Linux Journal. I found these two paragraphs of quotes down deep in Doc's notes on the Digital Hollywood conference (his report is really hilarious, btw). But this dude Jonathan Taplin just cracked my ass up.

But then he was interrupted by Jonathan Taplin, President and CEO of Intertainer, who said, "If TiVo scrapes off the top 30% of the demographic customers, and those people are fast forwarding through ads, there has to be some readjustment."

Mass replied, "I won't be able to sell advertisers, that's right, and the consumers will unfortunately be the beneficiaries of that." Then he caught himself and added "what will happen is that the consumers will not get as good programming".

Taplin replied,

Let's look at the larger skew. There are today 380 digital television networks. Ten years ago there was one Discovery Channel. Today there are fourteen Discovery Channels. Now you cannot tell me there is fourteen times as much advertising money flowing into Discovery Channels. They have fourteen times as much programming costs, fourteen times as much satellite transponder costs.... This is a train wreck. This cannot sustain itself, especially if you add PVR (personal video recorders such as TiVo) on top.... At the end of the day...there isn't a way to sustain this. (emphasis mine)

Tom McGrath, President of Paramount Enterprises and EVP of Viacom Entertainment Group, said

"We...are heavily dependent on first-run licensing from major TV networks to survive. If you follow through the train of logic that John Taplin started with, it's not a pretty picture.... The evidence from TiVo is basically people just don't watch commercials at all. It's not a question of watching the ones they are interested in or not interested in.... It is a transformation of the industry. As producers we rely on the fact that there is a market for good programming. Right now the penetration of these devices, of VoD (Video On Demand), of this disintermediation, is not so great that we face collapse in the near or intermediate future. But it's something that we think about all the time. (emphasis mine)

Taplin responded,

It would seem to me that Viacom is probably better positioned to weather the storm that is coming than almost any other major media company. AOL Time Warner is $30 billion in debt. That means the first $3 billion of profits goes to pay the banks. Vivendi Universal has $20 billion in debt. Disney has $25 billion in debt. These are companies that have been leveraged to the neck. If you think about the deflationary economy, which is where we are going, the pricing power--whether for VoD, or DVD rental, or for advertising--is not going to happen. Viacom was smart enough not to do anything stupid in the Internet space, and will probably weather this. But I am here to say that it is going to be a very rough two or three years for the media sector.

Ominous, eh? This last paragraph, at least. But this whole segment suggests a far greater sea change in the power struggle between new media and old media. Look at that quote I bolded again:

"The evidence from TiVo is basically people just don't watch commercials at all. It's not a question of watching the ones they are interested in or not interested in.... It is a transformation of the industry."

As in rent a clue-by-four, folks. The deep structural model of the entertainment industry is what is inherently at stake here, not the surface details like costs vs return on investment or wheeling and dealing and negotiating monopoly arrangements or exclusive contracts or 380 networks all wanting your fat piece of the pie or blah blah blah.

Instead, they should be looking at some basic elements of communication theory. Yes, I said an evil word, and maybe I can retract it and maybe I can't. It is assumed that academic theory is irrelevant to ongoing practice, biased by business practices, human beings, shitty programs, poor market research methodologies, flawed assumptions about audience.

But at some point, you have to step back and look at the social effects of the deep structure interfaces created by different communications media. I'm no technological determinist, but to ignore features of how programs/messages are delivered and received (and paid for), the STRUCTURAL features, is to pretend they are invisible, or worse, set in stone by some kind of god.

What makes these structural features key at this point in time, BESIDES the invention of the TiVo technology, is the pressure being put on broadcast models of communication by interactive communication.

There have ALWAYS been production costs. The Dots.Bombed because OLD media ranted and raved that online media did not have a cash flow model, a METER, if you will. A THING to charge for. And so VC lost vision (give me a break, did they ever have vision, or just more money than they deserved?), the stupidly overinflated stocks crashed, etc.

The DEEPER truth embedded here is that broadcast media has never had a cash flow model, a METER. Cable and satellite perhaps have it because they can scramble signals and charge for the signal decryption. Cable and satellite feed on the demand already created by broadcast, however. But the basic communication model for BROADCAST media is by definition signals cast broadly out upon the waters, and whose-ever ears/eyes they fall upon, it is free.

The advertising model is a prop, a false floor. Of course banner ads don't work online. Duh. Who among us liked them? That ought to be your first clue. Ads, for any media, are like Castor Oil. Only, see, I DON'T have to TAKE this medicine. Who among us likes TV commercials? Obnoxious radio ads? Paging through all those print ads in newspapers and magazines?

It is the height of arrogance within the context of rhetorical persuasion to believe that ad agencies and marketers can lead people to like something like Castor Oil, cold showers, or any other odious and disagreeable things.

Sure, like used car salesmen. I used to work sales. A razor's edge separates Madison Avenue from the guy who can sell an overpriced Kirby vacuum cleaner to a blind woman. Aristotle would tell you that was about rhetoric, and rhetoric depends on audience, namely an audience of suckers. I have more faith in audiences than that.

You may say (and it would be a point well-taken) that subscription models for cash flow repeatedly fail and at some point production costs have to be paid, whether in mass media or interactive media. It would be instructive to watch the pathetic begging sessions on PBS during pledge weekfor 5-6 hours, perhaps with no shows inbetween. Kind of makes you prefer the beggars around the Taj Mahal in India.

If old media is having to face the EXACT SAME cost considerations as new media--lack of a real meter for which to charge for services, if indeed the advertising model is being exposed both in new media and old media as the sham that it is, as the quotes above seem to indicate (nothing like the wrath of the righteously indignant when suckers refuse to take their Castor Oil), how can production costs be met?

Is that the question to ask? Or is there a deep structure scam involved, a pork barrel, a cash pipeline for which old media will beg, borrow, or steal to preserve its place at the table?

There is a clear production cash flow stream, to be sure, with hardened arteries of cash fed to those who aren't stuck with the hind tit. My sense is those cash flow streams already in existence keep Hollywood from actually looking at its models for doing business. New media makes them very nervous for that reason.

Back in the early 80s, with the manufacturing industry, they called this "structural unemployment," btw. Someone somewhere pays attention to deep structures.

But if better measures of value, P/E ratios, and true costs of doing business were used instead of ones distorted by false advertising assumptions, would those who are feeding the cash stream be so willing to pony up? When will some big Hollywood backer ask a production company or television network how it is going to "monetize" its business model? How much Hollywood spending is pure pork and would not hold up to real scrutiny if the cash flow scam were not already pre-existing?

The truth is that there is money to be made in communication and entertainment, good money, just not inflated money farm scams, just as there is good money to be made in professional sports, just not high ticket priced, extortion stadiums, fat owners and rich players. There are a number of industries that deserve to have their spending patterns analyzed with the same scrutiny as the democratic budget process in government, as Enron and so many other scandals only begin to reveal.

But, if you remove the bullshit, the house of cards, the money tit and scams, there is good business to be done, creative business, entertaining business, moving art, pertinent communication, and these are all things that a clear justification can be made for their production costs to be covered, both in mass media and interactive media forms of communication.

Compelling and effective forms of communication can be paid for. The entire Hollywood myth-making machine that has eaten billions of dollars was not built only by the advertising model. The advertising model came into existence BECAUSE there was real value in the output. Not made up or manufactured value. The fluff and the fluff that feeds off fluff and the producer's son's starlet cast on the couch, all the shit that built up around the money stream, that tends to obscure other standards of value, but it doesn't mean people don't still recognize it and hope for it.

The way the money tit was pulled away from new media, you would think the jury came back and said interactive media sucked as a compelling communication and entertainment form. The jury said no such thing, but the money people will stay away like the market-driven cowards they are.

And the way broadcast media believes its place at the money table is a sense of entitlement set it stone is just as short-sighted. If mass media doesn't take the time to look at the advantages AND shortcomings of the deep structure interfaces its product creates from a communication theory standpoint and from a practical rhetorical standpoint, it will just keep on groping around in the dark, throwing paint at the wall, hoping it sticks in some way that is maybe attractive, but who knows? A crap shoot? It doesn't have to be.

One thing I do know for certain. Anybody who tries to make people take Castor Oil is going to lose.

Miasma
7:26:06 PM    

Happy to see lower income and often technologically disenfrancised voices speak up.

For more on this issue, check out the BeHeard Site: http://www.nutball.com/beheard.

17. USATODAY.com - A homeless guy finds a refuge on the Internet (15.6 points). USA Today ... A homeless guy finds a refuge on the Internet ... piece [( blogdex : recent )]

He writes about God, Jung and the symphony. But mostly he writes about what he knows best: life as a homeless man in urban America, a world so far beneath the social radar that many step right over it.

By day, Kevin Barbieux writes in the free-form diarist style of Web logs [~] known in Internet circles as "blogs" [~] as "The Homeless Guy." His Web site (www.thehomelessguy.blogspot.com) has developed a worldwide following.

5:27:35 PM