Risky Business: USDTV Files for Chapter 7

July 12, 2006

Remember the movie Risky Business? Hard to believe but it was 1983 when Tom Cruise briefly slid across his parents hardwood floor. Where does time go? Until a party was held at my house which I didn’t attend, Risky Business was one of my favorite movies. Still, it is a great flick. It is a movie about becoming an entrepreneur, a kind of coming of age in the business world. Risky Business teaches us that action is always better than inaction.

Think about it. Had Joel done nothing he would have received nothing. He never gets into college. His life is ruined. Instead, he throws a party, a mixer of sorts. He takes action. Teaming up with Lana (Rebecca De Mornay) and knowing his customer-base all too well, Joel brings supply and demand together…in his parents’ house. In the end the party was a disaster. A disaster, that is, until it creates an opportunity. Rutherford’s (the Princeton admissions guy) untimely appearance at the Goodsen home put Joel in a position to succeed.

I was thinking about Risky Business yesterday when I read about USDTV filing for Chapter 7. The former WOW guys took a chance. Good for them. They created an opportunity to succeed. Action is always better than inaction. I applaud that. Is it too late for Rutherford to show up? Probably. Endings like that only happen in the movies. But it isn’t too late for all of us to learn from the actions of all the early entrants in the digital spectrum grab: WOW, USDTV, the Broadcasters Digital Cooperative, iBlast, Geocast, etc.

I believe in the digital spectrum. We should use it. You should use it. Viewers should use it. However, I am a staunch advocate of keeping your bits. Though they may not know it yet, the average U.S.household gets 12.3 digital broadcast stations over-the-air. At 19.4 Mb/s per transmission that’s 240 Mb/s per household of FREE digital content. To get it all they need is an antenna. We call that the 240 Factor.

It is unlikely that households will give up cable or satellite simply because of price. If they did, Charlie Ergen would launch a counter-attack of unprecedented proportions. Charlie would win. So would cable. Pooling bits to create a competitor to cable and DBS is no-win situation. This is business, right? The one with the most marketshare wins. Share of customer means nothing without marketshare. Nearly every household already has cable or satellite. Price isn’t the reason the rest don’t.

The answer is to use the digital spectrum to do what cable and satellite can’t. First, the easy one. Put out a great 1080i, 720p, etc signal and promote it. Not only is the HDTV experience better over-the-air, it is free. Who doesn’t like free? Second, multicast a community-centric digital sub-channel. Take the information you know better than anyone else – news, weather, sports, events – and create an always on channel. Promote it. Stream it. Get carriage. Get viewers to extend their relationship with you to 24/7. Advertisers will follow. Lastly, and perhaps most importantly, pack the excess bits with datacast content. Tons of content. Viewers will quickly migrate to it. For about $100 a viewer can get a digital media adaptor (DMA) to wirelessly grab content from their personal computer and play it on their digital television. Think of it like using your remote control instead driving to Blockbuster. In the not too distant future every PC sold will include an ATSC tuner. That tuner will talk to TitanTV. We created that market. We own that market. Broadcast to it…action is always better than inaction.