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EXECUTIVE SESSION WITH STEVE RIDGE

Stations Need To Hang On To Spectrum

TVNewsCheck, Nov 3 2009, 8:10 AM ET

Steve Ridge advises TV broadcasters to hang on to their spectrum, seize mobile and online opportunities, reorganize as 24-hour news operations, share retransmission revenue with networks and continue to build viewer loyalty with a strong anchor desk.

That Ridge has advice to share is no surprise. For the past 26 years, he has worked at one media's preeminent research and consulting firms, Frank N. Magid Associates.

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After several years working in TV broadcasting, Ridge joined Magid in 1983 as the firm's first full-time manager of its TV consultation unit. Over time, his job expanded and he took on corporate responsibilities. Today, he is president of the Media Strategy Group and corporate executive vice president.

In this interview with TVNewsCheck Editor Harry A. Jessell, Ridge expands on his best broadcasting strategy and gives some of the thinking behind it.

An edited transcript:

So what do you make of all this fuss over the broadcast spectrum? Does it make any sense for broadcasters to give back some or all of their spectrum for a piece of the backend?

I don't think it does and I will tell you the government has put itself in an awkward spot. How realistic is it for the government to, in essence, force consumers to buy expensive new TVs and then turn around and reduce or restrict the programming options. That's kind of flawed thinking. It is not going to go down well with the population.

Local TV operators have the potential to amass a very powerful grassroots lobbying effort. TV operators have direct access to consumers in their markets and the ability to energize and motivate a huge base of opposition to a spectrum take-back. Sure, they can't outspend Google or other lobbies on Capitol Hill, but they can win the war in their own backyards where they have huge influence.

But there are broadcasters out there who are underwater who might like the chance to cash out.

It's very dangerous to think about a one-time cash-out when, in fact, over time, spectrum will continue to have value. If you own spectrum, you have the ability to either use it or lease it. Then, in many respects, it becomes an annuity. So, I would encourage people to avoid the temptation to take the one-time payout and really hedge their bets and protect their options for the future.

Do you have great hopes for some of these digital businesses that broadcasters talk about — mobile DTV and multicasting?

Mobile is a case where you can either jump in and be active and define the opportunity or where you can sit back and wait until somebody else fills the void. Eventually, mobile is going to dictate much of the new reality, and then the question is how will local broadcasters deliver unique value. Streaming video and live programming is but one piece of the larger puzzle. Transferring the loyalty of local consumers to that platform is going to require a complete rethink of what is unique.

So, I will tell you that mobile is a powerful opportunity and one that should not be overlooked. One in 10 are now watching video on a mobile device and that's really where online was four or five years ago. So, it's poised for growth and it's not a window of opportunity that broadcasters should miss if they want to reestablish themselves and really own mobile in their local markets.

What about multicasting. There are a half a dozen diginets being carried on  subchannels. Is that much of a business?

There's a lot of experimentation going on with, perhaps, not a lot of advanced planning in terms of either consumer research or prototype testing. Just putting stuff up there is really not the way to discover a niche. It's not about just throwing everything at the wall and seeing what sticks. It's about really figuring out where the niche opportunity is, establishing that and then building on it in a smart way.

Are there any diginets or multicast channels that you would consider a success?

I don't think that there are any home runs out there, but I will tell you that there is some product development going on that is definitely going to pay dividends in the next three to five years. I have little doubt about it.

When you say "product development," do you mean other networks?

Other kinds of niche products. They are in the experimentation phase right now where we're conducting tests to make sure that there's a proper audience to support it.

When will we see these "products?"

Within a year to 18 months, you will see several potentially viable alternatives that aren't currently in the marketplace.

OK, you're the consultant. You're supposed to be the guy who stands back and looks | More …

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Comments (14) - Post a comment

PhillyPhlash Nicknameposted 135 days, 5 hours, 52 minutes ago
Mr. Ridge's point about the untapped grassroots PR power of local stations is well taken. But again, there's a presumption that holding a broadcast license confers property rights to the license holder. Spectrum belongs to the public, and licensees may be left holding the bag if they presume they have the right to cash in on a broadband industry- engineered auction. Regarding Harry's question about diginets: If local broadcasters offered an all-news digichannel, such as the one available to broadcasters back in the '80s, many frugal viewers would be tempted to churn off cable. Basic cable- like digichannels such as THIS TV and Retro TV are finding an OTA audience. Many viewers still don't realize they don't need cable or satellite to get true HDTV. Maybe that explains why broadband lobbyists want to limit local broadcasting to a "lifeline" SD service. Multichannel broadcasting is just coming into its own; when will the industry promote expanded OTA choice and uncompressed (or less compressed) OTA HDTV? Final point: As someone who's been news "talent," I heartily second getting rid of the anchor desk. It's a visual medium; why restrict the perspective to a static head and shoulders?
ZumaHans Nicknameposted 135 days, 5 hours, 46 minutes ago
Thank you for your frequent posts. They are as informative as bars and tone. Digital bars and tone.
PhillyPhlash Nicknameposted 135 days, 5 hours, 23 minutes ago
And thank you for your courteous psy op. But who's footing the bill? Roz Mazer, alert the DNI. Who is ZumaHans' handler?
PSIPthing Nicknameposted 135 days, 1 hour, 30 minutes ago
you obviously are off your meds. I can only assume that the DNI is the director of national intelligence, and your lack of strong drugs leads you to believe that organization is responsible for psychological operations against you. Don't flatter your deluded self. Nobody is engaging in psy ops against you; you aren't worth the effort, and only a lunatic would think that the DNI uses this TELEVISION INDUSTRY forum to denounce you. We're all in the television/broadcast business or in businesses that directly service the television/broadcast industry (note the name of the site.) We don't particularly care about discussing the content or context of particular television programs, or whether Jon is screwing Kate or a 22 year old with a drug conviction. The fantasy-land that you live in has a much different topology.
PSIPthing Nicknameposted 135 days, 1 hour, 11 minutes ago
Good interview, Steve and Harry. However, I think on "ownership relief" we can see a few lessons from the same thing in the newspaper industry. The only newspapers to colose down in this downturn were protectorates of the Newspaper Preservation Act. In other words, that legislation couldn't protect them from a true downturn in the market, just even out a few bumps in the long term. It's hard to imagine the strongest stations in a market merging, so it seems to me that lessening ownership restrictions more than they are today with SSA and LMAs, would just mean that a less-than-optimally-capitalized station would buy a truly weak one in a market. Or, at the macro level, a less-than-optimally-capitalized entity buys weak stations all across the country. The nets don't seem to be interested in buying stations anymore, but maybe "someone interesting" will buy NBC and change that a bit ...
David Hoffman posted 135 days, 1 hour,
I agreee, do NOT give up the spectrum. The PBS (Public Broadcasting Stations) network has been doing outstanding multicasting in Georgia. They were late in coming to digital in Georgia because of funding, but have done an excellent job of providing a much needed deverse set of programming that does not focus only on children during the daytime. They now have PBS kids to take care of the children and educational and news programs for the adults at any hour of the day. Multicasting is your only showcase to stop the spectrum grab. By the time 365 days have passed since the analog cutoff, every station should have 1 main HD channel and at least 1, preferably 2, SD sub channels going. If you have to lease the space to local community groups, schools, theater organizations or whatever do so. Multicasting will answer a lot of the critics who complain about diversity, and no good choices of things to watch on OTA. I have wowed many a coworker who has sat or cable with what OTA HD looks like on a 240HZ 1080P LCD. You have a great potential customer base if you show some hussle.
David Sams posted 135 days, 44 minutes ago
It's time to rise up and get creative. The government is looking for new revenue streams just like everyone else. The TV/Broadcasting industry needs to face this challenge head-on before it is too late. While it is true that the public owns the airwaves, what we don't need is for the government to take control for pennies on the dollar. Don't think that they won't do it. Just look at what icons of business the government now owns.
PhillyPhlash Nicknameposted 135 days,
True. One wonders whether authoritarians long entrenched the bureaucracy want to ensure broadband industry supremacy so they can better control content and news coverage on the networks and local stations, which would be beholden to those who control distribution. "Public airwaves" should mean the public has the right to free, universal access to the level of ad-supported broadcast services they've traditionally enjoyed.
PSIPthing Nicknameposted 134 days, 23 hours, 26 minutes ago
so, having many more sources of information rather than a handful, will make it easier for "authoritarians long entrenched in the bureacracy" to control content? I thought you wanted to control content yourself, by forbidding content owners from owning the means of distribution? (you are inconsistent on points from day to day)
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