Commentary
Calling All Buyers Of Slow-Moving Traditional/Legacy TV Assets: What's The Key Selling Point?
- by Wayne Friedman , Staff Writer, December 15, 2022
What do media and TV businesses need right now? I’d say more buyers of traditional TV companies -- networks, pay TV distributors, and other legacy services.
Surely in the next few years, owners of TV networks -- both broadcast and cable -- might be thinking of selling some of these assets as traditional TV viewing gets smaller due to cord-cutting and the rise of streaming, OTT, CTV, and digital business.
Former NBC and CNN senior executive Jeff Zucker might be interested.
Zucker is leading RedBird IMI, a joint-venture investment group, who will be on the lookout for large-scale media, entertainment and sports content businesses -- with an initial pocketbook of $1 billion in capital.
Legacy TV business owners will surely invite more efforts like RedBird to come forward.
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Already we have seen Nexstar Media Group -- the largest owner of U.S. television stations -- scoop up mini-broadcast network The CW.
Nexstar intends to make major programming changes -- including shifting away from high-priced scripted entertainment content to more non-scripted programming -- news, documentaries, and perhaps reality-based competition shows.
It seems the Zucker/RedBird effort would come at the right time.
But it begs the question of what other specific businesses large or small could in their gaze.
One billion dollars might not buy much, and surely, they will need to have a specific alternative plan -- a la Nexstar/The CW -- to transform that business into one that has a more savvy digital media or streaming spin.
Those most likely would be media businesses that have been tiptoeing into those areas already, but with limited success or opportunity.
It could be second- or third-tier TV station groups lacking a general digital direction. That means companies that continue to target older demographics via their TV station outlets that might be unable to fully make the leap for those viewers/customers -- perhaps younger -- who have fully moved on to the streaming and digital world.
Particular less-viewed cable networks might be a consideration.
Think of what happened when some flagging print businesses -- magazines and newspapers -- were behind in their efforts to transform into digital media over the last decade or so. That may be a clue to what happens next in the media/TV business.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Wayne, the key selling point for "legacy" TV stations, networks and cable channels is that they are profitable ventures in most cases---often very profitable---while the other content distribution option---streaming--- often is not profitable at the outset and may take many years to become so if at all. This is due largely to the different business models employed with streaming services seemingly determined to spend themselves into the red trying to woo declining numbers of add-on subscribers with over priced, high risk, "original content". There isn't enough viewing---about two hours per person per day---not five, which is the overall "TV" norm, to sustain all of the streaming services that are competing for audiences---and revenue. Is going free the answer? Maybe, but you need a lot of ad dollars to make this work for every player. Is the money going to be there?
As for the "mini" broadcast TV network, The CW, I wish Nexstar the best outcome, and it makes sense to shift to cheaper programming. But The CW, which was once the only broadcast TV network with a strong younger audience slant had already lost much of its youthful appeal as program spending was reduced. Under Nexstar it will probably wind up as a network with a median age of about 60 years for its viewers---just like the major broadcst nets---- if it goes in for news, reality fare, etc. and that may be a problem where ad revenues are concerned. What's the unique ad selling proposition?