TVNewsCheck

Speakers at the recent Investigative Reporters & Editors conference say that 76% of local broadcasters partner with other news outlets, and it behooves TV reporters to maximize the potential -- and benefits -- of those collaborations, whether they like it or not.

And the same goes for collaborating with their own digital teams. There should no longer be a division between on-air and digital departments.

At the same time the Federal Communications Commission axes its syndicated exclusivity and network non-duplication rules, it also should bar broadcasters from inking other kinds of contracts that could prevent cable operators from importing distant-market signals, say Cablevision Systems and Charter Communications in a joint filing at the FCC.

In addition, the two cable operators want the FCC to require broadcasters to offer “reasonable ” and “nondiscriminatory” retransmission consent rates to pay TV operators, “not tied to carriage of any other programming service or other non-cash compensation,” according to their June 26 FCC filing.

“These steps, which fall squarely within the commission’s authority, would reintroduce some equality of bargaining that has long been absent and avoid much of the consumer harm currently caused by retransmission-consent negotiations,” the cable operators added.

[Commentary] The way I see it, in closing the door on Aereo, the Supreme Court opened wide the door for the video distribution of broadcast signals by settling the question of whether online video distributors are cable systems.

Clearly, they are, the court says. So, in effect, an online video distributor that wants to carry a broadcast signal no longer has to worry about clearing copyrights of individual rights holders, including the rapacious sports leagues. It only has to get permission from the broadcasters.

The Federal Communications Commission has released key technical data that the agency used to predict that TV stations may face little new interference after they are repacked into new channel assignments in the wake of the agency’s incentive auction in 2015.

The FCC has said that agency repacking simulations had shown that only about 1% of stations are expected to receive more than 1 percent additional interference, with none receiving more than 2%, after TV stations are repacked into new channel assignments after the incentive auctions.

The National Association of Broadcasters asked that the FCC release the 100 repacking scenarios that the FCC had based its findings on, hoping to test the agency’s results. Said NAB EVP Rick Kaplan, in response to the FCC’s data dump: “We are thankful the FCC responded positively to our request. This information should prove to be very useful and will allow NAB and others assist the FCC in the very complex repacking process.”

Fox Television Stations said that it will expand its local news offerings in eight markets: Los Angeles; Philadelphia; Washington; Minneapolis; Phoenix; Charlotte (NC); Memphis; and Austin, Texas.

With the additions, which total 29½ hours, FTS will broadcast 885 hours of local news per week.

The Federal Communications Commission has hired an investment banking firm to help develop educational material to use to persuade broadcasters to participate in the agency’s incentive auction in 2015, clearing the way for the agency to beef up its station outreach efforts later this summer, according to an agency official.

The banking firm tapped, according to the FCC official, is New York-based Greenhill & Co. Greenhill’s key assignment will be to put together a “book” that explains why participating in the auction might be in a broadcaster’s interest, the FCC official says.

The book will be a “central part” of the outreach, which will have both “one-to-one and one-to-many” components, the official adds.

The FCC decided to seek outside help for the outreach because the financial analysis that broadcasters will need to use to decide whether to cash out of the TV business during the auction is complicated, the official says. “There’s a lot of money involved,” the FCC official adds. “We are hopeful broadcasters are taking a closer look at the opportunities.”

[Commentary] One of the lessons that I have learned along the way is that you never really know what's going to happen when Congress or the Federal Communications Commission begins fiddling around with the laws and regulations that govern the TV business.

My favorite example is retransmission consent. Congress created the right in 1992 to strengthen local broadcasting. But what retransmission consent did was strengthen cable as multimedia companies like NBC, Fox, Hearst and Scripps used it to secure cable carriage for cable networks that siphoned off broadcast viewers in ever larger numbers. It wasn't until pure-play broadcasters like Nexstar and Sinclair began demanding payments in the mid-2000s that retransmission consent began fulfilling its original purpose.

If Sinclair's response is the most surprising, Nexstar's is the most significant. Its deal with Marshall could set a precedent under which other minorities could team up with established broadcasters and actually bring some new voices into local TV. In announcing the deal, Marshall talked about a "new paradigm."

The Nexstar-Marshall deal is basically something I had proposed recently when it seemed likely that the FCC would move against JSAs and SSAs. It's a potential win-win. The broadcasters get to amortize costs and enjoy extra revenue from close partnerships with other stations in markets and the FCC gets want it has long claimed it has wanted -- diversity of ownership.

The FCC will closely scrutinize the deal and it should. Even the National Association of Black Owned Broadcasters has raised serious questions aimed at making sure that Marshall maintains its editorial independence.

The National Association of Black Owned Broadcasters has asked the Federal Communications Commission to approve joint sales agreement waivers that would clear the way for Nexstar Broadcasting Group’s $58.5 million proposed sale of three Fox affiliates to minority-owned Marshall Broadcasting Group.

But in its June 18 filing at the FCC, NABOB also said the agency should require Nexstar and the newly formed MBG to answer additional questions about their proposed deal. Also, according to the filing, NABOB wants the FCC to subject approval of the deal to annual reporting requirements.

Among the additional questions that NABOB wants answered are whether the parties have a plan in place for the brokered stations to develop their own sales forces during the terms of the JSAs, and how payments to the brokering stations will affect the brokered stations.

A Q&A with Roku CEO Anthony Wood Hastings. If Netflix CEO Reed Hastings is the star of the Internet video-streaming phenomenon, then Roku CEO Anthony Wood is the best supporting actor.

Wood shares his views on the convergence of Internet video and television. “To me, it's pretty clear that all TV is going to be streamed. It's either going to be streamed to a smart TV, a gaming console or a streaming player,” he said. “Where it will end up? I am not sure. I do believe people are watching more TV than ever and they have options.”

[Commentary] There is a new way of looking at spot that strips out the up-down effect of political advertising that makes broadcasting look to casual investors as volatile as a penny stock for a South American mining company.

Mark Fratrik, the chief economist at BIA/Kelsey, continuously averages spot growth (or decline) over four years. By doing so, he explained, "the impact of two election years (one presidential) and two non-election years are incorporated" in any review or forecast.

So, what did Fratrik's arithmetic reveal? Basically, that spot is growing at a 3% or 4% clip and will continue at that pace for at least the next several years. If Fratrik is correct, spot revenue is bumping along at about the same rate as real GDP plus inflation. That's not terrible, but that's not great either. That's certainly not the kind of growth that broadcasters expected in the good old days and it's not the kind of growth that will attract outside investors or cause a spike in station values. According to SNL Kagan, the TV station trading multiple has been stuck between 7 and 8 for the past few years now.

SNL Kagan’s spot forecast is even stingier than Fratrik's, mostly because it does not see much growth in local spot. Between 2014 and 2018, it says, local will grow just 6.5%. With the slow-motion collapse of newspaper publishing, most broadcasters think local will grow much faster than that. But broadcasting is no longer dependent on the single revenue stream. Over the past decade or so, it has been able to develop two other important streams -- retransmission consent fees and digital media. Retrans is more than a mere stream now. According to SNL Kagan, it has grown from $200 million in 2006 to $3.3 billion in 2013. In 2014, according to the research firm's forecasters, it will jump 30% to $4.3 billion and from there another 76% to $7.6 billion in 2019.

Digital is a trickle by comparison. Even in 2018, Fratrik says, it will still constitute only 5% of the industry revenue, although broadcasters more attuned to exploiting new media will do much better than that average. But what digital lacks in share of revenue, it makes up with in growth. Fratrik says that it will grow 10% to 12% a year for the next four or five years. In a perfect world, I would note, that would be the growth rate of spot.