TV stations join digital gold rush
The explosion of demand for video production is creating a new business for an unlikely source: local TV stations.
Broadcasters such as Gannett spinoff company Tegna, Sinclair Broadcasting, Tribune and the station division of Disney’s ABC are now creating shows specifically for Facebook and YouTube. The shows include “More in Common,” a weekly reality show from ABC’s station group for Facebook Watch, and Tegna’s morning talk show “Daily Blast Live” which streams both on YouTube and Facebook Watch simultaneously. Facebook is paying for some of these shows, such as “More in Common,” while others are financed by the station owners themselves.
THE TAKEAWAY
• Local broadcasters are making more digital shows
• Digital advertising is still only a small portion of broadcast revenue
• Gannett spinoff Tegna and ABC station group among producers
Plenty of media companies are making video shows for Facebook Watch, of course, including major networks like CNN, Fox News and Univision. But the efforts by local station groups are particularly noteworthy. Station groups typically don’t create much of their own programming, other than news broadcasts, because they usually fill their airwaves with programs made by other companies like game shows or big networks. By making the shows for internet services, the stations are taking a step into building their own digital business. That helps them capture both viewers and ad dollars shifting to digital. In the case of ABC, its station group even has a digital brand, Localish, which makes “More in Common,” a weekly show that brings together people from different backgrounds.
There’s also a side benefit for their traditional business: some of the shows appear later on the stations.
Whether the broadcasters can make money remains the big question. Tegna, which owns 47 local television stations and two radio stations across the country, says that each month it reaches an audience of 50 million on air but another 30 million digitally. Yet the digital audience is not nearly as lucrative for Tegna as the traditional broadcast audience.
The companies are relying on ad revenue but online ads fetch far less money than broadcast TV commercials. In 2017, even aided by the launch of a live daily digital program, only 10% of Tegna’s revenue came from online advertising, compared to 52% for television advertising, according to company disclosures.
And viewership for online video varies widely. “More in Common” recorded 5.7 million views for one episode that showcased an unlikely friendship between a former neo-Nazi and a Syrian refugee. But of the other 11 episodes that have aired, average viewership is just under 400,000 per episode. Tegna declined to say how many viewers the show has on its television stations; it has 68,000 followers on Facebook.
Still, digital programs allow broadcasters a chance to reach some of the viewers who primarily use streaming services such as Netflix to watch television. Women ages 18 to 34 are twice as likely to watch streaming services such as Netflix and Hulu during the day as are women ages 35 to 54, 46% vs. 21%, according to a study conducted by Magid, a New York–based research company. The younger group is also three times less likely to watch local television, 5% vs. 15%, Magid says.
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