Greenfield: Get in the Pool, ABC
Says O&Os' cost structure is out of whack without content shares
By Michael Malone -- Broadcasting & Cable, 7/9/2009 3:55:08 PM
Pali Research analyst Richard Greenfield blasts ABC in a report for not partaking in cost-cutting content pools in markets where it owns a station. "Why Do ABC's Stations Want to Have the Highest Cost Structure in Local News?" is the title of Greenfield's report, issued this morning.With local news viewing and revenue in decline and the sector seeing increased competition from the likes of new local sites from ESPN and Huffington Post, Greenfield says partnerships such as the Local News Service (LNS) between Fox and NBC and, in some markets, others, makes abundant sense.
Greenfield wonders why ABC doesn't take part.
"While ABC is the market leader in a good portion of its TV station O&O markets, we simply cannot understand why they do not want to participate in LNS, even as ABC affiliates such as Scripps are participating," he writes. "It would appear that ABC does not want to impact the quality of its local news gathering, however, LNS is invisible to viewers and is a way to reduce costs in a declining business. ABC's O&O's will now end up with the highest cost structure in the local TV markets it operates in and may not even have the opportunity to participate in LNS (ie. in NYC, the benefit of a fifth partner is rather marginal for the existing players, who also may not want to help the ratings leader).
ABC did not have comment on Greenfield's report at presstime.
Last month, WLS Chicago President/General Manager Emily Barr told B&C that she understood why Fox, NBC, CBS and Tribune would share content in the #3 DMA, but said it was essential for WLS to retain an independent voice. "We remain convinced the way to stand out is to provide coverage in our own unique way," she said. "I understand and respect the others' position, but we feel this is what we need to do to remain strong."
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Spoken like a true bean counter. It appears that content is no longer king. 24 hour tone & bars is also pretty inexpensive...but not very valuable as media product. This statement highlights the catch 22 of publicly traded media. The short term gain of the shareholder is in conflict with the longterm health of the media outlet.
M. Plummer - 7/10/2009 1:44:22 PM EDT -
I applaud ABC for being what they should be, a independent news voice, in all of their O&O markets. The writer mentioned that the ABC stations are market leaders. He obviously had not ever worked at one or he would not make these clueless comments. Shrinking newsrooms are dangerous to our health and welfare. The 2 dollar savings will never outweigh the risk. This is just another attempt to lower the broadcast standard so the internet can compete. Total BS.
KTVictor - 7/10/2009 10:43:19 AM EDT
Cover Story: Swim at your Own Risk
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