Broadcasters Stress Need For Revenue Diversity
NEW YORK — To understand the ad revenue potential of over-the-top ventures, consider one of the recent content plays at KSL in Salt Lake City. It’s had a camera on the roof of its building since the 1990s that gives a panoramic view of the city and surrounding mountains.
“I worked with our TV sales team to monetize that,” said Jon Accarrino, executive director of Bonneville Salt Lake/KSL business development. “We sold the sunset to a national car company. They have a watermark on the screen. We stream that camera in our OTT app,”
To help increase view times, Bonneville accompanies the sunset imagery with an audio feed of the company’s classic rock station. “The average view time is 64 minutes,” Accarrino said.
That’s just one of several innovative forms of business development that were discussed during the TVNewsCheck TV2020 conference session “Diversifying Revenue Streams in 2020” last Wednesday. The panelists covered not only OTT, but podcasts and the promise of ATSC 3.0 as well.
The need to diversify into those types of businesses is crucial. “Unless we evolve, the advertising revenue is at risk. It makes it important to have an approach to tap into ad dollars that are currently going to other companies,” said Dan Mellon, VP sales transformation at Sinclair Broadcast Group, referencing competition from other forms of media into TV stations’ traditional revenue stream.
“We’re following the consumer, where they are today and are going to be tomorrow,” added Tom Sly, VP of digital revenue at E.W. Scripps. “We know the dollars will follow. It’s not one-for-one today, but it certainly is the future. We need to make sure we’re putting bets in areas where we know the revenue is growing,”
OTT, in particular, is a natural for stations. “Of all the people in a marketplace that can credibly say, ‘We understand this business, and you should be buying it from us,’ it’s TV,” said Kevin Barry, head of broadcast TV and MVPD channel partnerships at the programmatic platform Simpli.fi. “Because that’s what this is: it’s the marriage of IP to sight, sound and motion. It is natural for you to dominate the market.”
It also requires very little sales training, Sly noted. “This has been the easiest transition for our local sales organization [among new opportunities] because it’s just TV.”
Gray Television takes a three-pronged approach to selling OTT offerings. It has apps for its owned stations and as well as streamed offerings like Investigate TV. And coming in 2020: a new programming coproduction with The Grand Ole Opry. Then there’s Syncbak, an OTT platform that is a co-venture with CBS and allows local broadcasters to stream content nationwide.
By suggesting that sellers approach OTT from the vantage point of a consumer, “something starts to click,” said Erin Overstreet, director of digital sales at Gray. “The conversations start to become more natural.
“We do a lot of work to make sure our broadcast commercials are extended on OTT platforms,” Overstreet said. So if a potential buyer comments that viewers are shifting to OTT, Gray’s salespeople can note that if an advertiser buys avails on the evening news at the company’s station in Marquette, Mich., their commercials are also on Hulu Live, she noted.
In addition to that line of reasoning, Gray’s sales team also has talking points specific to the apps it created for the company’s owned stations and the targeting advertising opportunity that OTT affords.
“I think in the long-term, it will become natural to do targeting on a really fine-grade basis, area wide,” Barry said. “As the growth continues with this kind of content and you’re able to do that kind of targeting, you’ll be able to tap into budgets that you’ve never seen before and do things with television that you haven’t thought of before.”
In explaining the explosive growth of ad-supported streamed content, Barry cited some numbers from Beachfront, a video ad management platform: “In November 2017, there were 1.9 billion ad calls. November 2018, it was over 29 billion. That’s not a fad,” Barry said.
Targeted advertising’s growth, along with whole new business opportunities, could accelerate with the introduction of the ATSC 3.0 technology standard. Sinclair’s Mellon noted that it will provide broadcasters much more bandwidth to deliver content across multiple platforms in the home.
“It will give us different options to offer to TV advertisers using the television signal as well as open up other businesses for us,” Mellon said. “And that innovation will only be limited by ourselves and the people we partner with.”
Podcasting was also a topic of conversation during the session. Bonneville has had success with easy-to-produce podcasts, like one that repurposes KSL’s traffic reports, which is sponsored, as well as the much more ambitious podcast Cold, which investigated a mysterious disappearance of a woman in the Salt Lake City area back in 2009.
“That show [Cold] debuted at No. 1 on iTunes, which took a lot of people by surprise,” Accarrino said. “The next day we were getting phone calls from people who wanted to help us monetize it.”
The journalist who was primarily responsible for the podcast was booked on national talk shows. “It was so popular locally that we did a live event in a theater for 3,000 people.”
While podcasts have been around for some time now, there’s lots of headroom for more growth.
“If you look at the data, only a third of the U.S. is consuming podcasts on a monthly basis — 20% on a weekly basis,” Sly said, noting that Scripps’ Stitcher unit owns, produces, manages or traffics ads for hundreds of podcasts.
“I think of myself as a podcast evangelist,” he said. “There’s a lot of discovery today, and I think we’re barely at the beginning.”
To read more TV2020 stories, click here.