TV stations have a chance to build toward future revenue by aggressively working to fill the gap left by dead or dying newspapers with strong, innovative hyper-local Web sites. While station budgets are tight and getting tighter, here are some things that can be done that don’t take dollars to help prepare for the eventual advertising upturn when the economy recovers.
In 1981, Ted Turner boldly predicted that newspapers would be dead within 10 years.
Well, he was off by about 20 years. And, of course, it wasn’t his CNN that killed the newspapers, it was the Internet, something nobody foresaw at that time.
But, still, let’s give him visionary points. Local newspapers are clearly on their way out now. The Rocky Mountain News published for the last time today after 150 years of service to Denver; Hearst has said it will close the Seattle Post-Intelligencer if it can’t find a buyer; and the San Francisco Chronicle may soon fold, having lost $50 million last year.
Some see the demise of the papers as portending the collapse of the TV stations-the other old, local business.
I don’t. I see it as an opportunity.
TV stations have coveted newspaper revenue since their inception. If this recession breaks the back of the local papers, TV stations will be first in line to grab their advertising when the economy comes roaring back.
It also gives TV stations the chance to become the dominant local Web sites. In most markets, newspaper-owned sites have ruled because they have been able to repurpose the great reporting and writing of their print product. To date, the Web has been driven primarily by text — newpapers’ forte.
Failing newspapers may try to make a go of it on the Web, but without the editorial subsidies from print, they will no longer have an advantage over TV stations or, for that matter, anybody else that wants to tap the pool of local advertising dollars with a Web site.
Even newspapers that survive in print will not be as strong and their Web sites will suffer commensurately.
So, with the newspapers gone or severely weakened, it’s the TV stations that can climb to the top of the local online media heap. They generate plenty of content that can be shared with their Web sites and have the power to drive traffic to them.
But stations can’t dawdle. Many others see what’s happening to newspapers and the potential of locally oriented, advertiser-supported Web sites. These include everybody from Yellow Pages publishers to radio broadcasters to countless entrepreneurs who think they have a good idea and are encouraged by the low cost of entry.
They also include at least one national media heavyweight.
This week, ESPN, one of the most powerful brands in TV, announced that it was plunging into the local online marketplace with a sports site for Chicago. Starting in April, the site will try to entice Cubs, White Sox, Bears and Bulls fans with a Sports Center-style Webcast along with popular local writers.
“We already have a user base with millions of people coming to [ESPN.com] looking for Chicago sports,” ESPN VP Marc Horine told the Chicago Tribune. “At its core, the mission is simple: to super-serve Chicago sports fans.”
Although ESPN Chicago’s charter advertiser is MillerCoors, I have no doubt that it will be seeking local as well as national advertisers.
ESPN considers the site an experiment. If it works, it says, it will roll out similar sites elsewhere.
If you are a station owner or manager of TV stations, you are probably hating this column by now.
As you pick over your budget seeking more to cut and ponder whom you’ll have to lay off next, the last thing you want is to be told is that you should invest more on the Web, especially since the medium has so far not shown it can generate anywhere near the revenue you really need right now.
As a practical matter, it may just be impossible right now. But some things can be done without dollars. Here are a few:
Rethink what you’re doing on the Web. Most stations have general interest sites, mixing news, sports and weather just as they have always done over the air.
Does it make more sense to create a vertical — a sports site like ESPN Chicago, perhaps — and pour all your resources into it? How about a local weather site? Or a real estate site? Or a health and fitness site?
Make sure that you have a media-neutral work flow. Whatever system you have for processing the video and stories that pour in from the street should be able to spit out finished product not just for broadcast, but also for the Web and for the various mobile applications.
Look to partner up. What you can’t do on your own, you may be able to do in league with a radio cluster or newspaper or a local entrepreneur with one of those bright ideas.
That partner could even be a cable network.
In Chicago, ESPN is working with WLS, the ABC O&O, which, not incidentally, is also in the Disney corporate family. If Chicago works, ESPN will move on to the other nine markets with ABC O&Os.
But where does ESPN go next? The ABC affiliates, of course.
I spoke to Darrell Brown, head of the McGraw-Hill station group and chairman of the ABC affiliate board, who told me that he was unaware of ESPN’s local sports plans prior to the announcement, but that he for one would be interested in talking to ESPN about them. Perhaps ABC could make the introduction.
I understand the downside of joint ventures. Who calls the shots? How do you split the equity? And how do you get your equity out when the time comes?
But they can and often do work.
So, don’t think life is going to get any easier if the local paper is finally done in by this recession. It won’t. The competition for local ad dollars is likely to get more intense as local directories, search engines and Web sites proliferate and become more aggressive.
This week, BIA and The Kelsey Group predicted a big shift in local ad revenue between 2008 and 2013. While revenue of traditional media (newspapers, newspapers, direct mail, TV, radio, print yellow pages, traditional out of home, cable TV and magazines) falls from $141.3 billion to $112.4 billion, the revenue of new media (mobile, Internet Yellow Pages, local search, online verticals and classifieds, voice search and e-mail marketing) will more than double from $14 billion to $32 billion.
You can quibble about the numbers, but the trend is clear.
The newfangled competition will come, but nobody is in a better position to rule the local online world than TV stations. They have the content, the business contacts and an unmatched ability to promote.
As stations struggle with maintaining their over-the-air service with drastically reduced resources this year, improving Web sites can’t be at the top of their list of priorities. But it definitely should be on the list.
Harry A. Jessell is editor of TVNewsCheck. You may contact him directly at [email protected]