Will Newspaper Companies Find Revival in Local Video?

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This post appears as part of a media sponsorship with Borrell Associates.

We live in interesting times.

Twenty years ago, it was inconceivable to think:

  • Telephone lines would deliver TV programs
  • Cable lines would deliver phone service
  • The $15 billion newspaper classified ad business would die
  • Few people would buy music CDs anymore
  • Nearly everyone would own a “cellphone”
  • Taking pictures and listening to music would trump making phone calls on cellphones

Even 10 years ago, believe it or not, the most trafficked site on the Internet, beating Google, was a social media phenomenon known as MySpace.   YouTube and Facebook were barely a year old, and the iPhone and Android hadn’t even been invented. (If you have any interesting 10- or 20-years-ago oddities, I’d love to hear them. Just post a comment.)

So, what I’m about to tell you may seem just as crazy.

Ten years from now newspapers will be delivering more local video programming than TV stations.

Inconceivable? Sub out the word newspapers for “a local media company formerly known as a newspaper,” and consider the assets, cash-flow and aggressiveness of these big print companies, and you might warm up to my theory.   After all, history is on my side: Most of the first radio stations and TV started in this country were established by newspaper companies – and quite a few of the cable companies as well.

Local broadcasters could very well be blindsided by the streaming-video revolution. True to form, it is starting out as a disruptor – small, lower-quality, and with a different customer set.   Because TV stations are locked into a business model that says “mass media” and high-quality production, they’re likely to miss out on the impending video revolution.

In fact, newspaper companies are already neck-in-neck with TV stations when it comes to generating revenue from streaming-video advertising. Both are at about $500 million. Imagine that – newspaper companies competing handily with TV stations at their own game. The combined $1 billion is still only a pittance of the $5.8 billion local advertisers are spending on streaming-video this year. But its growing fast, opening up broad new revenue opportunities.

I ran across an amazing story last week at Calkins Media, a family-run business that holds a handful of newspapers and TV stations. They’ve skipped the FCC license and created their own local TV channel in Bucks County, Pa. They did so by creating an over-the-top (OTT) channel that’s streamed on Roku or Fire TV devices (via an Internet connection). It includes 3 hours of weekly local programming, including high school sports, local news, a cooking show and other local-interest features.

What’s so interesting about that? It already has thousands of subscribers paying $10 per month, plus a wider audience of newspaper subscribers who get the channel for free. And here’s the kicker: Calkins found it easier to implement the idea through its newspapers, not its TV stations.

“We are out-TV-ing the TV stations in our markets,” explained Guy Tasaka, Chief Digital Officer for Calkins Media. Why didn’t Calkins launch at its TV stations?   “We launched with our newspapers first because the quality of video coming from print was light years ahead of TV.” In short, newspapers built a product to the specs of the Internet instead of “repurposing” content built first for another platform.

I’m looking forward to hearing Tasaka explain how at the Fast Forward Video Summit next month in Chicago. It’s one of a spate of presentations that will showcase how the video revolution is taking hold, opening up new pockets of opportunities. There are even two brothers – ex-newspaper guys who are sort of the Click and Clack of video advertising – who are having a blast in Tampa selling loads of video ads to local businesses in YouTube format.

The future, in the words of Yogi Berra, ain’t what it used to be. But for those with the energy and the smarts to keep up, it’s certainly a great time to be in business.

Gordon Borrell is CEO of Borrell Associates.