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Affiliates Find Lots to Like About 2004

Dec 20, 2004  •  Post A Comment

When applied to 2004, the word “fine” has two very different meanings for affiliates.

Overall, the pronouncement of affiliate-body leaders is that 2004 proved to be a good year in which business improved for local stations, business issues that had created friction between networks and their affiliates were resolved, and some business possibilities of the digital TV age were made visible.

“Once in a while, we have to stop and pinch ourselves and remind ourselves of how good a year it has been,” said Bob Lee, the Schurz Communications executive whose term as chairman of the CBS affiliates advisory board ends next week.

Like other affiliate-body leaders, he is upbeat about the position of affils at the end of 2004 even if they are not associated with a network on the upsurge, as CBS and ABC are.

“ABC’s success with their fall season appears to be continuing and will carry into 2005. It’s good for all broadcasting,” said Deb McDermott, Young Broadcasting president and chairman of the ABC affiliates advisory board.

But 2004 also started with Janet Jackson flashing CBS’s Super Bowl halftime audience. That bit of showmanship stirred up content watchdogs and put the Federal Communications Commission in a mood to levy big fines.

CBS argued that the proposed fine of $550,000 against itself and its 20 owned stations for broadcasting a gander at Ms. Jackson’s breast is illogical. The non-Viacom-owned CBS stations were exempted from the proposed fine, but local stations can be fined by the FCC for carrying what is broadcast by their networks.

By Veterans Day, when ABC scheduled the third broadcast of “Saving Private Ryan,” affiliates reaching a third of the country pre-empted Steven Spielberg’s Oscar-winning World War II movie for fear that its realism suddenly made them vulnerable to fines for content that was acceptable in 2001 and 2002.

“This uncertainty is unacceptable. The indecency issue will have to be dealt with this next year,” Ms. McDermott said.

Ms. McDermott was heartened by the resolution of issues that drove the Network Affiliated Stations Alliance to petition the FCC to investigate network business practices that had included the discouragement of local pre-emptions.

Now the networks are more accommodating of affiliates’ decisions to pre-empt programming for content reasons.

“I really have to applaud the networks for helping us to resolve [such] differences,” Ms. McDermott said.

Terry Mackin, the Hearst-Argyle Television executive VP who is chairman of the NBC affiliates advisory board, said another issue that needs resolution in 2005 is digital must-carry. Stations say it is essential to the economic viability of their digital spectrum in the high-definition age and to avoid dividing the TV audience into haves and have-nots.

Mr. Mackin said the recent launch of NBC Weather Plus on Time Warner Cable’s digital tier in New York (with rollout across 75 percent of the country in 2005) also is important because it is a 50-50 partnership between the affiliates and NBC. “HD is going to be the killer app going forward,” he said.

Earlier in the year NBC affiliates operated local links to the NBCOlympics.com Web site. “We absolutely made money at the local level. We are now selling convergence packages,” Mr. Mackin said. “The market is accepting the Web space as a real medium.”

In his “swan song letter” to fellow affiliates, Mr. Lee said the question of how best to exploit the digital spectrum is a key piece of unfinished business for the local stations and CBS, which had agreed to talk with the advisory board about possible projects. “The sense of urgency has been greater at the affiliate level than [at] the network level,” Mr. Lee said.

Among the issues still to be resolved are regulation questions about cross-ownership, duopolies and ownership caps. But the affiliate executives remain optimistic. 2005 looks good to affiliates because the networks are reasserting themselves as the place to find event-size programming several nights a week.

“That really bodes well for broadcasters,” Ms. McDermott said.