Analyst To Networks: Return Sub Fees, Go For Cable's 'Return Path'

by Joe Mandese, Mar 2, 2006, 5:55 PM

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ORLANDO - Influential media industry analyst Tom Wolzien Wednesday said the broadcast networks need to move beyond negotiations designed to preserve their one-way distribution system and work with cable and satellite operators to create a "return path" that would create new, more powerful and far more accountable forms of broadcast TV advertising.

During the opening session of the American Association of Advertising Agencies Media Conference and Trade Show here, Wolzien, head of Wolzien LLC, implied the networks were still "fighting the last war" in their retransmission consent negotiations with cable operators. Instead of haggling over subscriber fees for the rights to re-broadcast their programming, Wolzien said the networks should use their leverage to negotiate access to the interactive backchannels that cable operators can provide, which would create a more effective form of "two-way" broadcast TV advertising.

Wolzien's remarks, ironically, come as CBS is poised to cut a massive retransmission consent deal with cable operators that would reap CBS millions of dollars in subscriber fees, but which Wolzien suggests may be a shortsighted strategy.

"They have been reluctant to turn it over, but it may be that the broadcast networks are gaining more leverage in the negotiation," said Wolzien, adding that the two-way approach would create opportunities for marketers to generate "a lead" or a "call to action," that would give broadcasters the same marketing effectiveness as the leading online search players.

"In theory, you can do the same thing with broadcast that Yahoo and Google are doing," he challenged.

At least one of those players, meanwhile, has its eyes on television too. During his keynote presentation at the conference, Yahoo COO Daniel Rosensweig said the Internet portal wants to move beyond simple online content to enable consumers to find and manipulate all the media content they use in their lives.

Sounding a bit more like search giant Google, Rosensweig said Yahoo's strategy was being driven by "four pillars:" search, content, community and personalization.

"We see a giant shift in the world from mass media--because of digitalization--into something called 'my media,'" he said, adding that instead of being afraid of this shift, Madison Avenue should embrace it. "We should flip it around and say, 'My goodness, this is the single best opportunity we have,'" Rosensweig said.

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