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.”
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.”