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Shrinking newsrooms and budgets

I just returned from the Broadcast Engineering and B&C News Technology Summit, which was held in Atlanta, GA. You can read a report on the conference inside the October issue of Broadcast Engineering. The two-day event was filled with panels and experts covering a range of topics focused on news production and workflow. This year’s conference theme might be described as learning how to do more with less. For me, it was the "less" part that proved troublesome.

It’s no secret that ad sales are slow, times are tough and broadcast budgets tight. But as I moderated panels and listened to presenters, a disconcerting theme became apparent. Station news directors and engineering management are increasingly facing brick wall budgets and zero staff expansions. Yet, I heard three keynote presenters each talk of the new requirement for newsrooms to produce more content for more channels and do so without additional resources.

The new newsroom reality

The presenter who most clearly defined the issue for me was David Smith, CEO and partner with SmithGeiger research. His company is one of the premier research and consulting firms in the television industry. Smith’s clients include ABC, CNN, Warner Bros., Disney and many others. In short, this guy must know what he’s talking about.

Smith was positive, even optimistic, in his presentation. Even so, he brought with his presentation a cold dose of reality. “Your newsroom staffs are as large as they’ll ever be, and your budgets are as big as they’ll ever get,” he said. If that didn’t cause attendees to hold their breath, he had even more discouraging news.

He said current staffs are going to have to find ways to create more interesting content, do so more cost-effectively and do all of this faster. Oh, and by the way news directors, you don’t have long to make these changes.

At this point, you could have heard a pin drop. Attending news directors were unprepared for those ominous statements.

Smith said that even large markets aren’t seeing an increase in the number of news crews placed on the streets. “On a good day, even a large market may have only eight news crews on the street,” he noted.

To develop the additional news content, news directors are going to have to put more people (read that as video journalists) on the street. These people will have to be multiskilled, able to shoot, voice-over, edit and feed complete packages back to the newsroom. There simply won’t be sufficient money to run more two-three person truck crews. Smith said news directors are going to have to focus on developing more shooters and editors and operate with fewer managers.

Changing network-affiliate relationships

A key factor forcing the change in newsrooms is being driven by new relationships between local affiliates and networks. “The relationships between networks and local affiliates are breaking down,” Smith noted. Networks are increasingly building ways to bypass the local station to deliver programming. Increasingly, networks more resemble cable companies. They now have the luxury of receiving three streams of revenue: retransmission fees, online services and VOD. Even NBC Universal CEO Jeff Zucker admitted as much when he said, “We are, first and foremost, a cable-network company.” One might postulate that if he’d been a better broadcast channel manager, he could have worded the statement differently, but that’s a different issue.

The last NBC affiliate agreement ends in 2019. ABC’s agreements will end shortly thereafter. CBS is the only network that, for now, appears to still model the traditional arrangement. When those local affiliate agreements come up for negotiation, who’s going to be in the driver’s seat? Smith says that any station without a strong local presence providing good locally-generated content may find the network willing, perhaps eager, to bypass them.

Changing station programming

Smith suggests the path to success for the local broadcaster is through an emphasis on producing local news and other program content. Stations need content to which they hold all the rights. “You have to become a news network and produce local programming,” he said.

Smith predicts that within three to five years, most markets will support news operations from only a few top stations. Those stations will have to produce sufficient high-quality content to maintain their local news brand. In most cases, he says, the number of broadcast news outlets won’t exceed three or four per market. The successful stations will need to populate their content on three screens: OTA, Web and mobile. In addition, he predicts that success may even require that strong stations buy bankrupt smaller stations and then run them as zombies, programming them with their own content.

The key to success under the new model, says Smith, is to create more content and distribute it in as many places as possible. He said, “The old [business] model was to make pictures and send to televisions. The new model is to make pictures and send them to TV sets, desktops, laptops, PDAs, Web sites and mobile phones.”

New opportunities

Smith said that research indicates that seven in 10 people say they want to watch television and news on portable devices. And, teens spend twice as much time watching video on mobile devices as older adults and yet occupy only 19 percent of the mobile audience. Stations should view this as a growth opportunity.

It’s worth emphasizing that the ATSC standard supports inexpensive mobile transmission capability. A station can feed this mobile video and do so without expensive technology. However, feeding a mobile channel will require new workflows, new thinking and a commitment. But Smith said that broadcaster-supplied advertisements, combined with GPS-based advertising, could make mobile viewing highly successful for both viewers and broadcasters. Mobile could become a broadcaster’s second key income source. “Connecting to local markets,” Smith said, “Only broadcasters can effectively do that.”

Key takeaways from Smith’s presentation include:

• Your news staff is never going to be any larger than it is now.

• Your news department budget is never going to be any bigger than it is now.

• Within three to five years, as few as three to four stations will be providing branded content in most markets.

• Stations must learn to feed three screens: OTA, the Web and mobile.

• Successful news departments will generate large amounts of content, repurpose it to multiple outlets and channels — but do so with currently-sized staffs and budgets.

Sounds like a tall order to me, but Smith says broadcasters have little choice.