Nation's biggest broadcasters to team up on mobile content
A consortium composed of some of the nation's biggest broadcasters -- including News Corp.'s Fox, NBC Universal, Gannett Broadcasting, Hearst Television, ION Television and Cox Media Group -- has struck a deal to create a joint venture to develop programming for mobile devices.
The as-yet-unnamed venture has television stations that reach just about every major market in the United States and by its own estimation could offer content to 150 million people. The plan is to use spectrum that is not being used for broadcast and transmit content to mobile phones.
The move comes at time when how broadcasters are or are not using spectrum has become a lightening rod at the Federal Communications Commission and on Capitol Hill. FCC Chairman Julius Genachowski recently submitted the agency's broadband plan to improve mobile and Internet service across the nation, and in that plan the FCC advocates that broadcasters voluntarily return spectrum that could be auctioned to telecommunication firms. Broadcasters are reluctant to give back any spectrum because they see it as key to develop new businesses and revenue streams, especially as the local television station business is hurting.
Details of the new effort are sketchy. In an interview, Sandy Schwartz, president of Cox Media Group, said the companies are teaming up because it will be more cost-efficient. "If Cox did it alone it would be a huge expense," he said. As for content, in the early stages it would most likely focus on the staples of local TV -- news, weather and sports.
Many of the companies involved in this consortium also compete against one another for advertising and viewers both locally and nationally, a fact not lost on Schwartz.
"Broadcasters don't get along with each other very well," he said. But given how the competitive landscape has changed, "It's a new day."
The idea of a group of the nation's biggest media companies teaming up to offer content to mobile devices could potentially raise eyebrows in antitrust circles. Although local broadcasters often compete and share resources, just as newspapers do, a venture on a national level could face scrutiny. Also, the motivation of such ventures is usually one of financial survival.
Mark F. Grady, a professor at the UCLA School of Law, said the problem could be if this consortium were to lead to a restriction of content offered, as opposed to if the companies were competing against one another.
Cox's Schwartz said he did not anticipate any antitrust issues. "We have vetted it extremely well," he said, adding that the group has not "had one conversation without lawyers in the room."
-- Joe Flint