Television
What the year holds for broadcast TV
By Diego Vasquez
Jan 13, 2009 - 1:10:26 AM

Media people are hoping that the big story of 2008 does not also become the big story in 2009. The writers’ strike, which ended nearly a year ago, had far-reaching effects on the spring and fall television seasons, with a good chunk of broadcast viewers leaving and not returning as ratings declined for nearly every network. Now, with the Screen Actors Guild threatening a similar strike in the months to come, media people are hoping to avoid a repeat of this time last year, when the schedule was defined by a dearth of scripted programming and a glut of repeats and second-tier reality shows. The strike also curtailed the development season, which resulted in just one bona fide new hit this fall amid a slew of misses. An actors strike might not be quite as crippling, as one union, the much-smaller American Federation of Television and Radio Artists, has already settled with producers and so members would be available to work on new pilots. Still, any potential disruption would be problematic for television, which, like other media, is facing an ad slowdown amidst a greater U.S. economic recession. Steve Lanzano, chief operating officer at global media agency MPG, talks to Media Life about the coming year in television. This is the fifth in a series of 2009 previews with experts in different fields of media.

 
What was the biggest story in TV in 2008?
 
I would say probably two or three are related to one another, and one was a big one. I’d say the continued lack of content that’s bringing in viewers right now, and I’d say a lot of that had to do with the writers’ strike. The networks still haven’t come up with the kind of content viewers are looking for.
 
And then of course on top of that it’s the recession. It really hit in mid-year ‘08 and affected budgets in fourth quarter and looking forward. So I think that’s probably the biggest things that were out there.

What is the single most important thing for media buyers and planners to know about TV right now?
 
I think the one thing is, is TV really a mass media anymore? The average ratings for shows when I first came in this business over 25 years ago, we weren’t allowed to buy shows that had today’s kinds of ratings. A hit show does a 4.0 now.

What is mass media anymore? You still have the Oscars and the Super Bowl, but TV is becoming so fragmented, and as ratings for broadcast get closer to those on cable, whether TV is a mass media anymore is a valid question.

How will the recession affect television?
 
I think we’ll really know better in the coming weeks when we see what happens with second-quarter options. First quarter was down but it wasn’t a complete collapse.

But the fallout in second and third quarter will be really interesting. So I think we’ll learn a lot in the next couple weeks.
 

What are three trends to watch for in 2009 in TV?
 
As for short-term trends, I think the first thing--I’m not sure if it’s a trend or not--but if there’s a SAG strike, how that would affect TV. We all have to keep an eye on that, and within that organization there’s a lot of contentiousness. But that clearly would have a devastating affect.
 
Secondly, the analog-to-digital transition, how smooth is that going to go?

I saw the other day they don’t have any more money to send out coupons for converter boxes, and they don’t know if anyone will redeem the ones they’ve sent. I think there was an expectation that a lot of those households that still have over-the-air signals would move to cable or satellite, but it doesn’t seem that’s happening.
 
In terms of trends, one is the use of DVRs. I think you’ll see greater and greater use. People are time-shifting and skipping commercials, and I don’t think we’ve come up with the advertising application for it yet. People are time-shifting and so how are marketers going to circumvent that?
 

What will be the single biggest change in the industry over the next few years?
 
I think there’s a couple things, mobile TV being one.

One that’s also very interesting is internet-enabled TVs. You’re already seeing Netflix doing work with [electronics company] LG, where you can go online and take movie content and put it on your TV. 

Internet-enabled TV will really start time-shifting. I don’t have to watch “The Office” tonight, I can watch it whenever I want to.
 
That creates a whole new dynamic in terms of monetization, so will networks become like cable networks? What does it do to the affiliate business? This is probably three or four years down the road, but as there are more options it could be a real game-changer. That, again, drives some interesting advertising applications, behavioral targeting, etc., that all ties into it.

Internet-enabled equipment, whether it’s TVs or mobile, will have a big effect.
 

How is new technology influencing TV?
 
I think it’s allowing you to truly watch when you want it, where you want it, if you want it, and it’s coming to a point of, will you pay for it? People are willing to accept advertising if they don’t have to pay for it; the question is what type of advertising will work in those type of environments.

Again, it creates a whole new monetization. Do I want to pay a dollar for no commercials? Or will I watch ads if I get the program for free? It’s quite fascinating, and it’s coming faster than we expect.
 

Will the broadcast networks finally begin to distance themselves from the writers' strike this year?
 
I hope so, we all hope so. I think everybody is hopeful. Consumers want new and different programming, and on the marketing side we need the inventory. If we can’t find people, we’re out of business.
 
The networks are trying some different things, such as NBC with Leno, and trying to find ways to get people to watch shows, but at a production cost they can live with. So I think they’ll experiment with things and we’ll see what hits and what misses. It’s kind of simple, but great writing and good content, people will come and watch that.

How would a SAG strike influence the TV industry?
 
I think it would be devastating. We saw what the last strike did with the lack of programming and anything in the pipeline. I don’t think anyone would win. So I think at all costs it can’t happen.

What do you see as potential growth areas for cable this year?
 
I think you’ll see continued original programming, that’ll be the one area of greater growth.
 
Outside of the networks, operators have to find advertising revenue. Addressable TV and interactive TV, they will push hard to get that to critical mass. I think they understand they have to make advertising a strong second revenue stream beyond subscriber revenue. So hopefully they’ll get much more active with putting that in place.

NBC has already announced some big changes with the Leno move and last year's year-round programming move. What is media people's impression of the network after several high-profile series flops last fall?
 
They really need to get content and they’re keeping their fingers crossed with Leno to see if it can work. If Leno keeps his late night ratings and they get primetime dollars for it, it will be a win.

But it gets back to good and original programming. If the Leno thing doesn’t work, it won’t be a good thing, so they will still have to go out and find and produce good programming.
 

Why has CBS held up so well this year while the other broadcasters have struggled?
 
You know, I think they’ve got solid programs, and they’ve been able to build some of them out into greater franchises like with “CSI.” And it’s just good, solid writing and good solid programming that’s been able to maintain their audience. It really is that simple. They’ve also been able to reduce the age of their viewer, which bodes very well for them.

Will "American Idol" be as dominant as ever when it returns tonight?
 
That’s great question. It was a very slight fall last year, but if you look at the life cycle of shows, what “Idol” has done is phenomenal, they’ve created a global brand. You would think it would start getting tired, but I don’t know, it just seems to go on and on.

It is programming that, across all age groups, people want to watch. It’s family programming, but it’s also a great brand.

So we’ll see. I’m hesitant to say this is the year you’ll see some softening, it’s been fascinating to me.