Internal Affair

            Throughout this blog I have maintained a close focus on the entertainment industry and the technology related to the advancement of the industry. Additionally, I have included a number of posts that were directly related to the course work that I have been doing while completing my Masters degree. However, these are all impersonal matters generated from external sources.

            Being a leader, and a success in business, requires the ability to focus internally. You must be an independent thinker with the capacity for originality. With that in mind I would like to take this opportunity to write about my personal beliefs in regards to how a business should be run. Since these views are an intrinsic part of how I build and run my business ventures I feel that this is an appropriate forum to express my thoughts.

            The three most important aspects of my business philosophy are Employee Relations, Diversification, and the Value of Minimal Returns. These three concepts work in tandem with one another, and are at the core of my business model. They are also elements that I have seen either neglected or abandoned by other businesses.

            First is Employee Relations. This is what most companies refer to as Human Resources, which is a moniker that I take issue with. Names have power. This is a known fact, and is the reason why publicity firms are hired to determine the best names for movies, books, and companies. Yet, the name Human Resources is still used despite the fact that it sounds like individual people are nothing more than fuel for a machine that can be used up and disposed of. For that reason, I insist on using the term Employee Relations. The people who work for me have special skills, and they were hired for the unique abilities that set them apart.

            In terms of Employee Relations, it is my belief that a company should do everything in its’ power to improve the lives of those who work for the good of the corporation. If you expect employees to respect their jobs and the company that they work for you must actively show them that the company has the same respect for both them and the positions that they hold. Employees will not respect a company that does not respect them. This is why I make a point of actively pursuing positive reinforcement. People need to feel appreciated.

            Additionally, I believe in maintaining the largest number of employees that my company can support. That may sound horribly unorthodox during a time period when every other business is talking about “trimming the fat”. But, my view is that every employee is a customer. And, they bring with them all of their friends and family. Each person on the payroll is a representative of twenty other people. And, each of those people represents the type of “word of mouth” advertising that every company so desperately wants. 

            Also, when it comes to that "word of mouth" advertising there is one key factor that no publicity firm on the planet can achieve. They can get strangers to say nice things about your company, but they cannot get someone to stand up in a crowded bar and yell, “Hey! My aunt works there!” when a stranger is saying something negative about your business. 

             People only develop an emotional connection with a business that proves it cares about the people whom it represents. And, people only fight for the things that they have an emotional connection with. If your people don't think that you care about them, then they will never fight for you.

             Supporting that belief is the second element of my philosophy, Diversification. Right now every other business is eliminating all of their sideline endeavors in an attempt to “focus on their core business”. That roughly translates as, “we’re putting all of our effort into the one thing that makes the most money”. Or, as I call it, “putting all of their eggs in one basket”.

            The problem with minimalizing a company’s diversified output is the same as reducing advertising. The less you do, the less you are known. In addition to that, many potential side businesses are actually methods for reducing overhead for the primary business venture.

            As an example, I am currently producing a television sitcom that takes place in a tattoo shop. If I followed the industry standard practice of renting a soundstage and building a temporary set the pilot alone would cost 3.1 million dollars. Instead, I opened a functional tattoo shop and I shoot the show there on the days when the tattoo shop is closed. This has eliminated 2.9 million dollars from my budget. And, savings on expenditures translates into revenue.

            Businesses like this are called self-liquefying assets. They may not generate any substantial profits, but they pay for themselves. And, in this particular case, the side business is saving the primary business millions of dollars. The major corporations seem to be oblivious to this concept.  They spend money, and then consider the money to be gone. It is an extravagant waste that the current economy cannot support.

            The key to successful diversification is ensuring that you have multiuse establishments. Success can be advanced and enhanced by starting multiple businesses that compliment one another. Once you set up your first business you just need to take a look around and figure out what you are spending the most money on. Then, start another business that does whatever it is that you have been spending the most money on.

            Through that process you eliminate your greatest expenses, and you can reach out to your competition in order to make money off of them. Your main competitor may be making 30% more than you are on their primary business, but once you factor in that they are buying their supplies from your subsidiary you are making more money than them. And, the more small businesses that your primary corporation owns, the more this process is accentuated.

            This then leads to the third aspect of my greater business concept, the Value of Minimal Returns. Most businesses would sneer at an investment with a minimal profit margin. I happen to firmly believe that any profit is a positive. If a business only has a return of one thousand per year, my response is that I need to open one thousand more businesses so that I can make a return of one million per year. It is my deeply held belief that no profit is too small. Because, if you have enough small profits they will add up to create a large profit. It just takes a bit more work.

            And, that is the problem with other companies. They don’t want to do the work. They want instant gratification and large returns with minimal effort. But, the world does not work that way. If you want solid returns you must be willing to work for it. The reason corporate leaders have the highest salary isn’t because they had the best connections to get them the job. It’s because they have to work harder than everyone else in order to ensure that all of the employees under them are still in a position to feed their children.

            One of the most disgusting things that I have ever see was when Tony Hayward, the CEO of BP during the gulf spill, went on the news and said that he could identify with the victims who lost their jobs and homes because he wanted everything to go back to the way it used to be. For him that meant playing polo and doing nothing. He had no sympathy for the people his company hurt. He just didn’t want to have to do his actual job. That is why so many companies are failing. They just don’t want to have to work for a living. They want the money to show up without having to put in the hours that it takes in order to earn a sizable profit.

            The Value of Minimal Returns is based solidly upon this. No amount of work is too great if you are at the top and there are people depending on you to keep their jobs. No amount of profit is too small if the business is still turning any amount of profit. Layoffs should only happen after the CEO is working for free and every other option has been exhausted. It is about leaders taking personal responsibility. It is about placing value upon the lives and families of those who put their trust in you to lead them. It is about the fact that both of the previous elements that I mentioned are reinforced by this concept.

            This may seem like an idealist tangent by a youth who knows little of life. It is not. I am a man who is old enough to have his doctors complaining about the condition of my knees and my eating habits. I have been on every end of the business structure over the last few decades. My beliefs are based entirely on the experiences that I have had, the problems I have seen at companies where I worked that have since gone under, and my own personal knowledge of what both customers and low-level employees need in order to believe in a business.

            With the businesses that I now own, and the ones that I am in the process of starting, I have proven that my philosophy has a tangible merit. I entered into the business community with hardly any start-up capital, and in a relatively brief time I am already on the road to obtaining major returns. Regardless of what disagreements anyone might have with my beliefs in how a business should be run, I am actively proving that my system works. And, every time another mega-corp collapses under the weight of its’ own incompetence it only makes me look better. That just makes me more determined to prove that a positive, proactive, hard-working approach to business is the only way that we can ever save the American economy. I know that I am right. And, at this very moment, I am proving it.

            

Vision of the Future

            A new type of contact lens is being developed that has LEDs incorporated into them in order to provide a live display of information for the person wearing them. This can be seen at http://www.tomsguide.com/us/1-Pixel-Contact-Lens-HUD-implant,news-13298.html for an explanation of the concept.

            According to the researchers that are quoted at http://physicsworld.com/cws/article/news/2011/nov/23/digital-contact-lenses-come-into-focus, they are predominantly intending these devices to be used in the medical field for quick access to patient information under extreme conditions.

            However, this technology has the potential for wide spread use within the creative fields. An exhibit at the MOMA that can be seen at http://www.thecreatorsproject.com/blog/augmented-reality-art-takes-over-the-moma utilizes a technology called Augmented Reality. This technology makes it possible to use smart devices to see renderings of physical objects in places where they do not actually exist. The same technology is utilized in other methods seen at http://www.intomobile.com/2009/12/03/layar-3-0-puts-3d-objects-in-real-space-guides-you-on-tours-and-does-the-dishes/ where augmented reality is used to give tours, post advertising, and display art in public spaces.

            By combing the digital contacts with augmented reality it would be possible for people to function in a completely virtual environment while operating in reality. This would be particularly interactive if combined with nonphysical motion tracking keyboards.

            The full extent of this would be an empty room that people can enter and sit down at a table. To an outside observer the person would be sitting in an empty room. But, to the person wearing the contacts the room could be decorated in any way they desire. It could be a tropical rainforest, a prohibition era speak-easy, or anything else the imagination could create. A room full of people staring at a blank wall could be watching a live performance of their favorite singer.

            With this technology entertainers could literally perform in multiple locations around the world at the exact same time.

            But, all things come with a price. And in the modern age that price is usually an abundance of advertising. An example can be seen at http://itunes.apple.com/us/app/acrossair-augmented-reality/id348209004?mt=8

            While the technology presents amazing opportunities for both science and the arts, it also presents the opportunity for commercials to be broadcast directly onto your eyeball. Everywhere you look you see advertisements scrawling by in your peripheral vision.

            But, as with any technology we must take the good with the bad. And, the possibilities for the creative advancement that will be possible a definitely worth the minor inconveniences that will pay for the technology to become a reality.

Learning Process

            As I approach the end of graduate school I find myself in the position of reevaluating a great deal of the work that I have done since I first began pursuing a Masters’ Degree in Entertainment Business. Many of my initial assumptions have been left behind in favor of new approaches that I had never even considered before learning more about the business end of the industry.

            For example, after studying the strategies of Daymond John and Robert Herjavec I have come to understand that finding investors is not a matter of simply cranking out a standardized business plan that can be sent out to as many people as possible while I sit in my office with my fingers crossed.

            Investors want to see something tangible. They want physical evidence that the person in charge of a project is personally invested in the production, and willing to put forth the effort to make it a reality. Both Daymond John and Robert Herjavec emphasized that a business plan is only a rough blueprint of what is intended, and that the actions of the project leader are far more important in terms of achieving actual results.

            Taking this information into account I have adjusted my initial strategy accordingly. I have reduced my focus on developing a business plan, simplified the over all design of the business plan, and redoubled my efforts on the tangible aspects of the production company.

            Instead of spending time researching what other production companies have done, I am rewriting the scripts to provide better material for the target audience. Instead of assembling biographies of work history on the people that I would like to hire, I have gone out and recruited the people that I need to get the job done. Instead of writing a lengthy review and budget analysis on soundstage rentals and construction costs, I have opened a business that pays for itself and can be used as a zero cost location for the show.

            This means that I won’t be approaching investors and saying, “I need $3 Million and here is a stack of pie charts explaining what I am going to spend the money on.”  Instead I will be saying, “I have already secured everything that $2.5 Million of the budget would have paid for. If you invest the rest of the money needed you can be the person who gets to come along for the ride and make a lot of money with me.”

            What I have learned, what I have adopted into my personal business strategy, and what I have made the focus of my business plan is to demonstrate that so much of the project has already been accomplished that when investors look at the production they can see that my company will be moving forward with or without them. It is an exciting message to deliver in a weak economy. And, it will draw far more attention than a simple standard approach, because actions speak louder than words.

Daymond John and Robert Herjavec

             Daymond John is a marketing expert who created the fashion brand FUBU. FUBU is a brand targeting urban designs that were previously neglected by other marketing endeavors, and proved to be highly profitable for Mister John. His key to success was in designing a unique and recognizable logo that he was able to place on a wide range of products in order to establish his brand and develop a large following that has lead to $350 million in sales.

            Robert Herjavec is a professional entrepreneur who has amassed a sizable personal fortune through repeatedly founding and selling a variety of companies. As a first generation Canadian immigrant from Yugoslavia he began his business career waiting tables while starting his first technology company out of his basement. With the mass publication of his book “Driven” that stayed on the best sellers list for eight months he is now considered one of the most prominent business experts in the world.

            Daymond John and Robert Herjavec both found places on a syndicated television series called “Shark Tank” where it was their position to judge the business plans, designs, and concepts of hopeful applicants who have submitted their entrepreneurial ideas in the effort towards obtaining funding for their various business endeavors.

            According to Forbes the most important things to remember in designing a business plan are to keep it simple, clear, and professional. According to Business Insider the most important considerations in a business plan are a concise summary, legible material, and avoiding any method of harassing potential investors before the business plan is delivered.

            However, Daymond John has indicated that maintaining personal involvement in a business and finding employees who can cover for any of the owners’ weak points takes greater precedence than establishing a business plan. And, Robert Herjavec has given the advice that,” people spend way too much time on a business plan”. It is Mister Herjavec’s esteemed opinion that a business plan is little more than a theory of slim use as it is impossible to determine the exact data applicable to a given business until that business has been established for a considerable amount of time.

Daymond John

http://daymondjohn.com/about/

Robert Herjavec

http://www.robertherjavec.com/bio.php

Shark Tank

http://abc.go.com/shows/shark-tank/tips/ThemeGallery/777018

Forbes

http://www.forbes.com/sites/martinzwilling/2011/02/04/ten-top-investor-turnoffs-around-business-plans/

Business Insider

http://articles.businessinsider.com/2011-02-05/strategy/30070147_1_business-plan-base-plan-plans-investors

Evolutionary Media

            The growth of digital technology has generated a large number of opinions on the long-term viability of the technological precursors to modern media. In considering the value of the opinions, or the potential for long term viability within the use of digital media, it is important to develop an analysis of previous technology in terms of media as well as what can be conceived of as a media-form to begin with.

            The interesting aspect of this consideration is that media itself is similar to a meme in that it is truly an intangible. Media is simply the transfer or conveyance of information from one source to another. The real discussion is over the potential of various mediums, and how those mediums are utilized to support the existence of media.

            In the current discourse the transfer of media has been changed from print to digital. The medium involved in the first form would be paper. Over the centuries paper has undergone a variety of changes in order to be adapted for various uses and to make use of improved technologies for its manufacture.

            There were numerous mediums used prior to paper including carved wood, engraved stone, systems of braid work, and various uses of beads. However, the true precursor would be vellum. Vellum is a finely processed form of calfskin.

            With vellum being the most technologically advanced form of processed leather it can be seen that the earlier form of medium used for the conveyance of information would have been untreated leather. This base form of the medium can then be viewed simply as information emblazoned upon skin.

            The earliest form of the same methodology would have been the use of tattoos to convey tribal affiliation, social rank, religious alignment, or other forms of pertinent information. The use of tattoos as a medium to convey information is so ancient that it has been found upon some of the oldest human remains.

            To understand the potential for long-term viability in current and new mediums of media distribution we must look at the lifecycle of the earlier mediums. The most specifically relevant factor in this lifecycle would be intent.

            Each medium begins its life with minor distribution that is focused on communicating information of specific information that is deemed to be highly important. The second stage for each medium is the expansion of distribution. The interesting fact in each case is that as distribution expands the social importance of the information being communicated decreases.

            The final stage in the existence of each medium occurs after the media has transferred to a new methodology of distribution. This stage is art.

            Just as tattooing and vellum have transferred to this final state where they are in the singular hands of artists, so we now see paper following the same path. Art stores sell hand-made paper. There are schools that teach the techniques of hand binding books. Even museums maintain displays of items wrought from paper.

            With this understanding we can see that artists are a key component to maintaining the heritage of technology and the memory of our species. This also provides a glimpse into the future.

            While we cannot yet predict what the next medium of media distribution will be, we can see that the social relevance of information being distributed in digital format has lapsed in importance in conjunction with a small select group of enthusiasts continuing to work with outmoded components of the technology.

            Just as all previous mediums have become designated as forms of artistic merit, we can now look forward to seeing the existing digital medium becoming elevated to the same level of creative expression when new forms and mediums come into play. 

Digital Pyre

            Reporters Without Boarders is an amazing independent organization based out of France that works to maintain international freedom of the press and supports the pursuit of independent non-regulated media throughout the world.

            As a component of this noble effort they release an annual report that details the level of censorship enforced by the governments of every nation, country, and regime. Additionally, this report includes a list of countries that are described as “enemies of the internet”.

            “Enemies of the internet” include countries that block sites, threaten those who attempt to utilize mass media, and actively restrict digital communications such as has been done in:

•    Bahrain

•    Belarus

•    Burma

•    China

•    Cuba

•    Iran

•    North Korea

•    Saudi Arabia

•    Syria

•    Turkmenistan

•    Uzbekistan

There is also a second list described as “under surveillance”. This list is technically more benign than the “enemies of the internet”, however it can be construed as representing a far greater level of ominous intent.

            The reason this second list is insidiously upsetting is due to the major nations that have been included, and the reasons for their inclusion. Representing primary nations that should be considered safe havens for free speech are France (the geographical home of Reporters Without Boarders) and Australia. The addition of Australia resulted from the wide spread use of a content filtering system that was intended to prevent the spread of child pornography. However, its’ development and function are too nonspecific to be considered as strictly existing for the enforcement of the single well intentioned concept that was used to justify its’ creation.

            The existence of this material then leads to the attempts to pass Internet restricting legislation within the United States. The latest effort to push this material consisted of a law called SOPA (Stop Online Piracy Act).

            This law faced a drastic public outcry due to its’ capacity to allow the government to indiscriminately delete any online content without any form of trial or justification. Ostensibly the law was intended to prevent the spread of Internet based copyright violation. However, it had the same level of nonspecific flexibility as the system that got Australia placed on the “under surveillance” list.

            This means that had the law passed the United States would be placed on the list as well. The United States has long been considered to be the ultimate supporting nation of free speech. The nation takes great pride in this fact. And yet, the U.S. nearly joined the list of nations that hold little regard for such an important principle.

            Fortunately, the citizens of the U.S. were able to use their right to free speech in order to prevent the law from being passed. And, with the aid of organizations such as Reporters Without Boarders the citizens of every nation shall one day be able to enjoy the same capacities.

Cooper, Charlie (2012). Meet the ‘Enemies of the Internet’ 2012. Retrieved April 1, 2012 from http://news.cnet.com/8301-1023_3-57395455-93/meet-the-enemies-of-the-internet-2012/

http://en.rsf.org/beset-by-online-surveillance-and-12-03-2012,42061.html

http://issuu.com/rsf_webmaster/docs/rapport-internet2012_ang/3

http://unofficialnetworks.com/internet-censorship-bill-congress-today-protect-ip-act-53427/

http://thomas.loc.gov/cgi-bin/query/z?c112:H.R.3261:

    <iframe src="http://player.vimeo.com/video/31100268?byline=0&amp;portrait=0" width="400" height="300" frameborder="0" webkitAllowFullScreen mozallowfullscreen allowFullScreen></iframe>

Standardized Liability

            Business people often like to compare themselves to large carnivorous animals. This is meant to give an impression of strength and power. However, they never seem to notice that the vicious animals that they compare themselves with are either endangered or hunted for sport.

            In nature the most successful animals are scavengers. This can be seen in any populated area that has been overrun by squirrels, rats, raccoons, and mice. The larger and more complex an area becomes the better the scavengers seem to do.

            The reason for this is adaptation. The carnivores that seem so impressive are adapted to live in a standardized and stable environment with a set amount of resources upon which to draw. Whenever there is a change in that environment, or the nature of the resources, the carnivores die out almost instantly.

            Scavengers are forced, by their very nature, to constantly adapt to changing resources and environments. Since they never know what they will have to work with they require intelligence, versatility, and creativity in order to constantly find uses for whatever they have available to work with. Because of this the things that kill off the large predators rarely affect them.

            This analogy is particularly relevant to the production industry in the modern era of economic and technological change. With fiscal resources at an absolute minimum, and a technological environment that is drastically different than anything seen before, it is incredibly easy to see the correlation between large businesses and large predators. Neither is able to adapt easily to a change in resources or environment.

            This also means that smaller ventures that are willing to try radically new approaches in order to adapt to the changing business environment have an enormous edge resulting from their willingness to act like scavengers in order to obtain resources and their creative adaptability in finding new uses for the available resources.

            This means that by the end of the decade we should see a radicle power shift in the production industry and the business community. The carnivores are all going to disappear. And, the long-term survivors will be those with the greatest ability to adapt, change, invent, and push the boundaries of what is considered standardized practice.

The A-List

            There is a lot of talk in the production industry about the need to have an A-List celebrity attached to a project in order to obtain funding. This is a bit misleading.

            First, most people do not understand exactly what an A-List celebrity is. There is a general understanding that an A-List celebrity is someone extremely well known, and therefore marketable. But, the term actually comes from a complex system of measurement invented by an entertainment journalist named James Ulmer.

            The Ulmer Scale is a rating system designed to quantify an actor’s value to a production. It includes an analysis of professional demeanor, public image, historical box office success, willingness to travel in order to promote a film, and their over-all versatility in handling different roles.

            An actor’s placement on the Ulmer Scale then determines their marketability in terms of a score similar to a person’s credit score. These scores are then broken down into subcategories that are given letter grades.

            The top percentage, and highest paid, are categorized as the A-List. Slightly lesser known actors, new faces in the industry, and pop stars that may not last are then categorized as the B-List. The C-List is then populated by working actors with a solid body of work that are recognizable, but are easily forgotten.

            The final category of marketable talent is the D-List. This is an unusual category because it contains smaller celebrities with little market value, but they tend to be incredibly vocal about their ranking. This is the List that tends to contain the majority of comedians, stand-up acts, live performers, and general extroverted personalities. While their pay scale is at the bottom and their marketability is ranked as minimal they still manage to maintain a cult status that is nearly as great as the reputations associated with A-List celebrities.

            The flaw in the Ulmer Scale is that it is based on a broad generalization of the production industry as a whole. It can only determine an actor’s value to a production that is designed for standardized mass media exposure. There is no inherent methodology within the Ulmer Scale for determining an actor’s value to a production that has a specific target demographic.

            For example, a romantic comedy that targets an LGBT audience would benefit more from signing Ellen DeGeneres than it would from signing Will Smith. Or, similarly, a production designed to target a young Latino audience would benefit more from including Jessica Alba than a well know A-List actor like Danny DeVito. 

            Therefore, the importance of having an A-List actor attached to your production in order to obtain financing is not exactly a rule so much as it is a guideline. You must be able to analyze your production in advance in order to determine what actor would be the most valuable to your production as an individual business venture, not just to the industry as a whole. 

Harrisburg Entertainment Attorney

            The role of entertainment attorneys varies depending upon the region in which they operate. It is something of a given that every area has its’ own unique population with their own specific approach to the entertainment industry. This means that every area has specific issues to face that are primarily applicable to the individual region.

            Developing an understanding of the unique business atmosphere in the Harrisburg area involved a certain amount of research as well as a conversation with attorney Todd J. Shill of Rhoads & Sinon LLP. Mister Shill is a dedicated entertainment attorney in the Harrisburg area who is actively engaged in the local creative community.

            While the entertainment industry offers a wide range of potential jobs the two main areas of focus in Harrisburg are writers and musicians. Both fields require the assistance of an entertainment attorney for contract review and negotiation, establishing and protecting copyrights, and agent or management agreements.

            Additionally, writers often need help in the sale of optioning of their material. And, musicians frequently need help with licensing agreements, unpaid royalty collection, and merchandising arrangements within record deals.

            Many of these issues can also be translated into aspects of the local film and television production community. The creation of such projects inevitably requires the addition of the previously mentioned two professions. However, full-scale productions also require a large number of additional people with a variety of skills and abilities.

            The interesting fact is that all of these additional members of the production industry who operate on the more physical aspects of a production encounter situations for which they require representation outside of matters that are commonly considered with the creative industries.

            Gaffers, grips, and production assistants who are frequently required to deal with heavy lifting can develop repetitive motion injuries such as bad knees or back problems.

            Lighting directors, carpenters, and set designers often have to work on ladders or scaffolding at great heights where they face the chance of falling and suffering severe injury.

            One of the most important reasons for a producer from any variation of the creative fields to hire an entertainment attorney is to ensure that all legal requirements are met and the needed insurance is in place in order to protect the crew should they be hurt and the production company should it face the possibility of litigation over an accident or an attempt to issue a work-man’s compensation claim based on a pre-existing condition from another production job.

            With these issues in mind it can be seen that a competent and successful entertainment attorney is one of the most important people to have on the staff of any production company.

The Occasional Bastard

            The Federal Communications Commission is frequently viewed as a dark and ominous government agency bent on using its power and resources to restrain free speech and strip away the average person’s rights under the First Amendment. This view is reinforced by the large number of legal cases  they have been involved in, and the number of times that advocacy groups have questioned their adherence to the First Amendment. 

            Public opinion is further swayed by cases such as the FCC v. Fox Television Stations, Inc. in which the FCC levied fines against Fox over the fact that two celebrities used vulgar language during two separate awards shows a year apart. The idea that the FCC was pushing the limits of its control over free speech became so culturally relevant that the court case was covered in publications as divers as The Washington Post, The Christian Post, and The Huffington Post. The overwhelming public opinion was that the FCC was crossing the line. However, the court upheld the position of the FCC in the case.

            The view that the FCC is constantly pushing the limits of its authority is generally heralded by references to the case of the FCC v. Pacifica Foundation in which a radio station was charged for broadcasting the George Carlin routine “Filthy Words” during daytime hours. The case established the precedent that the FCC can control language as it relates to public decency.

            Any time an organization successfully fights the FCC they are viewed as heros. This is especially true in the case of Red Lion Broadcasting Co. v. FCC. The issue of this case revolved around the FCC “equal time rule”, which stated that in order to maintain a fair and balanced source of information for viewers it was required that equal time be given to both sides of any issue being publicly discussed. The final court ruling determined that this violated free speech. Since that date broadcasters have been permitted to air one-sided stories without giving consideration to opposing points of view.

            Red Lion is generally considered a hero of the First Amendment and is held in high esteem for their victory over the FCC. But, it should also be noted that they opened the door for a situation in which a small group of broadcast company owners are now able to decide what views are shared with the public, and act as their own independent board of censorship in order to suppress any opinions that they disagree with.

            The point where the FCCs villainy really comes into question is with cases such as Verizon v. FCC  and Comcast Corporation v. FCC. Both of these cases are directly related to the concept of Net Neutrality and the Open Internet policy enforced by the FCC.

            The issue in both of these cases was that the FCC stated in no uncertain terms that everyone had equal rights to digital distribution. The companies charged that they should be allowed to delete the websites of their competitors, or at least slow down their connection speeds. Their actual stated reason was that they would be able to make more money. In these cases the FCC went head to head with major corporations in order to maintain the freedom of speech and the free flow of information.

            There is an old saying that you can’t make all of the people happy all of the time. No matter what policies the FCC enforces there will always be people who call them bastards for doing it. However, the fight to defend the First Amendment has a lot of grey area. It is a never-ending fight to defend our rights. And, if we hope to maintain the free flow of information, it is going to take the occasional bastard who isn’t afraid to stand up to the corporations and the wealthy elite in order to get the job done. That is why we need the FCC to fight for us. That is why we need them to be our "occasional bastard". 

Digital Dollars

            The way that production companies make money off of television shows in America is a disorganized hodge-podge of business methodologies that were obviously slapped together as quickly as possible by the Federal Communications Commission in conjunction with a number of legal and business representatives while attempting to maintain the integrity of the United States anti-trust laws.

            The situation isn’t as difficult in other countries where they were able to look at what had been done in the States, and then formulate their own system without the complexities that had developed through the spurious period of adaptation to a new form of technology.

            Today we are seeing this same response in the techniques being used by production companies to try and capitalize their products within the digital medium. Internet distribution is rapidly becoming just as needlessly complex as the American television distribution system due to the speed with which corporations are being forced to adjust their core business practices.

            However, the American broadcast system does provide a surprisingly reasonable framework upon which to base the evolution of Internet based production distribution.

            In order to operate within the laws of the United States, no business may control more than a certain percentage of a total market. This means that the major television networks are not allowed to own all of the individual local stations within the country. The business repercussions of this are remarkably similar to the situations inherent in on-line distribution where a variety of individual sites are competing on a global scale.

            There are three primary ways for a production company to make money off of a television show that they have produced in the United States.

            The first is called First Run Syndication. This is where the production company signs an exclusive agreement with a network to air new episodes of the show while it is being made.

            The second is called Off Network Syndication, or Second Run Syndication. This is colloquially referred to as “reruns”. This is the aspect of American distribution that most closely resembles Internet distribution. In this phase the show is sold as packages of multiple episodes (one to four seasons worth) to all of the individual local stations around the country.

            The specific purchase arrangements will vary from one station to the next. However, there are two specific methods that can be seen as viable to the digital medium. These methods include straight sales and bartering.

            In straight sales the production package is sold for cash with the station taking all advertising rights within the show.

            In bartering the show is given to the station for free, and the production company keeps the advertising rights in order to make their profit off of the sale of commercial time when the show is airing. This method will usually have a contractual agreement stipulating that the show will have a specific time slot.

            The third way of making money is non-broadcast sales. At this time that primarily consists of selling collectors sets of DVDs. While it can be very lucrative for a successful show it is not directly relevant to this discussion on conducting business within the on-line market.

            Now, if we look more closely at the system for Off Network Syndication we can see how the overall structure is quite closely related to Internet distribution. And, how the evolving business methodologies are reflections of the predecessing sales structure.

            At first, on-line video distribution involved no commercials or any exchange of money. It was used primarily as a vehicle for gaining publicity. Just as television shows were originally free, because they were actually trying to sell the television sets that people were using to watch the shows.

            Then, some enterprising individuals began adding commercials to on-line videos. This quickly developed into a system nearly identical to Off Network Syndication.

            Now, we are seeing the more successful digital distributors (such as Hulu) beginning to produce their own First Run shows. This then opens the door for other production companies to begin selling their shows to the larger digital distributors for First Run Syndication.

            The important aspect of this is that the digital platform allows the audience to choose what they want to watch at any time. Prime Time slots are now irrelevant. Additionally, the major networks were always constrained to the number of hours in a day. The digital platform does not have this limitation.

            A digital distributor could, in all plausibility, launch 300 First Run shows at the same time. Then, only keep the ones that get strong ratings after the first season.

            While it does mean a drastic reduction in the amount of money available for production costs, it has one huge benefit. In an increasingly tight market where production companies are constantly fighting for airtime it is now possible to give every show an equal chance.

            The potential for increasing revenue by allowing every consumer to choose which shows to watch instead of leaving the choice for airtime up to a small focus group is exponential. It also allows for a drastic shift in the way that shows are made.

            Small production companies with great but unknown writers can now have the same opportunities as large companies that get away with cranking out over used material just because the producer is friends with the right person at the network.

            It brings the success of a production company back to a merit based system. And, most importantly, it opens up new doors for fiscal gain through proven techniques that can now be refined.

            Quite frankly, I think the next decade of digital entertainment is going to be a lot of fun to make. And, I’m really going to enjoy the additional revenue it is going to generate.

Death of a Salesman

            Over the past decade there has been a great deal of positive declarations about the benefits of on-line retail. Money Morning even compiled a lengthy article detailing how on-line sales were not only growing, but also benefiting the economy as a whole.

            Many businesses have found it as a way to expand their existing services in order to reach new sales markets. It is also true that the advent of digital retail has opened up a low cost opportunity for small businesses that have interesting products, but lack the capital to found a brick and mortar enterprise.

            However, I have just read an article by Larry Downes that was published by Forbes that suggests otherwise. The articles can be seen HERE.

            Mr. Downes begins by trying to explain the complexities involved in the current downward spiral that is being experienced by Best Buy. He veers off slightly when he goes into detail about a personal encounter when he went shopping with a friend at the aforementioned mega store. However, his over all message is related most specifically to Internet sales.

            The main point that he brought up is that larger retail stores have now placed such an emphasis on digital sales that they are neglecting to maintain their standards for in store live customers. This is not entirely surprising.

            Stores used to conduct regular free events. They would employ live musicians and host elaborate holiday parties. Malls contained fountains, plants, and things to see. In the 1930’s people would go to Macy’s just to see the tree. In the 1980’s pop singer Tiffany became a household name by doing a tour of malls. And, then they stopped.

            It would be easy to blame on line sales for the losses in retail outlets. You could simply say that people aren’t showing up, because they have other options. But, that isn’t true. The reason customers aren’t showing up in person is because the stores aren’t giving them a reason too anymore.

            It began with cost cutting measures. Reducing over-head is such a simple way to make it look like you have an increase in profits without actually making any gains. Then they reduced salaries. This looked great in the budget, but employees who feel under appreciated are not overly eager to provide quality service. Then there is the ever-present threat of lay-offs, and the fact the retail stores only higher part-time employees so they don’t have to pay for benefits. Employees won’t be loyal to a company that isn’t loyal to them.

            But, the main problem is the atmosphere. There is nothing left to make it an experience. Now people are just wandering into a warehouse full of merchandise where people are rude to them.

            If retail wants to save its’ brick and mortar businesses they need to bring back the show. Add a little P.T. Barnum to the shopping experience. Get people to come because they want to see what you are going to do next, and they will spend their money while they are there.

            The best way we could save the American retail business market as a whole is if we started teaching entertainment classes in business schools the way we teach business classes in the schools for the entertainment industry.

            If they don’t give the customers a reason to be in the building, then the customers are going to stop showing up completely.