Basketball players must pivot for tasks like squaring to the basket, blocking out for a rebound or getting away from defensive pressure. In a similar way, TV stations and other media need to keep one foot rooted in the core business while making calculated and strategic changes in position. The bottom line is that daily content planning must encompass both linear and digital platforms. Digital cannot be an afterthought if it’s to succeed.
Pivotal Changes Are Coming To Local TV
At the MFM CFO Summit held earlier this month, Brett Magid, CEO and president of the Frank N. Magid Associates research firm, entitled his presentation ”Key Trends in Media: Pivot for Success.” With millions of TV viewers tuned in to the “Sweet 16” semi-finals of the 2017 NCAA men’s basketball tournament this weekend, his use of the term “pivot” is well-timed.
Basketball players must pivot for tasks like squaring to the basket, blocking out for a rebound or getting away from defensive pressure. In a similar way, TV stations and other media need to keep one foot rooted in the core business while making calculated and strategic changes in position.
Magid opened his presentation with a look at the key trends influencing media consumption today. From there, he identified six pivotal changes that TV stations and other media enterprises should be considering:
Invest In Platforms That Are Growing
Viewers aren’t rejecting TV programming. Consumption has remained steady over the past five years, at an average of 5 hours and 25 minutes per day in 2012 and 5 hours and 24 minutes/day in 2017.
What has changed is how they are watching. While viewership of video programming on TV sets has declined by more than 30 minutes per day over the past five years, video consumption on mobile devices increased from nine to 31 minutes and viewing on connected devices climbed from 18 to 28 minutes.
As one might expect, popularity of viewing on digital devices is even higher among millennials. When asked to evaluate the statement “My phone is my TV,” a whopping 40% agreed. That’s in contrast to the average of 27% from all smartphone users.
Today’s consumers are shifting from “best screen available” to “best experience available.” It follows, says Magid, that stations need to consider complimentary extension offerings as well as stand-alone digital products.
Diversify Distribution And Embrace Nonlinearity
Magid reiterated that only 30% of consumers who plan to discontinue their cable or satellite TV service consider cost as the chief reason for doing so. Other reasons included control, convenience, customization and other features that align with SVOD services.
These revelations reinforce the importance of giving the customer more convenience and control with alternative platforms. “OTT and OTA strategies have become essential in an environment where pay TV continues to see declines,” observed Magid. “Diversifying distribution and effectively monetizing those platforms are essential to maintaining relevance.”
The increase in cord shaving can be an opportunity for broadcasters. Magid encourages TV stations to capitalize on consumer demand for them as part of an MVPD’s “skinny” bundles. Consumers find these packages attractive and local TV plays a key role in creating that value.
In addition, Magid recommends that stations produce and distribute long-form video for outlets beyond the television screen. It certainly makes sense that banner ads and short-form video are not going to be enough to drive significant revenue growth.
Evolve The Content Offering
Among the data Magid shared with MFM CFO Summit attendees was the finding that TV is still the No. 1 source for news. However, fewer adults are relying on scheduled broadcasts as their means of obtaining that information.
Magid’s data show that the idea of a news habit is far from dead, but younger consumers are far less likely to have it. More troubling is the fact that this group tends to let news find them. “In a crowded, competitive environment, the content that stands out and the brands that find them will win.”
With that in mind, it’s important to understand that platforms are not one-size-fits-all when redefining a station’s distribution strategy. This means creating and marketing unique content that aligns with the target audience and platform being used as well as developing specific content offerings that keep pace with distribution model changes. “Differentiated content strategies for mobile, OTT, connected TV and social distribution are more important than ever.”
Define The Strategic Goal For Each Platform
Magid also stressed the importance of responding to the exploding demand for live streaming. Today, nearly four out of five viewers (77%) report live streaming video. That number is even higher for millennials (85%). Nearly half of survey respondents (45%) live stream video found on YouTube, and 24% use Facebook Live.
“Look to social live streaming as an opportunity, not a threat,” Magid advised. “Consider the engagement factor and how it can be used to drive interest in content.”
Stations should view social live streaming as an additive to their brand and existing content offerings. “Develop meaningful connections with millennials and plurals on the digital platforms where they spend the most time.”
Refocus And Reorganize Ad Sales
Magid also cited market research data from Borrell Associates, which addresses some of the stumbling blocks in stations’ efforts to market digital solutions. The irony is that digital media businesses are looking to capitalize on the value of TV advertising but are succeeding in prying more dollars away from traditional media by offering such features as geo-targeting and programmatic buying.
As has been said many times, clients are under siege from sales reps. The number of ways to promote client products has grown exponentially as has the number of people trying to sell them. The key to success is reps who can provide clients unique market and business knowledge that truly helps them be better at what they do.
It follows that there may need to be a shuffling of sales reps’ responsibilities to remove tasks that take time from focusing on client needs. Magid advises that groups, “Invest in data that will arm your teams with information your clients truly value.”
Evaluate And Reallocate Resources
Finally, Magid recommends making some pivotal changes to stations’ content development capabilities. Newsrooms were initially designed to distribute primarily to one platform; they will need to change. He encourages management to rethink job descriptions, workflows, schedules, dayparts, and even the overall culture.
Magid recommends asking such questions as “How can we align our resources to better address the needs of consumers who live outside the linear paradigm?” and “Does the newsroom have the tools and training it needs to deliver on the intended strategy?”
The bottom line is that daily content planning must encompass both linear and digital platforms. Digital cannot be an afterthought if it’s to succeed. “Consider how stories and content unfold across each platform.”
Media Finance Focus 2017
Of course, many forward-looking stations and TV groups have already been making these pivotal changes, some more effectively than others. This creates an opportunity for the industry to come together and share the experiences that can help develop digital media best practices.
That’s one of the goals of Media Finance Focus 2017, the 57th annual conference for MFM – the Media Financial Management Association, and our BCCA subsidiary, the media industry’s credit association. The conference will feature presentations from industry experts who will provide the latest insights on accounting, economic projections, valuations, M&A, taxes, human resources, regulatory, and technological developments affecting the media industry. This year’s gathering will be held May 22-24 in Orlando, Fla.; you can learn more about it on the event’s website.
While the conference theme “The Magic of Media” reflects its proximity to the area’s theme parks and the local NBA basketball team, it also highlights our goal to aid our TV station and other media industry members in making the pivotal transformations required for keeping pace with the audiences our advertisers want to reach.
Mary M. Collins is president and CEO of the Media Financial Management Association and itsBCCA subsidiary, the media industry’s credit association. She can be reached at[email protected] and via the association’s LinkedIn, Twitter, or Facebook sites.