Who Can Save Local Television? The Merger Main Street May Need

By most accounts, America’s local television stations are in trouble. Declining viewership, diminished advertising revenue, and devastating competition from streaming services have left local broadcasters facing a dire future, and their fate now rests with a federal court in California.

Against this backdrop, Nexstar, America’s largest television station owner, moved to acquire Tegna in a $6.2-billion merger. The deal would establish the combined company as the undisputed leader of local television and promises to serve hundreds of cities with local news, weather, emergency information, sports, and community content.

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Making TV Great Again – Better Than Ever

Television is experiencing its most consequential and captivating period of the year, a span of several weeks that began with the Golden Globe Awards, Grammy Awards, the Super Bowl – the most watched event in the world – and continues through the Winter Olympics, March Madness, the Academy Awards (Oscars), and the World Cup.

It is a time when millions of Americans and those across the globe gather in front of their TV sets for must-see communal rituals, while thousands more have spent the last few weeks seeking the best buys on big-screen TVs to upgrade their home theaters. The annual January surge in TV sales is more than a seasonal trend; it is a tangible vote of confidence from consumers who see television as the undisputed hearth of the modern home.

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TV Consolidation – A Moat Against Extinction

Broadcast television, once the unquestioned center of American life, now stands at the edge of obsolescence. What was once a cultural hearth has been pushed to the margins by streaming, cord-cutting, “cord-nevers,” and the algorithmic dominance of Big Tech. Viewers have migrated, advertisers have followed, and revenue models that once sustained thousands of stations are eroding at an accelerating pace.

The uncomfortable truth is that fragmentation has become fatal. American broadcasters, still bound by ownership rules written for another era, are ill-equipped to compete against digital behemoths that operate without limits. Unless policymakers, regulators, and industry leaders embrace consolidation, the medium that has long been free, universal, and trusted risks being reduced to a relic of a bygone era.

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Local Broadcasters Need Level Playing Field To Compete, Innovate, Serve the Public

America’s broadcasters are beacons of our democracy. Every day, they exercise their First Amendment right to report, inform, and help citizens understand the issues that affect their daily lives.

And let’s face it: This is a challenging time to be a broadcast journalist. As the truth competes with falsehoods on social media and political polarization gets the headlines, exercising our First Amendment right to inform the public and provide the facts has never been more challenging – or essential.

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American TV Is Changing for Better or Worse

The American TV market is changing before our very eyes, presenting viewers, creators, and advertisers an unprecedented degree of choice, convenience, and competition. We are witnessing a platinum age of television, where an alluring array of movies, sports, and specials is accessible on our phones, tablets, and computers, available anytime and anyplace, on demand. Though we now refer to it as “video,” at its essence it remains television, and we just cannot get enough of it.

But, for traditional TV broadcasters, these changes are both a blessing and a bane. A blessing because more people are watching more video than ever before.  A bane because more people are viewing that video through non-traditional media, which represents an evolving societal shift.

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First Amendment Still Shines During Toughest of Times

Two hundred and thirty-one years ago this week, Congress passed a collection of amendments to the U.S. Constitution, 10 of which would become the Bill of Rights.  Foremost in the Bill of Rights is the First Amendment, which allows Americans to worship how they please, speak their minds openly, and have their voices heard by their government.

Our Founding Fathers, in their infinite wisdom, also included in the First Amendment the right to a free press.  They understood that our democracy could not survive without the freedom to report the news without fear or favor.  The times may have changed; that principle has not.

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Big Media’s Now Moment

Amid the deadly coronavirus and unfolding social justice movement, America stands at a momentous crossroads.  Following the tragic death of George Floyd at the knees of the police, a multiethnic, multigenerational mass of righteous protest is demanding police reform in cities across the nation. 

Captains of industry, in response, have hedged their corporate reputations on hefty pledges to promote African-American economic equality.  In stark contrast, the president remains defiant to convention and defensive of status quo law and order.

Chronicling it all in real time for the world to see has been the mainstream media.  Broadcast and national cable, in particular, have experienced a renewed relevance and a reborn sense of mission as the justice movement gains more sweep, scale, and seriousness.  This has been especially meaningful for local TV, which needed to burnish its credentials with American viewers.  Like many in America, journalists have discovered what heretofore has been absent from countless reports of black death-by-police.  Transparency.  Equity.  Empathy.

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Broadcasting Today: Energized by Innovation

There is a saying that goes, “Everybody has a story to tell.”

My own NAB Show story began a decade ago – almost to this day, in fact – when I spoke at my first show as the new president and CEO.  On that morning, I shared the story of broadcasters’ unrelenting commitment to always be there for their communities … to inform them … and to help them.

It is a deep-rooted commitment that manifests itself in many ways that often go unnoticed – in ways that have become ingrained in everyday life for millions of Americans.

Our communities turn on the radio to find out what the weather is like before heading to work … to learn how to help their neighbors in need … or to listen to the great personalities who seem like old friends.  They turn on their televisions to watch their favorite local news anchor and to get an unbiased report of what is happening in their communities.

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Who Will Keep the Sun Shining?

The news media’s annual celebration of Sunshine Week, which takes place March 10-16, has always called to mind the importance of access to government information, transparency of public records, and the idea that the free flow of information is an essential element of “good government.”

Created by the American Society of News Editors (ASNE) in 2005, the event was timed to coincide with the March 16 birthday of Founding Father James Madison, a strong supporter of the Bill of Rights.  It has always been envisioned as a celebration of the Freedom of Information Act signed into law on July 4, 1966, which outlined mandatory disclosure provisions for federal documents and records.

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Dueling Philosophies on Minority Ownership

What happens when you invite the FCC’s two veteran commissioners to speak about the media at a Rainbow PUSH Coalition symposium?  When one of the commissioners is Michael Copps, and the other is Robert McDowell, you get two very different views of where things stand and how they could be improved, as we saw on Nov. 20.

Copps, a Democrat, is a long-time foe of large media companies.  So he uses phrases like “excessive media consolidation,” “big media run awry,” “tsunami of consolidation,” and the punchline: “Minorities have suffered greatly because of consolidation.”  

One of his proposals to “put some justice back into our ownership policies” would involve a “public interest licensing system for broadcasters.”  Copps would like the Commission to “go back to having some guidelines to make sure stations are consulting with their audiences on what kinds of programming people would like.”  But wait, I think we already have such a system.  It’s called “ratings.”

Copps also favors something called a “full file review,” which would have the Commission award certain broadcast licenses by considering an applicant’s “experiences in overcoming disadvantages,” including race and gender discrimination.  (This sounds like a lawsuit waiting to be filed, but that’s another story.)  In other words, Copps views the FCC as the referee in a fight between “big media” and the little guy, where the solution is a tight rein on ownership regulations.
    
Robert McDowell sees things differently.  For minorities to get ahead in broadcasting and other media, Republican McDowell is quite clear about what is needed: access to capital.  “An important priority for me in my three-and-a-half years on the Commission has been to help create a competitive environment that allows minority entrepreneurs and other new entrants a real opportunity to build viable communications businesses,” he told the Rainbow PUSH group.
    
McDowell noted that he enthusiastically supported the Commission’s 2007 Diversity Order, which contained nine measures to help small entrepreneurs acquire capital or use their financial resources more efficiently.  He has also called for a tax certificate program to help disadvantaged businesses.  
    
At the same time, McDowell is keenly aware of the unintended and hurtful consequences of regulations (of the sort favored by Copps) aimed at helping small, local media owners  – like a “localism” proposal to reinstate a 20-year-old rule requiring stations to be manned throughout their broadcast day (technology notwithstanding), or onerous “enhanced disclosure” requirements so complex that they could require the hiring of additional employees.   
    
In short: On the question of disadvantaged minorities, Copps sees the culprit as large media companies.  From his perspective, the FCC must be a strict regulator of media ownership.  McDowell sees the culprit as the lack of access to capital.  He would envision the FCC as a facilitator, creating policies to generate financial opportunities for entrepreneurs.
    
Whose view is more accurate and whose solution is more likely to succeed?  On both counts, my money is on McDowell.