The Price Point

John Oliver exposed an embarrassing practice of using local news personnel to shill products on air. Station groups that participate are playing a dangerous game with viewers’ trust in the process.

This week’s announcement of a mega-merger between AT&T’s WarnerMedia and Discovery must still pass muster with consumers who may not be willing to pay a premium fee for much of what they watch.

The Video Advertising Bureau accuses Nielsen of a “systematic undercounting” of TV program viewership since last March. Nielsen needs to respond to the accusation with more than a white paper.

Nexstar’s nascent NewsNation cable network has been roiled with high-level departures and “plummeting morale amid dismal ratings,” as summarized by one media writer. It is certainly at a pivotal juncture, and whether it can deliver on the unique, apolitical content it promised will be key to its survival.

Last week’s winter storms were a reminder that audiences, enamored of streaming though they might be, still tune in to live TV coverage as essential viewing. Networks would do well to take that into account and move forward with integrated distribution strategies that include their legacy station partners.

Television stations should take a cue from the NAB, whose commitment to holding an in-person conference in October offers a light at the end of COVID’s long, dark tunnel.

There are no winners on the local front when it comes to station blackouts, but stations can maintain goodwill by answering irate viewers’ calls, keeping clients informed and calling viewers when carriage is restored.

A down year is a good time to be a hero since corporate expectations are low and any successes are magnified. But GMs need to face the situation head on, have the guts to make tough operating decisions and hold the line on sales rates, even when there’s pressure to cut them.

A political windfall benefited station groups after COVID’s ravages, and there’s every reason to see political remaining healthy for many cycles to come. The reason? Leading local newscasts still have a close and coveted relationship with their loyal viewers.

Broadcasters would welcome reformation of the outdated newspaper-TV crossownership rule, but the Supreme Court’s decision to hear an appeal of the Third Circuit decision doesn’t solve all the industry’s COVID-induced woes. The FCC still needs to eliminate the Top 4 rule and online video distributors need to be classified as MVPDs.

AT&T never had a clear plan to integrate DirecTV into its overall strategy, and instead piddled away its brand and showed an utter failure of leadership in the process.

Everyone who is anyone is now in the streaming business, including the traditional over-the-air networks. Late entrant NBC was so eager for a piece of the pie it was willing to anger its affiliate body by moving some first plays to Peacock. This has damaged an already fragile relationship. Brand is what strong local television stations do best. Whatever the future may bring, their unique relationship with local audiences is an advantage no other form or media can claim.

Hank Price: One is struck by how important leadership is during these times. Group heads set the tone and define the values of their companies, but only local leaders set the vision for their stations. No company, no matter how good, can overcome visionless local leadership.

Some trends in local television are making themselves clear as the country slowly reopens, among them a growing pressure to consolidate, a need to find new revenue streams and greater workplace portability.

If there ever was doubt employees are our strongest assets, that should be gone. Engineers, to cite only one example, have repurposed, reworked and scrounged everything from laptops to boom mikes. And that same creativity and positive attitude has been on display in every other department at TV operations.

General managers are showing their true quality in these extraordinary times, putting public service and concern for their staffs above all other considerations.

Six months after the merger of two Top Four non-failing stations under Gray ownership, increased news offerings and wider signal coverage are among the results.

You cannot be blamed at first glance for thinking the new AT&T TV is yet another OTT service. Actually, it is something else entirely; more akin to DirecTV than cable light. When one looks at the details and long-term pricing, it becomes easy to see AT&T TV is intended to replace DirecTV.

Today’s consumer does not have an unlimited financial appetite for new streaming services. Every time a new OTT service is selected, the consumer will feel pressure to drop something else. As competition increases, one must ask what all this means to retransmission consent.

With coverage of the Trump impeachment pretty much an overwhelming information dump, some may question why broadcast TV should bother, especially given the loss of ad revenue that results. It is during times like this that we must remember why local over-the-air television is fundamentally different from cable, OTT and all the rest. We are not just businesses. We are stewards of the public trust, operating on the public airways. Our service is free to anyone with an antenna. If viewers choose to pay to watch us on satellite, cable or OTT, then great, but no one is required to do that.

Hank Price: “Starting in July, Peacock premium subscribers will be able to watch The Tonight Show with Jimmy Fallon and Late Night with Seth Meyers live, hours before they air in their regular slots on NBC affiliates. Instead of the fresh product NBC stations now carry after their late newscasts, they will instead be airing reruns of shows that have already aired on Peacock. This is an outrageous breach of trust between Comcast/NBC Universal and the NBC affiliate body.”

Broadcasters were victorious in their fight against the pay TV industry the same way they have won so many other issues, by taking their case directly to Senators and members of Congress in their home districts.

Hank Price: “In the face of next year’s political ad prosperity, some stations are actually lowering ad rates on upcoming 2020 non-political buys. Why? Because otherwise smart people are acting out of fear. They want to lay in a base of regular advertising in case things go bad. They will then brag to their corporate owners about their high shares. Not smart: Not only do lower spot rates hurt the coming year, they could set up 2021 for failure.”

Hank Price: “With the unfortunate demise of print, leading television groups are making an even stronger commitment to local investigations. They are doing this with a full understanding of the financial costs. Why? Because they are in the journalism business. That means putting the well-being of the communities they serve first, no matter the cost or political pressure.”

Hank Price: “Every local general manager and news director is well aware of their need to constantly build and maintain viewer trust. Trust is not optional. To lose it is to go out of business.”

Impressions-based advertising will not be the last word in consumer measurement, but it is an important transitional step to the future. In a few years we will look back and wonder why it took so long.

The sad fact is that Marianne Williamson has a better shot at getting elected president than a new syndicated show does of becoming a hit. Williamson’s crystal gazing at least brings something new.

Hank Price: That crucial point in the long-running retrans standoff will come Sept. 5, the day the regular NFL season kicks off on NBC. If there is one thing that will cause consumers to change providers, it is the loss of NFL football. Should that happen, it will be a boon to the cable light OTT services. And the stakes are just as high for Nexstar since the NFL is a very specific advertising buy.

Hank Price: There is no question ATSC 3.0 will be a great quality advance for television stations. The picture alone makes the upgrade a must have, but it too will be challenged by a wireless competitor: 5G. 5G will empower two-way 3.0 services, but it will also function as a direct competitor, offering far more services than 3.0 alone is capable of.

For now, most station groups continue to use representation, indicating a desire to make the system work, but no one can ignore the dramatic change in landscape. Unless the reps learn to serve the new marketplace, their days are numbered.

Netflix’s major Q2 shortfall on new subscribers signals that OTT services are beginning to learn what broadcasters have long known: not everything will be a hit, and even the best programming has a shelf life.

With the financial pressure on system operators, pitted against need for broadcasters to eventually achieve parity with the most-watched cable networks, retrans fights and blackouts are bound to sometimes happen. The sad reality is that in the short term everyone loses. Viewers lose their favorite programs, stations lose news viewers, DirecTV loses subscribers and station general managers lose their minds.

As legislation is being proposed to regulate Big Tech, broadcasters should realize that any regulation involving use of the internet by business will eventually affect television stations, particularly any encroachment on the First Amendment. This is a genuine concern because one of the bubbling issues is who can post what information.

Hank Price: “The commitment of local broadcasters and their owners to the communities they serve is legendary. No corporation is perfect, nor is every policy. Employees have the right to disagree and should do so when they believe something is wrong, though hopefully not on a public forum.”

Is the loss of newspapers also the loss of basic information, deep reporting, investigations, even democracy its self? I don’t think so. Leading television stations are the natural candidates to become the trusted source, and many will.

There is every reason to believe advertising will continue to be the lifeblood of television, but the continuing growth of retransmission consent should remind us that future opportunities are unlimited.

The sooner we get to a fully measured consumer experience the better for everyone — stations, advertisers and consumers. Nielsen is the leading candidate to do that, but, make no mistake, someone will make it happen.

Hank Price: The relationship between Viacom and CBS is a long and complicated one.