As The FCC Dithers On The Top 4 Rule, The Case For Consolidation Grows Stronger

Hank Price

If you follow The Gauge, Nielsen’s media tracking report, you know that last month streaming captured 31.9% of total viewers, compared to 24.4% for broadcast.

Seasonal viewing comes into play, but one cannot escape the fact that streaming continues to grow at the expense of both broadcast and cable. With network owners pouring money into their streaming products, the problem will continue to grow. For local television to thrive in the future, it must find new ways to expand audiences.

Expansion is a hard thing to do right now because another reality is that the FCC continues to stand in the way of modern business models that would revitalize local television, adding new products and generating new audiences.

Right now, most television markets have at least four stations producing what is essentially the same local news product, all competing for the same audience. Some stations do a great job, some do a poor one, but the very presence of so much similar product, filling so many hours of the day on so many different stations, cannot help being a factor in the decline in television viewership.

The logical answer to this problem is to narrow the number of stations producing local news.

A good friend and fine broadcaster who is committed to excellence in local news told me just last week that he hates the idea of losing any news voice. I understand his point, but the economic and coverage cases for local consolidation are overwhelming.

Almost every market has at least one player just sort of hanging on, committed to news only because it is the key to political ad billing. Without political, some of those newscasts would be gone already. Unless the Top Four rule is changed, many of those stations will eventually have to exit news the hard way, possibly during the next recession.

The economic case for consolidation is strong, but I think the case for democracy is even stronger. Right now, television news departments cover the same stories, often with the same leads, same live shots and pretty much the same body copy. That means resources that could be used to expand news coverage are tied up in duplicated effort. Stepping back, that does not make sense.

What if instead of four stations doing news, there were two? Before you clutch your heart, there is a case to be made that content would increase.

Let’s assume the two surviving stations were the currently leading ones with strong commitments to local news and to their communities. Sure, they might still have the same lead stories, but they would also have the resources to add much broader and richer individual content, especially on their digital platforms, something that must happen if the user base is to grow.

Yes, they would generate more money, but that means they would also have the resources to go deep, creating a breadth of local content newspapers can no longer provide. This would not be simply replacement of newspapers, but something far richer and more compelling: hyperlocal, multiplatform, video-rich, some of it user-generated. Each platform could play to its strengths, not simply repurpose television content.

Why do this? There is a vast and untouched local audience of all ages waiting to be served. Many members of that potential audience have a much broader idea of what constitutes news than those of us still locked in the straitjacket of traditionalism. They care about their local world and are eager to consume information about it, but they will not come to us. We must go to them with products and platforms that serve their needs.

Why would stations make such a commitment? Because that is where the growth is; the economics make it compelling. It would only take one station. The other would then be forced to compete.

None of this will be easy. To build the future we must have a paradigm shift. That will happen only if we also have an economic shift that encourages investment. Sadly, that shift is being blocked by the FCC.

For longer than most people would imagine possible, the FCC has dithered about the Top Four rule as if it were a sacred scroll instead of a relic of the past. The rule was put in place during a time when television dominated media. The old saying was that stations had basement printing presses turning out cash. Today, those presses are full of rust and local television competes in a sea of many other providers, but the regulations remain stagnant.

Local television is the most important information force in America; one that represents the heart and soul of most communities. It is a force that not only informs and brings people together but is also the last bastion of citizen trust. If all that were not enough, time after time it has also saved lives.

If the critical role local television plays is to be preserved, we must have an orderly transition to the future. The FCC can — and should — ensure that future by removing the Top Four rule this year. If not, market forces will eventually reduce the number of stations producing news with unpredictable results. For the well-being of local communities across the nation, the FCC must act now.

Hank Price is a media consultant. His second book, Leading Local Television, has become a standard text for television general managers. In a 30-year general management career, Price led TV stations for Hearst, CBS and Gannett, including WBBM Chicago, KARE Minneapolis, WVTM Birmingham, Ala., and both WXII and WFMY in Greensboro/Winston Salem, N.C. Earlier, he was a consultant with Frank N. Magid Associates. Price also spent 15 years as senior director of Northwestern University’s Media Management Center. He is currently director of leadership development for the School of Journalism and New Media at Ole Miss.