Sinclair CEO David Smith says that without a new technical standard that lets broadcasters beam their signals to all devices, they will lose to cable and telcos and become “essentially a three-legged dog in a four-legged dog, fast-track world.”
With the mobile market surging, David Smith, Sinclair Broadcast Group president-CEO, says broadcasters need to rally to adopt the new broadcast standard, dubbed ATSC 3.0, to fend off competition from phone and cable companies.
“It is essential that we be in the business of talking to those devices as freely as everybody else,” he said. “If we can’t do that in the future we are essentially a three-legged dog in a four-legged dog, fast-track world.”
Speaking this afternoon at the second annual TVNewsCheck/SVG NewsTechForum — a two- day confab in New York focusing on news technology — Smith said the broadcast business is putting itself at risk by not keeping up with growing consumer demand to access content online and on mobile devices.
He says that by not adopting the new standard, broadcasters will stay stuck, having “no capability to be in the mobile business.” Currently, broadcasting is financially “irrelevant” next to the big telco companies, putting its future in a precarious place, he said.
“If in any way we are impeded from talking to every device in the marketplace under any circumstances, I view that as a failure,” Smith said.
He said it is essential that broadcasters band together to institute the new standard– and do so in such a way that is not disruptive to consumers. “Transitioning can be done efficiently without a lot of hoopla. It’s relatively simple if we can get our heads together and say let’s just do this.”
He said the industry as a group needs to rally against new competition.
“The Internet is the ultimate competitor here. If you pay attention to where the money is flowing, the money is leaving national [TV advertising] and going to the Internet. It is leaving the business,” he said.
Smith said the industry is not going to be able to recover that advertising without a new standard that allows broadcasters to meet both consumers and advertisers on mobile devices.
“We can’t talk to those devices. And by virtue of the fact that we don’t talk to those devices, we can’t sell to advertisers that we are talking to those devices. It’s that simple. If we can’t compete in that space using our digital platforms, then that piece of the pie will be lost forever and we’ll be relegated to what radio is,” he said.
Smith said he also believes broadcasters need to move into new businesses to keep the industry robust.
Smith added that he still believes in the viability of a Sinclair-run national news network whose content is provided by the group’s 61 news-producing stations, as well as stations from other large groups such as Tribune, Nexstar Media General and Gray.
He said that collaborating with other broadcast groups could create a network 400-500 stations strong, including those in major markets.
At a time when Sinclair is putting “millions and millions of dollars into the news business,” the idea of aggregating news content from around the country — a business model already proven by a range of websites — is viable, he said.
That is especially true, he added, when you factor in the fact that consumers time and again choose local news over the cable networks.
“Local television stations own the news business,” he said. WSYX, Sinclair’s ABC affiliate in WSYX Columbus, Ohio, for example, draws roughly 52,000 adults to its 10 p.m. newscast, while Fox News Channel gets just 2,000 viewers at that time, he said.
“It’s comedy what they do versus what we do,” Smith said.
Smith also discussed Sinclair’s commitment to local news, which has grown following the company’s recent acquisitions. Currently, Sinclair’s 61 news-producing stations deliver 2,000 hours of news a week, reaching 39% of the country’s TV households.
Smith said investing in news (all Sinclair stations will eventually be up to the same standards, including high-def broadcasts) is in keeping with the two-pronged strategy he says is “very simple: serve the public interest and make money for my shareholders.”
“The concepts are not mutually exclusive,” Smith said. “Serving the public interest is defined as providing news and content that serve the interest of the public. Shareholders want one thing: shareholders want higher returns. That happens by better programming. In this case, better programming means better news.”
In turn, Sinclair will continue expanding news at its stations — a lot at some, he said. “We fully expect where it makes economic sense to eliminate syndicated television shows and put in news. We think it’s important to be in control of our content.”
Smith said he doesn’t know whether there is such a thing as airing “too much news.” Regardless, he said Sinclair believes in investing in producing the best possible news product — upgrading equipment and the like — regardless of a station’s market size. Doing anything less is “just not acceptable,” he said.
Smith said all stations offer opportunity, including those that are lower rated. “I think you can be No. 3 or No. 4 in the marketplace and provide a significant service and still make money. It’s very doable,” he said. “I can say that with a straight face because we have stations that are No. 3 and No. 4 in their markets and we make money.”
He said that Sinclair believes “it is important to have different voices in a market,” and those stations will continue to provide that service while Sinclair tries to improve them.
There are times, he said, that people ask how long he’s going to spend fixing a particular underperforming station. “In some cases, we feel we’re going to stay with it until we fix the damn thing,” he said.
To listen to a recording of this panel session, click here.
To read more stories from the 2014 NewsTECHForum, click here.