You should see the ‘other guy’
June 5, 2012
By Marc Wilson
The newspaper industry has received a lot of black eyes in recent years—but you should see the “other guy”—TV broadcasters, both local and national.
Let’s start with the recent Nielsen TV ratings, which reported a whopping 90 percent drop in audience for NBC’s Thursday night lineup. Ten years ago, NBC reached 28.5 million viewers for “ER” and 22.6 million viewers for “Friends.”
But the April 5, 2012, NBC primetime audience reached just 3 million for “Community,” 2.79 million for “30 Rock,” 2.58 million for “Up All Night,” and 2.52 million for “The Office.”
TV columnist David Bauder of The Associated Press said much of the decline can be attributed to DVR usage, video games and competition from cable TV. (The quality of NBC’s shows has clearly declined; is that the cause or result of audience fragmentation?)
New/developing products add to audience fragmentation: Google TV, HULU, and Dish Network’s new Hopper program, which allows customers to record and store for up to eight days all network programming.
Fragmentation is hurting not just network TV. Local stations struggle as well. 2011 will likely see a 7.9 percent drop in local-TV revenue, according to a forecast from media consultant BIA/Kelsey. adage.com/article/mediaworks/local-tv-stations-expect-revenue-slides-2011/148221.
“As new technology becomes available, the trend that local TV management is afraid of is the dwindling amount of people who spend their free time watching local programming. A little less scary, yet still a concern, is the drop in hours a person is spending in front of the tube,” wrote Steve Kabelowsky, content strategist at Platypus Ad. He added: “Anyway, everyone in TV land is scared those numbers are falling.” onmilwaukee.com/movies/articles/tvengagement.html
Just as newspapers are, TV stations hope to increase digital revenue.
Borrell Associates reported that TV broadcasters tallied $1.97 billion in online ad revenue in 2011, a 41 percent increase from 2010. Borrell forecast that stations are forecasted to blow past the $2 billion threshold this year, possibly posting a 35 percent increase over 2011. www.broadcastingcable.com/article/482671-Borrell_Stations_Seeing_35_Boost_in_Online_Revenue_This_Year.php
Newspaper digital revenue grew 6.8 percent in 2011 over 2010, the Newspaper Association of America reported. That followed a 10.9 percent increase in 2010. www.naa.org/Trends-and-Numbers/Advertising-Expenditures/Annual-All-Categories.aspx
Even so, local online newspapers dominate. Borrell said newspapers claim almost 25 percent of a market’s local online ad revenue and broadcast TV takes 12 percent. Pure play digital outfits, meanwhile, grab more than 46 percent, while radio gets 1.8 percent.
The decline in broadcast TV audiences prompts speculation that some local TV stations will fold. Instead of three or four local TV stations, only one or two will exist. Some smaller markets won’t be able to support even one local station.
How might newspapers gain from traditional TV’s troubles?
The battleground for increasing revenues appears to be digital—Web and mobile. Newspapers have led with written content, though local TV has the best video content.
But there’s nothing stopping newspapers from turning their digital products into mini-TV stations. There is a low barrier to entry: Video cameras, editing tools and video players are inexpensive and easy to use. Consumers increasingly have tools to access video at home and remotely—on the Web, on smart phones and on tablets and e-readers.
Search and social media will increasingly drive traffic to local content, including video. This means the advantage of holding a traditional broadcast license diminishes.
Also, newspapers can move into the video space without fear of cannibalizing their traditional content.
I predict that in the next decade, the battle for local advertising dollars will be a desperate fight between local newspapers and TV stations over local content, with video playing an ever more important role. In the digital age, newspapers—thanks to better and less expensive technology—can win that battle, if they are willing to fight the fight.
Marc Wilson is chief executive officer of townnews.com. He is reachable at firstname.lastname@example.org.