Guest Commentary: Local TV will thrive in a fragmented media world

Jul 16, 2001  •  Post A Comment

All of us know that business hasn’t been great over the past several months. Memories of record growth in the ’90s have faded fast. But those of us in the local TV business need to keep this temporary advertising slowdown in perspective. Aggressive individuals and companies use times like these to position themselves for the upturn that will happen.
Local TV is not immune to the economic cycle. But every time the economy has a hiccup, some wring their hands about the future of over-the-air broadcasting. And I’m tired of it. Local broadcasting remains one of the great and resilient businesses of our time because we serve our communities with the kind of localism that television stations do best. Localism has real impact, and impact is what advertisers need most in an era of fragmentation.
Media fragmentation is far from new. In fact, from the beginning, waves of fragmentation, then consolidation, have swept over the media industry. Think about it.
In the 1930s there used to be multiple daily newspapers in most markets. Radio, the new game in town, had a real impact on newspapers, as did the advent of television evening news 30 years later. Afternoon dailies merged with their morning competitors, and then further consolidation occurred as large companies acquired more newspapers to expand their national footprint. Consolidation in the newspaper industry continues. And it’s still a great business.
Then in the ’60s, FM fragmented the established AM radio audience. Soon there were too many stations and too much advertising inventory, and investors viewed radio as a dying business. Then deregulation came and allowed for ownership of multiple stations in individual markets. This re-aggregated radio listenership and created backroom and sales efficiencies. Today, radio is thriving.
We’ve seen the same thing happening in television. In the 1960s and early ’70s, over-the-air television was the only game in town, and the Big 3 networks essentially owned the airwaves. In the late ’70s, independent stations arrived with improved programming to challenge network affiliate dominance. Then, most independents became network affiliates themselves with Fox, The WB and UPN. In a way, the would-be conquerors were assimilated.
In the ’80s, along came cable with an aggressive pitch and a great business model. We know this because Tribune is in the cable business with WGN, local cable news channels and interests in The Food Network and The Golf Channel. ABC/Disney, CBS/Viacom, NBC and Fox are also in the cable business. So once again, a would-be conqueror is assimilated and audience is re-aggregated.
Today, all media empires are under attack by another new player: the Internet.
All of these media waves have meant additional choices for consumers, smaller audience shares and increased fragmentation. Some people see this as a problem for local television. However, we see it as a challenge for all media and even more so for marketers.
How is the marketplace reacting?
Smart media companies are working to re-aggregate audience share to better serve the needs of their client advertisers. Recent mergers have played a key role: AOL/Time Warner, Viacom/CBS, News Corp./Chris-Craft and Tribune’s acquisition of Times Mirror, which gives us newspaper-television combinations in five major markets, including New York, Chicago and Los Angeles.
Who has the advantage in this fragmenting environment? First, large companies: Scale does matter. Second, companies that create content and use that content over multiple platforms. Third, companies with strong mass-media franchises, like local television stations.
We are convinced that mass-media assets are valuable and will become even more valuable in a fragmented media environment, because more than ever, today’s advertisers need to reach consumers with the kind of effective impressions local television can deliver.
It’s time for local television operators to repackage our strengths, go on the offensive and explode the myths that some of our newer competitors are trying to sell to unsuspecting ad buyers.
Some say broadcasting will not succeed going forward because of cable fragmentation, the Internet and interactive TV. Haven’t we heard this song before?
In the 1970s, it was interactive TV. (Remember QUBE?) In the ’80s, it was VCR penetration, cable viewing increases and interactive TV. In the ’90s, the 500-channel cable universe and direct broadcast satellite. Lately it’s been the Internet, DVDs, digital video recorders and, you guessed it … interactive TV.
Despite all the new competition, the future of local television will be great. We deliver a mass audience with both demographic and geographic targeting. And the environment that TV offers advertisers for their messages is unequaled by any other.
So, what do we need to do to compete? To stay successful? We need to:
* Drive a sense of urgency down through our sales organizations.
* Invest in sustained training to make sure our sales people are media-not just TV-professionals.
* Focus on transaction and back-office issues to make our medium easier to buy.
* Revitalize geography as a media-planning tool for national advertisers (in cooperation with the Television Bureau of Advertising).
* Create multiplatform promotional tie-ins that deliver real results for advertisers.
* Find ways to position local television to tap into the upfront network market.
* Continue our digital rollout.
* Most important, build on what has always been our greatest strength: localism.
Localism is more than just an FCC obligation-it’s good business.
The broadband revolution, far from being the demise of local television, means our established franchises will enjoy disproportionate rewards. New businesses need mass media to create awareness, build brands and drive traffic. Existing businesses need mass media to protect their franchises.
Fragmentation will continue, and we have to deal with it. But ultimately it can mean greater margins for local television when compared with all the wannabes trying to stand out in the clutter.
It’s time for us to once again go on the offensive … and to reaffirm our claim on the local marketplace.
Broadcasting is the most remarkable medium ever invented. And it will remain the world’s most important medium as long as we continue to serve our viewers, our advertisers and our communities better than anyone else. That’s our challenge in the coming years, and working together with TVB, we will continue to succeed.