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FCC Chairman to Broadcasters: Keep Betting Big on Digital

FCC Chairman Julius Genachowski tells the NAB gathering that TV stations that aggressively pursue digital initiatives are reaping dividends

Federal Communications Commission Chairman Julius Genachowski on Monday urged broadcasters to — in the parlance of Las Vegas, where the National Association of Broadcasters were meeting — bet even bigger on digital technology.

"When I was here at NAB two years ago," Genachowski told the group, "I encouraged broadcasters to seize the benefits of broadband, to serve their audiences over a growing number of digital screens, and to leverage broadcast news and other unique content to generate revenue from every platform. 

"I said the same thing last year, and I’ve praised broadcasters who’ve said they don’t want to be like the train companies that saw themselves as in the train business instead of the transportation business."

And it is working, he said.

Also read: FCC Chief Genachowski: 'Tablet Technology Is Revolutionary'

Online ad revenues for TV stations, Genachowski reported, have crossed the $1 billion-a-year mark at $1.2 billion for 2011, up almost one-third over the last three years with more growth expected this year. (Overall TV ad revenue is up 12% since 2009, and analysts project another 14% increase in 2012, he said.)

With Wi-Fi and the next generation of mobile broadband networks, Genachowski said, "the new expectation and the new norm is quickly becoming: the content you want, where you want it, and when you want it, accompanied by the full suite of interactive services."

He cited several success stories that have accelerated their digital efforts.

In early 2011, he said, NBC’s 10 O&O’s completely revamped their web presence – refocusing their sites on local news and video, and infusing social media throughout. Altogether, the sites are attracting more than 16 million unique visitors a month – up 33% from the previous year.

When tornadoes came through Cincinnati a few weeks ago, shutting down electricity including TVs, Genachowski said, Scripps-owned WCPO was able to reach viewers through its mobile products, which they used to repurpose weather and other reports from their TV station and news team. 

Genachowski addressed several other hot-button issues for broadcasters, including:

>> Retransmission fees: He reiterated the commission's resistance to calls for government intervention to prevent standoffs between broadcasters and cable and satellite providers, Genachowski said the panel would encourage private, market-driven agreements but continue to monitor the marketplace and see that consumers were not caught in the middle.

>> Government spectrum auctions: While his agency was busy implementing the incentive auctions authorized by Congress, "there’s no silver bullet," Genachowski said. "We need new technologies – both hardware and software." He said there would be a robust public process leading up to the auction, which would include webinars, workshops, public notices, and rulemaking proceedings.

>> The economic recovery: Broadcasters are benefiting not only from general economic recovery, he said, but from specific initiatives like the rescue of the auto industry. Across the broadcast industry, auto ad revenue has seen strong growth, now more than 20 percent of spot revenue. "Imagine the effect on broadcasters if the administration hadn’t prevented the collapse of the American auto industry," he said. 

>> Public record online: Genachowski strongly backed his commission's recommendation that TV stations be required to to post online the rates they charge politicians for commercials, calling it "common sense."