Despite the focus on retransmission consent fees, digital is a fast-growing revenue stream and a key focus for many broadcasters moving forward, according to execs at a panel at SNL Kagan’s TV and Radio Finance Summit Tues on the future of revenues and audience engagement for TV stations.

“Multiplatform is a huge revenue area for us,” said Deborah A. McDermott, pres, Young Broadcasting. It’s the company’s “growth and focus for the future.” Her company’s goal is to have digital be more than 10% of revenue. If the economy continues to recover and “regulations stay where they are,” she added, the company will have opportunities for more “diversified income.”

On revenue diversification, Bob Prather, pres and COO, Gray Television, agreed. He now has 5 revenue streams, where he used to have 1. At the same time, there is more competition from companies like Google, Hulu and (which snags a good chunk of auto advertising) than there’s ever been, creating a Dickensian “best of times and worst of times” scenario.

Peter Markham, Chairman and CEO, Granite Broadcasting, noted that while digital still makes up a small percent of total revenue, its share recently doubled.

“We think we have the ability to win as dominant multimedia provider,” said Richard J. Schmaeling, svp and CFO, LIN Media, and intends to exploit that content across a whole host of devices. “As the measurement system catches up, we’ll be able to monetize….There’s a lot of fragmentation, but that’s not a new story, that’s an old story.”
McDermott seconded the notion that proper measurement will lead to monetization, adding that she’s seen evidence of mobile consumption being additive. “When there’s a breaking news story, we shoot up huge in numbers. That’s why we’re going to be successful in that mobile arena.” She’s also seen a correlation between ratings and social media activity, which was evident when the company took it away for a time and watched ratings go down.
“Revenue diversification is 100% of our focus,” said Tonia O’Connor, president, distribution and sales, Univision Communications. On the company’s approach to digital she said it’s “committed to authentication.” For advertisers, the focus is video, she added. “Display has little to no growth,” she said. “Advertisers want a rich digital video environment for their brand to live in…. It’s really from a video neutral place. Linear or digital doesn’t matter.”
For Univision, digital engagement is a core part of its philosophy, given that its audience is younger and tech savvy. “There’s not a consumer that is more engaged in technology than Hispanic consumers. They way over index.” With that in mind, digital needs to be fully integrated from the beginning, she said. “We don’t want it to be an add-on or an after-thought,” but rather surround the consumer with all the different platforms. “It looks different, but the truth is they’re all just screens. It’s about producing relevant content.”
Several panelists noted that digital is the right place for experimentation since it’s less expensive to develop and carries less risk. McDermott said, “we know we have to invest [in digital] and we won’t see the same margins at first, but in the long run they’ll be successful and a core part of our business.” One way they’ve experimented is by allowing different stations to try varied new approaches.  
O’Connor added, “Digital platforms are a great place for you to experiment without huge risk,” and for the team to try out new things—always with the same flavor and ties to the flagship property—that they wouldn’t put on air. Prather concurred: “Fail fast and fail cheap. You have to be cut your losses fast.” And on digital, “you can usually do that relatively inexpensively.”

The Daily


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