While some people talk wistfully about the Golden Age of television, I’d like to suggest that TV has the opportunity to create and enjoy its next golden age. But the secret is that maps from the past cannot guide us in the uncharted territory that lies ahead — there be dragons. Succeeding in the digital era will require blazing new trails. The speakers and panels and experts that will be featured at Media Finance Focus 2015 — MFM and BCCA’s 55th annual conference — can help you find your way.
Over the past several years, we have heard TV critics and others describe these days as “the second Golden Age of television.” They cite the popularity of TV shows like AMC’s Mad Men and the overall growth in TV viewing, thanks to the addition of online and mobile TV viewers.
For local broadcasters however, there was more to like about the first Golden Age of television. As the Mad Men series has reminded us over its eight-year run, back in the day broadcast TV, with its golden age dramas and live entertainment shows, was unrivaled in its ability to reach and persuade American consumers.
There were also far fewer media entities sharing the gold. Just the Big 3 networks were available and they attracted as much as 90% of the vast prime time audience of American households while radio and movie theaters lost share.
Despite growing competition for viewers from cable, local broadcast fared very well in the next 25-30 years. In fact some of the highest valuations for TV stations were reached in the 1980s, with major market stations selling for more than half-a-billion dollars. As one TV station executive observed at the time, broadcast TV properties were like annuities, growing their operating cash flow by 10% or more year after year.
Contrast that with the economics of operating a TV station today. There are so many uncertainties on the broadcast TV landscape that it is an entirely new ballgame.
Broadcasters aren’t alone in facing the challenges brought about by a new frontier for the media industry. Unlike the days when there was a clear start and stop for transitions such as moving from black and white to color television, the digital world seems to unleash successive waves of change that require constant adaption of business plans.
In talking about the “good old days,” I don’t mean to suggest that broadcast television has no reason to be optimistic about the future; quite the opposite. In fact, I’d like to suggest that TV has the opportunity to create and enjoy its next golden age.
But the secret is that maps from the past cannot guide us in the uncharted territory that lies ahead — there be dragons. Succeeding in the digital era will require blazing new trails.
This is one of the reasons we selected “Blazing a New Frontier” as the theme for Media Finance Focus 2015, MFM and BCCA’s 55th annual conference. In addition to its location of Phoenix, the last contiguous U.S. territory to become a state, this year’s conference will assemble experts who can help us all to chart a course to the new golden age for TV stations and other media enterprises.
W. Charles Warner Jr., MFM’s conference program director and the associations’ chief financial consultant, has been working with the members of our Television Committee to identify the most pressing matters facing broadcasters today as well as the experts who can help address them. Warner, who is president of Broadcast Finance Inc., a media management consulting firm, has worked in media his entire career, including stints in finance, long range planning and governmental compliance at the CBS radio and television network groups. He is also one of the reasons the educational sessions at our annual conferences earn consistently high attendee evaluations.
I’d like to share a few of the 80-plus educational sessions Warner and our Conference Committee have lined up for this year’s event:
“Should I stay or should I go?” While asking this question for a very different reason than The Clash, the band that made it a hit song, many stations are wondering if they should take advantage of the FCC’s upcoming reverse auction for television spectrum and exit the business.
The repacking of local broadcast spectrum also raises questions for stations that are committed to remaining in operation, including how their broadcasts may be adversely affected by the repacking of local spectrum and what to expect in the way of reimbursement for the cost they will incur as a result of the repacking.
As part of the “FCC Update” session moderated by Paul Kelly, VP and business manager for ABC-owned KTRK Houston, broadcast law expert David Oxenford, an attorney with Wilkinson Barker Knauer, will provide the latest information on the auction. The session will also address other regulatory issues facing TV stations such as requirements for online access to the public file; retransmission consent, the FCC proposal to treat certain online video providers as MVPDs; captioning obligations; contest rule reform; costly enforcement issues (fines from the FCC); and music royalty changes.
How television stations can use the new SESAC per program license, the new BMI AFBL license and the traditional ASCAP and BMI per program licenses to manage their license fee payments for station music will be addressed in the “Music Licensing Update” session anchored by Alixandra Steier, director, broadcaster relations for the Television Music License Committee.
Making plans for the future, including that decision about participating in the FCC’s reverse auction requires an understanding of the financial outlook for media businesses. To assist us in gaining that perspective, we are excited to have a keynote address by recognized industry analyst Marci Ryvicker, managing director, Wells Fargo Securities.
While retransmission consent is an increasingly important component of station revenues (and we will have a panel for that), the lion’s share of TV station dollars continue to come from advertising; that is also undergoing a major shift as a result of digital media. We will be examining how stations can turn today’s digital dimes into tomorrow’s digital dollars through a number of sessions.
These educational sessions will discuss “The Digital Challenge,” including a look at structuring digital sales departments, one addressing the growing demand for programmatic buying of spot TV, and a session exploring the latest developments affecting political advertising, which will be a very important facet of station revenues in 2016. We will also be looking at the potential sales and use tax implications of digital advertising revenue,
A general session panel on Tuesday, May 19, will take on the daunting task of predicting the future. It will feature Neil Johnston, EVP, strategy and digital innovation for Cox Media Group; Rob Weisbord, COO of Sinclair Digital Group, and will be moderated by Chris Berry, SVP-GM of iHeartMedia’s 24/7 News Network. They are going to give us their outlook for local digital media by the year 2020.
A recent TVNewsCheck Jessell at Large commentary entitled “Broadcasters Have To Find Their Digital Way,” is pretty clear in its assertion that blazing trails into the new frontier for television must take into account the larger consumer trends affecting television viewing. To help stations to identify the revenue opportunities associated with these trends, we are assembling panels of experts to discuss the latest TV Everywhere developments and the value equation of on demand.
All told, the agenda for Media Finance Focus 2015 will feature presentations from more than 175 industry experts, who will provide the latest information on accounting, credit and collections, economic projections, valuations, M&A, taxes, human resources, regulatory, and technological developments affecting the media industry. The conference will be held at The Arizona Grand Hotel & Spa in Phoenix from May 18 to 20; you can learn more about this year’s agenda on our website, www.mediafinance.org
We hope you will plan to join us for this year’s conference. It is sure to be one of the industry’s best opportunities to get the information and insights needed to successfully blaze a trail through media’s new frontier.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary. She can be reached at [email protected]. Her column appears in TVNewsCheck every other week. You can read her earlier columns here.