Digital Media Buzz > TV and Radio Steal From Online to Survive

TV and Radio Steal From Online to Survive

By Sharon Hill

As more and more news, entertainment and conversation head to the Internet, radio and television properties struggle to keep their core products solvent and to evolve to multimedia. A 2008 Borrell Associates report concluded that radio stations earn only 2 percent of the online ad spend, while broadcast TV stations fare a little better at 9 percent. The revenue breakdown was 48 percent for pure plays (online-only), 26 percent for newspapers, 11 percent for directories, 3 percent for magazines and 1 percent for other print publications.

Mel Taylor has been on both sides of the media aisle, with a past that includes on-air and management for radio and television, newspaper management and now teaching media to join Web 2.0 and thrive. He was director of online sales at FOX 29 Television in Philadelphia, national sales director for WorldNow representing 250 TV station websites, and regional sales manager at Clear Channel Interactive. “I would grade both radio and television as poor [in online evolution] … at this point in time,” Taylor says. “Most radio broadcasters have made their fortune by repurposing music content (records and artists) as their primary way of attracting an audience. This reliance on non-proprietary content and advertising sales against it does not play well with the rules of the Internet. They have to pay fees that are not necessary in the over-the-air world. That is one giant hard cost.” Taylor said that when radio stations go online they are no longer the local top 40 monopoly. That local station is now up against tens of thousands of online radio stations playing the same type of music.

The TV industry has similar problems. “In many cases, reports show that 40 percent of revenue for the stations revolves around the local newscast,” Taylor says. “More and more people are now getting their news online — there is not a huge need to sit down and watch the news at 11pm. Advertisers are starting to pull their money away from that relatively expensive medium and put more of their money online.”

The second issue is that many local TV stations repurpose or retransmit network content rather than produce their own local content. They pay fees for syndicated shows. Now Hulu.com, for example, makes it easier to watch these shows online. “Back in the 50s [creating their own local content] was all they did,” Taylor says. “With syndication and technology now local broadcasters can buy rights and it’s cheaper. The stations have an over-reliance on that transition.”

Hofstra University assistant professor of Radio, Television & Film, John Mullen is also director of operations for Radio Hofstra University. His industry credentials include programming for MTV Network’s VH1.com, and operations manager/program director at Emmis Communications. “Radio station websites look like the Las Vegas strip,” he says. “So many things you can barely decide what to do. Is that the best model? I don’t know.”

His concept for broadcast multimedia relies on community contributions. “I watch thousands of students on MySpace every day,” he said. “They enjoy creating the content. I’d give the public little portals and suggestions about where to go. They’re creative. If there’s a problem [the users will] pull it off.”

Mullen predicts an evolution to Internet radio in vehicles. “Radio will never go away,” he said. “I believe that manufacturers will be putting free Internet radio in cars — with a little keyboard. That will be life changing. It will probably come from cell phone towers. Mullen further pointed out that now there are only so many FCC radio licenses in so many markets. “In the next year Internet radio will become standard,” he predicted. “Thousands of people will be doing it.”

There are some shining examples of multimedia evolution by broadcasters.

As of October 2008, NBC is doing something smart with its local TV station affiliates. At first glance it’s very difficult to tell that its Chicago beta site, for example, isn’t the home of a savvy community newspaper. NBC is transforming its local TV station websites into broader online communities, offering news, information and entertainment as well as social media tools.

The new locally focused sites feature content from online as well as print publications, local NBC TV stations and bloggers. The initiative has so far rolled out revamped sites for Chicago, Los Angeles, San Diego, Philadelphia, Washington, D.C., Hartford, Conn., and San Francisco. Site URLs have changed. WNBC.com in New York is now NBCNewYork.com, and Chicago’s WMAQ.com is now NBCChicago.com.

E.W. Scripps has a local TV niche online product it can be proud of. Phoenix, Ariz.’s ABC 15 News offers online coverage that includes news of who is hiring, staying afloat financially, surviving at work and a place to get and give advice. Its Financial Service Guide includes job search, tips on stretching every dollar and so forth. It’s a timely community service product, though the station still needs to work on search optimization. “Most likely there’s one webmaster who taps into news stories of the services they pay for,” Taylor says.

TV and radio still have massive reach, according to Taylor, who emphasizes they’re not down for the count by a long shot. He advises station executives to consider the following questions in their quest for the right competitive product:

What local online need or interest is currently not being serviced online?

Is this a local opportunity that Google or other outsiders don’t have the resources and/or interest to come in and steal?

Is there a growing demand from advertisers willing to pay to be adjacent to that online model?

Instead of trying to steal ideas from other radio and TV brethren, these station managers should steal from the online leaders, Taylor advises. “The future doesn’t have to be bleak for these stations. They just need a better business model.”

Sharon Hill, whose background is in advertising, reporting and marketing for newspaper advertising management, is president and founder of Yore Town, LLC. You can reach Sharon at yoretown@gmail.com.