No Olympics, no midterm elections, and an economy no one feels great about. It all makes for a miserable 2011 for stations, right?
Not so fast. Despite all the reports of a major hangover after the bubbly 2010, the tea leaves say 2011 won’t be all that bad. Conventional wisdom among analysts and industry insiders is that, taking 2010’s gaudy political monies out of the equation, 2011 looks to be up in the single digits for stations year over year.
Indeed, after 2010’s headiness and 2009’s heinousness, 2011 should fall somewhere in the safe middle. A number of factors—including auto sales, Oprah Winfrey’s departure from broadcast TV and stations transmitting their signals on mobile devices—will drive the needle one way or the other.
All eyes are on the automotive category, which had a robust rebound in 2010. Steve Lanzano, president/CEO of TVB, says forecasts show vehicle sales might be up around 10% in 2011, which means a sanguine marketing campaign on TV. And with Chrysler and GM eager to show the buying public their reorganizations are in the rear-view mirror, that should spell a healthy influx of auto ads on television.
“Chrysler and GM are motivated to make a good impression,” says Michael Alcamo, president of investment bank M.C. Alcamo. “I think they’re going to be very strong.”
And while 2012 looks to be another record year for political spending, 2011 might see some healthy issues cash coming through the pipeline. The Republicans’ gains in Congress and a range of issues dominating the front pages—from the tax-cut extension law to GOP plans to repeal the healthcare overhaul—could make 2011 surprisingly lively in terms of political cash. “There are a lot of issues that should get a lot of play,” says Lanzano.
Some are saying 2011 will be the year when mobile DTV, currently in test by a number of stations in Washington, D.C., and deployed in select other markets, moves closer to mainstream adoption. Local TV insiders are banking on stations’ content getting a big boost in value when mobile DTV starts hitting users’ smartphones in real time.
Steve Ridge, president of television at Frank N. Magid, says the bond between users and pertinent local content is growing. “Advertisers, who have been enamored with other platforms, cannot ignore the uniqueness of this high viewer engagement local content for their messaging,” Ridge says. “Broadcasters must act quickly, however, to leverage this enormous brand strength and seize control of the mobile content platform, or it will slip away, as the Web opportunity largely already has.”
After a quiet year for station M&A, in which a $30 million pair of ABCowned outlets in depressed Midwestern markets represented a blockbuster deal, 2011 may be the year when sellers and buyers fi nally see station values in the same ballpark. Either that, or would-be sellers may simply tire of waiting for their assets’ values to climb back to some semblance of their prerecession selves. “We need a big sale, so people can figure out what the going multiples are,” says Mark Antonitis, principal at consultancy CJ&N. “I’d be surprised to see the year go by without someone selling or acquiring a decent midsized, or larger, station.”
The new year also represents the one in which Winfrey will move her act to cable full time. While her impact on the station business can’t be underestimated, many are happy to get out from under the show’s onerous license fees—and control more of their own destiny with local programming. The CEOs at Raycom and Scripps, to name a few, have been vocal about their plans to slot homegrown shows in for syndicated giants such as Oprah, Wheel of Fortune and Dr. Phil.
Unemployment and depressed housing values will keep consumer spending in check in 2011. But the emergence of local television’s digital platforms, including increased HD offerings and multicast channels, coupled with the revenue-maximizing inventory exchanges that are growing among networks and their affiliates, have TV stations poised for a presentable, or better, 2011.
“Everything you hear is local, local, local,” says TVB’s Lanzano. “I think we’re well-positioned to pick up that local money.”
E-mail comments to mmalone@nbmedia.com and follow him on Twitter: @StationBiz
