EXECUTIVE OUTLOOK FALL 2013

Beating The Drum For Local TV

Bill Fine, GM of WCVB Boston and chairman of TVB, discusses TVB’s “report card,” the outlook of national spot and political advertising, progress in getting credit for DVR viewing, the loss of exclusivity to network programming and more.

You would think that Bill Fine would have plenty to do as general manager of Hearst Television’s WCVB Boston, especially this year in which all Boston broadcasters were called upon to raise their games to cover the April 15 bombings and their continuing aftermath.

But Fine has got another job — chairman of TVB, the trade group dedicated to maximizing spot TV revenue by convincing marketers, in Fine’s words, “that local TV is the most impactful place to allocate advertising dollars.”

Here, Fine discusses TVB’s “report card,” the outlook of national spot and political advertising, progress in getting credit for DVR viewing, the loss of exclusivity to network programming and more.

An edited transcript:

In our survey of GMs, we asked what kind of job TVB was doing. It was essentially 60/40 with 60% saying “effective” and 40% saying “ineffective.” How do you react to that report card?

My first reaction would be to ask you a few questions and gain context. I would absolutely be curious about the results of any survey, but I wouldn’t make business decisions off of one without knowing the methodology and science behind it.

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That said, I actually find something very positive in that split and might have accurately guessed at the result if asked. I have been involved in some capacity with TVB for over 30 years and have always found that those who engage, use the services and are aware of what the bureau does every day are supportive. Call them our core constituency.

The 40% may have some genuine concerns with TVB, but I also suspect they aren’t fully aware of the benefit they receive. They also could, in fact, be the free riders who benefit from our services without providing financial support. Regardless of who they are, [TVB President] Steve Lanzano and I would love to sit down with them. Care to send them our way?  If the 40% attends the Forward Conference [Sept. 18 in New York City], I know we can turn many of them into advocates or at least enlighten them a bit more. 

Those GMs also said that they expected national spot to continue to shrink as a share of their total spot revenue —- from 31% to 27% over the next three years. Do you think there is any way of stopping that erosion?

I realize that is the prevailing viewpoint and certainly the recent past has been tough.  But national’s share will also shrink due to simple math. All local television stations now do a much better job of developing local business. It is a strong focus everywhere and TVB has the tools to assist.  Local development takes work, but is easier these days, especially when targeting clients of local newspapers. But we also need substantial growth to offset declines nationally. We are attracting more new customers every day. Reclaiming money exported to cable, in any fashion, is also important. Have you ever really looked at the cost of local cable? The CPPs are out of sight and that is a reality we need to remind our customers of every day.

To stop the erosion all broadcasters also have to do a better job of making the case vs. national cable. TVB has commissioned some strong research which indicates buying a larger number of cable networks doesn’t materially add to reach or frequency. If we can get more clients to cut back the number of cable nets they buy and pour the money saved into spot, I am confident the positive results achieved can stop the erosion and start to rebuild our share. 

What’s the good news in national spot?

Put me in the camp of those that believe it will never come back to the share levels of 20 to 30 years ago.  The good news for broadcasters is this: A lot of that redirected money is misspent on national cable. If the industry can collectively demonstrate the inherent strengths and advantages of local TV, we can reclaim a good chunk. TVB has the third-party research and tools to assist, but it needs a greater focus from all of us. TV is one of the few industries that doesn’t allocate a large amount of money in research and development. The focus is certainly growing, but we will need greater utilization and expansion of resources nationwide, from local TV stations and rep firms, to succeed.

Political is critical to most station groups, if not to most stations. What’s the outlook?

It is critical and likely to continue growing.  It can be equivalent to adding an extra category on par with or even greater than automotive in an “on” year in a key market. Outside of the perennial states, the money will continue to be spent disproportionately and move around from state to state, election to election. For example, Texas is reportedly lining up well for next year. Massachusetts used to have very limited activity, for decades, which has all changed with four senate races in five years.

The main activity, certainly in 2014, is local, local, local. The biggest threats exist in any adverse judicial decisions or in the halls of Congress. Absent major reversals of current laws, broadcasting’s share will remain dominant for quite some time to come. Certainly there will be continued pressure from competitors. But when the race is on the line, and you need to reach as many voters as possible as quickly as possible, local television stations are a tried and true delivery system.

TVB has been waging a campaign to convince media buyers to accept live-plus-same-day ratings. Where does that stand and what kind of pushback has there been from buyers?

The pushback is thankfully less now than it used to be, but still exists with some major agencies. Acceptance is growing and we feel there is a positive momentum in the marketplace. TVB estimates about 65% of spot business is now purchased on Live+SD. In fact, I honestly believe the debate should be over Live+3 right now. But first steps first. The remaining pushback centers on the difference in methodology between national ratings — commercial minute ratings vs. local TV’s average quarter hour measurement. Yes, they are different, but the way everyone watches TV is not. Since ratings are not an exact science anyway, the trend lines we have been tracking become very important in the evaluation. And every year it is clear the gap between Live-only and Live+SD has grown. 

Our GM survey says that 83% believe that affiliates’ loss of exclusivity to primetime programming — its availability on digital media — is an “extremely serious” or “serious” threat? Do you concur? Why or why not?

Absolutely it is. Name any business that was the exclusive distribution source for a product and eventually shared it with a large number of other methods of distribution that isn’t affected. One smart response has been the expansion of local news across the country.  If you lose a degree of differentiation via your network programming, the best way to carve out a strong identity and succeed will center on local programming. Our station was built over the past 41 years on quality local programming and commitment to the community. It is the key to our success now more than ever.

How about a few questions about your station? Last fall, WCVB added Me-TV on a subchannel. How has that been going? Does the channel have widespread cable carriage? Do you think that multicasting will become a significant contributor to your business?

Me-TV Boston is off to a great start, building each month and already topping the household ratings of a number of independents in Boston. We are also working on a promotional model for next year that is very exciting and brand specific. The majority of cable systems in Boston carry us, but of course we also distribute via the greatest wireless system in the world — and free of charge to boot. Multicasting is certainly growing as a business and much faster at those stations that actually train their staffs to sell across all their platforms. TVB can help stations there too.

One of the outstanding attributes of WCVB is Chronicle, your 30-year-old daily half-hour magazine show? How is it doing?

Chronicle is an amazing local program and a great example of the need to differentiate yourself from all competitors. From a ratings perspective Chronicle is No. 1 or No. 2 in almost every book. I should add that having talented people in front of and behind the camera is a must. We share resources with news, mostly in technology and talent, which makes it an even better business proposition.  In a David vs. Goliath sense, Chronicle tops the ratings of major nationally branded shows with much larger budgets and PR machines. And we have for most of the 31-plus years.  I love that fact.

How come such programs don’t work elsewhere?

I don’t buy the premise more shows like this cannot be successful.  Most stations don’t even try.  Some of our other Hearst stations have started their own Chronicle programs. WMUR, our sister station in New Hampshire, has its own local version and WYFF won a Peabody for one of its Chronicle specials.  It is absolutely a challenge to deliver a consistently strong local product to compete with some of the industry’s most successful shows in access, no doubt about it. But the rewards can be spectacular and there is a tremendous sense of pride at WCVB because we do make the effort every weeknight.

Any hope for ABC this fall?

Of course. A few new hits will obviously help and there are some intriguing and smart new shows in the lineup. ABC is already very strong with women and more affluent viewers. If you accept the research that says women are responsible for 80% of retail sales, that is a strong audience we reach and can sell every day.

This story originally appeared in TVNewsCheck’s Executive Outlook, a quarterly print publication devoted to the future of broadcasting. Subscribe here.


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