More and more broadcasting executives are coming to the realization the economy is not turning the pivotal corner.
Advertisers continue to spend less and want more for their money in this new environment that has evolved in this recession. As we mentioned in an earlier post, the advertisers are the ones driving the bus right now. And they are digging in their heels for cheaper rates.
Many folks thought the stimulus plan would have helped to jump start the economy. After all, $787 billion is a good amount of money.But as of Sunday, Secretary of the Treasurer Timothy Geithner was pitching the notion on CNN and other media outlets we must be patient. The stimulus relief is coming soon.
However, can the media afford to wait?
Jobs are being lost at an alarming rate in all arms of the media. It doesn't take much perusing of the trades to find stations laying off people almost daily. Newspapers, magazines, radio and tv are all suffering from the sticker shock of how their past decisions are playing out in the new world order. Many company executives are having sleepless nights.
Unfortunately, most broadcast owners are being faced with the same issues: downsize or hub. Some are doing one, many are doing both.
For those of you working in the radio part of the business, this notion of hubbing is not foreign. The big boys, like Clear Channel, have been hubbing operations for a number of years.
In northeast Ohio, newsrooms including WTAM-AM/1100's provide news updates and other special coverage for their stations in other markets. Cookie cutter news has been a way of life in places like Cleveland, Akron, Canton and Youngstown locally. You hear the same person doing the news on different stations.
This has helped radio survive. Lower your cuts and your overhead.
Now, it has become television's turn.
In the early days of television, competition was low. Few stations existed. Those that did could afford large staffs and payrolls. This all started to change, arguably, in the 1980s as the industry began more about entertainment and less about news and journalism.
Today, the environment has changed even more with the addition of cable channels that blossom worse than weeds. Every month, viewers have more choices in programming and entertainment - not to mention the competition from Internet and other non-television related media.
Remember 10 years ago when we laughed at the notion we could choose from 500 channels. This is only the beginning as we head into the next decade and the era of "micro-niche" entertainment.
So, broadcast stations are forced with those aforementioned choices in order to survive with a smaller and smaller piece of the ratings and advertising pie.
Gannett, the owner of WKYC, has been one of the largest groups to start hubbing operations across their broadcast division in recent years. This started with centralizing our graphics departments and now includes master control operations, webmaster duties and human resources.
Another large group, Scripps, announced a similar move last week. Traffic for their stations will be based at KNXV Phoenix and WFTS Tampa, and will be operational by the end of the third quarter. WFTS will also house the graphics hub, which Scripps aims to be fully operational in the fourth quarter.
Again this means the loss of many jobs, a standardized look for all stations and a real lack of local creativity in the long run.
Unfortunately, this is the reality until market conditions change - if they ever do. Some markets, like Cleveland, will suffer far more than others as people and jobs are lost - and take their money with them.
So, no - I don't think you'll find many, if any, General Managers or General Sales Managers saying things are better - or will be better anytime soon.
Expect even mean more job cuts as we head towards 2010 and for media to centralize even more. We wouldn't be surprised if television stations eventually start hubbing their news operations as well.
When that happens on a large scale, it's game over for everyone.
Let me what you think.
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trif6csyu7
1 comment:
Frank...
Very good analysis of the current issues.
But I think there's another side of the story that never seems to come out of similar stores.
With some parts of the media are struggling, some are GROWING.
As you mentioned, "niche" entertainment is growing. It's easier than ever to create content and thanks to the internet, distribution to the masses is easier than ever.
My production company is creating podcasts/online radio shows for businesses that want to entertain, inform and help grow their brands to their customers. 10 years ago we never would have thought that would be possible. And what we're doing is growing.
As different choices open up for eyes and ears, those companies are creating jobs. They're helping to get the economy going. They're growing.
You pointed it out with local media: models need to change. The way it's been done for many years isn't necessary and isn't profitable. Do we really need 4 TV newsrooms? Do we really need 4 TV cameras at one event? (We already know this answer... no... thanks to the new agreements to share content). Radio doesn't... WTAM and Clear Channel proved that.
I think content is still king... but now it's easier for people to get it to their target market. They don't have to create content for everyone, they can go after their niche and make money from it.
Even when the economy turns around, I still don't think local TV and radio will get back to the amount of revenue they once used to have and control.
Onward!
Matt Haze
www.matthaze.com
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