Sinclair CEO David Smith sees big money in mobile TV.
Smith told a Bear Stearns media conference crowd in Palm Beach, Fla., Tuesday that there could be $20 million a month or more in new revenues from retransmission payments for content delivered to mobile devices taking just half of one study's predicted user appetite for TV over portable devices.
Sinclair, which owns 58 TV stations, the majority Fox/MyNetworkTV affiliates, teamed with Samsung at the Consumer Electronics Show in January to demonstrate mobile TV, and Smith said Samsung would likely be the first to market with a cell phone that included a TV tuner. Sinclair was an early proponent of a mobile DTV standard, which ultimately was not adopted, a point he made Tuesday.
Referring to the company's "escapades" re the DTV standard--it bucked the tide and was labeled an obstructionist to the DTV transmission standard that was adopted. "Our view of the world was portability and mobility, but the vast majority was only interested in talking to the box in the living room," he said. "We got overridden by that political view. Now, everybody wants to be in the mobile business."
Smith said that while local broadcasting for its first 50 years was essentially a single-revenue-stream business--spot advertising--the equation had changed.
He said the streams now included spot, political, retransmission consent payments from cable and satellite--Sinclair has pledged to get cash for its channels, and did so in a protracted fight with Mediacom.
But Smith said that mobile TV retransmission payments could "dwarf what we do in free cash flow," saying the "mother load" is all the content "we shove through the pipe that people will pay for worldwide."
Smith also said that issue advertising could be huge, adding that if California is the model, it's "a whole new world." The D.C. federal appeals court helped out broadcasters last year with a decision that corporate and union funds could be used for issue ads naming candidates.
Asked why his station group had essentially get on Fox's MyNetwork TV over the other new netlet, The CW, Smith pointed out that his group was primarily Fox, and now MyTV, because Fox had a track record of programming outside the box, and because it had a vested interest in making the network successful. He meant track record literally, pointing to the ratings success of Fox's NASCAR coverage, saying: "Who would have thought cars going around in a circle would be relevant content for TV?"
"If you are going to bet," he said, "bet on Fox." He said that he still thought MyTV was a good gamble, and that the network--which has been struggling in the ratings--should not be judged on its first six months or year, but what it is doing five or seven years down the line.
By contrast, he said, the track record of UPN had been "bifurcated," with nobody really knowing who was in charge, though he said that has changed with CW now that CBS has a vested interest too, with owned stations affiliated with the network.
While Smith saw big money in new mobile media, he said the company has seen no evidence people are lining up outside the door to buy Internet advertising.
Elsewhere on the ad front, Smith said auto advertising remains a tough category.