Friday, May 21, 2010

The potential economic threat to local TV news

This is the second of two posts adapted from testimony I am scheduled to present at a Media Ownership Workshop being conducted today by the Federal Communications Commission at Stanford University. The first post is here.

Once traditional television programming is married with a robust Internet feed to the family entertainment center, there is every reason to believe most modern consumers will take active control of time they spend in front of the tube.

Empowered with ubiquitous programming, unlimited choice and powerful media-delivery technology, the newly independent consumer will be decidedly unpredictable, if not downright fickle.

This will play havoc with the traditional broadcast model, which depends on assembling large audiences to view regularly scheduled programs. And that, in turn, will play havoc with local TV news coverage. Here’s why:

As broadcast audiences shrink, ad revenues will tumble. As revenues recede and profit margins are challenged, it is all but inevitable that most local broadcasters will reduce the resources they devote to covering local news.

A contraction in local TV news coverage, combined with the recent curtailment of newspaper coverage in most communities, will deprive our society of even more of the authoritatively reported information that is the lifeblood of a healthy democracy. I have seen nothing yet to convince me that crowd-sourced websites possibly can fill the void.

We already have gotten a hint of what the future could hold. Acting to trim spending during the recession, many local stations cut back their news staffs, resulting in a decline in the caliber and depth of their coverage.

The result has been ever-greater reliance on down-and-dirty stories about crime, fires and other visually arousing – but largely insignificant – events that can be covered quickly, cheaply and live.

As repeated studies have shown over the years, local TV news has scant gravitas left to lose.

According to researchers at the Norman Lear Center at the University of Southern California, only half of the average 30-minute newscast in Los Angeles is devoted to news — and only half of that news is local news. Of the 15 minutes devoted to news on a typical day, “the most common topic by far was crime,” said the USC study, adding:

One out of three broadcasts led with it. Nearly half of those were about murder, robbery, assault, kidnapping, property crime, traffic crime and other common crime. A fourth of the crime leads were about celebrity crime. And nearly a fourth of the crime leads were about crimes that didn’t take place in the Los Angeles media market.

With the gruel we call local TV news already quite thin, our society can ill afford further cutbacks. But this may be the path we are on.

Unless local broadcasters begin acting affirmatively and aggressively to explore new business models and new ways of serving their audiences, they run a real danger of squandering the valuable advantages they enjoy in the licenses granted to them by the Federal Communications Commission.

Given that our scarce broadcast spectrum is an asset which ought to be employed for the benefit of the public, the commission has a proper interest in inquiring into what steps broadcasters are taking to see to the future health of their franchises.

While I do not favor government prescriptions regarding the editorial or commercial direction of private businesses, I do believe it would be appropriate for the commission to ask broadcasters why they are not experimenting with innovative news and information services on the extra channels created in the recent shift to digital broadcasting.

Although KQED is making reasonably respectable use of its digital channels by time-shifting programming among them, the commercial broadcasters in the San Francisco market have distinctly under-utilized the additional channel capacity they gained in the conversion.

The Bay Area is fortunate to be home to some of the most innovative media projects in the country, if not the world. With the market so rich in possibilities and potential partnerships, it is amazing that our local broadcasters have been so remarkably un-innovative.

You would think enlightened self-interest would motivate these broadcasters to explore next-generation business models. If they don’t start acting on their own, maybe the FCC ought to give them a nudge.


Blogger Steve Ross said...

Enlightened self-interest has worked so well for newspapers and banks. Why not broadcasters?

BTW, the fundamental economics are about to change in another way. As most viewers get their TV on demand, even the smallest market can be accurately measured without the need for Nielsen, etc.

7:58 PM  
Blogger Carol Doane said...

Perhaps the future holds a new definition of 'news.'

11:10 PM  
Blogger Steve said...

Google has just announced Google TV, which will turn your home entertainment center into a multimedia center. Do you have any opinions on what this will do to local news TV and the papers? It's my opinion that this is just another nail in the coffin.

6:47 AM  
Blogger Steve Ross said...

Google would tend to cut the audience for local news, by fractionating the existing audience and drawing people away from "cable." Where local news stations have a strong web site they can maintain the audience, but not the ad revenue.

We knew the Google settop box was coming because my magazine covers these things. The real near-term issue is that network builders may not derive enough new revenue from what is almost an "over the top" service. Already, my wife and I do not bother with cable in the NYC apartment -- we just are not there enough to justify it -- so we get TV over the data line.

Where local news stations have a strong web site, we are fine. Otherwise, no. The "must carry" rules do not apply to data.

Note that Google is not the only one doing this.

8:36 AM  
Blogger John Reinan said...

Alan, thanks for this outstanding pair of posts. I cited you in my weekly marketing column on, the nonprofit news site:

8:07 AM  

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