With multiple introductions of new multicast networks at this week’s NATPE, and no shortage of existing ones, it gets one to wondering how they can all survive. The added capabilities of the upcoming next-gen broadcast standard will mean more space for them. And with smart, gradual investments in originals, some diginets could become great businesses and real contributors to the top lines of TV stations.
The talk at NATPE in Miami Beach this week had less to do with syndication and more to do with multicasting.
Just before the conference, Katz Broadcasting announced that it would launch a comedy channel, LAFF, in April. And then on Tuesday as the conference got underway, the Justice Network with John Walsh as spokesman and interstitial host made its debut mostly on Gannett stations, and Freemantle Media, with the help of Debmar-Mercury, said it was assembling a game show channel from its library of 40,000 episodes of Family Feud, Let’s Make a Deal, To Tell the Truth and the like.
These newcomers enter a marketplace already filled with diginets offering some mix of old TV shows and movies. I shouldn’t say “old.” The word is “classic” or “retro” or, more recently, “iconic.”
The other classic-retro-iconic networks include MGM’s This TV, Tribune’s Antenna TV, CBS’s Decades, Sony’s GetTV, Fox’s Movies!, NBC’s Cozi TV, The Works, Retro TV, TUFF TV, Bounce TV, Me-TV, Grit and Escape. Forgive me if I left somebody out.
The late Chuck Scherman of NAB liked to say you could watch the entire history of television on basic cable. Now, you can see it on broadcast TV.
In addition to the classic networks, there are a bunch of Spanish-language channels and specialty channels hoping to get digital slots on TV stations. Our list from last June includes MundoFox, UniMas, Estrella TV, Biz TV and The Family Channel.
It gets one to wondering how they can all survive. Because the programming is classic, it doesn’t cost a lot to license and you don’t need to spend promotional dollars explaining who Lucy, Andy, Archie Bunker and Hawkeye Pierce are.
But these diginets tend to lean heavily on direct response advertising and there has to be limit to how many that can support. Also, channel capacity is tightening up. A station broadcasting HD on its main channel really only has room for two SD diginets on its subchannels. How can you clear all these diginets?
When I suggest to diginet marketers that a shakeout is surely coming, they readily agree. Of course, it’s always the other guy who, for some flaw in business plan or execution, will fail.
Multicasting has always been tough.
Since broadcasters started experimenting with diginets a decade ago, many have disappeared from the airwaves. Remember, The Tube and the Universal Sports Network? How about Weather Plus backed by major station groups or the aptly named Dot2 Network?
ABC’s Live Well Network is barely hanging on. It was dropped by Scripps to make way for LAFF and limps along only on the ABC’s O&Os. ABC gets points for going with original programming, but it probably should have followed NBC’s lead with Cozi TV and converted from originals to reruns.
At this point, it’s hard to predict where the multicasting business is heading. Its long-term prospects depend in large part on the availability of subchannels. So, let’s take a quick look at that.
The FCC incentive auction is coming in 2016 or 2017. When it does, broadcasters in the top 25 or 30 markets will be selling stations, if not their main stations then their duopoly stations, reducing the supply of subchannels drastically. In the scramble for the remaining subchannels, CW and MNT affiliates will get first dibs.
That’s the bad news. The good news is that just around the same time that some stations will be going away, broadcasters might be ready with a new broadcast standard, ATSC 3.0.
Among other things, the robust new standard is promising greater throughput. In other words, it will allow broadcasters to air more channels within their 6 MHz of spectrum than they can today.
So, perhaps, capacity lost in the incentive auction will be restored with the new standard.
Also, keep in mind that the best of the diginets are not pure broadcasting plays. With the help of their affiliates, they get carriage on the local cable systems and that distribution could continue even if the broadcast channels go away.
At first glance, diginets look like a low-risk, low-reward source of incremental revenue for library owners and broadcasters. But they could develop into more than that.
Many cable networks were built on a foundation on off-net sitcoms and dramas. Once established, they slowly began developing their own programming. They now produce myriad critical and popular hits and become tremendously lucrative.
Diginets could take the same path to riches. Bounce TV, with a focus on black viewers, is already investing substantially original programming.
With smart, gradual investments in originals, some diginets could become great businesses and real contributors to the top lines of TV stations.
Time to wrap this up. I have things to do this afternoon. Gunsmoke and The Rifleman are on Me-TV, Starsky and Hutch and Charlie’s Angels on Cozi and I Dream of Jeannie and Bewitched on Antenna TV.