Local TV Keeps Chasing Scale. But Is Transformation the Real Challenge?

For years, the broadcast industry has argued that bigger station groups are the key to competing in an increasingly fragmented media landscape. With the FCC poised to loosen long-standing ownership restrictions, that argument may soon get its biggest test yet.

But in Episode 20 of In the Vicinity, Tim Hanlon and Madhive CEO Jim Wilson argue that scale alone won't solve local television's problems. The real challenge isn't simply owning more stations—it's transforming broadcasters into true local media companies that can create, distribute, and monetize content across every platform audiences use.

Listen to the full In the Vicinity podcast above or get it on Apple Podcasts and Spotify.

Tim Hanlon: How are you, everyone? You are In the Vicinity. Welcome to the proceedings. My name is Tim Hanlon, your humble and congenial host once again this week as we delve into our little sojourn into all things local media. Thanks for finding us, telling your friends, and having them tell two friends and so on.

We appreciate you. My day job is CEO and founder of the Vertere Group here in Chicago, where we advise and consult a whole ton of companies in and around the media and technology spaces. Some of them large, some of them small, some of them very much in between, all with sort of the same existential questions about what's gonna happen in the months and years ahead in these strategically challenged times.

And, in particular, of course, the local media front is where we spent an inordinate amount of time over the last number of months. And that's partially why my pals at TVREV and our friends at Madhive have allowed me to go into the last couple of weeks to have some of these conversations.

And we're looking forward to a whole bunch more in the weeks ahead. We are lucky of course, to have our return champion, Jim Wilson, the CEO of Madhive, which you probably know is an extensive player in the local meets streaming video space.

Jim is also part of the board of directors at GSTV as well as the audio/radio company known as Audacy. So he knows a thing or two about local media. And we've figured out a cadence between Mr. Wilson and yours truly. We're gonna do our conversations about once a month or so, and then we're gonna supplement them with other conversations with people in and around the local media space whose opinions matter, whose lessons may be instructive, and whose conjecture might lead us to a little bit more of a world of comfort and opportunity versus the negatives of that.

Great conversation last week, for example with our pal Christy Tanner of New York Public Radio. If you didn't get a chance to listen to that, I highly encourage it. It's a really good example, I think, of how public media can be instructive on how perhaps to approach the challenges facing local media, especially those in the commercial sector.

But this week is certainly not gonna be a slouch either. Jim and I get to a bunch of different conversations or questions and chatter about things at the moment. For example, in a couple of days as we drop this episode there’s a big meeting at the FCC where the 39% with an asterisk, next to it cap of or against local television station ownership, the concentration issues around that is going to be, we think not necessarily abolished, but certainly weakened significantly with a different sort of tone and approach regulatorily.

We're gonna talk about what that brings to the table, the continued nuances around consolidation, how much of this is going to help or not help or not make a difference. We're gonna talk about the transformation component. Scale without sort of transformation and understanding of where a linear television approach to media may not be necessarily the only thing even with a greater number of stations to economize against and behind.

We talk about some interesting experiments going on right now in the marketplace, in particular what Scripps is doing in Tallahassee, Florida. You can listen carefully for that. And a whole bunch of other stuff. We wax a little predictive on political advertising as it approaches its crucial point, especially for TV stations and their revenue expectations in the months ahead.

And all kinds of other fun and frivolity as we try to basically spend most of our time talking about local television this week and what's in the weeks and months ahead. Definitely some choppiness and challenging times for sure. Here's our chat that we had a few days back. It's Jim and me this week.

Please, as always, enjoy.

It's interesting that we're gonna be dropping this episode a couple of days before a major event at the FCC on August 6th. They're going to be supposedly making a vote to essentially eliminate the 39% local television station ownership cap that was mandated by Congress, and is still gonna be argued about in terms of if the FCC could actually do that or not.

But assuming that at least gets rolling I think it's an interesting time to discuss the concentration thing. And maybe I think one of the great questions that we can kinda maybe just latch onto that's embedded in all of this, Jim, is local television. The scale issue has been argued for a long time.

You and I have debated it back and forth. The NAB's got an opinion. The MVPDs have an opinion, for sure. But it doesn't necessarily address the full problem, right? Which problem does local television have? And I guess you can answer all of them, but is it an audience problem? Is it a revenue problem?

Is it an operating model problem? What is it that is incentivizing the NAB and the FCC to push so hard for greater consolidation and ownership of more stations nationwide? 

Jim Wilson: Yeah. I don't know. I think, broadcast, I guess in some ways you could say broadcast television, has an issue of growth in terms of the eyeballs.

The eyeballs, in some cases, have held fairly steady. In other places, they've declined. Sports is obviously a place where they've only grown. The World Cup was phenomenal. And, we've got a lot of other sporting events coming up. Sports are obviously becoming increasingly important.

So maybe there's an audience issue that's happening. But overall, I have a hard time sort of separating broadcast from local media, and so local media is what I think about all day long, and local media is a growing business. It's not a declining business, right?

And local media is more than broadcast, though, and local media is largely dominated by big tech. And so when we get into these situations where we're talking about preventing consolidation of broadcasters, what we're doing is we're putting them at a disadvantage to big tech because they've already been losing to big tech.

And so what they need to do is this shift from broadcaster to local media company is a content shift from content that's delivered solely over the air to content that's delivered on digital platforms. And then there is also an operating revenue that obviously revenue is gonna come not just from the broadcast side, which they protect like their life depends upon because they need to, because it's a high cash flow business.

There's a lot of commitments that go to that. So they've gotta balance that. And again, I did this when I was at TEGNA, watching the TEGNA leadership team as, as Premion was growing so quickly, I was getting a double message. I was getting a double message of, "Jim, grow Premion as quickly as you can. Oh, Jim, wait a minute. Don't you dare take any of our eyeballs away from the broadcast side," right? So it's gotta be purely incremental. And it's this again, it's a transformation and a transition that we've been talking about. So back to this vote, as I've been very pro consolidation because I see the competition not just with big tech, but competition for wherever eyeballs go.

And a TV broadcaster is not competing with just Meta, they're competing with Netflix. 

Tim Hanlon: Yeah, I think the argument is, okay, it's also, just to let's be clear, right? This is not an unfettered release of the 39% cap. It's just basically going to be a shift of the FCC's approach to doing it more on a case-by-case basis instead of a proverbial hard cap, which either you're over or you're under, or you have special exceptions to stay under.

That's just frankly gonna open the doors to a lot more where winds are blowing, right? It's gonna be a bit more situational, opportunistic and perhaps maybe even more challenging to predict because it's gonna be a, not even a softer cap, but just a different sort of case-by-case basis.

But assuming that scale becomes greater, right? And assuming that more stations can be held and stuff. I'm not sure that the logic completely plays out though, right? Okay, so you have more scale, you'll have more operations. You can obviously start to create more cost efficiencies and that kind of stuff.

But that doesn't necessarily translate to the transformational thing that you're talking about. Because that requires investment as well, and that also requires a bit of a change in the revenue structure and perhaps maybe even having to, I won't say deficit spend, but to recognize that there's going to be a cost involved in evolving into a, perhaps a more Hydra-headed business model than just one dominated by linear television.

I think that's where many of the broadcast television industry's local stations are stuck is they're so dependent on that local linear thing that there's only been incrementalism when it comes to adding streaming via the Premions and the Madhives of the world, or embracing new business models for something that's much smaller than the big checks that get written still for the linear broadcast thing.

To me, it kind of tips towards an operating model problem maybe in the long term. Do you think scale's gonna help that operating model problem and enable or speed up their ability to be more things to more people than just the dominant linear local voice in a market? 

Jim Wilson: They're definitely expected to maintain their market share on the linear side.

It's like I said back in the day at TEGNA, and that was almost 10 years ago now. And so as we were starting to build Premion and started shifting dollars toward digital there was such a hyper focus on protecting those dollars. And I think there still is a focus on protecting those dollars because there's so much cash flow that comes.

And a lot of these companies are public, and they're basically, public companies in many respects live quarter to quarter. And they've got expectations from the street on the performance of their business and maintaining their market share. And they have those commitments that they have to potentially the ABC, CBS, NBCs of the world.

So they gotta do both though. The answer is unfortunately, they gotta learn how to do both. And I think a lot of it starts with, do you have the right talent inside the house in order to do it? And where are you putting your dollars, and what are you putting the dollars into? A lot of the broadcasters don't have digital natives inside the house, and so they have to start looking at how they bring digital natives inside the house so that they can take content.

There is content that's made for broadcast that can obviously generate and be monetized in digital platforms, but then there'll be new content that's created for digital platforms. And they're different models, and they're different types of content, and potentially different production values.

And they're gonna need to do both. They need to become local media companies, meaning that they want. Again I've said it to you a million times, right? They're in the business of delivering news and entertainment to local audiences. And how they do that is really dependent upon where those eyeballs are, and they need to reach those eyeballs.

If they don't reach those eyeballs, someone else is gonna reach those eyeballs. And again, back to the concern about consolidation, there's always going to be a free market, I think of opportunity here. So if there's a hole in the market, then someone's gonna fill it. And I think seeing other bigger companies making investments, I think one of the AI companies recently, put dollars toward local. Local is such a big category and an attractive category, and tech in general is really geared toward local, right? The way that Madhive is delivered is geared toward local. We built ourselves to deliver locally, and we're gonna continue to build in an era of AI the ability to deliver campaigns locally, 

Tim Hanlon: How, though this is maybe a more pointed question maybe than I've asked you in months past, but how do you change this siloed mindset of revenue and operations and all that kind of stuff and operations devoted to generating revenue from the linear side to versus the digital side versus, say, the streaming side, right?

Where one is the traditional bucket, and you can't shake that too quickly. And the others are just more, smaller rounding errors. And rejigger the operation to be more I said before, hydra-headed, but multi-platform. As an example my conversation with Christy Tanner from New York Public Radio last week.

It was pretty clear you could hear her, I wouldn't say resist, but the label New York Public Radio is not even accurate, right? When you're talking about a company that, again, it's public media, and it's one market, but it is illustrative in that they are radio, yes. They are audio. They are podcasting.

They are live events. And she even went to great lengths to discuss how they've incorporated video and newsletters and those kinds of things into their mix. And so in some respects the name of the company isn't necessarily reflective of what she and others there want to or are evolving it to.

Where is that mindset in the local television landscape? It doesn't seem as aggressive maybe as it needs to be. 

Jim Wilson: Yeah. First of all, I love Chrissy Tanner. Second is NYPR to me just speaks of quality wherever it's delivered. There's just such a high quality and you and I were talking earlier about Dolly Parton's America.

And but just high quality content, so she's running a great enterprise. I don't know. I'm not running one of the broadcasters, right? And I would be thinking a lot about what are we becoming? We're in the business of creating content to be delivered into local markets.

Then you figure out what your distribution mechanisms are. And so is it a broadcast-first mentality or is it a content-first mentality? And if it's a content-first mentality, then you start thinking about where you are distributing that content. There's a shift in and of itself right there from broadcast to content first and then basically set up your distribution outlets.

The question that I've always said before is, how much are they going to build in terms of infrastructure or do they rely on the infrastructure of other companies? I don't know. Are they future walled gardens? They could be. I think some of them are thinking about being future walled gardens, and that makes complete sense.

And that those walled gardens will have, data and technology and content, but you gotta figure out first, I think, that content strategy,

Tim Hanlon: Yeah, and I'm heartened by it. I read a column that Scripps CEO Adam Symson wrote a couple weeks back on LinkedIn, and he mentioned an experiment that's been going on at one of their stations.

I think it's in Tallahassee, WTXL, which I think is the ABC affiliate there. And if you're unfamiliar, this is to me a really good example, I think, of what you're suggesting. And frankly, it's unfortunately an exception rather than the rule, but what they've been doing there is this idea of they call it a reverse broadcast. And in essence, instead of producing the newscast for linear television and then streaming it afterwards either as a simulcast or as a repeat of a repeat, which a lot of streams still do out there they actually have been trying to kinda change the dynamic of how news flows during the course of a day, all across the day. And focusing their energies on, first, the live stream whether that live stream is simulcast on linear broadcast or not. And then reverse it where broadcast is, dare I say, secondary. Or if it happens to be around the same time as it's being broadcast, if you will, on the linear feed streaming then broadcast can bring more heft to it or more visibility to it because it's that window of time where broadcast happens to be on.

So in essence, they're thinking of the stream first and all the digital permutations almost as the second layer, and broadcast just happens to be, I wouldn't say the last thought, but it becomes the emphasis, the exclamation point, the the thing that maybe brings more awareness and more scale to it as might be needed.

I think that's not only refreshing, but I think it's hugely smart because it already then says to the viewer out there that we're always on, always available. Start thinking of us wherever you go or wherever you are during the day, not necessarily at 6:00 or at 11:00 on a television set. But that's kinda bold, and sadly, it's that feels more like a cool exception.

And what do you think?

Jim Wilson: Yeah, no, that's a great experiment. I think that's a great idea. It goes back to again content first and having that digital DNA and how are audiences consuming content, where are they consuming content, and thinking about that first.

Now, again I'm in the advertising business, so I see, $184 billion local market of which 15% is broadcast. Then I think, okay, then why wouldn't they be doing that, right? And in many respects, one could think of broadcast as always being an amplifier, right? A megaphone. It reaches large audiences at scale.

There are lots of people who are trying to figure out how they do that, measure it, give it precision, give it attribution, et cetera. But there is a world where that great top of the funnel broadcast is met with lower funnel items, or channels, et cetera.

So I think it's a great experiment, obviously. Scripps is a very innovative company. And again, having worked with a number of broadcasters, they're all in varying stages of doing that, I think. They're all in varying stages of thinking about that. 

Tim Hanlon: All right, so here's one sort of last general set of questions I'll ask you for this week's episode. But I think it's actually important as the political advertising thing starts heating up, as September and October and November come around, and all that influx of political advertising, especially for linear comes about.

We had Kyle on from AdImpact a couple of weeks back, and he's a CEO. We were talking about the changing nature of what that ad spend looks like and frankly, how durable and seemingly unshakable the linear spend occurs every two years. There's always this sort of default into linear news sponsorship and that kind of stuff.

And the streaming thing has certainly grown and continues to grow at a heftier clip. But it's not to the exclusion of or has not seriously dented that linear thing. I have a sort of a fancy notion here that perhaps that's maybe what might shake broadcast television stations into a quicker transformation when and if, probably when, the political advertising spend becomes more digitally dominant or expectant than the linear newscast spend.

Because you see the data about how old local TV news viewers are and how the numbers are going down, and it's a difficult thing when you're in a stream-first environment. This will be a matter of time, this cycle, next cycle, where I think political ad spenders are gonna say okay, local linear is not unimportant, but maybe it's not as important as hitting people on all these fragmented digital things that you guys can offer, too.

Maybe we want that first and broadcast not unlike what I just described on the news side, "secondary." 

Jim Wilson: Yeah. I think if there's anyone that's leading the pack on that, it's Kyle. I met Kyle probably 10 years ago, and I think Kyle was probably one of the most forward-leaning, data-driven political strategists or political agencies that there are out there.

It's a great outfit. But you're right. It's still so dominated by broadcast. And we see it. We see it here in the dollars that we get, we get a sizable amount of political advertising. But it's still not at a point where I think it's equal to the rest of our business that runs every day.

And so you're right. Broadcast television basically gets smothered in political advertising. The people that are watching it are over a certain age so you're not reaching all demographics. You're reaching one demographic mostly. I was just with my 99-year-old great aunt who watches three channels and broadcast. But I'm just saying if you're trying to reach a broader audience, you've gotta go digital.

What's so obviously incredibly important and AdImpact really leads the way on this, is just having the right data sets to reach the right audiences, and doing that match on the streaming side to make sure that you're ensuring that you're reaching the audience and the geo, which, I always love the political cycles.

I think that they're fast, they're difficult, they make you better. They're very data-driven on the digital side. But it still seems like even in this cycle, it's still much more broadcast-centric, and basically they're filling dollars in digital channels when they can, but it's still broadcast dominant.

And I think there's still work that needs to be done there. Really does. Data sets, integrations and they need, obviously, with the candidates, a high level of certainty of delivery that you get with broadcast that with all the integrations and the data work they have to do now, I think that there's still some hesitancy from the political advertisers.

Tim Hanlon: Yeah, that's one of the ironies that we talked about. There's an efficiency in its inefficiency, right? Yes, of course, the political gerrymanders don't naturally or neatly match up with the local television marketplace's DMA. Or you're advertising in a spill state, that is, you're advertising one gubernatorial race, and half the audience is in another state, just the way the DMA is drawn up.

Yet you can't not be there, right? Because better to have that oversaturation and spillage, shall we say, than to not have that at all, or perhaps depend solely on targeted advertising that digital does so well. Also not unimportant by itself, but I think it's this elusive mixture of those two, right?

And I would argue we're still not quite near that sort of 50/50 split, if you will, in terms of, left hand of scale and reach in broadcast and linear, and right hand of, specificity and targeted punch. But I suspect that they're gonna get there sooner than the traditional brands are.

And maybe this cycle will be a real good example of it given just how seriously stuffed the coffers will be. It's probably the biggest non-presidential cycle we've ever seen. And the fact that like all of these races, they're gonna be exceedingly local with lots of national dollars pulling the strings.

Jim Wilson: We do a ton downstream through our partners.

I would characterize it as there's a lot more managed service in the digital space still this cycle, that I hope within the next cycle becomes really more self-service than, and less managed service. But I think there's just a lot of caution still, and I think we're gonna fix that.

Tim Hanlon: Okay, last question. And displacement by political advertising influx is assumed, but where is Madhive seeing strength and weakness in terms of categories these days with local spend? What types of categories are dominating or leading or you're seeing a lot of activity from, and where others might be waning in, as we record this, in early August going into the political season?

Jim Wilson: Good question. I haven't really thought about that recently. I'm surprised at how resilient the auto category has been. Auto has been extremely strong. The one thing that we've seen in auto which I think is super interesting, back to what you were just talking about, is we've been talking. I don't know if there's actually an increase in spending.

It's just that because we are so much better at attribution in the streaming side now, and local delivery, that we're actually taking dollars away from other tactics, other digital tactics, lower funnel tactics. So we're getting a lot more from there. So auto's been pretty, fairly strong for us. Healthcare has been strong for us.

Travel has been strong for us. Yeah, I don't know if I've actually seen any that have been weaker than others. I'm just amazed at the resiliency of some of it. That's all, especially auto. 

Tim Hanlon: I'm gonna put a pin on that. Maybe in an episode in a few months' time we'll, maybe let's talk about, drill down a little bit on the auto side.

Because the two and three tiers mixture of auto spending has always been a fascinating aberration from the rest of advertising, especially when it comes to national and local interplay, and I'm sure you're in the midst of some of those changes too, so maybe we can talk about that on a future episode.

But we have run out of time for this one. So of course, nice to see you again. We'll be on a more monthly cadence, so save up your questions and your tirades for me for I guess three weeks from now. 

Jim Wilson: Sounds good. I'll see you soon.

Tim Hanlon: Always a pleasure. Thanks, man.

All right. Many thanks to Jim, and we'll see him again in a few weeks. We'll try to keep to a monthly cadence going forward. And of course, we'll supplement with a whole bunch of other conversations with various practitioners and smarties out there in and around the world of local media. So stay tuned to your feeds for those, of course.

Our thanks not only to Jim, but the entire team at Madhive for sponsoring and being big backers of this ongoing podcast. And of course, we couldn't do this without the production support and apparatus of our friends at TVREV. Of course, Melissa Hourigan and Mike Gasbara, Jason Damata, and Jessika Walsten, of course, and our great pal Jerry Payne, whose audio excellence makes all these pieces come together nice and smooth.

We appreciate his efforts as always as well. Thank you for listening, and we'll see you next week here In the Vicinity.