Local TV Looks to Web

May 1, 2006  •  Post A Comment

If cable networks can deliver broadband channels, then local broadcasters can too.

Station groups including Hearst-Argyle, CBS Television Stations and Sinclair Broadcast Group, looking to augment their revenues with targeted broadband channels, have quietly begun exploring opportunities to offer exclusive and highly targeted video content online. That’s similar in concept to the business model Scripps Networks has established online: targeting a sliver of the lifestyle category its networks cover broadly-with broadband channels addressing niche topics such as kitchen and bath design and woodworking.

If the broadband channel model is indeed transferable to local broadcasters, it could spell new opportunity for that sector of the TV industry, which is struggling to eke out new revenue streams and remain relevant.

Going Hyper-Local

While many local stations are already delivering video on their Web sites, a hyper-local online channel takes broadcasters into the long tail of their own content. Instead of simply formulating online newscasts, a TV station could carve out several Internet channels geared toward specific local communities and neighborhoods within their designated market areas.

For instance, CBS owned-and-operated WBBM-TV in Chicago recently struck a partnership to share content with three newspapers serving outlying areas of the DMA: the Northwest Herald, serving the northern suburbs; the Post-Tribune, serving northwest Indiana, and the Naperville Sun, serving the western suburbs. Under that deal, last month the station began producing daily webcasts on its site tailored for readers of the Northwest Herald, a small subset of WBBM viewers. The webcast runs about five minutes once a day and is anchored by a WBBM reporter.

“The stations become hyper-local through the relationship with newspapers and radio stations,” Jonathan Leess, president of CBS Television Stations Digital Media Group, said at last week’s National Association of Broadcasters Convention in Las Vegas. Going hyper-local makes sense as long as the content is relevant, he said.

TV stations are sitting on a goldmine with their video assets, Mr. Leess said. “There is so much material shot on video that never meets an edit,” he said. Some video isn’t broad enough to air, but it works for the Internet. Stations can also repurpose sports, medical stories and cooking shows and evergreen content online and offer interviews, video and fresh stories, even on a pay-per-view basis in some cases, he said.

Hearst-Argyle is evaluating how to attack this possible new business too. “We are working on programs that can provide services to a very small section or a large community,” Brian Bracco, VP of news for Hearst-Argyle, said at NAB. “They can customize it to fit their needs. … We could add to that. Or traffic reports.” Such narrow channels would likely be ad-supported or subscription-based, he said.

On the multimedia portion of the NAB exhibit floor-where tiny booths and little-known companies proliferated with promise of the future-technology firms offered the tech tools to enable stations to slice and dice their local content into niches.

As local broadcasters consider ways to deliver narrowly focused content on the Web, Internet TV enablers, such as WhiteBlox, Narrowstep and Dave.TV, are reaching out to them.

Strategic Partnerships

Sinclair Broadcast Group has partnered with WhiteBlox to test its technology with the group’s Fox station WBFF-TV in Baltimore. Sinclair will produce exclusive online video tied to a local talent contest it plans to hold. The prize will be a trip to the finale of “American Idol,” said Del Parks, VP of engineering operations for Sinclair.

“It allows you to use rich media content to enhance the interactivity of the Web site,” he said. The content will be ad-supported.

WhiteBlox CEO Greg Demetriades said he’s talking to local TV stations that own their content. That could include TV stations with footage about sports, cooking, gardening and other material. “With our system we can create niche programs over broadband to supplement with content that doesn’t have a time slot,” he said.

To get into the narrowcasting business, a local station has several hurdles to overcome. “We would have to design a sales model to make this work,” Mr. Bracco said, pointing out other challenges including helping users find hyper-local information, creating a business that provides a return on investment and technology costs.

To pursue niche Internet video opportunities, local broadcasters likely will have to get back into production, which has fallen by the wayside in recent years, Terry Mackin, executive VP for Hearst-Argyle, said during an NAB panel.

Broadcasters are feverishly considering such opportunities because ad dollars are flowing abundantly to the Internet now and broadcasters are following the money. “Broadcasters have to find other revenue sources,” Mr. Bracco said. “We are all placing bets right now, and no one knows which ones will cash in.”

In general, the market is growing for online video. Narrowstep, which develops broadband channels for content providers, powers more than 90 Internet TV channels and has been adding channels at about two to three a week over the last few months, said Carolyn Wall, president of North America for Narrowstep. “There’s a lot of momentum in the marketplace,” she said.