advertisers are willing to directly pay for currently perceived alternatives instead of getting them "for free".

- For-Profit Alternative: HBO is now cited as a good example of this.

- For-Profit Conventional: this would be the advertiser-sponsored networks like ABC, CBS, etc.

- Non-profit Conventional: this is what some critics are accusing PBS of becoming.

Currently, each of these different channels actually has a range of content types that offer a range of types of value. Meanwhile, branding is usually the device used to try to herd the cats within any given channel. But when these channels are having problems, it has little to do with being broadcast channels per se.

Is there any reason to believe that changing producers at a channel, regardless of its category, could not all by itself suffice to make the broadcast channel viable? Making that happen would be plenty of hard, complicated work -- but my point is that it would be a renovation, not an innovation, and that broadcasting per se would not be a flaw. Look at what ABC has done in the last 24 months. It is simply not being held back in any significant way by being broadcast-based.

What goes along with this is that broadcasting can change its audience, in the sense that the content it delivers can actually alters their expectations. Break-through content is not prohibited by broadcasting; it is perhaps deterred by management.

So this points to what is likely the most important issue of all concerning innovation, and that issue is risk. Innovation can be an answer, but it is not necesarily THE answer, and a lack of innovation is not necessarily a sign of impending doom. Renovation may generate all the "new" that is necessary.

Posted by Malcolm Ryder at August 18, 2005 10:40 AM

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