Editor’s Corner—A bull’s view of broadcast TV from NAB Show New York

NAB Show New York was held Oct. 18-19 at the Javits Center in Manhattan.
Ben Munson

Broadcast television tends to be painted as a lumbering dinosaur enjoying its last days on Earth before the asteroid hits, particularly when viewed next to sleek SVODs. But the reality is that tipping point technologies like automated advertising and virtual MVPDs are bringing new life to an old medium.

That was the word on the street at NAB Show New York. Of course, whenever there’s a convention center full of broadcasters, things should be fairly pro-broadcasting. But media analyst Michael Nathanson promised that he was bullish on broadcast TV, and not just because he happened to be speaking at an NAB show.

During his brief talk at the TV2020 Conference held within the NAB Show, Nathanson said broadcast C3 GRPs among adults 18-49 have held remarkably steady over the past five years, particularly for genres like sports and news.

It’s true that ratings fluctuate and ad revenues can come under pressure as a result. In a research note last week, Nathanson said sagging third-quarter ratings will impact the national TV ad market.

“Despite easy compares for those networks that didn’t air Olympics or Presidential coverage last year, 3Q C3 ratings were still mostly disappointing. Given that pressure and a tepid scatter market, we believe national ad growth will be negative for the third consecutive quarter,” Nathanson wrote.

Broadcasters are eyeing new tech like automated and programmatic buying as a means to address national advertising.

“National has not been a growth area forever,” Tegna CEO Dave Lougee said, pointing toward automation as a means of removing friction from the media planning process. But he said there are a lot of players in the ecosystem, so “it hasn’t progressed as fast as we thought it would. But we think those icebergs will start to move.”

“I do see a groundswell this year in terms of wanting to get it solved,” added Sinclair CEO Chris Ripley, who wants to get to a point where a 25-year-old can handle all the buying and selling with a push of a button.

Virtual MVPDs

Nathanson also noted that broadcast television is in a unique position to retain or grow subscribers amid the scourge of cord cutting, since virtual MVPDs are overwhelmingly leaning toward broadcast content. He said $35 bundles from DirecTV Now, YouTube TV, Hulu and other vMVPDs are very aggressively priced, and they’re designed to stabilize subscriber growth for broadcasters and their affiliated cable networks. He said that’s coming at the cost of big cable programmers with long tails.

Lougee and Jordan Wertlieb, president of Hearst Television, both said that inclusion of broadcast channels has kick-started skinny bundle adoption and that broadcast can continue to thrive as pay TV and cable programmers struggle because broadcast has wide distribution on its side.

“We have 100% distribution, when none of our competitors in the cable or broadband industry do,” Wertlieb said.

“Declines in cable subscriptions are happening and accelerating, and over the air (is growing),” Lougee said. “We’re going to be the belle of the ball in terms of distribution.”

Still, Nathanson said the media landscape has become skewed. FANG (Facebook, Amazon, Netflix and Google) stocks added $438 billion in market cap to date this year, while all other media companies have lost $24 billion. And he said it can be hard to compete when companies like Netflix can spend at will with little regard for ROI and the market rewards them for subscriber growth.

But there seemed to be plenty of reasons to be optimistic about broadcast TV amid an NAB Show New York that, in its second official year under that branding, moved out of the Javits Center basement and let its sizable crowd bask in the sunshine under the Crystal Palace. — Ben | @fiercebrdcstng