Broadcasters have had it tough in business model terms.The rise of cable and the proliferation of content have shaken off their gripon consumers' attention and schedules. The vastly expanding worlds ofalternatives for entertainment and education have put them in a position ofstruggling to hang on toaudiences. And all this has basically ended the dominance of "appointmentTV," when you would know that a certain show was on at a certain time andclear your calendar to watch it. With the exception of "big eventTV," which includes programs such as the Super Bowl or the American Idolfinals, viewers can increasingly customize what they are watching to their owninterests and on their own schedules. The future of broadcast is indeed unclear.

The recent National Association of Broadcaster's annual meeting made atleast that much clear. I typically don't go to this meeting, but was asked tospeak this year and decided to stick around afterwards to learn more about thestrategies broadcasters are using to remain viable in the face of technologicalprogress and competitive pressures. (Also among the highlights was hearingDorie Clark talk about her new book on personal branding.Key takeaway: Weall need to build a brand!) My key impressions from the conference are, thatrelative to the folks from the broadband/wireless world where I have a gooddeal of experience helping executive teams develop new strategies and businessmodels, the broadcasters are a much more fragmented lot, and that the pressuresof unbundling (theseparate pricing of goods and services as opposed to purchasing them in apackage) could conceivablywreak havoc ontheir business models.

The basic problem is that the constraints which broadcasters havehistorically used to protect their profits have now been relaxed — or have evendisappeared. Indeed, the New York Times recently noted that theprofit model for broadcasters is under assault, citing "cracks in thecitadel of TV profits." The issue is that when you sell things in bundles you can chargefor a whole bunch of things nobody really wants — customers will pay for theentire bundle in order to get the one or two things they actually want. Thisworked for years in cable television — give customers hundreds of channels theywon't watch but will pay for anyway in order to obtain ESPN or HBO. It workedin music — make customers purchase an entire album when all they actually wantis the hit song. It works in other industries as well, such as education. Thinkof it — we get charged for a degree, when perhaps all we want is a course ortwo.

This is exactly what's happening in the broadcast industry right now. Upstart Aereo hasa potentially devastatingbusiness model where, using teeny antennas, they snatch "free" content that broadcasterssend over the airwaves, then charge customers subscription fees to have thatcontent directed to their own TV sets. While the channels are a lot morelimited, the fees are much less than a cable subscription. The broadcasters,obviously, have cried foul,arguing that they pay to create the high-quality content that is re-broadcastand should be compensated for it. Aereo's argument, which the courts have sofar supported, is that those signals are free for the taking and that all theyare doing is offering a sort of souped up set of rabbit ears to their customers. To understand just howdisruptive this is, consider one of the more dramatic moments of the conferencewhen News Corp.'s president, Chase Carey,very calmly said that if the networks lose the right to charge re-transmissionfees, they would consider abandoning the business model of sending content overthe airwaves and instead adopt a pay-only model.

Once the bundledmodel begins to erode, consumers flee it to go to a model where they are buyingonly what they want. That's what happened in music, fundamentally transformingthe nature of the business. Increasingly, that's what's happening with movies,as video on demand and streaming fundamentally shift power to consumers. So,will broadcasters be able to throw up the barricades and keep the bundled model going strong? My guess isnot. It will be interesting to watch and see what happens.