Commentary

CES: Savior For Traditional TV Companies? Probably Not This Year

by Wayne Friedman , Staff Writer, January 7, 2009

The Consumer Electronics Show can only do so much for traditional TV/entertainment content players looking to extend their businesses. In the next few days, at the CES annual get-together, maybe we'll find out how much.

One end of the TV spectrum -- the home video business -- isn't complaining too much, as 2008 looks to be down "just" some 3% to 4% from 2007's $15.38 billion in sales. Those fancy new Blu-ray units and discs aren't enough to compensate for the downturn of the standard definition DVD business.

Compared to numbers for other TV-related businesses, all these declines aren't all that bad -- not when there are "double digit percentage" declines in network TV viewership, in local advertising TV sales, and in most media companies' stock prices.

For a couple of years now -- ever since Disney/ABC made that historic iTunes deal -- CES has been seen as a savior for some TV companies looking for new distribution streams of revenue. But this year the number of media and entertainment content companies taking floor space has been stagnant, if not in decline. NBC Universal, Discovery Networks, Sony Entertainment, and Comcast's G4 Network will have a presence at the event.

The CES poster child has been Sony Entertainment -- one of those perfectly positioned TV producer/consumer device companies -- which now seems to be having a rough go of it, according to reports. Recently, the Times of London suggested Sony will undergo a massive restructuring soon -- some $1.1 billion in cuts, and 16,000 jobs.

Who can blame the company if this happens? Sony has been hit squarely like any other consumer products company -- with consumers pulling back on new high-end consumer media products, such as Sony PlayStation 3 game console and Bravia flat screen TVs.

So, in retrospect, those home video executives are feeling pretty good, in these economically troubled times, with comments like "down is the new flat" or "flat is the new up."

What, then, should we make of media businesses that gained in 2008 -- like Netflix or Marvel Entertainment, both of whose stock prices grew? Is "up' the new "hit," the new "Idol," the new Google"? Or is the new "up," the new poster child looking for eventual trouble, just like everyone else

7 comments about "CES: Savior For Traditional TV Companies? Probably Not This Year ".

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Douglas Ferguson from College of Charleston, January 7, 2009 at 11:29 a.m.
Not this year, not ever. Why is everyone whistling in the dark, as if nothing is happening? The whole rug has been pulled out from under the old media by disruptive digital technologies.
The media are propped up on a business model from the 1970s: few competitors, captive audiences, unavoidable advertising. It's over. The big media are over. The audiences have power now and they want content all for free. They will ad-block the internet. They will TiVo most of the ads. They'll make copies of DVDs that just show the main movie. Product placement will only go so far.
Young kids don't want radio. And they don't want to pay for MP3s. It won't get better next year.
Broadcast TV started dying in the 1980s. Advertisers so desperately NEED mass audiences, but the simple truth is that, short of mega-events, too many diversions are competing for too few eyeballs for anyone to make enough money. My kids spend 95% of their media time on YouTube and videogames, exposed to almost zero advertising. They don't plan their media consumption; they expect all of it to be accessible whenever they want it.
Young people don't read newspapers either. The NYT is so dead, like the mortally wounded yet walking Terminator II just before game-over. The trickle of online ads, easily blocked by IEPro7, won't save it or any other big city daily. Twitter is the new journalism.
True, advertising will live on in some form, but not big enough to feed the media giants. Ads that are unblockable or unskippable will live on, like ball park walls and gas station videos and billboards, but the usual party is over. Some of the guests are noticing it and starting to file out.
Ten year from now, when people start watching video on headset screens and earpieces, linked to cellphones, young people will marvel that we older folk ever stared across the room at a screen. And followed a schedule. And watched spots.
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Clinton Gallagher, January 7, 2009 at 11:52 a.m.

The only place for the licensed fascist broadcasting "TV companies" is a small paragraph on the same page of history looking back on what was intially a legitimate and noble means to manage the natural resources which allowed over-the-air broadcasting to occur unhindered so the general public could enjoy some benefit of what was to become known as the TV.

That was then, not so very long ago, before technology was available to utilize the same natural resources to create new markets, new companies, new entrepreneurial initiatives and many many many new jobs for all.

These few decades later the general public now observes the obscene social phenomena of the $12 million salary paid to a single negro basketball "star" sufficient to feed the people of a small country but for the fascist control of natural resources allowed to be exclusively exploited by corrupt oligopolies.

Many people in general and all people of moral and ethical concience have realized what has occurred in America the result of fascist licensing in the hands of the oligopolists.

The entire middle class is controlled by fascists who now determine who can and who cannot work in America. Cut somebody's hair without a license and you can be charged with a felony and put into prison. Draw a picture of where to arrange the furniture and the fascist architects and their homo interior decorators all licensed fascists will have you charged with a felony which could result in imprisonment.

Now it is asked why we as a society even need to sit down in front of a TV after a long day at labor only to be confronted with the starving naked negro child sitting in the sand trying to catch and eat the flies that swarm around its dirty body while the "stars" primp and parade with their hos down Broadway flashing the diamonds in their teeth.

The Savior for Traditional TV Companies you ask? Its the Internet Protocols dummy!

Since the TV and the microcomputer have become one and the same type of digital device the TV manufacturers must be compelled to begin manufacturing TV sets which support sending and receiving digital media in a manner unhindered by licensed fascism.

2009 can become the year of interactive TV or yet another year of observing naked starving little negroes eating flies on "TV."

The choice is up to you and I and what we as human beings are prepared to continue to allow to occur when what has occurred is no longer neccessary.

Larry Miller from Galey Media, January 7, 2009 at 12:13 p.m.

Have I missed someething? Despite the enormous changes in the media environment, most data I've seen indicates that network television viewing is hurting a bit, but it's not in the dire straits outlined in this article. Print media....CERTAINLY is in trouble! Local TV and non-prime time network numbers are off significantly.

There's little redeeming material in the tide of crap that comprises prime time network television, and I certainly would not be surprised if viewership went in the tank -- but that's not what I'm seeing in most industry reports.

Marti Jenskins, January 7, 2009 at 2:17 p.m.

@Douglas Ferguson

My gosh! Who do you suppose will supply all that free content? Will feature films and one-hour dramas and 30 minute sit-coms just spring up from the cloud? Who will supply the original material that your YouTube kids are stealing?

No, there will always be payment for entertainment. And there will always be an audience who is willing to let someone else make that payment in exchange for the obligation to be exposed to advertising.

The mechanisms will change, the technology will change, but the underlying economics are just too strong. One way or another, advertisers who need an audience will gather them by offering entertainment, and audiences who cannot or will not pay for tickets will pay with a bit of their attention.

Paula Lynn from Who Else Unlimited, January 7, 2009 at 6:12 p.m.

No pay = no content. Yup, that simple. And speaking about simple, we do need more exports to become a better nation which can start with exporting Clinton to Sierra Leone for awhile.

Douglas Ferguson from College of Charleston, January 8, 2009 at 12:23 a.m.

No it's not that simple. Ask Larry Flynt, who is currently looking for Federal aid for the bankrupt pornography industry. The no pay, no content world simply does not apply. For many years, companies like Vivid made enormous fortunes selling DVDs filled with filthy sex. Now websites like redtube.com and youporn.com serve up the same fare for free, 24 hours a day. No one gets paid, but the content is unending. There are other sites filled with amateur pornography. Poor Mr. Flynt can no longer peddle his smut. So, there's an example of plenty of content for no pay.

An extreme example? Perhaps. But everyone who tries to sell content on the net starts out by offering it free, hoping to sell subscriptions once people see how good it is. The problem is, someone else comes along near the upward arc and also decides to compete. The first company cannot sell the content because the second company starts giving it away, and so on, ad infinitum.

Even Rupert Murdoch has trouble selling WSJ content, which only five years ago was the shining example of content that would always have paid subscribers. But the internet is just too big and has too many choices for anyone to get rich anymore. The long tail was an idea that sold a lot of books, but hasn't panned out the way it was planned.

Douglas Ferguson from College of Charleston, January 8, 2009 at 12:31 a.m.

Let me add this: Yes, sitcoms and movies will be in demand. People will still shell out big bucks to sit in the dark, for awhile at least. But the economics of popular TV shows is shaky now, because the size of the competing channels and sheer number of competitors makes it difficult to get rich. Seinfeld, for example, worked because the networks still captured enough share of audience to be patient through the first and second meager-viewing seasons. It had time to catch on. I doubt a show about nothing would last more than 6 weeks in today's quick-hit world.