Q&A With Simon Applebaum
Simon Applebaum is a media veteran whose work reporting television news and trends spans over 30 years. Applebaum is currently on the forefront of off-platform media, hosting a weekly radio blog on www.blogtalkradio.com. This interview highlights his perspective of the current media environment across a range of topics including the broadcast vs. cable model of affiliation, the move of Jay Leno to prime time, the future of PBS, Internet TV, privacy and some predictions for the future.
Links to the full interview can be found at http://weislermedia.blogspot.com/search?q=simon+applebaum. Here is an excerpt:
Charlene Weisler: Do you think the broadcast revenue model is broken -- and if so, should it be the cable revenue model, or is that under stress as well?
Simon Applebaum: The cable revenue model isn't [broken] because it is based on two things:... ad revenue and subscription revenue from cable system owners. There may be some stress with individual networks because of the fees they charge, which sometimes go up and up and up.
You see this with ESPN or CNN or the Weather Channel, and less so with other networks because of the type of programming they do. Sports programming, for example... the costs go up and up and up because of rights fees from the major leagues, from the Olympics and so on. It may be difficult for broadcast to adopt that model, although there is now some talk that ultimately NBC, CBS, ABC, Fox will become cable networks. In other words they will do a 24-hour schedule and you will only be able to get [them] on your cable or satellite system.
The problem is, what happens to the broadcast stations? If they go that route, you basically have television stations becoming independent all over the place. And where is the programming coming from? How does it work?
What has really put the stress on the broadcast industry, aside from lower ratings, has been the ad market falling off a cliff. When this recession happened last year, particularly [hitting] home last fall, nobody expected that so many industries impacted by the recession -- the auto industry, the entertainment industry, the financial industry -- would all pull their ads off local television.
These [ad categories] are the financial underpinnings of local television. Auto dealerships, for some stations around the country, make up as many as 30% to 40% of a local station's annual ad revenue. So when GM and Ford and Chrysler, because of what they [were] going through, basically pulled the rug out, it took what many forecasters thought would be an 8% decline in local ad revenue this year, to double digit [losses] on the order of 15%-25%.
And we are seeing the results of that now, with local stations around the country cutting back on newscasts. Channel 9 here in New York has cut their weekend newscast. WMAQ, the NBC station in Chicago, cut back their Sunday newscast. The Fox station in Jackson Mississippi this week cut out their weekend newscast, and we may see more of that ....
CW: Simon, can you give me three predictions for the next five years?
SA: One: at least one broadcast network will flunk. Right now, I think the CW is on the edge of the cliff. I know they are going after the young audience, but their shows are not working for the most part. "Melrose Place" is a disaster. "90210" is the same thing. Both shows are done.
I think CW has a year or two to make it. This could be the final year of the CW if the ratings don't get better I think that network will drop.
[And what] if NBC, CBS, ABC decide to go all-cable, to have cable be their distribution vehicle rather than television stations? Obviously, we are going to see a very interesting fight for existence among all television stations since they will, in a sense, be all independents and they will have to figure out what they will do in prime time. What will we do in local beyond news? Can we afford it?
So I think [another] prediction I would make is, I think we will, unfortunately, see a decline in the overall number of television stations. I do think that if that's the case and we see more... local news cutbacks, we could see cable pick up the slack. I think we will see more local programs or networks like New York 1, News Channel in Washington DC, Chicago TV News in Chicago and so forth.
There is a big opportunity for local journalism on the all-news level on cable and satellite. I think FiOS TV and UVerse are here to stay. Both Verizon and AT&T have the bucks to keep going. They have billions to spend. It may be a loss leader, but they're placing their chips on video. I think interactive television will finally make it. I think the tech is ready and because of the Internet, the public may finally be ready to accept it. So I am going to go out on a limb and say that interactive TV is going to make it in the next year or two, and it will become mass-market.
CW: Simon, thank you so much. How can we get in touch with you?
SA: You can listen to my program. It's on Mondays at 3 p.m. Eastern, which is noon on the West Coast, on blogtalkradio. If you can't catch it live, you can catch it on replay at www.blogtalkradio.com/simonapple04