You are the Harbinger of Death, Bob Garfield
For our piece this week on the future of the major television networks (hint: think Rome before the fall or T-Rex before the giant meteor), we had the pleasure of speaking to Mr. Bob Garfield. For those who don’t know the name, Garfield is the host of NPR’s “On the Media" and a columnist for Advertising Age. He’s also the author of “The Chaos Scenario,” a goddamn terrifying book about the way new media has destroyed the old advertising models and is threatening to annihilate companies that don’t adapt quickly to the new order. Garfield spends a good chunk of the book—which should be required reading for anyone working in media, actors included—musing on the fate of network television, which since its inception has had a symbiotic (or is it codependent?) relationship with advertising. Assuming that you like gallows humor as much as we do, we figured we’d post some excerpts for your enjoyment. But be warned: What follows is not for the faint of heart or stomach. Abandon hope, all ye who enter here.
Well, not because I know anything. I’m not an economist. I’ve never worked on the business side of the media business. But I do have eyes, and what I can see is a business built on selling audience to advertisers losing audience, losing the ability to charge for the audience, and losing potential customers more day by day by day. They are in the middle of a vicious cycle, and it is a spiraling vortex of ruin.
When you look at Sumner Redstone selling off a bunch of his CBS stock, do you see that and go, “Ah-ha!”?
It’s the first evidence since Sumner Redstone spun off CBS from Viacom that anyone connected with the organization is living in a world of reality. Because what they’ve been doing in response to the forces of chaos, at least until this summer, is not only charging their customers more per eyeball, but then going to Wall Street and bragging about that, even as their audience is running for the exits. Their behavior is just so astonishingly tone-deaf and arrogant that it’s just hard to believe that we’re living in the same reality.
Is it fair to say that the old network model of 30-second ads is pretty much dead?
Yes. They are still profitable, maybe for another three or four hours. Not only is their audience fleeing, but they have already reached the point where they do not fetch for any given program the critical mass of advertising revenue to continue to produce that program. That’s why, on NBC for example, Jay Leno is on in primetime. That’s why “The Biggest Loser” runs nine days a week. They literally cannot afford to produce the programming that generates audience. Hence the vicious circle.
Is the Leno experiment a failure?
They spent many months trying to lower our expectations, only to under-deliver. Leno’s ratings are terrible, which has affected the ratings for Conan and whatever comes afterwards. It has affected the ratings of the local news broadcasts that he leads into, harming the affiliates. What they’ve gained is lower cost, and they may even be making a better margin than they were before, but again at the expense of accelerating the process of their own doom. You cannot cut yourself into growth.
The affiliates have not been happy, but how much influence can they really exercise over NBC?
The affiliates have problems of their own, and they don’t exercise much influence anymore. They barely get paid for running the network programming, and their businesses are collapsing beneath their feet as well. But for the moment the networks depend on the affiliates to distribute their product, and its doing nobody any good for them to be so deaf to the affiliates’ concerns. It’s almost as if every single thing the networks did in response to the digital revolution was designed to accelerate their failure. It’s really an awesome thing to witness. It’s like standing 30 feet from shore without a rope, witnessing a drowning.
So you would be someone who is against the notion of networks giving their programming away for free without significant advertising attached.
Hulu’s swell, but it doesn’t solve any problems. To me it’s an act of desperation. I guess they thought that they would first get some revenue where before there was none, and I guess they thought they would promote their actual broadcast programming to send people back to their TV machines to watch the stuff in real time over the air. But it hasn’t done much. What it has done is undermine them for their next play, which is to become a cable channel, to leave the ridiculously inefficient world of broadcast and move over to cable. Unfortunately, they’re just helping to sow the seeds of cable’s destruction, because what consumers will increasingly do is cancel their cable TV service, keep the coax in their house and get the same programming served to them free over broadband. In other words, less revenue for everybody. Again, I didn’t go to business school, but I think less revenue for everybody is not a path to growth.
Why not just make the switch from broadcast to cable now?
There are a couple reasons. One is that there are a lot of affiliate contracts to be dealt with. Secondly, these are still publicly held companies, and the kind of write-down that they would have to take is probably more than Wall Street could stomach, because essentially you’re turning off your business for a period of time. You’re exposing yourself to all sorts of liabilities, litigation, utter loss of audience for a period of time. It’s probably the right move, and you could do it if you were owned by a private equity company like Carlyle. But if you have to go to Wall Street and explain why on Dec. 31 you essentially turned your revenues off and opened up 900 lawsuits, you’ve got some ’splainin to do.
Well then how is it a possible solution?
I didn’t call it “The Chaos Scenario” for nothing. It’s just one of those crazy chicken-and-egg propositions. How do you repair the engines in mid-air? There are no easy answers to this question. You know that scene in “Butch Cassidy” when they jump from the cliff? That’s what Jeff Zucker has to do, and it’s scary.
You have a very special relationship with Comcast. [Garfield is the founder of the Web site Comcastmustdie.com.] What was your reaction when you saw that Comcast was sniffing around NBC Universal?
You mean when I stopped laughing? There is nothing I could do to harm Comcast more than what they’re fixing to do to themselves. Universal Pictures is the sirens in “The Odyssey,” and if you veer toward them, you will sail your ship into the rocks. No one has made a penny from Universal Pictures. In fact, businesses have been destroyed by Universal Pictures, and NBC is just another poison pill in the package. What could they possibly be thinking? Do they think there are going to be synergies? Mr. Roberts [Comcast CEO Brian Roberts], there is no such thing as synergy! Nobody has ever monetized these supposed synergies. I mean, he’s going to be the next Jerry Levin. That what he’s going to be.
We just saw General Motors rescued. We saw the bank bailouts. Are people going to really allow these television networks to cease to exist?
It’s funny, when I first started reporting on this five or six years ago, I was talking to [CBS executive] Dave Poltrack at CBS, and that was exactly the point he raised and that many others have raised since: “Do you know what you’re saying? You’re talking about the end of CBS. This is far more than just a media story. This is far more than just an economic story. It gets to our very way of life.” He was making that assertion as a reason for why none of what I imagine could take place. “Too big and important to fail.” And to that I say I really needed my mom and dad. I loved them, I cherished them, I depended on them—and they’re still dead. There is nothing in the Ten Commandments or in Newton’s laws of physics that dictates that we shall have free or subsidized media underwritten by mass marketers. And yes, I do not use the words “digital revolution” lightly. It’s revolutionary. I don’t know if it’s going to be catastrophic, but it is certainly going to be very, very severe—to the economies of two gigantic industries, to our society, to our democracy, to our very way of life. To all of the above.
--Daniel Holloway
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