Tuesday, February 10, 2009

Local TV Stations Face a Fuzzy Future

This article in the WSJ couldn't be more timely. Local television stations face the same threat from cable and now the internet. It has been getting a large share of its ad dollars from the auto and bank industries and is suffering as each of their media budgets have shrunk considerable. Their local news is threatened by web coverage as well as cable news networks, both national and regional, has led to less eyeballs. We now have a DTV conversion that will potentially cause some households to stop receiving TV signals and simply make the local broadcaster just another cable type network.

"Now, with their viewership in decline and ad revenue on a downward spiral, many local TV stations face the prospect of being cut out of the picture. Executives at some major networks are beginning to talk about an option that once would have been unthinkable: eventually taking shows straight to cable, where networks can take in a steady stream of subscriber fees even in an advertising slump." How does the local broadcaster survive? Cut costs, exclusive content, build stronger local brand value?

It is not all doom and gloom. "Local TV stations won't vanish overnight. Networks' parent companies still own some of the largest stations, giving them a possible incentive to preserve that slice of the business. And while their profits are down, the vast majority of stations are making money: Local, regional and national businesses, like car dealers and retailers, spent more than $20 billion on local TV-station ads in 2008, according to some estimates." Still it is about watching the trend and the arrow is pointing lower. Local broadcasters must find away to adapt and re-grow its stature in the community and its brand preference. For those owned and operated stations, a strong parent will be helpful; for others, the challenges will be higher.

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