Gazing into future for TV broadcasters

TV isn’t dead, but it faces intense competition for our leisure time. As the National Association of Broadcasters convenes in Las Vegas this week for its annual tradeshow, broadcasters must consider how consumers are viewing content, most notably on their mobile devices, and the implications of this viewing shift on our wireless spectrum capacity.

Once relied on solely for business functions such as organizing contacts and schedules, smartphones and tablets are now just as likely to be used to stream entertainment, a practice that requires vast amounts of wireless spectrum. Unfortunately, this spectrum is in short supply. Wireless carriers are desperately looking for ways to increase the amount of spectrum they can use to transfer content — apps, games and videos — to wireless devices. At the same time, broadcasters, the biggest users of spectrum, need less than ever before, but they refuse to share what they have.

The number of American homes that watch over-the-air programming is plummeting. In 1986, more than half of American homes relied on free, over-the-air broadcasting. Today, that number is closer to 7 percent, according to most research. This means more than 90 percent of Americans rely on cable, satellite and fiber — not spectrum — for their television entertainment. And, according to a study conducted by the Consumer Electronics Association, TV viewing is no longer a single-device experience: more than four in 10 people who own smartphones or tablets regularly use their devices to watch TV.

Recognizing both the wireless industry’s growing need for spectrum and the corresponding drop in broadcasting reliance, President Barack Obama and Congress passed a law authorizing the Federal Communications Commission to conduct auctions of voluntarily relinquished broadcast spectrum. Broadcasters also are encouraged to work together in individual markets to share their TV broadcast spectrum in order to maximize efficiencies. Recently, two Los Angeles TV stations announced that they will attempt to share spectrum, and more partnerships are certain to follow.

Sadly, the broadcasters’ lobbying arm, the National Association of Broadcasters, has done everything possible to discourage spectrum auctions and even spectrum sharing. In 2012, NAB President and CEO Gordon Smith accused the telecom industry of trying to muscle broadcasters out of access to airwaves. “They want us out of this game,” Smith said at NAB’s annual convention, adding, “We can’t let down our guard.” More recently, NAB spokesman Dennis Wharton pooh-poohed the Los Angeles spectrum-sharing proposal, saying it raises technical and business issues.

The NAB’s main interest is to preserve the status quo. Until the 1970s, broadcasters owned 100 percent of the market share of eyeballs on home screens. With notable exceptions such as Hubbard, broadcasters missed the migration to cable, the introduction of satellite, the opportunities offered by the Internet and the viewing shift to tablets and smartphone screens. Now they’re trying to distort the measurements to make what they have left seem bigger. Recently, NAB successfully pressured Nielsen into dropping its plan to include broadband-only homes in their measurements of local TV market samples. Nielsen was simply trying to be accurate in describing how many people watch programming. The NAB’s successful but sad attempt inflates over-the-air viewership statistics.

The market for over-the-air television viewing is disappearing. Broadcasters increasingly have no rational argument for holding the spectrum loaned to them in eight-year licenses by the federal government. So here are my suggestions for broadcasters, if they want to remain relevant:

— Embrace new media and become part of it. Instead of fighting Aereo, recognize it will expand your audience and business, which means more advertising dollars.

— Exploit the fact that you own local eyeballs. Cable and satellite are strapped with “must carry” laws that preserve your viewers, which means you dominate the viewing experience. Take advantage of this. Become part of your communities. Drive your viewers to your websites. Create daily Internet deals with your advertisers.

— Do things differently. Not all news shows must start on the half hour and run for 30 minutes. Give locals 15 minutes of fame by inserting them in your newscasts. Experiment. Think outside the box and you will be more competitive with emerging cable providers, as well as Netflix, Showtime and other creative products.

— Try a different approach to government. Instead of fighting to preserve your status, fight for deregulation. You are losing against cable because you have to follow more rules, yet the distinction between cable and broadcasting is increasingly meaningless. Instead of fighting it, embrace technology and go after the rules.

— Partner with disruptive technologies such as Aereo and Dish’s Hopper. See what kind of deals you can cut. Rather than mandating cable carriage via lobbying, embrace cable as a partner.

— Cut deals to combine operations in local areas. Spectrum sharing will make money through auctions and will reduce your operational costs.

Broadcasting doesn’t have to be frozen in the 1960s. The NAB should make this week all about envisioning the future of broadcasting, not longing for the past. Spectrum auctions give broadcasters a lifeline, if they choose to innovate. The NAB must embrace change and become part of the technology revolution.

Gary Shapiro is president and CEO of the Consumer Electronics Association and author of The New York Times best-selling books “Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses” and “The Comeback: How Innovation Will Restore the American Dream.”