Business Model for DTV

[Kevin Arnold]

Much has been made about the inability of broadcast stations to make any money from their DTV stations.  Some recent threads and comments by Tom Snyder have addressed this issue.  I've been thinking about this and have decided that the comments by the station brass about the inability to make a profit from this as bogus and disingenuous.
Most industries have to deal with Federal mandates, which is what this is.  From school systems, who are required to offer certain programs but are given no funding, and car manufacturers who are given mileage demands and safety standards, as well as airlines which have to meet Federal standards, there are thousands of businesses who have to toe the line.  Sometimes the transitions make sense, from safety perspectives, and some times its just to keep some special interest group happy. So this is nothing new.
Broadcast license owners were given this mandate mainly so the Feds could sell their spectrum for big money, and secondarily to finally push a 70 year old technology to the next level. The usual market forces don't work as well in the monopoly world of broadcast licenses, exclusive cable franchises, and otherwise limited spectrum.
Which brings us full circle to our local situation, where some stations have done the absolute minimum to meet standards (Wvtv18 and WCGV24 – I won't count the religious broadcasters) to others who have trumpeted their advancement but really did the job half way (WDJT58, WITI6). There are those who realize that the benefits of leading the way will pay off in the future. WTMJ has pursued this for years with a lot of success. They were the first to go to color, go digital, use electronic new gathering, and generally spend the bucks when there is no immediate return. Their reward? They are #1 in news and perceived as a local leader. Their ratings lead translates into dollars.  WISN has caught on to this and now is pursuing 4 using the same game plan. They are #2.  Fox 6 used to be a much bigger powerhouse but has been on the decline – you be the judge as to why. WDJT58 has tried to do the local stuff on the cheap. Their news shows it and their attitude reflects it.  Their reward? Last place in news. Channels 18 and 24 are no more than cable channels who happen to have a local broadcast channel also. Their function is to siphon the advertising dollar off locally and send it to corporate headquarters. Channel 18's local news reminds me of a bad Saturday night live skit.
Any business that is successful long term has to constantly evolve. Some times the profits aren't their immediately but will come later. If you ignore that you become the "also ran" on the local scene. 4, 6, & 12 have sunk enormous funds into helicopters and the staffing as well as maintenance of them.  Show me how this generates extra profits to cover the expense.  Most days the choppers are used to cover sunsets and traffic (when in my care I always carry a TV to check on local traffic). The argument is bogus and used to excuse bad behavior.

[mhz40]

The feds should have told the broadcasters that all profits from the sale would be shared only between the companies opening up the spectrum.  That would have stimulated the broadcasters desire move and offset thier cost to do so.  The feds could have then realized money on the tax revenue from the PROFIT of the new companies using the spectrum.