NATPE 2000: A Turning Point Toward Convergence

It didn't take long for the murmuring from New Orleans to reach Los Angeles. Something unusual was going on at this year's National Association of Television Program Executives (NATPE) conference. Going into the event predictions were that while no one knew what to expect, it wouldn't be incredibly eventful or exciting; a sort of status quo for an industry in limbo. However, as soon as the conference began Monday, January 24 an excited whisper grew to a roar by the close on Thursday, January 27, 2000. The "dot coms" were on the floor in force and a decidedly different tone was sparking the conference. People were discussing the current no man's land of convergence, grappling with its meaning and coming to some exciting results.

I asked Bruce Johansen, CEO and president of NATPE, about this year's conference and what it means Heather Kenyon: This year's NATPE seemed like a watershed year with a lot of changes on the floor, namely the introduction of so many dot coms. Why do you think this is? This is obviously a sign that the television industry is changing. Bruce Johansen: There are several reasons why there was a huge presence of dot coms on the floor. One is because we made an aggressive effort to market to the dot coms and new and interactive media companies. It is clearly of interest to our members, our core members, our traditional members, to learn more about this aspect of the industry. So looking at it from NATPE's traditional perspective it made sense for us to do whatever we could to bring these people into the fold. It makes our members better and more informed. We brought in Nina Steiner, who was our director of media sales, whose only job was to market toward those new companies. We had about 15 companies exhibiting at the previous year's conference. This year we had 140. HK: That's amazing. BJ: Absolutely amazing. It was incredible. I never expected to have that many companies there. Plus they were all over the board. There were b to b's, b to c's, there were start ups, there were dot coms, there were infrastructure companies. Now they came for several reasons. They came because they on the other side of the fence wanted to learn more about how they could integrate with the traditional broadcasters, networks and cable networks. They also came because they know we attract a huge number of advertising executives, and for the most part these dot coms are advertiser supported and they need to reach that contingent. NATPE is the most efficient way to reach the advertising community. It is even more efficient than the advertisers' own conferences. We had approximately 800 advertising executives at our conference in '99, and we had over 1000 two weeks ago, so that was a big attraction as well. Thirdly, we are the conference of record for the creative community here in Hollywood. A lot of the dot coms and new and interactive media companies have great technical prowess, but they need content. They need that expertise from Hollywood. So those are the three main attractions from their side and why they found this to be an invigorating conference for them. For the most part, I heard very positive reports that they accomplished what they set out to do and even more. HK: How do you think they are going to influence the television world? BJ: Well, I think it is a two way street. Both are going to influence each other and both are sort of cagily assessing each others' possible contributions to business ventures involving both parties. The broadcasters need to redefine their business and their role in their communities. They have lost exclusivity, because a lot of the network exclusivity they used to have is now diffused through cable penetration and what have you. Therefore, they are looking to build their Internet presence. They are also looking down the line at digital television that will probably give them four or five additional channels to program in their community. They are looking for ways of developing e-commerce and/or data transmission in those other frequencies they are going to have; they are looking for some of these new and interactive media companies to help come up with business opportunities that will fill those channels. It is a need on both sides, so to that extent they are influencing each other in a business vision.

HK: Can you talk about the syndication market? What is its current status? I hear everything from it is alive and well, to it is dead! BJ: I think up until about six months ago, most people felt that the syndication business in the traditional syndication sense was gone. That it had matured, that it had evolved. I grew up in the syndication business. I used to work for a company called Multimedia and we sold Donahue, market to market to market and I traveled all over the country. I have been to every city in America. It was hard work but it was rewarding and we went literally to each station and marketed our show, helped with promotion, etc. Today you go to one person. You go down the street three blocks from my office right here and you go to the guy who runs Fox stations. You can cover almost half the country with a phone call. So, on the one hand, the traditionalists in syndication are saying, "Oh, it is dead. You just can't get clearances anymore. The big studios control everything and they've got the big groups in their pocket. You can make six sales now and cover the country with syndication so the business is really awful." Then you can look at the other side and say, "Well, that's just not true. In fact, the business is stronger and healthier than ever. It is generating more money than ever." This is true. It is generating huge amounts of revenue, not only through barter and through the advertising sales aspect of syndication, but also from license fees, partly because of the changes in the regulations, the 1996 Communications Act, which allowed the networks and studios to own part of the projects. So they are investing more money in that and developing more product. Therefore, the argument, against that first argument is, "You are wrong. It is a very vibrant, healthy industry. It is just different. It is not done the same way." I fall into the latter camp, particularly after our last conference. In November people were still saying, "Oh, NATPE look at all the new media stuff happening. See? Syndication is dead. Nobody is going to go there to buy shows anymore and so NATPE is scrounging around trying to redefine itself." Well, that just wasn't true and in fact the development season was late, there was almost ironically, a look and feel to NATPE like 10 years ago, when there was a very strong syndication business going on the floor. Our new chairman Steve Mosko, from Columbia TriStar, announced to the press at our press conference, that they came to NATPE with two shows with no clearances, and they cleared them all at NATPE. Now that has not been true the last couple of years. So clearly when there is a need, and there is good product, syndication works. It was a very important part of the conference two weeks ago, which is fascinating because of all the new growth in new media. Plus, we continue to develop internationally. We continue to develop our cable presence. We continue to develop advertising, but our core traditional syndication business had a huge resurgence this year. That's why I think it all came together and made for a very exciting conference. HK:

I've heard that from a lot of people saying, "You missed it. This NATPE was great." BJ: It really was and you never know ahead of time. It is like going out on a date. You can do all the research you want and the chemistry either works or it doesn't. It really worked this year. HK: You have touched on this, but what role does NATPE want to play in the future? BJ: We continue to be a mirror of what is happening in the industry. The one core around which everything revolves with NATPE is content. When we started, NATPE's need at that point was to provide a forum for local program managers to get together and talk about how to create local television shows. That was the need, that was the purpose and that's how NATPE started. Then you fast forward through the years and as syndication began to develop so did NATPE. The meeting got larger and larger. There were two, and then three, thousand people meeting in hotel rooms. Then in the early `80s in Las Vegas we went to a floor show model, and it continued to grow and grow to 17,500 approximate attendees this year in these huge booths. But all of that constantly reflected what was happening in the business, and what is happening in the business today? Well, syndication as I said is vibrant, but different, so the emphasis fifteen years ago was 100% syndication. Today that percentage is drastically reduced because now we've encouraged participation from cable, international, independent producers, new and interactive media -- the network presence is much greater than before too -- so syndication now plays a 30% or 35% role in what NATPE is all about. We are not inventing this. We are just reflecting how the business is changing. Take a studio like Paramount and look at how that studio has changed over the last 10 years. They were basically a provider of television programming, and now they have a station group, are into cable and new media. NATPE has evolved the same way. We are not unlike any one of our corporate members in that respect. We will continue to do that. As the business evolves more and more toward a convergence with all these various media so will NATPE. HK: No matter how the industry changes, people's same priority is to make money. BJ: Correct.

HK: So no matter how they figure out a way to do it, they will do it. It seems NATPE is turning into a forum for people to meet and figure out how they are going to make money. BJ: Absolutely! We are indeed. That is a good point. We are very aggressive about our Web site and are always building up our Web site and people ask, "If you do that, can't you hurt the show? If you provide more and more opportunities for people to do commerce and to talk to each other via your Web site, then why do they have to go to a NATPE show?" I counter that by pointing out, it is a people business, and secondly, just as you said, as these new technologies develop and new means of providing programming develop, people still need to know how to make money. You really only learn that through personal contact and going to conferences like ours where you can walk down the hall and bump into the president of NBC Entertainment for example. From that chance meeting, who knows what can develop! You can't do that on the Internet. You can't do that with a phone call. You can't do that if you live here in Los Angeles and you want to set up a meeting with Garth and you don't know him. But at NATPE, suddenly the walls all come down and everybody is there at an even level for three days. All the aspects revolving around content are there under one roof. It is incredibly efficient and very inexpensive when you compare us to other shows. Small companies love it because they can knock off in three days what it would take them six months to do and a fortune flying back and forth to New York, Chicago, Philadelphia, etc. That's a great role for us to play and we'll continue. That will always be our focus: to provide a forum for people to learn how to develop the business and it will evolve as those needs evolve. We are not stuck in a rut. Believe me!

HK: You did mention the international market and I wanted to ask, how important is the Latin American market at NATPE? BJ: We are the conference of record for Latin America. We are the major conference for all of Latin America, for buyers and sellers alike. It is also very important for the European buyers to come to NATPE because they principally do business with Latin America. They don't come to America to do business with us. We are sort of the tent, a global tent, where people come from all over the world. Latin America is a very, very important part of this mix. It is the largest meeting of Latin Americans in this industry anywhere in the world. HK: MIP TV is the place to go to do business with the Europeans, but it definitely seems if you want to do business with Latin America you need to be at NATPE. BJ: Absolutely. And Asia and Canada as well, by the way. MIP definitely has an advantage in terms of the European community, but where we shine against MIP is that we are the only truly international, global market. They don't get the American buyers. They don't get the studio or the network buyers at MIP or MIPCOM that we do. We are truly the international market and I just want to point out here for the record that we are a nonprofit association. MIP and MIPCOM are run by a for profit corporation. While, it is apples and oranges to compare us, the costs for someone attending our show versus theirs is nothing. We also offer thirty award-winning seminars to create that forum opportunity that I discussed. HK: How do you think people will use their television sets in the future? BJ: It is going to take a generation or two but the television set, the appliance itself, will have many other functions than it does today. Today it is principally a medium for entertainment and information. That will still be at the core of what television can provide, but there will be all these other opportunities through convergence to do all kinds of things. A lot of the stuff you do on a PC or Palm Pilot will be integrated more and more into a television appliance, which will be more than just a provider of entertainment and information. That's going to take a long time because people from my generation are not going to adapt to that. We are used to watching what is being programmed for us by some guy in Burbank. The whole idea of a feed, of programming coming at a specific time, will become ludicrous. Our grandchildren will laugh at that concept. They will pick what they want to watch and will watch it when they want. They will do other things at the same time as well probably. HK: Do you think fifty years from now or maybe one hundred, people are going to look at this time that we are living in as an amazing media revolution or shift? BJ: This is a good question. In thinking about it, my first response was, "Oh yeah, this is the paradigm shift, etc." But you know what? I don't think so. I think this is one of a series of things that will in the aggravate, in a span of maybe 25-30 years, be truly impressive, but this is a blip. It is exciting for us because we are living in it. It is mind boggling. I grew up with the concept of a Dick Tracy watch in a cartoon. That was incredible, so now to see it happening! But I think fifty years from now this is going to be part of a whole series of things that are going to ultimately completely alter the way people receive content and conduct business. Heather Kenyon is editor in chief of Animation World Magazine.