As good a businessman as Rupert Murdoch has almost always been, like all human beings, there are some clear and lamentable flaws that continue to vex him. These are the kinds of things you would have thought 80 years on this earth, and 65 or so years into the game, would have weeded from his soul, and long ago.

My first true introduction to Rupert Murdoch was in 1995, through his daughter, Elisabeth, when she and her former husband were living in my home town, Carmel, Calif., and working across the hill in Salinas. Because her family had purchased a local NBC station a year or so earlier, Elisabeth Murdoch had taken over the general manager position at the local affiliate, with the call letters KSBW. And because I was so interested in TV and at that time, especially the fledgling Direct Broadcast Satellite industry, and because I knew who her father was, I called her and asked if she and I could meet. Being the lady and the top-class business woman, and class act, that I believe to this day she remains, she said come on over.

The meeting was a good one, I remember. She was quite pleasant, knew her stuff, answered lots of my questions, satisfied my business curiosity, and gave me a much better understanding of - and respect for — a rather complex group of people.

After that meeting in the summer of 1995 (I think that was the timing), I again saw Elisabeth Murdoch at a News Corp. investors meeting in Century City, Calif., where she introduced me briefly to her father as he walked by, and the Murdoch family together introduced the audience of investors at great length to their idea of buying the then newly-created DBS EchoStar corporation from Charlie Ergen. Mr. Murdoch wished to merge Dish Network into what Mr. Murdoch and his News Corp team then called ASkyB. (ASkyB was to be the American equivalent to the Murdoch’s DBS part-ownership play in the U.K., called BSkyB.)

Within a couple of years, however, that News Corp.-Dish deal tanked in litigation (which today sure pleases Charlie Ergen, because of the great things that have happened to Ergen and his companies since), and the Murdochs began their pursuit of another U.S. DBS company, this time the No. 1 competitor to Dish Network, DirecTV. You see Mr. Murdoch has always coveted a prime DBS product and service in North America.

Which is where Chase Carey enters the scene. Chase Carey was, is now, and likely in the future will still be the, or one of the, top lieutenants of Rupert Murdoch globally and in the U.S. of A. When in January 2004, Rupert Murdoch finally fulfilled his life-held dream of owning a top-level U.S. DBS concern, he turned to Chase Carey to take over the reins from DirecTV predecessors Roxanne Austin, as then-president, and then-founder/chairman Eddy Hartenstein, as a DirecTV president before.

I recall writing at one point in 2005 or ‘06 that Chase Carey was not long for DirecTV. I remember that upset one of his press lieutenants at the time. Yet, with his News Corp lineage and his east coast attraction, once Mr. Murdoch decided to sacrifice DirecTV in order to keep News Corp out of the hostile takeover hands of rival Dr. John Malone, Chase was able to quickly fulfill my not-so-tough-to-come-by prophecy. Chase returned to New York City and News Corp., where he soon took over the lead U.S. reigns from former U.S. News Corp. boss, Peter Chernin.

Which brings us full circle to today,

Wed in the greed and the all too much passion to be Number One Above All Others, and not caring enough along the way about what laws are broken or what people are hurt, and we see News Corp. struggling mightily still today against a tide of global disdain for its actions and follow-ups.

And then, when Mr. Murdoch and his team are caught, he refuses to do the right thing: Rather than take responsibility as the leader of the team (which naturally and reciprocally accompanies accepting the opposite, the i.e., the success and the victories…which I’ve often see Mr. Murdoch do), Mr. Murdoch instead blames the others around him who he believes he can sacrifice.

And Mr. Murdoch says they let him down. Yet, again, if long ago they didn’t do something right and it exploded within your own company (which you so ultimately control), then you, Mr. Murdoch, are to blame as much or more for not putting the proper checks and balances in place to catch and correct such behavior, even before it explodes.

And the irony of all ironies: 1) you lost EchoStar to bad management and bad luck; 2) you lost DirecTV to a marketplace struggle to retain your bigger prize, News Corp; and now 3) this recent crisis of bad management causes you to lose your latest bid to completely control BSkyB.

Summarizing, what will you have lost in total, Mr. Murdoch? Well, to start, 1) Some of your personal image as “The Last Media Mogul” (as The Economist recently dubbed you); then 2) your DBS company, BSkyB, in an important part of the world; 3) your esteem built around products like The Wall Street Journal; and 4) your current heir apparent.

But what will you have won? Well, perhaps most importantly, you will have understood who should be the proper person running News Corp post-Rupert Murdoch. Approving settlement payments to victims of hacks, and being accused of not telling the truth before Parliament, do not bode well for continuing respect for your - and your heir apparent’s — futures.

Steve Williams, Tiger Woods’s long time caddy, recently told his old boss, “You will have to earn my respect back.” Well, Mr. Murdoch, even though you are 80, and you probably will not have as much time left as Tiger Woods, I, too, would like to give you the benefit of the doubt. I, too, would like you to earn my respect back. Perhaps you could start by considering picking a better lieutenant than the one who joined you in Parliament recently, and apparently failed to do what he promised, i.e., tell a more accurate story to those asking the questions.

Indeed, if you ask me, I might just have a suggestion. (Hint: Replace JM with EM).

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).

During the past 70 years of television, broadcasters have been challenged by new forms of distribution in two distinct time periods: the cable era of the 60s and 70s, and the satellite era of the 80s and 90s.

These once-nascent distribution technologies, each one with one or two defining leaders using their legal strength to challenge the broadcasters, ended up dramatically changing the landscape of television.

Built upon that foundation, welcome to the dawn of a new television distribution era. This one is known as the Internet video era, or Over-The-Top (OTT), or as the government recently coined it, the Online Video Distribution (OVDs) era.

Recent research by The Carmel Group suggests that copyright challenges usher in change. In the past, when the all-important broadcasters had their copyrights and licenses challenged, first by newcomers in cable, and second by newcomers in satellite, they typically sued first and obtained their desired injunctions. The broadcasters then tended to see the light (i.e., that more distribution of broadcast TV is good), and they then worked with the government and the industry to achieve reform-based legislation that allows that new form of distribution to coexist…as long as there is control of distribution and the revenues are shared.

History seems to be repeating itself today, with broadcast television being challenged by Internet video distributors, and the Internet video challengers compelled to offer that must-have broadcast content. Challengers with what appears to be less legal staying power have drifted into this Internet video history. They include iCraveTV, which appeared to be claiming it was a passive carrier (but it didn’t seem to fit the copyright exemption); and FilmOn, apparently claiming its service was merely free-to-air (for which no copyright exemption exists); and Sky Angel, which seems to have claimed it was governed by the FCC (but the FCC states it doesn’t govern the Internet).

Meanwhile, another key Internet video challenger, ivi may be emerging as a defining leader with that important legal strength –ivi is claiming it is a cable system (where there is a clear copyright exemption). And beyond ivi is the yet-to-launched, and yet-to-be-sued, Bamboom, which may be legally claiming it is not rendering a public performance (even though it transmits the broadcasters’ signals).

The ivi situation may be an ideal case in which to make the observation of broadcasters suing, getting an injunction, and having it appealed to the higher court while proceeding on the merits.

In the specific case of ivi, against which a preliminary injunction was lodged in February 2011, the Seattle-based company has appealed that injunction, and is waiting for a ruling from the U.S. second circuit court of appeals. At the same time, ivi and its founder/CEO, Todd Weaver, continue to press forward on the merits of their basic claim, i.e., ivi should be permitted to carry broadcast channels in the same way that cable providers do, because ivi meets the statutory description of a true “cable system,” and it pays the exact same copyright royalties that cable companies do. Interestingly, there is a copyright exemption for cable systems in Copyright Law, and all true cable companies (perhaps one day including ivi), make a biannual compulsory licensing royalty payment to the U.S. Copyright Office, making it a non-infringing act to retransmit FCC licensed broadcast stations to their subscribers.

Like cable and satellite before it, Internet video as a future form of television distribution is going to be decided, in some measure, by the federal courts. Based upon developments to date, OTT, OVD, and the Internet’s ability to compete with cable and satellite as a pay TV platform, may be largely decided by the ivi case. If history is a guide, the ivi case outcome may then encourage the industry’s stakeholders to join and push the government to reform copyright and compulsory licenses, possibly merging cable and satellite in with Internet video into a single copyright section and royalty rate.

Although probably inevitable, this process will take a long time. The government will not do much, if anything, to push the process along, especially in the beginning. Indeed, new challengers and court decisions in cases like ivi’s will do the pushing to the point where Congress, with Copyright Law; the FCC, with rules and regulations; and, to a lesser extent, the Copyright Office, with reporting and payment, will all step in to create new legislation that cements that necessary change.

OTT/OVD/Internet video has the legs, and these new services make a boatload of common sense, especially for consumers. Call this a forecast, if you will, but finding a place alongside cable and satellite is unavoidable, as long as these new Internet video players play by the same rules. These are the all-important rules that properly compensate each member of the entire content food chain. Or, to amend an overused adage: If these challengers follow (and pay) the money, that success is very nearly predictable.

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).

From Oct. 4-5, in San Jose, Calif., together with about 200 others, I attended a well run and very informative telecom conference called TV Next.

TV Next is put on by Greg Fawson and his Jordan, Utah- and Berlin, Germany-based XMedia Research company. Its title replaces that of the same basic conference last year, called Set-Top Box 2010, which is quite fitting, because the real changes in TV today go way beyond the mere hardware side of the business.

Indeed, the real changes in TV circa 2011 are more appropriately described as including everything!

That said, one of the clear focuses of the two-day event was the online video, or Over-The-Top revolution, and how that plays out. Interestingly, there were multiple visions as to the ultimate success of OTT, ranging anywhere from very sanguine to surprisingly pessimistic. Several even supported a view I wrote about in Mixed Signals several weeks ago.

One of the less optimistic voices, that of my former boss and industry veteran Paul Kagan, noted (and I this time agree with him), that the in-place agreements that are controlled by the industry operators and content providers are typically long-term, and very restrictive in terms of what others can do with that content. Thus, the ability of newcomers, or the “MVPD Wannabees” as I call them, to rush into this space, is also restricted.

The big news of the event came in an opening speech on day two, where Verizon FiOS’s Eric Bruno was joined on stage by a representative from Microsoft Xbox’s Tom Gibbons to announce the deployment of new content services on Xbox’s in the households of Verizon subscribers. Yet, as much as this new announcement seems to open up new content to customers across the nation, in the end it touches less than 4 million existing FiOS subscribers, and it maintains the pay TV status quo in many if not most ways (or at least relative to that discussed in the paragraph immediately above).

The first day opening address was from Comcast SVP Steve Reynolds, who spoke of the technical strategy and product roadmaps for a typical wireline pay TV operator these days. Claiming that his company’s view is “all to service the customer,” Reynolds broadly mapped a transition from traditional video carriage to that of an IP-delivered and IP-dominated world.

The only other pay TV operator of real size and substance on the agenda was EchoStar VP Michael Hawkey, who presented the topic of “Life After The STB: TV From The Cloud,” on the afternoon of Day One. Hawkey and the hardware side of the EchoStar realm believe that the cloud is a secure and more valuable way of delivering content into the home, such that, among many things, it will eventually replace DVRs in homes. Having written an NAB/Focal Press book about DVRs , it is hard for me to stomach such a radical concept, but I can certainly see the logic (as least as far as concerns the idea of moving the DVR functionality into another more efficient and valuable locale beyond the household).

Throughout each day, sessions typically started on time. The panelists were also well picked, and afternoon sessions focused on single speakers delivering somewhat company-centered presentations, which nonetheless did focus on broader industry-based data and issues.

The lack of a Day One end-of-day mixer was a lost opportunity, because let’s face it, much of why people attend conferences is to network, be it to say hello to and catch up with old friends, or to meet a new one or two and share company business cards. That said, I’m willing to guess that at future such events, TV Next will be able to find a willing sponsor that can help foot the bill for such an important event. It’s also a great way to wind down the stress and high level “on” required of most executives these days, especially those involved in presenting or helping the show operate. As a former conference organizer, I can surely attest to the wisdom of that.

Thus, all in all, it was an event I hope to be able to attend frequently in the future, and one I would heartily recommend to others. Being in Silicon Valley is also quite good, because there are an awful lot of companies there, or that come there, so the locale induces more business meetings and related opportunities.
Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).

Oftentimes in business, as in life, it is important to be reminded of important underlying themes when approaching new developments.

A perfect example of that in the pay TV industry is the idea of always remembering the importance of monetizing the product or service. And still, these days, that means primarily finding revenues in either advertising, or subscription, or both. Cost per thousand viewers (CPM) and Average Revenue Per Unit (ARPU) are the cherished words for those pursuing this business.

At CES 2011 last month in Las Vegas, one of the core show messages or developments was tablets. Moreover, as it relates to pay TV, tablets will become the focal point of TV in scores of millions of U.S. TV households. Tablets will help us watch TV throughout the house, because the software interfaces being built by companies such as Technicolor (and its MediaNavi interface), Cisco (and its VideoScape software), and NDS (and its Snowflake service), as well as by companies such as Rovi, will aggregate and connect everything together. Once aggregated, the interfaces will help the content to be easily moved from room to room, following the individual user.

And as has been the case for so many companies in the past, looking at similar challenges, the interface evolution will be an opportunity for some, and an obstacle for others. This will be especially true for advertisers and their agencies. Indeed, there is lots of room for CPM and ARPU growth, especially for video delivered by Internet or Over-the-Top providers (OTT).

ScreenPlays magazine recently noted that “Internet CPMs, averaging under $5 in most categories, are a fraction of TV CPMs, which average $20-$30 based on dayparts and programming popularity.” As touch screen tablets replace funky and nearly archaic remote control devices, personalized TV seems a natural outgrowth of that change. Indeed, within a single typical U.S. household of two parents and two children, each is expected to have his or her own unique TV account. When that single person walks inside the room, or moves a certain way, a device recognizes that person (or that movement) and instantly delivers messages that only relate to that person, and on every level.

Thus, not only will channel lists customized to that single individual pop up on demand, but a screen format, and a sound level will set in instantly for that viewer. A specialized list of shows recorded to the digital video recorder will be accessed only by that viewer. Or, for a child, only certain shows within certain rating limits will be accessible. In fact, there will be dozens of individual adjustments made by the software and hardware.

But also very critically important to personalized TV will be what advertisers do.

Going back several years to a couple of books I wrote about both digital signage and DVRs, a heartfelt message I tried to maintain in those volumes was that of “relevant programming,” especially including advertising. Indeed, I challenge anyone to convince me even partially that the future of personalized advertising is not huge, assuming advertisers, agencies, and related industries make it relevant.

That is because personalized advertising is just another way of giving people the choice that they seek. And let’s face it, going back to the earliest days of true digital and first generation DirecTV, basic choice is the core reason behind the greatness of today’s pay TV industry.

So, when a typical teenager opens her tablet in her living room on a day after school, a part of that specialized and personalized upper, side, or lower screen scrolls or flashes a subtle message about a product or service she truly seeks and has interest in. For example, in the late summer or early fall, she might have an intense interest in the colleges she might attend next year. Or in the late winter, she might seek out prom dress information for one of the more important events in her teen life. And having both filled in her own profile information, as well as having entered special information about her own special interests, those educational and apparel ads and updates will arrive. And even with a DVR that offers a terabyte of storage (which is big), she will not skip over such desirable advertising video.

Thus, that special teenager will have special ads, which, if done well, will not only be watched, but sought out specially. And that is the future of advertising.

Indeed, it is a whole new ecosystem coming to TVs in living rooms, bedrooms, and every room throughout the average U.S. TV household. Speaking only from a numbers POV, taking roughly 115 mil. U.S. TV households, and estimating no more than 2.5 TVs in those homes, that represents hundreds of millions of additional, hopefully relevant advertizing locales, every day, for American advertisers and their constituents.

Furthermore, savvy social networks will drive that change and the opportunities for advertisers and their agencies even further. Plus, large monitor companies such as Panasonic and Samsung will not only add Internet connections to all new TVs, but also help turn those TVs, just like the tablets and handhelds, into computers that have the capacity to make just about any video happen when, where, and how anyone, anytime, chooses. Further, video delivered to all TVs via the Internet and OTT opportunities is just a few single digit years away from becoming the norm.

Will advertising be as effective using the tablet and user interface of tomorrow? The answer is not only “maybe,” or even “probably,” but clearly “certainly,” if advertisers can link that personalized world with the quality and relevant delivery of chosen advertising.

This is the successful future of advertising and tomorrow’s living (and other) rooms.

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).

My good friend and self-described latent curmudgeon, consultant Gary Arlen, has a remarkable mind. He engages things in ways quite unlike most others, and yet almost all the while keeps focused and amicable, despite an occasional flare-up of healthy cynicism. In short, I like being around him, and learn lots whenever I am.

Thus, when he accepted my suggestion to return to the satellite conference in Washington, DC Convention Center on March 16, and spend a bit more time on the exhibition floor, I was pleasantly surprised. And I was even more pleased when later on he scribed me a short tweet-like email, specially pointing out the Comcast booth # 1418.

You see, cable, and certainly big cable, has rarely ventured outside of its own big silo to dabble in the big silos of its rivals known as direct broadcast satellite and telco video. Indeed, I’ve never seen a big cable operator exhibit at any satellite show. Yes, this was a 25-year first.

Indeed, in the past, American Cable Association CEO and president Matt Polka has joined a couple of panels at the satellite shows I have produced in DC, but his visits have been rare, and Mr. Polka does not always have the kind of bigger cable constituency (and numbers) behind him as that of the National Cable Telecommunication Association. Put another way, I cannot remember seeing cable’s Kyle McSlarrow or Glenn Brit speak at a satellite show, nor Brian Roberts or Pat Esser, nor the telcos’ Ivan Seidenberg or Randall Stephenson involved publicly at a cable or satellite event. And satellite’s Charlie Ergen and Michael White haven’t been tapping the lectern at too many cable or telco shows these days. It just doesn’t happen.

Worth noting is that Cablevision chairman, Chuck Dolan, used to attend shows to promote his nascent Voom service, but that was because of the high-definition service’s obvious satellite centricity. Outside of that, there’s been nothing involving pay TV cross-fertilization, which does not make sense.

In short, it is unusual to see cable folks on panels or at booths at big or small show with satellite or telco folks, and I can’t recall ever seeing a cable booth on the floor of a satellite show (or vice versa).

The Comcast Media Center listing on page 44 of the official program guide included its Centennial, CO address and website, as well as the following verbatim description: “Comcast Media Center (CMC) provides businesses with full-time and occasional video and audio transmission services via satellite, fiber, and IP over video. CMC acquires and distributes content in HD, SD, 3D and in MPEG-2 and MPEG-4. Other services include network origination, disaster recovery, and VOD.”

Many of you may not know this, but the reason I chose the title “Mixed Signals” for this column is because I want to write about broadcast and pay TV as a whole, and because I see each of the core stakeholders currently and eventually becoming more and more alike (or at least doing more and more of the same things for consumers…who, by the way, don’t care much how they receive their signals, and typically don’t care about whom they receive them from).

Thus, when I see one player allowing its separate silo to merge and converge into and with that of another silo, well, frankly, I think it’s impressive. Because in the end, so much of what keeps cable and telco and satellite (and even Internet and over-the-top players) apart is artificial, and is imposed by an establishment and a culture that needs to think things through thoroughly a few times more every year.

And one of the last ones I thought I’d see doing this at this point was the biggest and often one of the most conservative of the large cable bunch, i.e., Comcast. I was, like Gary, intrigued, and upon further investigation, impressed. To mine and Gary’s great surprise, there they were. Comcast is trying to do what Charlie Ergen has been trying to do with them for years: get the traditional competitors to buy your services (as Ergen has been doing with his hardware spin-off, EchoStar, which endeavors to sell amazing set-top boxes to U.S. cable operators — but which has for years now not succeeded).

So, thanks, Gary, for helping me find these new “Mixed Signals.” Let me know when you find more, because they are coming, and I’ll be listening.

Indeed, cable, there’s money to be made in satellite, and satellite, you’ll find new revenues in cable and telco and Internet/OTT…and lots more in between and amongst each other. That’s the telecom business model of the future. You simply need to properly redefine what it is that you really do.

Jimmy Schaeffler is chairman and CSO of Carmel-by-the-Sea-based consultancy The Carmel Group (www.carmelgroup.com).