Local Media Disrupted. TV & Radio Screwed?


Not so long ago, small business was at the mercy of Newspaper, TV & Radio. If you needed to advertise your restaurant or a sale at your car dealership, the big media player in town played the role of Tony Soprano (or Nucky Thompson if you watch Boardwalk Empire on HBO). They were in the driver’s seat. But that’s no longer true today. Local ad & marketing budgets are up for grabs as the Internet has enabled and empowered every mom and pop in town. Yes, the deer now have guns.

Thanks to cheap and simple digital platforms, along with a growing army of online-only companies, SMBs (small & mid size business) are no longer trapped. No longer must they endure overly confident radio reps, or newspaper ad directors holding on for their pensions. Mom and pops can now take low risk chances, and move larger chunks of their ad dollars to new digital solutions arriving on the scene.

Consider the facts. Consumers now get 50% of their media from online sources. Compare this to the fact that local business still only allocates 4% of their marketing budgets to online. Imagine when local biz wakes up to this disparity. This impending tsunami of local marketing dollars to digital is why Patch, Reach Local, Google, Pandora and others are making big bets in the local space.

Can TV, Radio & Newspaper be losing its kung-fu grip on audience and advertisers? The short answer is yes. The longer answer is ‘yes but so what, they still make an awful lot of money’. Thanks to typical Q4 spikes and better than average political dollars, these types of short term windfalls obscure the growing cracks in traditional media’s revenue foundation. It also blinds managers to the growing success of digital outsiders like ReachLocal, (now in 45 markets) sucking bigger ad dollars out of the market.

Here’s a look at some recent local-media disruptions that are affecting broadcasters:
1. Journal Register Company (JRC) recently fired a shot across the bow of every Philadelphia news organization, when CEO; John Paton, announced his intention of launching a digital first news service for the nation’s 6th largest market. His plan calls for the leveraging of JRC’s suburban Philly newsrooms and their sellers, ‘cloud’ production and the hope of tapping a fiercely independent group of hyper-local content creators.

Clearly, this is a direct assault on dominant Philly news orgs like KYW News Radio and NBC Philly. It also kicks sand in the face of other market competitors like Philadelphia Media Network, Gannett and Calkins Media. While all of these companies have competence in the interactive space, traditional management still plays a far too dominant and protective role in strategic digital decisions & resource allocation. I imagine an uncomfortable meeting where NBC corporate asks their local Philly management: “why did we allow a former bankrupt company (JRC), take the lead in the Philly hyper-local news race?

2. Hyper-Local Advertising and Content. Speaking of my home base of Philadelphia, the hyper-local eco-system here features sites of every make and model. For example, PhillySportsDaily.com leaves local sports radio in the dust with its 24/7 online sports coverage & analysis. Gawker-influenced; Philebrity.com, probably assisted in the decline of our once great alt-weekly: City Paper. Smart and dominant technology coverage of ‘Philacon Valley’ by the very young team at TechnicallyPhilly.com certainly must embarrass the top brass at the legendary Philadelphia Business Journal. And if you taste-test the foodie editorial of JerseyBites.com, it’s easy to imagine that this quality of editorial eventually being licensed or sold to Food Network and Fodors.

All this content creation sounds like a fully staffed newsroom, huh? That’s why traditional media is attempting to lure these indies into some level of ‘partnership’. To date, most of these partnerships are too one-sided for my taste, with the newspaper gaining access to the blogger’s editorial coverage & readership while offering iffy sales representation and rev-share from their traditional sales force. See: KING-TV and The Seattle Times hyper-local partnership.

3. Dump your Expensive CMS. Go WordPress!   A rare moment of brilliance. The CBS broadcast division has started to dump its pricey and stale, interactive vendor offerings. The CBS move to WordPress as a content management system (CMS) should be a wake-up call to all broadcasters stuck in crappy vendor contracts.

WordPress; an open source publishing platform, has humble beginnings as a simple yet effective blogging tool. Today, WordPress is also the leading CMS that handles everything from easy creation and upkeep of Newspaper sites, to helping TV Networks with a series of specialty blogs. Some web development & digital VPs snobbishly look down their nose at WP. Understandably they’re fearful of implementing an in-expensive, yet robust and user-friendly platform where it would likely affect their employment and pay status. Nonetheless, watch for others to adopt WordPress and other free digital tools as they look to reduce interactive hard costs, while increasing ease of use, functionality and consumer value.

4. Tribune and 435 Digital It’s true. I’m still bitter over not being invited to those smoky poker games inside the Trib Tower. But before his exit, Randy Michaels was a big supporter of their 435 Digital division and we gotta love him for that. Imagine a newspaper & broadcast company getting in front of local advertisers…and NOT forcing them to buy print ads and broadcast spots. Instead, clients are given the option of digital solutions like social media management, web development and search engine optimization. This activity suggests some old school media finally willing to offer….what local advertisers want to buy.

Why do TV and Radio managers ignore or mis-play the new digital competition? Well, if your compensation is primarily tied to spot dollars and archaic rating systems, what would you do? But don’t place all the blame on middle management. It’s the broadcast CEO’s and investors that are in charge here. They set the tone. Instead of stepping up and immersing themselves in the business of digital, they sheepishly delegate all that icky digital stuff to the company web geek. Translation: ‘we hired some heavy hitter who worked at a dot com. He was recommended by someone who used to build streaming websites as a teen. Sure, this guy with the prestigious resume is burning through a lot of our cash, but our sites look really cool and traffic is building. He swears profitability is right around the corner.’

— By Mel Taylor, MelTaylorMedia.com