WHAT'S NEXT FOR THE TV STATION BUSINESS?

In his classic dissection of the movie business, Adventures in the Screen Trade, screenwriter William Goldman famously observed “Nobody Knows Anything.” 

Often misquoted to suggest that Hollywood executives are morons (always a useful default position), Goldman meant something quite different: that nobody can predict how well a film will do at the box office prior to that movie’s actual release.

Audience research, superstar casting, previous ticket sales, tea leaves and animal entrails are equally pallid predictors of subsequent success. Nobody knows anything.

I was reminded of Goldman’s rule at a recent NATPE session called “Station Breaks: The New Distribution Model for Local Television,” wherein a distinguished panel valiantly forecast the ways in which broadband will complement and compete with traditional TV.

The most cogent comment came from E.W. Scripps Director of Programming and Special Projects Marla Drutz, who observed that “within two years, everything we’re saying today will seem as out of date as a Model T Ford.”

Drutz, who doubles as program director of Scripps’ Detroit ABC affiliate, WXYZ, stressed that the industry is still trying to discover where the audience is today, let alone tomorrow.

“We celebrated our 60th anniversary last year and while the viewing experience has changed, the competition for advertising dollars is not all that different from 1948, except that it’s no longer TV only. We compete with everyone. We study who comes to our Web site and what they’re looking for during the day as opposed to evening visitors. We’re still learning from research.”

Learning, yes. But nobody knows anything—at least not yet.  Even so, the panel offered some tantalizing insights.

For example:

“Some of our CBS stations are now reaching 20 or 30 percent of their (Internet) audience outside of their DMA,” says Jonathan Leess, President and GM of CBS Stations Digital Media. “We’ve created a whole new daypart on the Internet. Most of our online viewers are watching during the day from work.”

That makes it vital, says Leess, for station personnel to learn how to attract and hold that new audience. Not to mention how to sell to them.

“Most of our television sales people don’t have relationships with digital media buyers. We could miss out when our longtime advertisers want to buy Internet as well. Part of our strategy is to build those relationships. The good news is that some media buyers are reorganizing to bridge the gap.”

Bill Hague, a senior VP with Frank Magid, heartily agrees. “The stations we counsel are usually generating just 5 percent of their revenue from the Web. When we’re through, they may earn as much as 25 percent from new media.”

Even better, Hague believes that the consumer electronics boom is certain to grow stations’ new media business.

“Coming products like the [revised] AppleTV and the Wii game system connect TV sets directly to broadband, he says. “Stations need to take advantage of these new tools.”

But Hague cautions against trying to embrace every new technology. “The point is not to be platform agnostic, but platform appropriate. You must understand tastes, appetites and availability of viewers.”

Hague cites stations’ new digital channels as one kind of “new media” that’s barely been exploited.

“Magid research confirms the appeal of 24/7 weather and news,” he says. “But there are other opportunities. If you’re an all-English station, your digital channel lets you expand your Spanish-speaking audience without sacrificing your main program stream.”

That certainly sounds plausible. And many NBC affiliates have bet their new channels on the appeal of that network’s NBC Weather Plus program service, including most of the Scripps NBC stations.

But initially, the audience for new digital channels is so small, says Scripps’ Drutz, “that you have to use the ‘big stick’ [your primary channel] to promote the new ones.”

For branding purposes, you’d better make sure that all your stations have compatible content. “If it’s not easy to understand,” adds Drutz, “it’s hard to promote.”

“The network play is only one choice,” says Drutz. “Purely local programming is terrific, but requires a tremendous commitment of station resources.” So for WXYZ in Detroit, Scripps went in a third direction: they chose an outside program source.

At the end of March, WXYZ will launch the Retro Television Network on a digital subchannel. Soon thereafter, the “classic TV” service will debut in additional Scripps markets.

“These decisions are about resources,” says Drutz. “Station groups can’t afford to fill up these new channels one show at a time. RTN is the syndicator of the future. They’re not just distributing a show, but an entire channel.”

Will that model work? RTN Executive Vice President Mark Dvornik sure thinks so. And to make sure, RTN isn’t merely distributing one generic channel. It's customizing the programming for each affiliate.

“We liken this to the second Star Wars movie, The Empire Strikes Back,” says Dvornik. “We’re giving broadcasters the means to strike back against cable networks and other upstart competitors.”

RTN aims to accomplish this with programming tailored to local tastes.

“We will complement what stations are doing on their main channel, not detract from it,” says Dvornik. “We’re creating a unique feed for every market to maximize local appeal. For example, in Raleigh/Durham, N.C., [on Capitol Broadcasting’s WRAZ], the schedule includes Bulls [minor league baseball] games. This is the year to take charge of new content.”

That strategy certainly makes sense to me, but will it work? Once again, it’s impossible to know. But one thing’s for sure. Doing nothing is not an option.

Jonathan Leess points out that it took four years to build up the CBS Stations Digital Group and to train station people how to program, stream and sell this new content. Today they’re close to their goal of positioning three or four digital sales experts in every CBS station. And no wonder. Groupwide, they send out 10 million unique video streams per month. That’s a lot of revenue potential.

“If traditional media transforms the business even a little bit,” says Leess, “then we can lead the future rather than be forced to follow it.”

Market Share by Arthur Greenwald showcases successful local marketing, promotion and sales efforts every Monday in TVNEWSDAY. Tell us about your winning efforts by writing to Arthur at greenwald@tvnewsday.com.