I think we may finally be getting to the bottom of the economic slide. What is needed now is for broadcasters to take advantage of the many good ideas out there and aggressively go after online opportunities, mobile and retans. But they must resist the temptation for quicker and easier fixs and cut too deep into staff and operations or they will make it impossible to bounce back.
Maybe it has something to do with the good vibes generated by YouTube sensation Susan Boyle, but I’m choosing to feel good about the TV station business as we head into NAB week.
We’re getting past the worst.
For the past several months, broadcasters have been freaking out because their revenue was melting away and they had no idea where the bottom was. Now we do, or at least I think we do. It’s right around now.
We surveyed a dozen GMs from around the country and the consensus was that ad revenue would be off 15-20 percent this year, but that core spending would start ticking up somewhere in the fourth quarter.
There were just two dissenters from the consensus, and one of them thought he would be back in the black in August. That’s the spirit.
Despite the small sample, I’m confident in the results of the survey. The revenue forecast jibes with what the experts have been telling me.
The broadcasters understand what is happening to them and they have taken action. They have cut costs, mostly by laying off people and operating more efficiently. I’m hearing more and more about news sharing arrangements. Why send two crews to a routine press conference when one will do? Does every station in town really need a helicopter?
Broadcasters are also relearning the lost art of prospecting for business. The business was so easy for so long, broadcasters had forgotten how to cold call small businesses in town and sell them on broadcast TV.
Stations all seem to have some kind of business-development programs aimed at attracting clients that have never or rarely used TV before. And from what I hear, they are having great success. Neither the spot rates nor the cost of producing TV commercials is as daunting as they used to be.
Now if only the TV reps could match the local efforts with some prospecting on their own among the national spenders.
The new business may not replace all the dollars from auto, but it doesn’t have to. TV stations are developing new revenue streams.
Network affiliates, at least, can now count on 20 cents or a quarter each month in retransmission consent fees from every cable and satellite home in their market. That adds up and it wasn’t there three years ago.
TV stations have also begun tapping the Web for additional revenue, and there is a lot more there. The problem is, other local media — newspapers, radio stations, Yellow Pages, startups — are all eyeing the same local online dollars. It’s going to be a wild scramble over the next few years to see who claims them.
Perhaps the most promising opportunity for TV stations is mobile. This could be the killer app of DTV, the return on all the millions stations poured into new transmitters, antennas and towers as they made the transition to digital.
It radically changes the basic arithmetic of TV. It’s no longer about 114 million TV homes; it’s about twice as many people equipped with their own portable TV sets. Stations will be able to expand their audiences without much cost or effort — a rare and beautiful thing.
Broadcast TV will be able to reach every young person in America the way AM and the transistor radio did in the early 1960s. TV will be hip again.
The media pundits who want to bury broadcasting point out that broadcast ratings continue to fall in just about every daypart. That’s true.
But it’s all relative, isn’t it?
Broadcast shows outdraw cable shows several times over. The No. 1 primetime show in broadcasting last week (American Idol on Fox) attracted nearly four times the audience of the No. 1 primetime show on cable (WWE Raw on USA).
And the cable audience is badly fragmented across hundreds of channels. The Big 4 broadcast networks on a good night deliver 40 percent of TV homes. It would be a challenge to replicate that reach in cable. How many cable networks would you need to get to that percentage? Can you efficiently buy them?
Each week, the Television Bureau of Advertising puts out a list of the week’s top 100 TV shows in the key 18-49 demo. Know how many cable shows were on it for the week ending April 12? Two. ‘Nuff said.
So, have no doubt, broadcasting will live long and prosper.
But that doesn’t mean that all broadcasters out there will. Some TV stations and groups may yet perish before this nasty recession finally peters out. Like that Darwin fellow used to say, it’s the survival of the fittest.
In the competitive media world of the near future, there may not be room for more than one or two TV news outlets in a market. That’s not bad news, unless you happen to be No. 3 or No. 4 in the ratings.
I suspect that in the rush to appease investors and bankers during this downturn that some station owners and managers have badly damaged their businesses. By cutting too deep into staff and operations, they have made it impossible for their stations to bounce back with the rest of the industry.
And to tap the new revenue streams of the Web, you are going to have to be smart and aggressive. Sorry. Not all broadcasters are.
Many of the people running the broadcasting business today have been through this before – -the mid-1970s, the early 1980s, the early 1990s, the early 2000s.
The business bounced back each time. It will do it again — at least one more time.
Harry A. Jessell is editor of TVNewsCheck. You may reach him at [email protected].