The Price Point | Suddenly, A Profitable Year For Local TV
This year will go down as one of the most bizarre in television history. After a disastrous second quarter, an unhealthy third and lagging spot pacing in fourth, suddenly 2020 has become a profitable year. It’s amazing what a few billion dollars in political cash will do.
The majority of presidential spending was concentrated in just six states, but with both the Senate and House being contested, pretty much every station group saw a surge in spending. After many tough months dealing with COVID-19, civil unrest and a fractured political landscape, at least the year will end with positive financial news.
Looking at the long view, many will say this was an unusual political year, but aren’t they all? A glance at history shows a continuing upward political track. There is every reason to believe that will continue into the foreseeable future.
Now let’s talk about the important question: Why do politicians at every level continue to say local television is their most important medium? It can’t be just video, since that is now ubiquitous. Nor can it be scarcity of platform, given the surge of OTT and on-demand products. Station digital, which also set political records this year, fights in an even more competitive space.
The answer, of course, is that stations with leading newscasts have a personal relationship with their most loyal consumers. Those relationships are so strong that when national media takes sides, local stations are seen as a refuge for fair reporting.
When you dig deep into those consumers’ attitudes, you quickly find the word “trust” showing up. In many cases “trust” in a local station is so strong that it does not matter which network the station is affiliated with. This is not a new phenomenon. For decades we’ve known that No. 1 local newscasts create No. 1 networks, not the other way around.
Let’s skip to the bottom line. Why do politicians spend so much money on local television? It’s the same reason as regular advertisers: Because it works. Period.
Here’s some more good news. The lackluster spot spending we’ve seen this year was driven not just by the COVID-19 recession, but some advertisers simply stayed away the past few months because they did not want to run next to political messages. That’s something else we have seen in previous years. Next year, with COVID-19, the recession and political races in the rearview mirror, the second half of 2021 could be huge.
Does all this mean future life will be a bed of roses? Of course not. Competitors will keep arising. Fragmentation will continue. A host of unforeseen issues are always around the corner. There will be big winners and big losers.
The winners will be stations that remember what business they are in. It’s all about local relationships and consumer trust. For the moment, stations own those relationships, but they must be nurtured and expanded, especially among younger consumers. New platforms must be seen as opportunities, not threats.
For some local station brands, but not all, the future is very bright. Ask any politician.
Hank Price is a media consultant and leadership coach. He is the author of Leading Local Television, a guide to leadership for television general managers, as well as those who aspire to top leadership. Price spent 30 years managing TV stations for Hearst, CBS and Gannett, including WBBM Chicago and KARE Minneapolis, as well as three other stations. Earlier, he was a consultant for Frank N. Magid Associates. Price also served as senior director of Northwestern University’s Media Management Center and is currently director of leadership development for the School of Journalism and New Media at Ole Miss. He is the author of two other books.