Scrap The 'Plumbing,' Share Master Control

The way Sarah Foss sees it, TV stations have to get out of the plumbing business.

With revenue and margins shrinking, the president and CEO of VCI Solutions says in this interview with TVNewsCheck, broadcasters have to quit pouring so much money into master control.

Such "plumbing" is still absolutely vital, but, with today's scalable digital technology, stations no longer need their own master control, she says. They can share master control -- and the associated capital and operational costs -- with other stations.

Several station groups have already implemented centralcasting, shared or hubbed master control, among their own stations. But Foss would take it one step further. She thinks stations ought to think about sharing across company lines and outsourcing master control to third parties.

Not surprisingly, VCI has developed a product that jibes with Foss's thinking. Verity is an integrated master control and trafficking system that will allow a station to continue to operate independently or, if it chooses, begin what Foss calls "baby steps" toward getting out of the plumbing business once and for all.

An edited transcript:

Good marketers are good listeners. What are you hearing from TV broadcasters these days?

That the uncertainty that they thought would be resolved by June 2009 is not resolved. There is a lot of uncertainty turning itself into some real fear about what really is the future of broadcasting and advertising. Is it going to come back or rebound a little bit? Or, because of the declining advertising market and changing consumer habits, do business models have to change to survive?

How are you responding to that?

I actually think that this is an amazing opportunity for broadcasters to reinvent the business model because I think we have been extremely lackadaisical in embracing some of the things that technology can bring to bear from profitability and efficiency standpoints.

We still have work flows that were in place when I was in a station almost 20 years ago. The times have so radically changed -- the way that we program, the way that we sell, the way that we spend, the way that we distribute the content.

So, I really think that the broadcasters who will not only survive this economic downturn, but who will thrive in the years to come are those who have utilized technology differently and have changed how they distribute content.

Please elaborate on that. How should stations be using technology differently?

A TV station today needs to take a step back and ask what is the core. What do we do? I would say a broadcaster creates and aggregates content for geographic distribution to reach consumers in a way that is of value to advertisers.  

Well that's a fine definition of what a broadcaster is, but what should the broadcaster of today be doing differently from the broadcaster of 20 years ago? What should the new broadcaster look like?

Well, if that is the core business strategy, then all of a sudden, the need to own the operational facilities, the need to be spending millions of dollars on capital expense for distribution purposes, is no longer of any value because that's not what helps the advertiser. In fact, the core suffers because they're putting money into rebuilding the same infrastructure 1,200 times across the country.

You asked how things are changing. The LMAs [local marketing agreements] that are so in vogue, the sharing the news facilities that is so in vogue are evidence of broadcasters who get it. They recognize that they need to focus on the content that is of value to consumers and let someone else get it to them.

OK, who is that someone else going to be?

What we've seen over the past five years in some of the very forward thinking [TV station] groups is the hubbing model. You can actually focus on creating content and then share infrastructure, what I call the plumbing facilities.

The hubbing concept is critical because, again, it allows the broadcaster to focus on the content for the region. That's of value to advertisers. And the shared plumbing really is much more cost effective and delivers content in a very efficient manner.

We have so many inefficiencies in the current work flows. Hubbing is the first stop. Let's share the infrastructure, the plumbing facilities, in a local market. You focus on your news and I, as your competitor, will focus on my news, but, frankly, let's share our maintenance engineer for the transmitters, let's share master control. Digital technology is highly scalable. The more scalable the infrastructure, the more channels you can add and the more cost effective it becomes. That brings the capital expense down.

In my interview with Tony Cassara a few weeks ago, he suggested the same thing: competing stations in a market sharing master control, the plumbing as you call it.