THE BLOG
02/11/2013 04:23 pm ET Updated Apr 13, 2013

Icing The Networks

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If you were born at the turn of the last Century (20th), and you were looking for a place to invest your money, ice looked like a pretty good bet.

The ice business was everywhere.

There were ice houses in New England that cut up the frozen ponds in the winter and stored the stuff all year long.

Everyone had ice boxes in their kitchens, and the ice in them had to be replaced weekly.

There were regular customers, and delivery routes and an endless demand for ice.

There were even ships that took nothing but ice from Boston to India and sold it on the dock.

Ice transporation, insulation, ice technology, even ice futures were all massive and very successful businesses.

And they had been for more than 1,000 years.

If you were just getting into business, ice looked like a pretty good bet with a pretty solid future.

Then, in 1913, Fred W. Wolfe of Fort Wayne, Indiana, invented a refrigerator that sat on top of a traditional ice box, and the ice business was over.

What had been a global, multi-million (in 1902 dollars) business came to a crashing halt.
The ice houses, the ice cutting technology, the ice ponds, the ice boxes, the delivery routes, the contracts, the whole thing was suddenly worthless.

Almost overnight.

That's what new technologies do - they crush existing businesses.

Almost overnight.

I thought about the ice business when my sister sent me an article from TV Week:

"Are NBC's Woes the Peacock in the Coal Mine? Perhaps It's a Signal That Broadcast TV, as We've Known It for the Past 60 Years, Is Going the Way of Brick-and-Mortar Record Stores and Bookstores"

Yes, I rememeber going to Tower Records to paw through their bins of records and later CDs.

Anyone been to Tower Records lately?

Hard to do, they are gone.

Another victim of technology - like the iceman.

And now, the same technology that killed the ice business and the record business is about take its toll on the TV business.

We all know non-linear video on demand is going to replace wait-until-9PM television. And networks are trying to respond with video on demand and online services. You know, 'TV everywhere'- on your computer, on your iPad on your iPhone.

But I don't think that it's the Internet or mobile that's the threat to TV.

I think it's something much more fundamental.

If you have a smart phone in your pocket (and more than 1 billion people already do), then sure, you have a 'little TV screen'. That's what the networks see. But you also have something else that they don't see. You have a 'little TV production company' in there.

That's right.

Between that HD video camera and that iMovie app ($4.99) you have everything it takes to make "The Real Housewives of Cleveland" or wherever else you happen to be.

No kidding.

That's all it takes.

That, and a creative idea or two.

Here are a few astonishing facts to ponder:

72 hours of video are uploaded to YouTube every minute.

Over 4 billion hours of video are watched on YouTube every month.

It would take all 3 US networks 60 years to produce the content that is uploaded to YouTube by average people every 30 days.

In fact, for NBC to produce the quantity for video that is already on YouTube, they would have to work flat out for the next 3,000 years.

But by then, I think, the tech will probably have changed once more.

Clearly, something very fundamental is happening.

A new piece of technology is destroying what was once a very profitable yet closed business - television.

It takes conventional cable networks about 19 weeks to produce a single hour of a 'reality show'. I know, I used to produce them. The networks are paying conventional production companies anywhere from $70,000 to more than $350,000 per hours for these shows.

Got an iPhone in your pocket?

Got an idea?

Just do it.

Go ahead.

Do it.

Is the broadcast model 'broken'?

You bet it is.

But not in the way networks think.

This isn't about putting traditional network TV shows on Hulu.

This is something much more fundamental.

This is about who gets to make TV shows, and what it costs to make them.

It is crazy that the most powerful medium in the world is in the hands of a few dozen people in NY and LA.

But that won't last.

And the future is, ironically, in your hands.

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