Culled from the headlines of the media and technology trade press by Katz’s Strategy, Analytics, and Research Team, Content Matters provides a periodic snapshot of news and issues that affect the business of creating, producing, and distributing content across TV, radio, and digital media. Here are this issue's 5 THINGS TO KNOW.

2019 Q3 Issue #2

 1   Broadcast Networks to Locast: You're No Robin Hood

A dicey legal battle is shaping up for the propriety of local broadcast signals between the nation’s major broadcasters and The Sports Fans Coalition, an organization that bills itself as a non-profit. The big four broadcast networks have filed a Federal lawsuit in the Southern District of New York to stop their Locast service from doing an end-around in providing AT&T and Dish consumers “free” access to local broadcast station signals.

Operating as a commercial interest is what felled Aereo in 2014. Locast claims to be a non-profit service, yet its inclusion in AT&T’s DIRECTV service and U-Verse set-top boxes seem to belie that standing. Indeed, a service bankrolled by large corporations with a vested interest (particularly in light of the current blackout of CBS stations for AT&T customers) is hardly a textbook definition of a non-profit.

Particularly troubling to local stations should be that this consumer usage is not necessarily being captured for measurement as Locast allegedly removes the Nielsen watermarks from the broadcasts. So even if the same commercial load is being carried, there’s no credit for viewership, resulting in advertising revenue losses for the station.

Hijacking viewership for corporate gain – even in the guise of “servicing the consumer – will have long-term and wide-ranging consequences for the industry. At least one user review of the Locast service decries the “free” aspect of Locast. Without being a “contributing member”, broadcasts are interrupted after 15 minutes with a suggestion to sign up for a $5 per month membership fee. Once the interstitial is complete, the viewer is bounced back to the program guide – not the program they’d been watching. And without a DVR-like feature, what they’ve missed, they’ve missed. This sounds less like customer service as it does user extortion. At least some of the viewer frustration will stop unfairly at the broadcaster’s doorstep.

There are some who may accept this on face value as simply another way to bolster consumer interest in local broadcast programming. In actuality, it’s co-opting intellectual property without credit to the owner. Adding a sub-par user experience is an added slap in the face to the local stations.

Catch up for more from “Broadcasters Sue Streaming Service Locast”, from Mediapost, the NAB’s support of the suit, and a consumer review of Locast.

  2   Looking Inward to Expand

Local broadcast television news has been the number one tool in the local marketer’s toolbox for quite some time. Advertisers know that on a local level, it’s as powerful as a sledgehammer in delivering a message to a tremendously loyal audience, while offering surgical precision geographically from the national perspective.

Yet we live in a media age where holding to the status quo could mean eventually becoming an afterthought.

So how do you “save” a longtime champion from extinction?

There’s a couple of guys up in Boston who could tell you without much thought. Reinvent your excellence. It’s worked pretty well for the Patriots. Why wouldn’t it work for broadcast?

Most stations have some sort of social strategy that helps to connect them to their viewers and for a two-way pipeline to breaking local news. Viewers are a great resource for content. Tapping into that is a reality that is pretty easy to jump into with both feet.

A more difficult leap to make is to reach out to a natural rival in the marketplace – the local newspapers. Print journalists and the newspapers they toil for are struggling to remain relevant in this era of digital immediacy. Partnering with those like-minded professional news-gatherers can benefit each side. Print journalists provide seasoned reporting, local stations offer a wider audience who is predisposed to video.

Like it or not, streaming services are starting to sniff around local news as well. With so many entering the marketplace, it might behoove local stations to find opportunities with some Netflix competitors such as soon-to-launch HBO Now, sports-centric Fubo TV, or even Amazon (with its vast database of consumers in every market under the sun) to get ahead of that wave.

A quick SWOT analysis would reveal two big threats looming for local broadcast: an aging constituency and the increasing encroachment of streaming. Looking for partners to address these issues head-on might just be the reinvention that Tom Brady would approve of – and keep those championship banners flying.

For a view from across the media aisle, read “To Carry On, Journalism Must Reinvent the Media Landscape,” from Editor and Publisher.

  3   Radio's Port in the Digital Storm 

Back in 2012, Hurricane Sandy crippled the Eastern Seaboard with a ferocity rarely seen in some northern markets. Media coverage was as widespread as the devastation as local news sources were on high alert to do their best to keep their communities informed. Despite their efforts, noble as they were, they often missed their mark. Not that this was under their control. The infrastructure had been damaged, eager audiences went unfulfilled because they just had no power nor cable service.

Mobile carrier service was spotty and overloaded. And once your batteries had died, recharging was often problematic.

Yet one resource remained that kept the communities tethered – over-the-air radio. Consumers would get most of their safety information as they listened for hours waiting on gas lines as shortages reigned for weeks.

Radio was a virtual lifeline.

In the years since, wireless service has improved dramatically, as has the Emergency Broadcasting System. However, radio remains the go-to resource for local emergency information. California’s wildfires are a prime example. While service has indeed improved, it is still susceptible to natural disasters. Once again, radio is the medium that proves vital to public safety. It is the first choice for communities to get important local information fast – and interruption-free.

For a look in more detail, see “The importance of commercial broadcast radio to public safety,” from Urgent Communications.

  4   Things You Should Know But Don't: TikTok

If you happen to have a child under 16, you’ve probably heard of it. If not, you should. It’s been downloaded over a billion times. Its parent company, Bytedance, has become the most valuable startup out there right now, surpassing Uber.

Should you need a ride to the airport, keep scrolling. But if you need to lip-sync a duet with a stranger for a 15-second or so video, you’ve found your outlet.

TikTok started out as before being purchased for $800 million. Since then, a hot property has caught fire. It tops Facebook, Snapchat, Instagram, and many other household names for monthly downloads, most happening since 2018.

The gist of it is this: users create their own short-form videos (either using a library of songs, effects, and sound bites or their own original source content), gain followers and collaborate with other users. Like YouTube and other user-generated content apps, all that’s really necessary is a smartphone and some creativity.

What it hasn’t done much yet is connect with mainstream media. Jimmy Fallon is the only bankable name that’s really been connected with the service so far, although that’s likely to change soon as word gets around.

Hot commodities in the digital ecosystem come and go quickly, especially with the younger users. And this one is squarely aimed at Gen-Z. As the content wars heat up with the coming wave of streaming providers, the battle for eyeballs – especially younger ones - is only going to get more intense.

TikToc may not have the long-term impact or utility of YouTube, but it has a generation’s attention. And that’s something that needs to have yours.

For a closer look at this craze, read “TikTok, Explained”, from Vox.

  5   Streaming is here. What now?

Netflix has become bigger than its core. It’s come to be the brand name for the streaming universe, having become the one-word definition for its brethren, as Kleenex, Kodak, and Xerox once did for their products. But as streaming ecosystem expands, where will the new players fall into the OTT orbit?

A recent Magid study pegged four as the operative limit a household will likely have in their streaming subscription wheelhouse. Price and content are likely to be the ultimate drivers of the subscription model. $40 appears to be around the spending limit that most households will accept for their streaming budget. So where do these other services fit in, assuming that Netflix remains a standard streaming brand (not a guarantee, as many entrants into the arena are pulling back their owned content for their own uses, surrendering the revenue generated in licensing their programming to Netflix and others).

Expect a blitz of awareness ads to come as these new service providers begin to go live and compete for their piece of the streaming pie. Most consumers haven’t heard of most of the changes to come, so it will be an uphill battle for some. Even Disney+ isn’t all that well-known among consumers.

There will be some ebb and flow as content appears and disappears from the landscape. As a new season of A HANDMAID’S TALE has been binged, consumers are likely to move on to the new season of THE MARVELOUS MRS. MAISEL on Amazon, possibly cutting ties with Hulu (at least temporarily) in the process.

Many subscribers are seeing cable as offering less fair value for their content, so streaming services will need to readjust their long-term strategy to avoid the same fate. Look for streaming to make more moves toward live sports and news to counter the likely response from cable – and broadcast.

Disney has already announced a bundle of Disney+, ESPN+ and Hulu for a combined price of $12.99 per month. The single-service cap is seen as around $15, so this may just be the first salvo in the price war that’s coming.

Value. That’s the operative word in consumers’ minds. As cable struggles to stay relevant, streaming services need to show that there’s value in their content. Otherwise, the “skinny bundle” that most cable customers have long desired will become a hard reality for those streamers that wind up close to the end of the “long tail” of streaming services.

The overwhelming amount of content available makes it unlikely to become a zero-sum game. But it will take a good value proposition for many wannabe streaming competitors to remain in the game.

For an extensive look at the streaming landscape, see Matthew Ball’s detailed piece, “Ride or Die: The Streaming Wars: Its Models, Surprises, and Remaining Opportunities”, from REVDEF.

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