California’s Monterey market gets its first-ever ABC affiliate next week, thanks to a unique partnership between the network and Hearst Television. Hearst, the largest ABC affiliate group owner in the country, expands its ABC reach when it launches the network on the multicast channel of NBC affiliate KSBW Monterey-Salinas April 18.
While numerous stations stock their multicast channels with news and weather that typically amounts to low-rated filler, Hearst TV is going all in in DMA No. 124, pumping in more than a million bucks, hiring staff and acquiring top-notch syndication to round out the programming mix on the new HD channel it’s calling Central Coast ABC.
“We’re treating it like a true second station,” says Frank Biancuzzo, senior VP at Hearst TV. “When people refer to one station as a primary channel and the other as a secondary one, I think they’re in trouble. This is a duopoly, and it’s set up the same way we do it in Kansas City, Orlando and other markets where we have more traditional duopolies.”
While stations are presented with a wide array of options for their digital channels, including local weather, Spanish-language programming and hit movies, savvy broadcasters are making the strategic decision to pair up with a network that doesn’t have a strong local presence and air that net on a station’s multicast channel—giving the station a virtual duopoly for a relatively low cost.
While it’s currently a smaller-market play, the trend of multicasting network programming may get more attention as networks consider new local partners when affiliates balk at the terms of affiliation agreements.
Robert Prather, Gray Television’s president and COO, calls these arrangements “beachfront real estate.” He’s perhaps the most bullish broadcaster on this front, with one ABC, four Fox, eight CW and 18 MyNetworkTV affiliates airing on the Gray stations’ digital tiers. Broadcasters can supplement the network programming with regional sports, political debates and other topics of local interest—all of which can be promoted in a broadcast network’s big-tent primetime lineup.
“All of our digital channels are pro! table, and I think they’ll continue to grow,” says Prather, who adds that multicast profit was around a couple million dollars last year. “This allows us to do more local programming, which I think is the secret to our success—and even more so in the future.”
Reps from the digital networks are out in full force at NAB this week, offering their programming to station groups. Netlets include Spanishlanguage fare such as Estrella TV and Mexicanal, entertainment networks such as RTV and This TV, and jock programming that includes Universal Sports and Untamed Sports.
Many stations, of course, produce their own multicast programming, whether it’s local weather or news or lifestyle content. NBC’s station group debuted its Nonstop channel and ABC launched Live Well Network in 2009, while CBS recently revealed it will launch a digital channel for its O&Os, with WCBS and KCBS first up in the third quarter.
But general managers talk more about potential revenue from their subchannels than actual revenue. Some say affiliating with an additional network on their .2 is a much more attractive offering. To be sure, the option exists mainly in smaller markets, where one (or perhaps even two) of the Big Four networks may not have a local presence, or their signal trickles in from a nearby market. ABC, for one, airs on the digital channels of nine stations that are affiliated with other networks, including the Fox affiliate WGXA Macon (GA). CBS airs on the digital channels of ABC affiliate KTVO Ottumwa (IA) and NBC affiliate WNKY Bowling Green (KY), among others, while NBC airs on the multicast channels of KXGN Glendive (MT) and WIVT Binghamton (NY).
Several stations even offer two additional networks on their digital tier. Lilly Broadcasting’s WENY Elmira (NY) is an ABC affiliate on channel 36.1, but airs CBS on 36.2 and CW on 36.3. Just two stations are licensed out of DMA No. 161, Sherman-Ada (TX-OK): Gray TV’s CBS affiliate, KXII, and Lockwood’s NBC affiliate, KTEN. As a result, KXII runs MyNetworkTV on channel 12.2 and Fox on 12.3. On the back of American Idol, Fox beat KTEN in prime households in November and February sweeps, says Rick Dean, VP and general manager.
“We’d rather do this than do news,” he says. “There’s a greater need in the market for bringing additional affiliates in.”
AN OPTION IN RETRANS SPATS
With networks and their affiliates sparring over reverse-compensation terms, the networks are watching how the multicast model works out for stations. Fox has said it will consider pairing with a rival station if the Fox affiliate balks at the terms of new affiliation agreements. “The networks would like to see operators score with this,” says one industry insider. “It would give them the leverage in the case of a challenging market or a challenging broadcaster to potentially go another way.”
Hearst TV’s new ABC affiliate in Monterey represents the company’s second shot at airing a major broadcast network on a .2 channel—CW+ programming debuted on KHBS Fort Smith (AR)’s digital channel three years ago. With 95% carriage in Fort Smith, Vampire Diaries posted a 6.3 rating among women 25-54 during a strong week in February, Biancuzzo says, adding that it outrated hits such as CSI, Hawaii 5-0 and House that week.
“It’s been a home run for us on every front,” he says.
Hearst is clearly expecting another round-tripper in Central California. KNTV San Jose had been the nearest ABC affiliate until it switched to NBC in 2001. Comcast and satellite subscribers in Monterey-Salinas could get ABC programming from Los Angeles and San Francisco, according to KSBW, but over-the-air viewers could not.
Central Coast ABC will air network staples such as Good Morning America, World News and Modern Family. Biancuzzo said the affiliation agreement with ABC for the new channel is part of Hearst TV’s groupwide deal, and inventory arrangements with ABC are the same as those at Hearst’s other ABC affiliates.
ABC did not comment for this story. It recently called Hearst TV “a valued media ally” in a statement.
Central Coast ABC is hiring seven to eight staffers for sales, engineering and promotions. It will simulcast NBC-affiliated sister KSBW’s leading newscasts. Managed by Joseph Heston, KSBW is a monster in Monterey; BIA/Kelsey reports that it grabbed around 35% of the market revenue in 2009, well ahead of Fox affiliate KCBA’s 20%.
Central Coast ABC has the enviable placement of channel 7 in the market, and 100% carriage. It will air OprahWinfrey at 7 p.m., has grabbed Anderson Cooper for 4 p.m., come fall, and will supplement the national programming with local fare.
In due time, Biancuzzo will hold channel 8.2 to similar ratings and revenue standards as Hearst TV’s other ABC affiliates—as opposed to comparing Central Coast ABC to channels airing 24/7 weather or Caddyshack. “We have reasonable expectations to do what ABC primetime shows typically do—we’ll judge it as we would any other television station,” he says. “It’s one of the best opportunities out there, but you have to be serious about it. You have to treat it like a real television station.”
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