This is Gregg Skall, Womble Carlyle law firm, and Don Hicks, President of the Missouri Broadcasters Association. We came out to Telecom 05 in Las Vegas, a telephone industry convention, because so much of this convention is devoted to IPVideo delivery and the entry of telephone voice providers into the broadband "Triple Play" or "Quadruple Play" of Voice, Data, Video and Wireless delivery. From a cursory look at the schedule for this conference it becomes clear that telephone sees video delivery, and most likely Video on Demand (VOD) as their next big market. The question is: what is the role for the local broadcaster in this future, as either a wireless delivery vehicle for digital video content to the consumer via multicasting or IP data stream, or as a content provider to other delivery modes, such as telephone or cable company fiber to the home (FTTH) technology.

Sunday's sessions had two relevant sessions. In On Demand Success Stories several companies presented scenarios showing that On Demand works in an IP environment.

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What seems clear is that the coming model is to be able to see what you want when you want it. Also, anything that is local tends to work well in VOD and research is showing that brands that are successful in broadcast are also the most successful in VOD. Interestingly, Jim Riley of TVN said that all the TV networks, all the studios and the cable nets are currently involved in moving IPTV. In a session called On Demand Success Stories, most panelists agreed that "free" on demand worked very well, usually warming viewers to later related fee based VOD programs. Riley said the role for local broadcasters is likely to emerge as content. Russell Zack, Cauldron Solutions said that On-demand becomes entirely consumer-centric, what they want when they want redefines the immediacy of TV. It fragments audience over a greater period of time, but it does grow the aggregate audience.

Most speakers however, had not yet considered digital television's capacity for IP digital streaming or multicast delivery. It is clear that several companies have been created to handle the digital conversion, transport, delivery and billing system services to support VOD for content providers.

The question from broadcasters is often, what will we do for content to fill all these channels. In another Sunday session, "The Consumer as Producer" one possible answer seemed to appear. Content aggregators are forming to gather interesting programming from amateurs and professionals that seem to have an audience on a pay VOD basis. They have developed a platform that includes a common search engine to find the programs that viewer wants to watch and pay for.

VOD is popular. One speaker noted that VOD assisted in a 25% NEW subscriber growth rate for average cable systems. Nickelodeon experienced a 12+% take rate of its viewers. Another speaker noted a system took 200,000 orders from 1.2 M customers over the last 6 mos., 20% of its customer base VOD customers. The VOD customer is comfortable with impulse purchases and responds positively to targeted, personalized promotions.

Skall/Hicks Observations:
Are TV broadcasters asleep at the switch? Cable and now, telephone are moving far out in front, are lining up the program creators like television networks and Hollywood studios, and now the newer creative content providers. One of the trade magazines here quotes Craig Moffett of Bernstein Research, "In the future, you're going to interact with your TV set, like you do with Google." The networks get it, do the station owners? With its coming switch to digital, and the enormous capacity for content delivery over multicast streams and IP delivered digital streams in the bandwidth, TV needs to be out in front, gathering content, creating local content and claiming a spot at the VOD table. TV has the advantage of being wireless. As video becomes mobile, the video iPod and other devices become ubiquitous; TV needs a preeminent role. Radio too, should be looking hard here. If local sells so well, get those popular morning teams and other programming that only radio can do and create video blogs and IP delivery vehicles for your already committed listeners. Radio too will have the capacity for digital video streams and should be looking for those technologies.