Standard General’s impending acquisition of TEGNA would create the nation’s largest minority women-run broadcasting company. Tegna operates 64 television stations in 51 US markets. Led by Soo Kim, a long-term investor in the broadcast and local news industry, and new CEO Deb McDermott, a 20-year television industry veteran, Standard General intends to grow and invest in TEGNA’s operations to become a premier broadcast television company. Although accepted by shareholders, the deal requires Federal Communications Commission (FCC) approval. The emergence of the agreement demonstrates the impact of internet disruption on traditional media and legacy FCC regulations.
Plug and Play: permissionless innovation in online television
There are few barriers to starting an online channel today. Compared to historic US regulations against owning radio stations, television stations, and newspapers, an individual can embed audio, video, and text into an online property from the start. This is made possible by multiple Internet-related technologies for content creation, management, and delivery, built-in analytics for market research, and a variety of quality, security, and acceleration techniques for end users.
With the ubiquity of high-quality broadband across America, users can access this content from a range of devices whenever and wherever they choose on demand. Online entrepreneurs can build their own websites or leverage existing video platforms, use white label templates for marketing, and rely on interfaces like Roku for search. Marketers benefit from different business models including advertising, subscription, or pay-per-view, and complement it with cross-sells, coupons, catch-up offers, and other promotions. Although there are fixed costs for content rights, innovators are increasingly creating their own content as inputs are plentiful, competitive and accessible with variable purchase of video servers, satellites, cameras and other equipment. Many entrepreneurs use the all-in-one solution of smartphones for mobile live streaming to facilitate viewing of sports, fundraisers, corporate events, local news, and more. If there are bottlenecks in online TV, it’s with Big Tech platforms, not regulators.
Archaic regulation of traditional television
Building or running a traditional, linear TV station is another story. You must convince FCC regulators that your station serves “the public interest, convenience, and necessity” and consistently report your numbers to the FCC. At the beginning of the 20e century, Congress and the Radio Corporation of America (RCA) took over the “public” airwaves and laid the foundation for the broadcast television oligopoly of NBC, CBS, ABC and PBS. This regime was later shaped by the FCC through the application, award, and approval of television licenses (note that in the 1990s the FCC initiated auctions for mobile wireless spectrum, allowing markets, not regulators, to determine outcomes).
Over the decades, a series of laws established by Congress and interpreted as regulations by the FCC evolved into today’s Media Office, which makes policy recommendations to FCC commissioners. FCC licensing and ownership rules served to protect major networks, until the rise of cable, thwarted for years by the FCC, rocked the television advertising cartel, which the Internet eventually dismantled.
While there are no rules on how many households Big Tech platforms like Netflix can reach, the FCC tightly regulates how many radio and TV stations a given entity can own in a given entity. specific area and the number of households it reaches, with a maximum of 39% of US television households.
To foster competition, the broadcasting and newspaper industry should be deregulated so it can compete with Big Tech, but progress has been slow and laborious. FCC Commissioner Michael O’Reilly has advocated for media regulatory reform for years. Finally, in 2017, the FCC removed the outdated ban on co-ownership of a television station and a newspaper in the same market and the cross-ownership of radio and television stations.
Reinventing Broadcasting in the Digital Age
Soo Kim is ready to take on the challenge of reinventing the media industry in the era of Big Tech. Accustomed to adversity, he emigrated from an impoverished farm in South Korea in the 1970s, grew up in Queens, New York, and attended Princeton. Its standard general has a winning record of buying troubled television stations and turning them around through thoughtful analysis and investments in people and technology.
Many analysts believe TV broadcasting is a dying business with no future, exacerbated by cord cutting. However, the existing networks still have important assets and connections to the communities they serve that streamers lack. If assets can be redeployed and combined with an effective local news strategy, local broadcasting can thrive; the demand for professional local news has only increased in the age of pandemics, crises and disasters.
Kim bets news delivery can be improved through streaming, direct-to-consumer marketing, and the Advanced Television Systems Committee (ATSC) 3.0 standard, which enables 4K and high-definition resolution and live Dolby audio transmission. . He plans to leverage proven TV executives including McDermott (together they brought Young Broadcasting out of bankruptcy in 2010) and others to lead the transformation.
Standard General’s FCC bid demonstrates a business plan focused on investing in talent and technology. Talent is essential for the content industry, which Netflix is touting in its reinvention of entertainment. Standard General plans to increase the number and salaries of station employees, add more field reporters, improve compensation packages, expand news production and investigative training, and s partner with local universities for the journalist pipeline.
The app further details investments in technology and facilities at the many stations including Lincoln, Cape Girardeau, Richmond, Nashville, Albany, Knoxville, San Francisco, Raleigh, Spartanburg, Providence and Mobile. This includes investments in cross-platform content distribution, new web assets, content management systems, cameras, cars, transmission equipment, home and newsroom computers, and captioning. automated for the hearing impaired. The investment expands Congressional coverage from the Washington DC newsroom and improves public safety during hurricanes with a state-of-the-art radar system at WFLA in Tampa, Florida.
Preserve local media
Broadcasting regulation has kept power in the hands of a few, leaving the future of local media in question. Standard General’s long track record of investing in local news is remarkable and critical to the future of local news in an age of streaming and big tech dominance. Investments in people and technology will preserve local newsrooms. The FCC is expected to approve the deal without delay.