The third-generation Minnesota broadcaster sees enough upside in the TV station business for any fourth-generation broadcaster in the industry pioneering family.
The Hubbard family knows a thing or two about broadcasting, having successfully run broadcast stations since 1925 when AM radio was just beginning the electronic media revolution. Applying those lessons to TV broadcasting today is third-generation Hubbard broadcaster, Rob Hubbard.
As president of the Hubbard Television Group, Hubbard oversees seven full-power TV stations (three ABC affiliates, three NBC affiliates and an independent) in markets ranging from Minneapolis-St. Paul (DMA 15), where the company is headquartered, to Rochester, Minn. (DMA 153).
In this interview with TVNewsCheck, Hubbard is fully aware of the challenges facing broadcasters, but appears in no rush to pursue new media until he has a better handle on where they are going. He suggests that there is still plenty of upside in the basic business for any fourth-generation Hubbard broadcasters, arguing that local spot revenue dollars will replace lost national revenue and that at least some of the ad money now being spent on the Web will find its way back to TV.
Rob also displays a little of the Hubbard maverick streak, arguing against TV duopolies, virtual or otherwise.
An edited transcript follows.
Making it as an independent is tough. You know, it’s a different business. I don’t know whether we could make it as a standalone independent or not because we’ve never had to try. We take advantage of synergies, and program purchases, and you get extra runs and things, but we’ve never looked at it and asked, could an independent truly stand alone in Minneapolis.
I notice that you do have some sports on the station, which is rare these days.
We have the Minnesota Wild [NHL], we have the Minnesota Timberwolves [NBA] and we have the Minnesota state high school league, which is boys and girls basketball and state hockey tournaments and boys football. They are huge events.
And that works for you?
Absolutely. Huge, huge stuff.
Do you think KSTC is a model that would work for other broadcasters?
I won’t say it is or it isn’t. Every market is so different. I think one of the key questions is how much programming is available in a marketplace. There’s more of an opportunity in smaller markets where there are not as many television stations. The fewer the television stations, the greater the availability of good syndicated programming. It may be a model, but it’s a difficult model, especially without the synergies and the support of having two televisions run from one facility.
You have ABC and NBC affiliates. Do you miss Monday Night Football on the ABC stations?
I don’t miss football on ABC at all, no. It was not a big factor. If the Minnesota Vikings would’ve played every Monday night, it would’ve been an unbelievable thing for us. But it was just like maybe once a year at best. And the impact of those overruns on the rest of your station was meaningful.
Do you mean as a negative?
Yeah, absolutely. Whatever good the game had, there’s was also a negative effect on the news. In the long term, it was a wash.
Well, I guess you can say the same thing about NBC now?
One thing is they do start earlier so that helps, but all in all I would say that at best it’s a wash, too. Just to expand on that a little bit: Sunday afternoon football is a huge home run because you’re replacing a time period that really has very little revenue-generating capability and you’re putting in primetime revenue. When you take a Monday or a Sunday night and it’s not a home team playing, you take primetime revenue and you replace it with other primetime revenue. Even if football does a little bit better, the net gain is not that significant.
You have to be happy that ABC is off to a strong start this season.
So far, absolutely. One of these days we’ll get ABC and NBC having good years together. That would be very good. Quite frankly, we hope all networks do well. I don’t think all broadcasters fully appreciate the fact that they’re in this together and they should be rooting for all these networks. We don’t have CBS affiliates, but nothing would make me more upset than if CBS had no viewers.
Now that we’ve established that you love the networks, I would like to play devil’s advocate and ask you why don’t the networks seem to love the affiliates. They seem to be looking for every possible alternative outlet for their shows. I missed 30 Rock last Wednesday on NBC, but found it the next night on Bravo. Are you concerned that the networks are looking for a way out of the affiliate business?
No I’m not concerned that that’s what’s driving them. Now, that’s not to say I’m entirely happy about all the repurposing that goes on, but I truly do believe that there is some level of repurposing that is very helpful. Take Lost, for example. If you lose track of that storyline, you’re not likely to come back. So if there’s an opportunity to catch up, that’s a very good thing. On the flip side, if it becomes so easy to catch up that you don’t have to worry about watching the original broadcast, then it’s crossed that line and now it becomes a negative. I know that nobody knows where that line is right now. I also know that line is different for every show.
Hubbard’s been in the business for 80 years and, because you’re privately owned, you’re not under this pressure to grow the revenue every quarter, but I would think that you would like to do that. How do you do that?
There are so many revenue opportunities in every market across the United States that are completely untapped and that we’ve never had to tap because, quite frankly, the television business has been fairly easy. As the television business has gotten tougher, stations have gotten better at tapping the local and I expect that that trend is going to continue and more then offset any weakness on the national side. That’s not to say that in any one year there might not be a squeeze and it might not be a hard one.
What about the Web? What is Hubbard doing to exploit that opportunity?
We’ve been less aggressive then some and maybe more aggressive then a couple, but I think there’s still a major shakeout to come. If you go back 20 years, there was a time when national spot was way off because the packaged goods people had found this promotion. The retailers had changed how they were doing business. They were squeezing money out of the manufacturers, making them buy shelf space and in-stores. It impacted national spot in a meaningful way, but over time that money came back because they couldn’t continue their brand. You can’t own a piece of somebody’s mine if all you’re going to do is sell on price.
I think what we’re seeing on the Web today is some of the same thing. People are spending money on the Web because they just want to learn it. They are spending money on the Web because they’re upset with something else. There are people that are spending money on the Web because it’s where they happen to live, or what they eat or how they happen to spend their free time. I think some part of that—I don’t know how big—is not going to work. When it doesn’t, they will come back and find the things that did work. Some of that will be coming back to TV.
What do you think of multicasting? To some, it’s just more TV stations, more independent TV. Can it be more then that? Do you have any bright ideas on how to exploit the second or third digital channel?
There may be somebody who has got some really bright ideas about it, but if they do they’re not talking today. And they shouldn’t until there is a critical mass of digital television sets out there. If I had really good ideas, I probably wouldn’t talk about them very loudly because by the time the marketplace was ready to accept those ideas or to monetize those ideas, someone else could just step in and do it.
What about HDTV? Are you committed to rolling it out at the stations?
Absolutely. At the local stations, it’s a natural progression. At this point we have taken the position that it’s not worth the millions of dollars per station to completely throw out all your plant and buy new equipment, but every time we buy new equipment we make sure it’s capable of handling HD within some relatively reasonable time period. We’ll make a transition and it will be a seamless evolution and it’s not a revolution of throwing out gear that works. That’s a thing that we think is just too expensive today.
Hubbard has been strongly opposed to the virtual duopolies that have been popping up around the country, going so far as to challenge the Malara-Granite duopoly in Duluth at the FCC. Why?
Because we think that they’re against the law.
But the FCC seems to keep approving them.
We believe that it is against the law. It’s no different than someone who has a trial and one judge or jury says X and you appeal it. It’s not the law until it’s done. So we think it is against the law.
Isn’t your real gripe that it gives the duopolist an unfair advantage in those markets?
Absolutely. We operate in a regulated world. Now, if you want to get rid of all regulations, that’s one thing. But to establish a set of regulations that says that this company or person can be advantaged over that person doesn’t help. It doesn’t make anybody better and it doesn’t help the consumer to take away voices in a market.
Let me say one thing about duopolies in general. I think that the duopoly rules, as they currently stand, are not good for our country. Now, they are the rules and we bought a duopoly in Minneapolis. But, with that said, I would have preferred that duopolies not be allowed.
Do you think a relatively small broadcaster like Hubbard will ever have the leverage to get restransmission consent fees from cable operators?
Yes, but we can’t drive that train. The networks have clearly gotten a lot of value out of retrans and they’ve chosen to put it into their cable networks. If they choose to get cash instead, I believe that at the end of the day they will, but it might not be pretty between here and there.
You’re now a cable programmer—you have Reelz Channel and Ovation. Doesn’t that change the retrans equation for you since you may want to use your retrans right to get carriage for your cable networks? Or, do you simply not want to do battle with operators.
We have not tried to tie any of our retrans rights with any of our cable networks. Now there have been systems, there have been companies, that have required us to tie those together. They won’t have a conversation unless we tie them together. I’m not saying that as a complaint. It’s just the way it is.