Free TV blogging -- collateral damage

For those of you who tuned in late to the TV debate, so far we've talked about how well over-the-air television compares to cable (for some people), how new and apparently successful businesses are springing up around OTA, and how the number of viewers getting their television through antennas appears to have been growing substantially since the introduction of digital. What we haven't covered so far is the potential social impact of killing broadcast television.

It is almost axiomatic that, if you have a resource that is used in one way by people at the top of the economic ladder and in another way by people on the bottom and you "let the market decide" what to do with the resource, it will go with the people who have the money. I'm sure many if not most of the readers here could explain it better than I can (econ is not my field), but the problem comes from the fact we're talking about absolute rather than relative money. People at the bottom may be willing to spend a larger portion off their income on the resource but it's a larger portion of a much smaller total.

This becomes particularly troubling when we're talking about a publicly held resource. When we consider selling off a piece of public property, we can't just assume that whoever is willing to pay the most will put it to the best use. By that standard, there would be no roads, parks or libraries in poor neighborhoods. Things used by the wealthy will always come out ahead.

Instead we need to think about who uses the resource now and how their lives will change if that resource is sold off. What groups rely heavily on broadcast television? What groups would have the most difficulty finding alternatives?

People in the bottom one or two deciles are going to be in trouble. Even the lowest tier of cable would represent a significant monthly expense.

People with limited residential security will be even worse off.

People with limited income security will face a difficult choice: sign up for exorbitant no-contract plans or commit to a financial obligation they may not be able to fulfill.

People with poor credit histories will have to come up with large deposits every time they move.

I have no idea what the unbanked would go about getting cable.

Keep in mind, all of these groups will have comparable or greater difficulty getting access to high speed internet service.

Weekend blogging -- if you were getting your fitness advice from a 1950 comic book...

The following ran in an issue of Harvey's Black Cat* in 1950. I doubt it was based on cutting edge science but it's probably a good read on the conventional wisdom of the time. 

What's interesting is how much and how little things change. There are certainly things here that would seem strange here (make sure to get two pats of butter every day), but much of advice -- not overeating, watching salt, sugar and fat, satisfying cravings in moderation -- still seems fairly sound.

One of my big concerns with health issues is that the media (and sometimes the researchers) create an exaggerated sense of volatility, the impression that, when it comes to a healthy lifestyle, doctors are constantly changing their mind on everything. Under these circumstances, it's easy to see why so many people fall prey to fad diets or simply give up.  

Joseph could give a more nuanced version of this point, but I'm sure that public heath would be better if we stopped presenting a distorted view of health research to the public.

*This one, not this one.

Weekend blogging -- TV themes by the otherwise famous

When I get around to a post discussing the different branding strategies of the various terrestrial superstations, one of the practices I'll be singling out is METV's policy of playing opening and closing credits uninterrupted. It costs little but goes a long way to build brand both by showing respect for the product and addressing a long standing complaint of hard core fans.

This got me thinking about TV themes, specifically those by musicians known for other things.For example, Flatt and Scruggs were bluegrass legends long before the the Beverly Hillbillies.






Here are some other TV themes known for things other than TV themes like collaborating with Dizzy Gillespie or scoring 500+ movies.

I'll post credits in the comments later.




















And bonus points if you can recognize the time signature...

Dangerous synergies

Taking a break from the free-TV blogging rant to go back to the decline-of-journalism rant...

Jonathan Chait has a great post up at New York:

The gigantic ethics violation that was once called the White House Correspondents’ Association Dinner, and is now known as White House Correspondents’ Association Dinner Weekend, is fast upon us. The event originally served as a relatively harmless scaled-up version of the routine source-greasing that is traditionally performed at bars and restaurants. It has become a powerful metaphor for the incestuous relationship between the news media and the power elite.

The WHCD has evolved into a profitable leverage opportunity for media companies. They use the cachet of their brand name, and the access it gives them to the event, to lure celebrities and sell that access to corporations. The biggest media personalities are needed to lure in both the celebrity flesh and the corporate johns, but the rest of the reporters are completely superfluous to the exercise.

Needless to say, the whole thing is lousy (in very close to the original sense) with conflicts of interest, but with the exception of Chait and a few other malcontents, no one seems all that bothered. (True, Tom Brokaw complained, but he seemed to be troubled by the tackiness of the low grade of celebrities, not by the flagrant influence peddling.)

A major aspect of our other ongoing thread (OK, just a little free TV blogging) is the way deep pocketed interests like Verizon and ATT can so control narratives that even our best journalists end up buying a factually questionable stories. When you get into the details (like the Atlantic's elaborate party and its list of corporate underwriters), you start to understand how this can happen.

But what really bothers me about journalism isn't the tolerance of conflicts of interest.

It isn't the devaluing of accuracy.

It isn't the increasing tendency toward group think.

It isn't the practice of uncritically passing on press releases as news stories.

It isn't the inability or unwillingness of press watchdogs to honestly address serious problems.

All of these things are bad, but it's when you combine them that you start looking at catastrophic failure.

I need to be very careful when I base an argument on NBC's competence

I argued earlier that the OTA television audience had to be healthier than Felix Salmon implied for NBC to go ahead with COZI. I was assuming that the company was capable of a basic feasibility study, not that they were good at actually running a channel. That requires programming skills such as putting complimentary shows together.

I'm not making this up:

1:00 p.m. Jan 28 Munster Go Home

 3:00 p.m. Jan 28 Agnes of God

 5:00 p.m. Jan 28 Highway to Heaven

Apparently the ghost of Zucker still roams the halls.

Update: Just to be certain that those unfamiliar with the material get the full disparity here, Munster is a light farce about lovable monsters, Highway is a feel-good Eighties show about an angel who helps people, and Agnes is a drama about a nun and probable rape victim who killed her newborn baby.

Free TV blogging -- betting against Felix Salmon

[Update: Andrew Gelman joins the conversation and, as usual, brings with him a fantastic comment section. Felix Salmon sites this Nielsen study to support his case. Rajiv Sethi (who was possibly the first major blogger on this beat) joins in. I'm still the only one talking about terrestrial superstations, but the night's still young so you never know.]

If you've been reading the last few posts, you know that Felix Salmon has weighed in on the free TV debate and that I find myself in the very unusual position of disputing pretty much everything he says (it is far more common for me to be completely in agreement). I'll be addressing the cost of Salmon's policy recommendations (born disproportionately by minorities and the poor) and questioning the economic implications later. Right now I want to focus on some disputed facts and assumptions.

In the post Salmon is dismissive of the claim that there are fifty million over-the-air television viewers:

The 50 million number, by the way, should not be considered particularly reliable: it’s Aereo’s guess as to the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. (Maybe they have a hut somewhere with an old rabbit-ear TV in it.)

And he strongly suggests the number is not only smaller but shrinking. By comparison, here's a story from the broadcasting news site TV News Check from June of last year (if anyone has more recent numbers please let me know):

According to new research by GfK Media, the number of Americans now relying solely on over-the-air (OTA) television reception increased to almost 54 million, up from 46 million just a year ago. The recently completed survey also found that the demographics of broadcast-only households skew towards younger adults, minorities and lower-income families.

OTA can be tricky to measure -- unlike cable, there's no way of telling who has an old set of rabbit ears -- but we can look at other indicators and see which set of assumptions they are consistent with. Specifically consider the recent decisions of NBC and Fox to launch dedicated OTA channels this year

Let's assume Salmon's right and put ourselves in the position of a Fox or NBC executive who has to decide whether or not to create a new broadcast network. We can be reasonably confident that the executives have access to reliable data (particularly the Fox executive if the deal with Weigel included a look at some numbers from ThisTV and METV).

You find, given our premise, that the total over-the-air audience is, say, forty million, the technology is obsolete and entire medium will probably be gone in a few years. At this point, it's hard to imagine you'd proceed with an expensive, time-consuming project that is likely to be an embarrassing failure but the situation actually gets worse.

You are looking at launching an advertiser-driven, English-language station but the OTA market is disproportionately poor and immigrant (I get programming in over a half dozen languages); the maxim relevant audience for your station now drops to maybe thirty million and there's more bad news. You're going to have to share that thirty million with a crowded field of competitors. A major market will have dozens of OTA channels including multiple PBS channels, This, ME, Antenna, Bounce, RTV, three ION channels and various independents.

Given Salmon's assumptions about the size and trajectory of this market, there is simply no way NBC or Fox would have gone ahead with these channels. They couldn't possibly recoup their start-up costs before OTA is phased out. Put bluntly, both NBC and Fox are betting against Salmon's position.

Obviously this is not conclusive, but it's a strong piece of evidence and it's consistent with what we've seen elsewhere. It's also consistent with GfK's numbers.

There's more to come on this. There are many aspects to this story and I'll try to get to as many as I can but I've been looking at this for a long time from a lot of different angles and from every angle it looks to me like OTA is a promising technology supporting an innovative and growing industry, serving important economic and social roles.

The technology is doing fine in the marketplace. It's lobbyists who are likely to kill it.

The Me Generation -- re-updated

Blogger apparently really dislikes PDFs so I removed the embed but you can find the original here (you might want to check out some of the other press releases as well).

Here's the subject line:

Me-TV adds seven new affiliates
Classic TV network now clears 89% of the U.S.

At the risk of putting too fine a point on a dead horse, this is consistent with a growing market and a sound business model.

(and at the risk of saying you-know-what, I told you to keep an eye on Weigel)

Normally this sort of thing never works

Matt Yglesias talks about a plan to try and move defined benefit pension funds away from organizations that are trying to defund or remove access to defined benefit pensions.  Generally, you would have thought that the people making money off of these funds would have worked things out for themselves earlier on in the process.  That being said, immediate losses that exceed any possible tax benefit might well work if the problem is that these pension managers are excessively focused on the short term.

At the very least it is odd for teacher to be indirectly funding Students First. 

Felix Salmon vs. Chet Kanojia

It's too late for me to think through and research all of the possible issues with these numbers so I'm going to pass these on without further comment for now.

From Salmon's "Aereo and the death of broadcast TV"

Here's the passage Salmon quotes from from Forbes on Kanojia:

“The real question is a consumer question: Can you rightfully disenfranchise 50 million consumers?” he asked. “Is that what the preferred policy is?”

In the event that the networks did go through with it, he speculated that other programmers would be quick to replace them in the role of public broadcasters. “That spectrum is incredibly valuable. Somebody’s going to take advantage of that,” he said.

Here's Salmon's dismissive response:

The 50 million number, by the way, should not be considered particularly reliable: it’s Aereo’s guess as to the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. (Maybe they have a hut somewhere with an old rabbit-ear TV in it.)

Here's a comment to Salmon's blog:

“The 50 million number .. is the number of people who ever watch free-to-air TV, even if they mainly watch cable or satellite. ” No! That is the number of people who rely exclusively on over-the-air TV without any cable or satellite. http://www.tvnewscheck.com/article/60230 /us-otaonly-tv-viewing-hits-178-of-hhs Also, far from being on the decline, this is actually one of the fastest growing segments of the market. I think it may have something to do with the digital switch and the accompanying radical improvement in visual quality of OTA TV. Exclusive OTA viewer estimates go from 42M in 2010, to 46M in 2011, to 54M in 2012. The reports of the death of bunny ears have been greatly exaggerated. But yes, it is true that OTA-only viewers rank low on the amount of political clout. They are disproportionally young adults and minorities.

And here's what you get when you follow the link:

According to new research by GfK Media, the number of Americans now relying solely on over-the-air (OTA) television reception increased to almost 54 million, up from 46 million just a year ago. The recently completed survey also found that the demographics of broadcast-only households skew towards younger adults, minorities and lower-income families.

The 2012 Ownership Survey and Trend Report, part of The Home Technology Monitor research series, found that 17.8% of all U.S. households with TVs use over-the-air signals to watch TV programming; this compares with 15.0% of homes reported as broadcast-only last year. Overall, GfK Media estimates that more than 20.7 million households representing 53.8 million consumers receive television exclusively through broadcast signals.

I will be posting some arguments that some of the activity we've seen (see the terrestrial superstations post) support Kanojia over Salmon but those come from a completely different direction. I'll take another look at these numbers in the morning.

Terrestrial Superstations

Normally, I have to work hard to find something to criticize in a Felix Salmon post. With this one, I'm having to work hard to lay the groundwork so I can spell out all of the problems.

When US television went digital, the new platform didn't just allow you to get HD video over a set of rabbit ears, it also allowed TV stations to broadcast multiple subchannels. This has created all sorts of interesting changes in the television landscape (for example, your PBS station is now probably putting out four times the programming). One area of particular relevance to this discussion is the appearance of general interest stations created specifically for the new technology.

The idea of using digital subchannels to launch a TBS style superstation seems to have originated with Weigel Broadcasting, a well-respected regional player noted at the time for being Chicago's last independent television broadcaster. (Both Weigel and Chicago figure prominently in this story.)

Weigel's ThisTV (a partnership with MGM) was up and broadcasting the day American television went digital. Here's what I said about the concept a couple of years ago.

ThisTV has caught on to the fact that the most interesting films are often on the far ends of the spectrum and has responded with a wonderful mixture of art house and grind house. Among the former, you can see films like Persona, the Music Lovers and Paths of Glory. Among the latter you'll find American International quickies and action pictures with titles like Pray for Death. You can even find films that fit into both categories like Corman's Poe films or Milius' Dillinger.

Of course, the other great insight was that movies on the far end of the spectrum tend to be cheaper.

I've written a great deal about Weigel and I have a lot more on the to-do pile. The company is one of my favorite examples of a well-run business but for the purposes of this story, the pertinent factors are: Weigel is an innovative with a good track record; it moves as decisively as any company I've ever seen; it is the most important player in the digital television landscape (as you'll see later).

Skip forward a couple of years and the follow-the-data approach starts to get interesting. The company with the most complete information (Weigel, obviously) announces another, more ambitious superstation called METV, a classic TV channel built around old but prestigious shows like Mary Tyler Moore, Columbo and the Twilight Zone (making very limited use of block programming to allow airing of fifty different programs a week) and promoted a surprising elaborate campaign. In-character station ads featured Betty White as Sue Ann Niven, Ed Asner as Lou Grant, Carl Reiner as Alan Brady and Bob Newhart as Bob Hartley.

The company that arguably had the second best information and experience was Weigel's long-time competitor, the Tribune Company's WGN. Tribune had data from its stations (including KTLA which carried ThisTV in the Los Angeles market), experience with one of the first and most successful cable superstations and finally the inevitable back channel communication you would expect from Chicago's famed television community. It is not a coincidence that Tribune launched its terrestrial superstation, AntennaTV about the same time METV went on the air.

After LA and New York, the two most important television towns are Chicago and Atlanta so it's not surprising that the next terrestrial superstation came from Atlanta. A few months after the launch of AntennaTV, Andrew Young and Martin Luther King III founded BounceTV as an over-the-air alternative to BET.

This is a good place to stop and note something interesting about all of these terrestrial superstations. Neither ThisTV, METV, BounceTV nor AntennaTV have regularly scheduled infomercials. This is a business model built on program driven advertising and we are going on five years of data that seems to say that it works.

2013 continues the trend of more investment on terrestrial television by bigger players. A few months ago NBCUniversal unveiled COZITV. COZI is the only terrestrial superstation with infomercials but, like Bounce, it also has original programming [link added].

And now there's this:

Movies! is an upcoming American digital multicast television network, that will feature an emphasis in its programming on feature films. The network will be a joint venture between Chicago-based Weigel Broadcasting and the Fox Entertainment Group subsidiary of News Corporation, and will be available in the United States through the digital subchannels of broadcast television stations, as well as on select cable systems. Movies! will broadcast 24 hours a day in 480i widescreen standard definition.

I have limited this post to commercial, general interest, English language stations created specifically for digital broadcasting. That's a small sliver of what's available over the air but it does, pretty much conclusively, show that the model is viable and that, unlike so many recent tech and media fads, the more data comes in, the more interested serious players get.

Unemployment and causation

Megan McArdle:

On Monday, I wrote about long-term unemployment, and why it's a large enough problem that the federal government should be trying to do something about it. I got pushback along two lines: 1. Extended unemployment benefits probably caused the unemployment, by giving people an incentive to stay home instead of finding a job.  2. Regulations and taxes are making it too hard to hire people. I am sympathetic to the basics of each argument. (. . .)

However, I don't see these as viable explanaitons for the current employment situation. Regulations and taxes did not suddenly spike in the fourth quarter of 2008, but unemployment did. And while Obamacare certainly imposes taxes and uncertainty on businesses, I don't think that it, by itself, can have driven the natural rate of unemployment up by 3-5 percentage points. (. . .) 

But six months is the current length of standard unemployment benefits. And if standard unemployment benefits cause very high long-term unemployment rates, how come they only started doing so in 2009? To sum up, unemployment benefits do cause some moral hazard, and taxes and regulation probably do somewhat depress the natural rate of employment in our country. But neither are an adequate explanation for the truly devastating conditions in the current labor market. Which means that--as much as I would love it to be true--we can't fix them by slashing taxes, regulation, and government spending.

This is a very insightful post from a pundit who is definitely not sympathetic to the role of government intervention in the economy.  But Megan very nicely hits at the core problem with a government induced recession story -- what changed in 2008 that was not true in the decade before?

Now you can argue about a financial collapse followed by central banks being uncertain about the best strategy to deal with interest rates that are nearing the zero lower bound that they can typically have.  It's possible that this narrative could explain some of these issues but it isn't an explanation that attaches blame to typical conservative bugbears.

So I think it is good to push back on these narratives.  They may have some role in particular circumstances, but are clearly insufficient on their own.  In fact, the unemployment insurance piece has the possibility of being counter-productive -- denying income to the very needy and reducing what they spend thus leading to even more economic contraction.  When the number of unemployed workers per job opening falls to the 2006/2007 level, that might be a good time to look at the long term wisdom of the program. 

So kudos to Megan for a very good post. 

Add Fox to the list of companies that think Felix Salmon is wrong about terrestrial television

[Corrected]

Much more on this soon, but soon after reading this uncharacteristically misinformed post by Felix Salmon on the dismal prospects of broadcast television I came across this link on Weigel Broadcasting's Wikipedia page:

Movies! is an upcoming American digital multicast television network, that will feature an emphasis in its programming on feature films. The network will be a joint venture between Chicago-based Weigel Broadcasting and the Fox Entertainment Group subsidiary of News Corporation, and will be available in the United States through the digital subchannels of broadcast television stations, as well as on select cable systems. Movies! will broadcast 24 hours a day in 480i widescreen standard definition.

So we have Fox, NBCUniversal, Tribune, BounceTV, PBS and others betting (in some cases betting big) that digital broadcasting is growing, not dying.

I have tremendous respect for Salmon but he's out of his area of expertise here and he's been sucked up into a narrative that has an army of flacks and lobbyists behind it but which does not have the evidence to back it up.

More on that later, in the meantime, check out this post by Rajiv Sethi for another take on the question.

[I originally wrote BET when I should have written BounceTV, the terrestrial superstation founded by Andrew Young and Martin Luther King III]

Free TV blogging -- results may vary

[Update: you really should check out the comments at the end of this post.]

It's always a bit of a shock when you're reminded that people do occasionally read your blog and even more of a shock when someone actually follows your suggestions. That was the case recently when, in response to a post on free TV, Andrew Gelman tried plugging an antenna into his set and couldn't get much of anything.

As a proponent of free TV and a reasonably honest  blogger, this forces me to confront an uncomfortable fact: some people need cable or satellite to watch live TV.

There are some caveats (you might improve your results with an amplified antenna; you can almost certainly do better with an external one) but there's no way to get around the fact that people who live in certain areas are going to get crappy results from terrestrial television.

NYC may be one of those areas. Most of my experience with over the air television has been in LA, a city of short buildings and tall mountains, obviously not the best proxy for the big apple. I believe NYC was one of the leaders in cable back in the Seventies and Eighties. I had assumed that the reason was density and infrastructure, but it could also have been due to the difficulty TV signals had making it through that famous New York City skyline.

But, even though it may not pay off, I still recommend testing out a set of rabbit ears if you haven't already, partially because you might find that what you can get for free is better than what you're paying thirty a month for, but mainly because over-the-air television may pay its biggest dividends for the people who don't use it.

In a healthy, competitive market, suppliers are under constant pressure to provide the best possible product at the the cheapest price, innovators find fertile ground and forces tend to align to keep people honest. In television, the market is anything but healthy. Content production is dominated by a small number of producers and channeled through a tiny handful of providers. Competition is severely limited.

As long as awareness of terrestrial television remains low, a Time Warner can overcharge for low quality product and force customers to buy bundles of mostly unwanted channels, safe in the knowledge that most people won't go to the trouble of switching as long as the TV packages provided by Dish, Direct and the local phone company also suck.

Free TV throws a huge monkey wrench in that business model. If a significant portion of of cable customers know that they can get fifty to a hundred digital channels for free, "We suck less than ATT" no longer works as a marketing slogan.

What if you're one of those people who can't get those fifty to a hundred channels? That might be the best part, because your cable company doesn't know who's in what group and even they did, it would be difficult, both in terms of implementation and PR, to set up a pricing system that selectively gouged people who got bad reception. The result is that no customer gets screwed.

And after all, that's how efficient markets are supposed to work.

Note to journalists -- you don't have to believe everything they tell you (business model edition)

File this one with the flack-to-hack series, that part of the decline in journalism that can be attributed to increased willingness to print whatever the PR person hands you.

You've probably heard about this:

While the world has no shortage of pie-in-the-sky renderings for floating cities, a new proposal by Silicon Valley start-up Blueseed is perhaps the first to invoke entrepreneurial spirit and the American Dream in its soapbox pitch. Looking for a way to give foreign-born tech entrepreneurs access to the enterprising atmosphere of Silicon Valley, the founders of Blueseed are hoping to revamp an old cruise ship to create a community, of sorts, 12 nautical miles off California's coast in international waters, so international techies could live within commuting distance without a work visa. With a simple business tourism visa, denizens of the vessel could take a 30-minute boat ride to the mainland once or twice a week. Of course, creating an inhabitable community on water—one that people would live on six months or a year at a time—requires some interior design finagling, including incorporating lots of light and open space.

The big issues here have to do with labor, immigration and industrial policy, but this also provides a small but useful example of gee-whiz, ddulite journalism. I will give the writer, Amy Schellenbaum, credit for using the phrase 'pie-in-the-sky' in her opening sentence but other than the occasional qualifier, that's pretty much the last trace of incredulity you'll find.

For example:

Blueseed still needs $18M (of the $27M required, total) before any building can take place, but if this actually gets rolling, Mart imagines he'll charge organizations anywhere between $1,200 a month to house their employees in a shared cabin to $3,000 a month per person. Just what everyone wants to do: shack up with their coworkers!

I looked at a few cruise ships on Wikipedia and where cost was given, they were all in the hundreds of millions (and sometimes much higher). Even done on the cheap with an old ship, between buying the damned thing and doing the kind of major refit described here, we've got to be talking nine figures.

Now, I have to admit, my experience with start-ups is very limited, so it's very likely that I'm missing some important aspect of funding in this casse. Perhaps this proposal is more credible than it looks, but as presented here, these numbers seem awfully screwy, and it's worrisome that the reporter either doesn't feel the need to explain the screwiness or, worse yet, doesn't even notice it.

Quote of the day

From Norman Geisler’s book on Thomas Aquinas via John D. Cook:

No, I do not agree with everything he [Aquinas] ever wrote. On the other hand, neither do I agree with everything I ever wrote.