A Possibly Crazy Idea: Are Local TV Stations Poised For A Comeback?

Posted by: Jon Fine on July 8, 2009

I am playing around with an idea, and I have no clue as to whether it’s totally offbase or not. Nevertheless! Thought I’d struggle through my preliminary reasoning here and see what you all think about it.

The idea is this: While local TV stations are getting killed in this current environment, they are uniquely poised among media serving local markets to bounce back, and bounce back more strongly, once the economy turns around.

Embedded in this notion are the following assumptions:

1. That local car dealer advertising will stabilize after a dreadful period of pullback, and that TV will hold onto the remaining ads better than other media.

2. That classified ads will not come back to newspapers in any significant way.

3. That the familiarity of TV will continue to beat back or at least significantly marginalize new Web-related ways for local businesses to reach consumers.

4. That the big broadcast networks will not find a way, in the near-term, to bypass their local network affiliates and get their programming to consumers.

I ask you all: Am I right? Am I nuts? In either event, why do you think so? I’m calling a bunch of people to try to get a sense of what execs and dealmakers think, but while I do that I’m curious to see what responses this blog post may elicit.

Reader Comments

Jonathan Salem Baskin

July 9, 2009 11:48 AM

I think you're onto something; I came up with a few complementary ideas in a post on my blog (it makes absolutely no sense that local TV stations are the corollary of dumb/inert outlets for network programming): http://dimbulb.typepad.com/my_weblog/2008/03/make-local-tv-n.html

Larry Kramer

July 9, 2009 12:22 PM

You are nuts. Local stations face huge issues.
1) The car dealers aren't coming back. The cars that are still selling aren't using any print and very little tv anymore. It's all going to web and email. The successful (foreign) auto companies aren't doing much co-op on tv and non on print...all the money is going into web development of their own destinations and the car company sites.
2) Classified are gone from newspapers, but aren't going to TV...they went to craigs list.
3) The Web is coming to the TV and will allow even more alternatives for delivery of programming...reducing the value of a linear channel...especially one with no original programming.
4) local news is the only local programming most local stations do, and how many news organizations with a local market be able to support in the future?...clearly fewer than they have now.
5)

Eric Olander

July 9, 2009 1:57 PM

I think you are over-estimating the ability of local TV management to adjust to the new painful realities of the media marketplace. For the most part, local TV stations are being run the same way they have been for the past 50 years. Try this experiment, go to You Tube and search for "KABC." You will find clips from past decades and what is remarkable is how little the substance of what their local news is has changed in that time. Now, take into account that the web is increasingly eating away at their marketshare for micro-local news and their parent networks are doing everything they can to side step affiliates by going straight to the consumer with their best shows via iTune, Hulu and TV.com among others.

Still need more evidence of the brazen lack of awareness on the part of these managers? Go to their web sites. They have to fully embrace the web as a means of integrating it with their TV content in a meaningful way. For the most part, local TV websites are poorly designed templates with little to no video content that isn't re-purposed from their on air broadcast.

Still need more convincing? What have most local TV channels done to expand their market share with the recent digital TV transition? Little to nothing. Most for-profit (non-PBS that is) local affiliates have either avoided creating new content channels with their digital spectrum or are placing rather useless feeds like weather or traffic which are far more effectively disseminated on the web.

There is a painful mix of fear and ignorance that dominate too many local TV station managers. They are hoping that things will get better when the economy turns around but are refusing to modernize their content and its delivery mechanisms. Sadly, the future of local TV is set -- it will soon follow the newspapers into the dustbin of media history.

Claire Atkinson

July 9, 2009 2:10 PM

I'll fill in Larry's 5)
The broadcast networks would like to divorce themselves from the affiliates even if they can't say that directly.
News Corp sold 8 last year, CBS would like to sell when the market gets better.
Doesn't sound like a great biz to be in now or in the future.
The only possibility of big gains in the future is if we all carry mobile phones with receivers and want to watch our local news on the go.

Larry Kramer

July 9, 2009 3:55 PM

Thanks Claire...you actually hit the point spot on... (which is why I love digital news...the collaboration makes everything better). The fact is that the fundamental reason to have local affilates -- the need to have a local channel carry a network signal into that market -- doesn't mean anything any more. CBS can get to everyone via several national distribution platforms. And local news doesn't justify 24 hours of linear programming.

mk

July 10, 2009 9:04 AM

the industry can't see five feet before itself. Innovation will come to the technical distribution of the digital spectrum. Once the TV industry catches it's breathe from a 10 year build out to digital television new technological innovation will come and the entire face of television will change again. TV is fine. Short term extreme pressure opening up to a new beginning. Pundits are grounded in the reality of quarterly earnings releases while others are allowed to dream of a new beginning.

Don

July 10, 2009 9:58 PM

I'm going to have to agree and disagree on this one. First off, the disagreement: None of the reasons you cite seem to make sense to me.

1. Car dealerships are going under in a completely revamped market. Now and in the future there will be fewer car dealerships. I believe there is no going back on car ownership, but would accept a flat or 10% reduction in car sales. I would be shocked if car sales EVER go back to their high (adjusted for population growth).
2. Lack of classifieds may sink newspapers but won't help TV news.
3. I do not see TV breaking new local businesses, but it should keep the same level of plumber and air conditioner repair commercials.
4. I agree with #4 but caution that it may be irrelevant.

The issue I have is that, over all, we should not be very sure of what post-recession consumption is going to look like. If you compare World War I and World War II consumption they look significantly different- think horses and wagons, trolleys, airplanes, passenger liners, etc.

Frankly we just don't know what effect the recession will have on cable tv and internet consumption nor how the digital transition will allow people to cancel cable or order cable.

I believe in my that there's a new generation of consumers under 25 who have no need to EVER pay for cable tv OR to own a tv set at all when they own a good computer. For that audience, the local tv stations are as meaningless as HBO- all they consume is internet or DVD entertainment.

Sure, if I had the money I'd consider buying a local station in Florida that might benefit from 2012 presidential campaign advertising dollars, but you have to get to very specific situations before you separate the wheat from the chaff. If I owned an independent UHF station I'd feel pretty low right about now.

Anthony

July 12, 2009 10:04 PM

Relevant, targeted (local) and professionally produced content will always have a means to survive and even thrive.

Local stations have already survived the elimination of network comp (where the networks actually paid local stations to carry their content) and have been through tough advertising climates in the past. With so many distribution options available, many are actually moving beyond the web and into mobile as well - KOMOTV the local ABC affiliate here in Seattle is a great example.

There's no question that some entrenched management groups are turning a blind eye to the efficacy of the web and the power that mobile distribution has to offer - which will catch up with them in the long run. But near term, TV is still the preferred medium for many consumers and advertisers and local offers a unique product in the market.

It will be a survival of the fittest and the FCC may need to continue to re-think it's duopoly stance across the board as most markets will be unable to support so many local station groups, but as a whole, there is still plenty of power in localized TV.

John

July 26, 2009 6:52 PM

I disagree with your premise Jon. The real reason for the dcline in newspapaers and TV is that they are a 'push' model. They decide when and what I see.

We are now in the browser age, where I decide what I see and when. A 'pull' model if you will. You only have to sit through a few of those darned weather 'teases' on the news before you stroll over to the computer and get the weather instantly. And turn the TV off.

David Siteman Garland

August 3, 2009 9:52 AM

Very insightful article that I definitely found interesting and can see both the positives and negatives.

My Company, The Rise To The Top (http://www.therisetothetop.com) has a local component on ABC in St. Louis Missouri (TRTTT is a TV show, events and resources for young and young-at-heart entrepreneurs).

I think the future of advertising in this respect will be a 360-degree approach which combines TV (local..perhaps), Internet (video ads mixed with other forms of media), mobile phones (mobile websites and the annoying-but-effective for the younger sect...text marketing), event marketing, E-Blast (or newsletters) that offer value and more.

Either way, it will be very interesting to see what happens. With the lowering cost of video, and more ways to get content out there including local TV methods, it will be interesting to see when (not if) advertising changes the game to get a bit more niche.

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