In my previous post, I talked about how local TV (broadcast and cable) needs to explore ways to work together. They could provide an enhanced, expanded local media footprint for local advertisers and client partners. It’s been/being done on a national level through integrated stacking. It is also the best way to combat outside, national, direct-to-client competition. Now, in Part II of my blog, I’d like to discuss improvements for consumers. Specifically, how do local TV stations and MVPD’s with local channels improve the quality of the local programming they produce? My answer to this question; Content Consortiums.
Content Consortiums
What are content consortiums? Well it’s something I’ve made up but can explain fairly simply. It’s a way to form local programming “pods” to create content for local broadcast and cable channels. Simply put, create a separate company or LLC that is funded by the owners of local affiliates and cable channels. This company would produce news, sports, lifestyle, reality and advertiser supported native programming.
Look at what’s happening in the ratings game. Viewing habits are changing and the core news viewing audience is aging. As a result, local news ratings have plummeted all around the country. There is also a severe lack of viable syndicated programming and the competition from national cable for content. Well, you get the dilemma. There are simply too many newscasts in most top 100 markets for all of them to survive long term. My solution? Call it forced natural selection.
Here’s how it could work.
Let’s say a midsize market has four stations producing news (and a local cable channel in certain situations). Also, there are at least three different owners of those distribution channels. Each of these stations/channels is spending an average of $2,500,000 annually on day-to-day operations of its news department/local cable channel. That’s $10-12 million dollars being spent to create local content; much of it duplicative and of average to poor quality.
Forget ratings for a moment. Have you tried to watch a local newscast lately? Have you stumbled upon a weekend show on the #3 or #4 rated station/local cable channel? If so, you know how poor the producing, editing, writing and on-air talent can be. Can this model work in 5 years? Now throw ratings into the mix. Many of these second tier stations or local cable channels don’t even produce a buyable rating in key demos. In the end, it’s a toxic mix of bad TV and bad, unbuyable ratings.
How do you fix it?
Content consortiums are the solution. Why not pool all or most of these dollars and fund a local “start-up” content creation company. Allow for two newscasts per time period (each with a different, research based brand of content). Each would generate much higher quality programming and better ratings. For the stations/channels that don’t produce news, build alternative programming (reality, lifestyle, sports, local issues, local pop culture/entertainment). Offer a financial incentive for them to forgo producing their own newscasts or local programming. Finally, have a third, separate arm of the consortium for purely advertiser supported content (digital/traditional/social/native). This would be inclusive of all elements of local advertising production. Sellers sell multiplatform solutions and work through the consortium much like they would with an advertising agency.
Of course there are hurdles to such a bold idea but what’s the alternative? Consolidation is not about being “bold.” It’s about survival. Retransmission consent revenue isn’t “bold.” It’s about the strength of your network affiliation and the sports you carry. If you don’t have either of those, you don’t get to participate in future growth.
A truly separate entity with the right checks and balances could create top-notch news, sports and entertainment programming. Another intriguing prospect is it would also have the added benefit of an in-house unit supporting multi-platform, multi-media advertiser solutions. It allows for everyone to potentially make more profit. They can connect with consumers via high quality local content and to provide local advertisers with truly integrated solutions.
Let’s figure this out.
Reread Part I here.
