Mining profits from bleak broadcasters

TitanTV President Mark Effron

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LAS VEGAS (FORTUNE Small Business) -- Talk about going from media hero to digital zero. Broadcasters just can't seem to get any love.

The industry is facing a forced march from its home analog spectrum early next year. By next February, all broadcasters will have to abandon their analog spectrum and rely solely on digital distribution. Local broadcast affiliates, the on-the-ground arms for the national TV networks, are still nowhere near solving the challenge of making compelling stuff online - even though some have been trying for more than a decade.

And now, new-media stalwarts Apple (AAPL, Fortune 500) and Avid (AVID) can't be bothered to make the trip here to the industry's annual National Association of Broadcasters Show (NAB), taking place this week. Ominously, the two companies decided to pass on this year's trade event, citing cost cutting and other factors - even though both have shown here in the past, and both are offering significant new product upgrades: Apple's new media server application, Final Cut Server, is aimed specifically at professional and semi-pro video producers.

It's a bleak scene.

Still, small businesses are showing some real guts here at NAB. They are finding opportunity in the industry's struggles.

I like what I am seeing from a 42-person Web hosting and content production company called TitanTV. The company, with offices in Cedar Rapids, Iowa, and New York City, was started in 1993 by technologist Jack Perry. Its goal is to help broadcasters be more efficient and profitable online.

TitanTV got its start solving an unsexy but critical problem: It developed technology for posting a television station's air schedule to the Web and keeping it updated in real-time.

"Back when we got going, even something as basic as schedules was not trivial," said Mark Effron, TitanTV's president and a former TV executive. "When there was a fire or storm it had to be changed by hand online, which was very slow."

Stations responded. TitanTV's listings product is now used by more than 1,200 broadcast affiliates nationwide - which makes this small company the de facto listings solution for much of the broadcast industry.

From that launching pad, TitanTV has expanded its offerings into content creation. It's begun producing webisodes: short snippets of sketch comedy, environmental newscasts, video advice columns and other Web-friendly video blasts.

"The Web really passed most of the local stations by," Effron said. "Sure, viewers come to watch when there is a local bit of news. But they tend not to stay. So we are offering new video products that affiliates can use to drive traffic to their sites."

Let's be clear here: TitanTV's shows are hardly earth-shattering stuff. Though professional, the segments are very simply produced four-to-five-minute bits on fashion, culture or whatever, from such decidedly modest Web talents as Grace Randolph, a New York comedian, and Michael Somerville, a columnist for Glamour magazine. Watching these clips, I didn't feel I was witnessing history being made.

Still, TitanTV's products are finding a home. To date, 20 stations have signed on, including some decent-sized affiliates such as WCBI in Tupelo, Miss., and KLAX in Alexandria, La. Titan is also syndicating other content from third parties, including some from existing producers like A&E, and it's in talks with Bravo.

TitanTV has taken a smart approach with its revenue model: It does a straightforward 80/20 split with stations, an arrangement that requires minimal upfront spending on the station's part.

While the offerings are simple, it's hard not to be impressed with what TitanTV can do with an otherwise lame broadcast station website. The TitanTV interface is a nice layout of video panes and other content windows. Clips play quickly. And other content, like weather reports, can be sampled easily. Trust me - Web content, particularly Web video content, can get far, far uglier than this.

Is something like TitanTV the ultimate answer to television's crumbling Web ambitions? Probably not. Stations still have to have a reason to exist online in an age when cable and satellite offer similar products. And it's not like the big guys have the answer. It's telling to see the major players continue to struggle - CBS almost made a point of whacking talent from affiliate stations in major markets in the week before this NAB show.

Here, smaller companies aren't waiting for an economic sea change to save them. They're getting on with the future - for better or for worse.

Correction: An earlier version of this article described Mark Effron as one of TitanTV's founders. Effron joined the company last year. FSB regrets the error.