DOES LOCAL TV NEWS HAVE A ROLE IN OTT?

By Steve Schwaid, CJ&N VP of Digital Services

In the local news world, we’re good at chasing that shiny object. And sometimes that shiny object can take us down rabbit holes as we lose focus on our real goals and strategies.

The latest shiny object is OTT – Over The Top.

It’s understandable. We see cord-cutting and the huge numbers Netflix and Amazon get on their OTT services and we in local TV want our share. Plus, with corporate pressure for new revenue streams, OTT seems to be the place to go.

Big groups like Sinclair are putting together sophisticated OTT packages with various streams of content – local news, national news, sports and entertainment.  They are involving content partners to provide lots of material.

Then there are individual stations looking to get an app on ROKU and stream their local content almost in a continuous loop.

I applaud those who are investigating the opportunities, but I suggest you ask a few questions and do research before launching your efforts to conquer OTT:

  • What is your OTT goal? Is it just to test something new and put a toe in this space? Or actually create a true OTT business plan? How will you measure it? What determines success? 10 streams a month?  Or 10,000 streams?   How do you monetize it?
  • What content are you going to put on your OTT product that would drive consumption?  What is appealing – and what is not? 
  • Is this content being designed for the OTT user or are you just pushing your broadcast content to this stream (much like you push the same content to your website or your app)? If so, why would someone want to watch this via OTT?
  • When users go to OTT services like Netflix, Amazon and soon-to-launch Disney, they are looking for specific content from the provider. Meanwhile, some local stations are looking at OTT to just provide a continuous stream of content from the website video server in no particular order. Why would an OTT user choose to watch this stream?
  • Would you provide live, breaking news and weather coverage on this platform? If not, why not? We know these are key drivers for those wanting local news. 
  • Do your retrans agreements prohibit providing some OTT content – particularly any kind of “live” content?
  • Do you have the current staffing to manage the OTT content side of the “business?”  If not, is there even revenue available to support adding staff?  When most stations started websites years ago, they were treated as “bolt-ons” with no true business plans for added staffing, technical resources and monetization.  That’s one reason station websites have had a rocky history – they were never really treated as start-up businesses. 

Again, look at what Sinclair is creating – it is a multi-channel/stream, not just a stream of content from one station. Having group-wide content sharing certainly holds advantages in the OTT space.

I’m not saying stations should stay away from OTT.  We will have to be in that space. But it has to be more than a shiny object to chase.  It can’t be about what you can recycle from you video servers. OTT users may have totally different content needs than broadcast viewers simply because of the way they choose to watch.  Research in this space is key – understanding what cord-cutting millennial users are looking for should be an important focus.

Think about this. Netflix spent around $8 billion last year on content. Disney has already told stockholders that profits may be down next year partly because of their huge OTT start-up costs.  Do you think they are spending that kind of money in a blind experiment to see what people like? 

When I worked at NBC eons ago we met with Apple in Cupertino. We were talking about getting station content on iTunes.  (That seems quaint, doesn’t it?)

One of their leaders said to us:  “You folks in TV don’t get it. Consumers are looking to pick and choose WHAT they want to watch and listen to on their devices. They don’t want to see your entire newscast on digital, only the stories they want to watch. You need to let them chose what they consume, not what YOU want them to consume.”  As the years pass, the observation stands the test of time.   

I’d love to hear your thoughts on this. Please email me at sschwaid@cjni.com.