Making change
Oct 1, 2004 12:00 PM, BY PAUL MCGOLDRICK
All of us have problems with changing the status quo. We would be in denial if we said otherwise. But, when change comes gradually, sometimes we don't even notice it. In TV broadcasting, there is a change that now pervades the industry that most people either have not noticed or have intentionally ignored or denied.
Forty years ago, in the broadcast equipment market, the modus operandi for product sales was very different than it is today. In my initial days in the industry, an operations unit couldn't buy a product without approval from the engineering department. We tested products, measured and compared the results with the data claimed by the manufacturer and then (and some out there will have a hard time accepting this fact) we either recommended the product to operations or we flatly denounced it as unbuyable.
In some cases, we actually had to design and build the equipment ourselves, because what existed in the marketplace simply didn't meet our needs. And, sometimes, this resulted in major system developments that pushed the envelope of technology where no vendor could afford to go. That's what has made the intellectual property of BBC Technology (formerly BBC's R&D department) so hot as the development process continues to spin it out into the open market. Compare yesterday's radio amateur who made all his own equipment with today's counterpart who shops for the smallest Japanese box. That difference is paralleled in the professional market.
Twenty years on, the vendors and/or distributors still dropped in to demo the new product. But, increasingly, operations departments were making the buying decisions and engineering had little say in it — sometimes no say at all. Yes, the poor engineers would have to keep the purchased products working 24 hours a day, but the operating bells and whistles were more important. It was also becoming clear that the operators' bosses needed to be briefed on the products without their staff present because a demo that included all levels of staff turned into a “show how much the boss doesn't know” event. And, whenever that happened, the order was gone.
Things have changed again today, but it wasn't clear to me just how much until after I had left NAB this year and digested what I had seen. Twenty years ago, the major players made their own programs in their own studio facilities, or at sporting venues, using their own equipment. How much of that do you see today? When you look at the number of vendors vying for a chunk of newsroom money (a service that, for small operations, is an absolute money loser) you have to wonder why you would want to be in that business.
But the rest of real programming (even “reality” programming) doesn't come from the big studios any more. The model has changed in both the business sense and the equipment sense. With the sheer plethora of distribution sources, with hundreds of channels on cable and satellite, there is not nearly enough original programming to go around. Yes, you can survive on a channel of game shows, or ‘60s family series, or even repeated soaps, but most people will switch channels when they recognize a program they have already viewed.
When a production company pitches a deal to one of the networks, the agreement consists of how much money is going to change hands, and when; and in what video and audio format they will deliver the program, and when. The production company has no choice in the format; it has to acquire suitable equipment to deliver what the network wants or the production company doesn't get the business. It has to determine what other equipment and facilities it needs and it has to mold its own budgets around that. It is buying in a different way.
The other buyers — the networks or the cable channels — are now distribution stations, with or without news operations, and they are increasingly automated. They also are buying in a different way.
If you are a vendor, the next time you think about your equipment sales channels, think differently. Where you once sold to operations the size of half dollars, now you're selling to dimes. And it takes many, many more of those to bring home the big bucks.
Paul McGoldrick is an industry consultant based on the West Coast.
Send questions and comments to: paul_mcgoldrick@primediabusiness.com
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