Backchannelmedia

Jack Myers Media Business Report, June 1, 2006

Gates to Broadcasters: "It's Gone;" Google to Broadcasters: We Agree!; Plus Univision Wins NY Ratings Race

Microsoft chairman Bill Gates has a clear vision of broadcast television's future. "It's gone," he told attendees at the exclusive invitation-only D-4: All Things Digital conference hosted by The Wall Street Journal's Walter Mossberg and Kara Swisher.

"The biggest thing with video, is taking all of television and putting it on the Internet, creating a video experience that blows away the broadcast model," Gates commented. He pointed out that both Verizon and AT&T are developing models that support that transition, arguing "there is no dividing line between TV and the Internet. We're finally getting to the point where richness and bandwidth are available." Gates, smiling, commented "broadcast was a hack. It's gone. The marketplace will demand customization. The segment of a news show that you don't care about; why is it there? There's software that recognizes highlights of a ballgame, providing [viewers with] value added on top of video. Broadcast will be limited to things that are most popular."

Responding to questions asked by Swisher and Mossberg, Gates said "affiliate stations and systems are artifacts of the broadcast world. There's a difference between what technology enables and what historic business models do."

Commenting on the YouTube and user-generated content phenomenon, Gates asked "how do you make money and how about copyright violations? There is no clear guidance for rights," he said. "How do we strike a balance so creative people get paid yet it's easy to use?"

With an estimated 500 guests, D-4 is considered a must attend event for the "digerati." Speakers include Disney's Bob Iger, Sony chairman Sir Howard Stringer, Kodak CEO Antonio Perez, Comcast's Steve Burke, Yahoo! chairman Terry Semel, producer Barry Sonnenfeld, Martha Stewart Living Omnimedia president Susan Lyne, former Vice President Al Gore, and Discovery Communications CEO Judith McHale. In the audience are Martha Stewart, Technorati chairman Peter Hirshberg, a who's who of the venture capital community, Google VP Marissa Mayer, YouTube co-founder Chad Hurley, Dow Jones CEO Rich Zinnino, writers from major business publications, Microsoft corporate VP Joanne Bradford, New York Stock Exchange EVP Noreen Culhane, Real Networks founder Rob Glazer, senior executives from Verizon and Qualcomm, and HP CMO Cathy Lyons.

Among the 500 guests here in San Diego, not one is associated with an advertising agency, media agency or interactive media agency. The advertising community is a total no-show. The executives responsible for leading marketers into the digital age (and the media sellers that hope to have a prominent place in that age) have no presence or representation at D-4. Similarly, the agency community had no representatives at the famed annual TED Conference in February or at Richard Wurman's Entertainment Gathering in Los Angeles earlier this year (except for R/GA's Robert Greenberg).

Google Also Questions Traditional TV Models

In a further attack on traditional broadcast business models, Backchannelmedia's DRTV Connected reports Google Chief executive Eric Schmidt told London's Sunday Business Technology Editor Tony Glover that "Google is planning a new version of its search engine designed for TV screens that will rival traditional broadcasting.

"At the most people currently have access to only around 500 television channels, said CEO Eric Schmidt. They should have access to everything that is where we are heading. As they prepare to make the move from the PC to the television, internet service providers and broadcasters are trying to develop electronic program guides (EPGs) that will enable viewers with a broadband internet connection to choose from a far wider range of video and film entertainment than is currently available. And Google believes it can offer a world-beating EPG.

"You have to look at what an electronic program guide is. It is just a search engine and that is what Google does best, said Schmidt. Some internet service providers such as [British Telecom] intend to limit viewing choice to content suppliers they have selected. But IT giants such as Microsoft and Intel are determined to harness the full power of the internet with its virtually unlimited choice into every living room.

"Attaching a Microsoft Media Center player or an Xbox console will enable consumers to use a digital television to browse the internet for whatever video content they wish. This will enable viewers to use Google to realize Schmidt's vision of allowing viewers to use a television-enabled Google search engine to watch any film or program they want via the Internet.

"There has been industry skepticism as to whether the Internet will be able to sustain the volume of data needed to allow television audiences to stream live video into their living rooms en masse. But [Google co-founder Larry] Page, told The Business: People are inventive and the history of the internet proves that it can be adapted to carry whatever level of data is required.

"Page is involved in a project being carried out in Google's U.S. research and development labs that will revolutionize television advertising. Paid search, the paid ad links that appear to the right of all Google searches, is the revenue generator that made Google the fastest growing company on NASDAQ.

"Page believes that if the company is to continue to be successful in the era of Internet television, it must develop a new form of paid search. Schmidt admitted to The Business that the company has yet to develop the right format but added that Page is trialing new prototypes on an almost weekly basis."

Univision's NY Station Wins Total Day Ratings for Adults 18 to 49

Sunday May 28 is the first time since the inception of New York LPM ratings more than two years ago that Univision has won the New York total day ratings race in any key audience category. For the first time ever in New York TV ratings history, Spanish-language Univision affiliate Channel 41 (WXTV), has won New York's total day ratings race according to Nielsen Station Index Local People Meter ratings. WXTV won two, key audience categories: persons aged 18 to 34 and persons aged 18 to 49.