How TV broadcasters can regain their leadership


If one observes most of today’s broadcast TV stocks, it is quite obvious the present business model is not working. One is reminded of the decade-old TV Ad that portrays a young computer guy showing an executive what he has done with the company logo. “Look, I know how to make flames dance on top of the logo!” The executive says, “What I really need is to integrate my accounting, sales, and inventory into one document.” The young computer guy says, “I don’t know how to do that.”  

Apparently, the TV executives today and their Internet gurus do not know how to make revenue from their web sites either, yet the race toward prettier TV web sites and more video “on demand” through wireless and Internet delivery systems makes TV executives resemble lemmings racing toward their untimely, corporate mass suicides.  

Broadcasters have, even in these turbulent times, two powerful, preemptive tools in their possession: an exclusive, federal license granting them protection from product encroachment within their Designated Market Areas and the ability to reach nearly everyone in their DMAs. These considerable tools are sorely undervalued, underused, and under enforced in our rapidly changing media landscape. To this observer, it seems the broadcast community has abdicated its former preeminent position in favor of following unproven and lesser media pretenders and has suffered miserable revenue consequences for its very wayward, mob-driven, blind path.

About a decade ago, broadcasters began creating station web sites and encouraging viewers to stop watching their station and begin seeking their news and other programming online. Why would any broadcaster suggest that a hard contested viewer choose any pursuit other than watching the TV station, especially watching a new media competitor? Network news anchors used to say, “Stay tuned for your local news;” now they tell viewers, at the end of their newscast, to stop watching TV and go to a computer for more network news. TV stations purchase outdoor, radio, print, and other competitive mainstream media to encourage consumers to watch their stations. Then, when consumers do respond and tune-in, what do they see and hear? “Go to our web site.” This seems, at least, counter-productive and, at worst, a fatal, self-inflicted gunshot wound to the head. Broadcast investors see the blood in today’s balance sheet red ink.

In addition to directly instructing consumers, through on-air promotions and personality chit chat, to cease watching their stations, TV executives have also embraced the practice of freely giving away valuable air time, through poorly selected Public Service Announcements, to organizations that also tell the viewer to stop watching TV and go to their website. There was a time when “dot coms” had to pay for that. Also recall when, in order to be chosen as a P.S.A. air time recipient, charitable organizations had to say on air, “And thank you, WBTV, for caring about Charlotte.” Now the TV air waves are awash in freely given dot com, dot net, dot org, dot edu, and dot gov competitors. One gets the idea that TV executives are really pushing hidden agendas to promote their sons,’ daughters,’ or their own worthless Internet sites that cannot survive without the mass exposure television alone provides.

Perhaps the most troubling question about TV executives’ motives in gifting their air time, reach, and revenue to the Internet is in their disregard for the stolen content from their own stations that fuels the content on their Internet revenue competitors. When a local TV station allows its content, either news or entertainment, to be displayed on any number of web sites without immediately leveling damage litigation against the thieving party, that television station funds its indigent competitor with both content and revenue.

Television stations are granted federal licenses to exclusively air their content in their local DMAs. In the same way cable companies created significant revenue streams by fining or jailing cable thieves, television stations can create revenues and protect the value of their products by intensely guarding their owned products wherever they are illegally displayed and by denying use of their purchased and licensed products within their own DMAs.

Why should one tune-into Family Guy when one can view the funniest clips on You Tube? What would You Tube do if they were forced to pay fines for every pirated piece of content? Yet TV executives have been duped into believing these clips somehow promote their program. If that were a good thing, why are TV stations failing by the hundreds?

A television station would produce far more revenue (to offset the auto industry’s advertising cut-backs) by repurposing their web efforts to hire more salespersons to develop more new business categories. TV spots are much more valuable than banner Ads. The “value-added” to the TV station here is that it would also comprehensively eliminate internet as a local competitor in the process.

We are at the dawn of the digital age of television, a vast improvement in picture quality, over-the-air channel selection, and reception that has been thirty years in the making. Now would be a good time for all TV executives to admit that their misguided foray into a competitive media (a competitor that clearly means to kill TV) was a bad choice.

TV stations have all the best cards: sight, sound, motion, emotion, color, H.D, exclusivity of marketing area, multiple DTV stations per channel, huge reach, best consumer perception, best content, group / family participation, true public service in a crisis, and federal protection. Why do TV executives insist on relinquishing those unconquerable assets? Is a TV station not worth more than some “lost in the billion dot whatever” website thrown-up by someone in bed, copy / pasting on their laptop in their pajamas? Without expensive content and mass promotion, that web site is dead on arrival. If it is to succeed, it must be worthwhile, and consumers must know of it. Web sites cannot stand alone. TV spots are worth hundreds, banner Ads are give-aways.

TV broadcasters should stick to what they do best, television. With all the advantages TV broadcasters possess, they hardly need to jump into businesses about which neither they nor anyone are remotely informed.

Executives in television should devote their best efforts to serving the public with quality programs in the media they know best and leave the “trial and error,” “run and gun,” “who knows if we can sell this new technology?” explorations to those who have not yet figured-out how to make money. With regard to revenue generation, the web is still a big loser.

— By Kevin Mirek, TV executive elite