Syndicators See Eventual Market In Digital

If syndicators fear emerging delivery platforms such as the Internet, they’re hiding it better than a used car salesman with a lot full of lemons.

In fact, the prevailing attitude, with apologies to Jerry McGuire, is show me the money.

“Ultimately, we just want to make money, said John Nogawski, president-CBS Television Distribution, during the NAB panel session TV Syndication: Going Over the Top. “It’s a pretty simple premise, it begins and ends there…. We love the opportunity to sell to people who aren’t part of our infrastructure…. We’re just excited about new customers.”

The traditional broadcast business is robust and remains the core revenue stream for syndicators. And cable, even though it’s increasingly producing original shows, also is important.

Indeed, those two customer lines are strong enough that syndicators feel a limited sense of urgency in pursuing the new, digital customer.

“There’s no inherent advantage in being first,” said Ken Werner, president-Domestic Television Distribution at Warner Brothers. “Figuring out where value is is hard to do…. We’re looking at in a very slow and methodical way. The CW [the Warner Brothers-CBS joint venture] was a first step in that area…. Each program has unique characteristics and we’re slowly but surely moving to different platforms.”

“It’s a very, very vibrant marketplace,” Werner added. “Our job is to understand how consumers are consuming material.”

Clearly, consumers are consuming in new ways — Hulu, Netflix, over networks’ websites. Whoever’s willing to pay the most gets first crack. So far, that’s the broadcast networks — still the preferred platform for launching shows and building an audience.

“Networks still determine a hit with ratings,” Nogawski said.

At the same time, cable may be willing to stick with a show longer than a broadcast network in order to build a show, observed Ira Bernstein, co-president of Debmar-Mercury.

“I think it has to do with shows on the fringe,” he said. “There are some low-rated shows that have a following.”

While syndicators are optimistic about the core business, there are some worrisome issues. It’s not who they’ll sell to but what they’ll create.

“I don’t sit up nights worrying about [industry] consolidation, I sit up nights worrying about making good TV shows,” Bernstein said.

Stock prices are a perennial concern for the publicly traded companies, but with station groups producing 30%-40% cash flow margins, and stock prices healthy for the moment, that’s a back-burner issue.

The emergence of a new audience demographic coupled with the decline of the Baby Boomer segment also is an issue.

“There’s a huge generational shift,” Werner said. “Baby Boomers … in five years will be only 30% of the demographic. We’re taking that into account.”

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