A Deep Dive in Content Distribution with Scott Ehrlich, SVP Growth Networks & Content, Sinclair Broadcast Group

Speaker 1 (00:00):

[inaudible]

Speaker 2 (00:06):

Hi everybody. And welcome to this week's podcast, Joe and I am this week with the fabulous Scott Ehrlich, who is the senior vice president for growth networks and content for the Sinclair broadcast group. And I had a chance to be on a panel recently with Scott and the stuff that he has his hands on is kind of a mind blow, um, and sort of the best education of what's happening in television in terms of the distribution mechanism and all the different content models. And so I thought it would be great to talk to Scott about all the things that they're up to, um, at Sinclair, um, because it's, it's a great education, I think, for the current ecosystem. So welcome to the tech cat show Scott. Um, why don't you tell us first about your role?

Speaker 3 (00:50):

Well, thanks for having me. I appreciate it. Um, so I've been at the company for almost four years now. Um, and, uh, I oversee a couple of different units. Um, so my, my, my business unit is called national networks and platforms and, uh, Sinclair is at its heart, um, a local media company. So our biggest assets are our local television stations, um, and the regional sports networks that we acquired about two years ago. Um, and so we're known generally as a local media company and I was kind of brought in to be the kind of national guy. Um, so, um, that means a couple of things. So the national networks part is we have for over the air, um, broadcast networks. So yes, 25 years after I got into streaming, I got into over the air broadcasting with antennas and stuff. Um, and we'll come back to this or why that makes sense to me anyway.

Speaker 3 (01:50):

Um, uh, and then the other part of the job is, is, um, uh, the platforms part, our OTT platforms. So we have, uh, we have, uh, uh, a service called news on, um, which has well over 200 local newscasts aggregated into one app. And so if you're a local news junkie or your news junkie general, um, it's, it's kind of a, a real buffet. Um, and it's really, it, it, it really hits a stride in, you know, of like a hurricane hits the Gulf and you can go from a station in Shreveport to a station in mobile, to a station in Tallahassee, and you can even kind of go around and see how different people are covering the story. Um, and then of course, if you're out of market, you can, you can see, um, the news from your market and then, uh, stirs our owned and operated OTT platform we launched in, uh, in January of 18.

Speaker 3 (02:48):

I think it was, um, January of 19. I feel like I've been living in a time where for the last year and a half, does anybody else feel that way? Yeah, we had a year that sort of did no, it was January of 19. Um, so it's not two years old. And in stores, there's a platform that has about 130, um, uh, fast channels, uh, free ad-supported streaming television channels, um, and unique to that space, which is a space that includes people like Pluto and, and, um, uh, Samsung TV plus, and other brands in this space. We have a local curated channel for each of our markets. Um, and so right now we have 85, I think, localized channels, um, that combination of local content, um, syndicated content, um, uh, and just the mix that we think is appealing to the local broadcast audience. But, um, and then the last part of my job is, um, has to do with innovation.

Speaker 3 (03:47):

Um, and so I oversee a group that, um, we refer to as the content lab. Um, and about two years ago, we decided it would be really, um, helpful for all the things that we were trying to do to have a group that was just dedicated to innovation. And so we put together a cross-functional team and let's get somebody who comes from a sales background. So when it comes from a audience development background, somebody who comes from a, uh, format driven production background, um, uh, another, producer's a bit of a mad scientist kind of, um, producer and, um, uh, some research support and, and, and really kind of gave them a charter to go and break things, um, build things, um, find a different way to do things. Um, and it's been, it's been a really great group to put together and, um, really was really was eye opening, you know, when COVID hit. And we had to figure out things like, uh, like remote production, um, that team was able to dive right in and, and work with different technologies and figure out a solution so that we could, uh, we could, well, we wound up producing a newscast for, I think it was Gainesville, Florida out of a laptop in west Palm beach. Oh, cool.

Speaker 2 (05:01):

Cool. So like a skull, a skunkworks. Well, I would love for you to, let's take a step back now because I know you have your fingers in all these places and just sort of look at the landscape because most consumers right now have, um, and you and I were talking about this, cause it's awkward for me. I have a LG and I have a, a Firestick in it, and it takes me a while to get to the fire stick on the remote because I'm competing with the LGS own solutions. And then there's all the OTT boxes, then there's the apps. So could you kind of break it down for us? Like what are all these models and a little bit, maybe, you know, if you have any, any insights about what you think is working or why not? Because it is, it is overly complex. And I think more than ever before, especially with like what's going on in the news today with all the re aggregation now of at and T and all that, but also, um, ju just, there's so many choices for consumers. So how do we think about this? So maybe talk to us a little bit about what are all these things, which I know, you know, Sinclair and you've just mentioned has, but give it gives us, give us a sense of what this landscape is.

Speaker 3 (06:17):

Yeah. I mean, listen, if I really knew, um, bottle it and sell it, um, uh, uh,

Speaker 2 (06:24):

You know, just, we have connected TVs, right? So what we'll show,

Speaker 3 (06:30):

If you look the biggest issue, I think we face as a content industry right now is discovery discovery. Like discoverability of content is, is hard and getting harder. And the more content there is, the harder that problem gets. Um, and that is a common problem, no matter what, what platform you're on. Um, but, um, the way I think about it is you've got over the air, um, which is both where television started, um, and has sort of newly found its footing. Um, the largest, I think the largest growing segment of the television audience is the over the air audience. The audience, the part of the audience is getting television, um, over an antenna and digital antennas, um, are the relatively inexpensive. They started at like seven, eight, $9. Um, and you get a lot of channels, uh, here in Los Angeles. The, I actually put an antenna on my roof. Um, and when I asked my installer to do that, he was like, what? Like an antenna, like, yes, an antenna, um, I get 205 channels there, a service

Speaker 2 (07:38):

You're subscribing to, or it just, you buy the antenna and you just connect to TGV. Yeah.

Speaker 3 (07:45):

You just connect it to your TV, just old school, like you said, the rabbit rabbit ears right back in the day. Um, this is really not that different. I mean, it's a modern version of that, but it's still, it's an over the air in tennis. So there's your free over the air signals that come over FCC license, spectrum, um, and you know, you get the full uncompressed signal, um, you know, the rebroadcasting services, whether it's cable or satellite, or they have to compress the signals, um, to be able to take maximum, um, use, use their pullout platforms with maximum efficiency should have been easier to say, um, uh, over the air though, you get the full on compressed signal, um, and you know, in areas where it works, it's beautiful. Um, and you do see a lot of consumers taking this kind of hybrid approach where they'll have an antenna, they'll have, um, a streaming box of some kind, um, or a connected TV. And those are getting closer and closer in terms of the functionality that they offer. Um, and maybe they'll have one TV. Um, that's still kind of old school connected to an MVPD. Um, you know, for us as a company, it's, it's, um, it's a little like asking which of your children you prefer, right? You you're,

Speaker 2 (09:09):

You, you have, you have plays in all those spaces, but if, if I'm watching something over the air, are there commercials? Yep. And so, and, and there's, is there a guide or just a budget?

Speaker 3 (09:22):

Yeah. So the TVs, the TVs for the most part, have the guides embedded in them. Um, so the TV I have here, I plugged it into the antenna. Um, what'll happen is then it will automatically scan for channels. So the same way, like if you think about your car radio and the scan feature, um, your TV does exactly the same thing by, by, um, by default. Um, and in America you can't ship a TV that doesn't have a TV tuner. Um, so TVs all have tuners, um, but they require external antenna. So you have to plug an antenna in, um, so you probably the antenna and, and it scans for channels. And then it builds a program guide. Um, generally, um, there are some over the air DVRs, but they're all third party kind of things. I, I, haven't seen a connected TV with a built-in record function.

Speaker 3 (10:12):

Um, but the rest of it is built in, um, the tuners built in, uh, the program guides built in, um, all of that information gets pulled, you know, pretty big connected TV. It gets pulled through, um, through, I think he gets pulled through an internet connection. I actually don't know, but, um, but it builds the guide based on what channels it scans. Um, and one of the challenges in the, over the air space as the channels move. Um, and so we do, we did tell our audience fairly frequently to re-scan cause you might find new channels, you might find some channels have moved. Um, and so people that are regular users of antenna based TV, no to re-scan their TVs. Um, but, um, you know, like here in Los Angeles, uh, K TLA is channel five. And so that used to be channel five. Now it's technically channel five.one and this channel five, but two, and there's a channel five, three, and there's a channel five dot four. So channel five is now actually four channels

Speaker 2 (11:12):

And those are all intent-based or they could also be what comes with the connected box, which is another model, right.

Speaker 3 (11:22):

Dreaming is a different model than broadcast, right. Um, and the way that you license content, generally you will, the studios would have a different structure for, for streaming versus versus broadcast in less you're packaging them together. So for our networks, um, not all over their network stream, but ours do. Um, so TBD comet charge stadium, uh, which are four over the air national channels. Um, they all also stream, um, which we think is kind of the right approach. Like we, you know, are like my view of this is, is all broadcasting like broadcasting at the end of the day is the art of putting, putting a piece of content out, getting the broadest audience possible and then selling advertising against that audience. Um, and a free streaming channel, fast channel, um, does that a free over the air channel does that. Um, and so from my perspective, they're, they're sort of the same thing. Um, but technologically, they are different. Um, one is purely coming through the internet and the others literally coming through the air.

Speaker 2 (12:34):

Got it. And so for, I understand from your perspective, you're hitting all the notes because that's the way that you can incrementally build an audience, right? I mean that, that way get audience, if you're streaming, um, if you're getting it over the air, if you're getting it through your cable box, if you're getting it through a streaming streaming box or the connected TV streaming services. So all of these things, so is everyone just out there shopping for content to put on all of their different services and creating content? I mean, it seems to me an explosion of, of choices,

Speaker 3 (13:12):

Which leads back to the discovery issue. I was mentioning earlier. It did, there is, there's a lot of content out there right now. There's a lot of, and

Speaker 2 (13:19):

On all these different ways to receive the content

Speaker 3 (13:24):

And ways to license the content and platforms to create content for and on and on and on. Um, it's a problem that keeps sort of multiplying on itself. The more platforms you have, the more channels you have, the more programming brands you have. Um, the more acute that discovery problem gets, which is ironic. Um, I look at it a little bit differently. Um, you know, our kind of, um, mantra as a company is connecting people to content everywhere. Um, and so what that implies is it's not up to me, how you want to watch content. It's up to you. If you want to watch it on your phone, great. You want to watch it on a connected TV. Awesome. You want to watch it on a laptop? Cool. You want to watch it connected to an antenna? Awesome. Then it's then it's, then it's my job as a programmer to make sure that my product is available to you when and where you want to consume it.

Speaker 3 (14:22):

It shouldn't be the consumer's challenge to figure out, um, what they need to buy to experience my content as a practical matter. There's very little content that is so compelling. It gets people to buy a new device, to change a platform, um, to improve the speed of their internet connection, whatever it takes to get that content. Most people aren't willing to go that extra mile for any particular piece of content. There's some content that is so unique and so valuable. It gets people to change devices. Um, but once you get outside of sports, which is the best repository of that kind of content ever, right? And if you're a fan of the New York Yankees, and you want to watch the New York Yankees, there's only the New York Yankees there isn't, there is, I believe there is a team called the Yokohama Yankees, but it's not the same thing.

Speaker 2 (15:15):

You're going to find your way to, to, to get that content, whether you're paying for that sports service on whatever solution you have, but you're going to figure out how to get it. Cause it's, cause you're a fan,

Speaker 3 (15:27):

A fan of that. You're going to figure out how to get it. And if you have to pay for it, then you have a decision to make, right. Um, it's either worth it to you or it's not worth it to you. Um, and again, that's the, then it's our job to get it to when and where you want to have it. And that's why you'll hear us talking as a company a lot about direct to consumer, um, for the sports business. Um, and that's an important thing going forward. If you're a fan of a team and you're not a cable subscriber, you know, you should be able to still buy access to that, um, to that season or whatever. Um, and we see that more and more that people want to be. Um, people want to be connected to their content in their own ways. Um, and you know, we need to preserve value for our partners in some cases, but overall we want to make sure that the content is where the consumers want it to be. Um, so that they have an opportunity to see the thing they want to see.

Speaker 2 (16:29):

Now, what about, um, we also have mobile, we also have the web and we also have a VOD and STD, which is more on the cable side of things. So are you also looking at placements of content and all those other sort of models as well?

Speaker 3 (16:46):

Um, I mean, we work a lot in the, in the Avon space. So, um, on stir, so at the local station level, we have streaming rights to most, if not all of the syndicated content we put on there and so on a market by market basis. So part of what we've done with stir, which really from a technical standpoint, was not trivial at all, was set up a geo-fencing system so that the right shows or geo-fence to the right markets. And so it's a market where we have Ellen, you can see the last five episodes of Ellen if you're in that market, um, or for the market where we have jeopardy or Maury Povich or whatever your favorite show is. Um, and that local station is the only one that's able to present. Um, the ability to on demand, catch up with that show. Um, and that's proven to be really, really, um, popular.

Speaker 3 (17:40):

Um, we thought it would be, these are popular shows and they're well-known shows and well-established shows. And, um, there isn't a lot of places where they're available on demand. So, um, that was a big initiative for us. Little Ash cheer, I think. Um, uh, so we do, we are in the Avon business from the perspective of a platform of a distribution platform. Um, I don't know, um, really that we do much in the S VOD business and the subscription, the on demand business, um, tennis channel has a really cool subscription product called tennis channel plus, um, that if you're, and you don't have to be a tennis channel subscriber necessarily to, to buy it, but it gives you kind of an all access pass. So like for the French open, you can watch all of the courts and pick the match that you want to see at any given time. Um, so we do have some stuff, uh, that is in the subscription business. I think we'll have more subscription businesses in the future. Um, but today we're mostly in, you know, most of, most of the businesses I'm involved in, um, tend to be on the ad supported side.

Speaker 2 (18:49):

And the, the thing that I keep hearing from you too, is these, these, uh, like vertical content areas. So you mentioned sports, you mentioned tennis. Um, do you see also other models, uh, growing, um, finance, the finance channel, or like back in the early days of cable or, or that kind of famous Saturday night live episode where the mall had just a masking tape store, you know, these like really specific, um, verticals of content channels all over the place, like it was cable, but now it seems to be being born again in this world.

Speaker 3 (19:27):

Well, it is sort of a, you know, what what's old is new again, kind of thing. Um, when we started working on stir, we started, you know, the phrase that we used was the basic food groups of content. And if you look at basic cable, the, the original, basic cable that early eighties, basic cable, it covered the basic food groups, right. There was a news channel, there was a sports channel, there was a youth channel, there is a, a lifestyle channel. Uh, there was an, a general entertainment channel or two, um, the factual channel, right. Basic food groups. And so when we looked at how we were going to program stir for the over the air audience, uh, I mean, it's no duty service, but it's promoted a lot to an over the air audience. Um, that was the first thing was okay, well, let's make sure we have those basic food groups covered.

Speaker 3 (20:22):

Um, and as we've been building our own channel portfolio, um, our network portfolio is similar kind of thing, right? So comedy is a science fiction channel, uh, charges in, uh, action show channel. Um, TBD is a youth oriented channel. A stadium is a sports channel. Um, and you can see these patterns and they do repeat because there was a version of the basic food groups of cable in the eighties. And then in the nineties, when you went from analog cable to digital cable, then there was the digital tiers with whatever sorts of expanded, basic food groups right now, the luxury food groups, not the basic ones, even

Speaker 2 (21:06):

Now spectrum is still sort of organizing it like that. And it's very confusing, I think. But, um, so you'll see, you'll start to see. And then the other announcements that came out of, um, the new fronts a couple of weeks ago, what was the sort of talk of augmented reality and shopability, so are you guys looking at shopability for all your different channels and things like that, you know, the ability to really bring that Jennifer Anniston t-shirt metaphor that T commerce thing to make happen? Is that something that, that is of interest right now that maybe your skunkworks is looking at, or you're already playing with models?

Speaker 3 (21:46):

Um, I can't imagine there's a business model in the media business. I either haven't or won't play with, um, definitely it's fun

Speaker 2 (21:56):

To talk to you cause you've got your fingers in everything right now.

Speaker 3 (22:00):

Uh, well, listen to the, the, the, uh, the labs team is a, is a great, I mean, for me personally, it's a great outlet to, to work with really creative people on projects that aren't necessarily tied to an operating business, and that are really just about, you know, figuring out how we can skate to where the puck is going. Um, uh it's um, it's, it's been a lot of fun, um, in terms of commerce. Um, there are a couple of different ways to think about commerce. Um, we do have a couple of shopping channels on stir. Um, we're talking to others. Um, so my guess is we'll have more of that activity on the OTT side, um, to learn really as much as anything else. Um, I mean, some of those are big established businesses that have legacy and history and they really do know what they're doing.

Speaker 3 (22:57):

And, um, there are others that we're talking to, they're taking a newer fresher approach to, um, to how you combine content and commerce. Um, there's a food company that I think is, is, is doing some really interesting work, um, and, and a few others. So, I mean the short answer, yes, we're, we're playing with those kinds of models, but, uh, I think it's it, it's also, you know, how are you using your airtime? What are you, what are you, what are you using your time to sell? Um, so, you know, the notion that, you know, maybe there's products that we have to sell and we use some of the airtime to sell those products. Um, uh, maybe we partner with people, um, and, and have a, um, a deeper relationship than just a, you're an, um, uh, you know, I don't work a lot on our sports side, but, you know, look what the sports division did with ballet.

Speaker 3 (23:52):

Um, you know, the, all the networks are branded as valley. Um, um, that's about as deep as a partnership as you can get is, is putting the partner's name on the door. Um, so I, I think that there's a lot of room to experiment in this. Um, I also think that, um, just as everything else evolves, advertising models have to evolve as well. Um, you know, I'm sure, you know, you know, before I came to this company, I was doing a lot of work in branded content and producing movies for Marriott. And, you know, we did spots for Fiat and, uh, we also worked for companies that didn't Brian, but, um, um, but this happened, um, but, um, but you know, that notion of sort of a brand being part of the content and part of the storytelling, um, I believed in for a long time and, and we certainly haven't seen the end of it.

Speaker 3 (25:02):

And, um, the 32nd spot model has been a very good one for our company and continues to be. Um, but it's, you know, you have to continue the course and the pace of innovation, you can't sort of sit back and say, okay, well, this worked for 20 years or to work for the next 20 years. Um, the one constant has changed. We all know that, um, and in this, and, and, and, you know, when it comes to the, you know, the basic mechanisms by which we make money, um, we're constantly examining those to make sure that, that in a dynamic industry, um, we're up to speed.

Speaker 2 (25:38):

Hmm. When, if you looked at your crystal ball, we have another 10 minutes. I just want to talk about the future a little bit. And I know we mentioned discoverability, but do you think there'll be a point where literally you could go up to your TV and just say, you know, female comedy, you know, romcom, you know, meet cute or whatever your words are, and it will bring up whatever Sinclair say has on all your various things. And it'll give me a choice, you know, are we going to ever get there where you're going across all the different models and services, and it will pluck out of it, you know, what I want to watch or serve up to me, something that it thinks I want to watch based on data?

Speaker 3 (26:23):

Well, it's, it's the same sort of answer. Like if I, if I had the answer to the discovery problem, um, I, I, I be implementing it right now. Um, yeah, look, I think things like, uh, artificial intelligence and machine learning, um, I think we have reasonably good hopes that those will, will help us solve this discovery problem. I mean, look, I, I, for me, I, I prefer the TV. Didn't need me to ask it a question. If the TV understood my viewing habits and viewing patterns to the point where what I turned it on, my ex-husband, let me just tell you.

Speaker 2 (27:04):

Right. But you would prefer if it just knew

Speaker 3 (27:07):

Yeah. Certain level, like, you know, if the machine is able to track your consumption, it should be able at some point to predict your consumption. Um, and you know, I made some sort of, uh, uh, not too far fetched thought. Um, you know, if you, if you look at some of the services now, um, uh, one of the virtual MVPD is that I subscribed to actually does a pretty good job of figuring out what I want to watch based on my viewing patterns. It knows that, you know, when I first turned on the TV in the morning, I tune it to a news specific news channel. Um, it knows that the afternoon I tend to go to something else. And so it's, it all orders, the choices it offers me based on, on, um, based on what I've consumed. Um, and I think that's an interesting path because I, you know, I do get, um, I do get concerned when I hear people talking about personalization and customization and whatnot, because a lot of times that leads to a consumer experience.

Speaker 3 (28:16):

That's a lot of work for the consumer and it needs to be work for the consumer, right? The more work you make it for the consumer, the less often they will do it. It's just a general. Um, and you know, the beauty of ad supported is, um, you know, it adheres to one of the key rules of things you never have to do research on. People will always like free. Right, right. I don't feel like I need to research that. Um, but at the same time you need to connect them to the right thing. Right. Um, and my hope is that that, that as the machines get smarter, the path between consumers and the thing they want to consume get shorter. Um, and that's, you know, that's kind of the, the, the, the high-level way I like to view it. Um, now how much of that will come true? I don't know. I don't really actually have a crystal ball. Um, although if I had a time machine, that'd be pretty cool. Um, go back to my team. I go back to 1998 and buy a lot of apple stock.

Speaker 2 (29:28):

Where, where can we Scott learn about all the things that you're doing? Is there anywhere that folks can, can dial in so they can learn more?

Speaker 3 (29:36):

Um, well, certainly all the stuff that we're doing at Sinclair, um, we talk about, um, on our website, which is, uh, gi.net. Um, um, but I think, you know, stir, uh, which has to ours, second art for flavor, um, function, fun fact. They presented the brand stor, uh, when we were looking at brand choice and I was like, eh, and then the branding team came back and edited a second or two. And I'm like, now it's really cool. I thought who thought misspelling, it was the way to go.

Speaker 2 (30:11):

Um, it is more sexy in a way, but that's economic.

Speaker 3 (30:15):

It kinda, it kinda is that there's, there's actually the, the, uh, just inside baseball, but the, the development name for that, for that, uh, for that logo is the naughty ours. Um, we'll just, we'll just leave it at that. Um, but, uh, so stir.com uh, is where you can access. So you can access stir on the web. You can also access it in, uh, obviously primarily meant as an app. So, um, iOS, Android, um, uh, Roku fire, uh, we just launched on the Samsung platform, um, last week or week before last, sorry. Um, so it's now available on there. Um, news on is on all those platforms as well. Uh, except Samsung, um, that might happen soon though. Um, and, um, where else, uh, and then, you know, the, the stations, if you live in one of our markets, all of the stations have their own, uh, apps and websites as well. Um, so I think at the moment we have, we maintain, we maintain some ridiculous number, like nearly like a couple of hundred apps. Yeah.

Speaker 2 (31:33):

I love though the thinking around a lot of this is how a consumer consumes you, you know, which is that direct to consumer piece that you were talking about. It's just so smart. Um, well, Scott Ehrlich, who is the vice president, the senior vice president of growth networks and content and Sinclair broadcast group. Thank you so much for enlightening us. I love talking to you because honestly it is a confusing marketplace right now, and I think content creators need to understand what's going out to consumers and how to plug in, and then consumers need to understand what their options are and, and the advertising and brands in the middle of need to get like where their content is going. So it's very helpful to hear, you know, from the, from the front seat, you know, what what's happening out there. So thank you so much anytime. All right. We're going to be, um, coming back, hopefully in another week with another great episode, probably not as good as this one, cause God is so smart and interesting. Um, but we will be back again. Thanks everybody for listening and thank you again, Scott pleasure.