Genius interview with Howard Homonoff
Posted on Sep 10, 2021 by FEED Staff
Broadcast strategist Howard Homonoff has watched the evolution from old school transmission to cable, and now the web of digital media. He talks to us about what came before – and what’s coming next
FEED: You have extensive experience with operations of content platforms. Now you advise major media companies on strategy, and write for Forbes. But your start was in the heyday of cable networks.
Howard Homonoff: I’m a lawyer by education. I grew up in the Boston area, the home of the Kennedys, in an era influenced by that family and the idea of public service. After law school, I was counsel on Capitol Hill to the subcommittee in the House of Representatives, overseeing the communications, media and securities markets. So, I came at the issues concerning broadcast and cable television – and the early days of online – from a macro-policy perspective. I wasn’t just asking about business problems, but what the marketplace should look like. Also, how do you balance the hand of government in a free enterprise and creative world? And I still like to think of issues from that perspective.
I went from Capitol Hill into the business world. I acted as counsel to Continental Cablevision – at the time, the third-largest cable operator in the US. Then, I became general counsel for NBC’s cable networks. When we were dealing with, what I would call, Internet 1.0, my job shifted to head of strategy and business development. My role started to be about how to exploit CNBC and MSNBC content on these new platforms that no one really understood yet.
For the past decade, I’ve been working on behalf of big media companies and their partners.
FEED: With your vast knowledge of the cable industry and its operations, what have you learnt that could be applied to today’s internet-based distribution?
HH: It’s hard to believe today, but the cable business was once the young upstart. In the US, it was originally just a means of sending signals to remote places, which regular broadcast couldn’t reach. Even as late as the sixties and seventies, there were millions of people who didn’t have access to television. Cable’s great innovation was to use its wires to create new programmes, not just retransmit what broadcasters were doing.
First HBO, then a whole slew of networks came along to compete with broadcasting. Finally, cable became the major means for people to get channels. Broadcasters, like everybody else, became beholden to the cable industry. The gatekeepers were not the broadcasters any more, it was the turn of cable operators – satellite companies to a lesser degree.
Then the internet came along. That has been a shock to the traditIonal system
That world of three or four channels went to a dozen, to 50, to hundreds. Its brilliance was the dual revenue model – people paid for cable, but were also willing to watch advertising.
Then the internet came along. That has been a shock to the traditional system, with an almost infinite amount of content. You only have so many hours in a day, and no matter how much you multitask, there is only so much you can watch. Not only do consumers have all these content choices, but they can choose when to tune in.
All of that has upset the two big pillars of revenue from the cable business I grew up in: subscription and advertising. I teach graduates, and nobody in my class subscribes to cable – even the older generation are dropping it for a smaller bundle, or no bundle at all. At the same time, it’s taken a big hit to advertising revenues. With consumers having so many more choices of what to watch and what platforms to use, you just don’t have the same level of concentration around the small handful of programmes that you used to have.
FEED: But now the internet is no longer the new kid on the block. A lot of these digital giants have become the incumbents.
HH: Now, as the cable industry once was, digital providers are becoming the gatekeepers. Revenues are drawn from data, e-commerce, advertising and subscription; but now in the service of very powerful companies, well beyond the size of old cable.
With so much content available, these companies are put into the role of curator. Things have begun to develop around different apps, and you can move easily from one to another. But you don’t always know where your favorite content is. Sometimes you only find it through word of mouth, sometimes you need the old-fashioned New York Times as a guide.
Getting a share of voice, as you’d say in the marketing world, is an increasingly difficult problem. The odds of any one particular show breaking out are increasingly difficult. In the old days, if you could get your show on a network, you had a good shot that there was going to be some life in syndication, even if it wasn’t a big hit. Now, things come and go, and we never know that they existed. It’s a challenge for everybody: content makers, distributors, marketers. It’s more complex for everybody in the ecosystem.
Getting a share of voice is an increasingly difficult problem. The odds of any one particular show breaking out are increasingly difficult
FEED: What chance do traditional broadcasters have against the big digital platforms? How do they keep from being run out of business?
HH: In the States, there is ATSC 3.0 on the horizon, and that might provide some bridge forward. This kind of next-gen TV will permit a broadcaster to communicate in both ways with viewers. It’s still in test stages, with a very slow rollout, but has the possibility of bringing a much more digital approach to broadcasting, with targeted advertising and differentiated content.
Secondly, broadcasters have to really think differently about curation and delivery. Jason Kilar, the head of WarnerMedia, got a lot of flack during the pandemic, when he recommended launching Warner Brothers movies simultaneously in theatres and on HBO Max – or even just on HBO Max, when theatres were closed. There was a big uproar. People said,‘What are you doing? That’s the end of cinemas.’ I don’t know whether it will work. It’s not the right strategy for every movie, but it’s probably the right approach for many releases.
But in television, we still do the same things over and over. The morning shows, the news at noon, then at 6:30pm another news broadcast. Friday and Saturday nights have been abandoned to Netflix. Try something different! Instead of airing another bottom-of-the-barrel show, maybe do something in conjunction with Netflix. You’ve got to innovate. Being what you’ve been is a death knell.
FEED: Broadcasters have so much expertise, infrastructure and cultural clout. Is there more they could be doing?
It’s amazing that so many people still watch broadcasts, given all the options they have. Some of that is inertia, and the audience is ageing. But everybody knows ABC, NBC, CBS and Fox. Obviously, the BBC is ubiquitous – you can say the same thing about Canal Plus. Broadcasters have a lot of legacy strengths to support them, but they will need more than this to win the day.
FEED: Have new technologies helped niche and local interests? There are so many options, but are things like quality local news still drying up?
HH: There are green shoots around local media, where you sometimes have local partnerships between public media and private enterprise. American public media has some of the most powerful local presences – WNET in New York or WGBH in Boston have always been very influential. I think a public-private partnership is the future.
In the States, they have been trying to deliver local news. Their business is meant to be a community resource, providing groups with a way of sharing information. That was a big problem with Covid-19. You would hear from a friend’s mother’s sister, ‘Hey, you can get tested at such-and-such a place. Or I heard they have masks at this drugstore.’ I don’t know if that qualifies as news or not, but it is a local resource. And it’s probably even more important to have today, as we’ve seen with issues of public safety – think Black Lives Matter and the climate emergencies.
The challenge is that in a capitalist economy, to keep growing requires greater scale. If you go to Roku, there are 10,000 streaming apps, but there aren’t 10,000 successful businesses. Many will roll up with similar apps; some may be bought by Warner Bros, NBC, Amazon or another giant.
FEED: You mentioned that idea of public service. Most of the platforms, technology and infrastructure we use are in private hands. Does this need to change?
In short, yes. The question then is, what should we do about it? The States has always – and some might say to a fault – been private enterprise focused. More or less, the government allocated broadcast frequencies to private parties, who didn’t have to pay for those broadcast licences. But what we did in broadcasting – and then cable – was make certain public interest demands, which have been lessened over time. We used to have the Fairness Doctrine – if you had a broadcast licence and, for example, televised public affairs handling controversial issues, you had to treat them in a in a fair manner. There was an equal time doctrine, where both sides had an opportunity to be heard.
We should be thinking hard about what responsibilities these big companies have to the public
In the cable world, you had more or less free reign over what you carried on your system, but with some allocation for local access, public education and governmental channels. And cable operators also had to pay – and still do – a franchise fee to the local community, based on their revenues. So, you didn’t have public ownership, but you did have responsibilities to the people.
Will, or should, the government own Amazon, Facebook or Netflix? I don’t think that’s realistic, or the solution. But we should be thinking hard about what responsibilities these big companies have to the public. There are important questions around privacy. That’s an area in which Europe is taking the lead, demanding greater protections for personal data. Equally, you could look at how these platforms handle news and public affairs. Or, you could consider representation – should companies have to provide some subsidy to low-income people? These are all things that we have done in the past.
FEED: How do you see broadcast unfolding in the future?
HH: The future of the business models – models, plural – is that we’re going to be in a stage of experimentation for a long time. That includes understanding how many subscriptions will actually be bought. Only a couple of years ago, the belief was that people would only subscribe to, on average, 2.8 services. That is plainly not true. Now, it feels like that’s something people talked about 30 years ago. If you have a casual conversation with someone, you find they have Netflix and Amazon Video with their Amazon Prime account; then they have HBO Max and Disney. Never mind Peacock and Paramount Plus. These are just the major ones. A business model has to figure out how many services people will subscribe to, in order to survive as an independent and thriving streaming service.
The advertising world has it’s share of challenges, too. What do you do when there are so many choices, and so many ways to not watch advertising? How does the advertising world – which is often stuck with an old fashioned mindset – adapt to the future?
How will e-commerce, loyalty programmes, and the things we associate with the shopping experience translate in future media? For the longest time, you put on a TV show, people watched it, and you sold advertising – that was it. That accounted for 60 years in the 20th century. Nothing lasts nearly that long any more.
The future will be less about traditional advertising, based on how many people are viewing. It will, instead, focus on content leading viewers towards a purchase. Whether it’s healthcare, fashion or travel, taking commission will be a large part of advertising. For example, somebody books a trip on American Airlines because they got there from an article or show about some travel destination. American Airlines will share with the publisher, as opposed to paying for the single ad, and keeping everything else that is paid out down the road. You could say they’re sort of sharing risk, sharing reward. In a very complicated world, those are arrangements that may help people figure out
an uncertain future.
This article first featured in the Autumn 2021 issue of FEED magaine.