The Digital Resurrection Of Ron Burgundy

On April 16, more than a hundred thousand people from over 160 countries will descend on Las Vegas for the annual NAB Show (National Association of Broadcasters). We’ve all heard the death knell warnings from the likes of Mary Meeker about the tectonic shifts in consumer media consumption away from TV to mobile, and the clanking sword slices of the cord cutters.

I’m here to present a contrarian view that TV is not dead, and that in fact, the local broadcast market is arguably the largest overlooked opportunity in digital today.

Let me explain and enlist the help of one famous local newscaster named Ron Burgundy.

Have you heard of Ron Burgundy? He’s kind of a big deal.

Ron Burgundy is the local TV newscaster in San Diego, a city we heard is named after some part of a whale. He’s the face of his station, KVWN, bringing you the news (“so you don’t have to get it yourself”). He is the anchorman you trust, recognize, and connect with—a local star who brings credibility and a sense of community to his station.

But let’s face it: Ron is losing his mojo, and he hasn’t kept up with his Facebook and Instagram pages, let alone his blog. While Ron lives in his anachronistic, fictional movie world, what’s real is that content is proliferating across an explosion of new media sources like interest-based publications and user-generated content aggregators like BuzzFeed, Medium and Vingle.

Even competing national TV networks are delivering news on the internet, smart TVs, and mobile devices, but Ron’s trapped in a glowing box in the living room. It’s 2016, and he’s losing his sex appeal.

So here’s the question: Is Ron STILL kind of a big deal? In this changing world of digital content, how can we save the anchorman?

“I’m in a glass case of emotion”

Ron’s getting left behind by social media and newfangled devices, but that’s not all he has to worry about. Competition is getting in between him and his viewers, with content creators new and old cutting in on the dance floor.

National networks like CBS are going direct to consumers with their over-the-top (OTT) offerings to connect national content directly with end-users, bypassing Ron and the local TV stations who had traditionally served that bridge role. Cable companies and operators such as Comcast and Verizon own their customer relationships with things like billing data and triple-play plans, while Silicon Valley and tech platforms like Netflix and YouTube are disrupting traditional content with new distribution and production models. Hollywood is going direct-to-consumer with MCNs and on-demand video services like Hulu. Even TV manufacturers like Samsung’s Smart TV and LG want to have a direct customer relationship by allowing users to access Internet-enabled content via their user interface, bypassing traditional cable or over-the-air TV feeds.

All the while, Ron and KVWN are getting pushed farther and farther away from their audiences, being disaggregated by new players from networks in New York to Silicon Valley to Hollywood to Seoul.

And all of Ron’s “competitors” have something that he doesn’t: audience data. While Ron putts around with archaic panel-based ratings that don’t give much information about who exactly is watching his newscasts (by definition “broadcast” being broad and not targeted), every one of his competitors know more about their users than he does. These companies can connect with users in new ways with information like subscription and billing data, viewing behavior, granular demographics, interest profiling, and location awareness.

So, is Ron screwed? Maybe not just yet. Amid these industry-wide changes, local TV actually still has a stronghold in the hearts of Americans.

“They’ve done studies, you know. 60% of the time, it works every time.”

Let me back it up with data. TV is still America’s favorite medium, and we have a deep love for Ron Burgundy. Local TV remains the #1 news source for Americans, beating out print newspapers, online news sources, and national networks. In fact, 82% of Americans watch local TV news, and the average person still watches over four hours of television per day [KPCB Internet Trends 2015]. By the beard of Zeus!

(Image: American Press Institute)

TV also gets 41% of ad revenue in the US [KPCB Internet Trends 2015], which is the largest share compared to internet advertising (including online media like YouTube), mobile, radio, and print. Local TV’s ad revenue grows year over year and reached $20B in 2014. Compare that to only $6B for all of YouTube, according to Credit Suisse’s estimates. What?! Local TV makes 3x more money today than YouTube, the behemoth of Internet video? To make Ron feel even better, news directors across the country report that half of local TV station revenue comes from local news.

And the market for local TV in small-to-midsize cities is gigantic: When you exclude the top ten metropolitan areas with over two million TV-owning households (like NY, LA, Bay Area, etc.), the next 200 midsize-to-small metros make up 70% of all TV-owning households (Nielsen). And if the average U.S. household has 2.63 people, that’s an estimated 200 million viewers. Which, by the way, is roughly tied to Facebook’s U.S. monthly unique visitor number as reported by comScore.

No matter how you slice the data, it looks like Ron Burgundy and local TV are still very powerful.

“You’re so wise. You’re like a miniature Buddha, covered with hair.”

So, there’s the explosion of content and proliferation of consumption devices, the disaggregation of local TV, the fact that TV still makes a ton of money, and data showing that local TV is a big player. While these change are afoot, there is also a powerful macro trend unfolding: the rise of content.

While the last ten years were dominated by platforms (e.g. Google, Facebook, Netflix), the next ten will be dominated by content. In fact, we’re now witnessing major platforms becoming content providers, and the wall between the two (platform vs. content) are crumbling down. Just look at Netflix’s $5B original programming budget for 2016, Verizon buying AOL, Sinclair buying the Tennis Channel, and Major League Baseball creating the MLB Advanced Media platform. We also see Apple making its foray into the original programming game, and a heated battle around live content unfolding this year involving Twitter, Facebook, Snapchat, Amazon, and Instagram. This is no theory of relativity, but I suggest the new formula in media today is C = P (content = platform).

In this way, Local TV is uniquely positioned as a differentiated content provider that can also become a scalable digital platform. It can become a dominating force again, transforming its older platform (towers and antennas) to the new (IP enabled and digital). But this will happen if, and only if, they have the right platform strategy. At my company, Frankly, we are long on Ron Burgundy, and we’re taking a big bet on local TV’s resurgence made possible by strategic changes in three areas: audience data, content expansion, and cross-device growth hacking.

“I immediately regret this decision”

To become a dominant platform, local TV needs to prioritize three key strategies.

• Collect audience data — Knowledge is power, and local TV needs to get to know their users better to improve user experience, content curation, and profitable advertisement targeting. Luckily, digital and mobile technologies are built for the close relationships and data collection that enable this, starting with the audience’s basic personal information, like email addresses and demographics. The next level up is to build an interest graph to understand what the audience cares about, their social interactions, and how they interact with content for better targeting (of both content and ads). They can also supplement with unique location data (by definition local TV is “local!”) to build a unique dataset, especially with their native mobile apps that can serve as enhanced hyperlocal data. Local TV stations are one of the very few dominant local platforms left to gather this data reliably and scalably.

• Expand content offerings — We love watching Ron’s local news reports, Brian’s reports from the field, Champ’s sports news, and Brick Tamland’s weather forecasts. But Local TV can expand their content offerings, and there’s a huge opportunity to make their digital sites (which usually are limited to local news, weather, traffic, and sports) commensurate with their broadcast content. They can diversify their content portfolio, strike deals with Hollywood for digital rights, create original and local programming, and get smart about their digital content syndication out to other local TV stations and publishing points. Local TV doesnt just have to be local news and weather. In fact, local TV in the minds of the general audience means much more than that – it should rather be content that local audiences care about, whatever the topic.

• Embrace all device platforms — Ron’s KVWN is available on Channel 4, but people aren’t always home to watch the five o’clock newscast. The station needs to become ubiquitous with a multi-platform strategy that gives their audience a consistent and high-quality experience on phones, connected TV devices, computers, tablets and any other IP-enabled Things. They need to integrate all platforms so that they feed into one another and work in concert.

In conjunction, they can tap into Silicon Valley’s proven growth hacking strategies to acquire and retain users across all of the disparate platforms, including TV broadcast. Email campaigns, push notifications, app store optimization, deep linking, and A/B testing are effective techniques that TV has yet to master. Many Silicon Valley companies ultimately leverage TV as part of their growth and user acquisition strategies once they have hit scale and saturated digital outlets. Local TV already starts from that powerful platform, so they have the chance to work backwards into the other digital platforms and can leverage this very unique and powerful platform in concert with the traditional digital growth hacking playbook.

“Don’t act like you’re not impressed”

Even the biggest YouTube stars today get excited the moment they can say, “Look Mom, I’m on TV!” There is still something visceral and sexy about lights, camera, action! If podcasts and Vine have turned nobodies into influencers with millions of followers, TV stations have been doing that for over 80 years and will continue to yield that outsized power for the near to medium term. In the words of the 40-Year-Old-Virgin, if you don’t use it, you lose it.

Ron Burgundy isn’t going anywhere. Local TV stations can hold on to America’s hearts (and advertiser wallets) with deeper user knowledge, expanded content offerings, a presence on all devices, and digital growth and user engagement tactics.

And, of course, by staying classy, they can experience a digital resurrection that will up-end all critics and fulfill its potential as one of the biggest opportunities in all of digital media today.

Steve Chung is the founder and CEO of Frankly Inc.