The revolutionary changes underway in the television and video industry have never been more promising, and yet at the same time more challenging for marketers, media buyers and sellers. The whole ecosystem is becoming out-of-balance, fragmenting into countless untested media brands and their models, across consumer devices, and absorbing the dual phenomenon of cord-cutting and the rapid expansion of subscription-funded, ad-free and reduced-ad platforms.
As always, predictions for how all this will eventually settle include forecasts for the death of traditional linear broadcast television and its legacy models based on local affiliate distribution. Yet such predictions always fail to recognize the strengths in these models, the combined forces of the many thousands of station businesses involved, the deep roots and trust each has forged within the communities they serve, and their nimble and advantageous capability to adapt to change.
So, what if the future was reimagined, with local television becoming even more important? It’s easy if you try. First, don’t underestimate the value of local stations. Locally driven programming and services make the most relevant connections with consumers. In the early days, it was network programming that brought viewers to their local station affiliates, but for many decades now that’s been switched, and instead it’s local news, local sports, local services and information that retain audiences to sample and then commit to watching the network programming on their stations, and a foundational reason why local broadcast stations out-perform national cable networks in all respective markets. Second, as the phenomenon of cord-cutting and cord shaving grows, directly motivated by consumers’ purpose to save money, local broadcast TV will continue to be a free complement to over-the-top paid alternatives. If not already, local broadcast will soon become the most effective and efficient means to reach cord-cutters with traditional thirty and sixty second commercials. Next, consider the scale: today, fifty-five percent of all linear broadcast television commercial time is local, owned by the stations to sell. Add to that, two minutes of commercial time per hour on every cable network is local inventory, not national.
But without question, the most intriguing aspect for the future of local broadcast television is the roll-out of ATSC 3.0, projected to begin in 2020 and accelerate over the next 5 years. These next generation TV signals will be stronger and will transmit over greater distances, deeper into buildings, uninterrupted on devices in motion. Consumers can expect to watch broadcast TV at home, on a tablet, or in the rear seat of a moving car with a better signal than you get in your living room today. ATSC 3.0 is an Internet Protocol (IP) based system, which means it can carry internet content alongside the traditional over-the-air broadcast signal, yielding never-before available services and interactive features. By combining over-the-air with an internet connection, broadcasters and advertisers will now have the ability to collect data and target advertisements, multiple ads can be carried simultaneously, and the ad shown on a particular TV can be controlled based on location, demographics, what program is being viewed, or any IP address assigned database.
It's understandable that many in the industry remain skeptical about the speed and scale of the ATSC 3.0 roll-out, since it does require investment by stations to upgrade their antennas and equipment, and unlike the 2009 conversion from analog to digital, this upgrade is not federally mandated. But again, it’s important to not underestimate the collective power of local stations or their unique capability to be nimble and adapt to change. Unlike any type of full-scale national testing and experimentation, which can be costly and damaging, testing ideas, conversions and technologies at the local level creates an abundance of smaller, cost-effective test and control laboratories. While most stations are taking a cautious approach to investing in the new standard, it would also be a mistake to underestimate their motivations and support for the roll-out of ATSC 3.0. As the cable and digital industries have long benefitted from having household and IP level data and targeting capabilities, broadcasters to date have largely been left out, unable to participate or even get such data on their own programs being viewed on cable set-top-boxes. This is going to change.
Change, however, happens slowly…and then suddenly all at once. When looking at the full picture, it’s very easy to reimagine a near future where local television inventory scale, relevance to consumers, and technological advances will make it much more important, not less, in the industry. Marketers will be able to do more in local breaks than ever before, reach more audiences with more scale than anywhere else, and employ data-driven, addressable advertising opportunities in the highest quality top broadcast content, live or on demand, across television screens & mobile devices. This evolution will fuel new innovations from television, device and chip manufacturers, as well as from experienced technology partners to target and aggregate audiences at the local level in order to streamline buying, selling and stewardship efficiency and performance. Those who get involved sooner and become the catalysts of these changes will be best prepared for the new television and video landscape, with local at the forefront.