SpotX - leaderboard - 12-8-20
  • Broadcast TV Stations Most Threatened by Broadband/On-Demand

    Last week a journalist interviewing me for a story asked: "Which industry or industries are potentially threatened the most by the rise of broadband video and on-demand usage?"

    It's a tough question to answer because there are so many different variables at play. However, if pressed, my answer would have to be local broadcast TV stations. Taking aside the current WGA strike which exposes yet another industry vulnerability, local TV stations find themselves on the short end of just about every macro trend being driven by broadband and on-demand adoption. To thrive in the future, stations are going to have to radically reinvent their business models. It's by no means an impossible task, but it is going to require savvy and aggressive strategic moves.

    Consider the perfect storm local stations are up against:

    1. Broadcast networks (ABC, CBS, FOX, NBC) are avidly pursuing broadband distribution of their hit shows, creating competition to the traditional model of geographic programming exclusivity for local stations. Initiatives such as Hulu and CBS's Audience Network can be thought of as 'digital replicas" of the old analog affiliate model. Networks have gotten broadband religion; notwithstanding their finessed protestations, they're only going to be increasing their digital bets, leaving their affiliates with new competition for eyeballs at every turn.

    2. On demand viewing is shattering prime time viewership and the all important "lead-in" to late news broadcasts. Between DVRs and VOD, more and more of the world is habituating itself to watching programs when they want to, not when they originally ran. So appointment viewing is out and along with it the concept of audience aggregation. Strip out prime time and the local station needs to build audience for its own shows and newscasts by itself.

    3. Local news, weather and sports content are the mainstays of local newscasts, yet the availability of this kind of content is becoming pervasive and conveniently accessible. Remember when you had to stay up late to find out what the scores were? Doesn't that seem quaint now? These days every spec of information about these key categories is just a click away, further undermining local newscasts' value.

    4. Advertisers have more options than ever and are gradually going to move spending to approaches that are both more ROI-centric (e.g. Google) and a better match for their customers' media behavior. Think about it - if you're a Honda, Scion or Volkswagen dealer targeting younger demos, is local TV really the best way to reach this audience? The range of options for local advertisers is already robust and is only going to become more so in the future.

    All of this said, however, all is not lost by any stretch. With the right leadership, I happen to believe that local stations can find ways to manage their way through the chaotic days ahead. Tops on my list would be embracing broadband as a new programming platform to leverage their local expertise, blasting their content out through every possible distribution path, radically re-training their ad sales teams to be Internet-literate, cross platform-obsessed warriors and re-creating their brands' perceptions for the broadband and on-demand era.

    Broadcast TV stations need to look no further than their cross-town rival newspapers to understand the gale-force competitive winds coming their way. Hopefully with these examples plainly visible, they'll prepare themselves appropriately.

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