Feldman: The Show Must Go OnAnxiety is a common emotion at this year’s National Association of Television Program Executives conference in Las Vegas, as the shaky economy and thin station budgets threaten participation and attendance.
Rick Feldman, president-CEO of NATPE, is well aware of that, but he’s tempering concerns with 30 years of perspective, and thoughts about the future of his group.
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TelevisionWeek’s Andrew Krukowski talked with Mr. Feldman about the direction of NATPE, the possibility of a new location or look for future conventions and NATPE’s role in syndication amidst the economic turmoil.
TelevisionWeek: What are your expectations for this year’s NATPE? What are you expecting to get out of it?
Mr. Feldman: Thanks for the question, but it’s not the right question. The question is not what I want to get out of it, because I only want to get out of it what the participants get out of it. The important thing always for us is to remember that we are a membership trade organization. We exist for the purpose of creating environments that allow people to get together, to learn and to do business.
I can’t control how many people come to NATPE. We can do everything we can, but in the bad time such as it is, we know that we’ll have attendance figures that won’t be the best ever. Then what’s the job? The job is that every single person that walks through the door and comes to NATPE for those three days in Las Vegas leaves saying, “That was worth my time, that was worth my money, the people that I saw there I could not have seen anyplace else I could have gone. The people that I met there I can’t meet in the same kind of environment anyplace else.” And for the people that didn’t make it, they missed a great opportunity and we’re gonna spread the word and we’ll see them next year.
You always have to remember that we’re not a commercial organization. It’s not about the profit motive, it’s not about making the last buck, not driving the last deal. It’s really getting people to feel like we’re working for them, and I think we do a pretty good job of that.
It’s the whole idea of me going around all year round and talking to as many people as I can talk to to find out what should we do that you need. What is not out there in the market? I keep getting back over and over and over again that people are seeing that the word “television” is morphing into something else. Nobody knows whether to call it a video show or television show. And then people want to say to me, why don’t you call it a digital show? I said because everything is digital. There is no analog effective Feb. 17.
There’s got to be a place where for a week every single year, the United States of America has a market and conference where people that create and buy and sell video and distribute it all get together to discuss the issues, the problems, and then to make a buck.
That’s what NATPE has always been and that’s what NATPE continues to be. It’s just that all of the definitions are different. The definition of syndication, it used to be “Oprah Winfrey,” “Wheel of Fortune.” But now syndication—there’s all kinds of syndication, defined by us as the secondary and tertiary and fourth plays of various content as it moves from platform to platform.
The exciting thing about what’s happened over the last couple of years and what we’re trying to catch at NATPE is that it’s singularly about original content created for use across multiple platforms: Who is creating it, how are they going about it, how are they maintaining their rights, how are they doing it at a price point that makes sense, what are other people paying for it, how is it getting distributed and then ultimately what are the monetary lines down the road? That’s what NATPE is about. If you look at the conference, you’ll see it’s all centered around content. We’re content-commerce connections. We’re very specific about what we try to do.
We’re going to involve this year a lot of technology, the technology in a small way, as it applies to the viewer experience, or the way people can access the content, or how it helps content producers produce it a less expensive way. And we have LG involved and we have Nokia involved and we have MobiTV involved and various platforms. But for us we really are trying to keep our eye on those pieces of technology that aid in the transformation of original content. And that’s our mission. That’s a long answer, I know, but hopefully it’s OK.
TVWeek: You said before that there needs to be a conference where people can go for a week to talk about syndication, whatever that realm may be. Other than the current iteration we have now, is there a different kind of setup that would also be optimal to this that you’ve been thinking about?
Mr. Feldman: I don’t know that there’s a different kind of setup. The technology part of the world now makes one believe that you could theoretically dispense with all of these kinds of conferences. But what you then lose—we could do videoconferencing so that everything we do from the program standpoint at NATPE we could put online, but the problem is that ameliorates the actual getting together, the actual connections.
I’ve been to 30 NATPEs and all of my contemporaries who have been around for a while, we always say the most exciting things that happen at NATPE are the ones that are unplanned. They’re those serendipitous things. So to answer your question, I’m sure, yes, that there are various ways that we can do this.
Every year we ask people, are we doing it in a way that makes it easy for you to negotiate, makes it easy for you to get the value out of it? The problem is also when you have 7,500 people all in one place and you ask them each the question, you get 5,000 different answers.
So you have to try to figure out how you can make the majority happy. And frankly, we always have this conundrum at NATPE where you’ve got people buying and selling over here and you have a program over here and the people that are buying and selling don’t necessarily want you to have as robust a program as we have. And we always say, the whole idea is for it to be a three-ring circus, that everybody is there to do what needs to be done for their purposes, and we obviously hope that people who are up in the suites come down to the floor.
Now you could say to me relative to the way NATPE is set up, could it be a little easier to not have these people here and these people here, and the answer is yes. What we try to do is make available different ways to approach what we do and then have people try to tailor it to their best needs.
But you don’t want the technology to come in and necessarily undermine that actual meeting place, that going for a drink and that talking in that meeting. So if you take a look at what we try to do and how many different times and places we do it, this year we’ve added more.
We have a restaurant right on the floor, we have a B-to-B Lounge right on the floor, we have this new tech area where people can fool around with 10, 15, 20 little things. We’re going to have a martini bar, we’re going to have some music, and the idea was to try to funnel as many things into one place, so that people can connect. Every year we look at it and after this year’s NATPE, we’ll ask as many people as many questions as we possibly can, but next year we are again at the Mandalay Bay, which does present certain advantages and then other problems.
But wherever you go, you’re going to have some sort of a physical problem somewhere. So we’re at the Mandalay Bay in the hotel next year, and we’re free, kind of, in 2011 to figure out if we really want to totally change the way we’re doing it. That would be the year to do it, but you never want to throw the baby out with the bathwater, so I think that we’re looking and talking and thinking about that all the time.
TVWeek: You bring up the Mandalay Bay in 2011. Any word on that front—if you’re going to stay in Vegas? Because a lot of folks seem to think Los Angeles is kind of a more interesting—or an easier area to get to.
Mr. Feldman: You can’t do it in Los Angeles, because it is easier to get the executives in Los Angeles to come to Vegas and make sure that they are actually going to come than if you do it here in L.A., where they can easily stay in their office. And what would happen is that some of our really, really good friends would bring a bus to wherever we are, and invite everybody to lunch at their studio, and perhaps they would get back by 5 o’clock and perhaps they wouldn’t. So as much as these people are our clients and our best friends, the temptation to steal people from our lot to their lot would be too great, and too much of a risk for me to take.
TVWeek: Any other cities that may be on the radar?
Mr. Feldman: There are many. Well, there are various cities on the radar for different reasons; however, everything has got their plus and minus, and I would rather not say that there is a front-runner. Frankly, there is only really one or two other cities in the U.S. where I think this could kind of get done and be better than it is in Las Vegas.
But one of the reasons we’ve been in Las Vegas for the last six years is you can get everybody under one roof. You can get all the sleeping rooms and all of the meeting space and the floor, and everything in one place. You can’t do that everywhere. The other thing is, we don’t have dates that we can really move. When you take into consideration everything that happens, everybody knows we’re kind of at the end of January. You move too early, you’ve got CES. You move to November/December, you’ve got Christmas. You move to October, you’ve got Mipcom. You know, you move to the spring, you’ve got the LATV Festival, you’ve got the L.A. Screenings. So we kind of have to be in January. Then you’ve got the Super Bowl right after us, you have to be careful of how late you go, and so even if you were to possibly want to go to another venue, whether you could get your dates or not is another question.
TVWeek: Now you mentioned in your first answer about having attendance that is not at record levels, and that’s an interesting way to put it.
Mr. Feldman: (Laughter) We’re going to be down.
TVWeek: You said [previously] that you can’t give specific numbers.
Mr. Feldman: I can; I don’t want to. Because the truth of the matter is, we get so much walk-up traffic in the two weeks before—we’re talking thousands of people, not hundreds of people—it makes no sense for me to say. The amount of companies represented at NATPE will actually be pretty much the same; maybe even a couple of new, different other companies will show.
It’s more that each company, especially on the exhibition side, is just sending fewer people, and so I really think that the representation is going to be as good as it has ever been. It just will be, I think, companies are being more frugal about who they send. There’s not going to be a difference in the business that gets transacted, nor if you look at the Web site and you take a look at everything that’s going on for three days, it’s chock-full of stuff, and there are people that are all involved doing stuff, and so yes, there won’t be as many people, but the intellectual conversation and the buying and selling of content and ideas will be just as robust as the marketplace has room for it.
TVWeek: In terms of broadcast syndication, have you seen a year with this small amount of new first-run material?
Mr. Feldman: I think last year, frankly, was just as small. The last couple of years have been small, but I do think there are two or three opportunities in the broadcast world over the next couple of years.
One, I think as more stations get paid by the multisystem operators to carry their signal, as a lot of groups, including CBS, just did, I think you’re going to see a resurgence in the coffers of local broadcast stations, which is going to lead, hopefully, ultimately to some development of local programming down the road.
Two, I think you’re going to see some sort of value placed on the digital channels that these stations are going to be able to develop over the next couple of years. I don’t think you’re going to see it any time soon, but there is no doubt in my mind that, when there is real estate to be filled, creative people will find ways down the road to program the extra channels that they have got.
Three is that I think that many of the contracts are coming up in the next couple of years—not in 2009, but you start looking at 2011 and 2012, and you also start to see channels. Even take the good shows—”Seinfeld” and “Friends” and all of that stuff, and “The Simpsons”—you know, at a certain point, there are diminishing returns, and then you can’t play the stuff forever, 10 or 15 years, whatever.
So I think with these three things, over the next couple of years, you will start to see resurgence in creativity and stuff going on in the domestic syndication world. I think we’re definitely in a lull now, and NATPE is unfortunately hindered by that, because one of the great things about NATPE is creativity, and if there aren’t time periods and places to put the programs, you can’t make them. But as the time periods become available in the next couple of years and as the stations have more bandwidth to put stuff on, I think you’re going to see a creative resurgence. I hope when that all happens, business is better and can support not only the production of that stuff, but also the advertising support for it, and the TV stations will make commitments to that kind of product.
So yes, we’re definitely in a domestic syndication lull right now, but I look over the next three to five years and see a much better marketplace.
TVWeek: As stations right now are not as profitable as they once were, do you see a situation where big station groups begin to sell off some of these smaller-market stations and kind of deconsolidate these massive groups, which then opens up the opportunity for more of a vibrant marketplace in syndication? Is that a possibility, or are we just dreaming?
Mr. Feldman: There are two things at work there. I think that some sort of a consolidation on a business is probably inevitable, because you have too many gross ratings points chasing not enough dollars.
In order for the stations to be stronger and for their business to be better, I think that some consolidation in many markets that can handle the inventory they already have is not a bad idea.
However, while I am saying that and I think that’s true, that doesn’t necessarily work for syndication, because then you have fewer stations on the air, and you have fewer time periods to feed new product. So while I think it will happen, and I think it will help the television stations get stronger—it doesn’t necessarily help syndication in the sense that the stations will be stronger and will be able to support good shows with cash.
It will hurt because there will be less places to put shows. So you know, it’s good and bad at the same time, but I do think there is an inevitability to it, that same way, you know, there were too many Starbucks, and the same way there were too many magazines. I think that there are great stations all over the country, but I don’t know that, you know, markets need three, four, five or six stations when maybe they only need three or four.
So that’s a good question, and it will be interesting to see how it plays out, but it’s like the law of unintended consequences. You think you have a really great idea and you think it’s going to be terrific, and then all of a sudden the things that you didn’t think were going to happen, happen. Then you realize you hadn’t thought about that, and so the implications of consolidation, while on one hand they’re good, they would also have some other effects that aren’t so positive.
TVWeek: Let’s say you had a direct line to the Oval Office. What piece of legislation would you want to see passed that would benefit syndication the most?
Mr. Feldman: Relative to our world, I’ve said for a long time that the coup de grace to domestic syndication in the country was the ability for an owner to own two stations in New York, L.A. and Chicago. It’s a great thing for News Corp. It’s not a great thing for the business, and I don’t ever see that going away.
That was probably the most difficult thing that did happen. I’ve been around long enough to remember all of the debates about [the financial interest and syndication rules] and what would happen if the rules changed and how the studios would be able to control too many destinies. And we’re seeing that now with the problems that we’ve got with lack of regulation in the housing market and Wall Street.
It’s just too compelling a proposition for a company not to take advantage of whatever is given to them, and you just have to try to set up rules and regulations so that you don’t have any one, two, three, four, five companies controlling too many levels.
So, that’s what I would do with President Obama. And by the way, I also think so many stations have done so much work over the last couple of years to get ready for a digital transition, that I just think to all of a sudden pull the plug now and change the date is very difficult to ask.
I was actually very surprised, not knowing what’s going on behind the scenes, that News Corp. and I think CBS asked for the date to be moved, and I know they’ve got really big and great stations and big markets, but just so much has been done to try to get it done on Feb. 17. If the president asked me, I’d say keep it the way it is.
TVWeek: Going back to the idea of the economy souring, do you see this particular NATPE as a bump in the road? Or is this kind of a trendsetter? Are we going to expect this in 2011, 2012?
Mr. Feldman: It should be put in the context of the fact that this is an organization that has now gone on for 46 years. It doesn’t mean that we’re guaranteed another 46, all right? But it does mean that we’ve faced these bumps in the road and ups and downs. Most lately in 2002 after Sept. 11, the January show the next year was really difficult, and so we had a major bump, and then over the last four or five years we’ve been building it back up, and we’ve added like 2,000, almost 3,000 people since just four or five years ago.
Now it won’t be like it was in 2002, but it’ll go back a year or two, whatever it ends up being. It’s a very good question. I think there are a couple of things going on. There’s the economy. There’s the ecosystem and the business changes in my business, which are definitely causing dislocation in a lot of areas in a lot of ways. That makes putting an effective NATPE together more difficult, because your consumer is becoming a broader consumer.
You know, NATPE used to be a smaller organization relative to the people that came, and as content migrated to more platforms, it tends to be bigger, so now we have online people and we have mobile people. We have a lot of people that are creating for platforms and they might not have been at NATPE five or 10 years ago.
These people, however, are so far in the nascent business, so they’re the kind of people who want to be at NATPE, but they’re not, from a financial standpoint, going to be a building block of NATPE.
So I would say that it’s a bump in the road relative to the overall economy, but there is a systemic change going on now, which we’re trying to stay ahead of. NATPE is going to have to change, because our key consumer and our membership is changing and becoming broader.
The financial underpinnings of the organization aren’t the same as they were, so we’re going to have to find probably a more efficient, maybe less expensive way for people to use NATPE and for us to put the show on, in an effort to bring some of these newer people into NATPE, and so it’s both of these things going along at the same time. But what business in America right now isn’t changing? The car business, the steel business, the coffee business, the Polaroid camera business—everybody is changing. So we’re a reflection of our business, and so as the business changes, we have to change to reflect the business and to serve our consumers. And since our consumers are going through turbulence, we are, too.
TVWeek: I noticed in a recent issue of TVWeek that NATPE has an ad that’s kind of like dark humor. It says, “If misery loves company…”
Mr. Feldman: “Then we won’t be lonely.” (laughter)
TVWeek: Exactly. What was the reaction to that?
Mr. Feldman: Mostly it was, “Way to go, way to go.” We also have another one you’ll see, times are tough. You know what? We don’t want to be like off to the side. We want everybody to understand, we understand what’s going on with them and what the problems are. You also want maybe gallows humor, but you want some humor.
If you take a look at everything that’s going on in the world, from the Gaza Strip to your portfolio, it’s not a pretty sight. We want people to come to NATPE and have a good time—we want them to do business, but we want them to have fun, relax. We have a martini bar this year and we’re going to have a jazz band, and we’re going to have some musicians playing, we’re going to have some dancers dancing. Lionsgate has produced this live show. We’re going to premiere “Dollhouse” on Monday, which is a new show that’s going on on Fox in February.
So the idea of the ad is, OK, it’s bad, but we’re all in the same boat, and by the way, when is a conference like ours most valuable? Probably now. If you really think about it, it’s really now.
It’s like, “Oh my God, what do we do?” Well, many of us are going to be in this business three, four, five years from now, and we’re going to have a different set of problems, but we’re trying to take a snapshot of our business right now, January 2009. … So we’re right where it is right now, and where we’re going to be next year I can’t tell you. But hopefully it won’t be in misery loves company all over again. Maybe it’ll be, you know, we’re all in the clover, and come and enjoy yourself. I don’t know, but right now, that seemed to speak to the tenor of the times.
TVWeek: What is the bright spot in syndication? There has to be a good news story.
Mr. Feldman: Well, wait. What syndication are you talking about? The bright spot in syndication writ large is that there is more creative and professional video content being made now than ever before in the history of the world. There are more platforms on which to put this content.
The big question down the road is, who is going to last? How are they going to create a business model that’s going to make them last? Or is everything that’s happened the last couple of years by taking your content from a network and putting it on Hulu or by putting it on YouTube, does that ultimately make sense? Can you make money from that?
You know, at a certain point in time, no one is going to be able to create really good content if they are not going to get paid to do it, and you’re going to see a further consolidation. Over the next couple of years, you’re going to see some of these video platforms—whether it’s Veoh or Vuguru or Next New Networks, or Hulu—there will be a consolidation in that business.
I still maintain that ultimately the best way to get value is to have some sort of exclusivity. As soon as you commoditize something, and you can get it everywhere, trying to aggregate all of those eyeballs and trying to get paid a penny here, a penny here, a penny here, is way too difficult to do. So at a certain point, there’s got to be some sort of re-aggregation of these eyeballs.
But the bright side is that really creative people are making really good content at relatively low cost, all right? And people around the world are watching. The problem so far is, OK, great; now how do we make money? Maybe you’re Daisy Whitney, OK? If you get known sort of as a brand, then ultimately that brand speaks for you, and it’ll speak for something that advertisers will want to be around, and those people like Seth MacFarlane who are able to deliver on their brand will do well.
This will all eventually shake out. You’ll have more platforms, you’ll have more content, and you’ll have more new shows of different kinds. You’ll have different kinds of advertisers. There will be new companies taking advantage of these new platforms, and so that’s the bright side.
The other side of it is that everybody laments the broadcast business and how terrible it is—it’s not so terrible. It’s terrible if you’re looking at your P&L versus what it was five years ago. To me, the terribleness is driven by the slavish demand to show earnings every 30 days to every 90 days to Wall Street.
But if I told you that I was going to give you a business and you were able to privatize it and you were going to make 10%, 15%, 20%, 25% a year, I think you’d be very happy, because my friends in the real world, they work on margins that are 1%, 2%, 3%. The problem is that everybody wants growth, growth, growth, growth, growth, growth, growth, and it can’t happen. You can’t have that.
Microsoft—fantastic company. How can they grow in the second 20 years the same way they grew in the first 20? You can’t—unless you buy and you acquire. Well, talk to [Sumner] Redstone, talk to Jerry Levin, about buy, buy, buy. That’s not necessarily the answer either.
As an aside, I think one of the good examples is if you take a look at NBC and Universal. That actually turned out pretty good. But just getting bigger doesn’t make you necessarily better. I think this is going to be a problem forever. It places really good companies in a bad position because they have got to show results as a mature company that are probably unrealistic.
But there are some great companies out there; there are great people in our business—really bright, intelligent people in our business—making really great stuff. Just look at what happened the other night in terms of the TV shows, both on cable and broadcast, you know? At every job you probably have to be better than you had to be 20 years ago. It’s more complicated. Everything is more complicated. The pressures are greater on everybody, but the creative people, left to their own devices, make great stuff, and we’re all very lucky to be involved in the business.
TVWeek: Do you have anything else you want to add?
Mr. Feldman: For those people that, for whatever reason, don’t make it to NATPE, we think you’re making a mistake.