Free TV blogging -- Why Weigel Broadcasting may be the best business story that no one's covering -- part I

[I should start with the disclaimer that all of the information I have about Weigel comes from two sources: Wikipedia and way too many hours of watching television. It's entirely possible that a competent journalist could discover that the truth here is something entirely different, but if competent journalists were paying attention I wouldn't be writing these posts.]

Though the improvement in picture and sound got most of the attention, another aspect of the transition to terrestrial digital was arguably more important, particularly for broadcasters: under the new technology, each station could broadcast multiple subchannels. The situation was analogous to the TV landscape thirty years earlier when cable and satellite stations were exploding on the scene. It's not surprising that someone would try to create the broadcast equivalent of superstations like TBS. What is surprising is who was able to get a channel up and running before any of the competitors were out of the gate.

The name of the channel was ThisTV. It was produced by a regional broadcasting called Weigel, best known for operating the last independent station in Chicago and being the home of the cult favorite Svengoolie -- last of old time horror hosts. Weigel had a content deal with MGM which was not nearly as impressive as it sounds -- Turner had bought out the classic MGM library years earlier -- but MGM still had a lot of films including the catalog of American International, the studio responsible for virtually every drive in movie you can think of from the late Fifties through the early Seventies.

Access to all those AIP films probably had a lot to do with the unique ThisTV brand. Here's how I summed it up earlier:

Weigel are the people behind ThisTV and the exceptionally good retro station MeTV (more on that later). ThisTV is basically a poor man's TCM. It can't compete with Turner's movie channel in terms of library and budget -- no one can (if my cable company hadn't bumped TCM to a more expensive tier I never would have dropped the service), but it manages to do a lot with limited resources using imagination and personality. As a movie channel, it consistently beats the hell out of AMC.

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.

If I ran a TV station, I would definitely combine Bergman and ninjas. I would not, however, run Mario Bava's feature length pulp magazine cover, Planet of the Vampires from twelve till two. Some of us have to get up in the morning.

This mix was in place from the very beginning. The station officially debuted on November 1, 2008 with Spike Lee's She's Gotta Have It but many stations started carrying it a day earlier to take advantage of a day of cheesy Halloween horror films. It was a formula that made a virtue out of cheapness (rarely seen auteur films and drive-in movies both have the advantage of not costing much) and it produced a format that's been running smoothly with remarkably few adjustments for almost three years.

For a small player to identify a new market, develop a concept, negotiate the necessary deals with a content provider (MGM), line up affiliates, make the countless other arrangements that accompany a major launch and to be up and running with a quality product when the support technology first comes online is an impressive accomplishment. But it gets better.

So far we have a solid business story -- small yet nimble company with some good ideas beats big, well-established competitors into a new market. Not exactly the most original piece of journalism but certainly good enough for the front page of the business section. However the story doesn't stop there. Weigel didn't just beat its big and well-financed competitors; it lapped them. Before the next entrant, Tribune/WGN, was able to get its station, AntennaTV on the air, Weigel managed to launch a second channel, the ambitious classic television station, METV. If this weren't enough, AntennaTV is the only one of the three to look slapped together despite having taken far longer to make it to the air (of course, we have no way of knowing how long it took Tribune to see the opportunity and how long it took them to act on it but either way Weigel looks good by comparison).

To put this in context, at least half of this story takes place after the collapse of '08, a downturn that hit advertiser-based businesses particularly hard. Furthermore, the story occurs in an industry that a large number of lobbyists and at least a few pundits were literally trying to kill. There had even been a New York Times op-ed calling for the government to eliminate over the air television and sell off the spectrum.

One of the great memes of the Great Recession has been that uncertainty paralyzes businesses. Even the possibility of a tax increase or some additional regulation -- both extremely mild by historical standards -- are enough to bring the economy to a standstill, but here's a market filled with unknowns under a credible threat of annihilation and we can still find a company like Weigel moving aggressively to establish dominance of it.

That's the other side of uncertainty. It allows companies to substitute boldness and decisiveness for money and market position and take advantage of opportunities that would otherwise be out of their reach.

[also posted at Observational Epidemiology]

Why I keep going on about rabbit ears

I'm starting a string of posts on this so I thought I'd take a few moments and explain why I think over-the-air TV is worth discussing.

1. I genuinely like the product

I get my television through an antenna on the top of my set and I can't think of a purchase I've been happier with. The picture is DVD quality and I get over a hundred channels, some of them very good, all for free.

2. It provides an excellent service for people who could use something nice

It has always sucked to be poor but in recent years we seemed determined to make it suck worse. Over the air digital television bucks that trend. Anyone with an old TV, a second hand converter box and a set of dollar store rabbit ears can have a source of entertainment, news and education (I get ten PBS channels). That may not seem like much to you but to a lot of people in this country, it can be a major improvement in quality of life.

3. There are other people trying to take that service away

Some would like to sell off the part of the spectrum used for television. Economist Richard Thaler even wrote a New York Times op-ed on the subject, explaining how the sale could solve virtually all of society's ill. Think I'm exaggerating?

Here's a list of national domestic priorities, in no particular order: Stimulate the economy, improve health care, offer fast Internet connections to all of our schools, foster development of advanced technology. Oh, and let’s not forget, we’d better do something about the budget deficit.

Now, suppose that there were a way to deal effectively with all of those things at once, without hurting anyone... I know that this sounds like the second coming of voodoo economics, but bear with me. This proposal involves no magical thinking, just good common sense: By simply reallocating the way we use the radio spectrum now devoted to over-the-air television broadcasting, we can create a bonanza for the government, stimulate the economy and advance all of the other goals listed above. Really.

(I'm tempted to go off on multiple tangents here about how these sales of public land of have a way of going badly for the government and the tax payer, or how the VHF part of the spectrum isn't actually that useful for mobile applications, or how oblivious men like Thaler are to what life is like in the bottom decile, but Rajiv Sethi has already written the definitive rebuttal so I'll just leave it with a link and a recommendation to follow it.)

At the risk of sounding paranoid, I very much doubt that this idea simply popped into Thaler's head. We live in an age subsidized discourse. Whenever you read a news story or opinion piece that seems to come from a lobbyist's desk, you can generally assume that it originally did. I'm not saying that Thaler was paid to hold these opinions -- I'm sure he wasn't -- but I'll bet good money that the experts he relied on were, either directly on indirectly.

There is a huge imbalance of money in this conflict. A number of big and deep-pocketed corporations are gunning for OTA broadcasters. Some would like to carve up the spectrum. Other would just like to get rid of the competition.

4. Competition is good

And over-the-air television plays a vital role in maintaining competition in the world of live TV. If access is limited to cable/phone lines and satellite, the business will always be dominated by a handful of very big and powerful companies and since these companies fall in the middle of the supply chain, we have to worry about both monopolistic and monopsonistic effects.

The industry currently runs on the up-sell model: get people in the door with a twenty or thirty dollar a month plan (sometimes helped along with some opaque pricing), then make the package crappy enough to get people to move up to a more expensive tier. OTA television presents a potentially deadly threat to that model because, in most markets, OTA is actually better than cable's basic package. It has more channels, better content and less compression (this may be less applicable to satellite). Cable has been able to ignore this threat up until now because most consumers are unaware of what they can get for free, but if word gets out cable companies will have to start giving customers considerably more value for their money.

5. There's a story here

And it has been woefully under-reported. New technology. New markets. Small but smart players like Weigel Broadcasting coming up with innovative business models and easily lapping major media companies. For me that's way more interesting than reading about Facebook throwing money at some business problem.

(originally posted at Observational Epidemiology)

Paul Krugman needs to watch more TV

From today's Conscience of a Liberal:

Think of it this way: there was a time when you could say that the right had a model of how the economy worked. A silly model, yes, since it depended on implausibly large effects of marginal tax rates on incentives. Still, supply-side economics had a point of sorts.

But can you discern any model in what Malpass wrote, or for that matter in almost anything on the WSJ editorial page? I can’t. All I see is a bunch of prejudices, strung together with some vaguely economistic-sounding phrases, something like someone talking gibberish that sort of sounds like Swedish. In the world according to the WSJ, low taxes are good (unless the people involved are low income lucky duckies), regulation bad, low inflation good, low interest rates bad, strong dollar good — and don’t ask why.

I can't believe a Nobel Prize-winning economist would get this wrong. It's not gibberish; it's double-talk, and this is how it's done:



Co-posted at Observational Epidemiology.

See update here.

Free TV blogging -- ThisTV's Art house/Grind House mix

I always thought it would be fun to run a TV station and yet I've noticed that the people who do seldom seem to enjoy themselves. Most channels reek of that sterile kind of marketing you get when business people try to pitch a product they neither enjoy nor understand.

There are exceptions, of course. Ted Turner had a good time and I get the impression that the people at Weigel Broadcasting are having fun as well as they carve out a mini Turner-style empire in the new world of digital broadcast TV.

Weigel are the people behind ThisTV and the exceptionally good retro station MeTV (more on that later). ThisTV is basically a poor man's TCM. It can't compete with Turner's movie channel in terms of library and budget -- no one can (if my cable company hadn't bumped TCM to a more expensive tier I never would have dropped the service), but it manages to do a lot with limited resources using imagination and personality. As a movie channel, it consistently beats the hell out of AMC.

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.

If I ran a TV station, I would definitely combine Bergman and ninjas. I would not, however, run Mario Bava's faeture length pulp magazine cover, Planet of the Vampires from twelve till two. Some of us have to get up in the morning.

Great moments in marketing -- Charlie Sheen edition

About a week ago, while waiting to check out at a local electronics store, I came across these odd pouches in the snack section.

They looked a bit like IV bags but closer examination revealed they were energy shots accompanied with inexplicably bizarre copy.

It was only after consulting Google did I discover that phrases like "Adonis DNA," "truth torpedos" and "rockstar from Mars" were taken from Charlie Sheen rants.




Further research revealed that the product went out on the shelves more than a month ago. Say what you will about American ingenuity, I'd like to see another country go from embarrassing public spectacle to worthless consumer product this quickly.

The asshole plot

You may be familiar with James Blish's idiot plot, generally defined as a plot that is only possible if the protagonist is an idiot (in some variants, the whole cast has to consist of idiots).

I'd like to add an even more common genre, the asshole plot. In these stories, most or all of the conflict comes from a major character who makes things difficult for the protagonist by being an asshole for no apparent reason other than to make things easy for the writer.

Television, with its constant need for story arcs, is rife with asshole plots. Recent examples include Jayne Atkinson's Erin Strauss on Criminal Minds whose campaign to remove Thomas Gibson's character never made any any sense in the context of the story, or Chi McBride's Edward Vogler on House.

But the best example I've seen in a long time comes from CBS's soon to be late Chaos. In the episode "Song of the North," a congressman, played by Currie Graham holds a press conference revealing a secret mission in North Korea. He knows that this information is top secret. He knows that making it public will endanger American lives. He should know he's risking his political career if something does go wrong. The only reason for him to screw up the mission was that the writer couldn't think of anything else.