Local TV no longer ‘license to print money’ because of web
Steve Safran April 11th, 2007
The Wall Street Journal (paid sub. req.) has a ’state of local TV’ article today that was forwarded to me by friends before I even had my coffee. LR readers will certainly be familiar with the scenario, but it’s a good recap and certainly good to see the WSJ picking up on the story. The gist: TV stations are losing audience share and not investing nearly enough in their online presence to make up for lost ad money. The article mentions successes at WKRN, WRAL, WITN and WNEM - but points to the overall industry trend of losing viewers and stagnancy online. Some key quotes from the article:
Complacency and greed are two reasons station operators have fallen so far behind, say media analysts and consultants. The majority of local stations enjoyed 40% profit margins as recently as the mid 1990s (compared with 25% to 30% today) because they had little competition. Many didn’t see a need to invest in their Web operations as a result…
Once considered a license to print money, TV stations have suffered body blows from the Web. Lucrative 11 p.m. newscasts are sinking in the ratings as more viewers go to the Internet or cable channels to get weather and sports information. Viewers no longer have to tune in to catch shows such as ABC’s “Lost” because networks are making programming available all over the Web. And key TV advertisers such as auto manufacturers are moving cash toward online campaigns.
We will be addressing these matters at our panel at RTNDA@NAB, as well as during our liveblog coverage of NAB. But it’s pretty obvious what needs to be done: more innovation, more investment, and fewer excuses. (Thanks Mary and Rich!)
Adds Cory in comments: What’s interesting about this article is it dovetails with yesterday’s post about the lack of TV website success stories in the media. While this article highlighted a few, the overall theme is that TV sites are lagging behind — not a good message to send to Wall Street.
13 Comments Add your own
1. invitedmedia | April 11th, 2007 at 8:05 am
i’m not good at forecasting the future but counting on the 2008 election cycle like tv has done in the past is a huge mistake.
the cw was (not long ago) that 2008 was safe and planning for the money move was pushed out to ‘12.
not so certain that strategy will work any longer.
yet i just read a press piece from a station group that is already counting those ‘08 chickens.
2. Allen | April 11th, 2007 at 8:12 am
Is WKRN a success because of their web site, or because they saved a lot of money by letting a lot of good, higher paid people go because of the awful vj system?
3. mike | April 11th, 2007 at 8:33 am
Allen: No one lost their job because at WKRN because of the switch to VJ’s. The newsroom headcount and the newsroom budget remained the same. And most of those additional VJ’s now have blogs, twenty three at last count, and contribute toward the 11,000 plus videos accessible from our website which earn additional money every time one is played.
I don’t mind if you want to disagree with the decision to go VJ or argue the merits of it but let’s make sure the facts are right.
4. invitedmedia | April 11th, 2007 at 8:34 am
funny, wnem is right in my lifelong back 40 and i never knew it.
5. Cory | April 11th, 2007 at 10:13 am
What’s interesting about this article is it dovetails with yesterday’s post about the lack of TV website success stories in the media. While this article highlighted a few, the overall theme is that TV sites are lagging behind — not a good message to send to Wall Street.
6. Rick Ellis | April 11th, 2007 at 12:12 pm
The thing that all of the successful examples seem to have in common is that they see the web site as a complimentary business to the broadcast operation. Not primarily a promotional arm, or just something that needs to be done to “look competitve.”
It’s important to think of the station’s website as a new business, and treat it that way.
7. Allen | April 11th, 2007 at 12:57 pm
Mike: No one may have “lost a job” because of it, but many left. I’m guessing most of which were replace by people making a lot less…but that’s a whole other issue.
Your web site is impressive. I guess I should re-phrase my initial question to be less biting. I don’t have a paid subscription to the Wall Street Journal so I can’t answer this. Are they considering WKRN a “success” on just the web site or the station in general on the air. From what I’ve read, ratings tell a different story.
8. Anony Mouse | April 11th, 2007 at 1:40 pm
1) I am also sick of all the “oh, boy newspapers do video now” stories. Some of that video, notably on washingtonpost.com, is great. The rest isn’t. However….
2) I’m sad to say that TV is lagging behind, and it’s because station management refused to fund and fight for their overworked web people.
3) I think what WKRN does is neat. But I do want to know, is it successful? Is it making money? Where does WKRN rank among the local sites in its market/geographical area? We all got conned into thinking that TBO.com was a model of convergence. It’s not, and that’s why there’s skepticism about WKRN.
9. mike | April 11th, 2007 at 4:17 pm
Allen: The article is just referencing web efforts not broadcast. Rick’s comment just before yours is right on the mark. You have to treat your web endeavors not as an offshoot of the station but a whole new business. We’ve learned the hard way that what you do on the net is very counter intuitive to what you would do on TV.
Anony Mouse: Yes, we are making money on the website, much more now that we control the site completely and own all the add space. The majority is coming from video pre-rolls, none longer than twelve seconds max that play before our stories. As I said above we now have more than 11,000 videos available on the site and we prove the “Long Tale” theory everyday.
10. milton howard | April 11th, 2007 at 5:36 pm
where does WRKN rank in the marketplace?
how is traffic overall now that most of the site is video and blogs only?
11. NetizenKane | April 11th, 2007 at 10:54 pm
I work for a major entertainment company. Part of that company is a stations group. And that stations group is the most arrogant, backwards ass group of people in the company. So much so that even the people at the network don’t like them. And we don’t like them not because they don’t bow before our divisions, but because they are as helpful and forward-thinking as Lily Tomlin’s Ernestine character — on a bad day.
Everybody in media has to be able to adjust to new rules, new dynamics. In my experience, local station people are about as interested in changing as Mormon schoolteachers are in fornicating. As with any operation involving a lot of money, though, all that means is that someone at the top will eventually lose patience with local station employees, fire the top brass, and replace them with people who “get it.” Which is ultimately good for everyone else who “gets it.”
The newspapers go first. Local TV is next. Start saving your own asses, people — and start “getting it.”
12. mike | April 12th, 2007 at 4:07 am
Milton: The short answer for news is third in households and competitive in demos in some time periods. All of us have seen audience erosion over the past ten years which matches up with national trends for local news. It was this erosion and watching the slow spiral of death in most newspapers that got us into the web in a big way. At the beginning of ‘07 our goal was to double our web traffic which had been modest under World Now. We broke away in ‘06. We accomplished that that goal in March. The decision to use Flash and populate the site with blogs worked for us and continues to work. We also continue to “tinker” and producing streaming content for the web only on a daily basis is where we are headed next. Again, Rick in the comments above hit the nail on the head. You have to approach this as a separate business. The great thing is you can use content you already have to make that business work.
13. Somewhat Anonymous | April 12th, 2007 at 8:36 am
One of the biggest problems I have experienced is staffing. Many of the newspapers in our region have significantly larger staffs, I’m talking in general. It’s a heck of a lot easier to realign/redirect existing people and departments than it is hiring all the resources from scratch.
I mean, right now, we’re the only station in our small market with a person dedicated to managing the site. Not even the strong on-air leader has one yet.
Personally, I’ve had a pretty favorable experience with my station group embracing Web, but between corporate, group, and station management, there are way too many opportunities for someone to drop the ball and not devote the resources needed to innovate and excel.
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