Observations from AdTech and NAB. Metamorphosis?

…Too many digital media companies are struggling to conform to legacy revenue-generating models imposed by advertisers, agencies and distributors…

Metamorphosis. The National Association of Broadcasters branded this year's convention in Las Vegas under the theme that describes "a conspicuous and relatively abrupt change usually accompanied by a change of behavior." The NAB event brought together an estimated 90,000 TV industry professionals and 1,600 exhibitors, 90% of whom have little or no involvement with online or mobile media technology. The mostly white, middle-to-older aged and male executives certainly did not look or act conspicuously different from past NAB attendees, nor did the focus of the event reflect a significant change in behavior.

By contrast, few of the 10,000 AdTech attendees and 200 exhibitors have ever worked in the TV, radio or print media business – and are increasingly young with a growing base of females. The common denominator between the two events is the focus on engineering as the centerpiece of expansion and development for both the digital and legacy broadcasting business. While the NAB did host sessions on the Internet and mobile, the primary concentration of floor space is directed toward enhanced production capabilities. Digital is a tool for production and distribution and has not yet evolved to be at the foundation of a redefined industry business model. There certainly has not been an industry metamorphosis.

AdTech remains much the same as it has for years: an over-weighted celebration of early and mid-stage companies struggling to establish themselves in a cluttered competitive environment. There was far greater emphasis on mobile this year, but again the primary take-away is that hundreds of companies crowd into small displays and compete for the attention of passers-by who are there more for the networking than for the learning. Little business is done at AdTech. At the NAB, business is front and center. TV station engineers browse the displays, engage in pre-arranged meetings, and absorb the pitches from the hundreds of product and service providers who crowd the thousands of square feet in the Las Vegas Convention Center.

NAB is almost ten times larger than AdTech, yet AdTech generates greater trade press attention and ad industry awareness. Unlike CES, where thousands of ad community executives now converge each year, the NAB is almost totally ignored by ad professionals unless they've been invited to speak. TV studio execs, programmers and network execs are rarely seen. If they're speaking, they often swoop in for their panel or presentation and then fly right back out. McCarran Airport, only 15 minutes from the Convention Center, makes the Vegas in-and-out especially convenient. Studio and network execs can leave from Burbank at 8 AM, speak at 10, and be back in their office by 2.

Perusing the many technological advances on display at NAB, it's clear the broadcast industry is not at a standstill. Broadcasters are investing heavily in infrastructure, and challenges from IAC's Aereo and other over-the-top technologies make for especially interesting discussions about the industry's future. Mobile is clearly making headway and 3D TV has a meaningful presence. Call it evolution, change, transition, even transformation… but there is no metamorphosis anywhere to be seen at NAB.

Nor is it to be seen at AdTech. Yes, there are new companies and expanded emphasis on the cloud, mobile, high speed, gaming, marketing and advanced digital technologies. But other than the appearance of more mobile companies, there is very little to differentiate AdTech 2013 from AdTech 2008, except that AdTech 2008 was more crowded with ad executives, Hollywood execs, trade press, consumer press and curiosity seekers.

Of the two events, NAB was the more meaningful. The continued dynamism of the broadcasting and cable industry is evident. It's not static, nor is it progressing as fast as it could or should be. But it is advancing. AdTech, by comparison, feels static and uninspiring. While NAB was also uninspiring, I am impressed by the choice of "Metamorphosis" as its theme. I believe the industry will go through a metamorphosis in the next several years. It will either shed its skin like a caterpillar and turn into a beautiful butterfly or become a moth that eats away at its own the fabric until it disappears. But the industry will need to move beyond change, transition, transformation and evolution. It may take two more decades to complete the metamorphosis, but it will need to alter its fundamental self if it is to survive the realities of digital acceleration. The fact is that most of those white men at NAB will be retired or have passed by then, so they can uncomfortably hold to the status quo as the industry moves past them. The young execs at AdTech do not have that luxury; they need to be more aggressive in inventing the future.

Too many digital media companies are struggling to conform to legacy revenue generating models imposed by advertisers, agencies and distributors. They too need to reinvent the business if they are to break out of the walls within which they are competing. As younger managers – who have no experience in legacy media – move up the ranks they will not be held back by the relationships and strategies of the past. They will move on without regret, seeking partners and revenue models built on new technologies and metrics. The young people at AdTech will be leading the industry in 2025, with little understanding of or interest in the foundation on which it was built. That foundation was on display at NAB. Unfortunately, the metamorphosis was not.

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