Changes in the television news business are forcing consultants to retool their operations to meet the challenges of the rapidly evolving marketplace. Rather than spend the bulk of their efforts working with stations’ news departments, many consultants are expanding their sphere of influence beyond the newsroom.
“Twenty years ago, we spent 100 percent of our time with news directors. Today we work about a third of our time with news directors, one-third with the marketing people and a third with the general manager or group head,” said Jerry Gumbert, managing director of Audience Research & Development. Based in Fort Worth, Texas, AR&D is one of the largest television research and consulting firms in the country.
As consolidation, a slump in advertising revenue, an explosion of options for viewers and a generally fickle audience roil the television industry, consultants are working harder than ever to help clients get a handle on ways to hang on to news viewers longer.
“I am not a news consultant. I am an audience consultant. We are in the business of audience development, and if you forget that, you’re not going to be in business,” said veteran consultant Bill Taylor of NuFuture.TV in Aiken, S.C.
The New TV Viewer
As budgeting and financial matters take up more of a news manager’s time, Mr. Taylor worries that the pendulum may have swung too far toward bottom line concerns.
“Television executives wear two hats: the hat of a businessman and the hat of the show businessman,” he said. “If you chase the bottom line too much and don’t wear the show business hat, that’s a problem.”
With audience loyalties shifting, viewers are finding a plethora of new venues for information. They check the Internet, watch news on cable or listen to the radio. By the time they land on the local television newscast, they are much better informed, a fact that places additional pressure on news managers to keep one step ahead.
“To think about today is to think about 24 hours too late,” said Phyllis Slocum, a consultant at The Network Effect, Dallas.
Expanding choices mean that audiences don’t light as often on their traditional local newscast, which creates yet another obstacle to growth.
“While a station may enjoy a very strong `favorite station’ status, it does not necessarily mean that people watch them any more often than once or twice a week,” Ms. Slocum said.
Finding ways to increase viewer “frequency” consumes a good deal of Ms. Slocum’s time. She also finds herself doing more of what she calls “needs-based consulting,” focusing her efforts on two or three areas that are critical to a client’s success.
Though consultants are wont to say their business remains strong, they acknowledge a level of concern over some worrisome trends.
Some large-group owners, such as Hearst-Argyle Television, have taken many of their consulting efforts in-house, creating an internal bureaucracy to work with local stations and squeezing out external advisers. Dave Busiek, news director at the company’s KCCI-TV in Des Moines, Iowa, admitted to some initial skepticism, but said the system works well at his shop.
“That is an advantage to us to have someone who says, `I see this. I know what you need,’ and then can go to corporate and get resources to address it,” Mr. Busiek said. Having an in-house perspective may work for some stations, but Mr. Taylor admonished news directors to keep an open mind to avoid possible pitfalls. “The problem is these guys are `from corporate,’ and the risk is that they might be seen by the stations not so much as an adviser but as a commander,” he said.
Another emerging trend affecting the consulting business is the growth of centralcasting, in which a group owner develops what amounts to an internal network to provide its stations with programming. Sinclair Broadcast Group is delivering a centralized news product, News Central, to some of its stations. Should the concept spread, it could dampen business prospects for news consultants.
In addition, as stations look to reduce costs, more of them are calling on consultants for specific projects.
“I see a lot of a la carte deals now, stations contracting just for research or for a specific project, instead of for an ongoing consulting relationship. Stations are really feeling a pinch, and they are becoming much tougher negotiators,” said Valerie Hyman, a consultant in St. Petersburg, Fla., and former head of the broadcast program at The Poynter Institute for Media Studies.
Changing the Model
The financial squeeze will only worsen next year, when networks begin to reduce or eliminate the compensation they pay affiliates to carry network programming. Stations in smaller markets are likely to be hit hardest.
“For many of these stations, that comp is the difference between being in the black and being in the red,” Mr. Gumbert said. “When the comp goes away, the pressure will be enormous for stations to change the local business model and work harder to become profitable.”
Change begets opportunity, however, and consultants who become adept at helping stations generate revenue will be in great demand, Mr. Gumbert said.
Local stations will have to learn what cable networks have known for some time-that they must work with smaller, more highly focused audiences. In that environment, branding takes on a much higher profile.
Local Heart and Soul
If there is a bright spot, it comes in the general agreement among both consultants and their clients that local news will remain the heart and soul of most television stations and will continue to grow in significance. Obstacles abound for consultants, but so does opportunity.
“There are other priorities that our company must provide to broadcasters, because they are in dire need of understanding about how they must evolve into the new economy,” Mr. Gumbert said.