While many station groups revised their earnings forecasts downward to reflect dampened ad spending during the war in Iraq, a few reported solid results that may translate into a renewed willingness to reinvest-slowly and cautiously-in new technology.
Those that saw a dip are still ready to ante up for new technology, but the lessons learned by slashed capital expenditures and tight requirements for returns on investment over the past few years inform their equipment buying today.
The most prevalent trend is to centralize distribution of syndicated programming from a remote source. Tribune Broadcasting Co. reported a first-quarter profit and a 13 percent increase in TV revenue. The company will continue to move forward with projects introduced over the past few years and will also ramp up some of its newer tech ventures, said Ira Goldstone, VP and chief technology officer for Tribune Broadcasting.
Tribune plans to beta-test later this year its “Distributed Ingest Architecture” project, a new ingest facility at its Indianapolis station cluster of Fox affiliate WXIN-TV and WB station WTTV. Programs will be recorded there onto servers and delivered directly to file servers at stations, said Mr. Goldstone. “The program that’s delivered is already recorded and cued up with in and out times and then distributed from [Indianapolis]. We then ship it as a file to the stations.”
Tribune, with 26 stations, will roll out the project early next year to two or three larger stations with smaller-market stations to follow. DIA is possible because the cost of storage technology has plummeted and the industry is moving toward standardized file exchange formats. For the DIA project, Tribune is relying on tools from Thomson Grass Valley, Masstech, Harris and Pathfire.
The company should realize a return on investment shortly after deploying the solution. The sheer volume of content that arrives into a station on a given day necessitated a solution that would save time in recording and prepping shows, Mr. Goldstone said.
Emmis Communications saw a 14 percent increase in revenues at its TV division for the fiscal year ending Feb. 28, and as a result will be able to move forward, albeit cautiously, with new technology solutions. “[With] improved economics, you will allocate more resources, but you want to be prudent and we’ve all been through tough times,” said Jeff Smulyan, chairman and CEO.
That means increasing the 16-station group’s ability to share news by extending the fiber-optic connection between the stations, said Mike McKinnon, VP, engineering, for Emmis.
The company is also evaluating new editing systems and field acquisition cameras such as Sony’s optical disc recorder, which eliminates tape.
Even broadcasters with less-rosy reports are opening their wallets when there are opportunities to introduce solutions that generate revenue or improve the bottom line. Media General reported broadcast revenues were down about 2 percent from last year due to $1.6 million in ad cancellations during the war. Still, over the next 12 to 24 months Media General, which has 26 stations, plans to invest in digital videotape recorders from Thomson Grass Valley to distribute syndicated programming.
One person could now send out The Oprah Winfrey Show, for instance, to all the Media General stations that carry it, said Ardell Hill, senior VP, broadcast operations, for Media General. The company will save several man-hours a day and in turn will either reduce staff or reallocate positions, he said.
Belo and Sinclair Broadcast Group also cut earnings forecasts due to declines in ad spending during the war but are still moving ahead with technology investments. Belo is spending on high-definition equipment and new servers and automation systems to distribute syndicated shows, while Sinclair will continue to outfit its stations with Telestream ClipMail Pro devices for video delivery.
As an industry, broadcasters will spend on scattered upgrades here and there, but significant spending won’t occur for another 16 to 18 months as the economy improves and the digital deadline looms closer, said Mukul Krishna, senior industry analyst for digital media at Frost & Sullivan in San Antonio.