Commentary

TV Station Cos. Big Deals Mean Bigger Business Arrangements

by Wayne Friedman , Staff Writer, March 16, 2017

TV stations group have a big wish -- to be a bigger TV entity. Not just focusing on local TV consumers, but a national TV audience -- and marketers.

We are not just talking about possible deregulation of companies to buy more TV stations -- but where the biggest of TV groups continue to seek ways to get business scale equal to that of say cable TV networks.

Take Sinclair Broadcast Group efforts to create an local TV advertising consortium, called OxMyx, one where other big TV station groups could join building a national TV footprint -- “a scalable unwired network” -- when it comes to automated/programmatic buying that U.S media agencies continue to want.

In large part, this is looking to pull advertising money from mid-to-small cable TV networks. To avoid antitrust concerns the operation would be independently operated with TV station groups as silent equity partners.

More on the consortium-front: Two of the biggest TV station groups, Sinclair and Nexstar Media have announced a tech-focused consortium “that will promote spectrum aggregation, innovation and monetization and enhance their abilities to compete in the wireless data transmission sector.”

This comes with the anticipation of the adoption of the new ATSC 3.0 broadcast transmission standard -- believed to be a basis for new products and services: virtual MVPD platforms, multicast channels, automotive applications, single frequency networks and wireless data applications.

Nexstar reaches nearly 39% of all U.S. television households; Sinclair is also close to that coverage level. So you see the numbers are adding up to network-like levels.

Much of this would be easier if more deregulation of local broadcast TV and radio stations would occur -- specifically letting companies buy more TV stations. Currently, the limit in buying stations is coverage amounting to 39% on U.S. TV homes.

For its part, Sinclair is already looking nationally -- starting up, or owning national TV networks -- either traditional cable networks or new locally based networks TV stations with local digital over-the-air signals.

Last January, Sinclair recently bought cable network Tennis Channel for $350 million; recently it started up digital TV networks -- Comet TV, Charge! and TBD.

All this doesn’t mean TV station groups want to abandon one business advertising effort and move into another. Instead, it gives companies options -- not just against their long-time cable TV competitors, but increasingly against new digital media platforms, with a local and national focus.

advertising, programmatic, tv

3 comments about "TV Station Cos. Big Deals Mean Bigger Business Arrangements".

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Ed Papazian from Media Dynamics Inc, March 16, 2017 at 10:04 a.m.
Wayne, as you know, we already have "unwired networks" so the new gimmick in this deal is the use of the term "programmatic"---which you say the agencies want. But do they? Perhaps for spot buys on a city by city basis as this may reduce the amount of person power expended in shunting the paperwork around, but certainly not on a national basis. So several station groups form a consortium that, I presume, bundles together audiences delivered by their stations on a national basis based on the advertiser's specs---demos, market by market GRP goals, etc. Great. But what has "programmatic" got to do with it? They are probably going to use the now familiar "big data" indexing scheme---blended with purchaser profiles----as the targeting mechanism---mashed on to Nielsen ratings, to create a "currency"?If so, you get a seller-friendly metric, which is highly misleading in terms of actually reaching the prospective buyer of the client's product. Worse, what does the computer compare any of these offers to? Or will the broadcast TV networks and national cable channels cooperate by submitting their packages using the same metrics----so the buyers can decide the best way to go? On the plus side, I applaude the station groups for trying to exploit the hype about "audience targeting" and the supposed magic of "programmatic buying" and "big data's" more precise ability to slice and dice set usage ratings. Unfortunately, it may be too late as many of the smarter national advertisers have wised up on this score.
Reply

Long Ellis from Tetra TV, March 16, 2017 at 12:45 p.m.

Along with ATSC 3.0 comes the ability to target ads to the HH level. There are paths the TV station groups can take that will enable addressable TV capabilities without MVPD involvement. IF that happens, it will be a game changer and then the technology for transacting addressable TV campaigns between buyers and sellers will need to catch up. There is a compnay called MASS Exchange that has already built a platform that can handle this level of complexity. I'm not sure a media company can actually build this without it just being another attempt at shoehorning TV into a digital model.

Paula Lynn from Who Else Unlimited, March 16, 2017 at 7:46 p.m.

Media speak as you will, a one party system called by any other name is still a one party system with no room or growth for an alternative. Absoulte power corrupts absolutely.