NATPE 2012

Multicasters: Stations Leave Millions Behind

Even in small markets, broadcasters are generating up to $1 million in annual revenue with a single subchannel, according to panelists at a NATPE session on multicasting. 

Too many TV stations are leaving millions in annual revenue on the table by not multicasting, according to three broadcasters who are not only airing digital subchannels but distributing them as well.

“We have a station in a market ranked between 75 and 80 that’s generating nearly $1 million in local revenue annually,” said Sean Compton, president of programming at the Tribune Co., which distributes classic-TV network Antenna TV. “There is money to be made.”

Agreeing with his take was Emily Barr, president-GM of ABC-owned WLS Chicago, who said her station and others, including WFAA Dallas, have been boosting revenue and ratings on ABC’s Live Well network by airing some of the channel’s programs on their main channels on the weekend. “We realized we were picking up a lot of syndicated programming to use as filler on the weekend,” she said, “but if you can do a couple of rating points on a Saturday or Sunday with a show from Live Well, you can promote the network and at the same time, bring in an advertiser on both sides” with a package of spots running on both the main channel and the subchannel.

Ratings are growing at all of Live Well’s stations, but especially at those pursuing this weekend strategy on their main channels, Barr said.

“We possess the single best promotional vehicle: our main channel,” Barr said. “We aren’t doing enough to promote our other channels with it.”

Neal Sabin, president of content and networks at ME-TV and Weigel Broadcasting, suggested that subchannels “are duopolies, only you don’t have to get permission from the FCC to have one.”

BRAND CONNECTIONS

Multicasting is also local broadcasting’s “best answer to local cable,” Barr said. “There’s a lot of money tied up in local cable that none of us used to see. We can sell [subchannels] to advertisers who aren’t interested in the main channel because of the cost.”

Barr and Sabin both argued that stations don’t need to pass on multicasting in order to reserve spectrum for mobile DTV. Weigel runs four SD channels and one HD channel in Chicago, and ABC stations run both their main channels and Live Well in HD without a problem. “We’re going to get to the point where spectrum is more efficient,” Barr said, “so there will be room to do it all.”

Asked whether their subchannels would always rely on direct response advertising, Barr said Live Well is “already doing some national business and properly-placed product integration because we are doing original production.

“We did a big promotion with Walgreens,” she added. “We are seeing DR, but as we see the ratings go up we are seeing more interest from other advertisers.”

Sabin said Me-TV’s advertising is “100% DR right now. When we get more distribution we’ll take a look at Nielsen and see whether we can go [the other route],” he said. “We need to decide if going after other business is worth it when the DR business is burgeoning.”


Comments (10)

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mark wienkes says:

January 24, 2012 at 10:12 am

Since we went on the air in 1987 we have been trying to get a serious distribution partner for what many believe the most lucrative local TV channel programming concept…The Auto Channel.

We went on line in 1996 and have been generating content, audience and revenue ever since. Today we can build off of our successful on line site http://www.theautochannel.com and provide TV programming sought out by the number one local advertisers, the auto dealers..

In 1989-1991 The Auto Channel was syndicated and was cleared in about 50% of the U.S and averaged almost a 1 rating…imagine what your sales force can do when your station is your market’s exclusive Auto Channel…talk about leaving money on the table.

    Julie Caracciola says:

    January 24, 2012 at 12:32 pm

    Check your email Bob. Let’s talk . . .

Christina Perez says:

January 24, 2012 at 12:02 pm

Here’s the litmus test for putting up a new subchannel with no guarantee of a cable channel slot: Would a significant number of viewers put up an antenna just to be able to view the programming offered by the subchannel? If the answer is “yes,” then you’ve got an audience magnet and you’ll also be helping to reinforce the primacy of broadcast TV. If local broadcasters could offer a free, OTA all-news channel with local ad avails as a digi, I contend that a sizable percentage of cable subscribers might be persuaded to drop cable in favor of a combination of OTA and internet-streaming — and local stations could grab some of that local cable ad money.

Colin MacCourtney says:

January 24, 2012 at 12:29 pm

With nearly 95% of TVHH obtaining television from subscription services, without at least cable carriage, the homes available to sub-channels remains very small in middle markets. In low-density markets where ADS gets 50+% of households, the prospects for sub-channels becomes even more difficult.

    Christina Perez says:

    January 24, 2012 at 2:48 pm

    Cable penetration is dropping, barely at 60 percent of TVHH. That same trend is affecting non-traditional delivery technologies, too, which represent about a third of TVHH. If broadcasters would promote OTA TV and offer an all-newser, cable churn would accelerate. Broadcasters are so consumed with getting a slice of the pay TV pie, they are throwing the baby out with the bathwater. Prime example is mobile DTV. If existing stations keep mobile DTV in the free and clear, no signup required, you will see a new renaissance for local TV broadcasters.

    len Kubas says:

    January 24, 2012 at 3:55 pm

    Cable is a subset of “subscription services” which also include DISH, DirecTV, AT&T U-Verse and Verizon FIOS, and less well-known brands. Your figures are correct — at least for Dec 2011 — but present an invomplete picture. Even if true, every market is different. New Mexico has the lowest percentage of TVHH with subscription services; but my market is over 90%. Cable/sat carriage is important everywhere, but less so in NM than NYC.

    mike tomasino says:

    January 24, 2012 at 4:12 pm

    I have no clue where Mr. Schutz is getting his numbers. Even Neilsen’s numbers are well below 95% of TVHHs. I saw on “Democracy Now” that 25% of children live in house holds that have difficulty paying for food, and yet I’m to believe that 95% of households that watch TV pay for it? Philly is completely correct about the drop in pay-TV penetration. In the middle 6 months of last year the pay-TV universe dropped by at least 60,000 subscribers (not counting Cox or Brighthouse which I assume aren’t doing any better than other MSOs). Meanwhile occupied housing is going up. Were still about 2 weeks out from getting Q4 numbers, but I expect to see a drop in subscriber numbers. There will come a time shortly where cable carriage will become much less important in most DMAs.

    mike tomasino says:

    January 24, 2012 at 4:25 pm

    Add to that, that Antennas Direct is reporting shipping as many as 80,000 antennas in a single month and consistently doubling sales every 9 months. That of course doesn’t count sales by the old line manufactures like Channel Master, Winegard, Antennacraft, and RCA. In a recent article in TVtechnology RCA reported recently that they are definitely seeing a rise in the sales of antennas and then there is Mohu and Walltenna. Even Home Depot is starting to carry antennas in selected markets. The age of traditional pay-TV growth is over. This is the age of OTA and OTT.

    Christina Perez says:

    January 24, 2012 at 4:48 pm

    Think where local TV stations would be today if the ATSC DTV standard had been robust and able to handle motion from the get-go. The reason that didn’t happen has little to do with technology and everything to do with a hidden agenda aimed at the eventual demise of free, over the air broadcast TV.

    mike tomasino says:

    January 24, 2012 at 5:06 pm

    If broadcasters would just push what they have today they would be miles ahead. Most people live in areas where an attic or small roof top antenna is all they need to get reliable reception of all the locals and possibllly a neighboring market. It isn’t like people are against antennas since satellite is so popular. I’ve picked up all the full power Denver UHF Lookout and Mount Morrison stations at 62 miles in Northern Colorado Springs using a 6″ loop antenna.


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