Cover Story: Network News -- One Click AwayWebcasts and online shows provide broadcasters with the same type of outlet as a cable news network. They just need viewers—and advertisers—to tune in. 7/18/2009 02:00:00 AM Eastern
When Michael Jackson's untimely death last month set news sources scrambling for any possible competitive advantage, the Web became the vital go-to source for breaking news and information. ABC News President David Westin acknowledged as much in an internal memo touting the network's online coverage of the developing story.
“We saw a major step forward toward our shared goal of bringing the news to people when they want it and how they want to get it,” Westin wrote. “We truly came to the audience, rather than expecting them to come to us.”
In June, when violence in Iran hit its peak following the country's presidential election, ABC News responded by launching a daily half-hour program focusing exclusively on the crisis. There was one catch: You couldn't find it anywhere on TV. The Web program, Iran in Crisis, emerged from ABC News' Nightline, which already had a foot in the original live Web programming door with NightTline (note the extra “T”), a weekly show incorporating the microblogging service Twitter.
Other news teams are also on board with Web programs. BriTunes, an MSNBC Web series featuring NBC Nightly News anchor Brian Williams talking to up-and-coming musicians, has a much more casual look and feel than anything you would see on-air, more like something on MTV than NBC.
CBS Evening News anchor Katie Couric cites an in-depth online video interview she conducted with former British prime minister Tony Blair to explain how the Web has become a main portal for viewers, not just a place for news organizations to serve leftovers. “To have the former prime minister of Great Britain willing to do an interview that was never going to appear on television was, I think, a signal that many people acknowledge the importance and reach of the Internet,” Couric says.
Facing a dour economy and shrunken budgets, network news divisions are, by necessity, turning more and more to the Web as a less expensive, technologically sound portal for original reporting. The networks are also viewing the Web as the next battlefield for eyeballs and ad dollars, looking beyond the cable news networks.
The Web effort might also serve as a field-leveler for CBS and ABC; both operate without the advantage of an MSNBC-like 24/7 cable news sibling (though ABC News has a small presence with ABC News Now). But according to Andrew Tyndall, TV news analyst and publisher of The Tyndall Report, the online push is an all-around necessity.
“There is no other option,” Tyndall says. “It is not just a question of broadcast networks; all old media have got to find ways to go multiplatform in order to survive.”
That fact is not lost on executives and producers, who are still trying to figure out what the content should look like, how to monetize it in a meaningful way and how to make it all click with online viewers. “We need to do more,” says ABC World News executive producer Jon Banner. “I am not going to be satisfied until [we] probably double, triple, quadruple the amount of content that is able to be read, watched and listened to online.”
LOOKING FOR WEB GROWTH
While there is no hard blueprint for Web news growth, there are common goals. Beyond simply generating “real” revenue (at least when compared to larger TV revenue), there is a need to expand existing broadcast news brands online while creating new ones. And an effective Web video strategy could also fire a shot across the bow of the cable networks.
“Given the fact that CBS doesn't really have an all-news cable operation you can shift to at certain times, it has been a wonderful opportunity for me to expand coverage,” Couric says. “[The Web] is obviously more in its infancy than cable operations, but I think it can provide the same kind of outlet for people.” For example, if a story breaks in the middle of the day but it isn't at a code-red level, the heavy lifting can be done online.
“If you think about where people consume their news, during the day [most] people are at work and don't have access to TV,” says Mark Larkin, VP of programming and operations for CBSNews.com. “[The Web] serves as a way for us to reach that audience.”
With people getting their news from many different platforms, the Web could be a way for broadcasters to take back the news from competing cable outlets. “It is their leapfrog move, rather than their replacement move,” Tyndall says. “The advantage of the 24-hour cable news networks is not a long-term advantage, it is a medium-term one. When everyone gets all their television online, it makes that advantage disappear.”
TROLLING FOR DOLLARS
But the biggest question for broadcasters seeking to build their news brands online is a familiar one: Where is the money?
“That is the $64,000 question with everything in the digital space,” says Paul Slavin, senior VP of digital at ABC News. “[Web programs] are monetizable largely because the amount of resources you have to apply to it is not so great.”
Because most Web programming uses existing staff, anchors and equipment, the cost of producing it is negligible, and profits can be made relatively quickly—assuming sponsors sign on. But Web revenue alone will not sustain the quality of programming one expects from a TV network. “The financial model just isn't there on the Web yet to support professional journalists to the degree they need to be supported,” Couric says.
The silver lining is that Internet advertising has bucked the trend of the market as a whole and will grow 10.1% in 2009, according to a report issued in July by ZenithOptimedia. By comparison, television ad spending is estimated to drop 7.1%.
Web video also has one of the most effective online advertising formats. “Online video has a better model for monetizing eyeballs than other Website [features] because of the pre-roll ad,” Tyndall says. “It is one of the few formats online where you can guarantee an advertiser that eyeballs have watched the ad.”
Data from AccuStream iMedia Research places an average pre-roll CPM at $25, with premium pre-roll averaging $35. That is higher than any of the other forms of online advertising surveyed, and on par with CPMs on television, which average $30 in primetime. A report by Bloomberg last month said that some premium online CPMs could be as high as $60.
But even if CPMs online outpace those on television, the number of views on a typical Web program or news report don't come close to the 7-8 million viewers an evening newscast can average on any given week. The only way to maximize revenue and get the premium CPMs is to aggressively seek out advertising partners.
“We have seen revenue against a lot of these different shows,” Larkin says, noting that Ford, Sprint and Intel have sponsored some CBS Webcasts such as Doc Dot Com.
At presstime, the inventory on news sites appeared to be undersold. BriTunes on MSNBC.com features a house ad for MSN, and the ABC and CBS Web programs play with no pre-roll.
“Broadcast networks think in millions, not in thousands,” Tyndall says. “They don't have the audience for those things, but they have the sales force and they have the technology.”
That is the conundrum facing executives. The ability to explore and innovate has never been greater. There's more Web programming, and breaking news is covered more and more online. Now it's a matter of spreading that news.