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  1. 1. publictelevision.org CPB Future Fund Proposal Narrative The applicant will develop and implement a streaming media service for public television programming called publictelevision.org. This site is designed to be integrated with a participant’s own web site (e.g., wnin.publictelevision.org) without diluting either the station’s brand or that of PBS. The project will stream an average of 30 hours of programming for each of 20 public television stations and consortia for a one-year extended beta test and the first full year of operation beyond that. Streaming will be at both broadband and dial-up data rates. The number of participants will double in the second year. Participants will include both public television licensees and recognized minority and independent consortia producing programming for public television and provide pro bono services to the latter during the two-year startup period (consortia would pay full fees after that). A beta version of the site can be seen at www.publictelevision.org. The site currently includes programming from Connecticut Public Television, KWSU/KTNW (Pullman/Richland, WA), West Virginia Public Television, Wisconsin Public Television, and WNIN (Evansville, IN). The project will secure professional design services to encourage usage and facilitate e-commerce applications. Viewers can enter the site either through the main URL or through participant-specific URLs, for example, kwsu.publictelevision.org. Programming is accessible by station/consortium or by programming type. Need How will public television become an effective distributor of programming in the emerging broadband world? We are, to use the current slang, pros in the “lean back” world, but novices in the “lean Residential Broadband Subs (Millions) forward” world. The current quality of Internet video is poor for the 40 typical dial-up consumer. 30 20 But that is changing fast. An August 2000 FCC meta-analysis1 of several 10 reputable forecasts concluded that 0 2000 2001 2002 2003 2004 residential high-speed access technologies will have 35 million Cable Modem DSL Fixed Wireless Satellite subscribers in 2004 – a number that will almost surely dwarf the number of DTV receivers (there is already a 100:1 ratio). In Las Vegas, Palo Alto and even rural Ephrata, Washington, fiber-to-the-home services are now being offered, and these were not included in the FCC analysis. In contrast to problematic prospects for cable and DBS 1 FCC 00-290,Deployment of Advanced Telecommunications Capability: Second Report, August 2000. The report may be downloaded at www.fcc.gov/broadband. Sources include Bernstein/McKinsey, DLJ, Bear Stearns, Veronis Suhler, Morgan Stanley, Pioneer, Merrill Lynch, Lehman Brothers, Strategic, and Dain Rauscher Wessels.
  2. 2. carriage of all public television stations, IP delivery is its own “must carry.” Cable and DBS will welcome our activity as they would any other IP video because it advances their own business plan for broadband. To effectively compete in an increasingly IP world, television must be produced and delivered in a new way, a way we’re calling “just enough, just in time, just for me” television. There is already evidence that people who have broadband connections are using traditional broadcasting less. Given the expense of development costs, broadband access and support costs, and more importantly an expensive learning curve, go-it-alone IP video operations are expensive. This proposal provides an effective way for stations and consortia to enter this new medium with minimal risk, while at the same time emphasizing their value as content producers beyond the national schedule. As a means of enhancing local value, station clients may choose to provide some of their capacity to provide streaming services for other content sources in their communities such as museums, libraries and educational institutions. Approach This site will operate as a utility, not a portal. That is, it is intended to be a service to content providers, not something with its own brand and programming goals. Participating entities will have complete control over what they put on the site. There will be no editorial process involved in selecting what goes on the site. The video assets posted to the site may or may not be programming that they broadcast over their own air, they may be what we normally consider odd lengths, they may or may not be closed- captioned, and they may not even be programming directly produced by the client. Additionally, publictelevision.org will not have an exclusive license; therefore, stations will be free from our point of view to stream their programming both places. We recognize that stations are going to have to do business differently in the web environment. Programming is asynchronous, not scheduled. Streaming technology often makes viewing what we now consider program length material impractical, so some form of indexing or “chunking” is advisable. As time goes on and true high capacity broadband such as gigabit Ethernet becomes more available, and as digital personal video recorder (PVR) devices become more generally available, these assumptions will change and the environment will probably become more broadcast like, especially with regard to program lengths and where people view programs. However, for the next few years, we must make accommodations for the streaming technology and the viewing environment. Our proposal advocates a flexible approach to this and will encourage and assist clients in versioning programming for the web, in “chunking,” and in providing indexing. Financial Assumptions This project will both save substantial money over the costs running individual streaming sites and result in new income opportunities. It is easier to estimate the former than the latter, so we have tried to justify the economics of this based on savings alone. Participant fees in our model are $5,000 for the first year of the grant, $15,000 for year
  3. 3. two, $25,000 for year three, and $30,000 in year four, increasing only with inflation after that. These fee levels were set to more or less linearly track the projected increase in U.S. broadband subscribers through 2004 (which will continue to climb after the fee levels out). We estimate a standalone streaming service would cost a station or consortium $94,000 per year – compared to the $30,000 per year cost once the grant subsidy has ended. This $30,000 would include national-level marketing plus traffic generated from people coming to the site from other stations or producers. Ten-year savings (if our participation assumptions are correct) could be in the $50 million range on a total participant investment of about $20 million and a CPB investment under $1.5 million. Our long-range assumptions (see Appendix B) are for 60 participants in the third year, 80 participants at year four, and that it would level off there. We are assuming, based on conversations with streaming companies, that we can conservatively expect the amount of programming to double at the same cost every three years (it has been 18-24 months so far), so participants should be able to stream an average of at least 60 hours in 2003 and 120 hours in 2006. We project that the site can be financially self-supporting from station fees at roughly the $30,000 level beginning in year four. This is less than one- third what we believe a rudimentary video streaming service would cost a station on a standalone basis, and that would not include national marketing and traffic from other participants (see discussion below). publictelevision.org would keep underwriting revenue from common pages on the site and participants would keep revenue from underwriting and e-commerce from pages on the site dedicated to their programming. Solicitation of underwriting would be outsourced. Stations could also partner with local colleges, museums and libraries to distribute content that they want to share on a co-branded basis and keep money from those sources to the extent that it did not exceed their contracted hours. Tasks2 • Provide for professional design review of the existing publictelevision.org beta site. • Prepare, encode and incorporate an average of 30 hours of streaming video per participant for 20 entities in year one and 40 in year two. • Contract with a streaming service to provide the backbone distribution platform. • Provide for marketing (albeit “barebones”) of the site to the general public through public radio underwriting or similar venue. We presume that clients will also promote the availability of programming on the site via their air, program guides, etc. • Form an advisory board to guide operations of the site. • Form an administrative, client relations and operations infrastructure for daily operations of the site through its first two years of operations. • Demonstrate the viability of a collaborative model for distribution of high quality web-based public television video assets. • Identify the characteristics of “good” broadband web-based television. 2 We believe that training will be an important task and have had an initial discussion with Cindy Johanson PBS about potentially submitting a separate joint proposal for training stations in web video production techniques.
  4. 4. • Demonstrate the marketability of web-based public television productions. • Generate support revenue through this new model of delivery. Appendix A – Frequently Asked Questions How does this proposal compare to the PBS video streaming initiative? The PBS initiative would stream some local public television programs on the national PBS portal site. It differs in several important ways from this proposal, however: • Publictelevision.org is designed to be complementary, not competitive, with our two most important brands, those of the individual station and PBS. This service is a utility, not a portal, and its sole raison d’être is to signal the value local stations and producers add to the national schedule. • The PBS initiative also provides ways for stations to incorporate PBS programming onto their local sites as well as streaming video assets, and does so in a well thought out professional way. This proposal focuses only on streaming station video assets. • Stations may stream anything to which they own rights on the site, including non-broadcast video like distance learning or “PEG-type” cable programming. The PBS initiative involves an editorial process for program selection. Presumably, it will apply standards that are consistent with the quality and programming image associated with the PBS brand. • Stations keep underwriting and e-commerce revenue from their own pages in this proposal. • Recognized minority and independent producer consortia will be eligible streaming entities. • PBS utilizes a search engine technology that relies on closed captioning information. publictelevision.org will permit indexing, but producers will be encouraged to permit web friendly “chunking” of video assets. • Stations may promote direct access to the site using their own identity; e.g., ktnw.publictelevision.org. Viewers can access station pages directly rather than drilling down through a portal site. • Finally, the site is governed with the assistance of a station advisory board.
  5. 5. How would the governance of this service work? This would be a non-profit service of Washington State University. We would appoint an advisory board to staggered terms consisting of the first 20 stations or consortia willing to make a two-year commitment. Longer term, we would anticipate that the board would be reduced to about a dozen people chosen by other users. Why don’t you show underwriting, e-commerce and partnership revenue? We believe that underwriting and e-commerce revenue can exceed the cost of streaming for many clients, especially for those whose programming (e.g., how-tos) lends itself to e-commerce or videotape sales. However, it seems highly speculative to include an estimate for that revenue in this application. This is too new to have widely known rules of thumb that can be applied. The same goes for potential income from college, museum and library content partners. Local situations will vary considerably.