Some recent newspaper headlines include: “WUSA Drops Weekend Morning Newscasts,” in the Washington Post on Jan. 7; “WYOU-TV Pulls Local Newscast” in the Republican Herald on April 4; and “Local KBIM-TV Newscast Going Off the Air” in the Roswell Daily Record on Dec. 10, 2008.
Broadcasters are forever at the initial brunt of economic downturns. One of the first things to get the axe at most companies is the advertising budget. As a result, and indeed as I have written previously in these pages, this reduction in advertising at the very beginning of a slump in the economy results in the broadcast industry being a leading indicator of the start a new recessionary cycle. Now, on the heels of several years of belt-tightening and heavy capital expenditures for DTV upgrades comes the mother of all recessions, and broadcasters are finding no notches left on that increasingly tightened belt.
Is local TV news losing the battle for eyeballs?
As a result, that last bastion of original programming and typically the largest provider of station revenue, local news, is now taking huge hits under the banner of cost reductions. Reducing the costs of news operations is one thing, but completely eliminating news broadcasts altogether? That draconian tactic is being implemented more and more today, and while it may provide instant accounting gratification, it really begs the question of whether this approach is in the best long-term interests of the station.
Recent years have seen a number of actions by stations to reduce the cost of news. The 11 p.m. or late night newscast at one time was a completely new production vis-à-vis the early evening newscast. Today we see more and more 6 p.m. newscast footage repurposed for 11 p.m. and entire 6 p.m. segments simply being rebroadcast at 11 p.m. One recent study found that 47 percent of stations repeat news segments.
But once you start worshipping at their altar, the gods of cost reduction demand continuing sacrifice. Thus, enter unique new approaches to reducing the cost of news. Welcome to the world of Joint Sales Agreements (JSAs), Shared Services Agreements (SSAs) and duopolies (single ownership of multiple stations in the same market). Call them what you will, but the result is the same — simplifying for the sake of brevity, the news operations of two or more stations merge into a single entity that provides all the newscasts for each of the stations that are part of the agreement. So, vanilla they may be, at least newscasts on each station continue. Such agreements aren't limited to smaller markets or independent station groups.
In Philadelphia, the FOX and NBC O&Os have gotten together to share news story video. Instead of each station sending a news crew out to cover a story, now a single crew can go out and provide the same video feed to both stations. What's the next step? FOX and NBC plan to roll out this same concept in New York, Chicago, Los Angeles, Dallas and Washington, D.C., later this year. Ah, but what about those ever demanding gods of cost reduction?
Welcome to the virginal sacrifice stage of adoration. Content has been repurposed, news operations have been merged — what's left? Aha! How about eliminating newscasts entirely? And, that's where we are today. If you are losing viewers to cable news channels, why would you want to hasten the process? If more and more people are relying on the Internet for news, why would you want to confirm they are making the correct switch? There really are broadcast viewers out there. Radio Shack just released its first- quarter 2009 results. In the worst recession since the 1930s, its profits were up over last year! What did the company attribute it to? The sale of DTV converter boxes.
Verizon is readying the launch of FiOS1, a New York City local news channel for its fiber-optics system. Why? Because it believes that news sells, and news attracts viewers. Many stations use their newscast to drive viewers to their Web site. How about using the Web site to drive viewers to their on-air channel? Why are some broadcasters so focused on expeditiously creating their own demise?
Fortunately, not all is doom and gloom. Here are other headlines from markets as diverse as Idaho Falls, DMA 163, and Milwaukee, DMA 34: “KIFI Goes to HD News Broadcast” in the “Idaho Business Review” on March 6; “Channel 4 is First Local Broadcaster to Air Newscasts in HD” in the Milwaukee Journal Sentinel on April 7; and “KTLA Channel 5 Expands News Operations” in the Los Angeles Times on April 1.
Perhaps then all is not lost for local broadcast news. On one side, TV news is becoming irrelevant, and eliminating the costs of the news operation will allow the station to remain on-air. The opposing view finds TV news to be vital and vibrant; smart marketing and promotion as well as creating a good product utilizing the latest technology can best the competition. Where do you stand?
Anthony R. Gargano is a consultant and former industry executive.
Send questions and comments to: anthony.gargano@penton.com
