If there is one strategic assumption that has dominated local television's thinking over the past decade, it is the belief that scale remains the industry's most important competitive weapon.
The argument has become familiar. Faced with audience fragmentation, cord-cutting, streaming competition and increasing pressure on traditional advertising revenues, broadcasters have understandably concluded that larger station groups represent a necessary response. More scale creates operating efficiencies, strengthens negotiating leverage with distributors, improves national advertising capabilities and provides greater financial flexibility. It is the rationale behind many of the industry's continuing efforts to secure ownership deregulation and facilitate additional consolidation.
Yet for all the attention paid to scale, there is growing evidence that broadcasters may be solving for the wrong problem.
Tim Hanlon is the founder and CEO of the Chicago-based Vertere Group, LLC.
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