Challenges to the broadcast industry abound. New players on the block, ranging from You Tube to Hulu to Netflix, Amazon, Yahoo and AOL are stretching their wings in the television area. Netflix has made the biggest splash so far with Emmy Award winning shows like House of Cards and Orange is the New Black. How is the viewership and revenue of TV stations going to be affected in the future?
According to Pew Research, local TV stations forecasted $19.1 billion in revenue in 2013. Online advertising for these markets, according to the TVB, would generate $2.9 billion. These revenues are growing at an estimated rate of 23%. Getting to connect with the evolving technologies in an efficient way at the National Association of Broadcasters (NAB) is so important to broadcast managers, who are interested in expending their audience engagement and growing their revenues in the future. Much of that revenue is tied to digital and mobile TV connections for local news.
At the same time, cable and satellite providers, who pay significant retransmission fees to broadcasters today, are losing subscribers to these broadband TV providers (OTT). Broadcast stations, are more challenged every day to prove their relevance to their local audiences. Upstarts like Aereo are providing local TV stations to subscribers without compensating stations for their programming. How are broadcast stations going to fight back?
There was a time when the NAB was primarily a hardware show that brought television technology to broadcast companies. It was not a place where programmers, content providers, social media companies or OTT companies flocked to show their wares.
This is no longer true. SPROCKIT, the creation of Washington DC lawyer, Harry Glazer, in partnership with the NAB brought 27 innovative technology companies to the annual show in Las Vegas and created a bond connecting start-ups and established television companies. Harry explained why SPROCKIT is relevant for the industry: “It’s hard for these companies to find each other out there in the work-a-day world. Here at SPROCKIT, we bring together game-changing start-ups with the broadcast industry, making the connections efficient for both.”
Kevin Cuddihy, President of Univision Television, added his perspective, “The ability for companies like Univision to be able to get in front of young start-up companies with products and funding, and the chance to talk to them about finding relief for us where we have pain in these broadcast transitions is a great opportunity.”
This year, 27 entrepreneurs brought their solutions to the floor of the NAB, to help station owners to get in the expanded media game. These companies fell basically into four categories: 1) changing the way we create content, 2) changing the way we manage content, 3) impacting the confluence of content and commerce, and 4) changing content distribution and consumption.
One company in the distribution and consumption category that got enormous amount of attention was Webtuner, who’s Co-Founder and CEO, Bernee Strom, is an experienced hardware and software provider in the industry. Webtuner brings broadband to TV with its next generation hardware and innovative content guide. Six years in research and development, Webtuner makes the integration of broadband television seamless with current broadcast and cable networks. Their new seven button remote control replaces today’s models with 30 or more buttons in a remote that is intuitive to use and provides all the functions users want, whether live or recorded TV, of any source of programming from the internet.
Another early stage company impacting content and commerce is Clypd, a company bringing programmatic (computer generated) advertising to the stations and putting it under their control. Programmatic advertising is controversial today at advertising agencies and among networks that sell advertising to them. Programmatic buying is in the hands of the advertisers and the agencies, and is driving concern among networks and stations as they see it as a way to drive pricing down. Clypd puts the inventory from networks and stations in the hands of the sellers, offering them more control over inventory and pricing they are willing to accept. Doug Hurd, a Co-founder of Clypd, found being at the NAB enormously productive for his company. He said, “Being there gave us a chance to be part of the buzz created in the SPROCKIT booth with so many other innovative companies and the sponsor companies, who were exactly the people we wanted to see.”
Some companies are helping broadcasters and cable companies deliver their programming to subscribers on their phones and tablets. One company doing that is Panthera. It has software to extend the delivery system for all programming for consumer convenience. Panthera is already demonstrating this service for Comcast Xfinity subscribers, who can take their programming with them on tablet and smart phones wherever they go. This is also something crucial for local broadcasters for keeping their viewers connected.
Social News Desk is a company trying to make it easy for local news operations to facilitate video across all video screens. Founder Kim Wilson leads a team of women who managed local news operations at TV stations and know full well the challenge it is for news teams to move their content from TV to online and mobile. That is why they created an automated system that can help news teams accomplish their goal of feeding all channels and social media sites with content. According to Kim, they have created a social media management tool for news people so broadcasters can increase social engagement and monetize it from a single dashboard.
Kevin Cuddihy summed up the experience he had meeting with so many entrepreneurs in one place at the NAB. He commented, “We had a number of one-on-one conversations. I plan to bring the companies to our corporate headquarters in New York. We look for a year long association with them.” Now that’s the human capital connection both the entrepreneurs and the companies are searching for.
For a full list of the 27 company SPROCKIT attendees click here.