Local television revenues keep growing

The newest data from BIA/Kelsey paints an optimistic picture for local, over-the-air television revenues, and the study’s author says there’s more to come. According to the report, the local television industry experienced 23.2 percent growth in 2010, achieving over-the-air revenues of $19.4 billion. The impressive growth came due to an improving economy (especially the automotive sector) and a hot mid-term election season.

Last year’s impressive numbers were buoyed by strong political spending and a faster than expected rebound in ad buying by national advertisers wanting to reach local audiences,” said Mark Fratrik, Ph.D., vice president, BIA/Kelsey. “Even with some erosion of viewers, it was a strong demonstration that local television continues to show its value to advertisers by delivering the shoppers, voters, and influencers they want to reach.”

Fratrik told me via email that the up/down nature of the below revenue chart is actually deceptive, because if you took out political, each year would show growth.

BIA Kelsey TV revenue growth rates

If you would subtract the political advertising you would get consistent up years,” Fratrik said. “So long as there is so much political advertising being spent, there will continue to be down years in the odd years.” Fratrik told me he was struck by the sheer volume of political money spent last year at the local level, apparently because “local television stations continue to provide candidates with access to potential voters.”

Fratrik is confident the industry is on the road to recovery, although not in usual, post-recession ways.

We build up on a local basis looking at the recent history of a particular market and the economic conditions present in those markets. Overall I see the economy moving forward positively, though not at very high rates, which is not the usual case when the economy comes out of a recession.

BIA/Kelsey also reports local television stations earned $450 million from digital and mobile advertising in 2010 and estimates that number will climb to $890 million by 2015. That’s a small number, of course, compared to $19.4 billion, but it’s the one to watch. Mobile is the wildcard, but there’s also the question of how long television’s relative strength in the advertising mix can be sustained in an environment where ratings are consistently tracking downward. That makes any long term forecast problematic.

Get your bloody hands off our spectrum!

Dear President Obama,

I wanted to take a moment this morning to give you a bit of advice in your open attempts to steal take spectrum from broadcasting and give it to the Telcos for your broadband plan.

We had a bunch of tornados in the South this week, including some enormous ones in Alabama. Brian Stelter of the New York Times has done an excellent job of covering the local on-air coverage of the storms, so you can see the role that broadcasters played in protecting lives. Many, many reports have come in that reveal lives saved by people watching television meteorologists or listening to the radio. In one particularly vivid account, a group of young people were on their way to Milo’s in Tuscaloosa (THE local hangout — best Sweet Tea in the country) when television broadcasts alerted them to the danger. They stayed home. Milo’s was destroyed.

Here’s a paragraph that Brian wrote:

After the storm, hundreds of viewers wrote on Mr. Spann’s (James Spann, WBMA-TV) Facebook page, where he has 55,000 connections, to thank him for the hours of nonstop live coverage. One woman wrote, “I have no doubt that you saved too many lives to count.”

So you see, Mr. President, you’ve got a problem on your hands. You want that spectrum, but you’re not about to be the leader who led to broadcasting’s downfall, are you? Sure, Twitter was filled with accounts, too, but that’s a very long way from what a simple broadcast signal can do in such an emergency. And let me get this straight, you want us to trust the Telcos in an emergency? Anybody who has AT&T as a cell provider knows the foolishness of that thought.

Now it’s true that some of the live pictures of the twisters came via Internet connections — and those were helpful in getting people to pay attention — but it took the work of a central organization to put everything together and make sense for everybody else. This is not going to be replaced quickly, and you flirt with disaster every time you hint through actions that broadcasting should be treated as second class.

So think twice before you move in where you don’t really belong. Think of the consequences for the mere suggestion that we could live without this.

Thanks for listening,

Terry

The mystery of the upfront

It's all relativeTelevision’s “upfront” season is approaching, which brings about stories from observers that link the health of the industry to the kinds of deals the industry makes during this period. Every one I’ve seen predicts this will be a big upfront for TV, because ad prices will be going up. Cable rates will grow much more than rates for the broadcast networks, according to the Wall St. Journal’s Demand Builds for TV Ad Time:

Last week Barclays Capital projected 7% to 8% growth in dollars for broadcast networks during the coming upfront, and 15% in upfront growth for cable networks. Rates per 1,000 viewers on some broadcast networks could grow by 10% or slightly more, the bank said.

As audiences shrink for the broadcast nets, prices for ads go up in order to balance the old budget (or grow it?). Madison Avenue decides whether it will play this game, and the answer has always been “yes.” New digital advertising solutions and advertisers spending money on their own forms of “media” put tremendous pressure on the whole system that Madison Avenue controls, however, which begs the question “how long can it last?”

Here’s the justification for ad price increases as presented by The Journal. You’ll have to read it a couple of times to fully appreciate the insanity strange logic of the rationale.

Higher prices for TV commercials are, paradoxically, partly the result of shrinking audiences for big broadcast networks, as viewers scatter across the dial. Amid that fragmentation, marketers have a harder time reaching consumers, and still view TV ads as an efficient way to reach large audiences. That has kept demand high, even as lower ratings make viewers scarce, driving up ad rates.

If the industry was delivering bigger audiences, the rate hikes make sense, but this justification is the same kind of economic spin that has gotten us into trouble before. Still viewing TV ads “as an efficient way to reach large audiences” can’t qualify for increasing rates for long. Basing price increases on “TV’s relative strength among ad-supported media” is a bit like saying that Aunt Ginny’s corn puddin’ (“that stuff’ll sink ya like a stone) is edible, because it sucks less than anything else at the table.

The auto industry is in a boom right now, although the experts that I talk to don’t really know why. Americans are still deeply concerned about the economy, as was revealed last week in a new New York Times/CBS News poll:

Capturing what appears to be an abrupt change in attitude, the survey shows that the number of Americans who think the economy is getting worse has jumped 13 percentage points in just one month. Though there have been encouraging signs of renewed growth since last fall, many economists are having second thoughts, warning that the pace of expansion might not be fast enough to create significant numbers of new jobs.

Will the automobile buying spree continue, or will we drift back to clutching every dime we have in our pockets? It’s in this environment that the upfront challenges common sense about ad price increases.

Meanwhile, ad spending via digital and interactive channels continues its explosive growth, despite its own challenges (Internet Users View Ads As Distraction) and mobile is hanging there with a world of incredible possibilities. There’s so much money at stake that things won’t change completely overnight, but those who bet the ranch on the entitlement of upfront increases are one day going to run into a Madison Avenue that’s had enough.

RSS going mainstream

TNW2011 logoThere’s more evidence this week that full-feed RSS is about to become a go-to technology for all forms of media. At TNW2011 in Amsterdam, companies showed off new technologies, and there seem to be many that duplicate in some way the model of Flipboard, what Steve Jobs described last year as Apple’s favorite iPad app. Flipboard presents RSS feeds in a magazine-style reading format, but it can only do its magic with a site that provides full-feed RSS. In Amsterdam, another technology does the same thing, only this one works in a browser. Pressjack is still in development, but it allows users to create a magazine with multiple feeds and then upload it to the Web for others to see. Pressjack’s Hannah Baldero told The Next Web (TNW) that they’re not really a Flipboard competitor.

While working with our customers to develop new features it became apparent many clients did not have design resources in-house so updating a publication was a lengthy process. We also wanted to address the matter that with a traditional publication, the content is fixed to the time the publication went to print. Readers were moving online as they demanded more up-to-date news.

So, we started about trying to design a technology that would allow publications to update themselves without the need for any design resources and this is where PressJack sprang from. We wanted to ensure a digital edition was always displaying the latest news.”

RSS logoThere’s also Yahoo’s Livestand — “Livestand is a digital newsstand that’s always fresh and effortlessly personalized. Sit back and enjoy the news, entertainment, and local information you love, right on your tablet. The more you use it, the more it gets to know you.” — Treesaver, another browser-based tablet reader — Treesaver will soon be releasing a set of templates for publishers to use and the technology will be open sourced, allowing anyone to customize the idea as they choose. — and NewsAnchor is a Mac app that reads your RSS feeds to you.

These readers are all designed for tablets, and they don’t play well with feeds that are meant to tease users and push them to the home of origin. This will usher in the age of unbundled media about which I’ve been writing for the past 6+ years, and media, especially local media, is totally unprepared. Oh, it’s easy to turn the switch and make full-feeds for consumption in these devices; but how to we make money in so doing?

If all of these companies wish to display advertising around this content, there will have to be some form of licensing developed. Feeds can be password-protected, although my preference would be otherwise. Ads “as” items in a feed is a whole different animal, for what advertiser wouldn’t want his content displayed in magazine form via Flipboard or any other reader? There’s also feed sponsorships, which would also include mentions in the stream.

Of course, media companies could put out their own reader-apps, but they would have a tough time letting go of the content permissions, because we’re so stuck in the past about the value of ours! The user-customization aspect is what troubles media companies and their apps. It’s a matter of control.

But make no mistake, this is coming faster than you think. My advice is to jump in with both feet and start experimenting with your best advertisers. It’s not about CPMs; it’s about the value of such unique or exclusive exposure. Early in gets the worm, if I can twist the old metaphor. Your RSS feeds will one day be far more valuable than your own app.

For more insight into the mainstreaming of RSS this week, read Mathew Ingram’s Are Apps Like Flipboard the Future of Media?

How I beat the New York Times’ paywall

NYT paywall noticeA big part of my study time is following links from my RSS reader. You can say what you want about Twitter, but I still find RSS to be the best way to keep track of what people are writing in my beat. A lot of those links go to the New York Times.

The Times, however, has introduced its paywall, and part of the deal is you get access to 20 articles for free per month. After that, you’re blocked and need to pay up. The exceptions are links from social media giants Twitter and Facebook. The reason is simple: the Times wants no part of losing audience for advertisers, which is what has happened with other paywall experiments.

But I’ve thought the same exception should apply to RSS, and I’ve complained about it via Twitter.

Today, I ran into my first blocked story, so I simply tweeted the URL of the article:

turning the Times article into an exception

That link allowed me past the paywall.

This is silly, but it shows how easily the Times wall can be breached. Frankly, it makes sense that the paper’s paywall should allow inbound links from anywhere, but that’s probably impractical. Why have a paywall then, right?

Right.

The Internet is about humanity

Kevin KellyI’m so glad that Kevin Kelly is back to blogging regularly via The Technium. Today’s entry is worth a comment. Kevin writes of what it means for kids to be growing up in the digital age and concludes:

…the internet is not about computers or devices; it is something mythic, something much larger; it is about humanity.”

This is so true, but there’s one group that doesn’t seem to understand — media companies. To us, the Internet is all about technology, the technology to better enable us to do our job. It’s so much bigger than that, people. It’s a beat unto itself, and one that’s damned compelling, too.

Do you have anybody assigned to this beat? I’ll bet not.