Assessing Local TV’s Top Challenges

Confusion over new media and its impact on local advertising, coupled with an FCC that is “unfriendly” to local TV are two of the biggest threats facing local television, said two panelists at the TVB Forward conference Thursday in New York.

The threat picture was one of the areas explored in an on-stage panel session titled “A SWOT Analysis of Television.” (SWOT stands for strengths, weaknesses, opportunities and threats.)

“The biggest threat?” panelist Larry Patrick asked rhetorically when he was queried by moderator Robin Flynn, director, SNL Kagan. “Tom Wheeler!” Patrick answered, referring pointedly to the chairman of the FCC.

Patrick, managing partner of Patrick Communications, a TV and radio station sales brokerage, had previously accused Wheeler’s FCC, and Wheeler personally, of harboring a “pro-cable” bias that is “damaging” to the TV industry. Among other positions he has held, Wheeler is a past president of the National Cable Television Association and past CEO of Cellular Telecommunications and Internet Association.

“I think that Chairman Wheeler, with all due deference, is getting payback” for perceived slights to the cable industry going back 35 years, Patrick said when he was asked to assess the potential impact of the FCC’s current initiatives in retransmission fee and exclusivity reform, and next year’s expected spectrum auction.

“I think he is absolutely dedicated to two things,” Patrick said of Wheeler. “One is getting the auction right as fast as he can because by November 2016, he’s out of there. And two, all of this is cable-satellite friendly.… All of this is sort of pent-up anger and frustration on his part.

“He thinks our businesses are bandwidth hogs, we’re rich fat cats who are using too much, and should be slapped down,” Patrick said. “This is not leveling the playing field. It’s tilting the field dramatically on the side of the cable and satellite people.”

Patrick’s advice: That broadcasters “hammer on” their representatives in Congress.

While the SWOT session delved partially into these Washington-based issues, most of the session was focused more on issues related to the local TV advertising picture.

On that subject, new and emerging media were a principal topic of conversation. According to the panelists, the new media embody both opportunities and threats. “Emerging platforms -— that’s the biggest opportunity where the growth is going to come from,” said panelist Bill Hague, EVP, Frank N. Magid Associates.

“The biggest threat” to local television,” he said, “is local advertisers and ad agencies in confusion” about aspects of that very same new media. “There is no more confused group in the world. They’re chasing the shiny object, the app for this and for that, and they don’t know why. [At the same time] the traditional 15- or 30-second spot on a local TV station still works exceedingly well. That’s the threat.”

Another panelist — Jack Myers of MyersBizNet — sees opportunity in local TV’s ability to serve the interests of their communities, only more intensively than they’re doing already.

“It’s really operating in the public interest, understanding the local community and fulfilling those needs and doubling down on local community engagement,” Myers said. Along those lines, Myers floated the novel suggestion that stations add 30 minutes of local political coverage to their late local newscasts in the weeks leading up to Election Day next year.

“Why not expand the news coverage during the political season? Why not push the latenight shows back a half-hour” to create more inventory for political advertising right before the election? he mused. He didn’t offer a suggestion for getting any of the networks to agree to a half-hour delay of their latenight shows, however.

Other topics covered during the session included audience measurement, with Myers cautioning against “over-investing” in new research. He advised focusing on existing methodologies and making them better. “We have to double down on today’s currency,” he said, rather than devise new ones.

For Magid’s Bill Hague, local television’s biggest strength is the relative scarcity of its inventory. “One of the strengths of broadcast is scarcity,” he said. “Scarcity helps us on the sell side — the people in this room — control that inventory so you’re increasing the value of your inventory.”

The prognosis from the panelists, where revenue growth in local television is concerned, was mixed: Next year will be up, thanks to politics. The year after that, revenue will be flat, the panelists said.

“We have a huge year next year,” said Patrick. “And then in 2017 we’re going to be fighting just to stay even.”

Read all of TVNewsCheck’s TVB Forward coverage here.