Local TV Stations Face a Fuzzy Future

Many local stations — once treated like royalty by broadcast networks — are scaling back their original programming, cutting down on weekend news shows and trimming staff. Nationwide, 2009 TV-station ad revenue is projected to fall 20% to 30%, according to Bernstein Research.

Last week, Walt Disney Co. reported a 60% slide in operating income in its broadcast segment, including ABC and 10 ABC-owned stations, for the quarter ended Dec. 31, in part because of a 15% drop in revenue at its TV stations. Ad revenue at local stations is “significantly behind” last year’s pace, Tom Staggs, Disney’s chief financial officer, said in an earnings call. News Corp., which owns Dow Jones & Co., publisher of The Wall Street Journal, reported last week that its local TV stations, including 17 Fox stations, will undergo “major” cost-cutting in the coming 12 months. The stations are looking at a 30% decline in advertising revenue for the second half of the fiscal year ending June 30.

The weakness in the local-TV market could hammer the big broadcast networks, says Randy Falco, former president and chief operating officer of the NBC Universal Television Group and now CEO of Time Warner Inc.’s AOL. Cable operators, he says, may lure networks away from some ailing stations with the promise of steady subscriber fees: “Ultimately one of [the networks] will make a break. One of them will try to make a go as a cable network.”

Follow the ‘via’ link to read the rest of the article if you’d like. This makes me think about the wisdom of advertising on local television as well…


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