Panic at local affiliates

OK, panic might be too strong of a word. But there definitely is great cause for concern at the local affiliates.

Let’s say your local Seattle affiliate station runs ads against its shows. All these shows are either run in syndication (Sienfeld) or are current primetime shows (CSI). Local news is the only content you produce and maintain total control over. If your success depends on getting popular shows (and their viewership) to your station which allows you to sell local advertising, what do you do when your audience is dwindling in favor of online entertainment (everything from Facebook to YouTube)? To make matters worse, the national networks – in an effort to chase this shifting audience – start streaming new shows online with ads?

The local affiliates are totally cut out. From what I understand, the national networks have made some deals to give local stations a cut of the online streaming ad revenue. While this helps the locals out, I don’t see this as something that can be maintained. My understanding is that the nationals still need local affiliates since the bulk of TV viewership is still over broadcast/cable. You can’t piss them off too much, because they may turn to another company for syndicated content. So they get a cut.

And other methods to prop them up are afoot. Affiliates are trying to bring more traffic to their websites to help offset losing TV viewership. So the national networks are looking to give them exclusive online content – but in the end, who turns to their local stations’ website for Seinfeld content? The national networks still need the local affiliates as partners and may be willing to lose money on the online component so long as the affiliates keeps getting Seinfeld.

But one day the balance will shift.

What happens when the bulk of TV is delivered through the internet? This completely cuts out the need for the local affiliate. I don’t see the national networks continuing to provide the cut of ad revenues at this point. Granted that time my be 10 years away (Sooner I think). But it will stop. And it will be sudden. And it will hurt.

So the local affiliate needs to be planning its next move now. This s a tough spot to be in. Is there hope? Some industries vanish as technologies change just as others start up. My hunch is that local TV will combine with local newspapers. This will bring greater coverage of local matters (combining the journalism of the press with the ‘on the spot’ filming that local TV news handles. This will give more thorough written and filmed coverage to local happenings. I think this would be great. Will it be as profitable as being a full television affiliate is today? Who knows. Maybe not. But I don’t know if there are a lot of other choices.

- MediaBits

Next – NBC Direct launches, offering you less power than your VCR from 1986