TV Stations Losing Revenue In Bad Economy The end of the election season means the end of election ads on local television stations. While that may be good news to some viewers, it's bad news for TV stations' budgets as the economic downturn squeezes local stations.
NPR logo

TV Stations Losing Revenue In Bad Economy

  • Download
  • <iframe src="https://www.npr.org/player/embed/96557541/96557514" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript
TV Stations Losing Revenue In Bad Economy

TV Stations Losing Revenue In Bad Economy

  • Download
  • <iframe src="https://www.npr.org/player/embed/96557541/96557514" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

STEVE INSKEEP, host:

The end of the election season also means the end of election ads on local television stations. And that means the downturn in the economy is going to start squeezing your local station. NPR's Kim Masters reports.

KIM MASTERS: Local news, as anyone who watches television knows, tends to include a certain kind of happy talk.

Ms. KIM MARTUCCI (Meteorologist, WUSA9): So nice to have you with us. I'm meteorologist Kim Martucci live at Broadcast House. My hair is giving me some problems. Yesterday was the bad hair day. Well, it's still suffering. We got rid of the winds at least. Whew! I'm glad.

MASTERS: That cheerful chatter masks a lot of anxiety at local television stations about falling ad revenue. Media analyst Jack Myers says the forecast for local stations really isn't sunny.

Mr. JACK MYERS (Media Analyst): The economy is having devastating effects, so the future is definitely cloudy at best.

MASTERS: And that's a big change. Roger Ogden retired about a year ago as the head of the Gannett Broadcasting Group which operates 23 television stations. For decades, he says, local stations shoveled in ad revenues, sometimes almost in spite of themselves.

Mr. ROGER OGDEN (Former President and CEO, Gannett Broadcasting Group): You didn't have to be a genius to look pretty good in this business.

MASTERS: That had already started to change in the past few years as stations started to face competition from cable channels and the Internet. Their big profit margins were trimmed a little. With the economic downturn, a trim became a buzz cut. The stations are losing revenue from advertising, in particular this kind of advertising.

(Soundbite of TV commercials)

Unidentified Announcer #1: Cars that fit, financing that fits. See your Northern California Chevy Dealer. Visit ChevyDealer.com.

Unidentified Announcer #2: This portion of ABC7 News is brought to you by your Northern California Chevy Dealers.

MASTERS: Local car dealerships are major advertisers on local television stations. But this downturn is hitting the auto industry especially hard. Roger Ogden.

Mr. OGDEN: Business that comes from the auto category could range from 25 percent to as high as 35-38 percent, and that number is diminishing fairly quickly.

MASTERS: And other businesses of particular importance to local television, like retail, are suffering too. Jack Myers points out that the full pain hasn't been felt yet. Advertising dollars roll in during political years, and Myers says more than two billion dollars have been spent on local stations around the country. That should have meant a big bump in ad revenues, but instead the numbers are flat or even a little down.

Mr. MYERS: Based on that, the forecast for next year looks particularly dismal.

MASTERS: Myers says local stations have to forget about short-term sales goals and focus on long-term survival. Ogden believes the key is embracing the broadband world, creating a proliferation of video-rich Web sites and opportunities for social networking.

(Soundbite of commercial)

Unidentified Announcer #3: It's not just TV on the Internet. It's access to thousands of video clips.

MASTERS: Ad dollars that can be wrung from the Internet hardly match the kind of money that stations have reaped in the past. And it's not as though viewers accustomed to getting their news for free are willing to pay for it online.

(Soundbite of commercial)

Unidentified Announcer #3: Of course, you can always still watch an entire newscast streamed live. This is ABC7News.com.

MASTERS: Some smaller outlets simply won't make it. But Roger Ogden, the former Gannett executive, says if stations do their job right, they'll still provide programming to local audiences, though many may not be watching it on television. Kim Masters, NPR News.

Copyright © 2008 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.