This was a difficult and troubling year for the broadcasting industry, as a confluence of challenging but predictable disruptions continued to eat away at the industry's value propositions. The stock value of most media companies fell precipitously, with investors sending a clear message of doubt about the industry's ability to return to the growth of better days. Economic wellbeing in our culture is based on growth, to say nothing of the pay raises we've all come to expect year-after-year.

As we look ahead to next year, the challenges will be more numerous and even more acute, but the biggest danger on the immediate horizon is that 2006 is a mid-term election and Olympics year. Revenue should be up, and that expectation has been fueling the station budgeting process over the last quarter. It's a dangerous assumption for two reasons. One, the Web is seen as an increasingly attractive place for political advertising — especially the blogosphere — and while television still provides the best return from political ad dollars, we don't really know how this is going to break out this year. If politicos shift ad dollars to the internet, they will likely come from television budgets.

Two, relying on continued bumps in political and Olympics years creates an artificial sense of safety in these increasingly unstable times. Moreover, while NBC is close to selling out the Winter Olympics, ad sales have been slow, and analysts are predicting this will impact all broadcasters negatively in the first quarter. As a result, the whole year is likely to be another one of budget cuts, staff reductions, frustration and fear.

It's a very dangerous time for any broadcaster to be making assumptions based on history.

But the biggest problem for broadcasters is their crumbling core competency and the shrinking value propositions they offer to both viewers and advertisers. The natural ability of the Internet to distribute unbundled media is disrupting broadcasting's basic business, and that will accelerate in 2006. Most broadcast companies have responded to the disruption by forcing their mass marketing value propositions into the situation (it's what they know), but most are finding that such a response — while creating some revenue opportunities — doesn't produce the kind of scale necessary to make up for the kinds of losses to their core business that they're facing.

The irony is that the same disruptions that are eating away at the business of broadcasting offer tremendous opportunities, if broadcasters could simply rise above defending their old turf and play a little offense in the new stadium. Local media companies have a tremendous advantage over outside threats like Google and Yahoo!, because they're already firmly established in the local advertising community. It's time we used that connection and reputation to lead a boom in online local advertising. Most of the ad experts are projecting that online advertising will jump to a $33 billion market by 2010, and researcher Gordon Borrell predicts much of that growth will be local.

I believe history will look back at 2006 as the year of an unbundled awakening in the media world, ushering in an era of creativity the likes of which we've not witnessed in recent history, especially in the advertising community. Unbundled media is clearly what people want, and when that kind of energy bubbles up from the bottom, media companies of all sorts have no choice but to respond. This is currently happening in the worlds of entertainment, education and information and one day will be realized in every institution of our culture.

Beyond what is happening in media itself is the unbundled awakening that's taking place in our homes, schools, and offices. The Pew Internet & American Life Project reported earlier this year that half of all teens in this country — and 57% of those who use the internet — have created a blog or webpage, posted original artwork, photography, stories or videos online or remixed online content into their own new creations. This awakening of creativity among our youth — and their ability to do something with it — is the essence of what's known as Web 2.0. We've moved past the early adopter stage with young people, and that will continue to flourish next year.

Online video will be where much of the action is in 2006. ABC and Apple began the explosion this year by offering unbundled programs via download to Video iPods, and the results have been significant. So much so that the other networks, studios and even outside players have jumped on the bandwagon. Rocketboom, the quirky slice of life offered daily by Andrew Michael Baron and the increasingly glamorous Amanda Congden struck a deal with TiVo that makes their vlog available to TiVo users — just like any other television program. This is the final insult to the broadcasting industry — that two young people from New York with a great idea and little resources can compete with their expensive programming. It's only the beginning.

The rush to provide downloadable content for cellphones and other handheld devices will boggle the mind next year. Many argue that the market for such is limited, because of the size of the screen for viewing. This is a shortsighted argument, for the real threat to the mainstream from these kinds of cellphone deals is the creation of an infrastructure for unbundled television, regardless of the screen size.

Another important milestone for online video will be reached in 2006 when Comcast begins offering 10 megabyte download and 1 megabyte upload speeds for their standard broadband package. At 10 megs down, home viewing of video streams will be smooth and high quality, and this will further drive the convergence of television and the web. It will also make start-up efforts by vloggers more doable, because it won't take as long to upload their products at 1 meg. Symmetrical broadband, where upload and download speeds are equal (and robust) is a sticky business issue that is unlikely to be resolved for some time, but there will be increasing pressure from consumers to move in that direction.

I wrote last year that newspapers would increasingly get into local television via the Web. Not only has this happened, but it will accelerate in 2006 and put even more pressure on broadcasters to do it better. Two Video Journalists (VJs) employed by the online version of The Washington Post won national television awards from the National Press Photographer's Association this year. Newspapers see the value of online video advertising and will continue to compete with broadcasters (and vloggers) for those ad dollars.

Increasingly, we'll see media companies hiring people with multimedia skills as the drift away from expensive specialization continues. The New York Times, for example, recently laid off 85 people but continues to advertise for those with web and associated skills. Universities have begun to respond to the market, and that will continue next year. More and more, we'll see recent graduates more qualified for mainstream media jobs that demand multimedia skills than people with considerably more experience. The only way this won't happen is if media companies invest in retraining to provide their mid-career employees with a multimedia skill set, but this will be fought by those who'll insist that it's only being done to save money.

Bottom line pressures will continue to eat away at the structure of media companies, and it's likely at least one public company will buy back its undervalued stock and take themselves private this year. The rules of the Sarbannes-Oxley legislation have dramatically reduced the ability of public companies to be flexible, and this has had an extremely negative effect on broadcasters, who need to be VERY flexible right now. Private companies don't need to operate under these restrictive rules and can do more creative things in a changing environment. Absent bankruptcy, this may be the only way some public media companies can survive, and it would be a good thing for the industry. Owners would actually "own" their own companies again, and not have to serve the quarterly dragon of profits demanded by shareholders.

Despite the fears and anger of many television news employees, the VJ model of newsgathering will spread to more stations in the U.S. during 2006. The pros and cons of this have been debated in many places, but there are three reasons why this is inevitable in our industry. One, it will be seen by some companies as a way to reduce expenses — both capital and operating. This is not the right reason to move to the VJ model, but it's likely that some companies will see it that way.

Two, single journalists with cameras and editing systems force the newsroom out of the ruts and routines of a way of operating that contributes to the decline in news viewing. In most places, local news viewing is off 30% in the past ten years, and there's no sign of that slide ending. We simply won't bring viewers back doing things the same way, and the VJ model dramatically breaks something that really needs breaking and demands that people think creatively across-the-board.

Three, and I believe most importantly, it puts the tools of the personal media revolution into the hands of professionals and asks that they do it better. The reason this is so vital is that, absent such a response, the citizen media movement will continue to thrive and explore every new innovation that comes down the pike, while broadcasters struggle along with inflexible, old systems and the mistaken belief that we are immune from such competition. VJs have a huge advantage in this situation, because they are no different than any entity that comes up from the grassroots media movement.

And make no mistake, citizens media (or citizen media, as some call it) will continue to be the driving disruptive force confronting all media in 2006. Whether it's blogs competing for political dollars or vlogs competing for eyeballs, citizens media is here to stay. And it got a big boost in legitimacy when We the Media author, Dan Gillmor, received backing from U. C. Berkeley and Harvard to form a Center for Citizen Media that will serve the interests of the personal media revolution. The single most important piece of advice I can give to any media entity in 2006 is to get involved in the local citizens media community.

Watch for more media companies to make acquisitions in the online space, and pay special attention to Rupert Murdoch and his moves. Like him or not, the guy consistently makes decisions that are based on viewer or reader tastes, and his purchase of the popular mySpace site puts him in league with other big time internet players. Murdoch had the quote of year, when he said, "...reporters and editors think their readers are stupid. In any business, such an attitude toward one’s customers would not be healthy. But in the newspaper business, where we rely on people to come back to us each day, it will be disastrous..." If any of the big boys in media is able to enamor him or herself with the citizens media movement, my money would be on Murdoch.

The dark cloud on the horizon in 2006 for all of us who see the possibilities of a free internet will be actions by those with the most to lose to stifle what we currently have. This is a serious reality that we can't overlook in the year ahead. Already, the owners of the fiber optic lines in which the World Wide Web exists want to put in controls that will enable them to restrict access in the name of profit. We simply cannot allow this to happen, but the forces who want to make it so are well-armed and powerful.

The institutions that are threatened by all this freedom will also start taking the gloves off, and legal battles and threats will surface at an increasing rate. There is simply too much at stake for this not to happen. The nature of authority — all authority — is changed by an informed public, and that is a very real threat to those who've made their living through the authority of restricted knowledge.

But the remarkable thing about these enormous changes in our business and our culture is the opportunities that exist for all of us. More people will lose their jobs in the industry next year, and some will be forced to learn new skills and think for themselves in a different way. It will be the best thing that ever happened for them.

There's little about change that we can control except the way we react to it. We can fight it or accept it; it's really that simple. Those who accept it will find a fascinating world awaits their skills and abilities. For those who continue to cling to old beliefs and old ways of doing things, it won't be pretty.