National networks are distributing TV online to increase consumer touch points, but what does that mean for network affiliates?
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You don't need a TV to get TV. Networks have begun streaming their shows over the Internet, in some cases mere hours after they're broadcast on television.
The trend has some in the industry feeling nervous. Local network affiliates, who carry network content, now face direct competition from the online arms of the networks themselves. Although no one has yet shown any impact on affiliates from Internet-streamed content, conflict over repurposed broadcast material is already brewing at the industry level: The Writers Guild of America has threatened to strike over profits from newer media, including the Internet, cell phones, and iPods.
Despite fears of the Internet option eating into TV viewership, viewing remains at record highs, according to Nielsen Media Research. The average American household watched about 8.25 hours of TV per day, level with last year. But as Internet streaming increases the networks' viewer touch points and as viewers enjoy the convenience of on-demand shows, some local affiliates worry about their business model.
"There was a little bit of concern, like, 'Oh my God, are they trying to get around the affiliates?' " admits John Baldwin, creative services director at WGAL, an NBC affiliate in Lancaster, Pa. But with overall ratings still high -- despite declines in individual shows across the board -- and advertisers displaying no signs of pulling out, many affiliates are staying positive.
TV continues to be integral to personal entertainment. Having the communal experience of watching a show at the time of broadcast still has the so-called "watercooler effect." "There's nothing better than watching The Office last night and being able to come in [to work] and say, 'Did you see that? Wasn't that funny?' and talk about it," Baldwin says. Still, Baldwin says he enjoys knowing that if he does happen to miss his favorite shows, they will be waiting for him online.
Some are less excited about the TV-Internet relationship. "Any rebroadcast of the show, we feel, takes away from the potential audience. We don't benefit from any of the [online] rebroadcast," says Hank Ingham, general sales manager at KIEM, an NBC affiliate in California. And yet, rather than stealing TV's viewers, Ingham says, the Web only fortifies audience loyalty. "The Internet offers additional opportunities for nonviewers to sample network shows," he says. "Once they've been hooked, they'll tune in to broadcast."
NBC affiliates have yet to benefit from their network's Web efforts, but ABC has given affiliates online recognition with geotargeting. "You see our logo on top, so we're getting some credit for [the streaming] as well," says David Caldwell, creative services director at KTXS, a cobranded Texas affiliate of both ABC and The CW.
Local advertisers (and niche marketers) have a vested interest: As the Web became a distribution channel, networks kept the ad-based model that dates back to TV's earliest days, with 15- or 30-second spots before, during, or after the streams. But those ads have been for national brands, not the local dealerships and professionals that affiliates have traditionally catered to through broadcast television.
Microtargeting online may allow networks to supplant the local affiliates as middlemen for smaller advertisers. But some affiliates remain confident that there will always be a place for TV, KIEM's Ingham says -- even local TV. "The Internet won't replace broadcast, just like television didn't replace radio. They will co-exist."
Despite the competition, most stations are still hoping that Internet streams continue to trail behind TV broadcasts. Otherwise, Caldwell asks, "What would be the need for a [local] TV station, other than the local news?" He adds that if all network content were available via the Web, it would be very difficult for local stations to survive. "I don't know what we would do," he says.
Advertising Week NY '08: While television attracted the most viewers during the Olympics, the CEO of NBC Universal gives online media medals of its own.
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