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Businesses change just like people do — in little ways that are barely noticeable when you see or interact with them frequently but that add up to something substantial over time.
Take the television stations that most of us watch every day in the Twin Cities.
Day in and day out, year in and year out, they don't seem to change much. Their broadcast day looks like it has since the 1960s: morning news shows, daytime talk shows, evening news shows, prime time network shows, late news.
But the business of local TV broadcasting has been utterly transformed. First with the arrival of digital broadcasting in the late 1990s, then high-definition pictures immediately after that and then, over the past decade, by new competition from social media and streaming services.
The number of things we can watch — and the number of places where businesses can advertise — has exploded. And yet, Minnesota's big TV stations WCCO, KSTP, KMSP and KARE are doing pretty great.
Now, OK, I don't have details on their finances. Only one station is locally owned, KSTP by Hubbard Broadcasting, which is a private company. WCCO is owned by CBS, KMSP by Fox and KARE by Tegna, which is in the midst of a sale and restructuring.
No TV station is the cash cow it once was. They all face a revenue squeeze from the fact that advertisers, on a unit basis, pay less for the digital audience.
One effect of the digital transformation at the stations is that ratings matter less and less. February is one of the three months of the year (along with November and May) known as a sweeps month, when the TV industry's long-dominant researcher Nielsen takes more extensive surveys of viewers.
But now, says Bill Dallman, the general manager at KARE, "Nielsen and Comscore, the other big research firm, measure every 15 minutes every single day."
Networks still tend to focus on sweeps months by making sure original episodes run in prime time, said Jim Thomas, KARE's marketing director. "Even there, this modification is happening because consumers have said, 'Gee, I like it when whatever streaming channel is my favorite launches an eight-episode series all at once,'" he said.
In a similar way, KARE's news department no longer confines its biggest investigations and best features to sweeps months. "We have a saying that news delayed is news denied," Dallman said. "When the news team is ready with something, Jim and his group will jump into action to let people know."
Viewers watch videos on the KARE 11 website about 1.3 million times a month and videos on its YouTube channel about 1.9 million times a month. All of that represents new revenue opportunities beyond the 10 or so minutes of airtime it sells each hour on its main channel.
"Before, our sales people were order takers. We had inventory [of time]. We sold it and advertisers were pleased to watch the results in their business," Dallman said. "Now, every one of our sellers has to be smart about all platforms and they also should tailor a package to the customer. No two pitches are alike right now."
On the programming side, all the local stations keep innovating, particularly in news. KARE 11's 6:30 p.m. show and KSTP's 10 p.m. show break decades-old conventions about how news is delivered. WCCO's streaming news service runs all the time. Fox 9's 7 p.m. news (technically on Fox 9+) is the most convenient and relaxed catch-up on the day.
"The Twin Cities stations have always been sort of a hotbed of innovation," said Brent Magid, chief executive of Magid, the Minneapolis-based consulting firm that itself has been a transformative force in media. His father, Frank Magid, formed the company in 1957 and, in 1977, was called "the nation's leading television news doctor" by Time magazine.
Similar changes and incremental revenue opportunities have happened at local stations across the country, Magid said. His company provides consumer research on a subscription basis to the sales teams at TV stations, which allows them to help advertisers craft their message. "They can go out and be super helpful to their advertisers," he said.
The challenge for local broadcasters, Magid said, is to help advertisers manage the bifurcation of the audience, because younger people are more likely to access content on digital platforms than by watching broadcast TV.
"Innovation has to involve not only the product, but distribution," he said.
"People under the age of 45 are quite radically different in what appeals to them versus people who are over the age of 45," Magid said. "And those traditional media companies were really built around, and targeted for, the 45-plus audience."
