Retired life has been pretty exciting for David Waterman. On November 13 Federal Communications Commission’s Chairman Wheeler announced David’s appointment as FCC’s Chief Economist.
David has published for years in the area of economics of telecommunications and media ( here is an earlier blog post), and has consulted for the FCC in the past (as well as the Federal Trade Commission and the U.S. Department of Justice); so being considered for the appointment wasn’t a complete surprise for him. He knew for some time that he was the shortlist for the appointment and had spent a day interviewing at the FCC earlier this year. Although David had gotten to know quite a few people who work at FCC through annual conferences, David thinks that the opportunity was mostly about being in the right place at the right time, given the media-related issues coming up at the commission next year.
Humble in his usual ways, David explained, “It’s not as important as it sounds. Even though they call me the Chief Economist, I don’t actually have any real power. There is a large staff of economists at the FCC and I’m sort of, theoretically, at the head of that staff. And part of my job is to promote economics in the commission and encourage publishable research by the staff … but I’m actually not in charge of administering anyone. It is like academia in that I can choose what I work on and although I report directly to Tom Wheeler [the chairman of the commission] and that’s a great opportunity, he chooses whether or not to listen to me.” Considering this is his life’s work, David is, as you might expect, looking forward to his new role at the FCC. After interviewing him a few times for the blog, I have to say this is the most I have ever seen David smile!
The appointment term is for one year beginning January 5.th David will be living in Washington and was still searching for somewhere to live when I interviewed him before the Thanksgiving break. He won’t be far from family though because his daughter, Chloe, works in DC for the American Society for the Prevention of Cruelty to Animals – another perk that David is looking forward to. “She is going to help keep me anchored and from going crazy so that really makes a big difference.” I was very concerned that his beautiful garden would suffer without his attention and care, but don’t worry! David plans to leave detailed instructions for his son Matthew, who will be staying in Bloomington, to care for his peppers while he is away.
Before our interview ended, David wanted to recognize Ryland Sherman and the work they have done together. “It’s been the flair coming from his understanding of technology and the law that I think attracted the attention of the Commission, so that’s been a very valuable thing.”
Today’s brown bag featured four faculty members who currently are or who have served as journal editors: Annie Lang (Co-Editor, Media Psychology, 2008 – 2011), Radhika Parameswaran (Editor, Communication, Culture & Critique, 2014 – present), Harmeet Sawhney (Editor-in-Chief, The Information Society, 2004 – present), and David Waterman (Co-Principal Editor, Information Economics and Policy, 2005 – 2010; Coordinating Editor, 2008-2010). They spoke about the manuscript review process as well as what it takes to publish in top-flight journals – and answered questions, too.
Ryland Sherman, PhD student, and David Waterman, Professor Emeritus, Indiana University, Department of Telecommunications
The Future of Online Video: An Economic and Policy Perspective
Abstract: We explore the economics of the online video entertainment industry to provide a foundation for understanding its economic future and how regulation may affect it. We first document recent development of online video, including market structure, prevailing programming windows, and content aggregation patterns. In spite of its remarkable efficiencies, we identify three potential obstacles to online video’s future growth: competition from increasingly efficient cable, DBS, and other multi-channel programming distributions, including advantages they have in large scale aggregation of online content via “TV Everywhere” type services; limited availability of high quality content, especially windowed programming; and ISP pricing strategies that may raise effective consumer prices of video consumption. In conclusion, we discuss the role that FCC regulation or other government policies can play to ensure future competition and open entry in the online video industry.
The moment I learned of Professor David Waterman’s plan to retire effective July 1, I heard a muffled yet distinct “thud.” It was the sound of my own despair. My mind raced to all the things I’d miss: David’s kindheartedness and thoughtfulness, his warm smile and humor (sometimes in charmingly self-deprecating ways), his very audible battles with the photocopier (complete with door slamming and expletives), and more than anything, the care with which he treats others and cultivates relationships with colleagues, students and staff.
But this momentous event wasn’t about me, it was about David. So in hopes of soothing my sadness by finding a way to embrace David’s decision to retire, I asked him if he’d entertain a few questions. Here are his thoughts in his own words.
David’s Beard (2002)
How is the David Waterman who joined Telecommunications in 1993 different from the David Waterman who is heading into retirement? How has your work impacted that change?
My hair has gone from blonde to gray-blonde (Sharon says only I can still see the blonde), and I shaved off my beard about 10 years ago. More seriously, I still have the same intense interests in the economics of media and information that I began with in graduate school. The media world has changed incredibly, of course. I have admittedly changed more slowly, but I hope I have made up for that with some wisdom. I wrote 2 books in the 21 years I have been at IU that contain a lot of what I have ever learned. But they both contributed greatly to the graying of my hair. What was a defining moment of your career as a scholar?
I would say the turning point was when I got a research assistance job in graduate school to work for a professor proposing to study the economics of the media, a topic barely heard of at the time. You’ll teach a graduate course in the Fall and continue to serve on grad student committees. What other work will you continue with into retirement?
For the near future at least, my research agenda about the online video industry and its regulation occupies me. Ryland Sherman, Yongwoog Jeon, and I are writing a paper on this topic for an FCC conference at the end of May. It’s a fascinating, though dauntingly technical and complex subject to me, but at least in the past, my fascination has kept my head above water.
Do you have any words for those who will carry the torch into the Media School era?
I don’t think our faculty needs any advice. I have a great ambivalence about not participating in this myself. But I concluded that I would not be able to fully participate far enough into the transition to really have a meaningful influence on it. I am very optimistic that this is going to work out well for our department and students. I think that the research, production, teaching, and people skills in our department will carry the day. What does retirement mean to you?
Well, I never liked the word, because I don’t want to sit on a bench in a park, and don’t have any grandchildren to play with yet. To me it will be a slow transition from my academic life to one of physical labor and strengthening my bonds with the land, plants, and animals. To me that’s an alluring and powerful force in my life. I’m still able to do that and I’m not going to let that time pass. What are you most excited about for your retirement? What do you most look forward to?
Digging, farming, getting bees, chickens and a dog, and connecting more with my Quaker group. As for the academic part, I look forward to a delicious balance. Working hard on my research, but not too hard, and not worrying so much of the time about how I can possibly get it all done in time, still finish my absurdly elaborate class preparations, be evaluated by a committee, and all that. Do you have any specific plans for how you’ll spend your time? Any special projects or adventures planned?
For one, I’m going to renovate our house, which would take even someone who knows what they are doing a year of work. I’m also going to expand my garden, hopefully back into my neighbor’s property, and make friends with my bees and chickens. And not least, I plan to do some socially helpful things, helping people in real need. What will you miss most? What will be the hardest thing to let go of?
That’s easy. I will miss being an integral part of our faculty and graduate student group. It is truly amazing to me that I could be in a place with people that I like so much and who all seem to put up with me with tolerance and good humor. At heart, I’m a real nerd, subject to hysteria and unsuited to corporate culture. I’m also really going to dislike moving out of my office. I’m hoping to make a deal with Walt, but it doesn’t look promising.
On your impending retirement, you were overheard saying that “it’s like turning in your musical instruments.” Can you say more about what this means to you?
I think I said that on a day that I was trying to talk myself out of the whole thing. That is the toughest way for me to envision my transition, since I want to play on. I think I’ve learned to play a few really good songs. I won’t be able to do that forever, but I’m not turning in my fiddle yet.
David Waterman, Department of Telecommunications, Indiana University
Printed vs. Electronic Readings: A Misalignment of University and Student Incentives?
ABSTRACT: I will report on joint work done with Sung Wook Ji and Sherri Michaels (IUB Libraries). We surveyed 101 students in two undergraduate courses (one in Telecom) about their usage of electronically accessed required readings. About two-thirds of respondents printed off at least some required readings in these courses. Our results show that for most students, however, electronic readings are cost efficient. That is, printing students incurred substantially lower time and money costs in printing and binding themselves, than the projected price of a printed and bound course pack with all of the readings.
A majority of respondents also reported an overall preference for electronically supplied readings, but only because of cost. Large majorities said they usually read more, and learned more, when readings are supplied in print. Furthermore, students who said they preferred readings to be supplied in printed form were no more likely to print off the electronic readings themselves than were those who said they preferred readings to be supplied electronically. These findings suggest a misalignment of university and student incentives in the supply and usage of electronic readings.
A career-bound academic has to learn to master three realms of work: teaching, research, and the glut of work-like things that threaten to overtake the other two—like attending meeting, reviewing papers, and writing letters of recommendation. Annie structured the class to simulate that latter third, which she equates to “being nibbled to death by ducks.”
To “feed the ducks” and satisfactorily simulate a functioning department, Annie Lang’s class T540: The Compleat Academic – The History and Practice of Academic Life had to assemble a panel and an audience for a mini-conference that featured their papers. The result? Understanding Academic Freedom: History, Purpose, Threats, and Successes.
The discussion went for almost the entire hour allotted to the panel, which was comprised of the following scholars:
Mary Gray of Department of Communication and Culture
Ted Miller of School of Public and Environmental Affairs
IU has much to be proud about its record on academic freedom.
The panel (from left to right): Herb Terry, Mary Gray, Ted Miller, Eric Rasmusen
Saving Money with David Waterman, by Mike Lang
Have you ever sat at your computer day after day hitting refresh on sites like Orbitz or Priceline waiting to pounce on the cheapest airfare for your next conference? Have you ever found yourself screaming at some poor cable customer service rep threatening to cancel if they don’t give you free HBO? Have you ever been sprawled out on the living room floor, buried up to your neck in newspapers, clipping coupons with the determination of a football player on 4th and 1st? If you answered yes to any of the questions, you are probably a low value consumer, and that’s not a bad thing. David Waterman, our department’s resident economist, is a low value consumer and he’s proud of it. As a low value consumer, Waterman has learned the tricks of the trade when it comes to saving money and he has been gracious enough to fill us in on the details.
As an economic principle, low value consumers arise from the practice of price discrimination. As Waterman explains, price discrimination entails charging different prices to different consumers according to their willingness to pay. High value consumers tend to be less price sensitive, and will sometimes pay higher than the sticker price for the product they want. Low value consumers, who are much more price sensitive, try and purchase the product for the lowest price possible. As an example, my old roommate always bought brand new video games at full retail, and would occasionally splurge for the expensive deluxe/special/awesome edition for upwards of $100. Price didn’t matter as much to him. While he waited outside of the game store at midnight, I hunted around looking for a coupon or a deal or a used copy or cheaper game at a lower price. Price mattered, and if I could find my game for $5 cheaper somewhere else, I was there. When it comes to video games, I’m a low value consumer. At the heart of the high value/low value consumer dynamic is a struggle over time. High value consumers don’t spend time doing price research and pay higher prices as a result. Low value consumers spend the time in order to find the best deal.
High Value Consumer: “I got a Jeep with my copy of Call of Duty! for $30K!!” Low Value Consumer: “I rented my copy from Redbox for $1…”
However, low value consumers are not less important consumers. Every firm is interested in making a sale as long as it can cover the incremental cost of providing the next product. Sure, my roommate may fork over $100 for his version of the game, and I might only fork over $20 for my version 6 months later, but the firm makes money in both circumstances, and my $20 is much better than zero dollars.
One of the primary areas where low value consumers thrive is cable subscriptions. Like most of the media industries the majority of the costs in providing cable subscriptions is in the production of media content. As such, hooking up one more house to the network, or enabling HBO for one more customer costs next to nothing. When that cable bill starts stretching the wallet a bit too far, calling up the company and making a persuasive argument about dropping its service or switching to a competitor immediately identifies you as a low value consumer, and can often result in reduced rates or free content. The cable companies retain your service, and make more than the cost of providing you with content.
However, cable companies are savvy when dealing with low value consumers. In many cases, when low value consumers identify that they don’t want premium channels like HBO, cable companies may enable those channels regardless, even though they won’t charge you. From their perspective, two things may happen. One, in rare cases, the consumer may get attached to the channel, and when it gets cancelled, they will choose to upgrade their package. Two, it encourages low value consumers to keep their subscription. In other words, when low value consumers think about switching, the value added to the package by the free HBO may keep them from switching to a competitor. However, coercing cable companies into cheaper rates requires some care. Because most deals are temporary (cheaper service for 6 months), it’s important to look long term. At some point the cable companies will try and get low value consumers to pay up.
Seriously, who doesn’t want to watch HBO’s Game of Thrones for free?
TLC has popularized couponing in their television show, but in many cases, consumers can go beyond the coupon. Sales and coupons at grocery stores work in cycles. An item may be on sale for a week, and then go back to retail price. During that retail period, stores often offer coupons for those who still want the sale price. However, stores don’t all follow the same cycle. In one region (Indianapolis for instance), an item may be at full retail, with a coupon being offered. However, in another region (Bloomington), the item may be on sale. By cutting coupons from Indianapolis, and using them in Bloomington, groceries get really cheap, really quick. However, this method requires access to out of market coupons, but that’s what friends and family are for, particularly for the cash strapped.
Another area to save money is books, particularly when visiting websites like Amazon. Book prices change frequently, sometimes from hour to hour on big book sites like Amazon, and Barnes & Noble. In some cases the book will ping pong between a high price and a low price. High value consumers in their haste to purchase the book may stumble upon the high price and pay more or they may stumble upon the low price and get a deal, while low value consumers will wait for it to drop to the low price. When the new semester rolls around, wait long enough to watch the price fluctuations and you might just save some money.
Sometimes it pays to embarrass yourself a little bit, particularly when it comes to specialty shops. Using dive shops as an example, Waterman tells me that in many cases high value consumers will walk away with lots of equipment at sticker price but experienced divers who regularly visit the shop are more price sensitive. As a result, the shop offers discounts to those customers. Sometimes they may have discount cards, and other times the system is informal. Either way, asking for the discount will occasionally save you some green. If it doesn’t embarrass you, it doesn’t hurt to ask.
Hey girl, Can I get the discount?
Price discrimination practices are everywhere from airlines to movies to groceries and identifying yourself as a low value consumer can often save you some money if you are willing to spend some of your time. For those with lots of time, low value consumer practices can fill time productively while saving money. For people like us grad students who are both time strapped and broke, well, we knew what we were signing up for.
In the spirit of saving, we have included our own coupon: A free joke from funny man Reed Nelson. Just print it out, cut it out, and find Reed for a side-splitting good time.
David Weaver and Lars Willnat gave a special presentation and sneak preview of their forthcoming book The Global Journalist in the 21st Century, which will be coming out in May through Routledge. Professor Emeritus Cleveland Wilhoit was also on hand to answer questions about previous research he and Weaver conducted.
From the publisher:
“The Global Journalist in the 21st Century systematically assesses the demographics, education, socialization, professional attitudes and working conditions of journalists in various countries around the world. This book updates the original Global Journalist (1998) volume with new data, adding more than a dozen countries, and provides material on comparative research about journalists that will be useful to those interested in doing their own studies.
Weaver and Wilhoit put together this collection (covering 33 nations around the world) working under the assumption that journalists’ backgrounds, working conditions and ideas are related to what is reported (and how it is covered) in the various news media round the world, in spite of societal and organizational constraints, and that this news coverage matters in terms of world public opinion and policies.
As the most comprehensive and reliable source on journalists around the world, The Global Journalist will serve as the primary source for evaluating the state of journalism.”