The long-term demographic trends for the United States are well known. By the year 2020, the multicultural segment (defined as Hispanic, black, and Asian) will represent 40% of the U.S. population. By 2040, the multicultural segment will be equal in size to the white population. The growth in the multicultural segment is significant and represents virtually all the growth that will occur in the population.
The multicultural growth story is especially pronounced when we look at local geographies. Consider this: In the top 10 states that will have the most growth in population in absolute terms over the next five years, over 98% of all the growth will come from the multicultural segment. Forecasts show the white population will be either relatively flat or, in the cases of California, Florida, New York, and Georgia, it will decline slightly.
Let’s get even more granular. Let’s talk actual counties. We see a similar pattern at a micro level. In the top ten counties that will have the most growth in population in absolute terms over the next 5 years, all of the growth will come from the multicultural segment. These include some of the largest TV markets in the country: Houston, Los Angeles, Phoenix, Dallas, and Miami.
So what's a local TV station to do?
For local TV stations to keep pace with the changing demographics in its markets, it needs to think through the implications of a growing multicultural segment. In many of the top DMAs, for a station to grow its overall audience, it will have to evolve hand-in-hand with its multicultural audience.
To capture this opportunity, stations will need to evaluate how their news and other local programming might best serve the needs of this diverse segment. Adapting programming to the multicultural segment is particularly challenging as acculturation levels span across a broad spectrum. For example, the Latino boom has expanded beyond traditionally Hispanic markets, leading to fragmentation. Brands are looking for ways to speak to young bilinguals, as well as suburban and upscale households in new local markets.
Local TV stations are well positioned to take advantage of this growth opportunity. They have strong ties to the local community and advertisers and they can leverage their deep local knowledge to adjust for the unique changes of their market. Changing programming and promotions quickly to meet the needs of an increasingly evolving audience can be accomplished best at a local level where stations are nimble and available audience data is incredibly granular.
It’s a Multiscreen World
For media consumption, two platforms will continue to dominat: the TV display that offers cinematic-like, “lean back” experiences in the home, and the mobile/tablet screen that enables more personal, on-the-go consumption of video.
The TV display will be a dominant and stable presence in the home. IHS iSuppli forecasts that U.S. TV shipments over the next 5 years will be in the range of 37 million to 39 million units per year.
Ever present, the tablet screen is changing the viewing landscape from where we watch to how we interact with traditional viewing on a TV display. Recent Nielsen figures indicate that tablet penetration at the household level in the U.S. has already reached 28%. In some DMAs, such as New York, San Francisco, Boston, and Washington D.C., the penetration level is over 35%. This rapid adoption is likely to continue. In fact, the Consumer Electronics Association forecasts that tablets could have a 48% U.S. household penetration rate by the beginning of 2014.
The mobile/tablet screen will be that new frontier for local TV stations looking to venture out and capture an occasionally hard-to-reach audience.
Several local station groups (e.g., ABC, CBS, Gray) have recently made announcements about getting more aggressive with the mobile/tablet platform. As stations make more content available on this new platform, they will have to figure out a way to make it relevant to local viewers.
Though in some instances, the tablet could be thought of as another -- albeit more personal -- TV screen used to consume video content, we believe that the tablet screen will facilitate consumption of many forms of content on the go. Local TV stations already have a library of rich local content (for example, news, weather, sports, traffic) that can be repurposed in shorter, easy-to-digest bits for this new digital environment.
In all instances, this digital landscape presents not just a challenge, but also the opportunity for local stations to develop new ways to package their content to reach a desirable audience. A large piece of local advertising growth will be in the digital space, and local TV stations will be first to the scene, since no one knows their communities better.
In the next column, I will cover distribution disruptors and how local TV can take advantage of these new channels to reach viewers.