With the MyFox deal, the Fox-affiliated television stations have just taken the path of least resistance in the area where they need to make the biggest strides. They have chosen ease over risk. In doing so, they have given away access to fully half their sales inventory. They have just sold their chances for success to a low bidder who is the only winner in the deal. And they are making the announcement that they are not interested in the local web at all. This is going to be a mortal wound, self-inflicted by people who still believe it’s TV first, then web as an afterthought.
In adopting the MyFox platform, Fox affiliates have made an error that many stations before them have made – they’ve just made it about seven years after those stations made that mistake. Those stations have learned from their past. Why didn’t Fox take a tip from its competitors?
We have seen stations fail in their online attempts. What do those failures have in common?
In short: ownership.
The stations that have failed to make money from their online efforts are those that have failed to take ownership – true ownership – over their sites. By handing over the command and control to vendors, stations get into this loop where A. They produce an inferior product, B. They make no money and so C. They don’t invest in the product.
And at a time when station groups are finally taking back control of their own sites, Fox affiliates are acting as though there are no lessons to be learned.
The problem is that the Fox stations are thinking that the web is television. In television, you can take a graphics package, put a new city’s name on it, and drop it in just about anywhere. While that’s not especially creative, it’s not the kiss of death on television. Templates can work in TV news, if not terribly well from a quality standpoint at least from an efficiency POV.
But the local web is something different. It is not about taking your television product (already produced according to a template) and putting it into a template online. This recipe will absolutely end in disaster. The Fox affiliates will not make close to the revenue they could make if they were to take matters into their own hands. The MyFox model is based upon getting as many pageviews as possible to a station’s website. This is inefficient. Stations need the best model for the aggregation and distribution of information. The need Web 2.0. That’s where this model comes up short. Implementing it will put the Fox stations years behind the social web the moment they launch.
The local web is not about templates and newscasts – it’s about people. How stations aggregate the voices in their community and reflect the needs and wants of the community is what matters most online. Stations need to have multiple niche site offerings that address the many colors of life that are unique to their own towns and cities. They need to have the flexibility to change their site and its processes on a moment’s notice. The web changes all the time, without notice. Corporate templates do not, generally, leave room for that sort of change and speed.
Revenue sharing is an idea that has to stop. As part of this deal, the Fox affiliates are giving Fox Interactive Media access to half their online sales inventory. Just like that, stations will be handing FIM access to inventory worth far more than what it would have cost to build a new site – every year. It’s quite a siren song – “We’ll do all the selling and you’ll get a 50 percent revenue share.” The trouble is that nobody gets rich off revenue shares – except the people who are doing the selling across many stations. Aggregators – in this case FIM – can make money in this model. The stations cannot hope to see anything close to what they would sell on their own with the right sales strategies.
Here is the question most commonly asked about TV station web offerings: “What are we supposed to do? We’re not budgeted to hire a staff.”
Here is the answer: Budget for a staff.
Businesses don’t succeed without investing in themselves. When major newspapers started television stations, they didn’t say “we’re not budgeted for anything special, so just point a camera at our guys writing news copy.” Stations need a real, honest-to-goodness business plan that treats the web as a separate profit center. The sales staff needs to be fully incentivized. and the web producers need the freedom to create the content they know their audience wants.
There has never been a better time to build a web team. Open source software makes it possible to have robust content management systems for free. Start hiring people in your IT and operations departments who understand the web and make the web a part of their job. Thinking “we need one person to do the web and another to do TV” is exactly the problem. You need to transform your station so everyone chips in to all platforms.
Stations are spending a fortune upgrading their TV equipment to HD right now. They understand capital budgets. The irony of the HD conversion is that all the money that the locals spend will not translate into any more advertising money. They’re doing it because they have to. But faced with the opportunity to invest in the web, where there is real money to be made, suddenly the stations say there’s no budget.
Those who do not invest in themselves get exactly the ROI you expect.
The most frightening aspect of this deal is that the Fox stations are so casually giving away access to half their ad inventory for national ad campaigns.
I hear the argument “What can joining the Fox platform hurt? Every penny of national ad sales helps the locals.” The logic behind this model is that Fox will be able to make national ad sales across this new network. So? The local web is not predicated on national ad sales. The local web is about finding new, local advertisers who never could afford advertising before. It’s about building niche sites and then finding local businesses to sponsor those sites for far more than you would get selling the sites to a national ad firm on a CPM basis. You don’t find solutions for problems that face local advertisers by building out a network that can sell 10 million eyeballs to Coca-Cola.
This play helps FIM and it hurts Fox affiliates, plain and simple.
Successful sites constantly evolve. If a site is exactly as it was a year ago, it has fallen behind. Sites like Facebook, YouTube, Google, MySpace, Digg and others make significant changes to their models every few months. Television station sites can only have this kind of required flexibility if they have full control and ownership.
The web is not syndicated programming. You can’t buy a site, stick a wrapper on it, and call it yours in your local market. What the past several years have shown us is that homogeneity and Web 1.0 thinking leaves online stations’ revenue efforts and technological advancement moribund.
Now, there is no rule that says TV stations have to have websites. Many still don’t really bother with much, preferring to put up a placeholder site with basic information. That’s fine. If you don’t want to be in the web media business, then don’t jump in. But if you’ve made a tactical decision to get into online media as a business, the first question cannot be “How do we do this as cheaply as possible with as little risk as possible?” Nobody built their TV stations this way.
If I could offer any sort of advice to the Fox stations that are adopting the MyFox model, it is this: do whatever you can to differentiate yourselves. If the MyFox page is your brand extension site, so be it. Don’t think of it as the “master site.” It is just one part of an overall strategy. Don’t let it be the only part of your station’s web efforts. Build a 2.0 strategy on your own that your station can have true ownership over. Take the tools that MyFox offers and start playing around. See if there are new and different uses you can find. Have a rule that the MyFox page can only have a limited amount of information repurposed from newscasts. The rest has to be original and community-generated content.
So there is some hope here. It’s just a shame that the Fox stations have chosen not to learn from the mistakes of their competitors. They will learn on their own, however, and the smart Fox stations will not cede full control and this product stop their purpose of transforming into a 2.0 company.
After all, smart web people always come up with workarounds.
