By William B. Ketter
Special to the Tribune-Star
July 03, 2009 06:43 pm
—
You didn’t hear this on the network news. Or your local newscast. And chances are you won’t. Unlike newspapers, they’re good at keeping bad news about themselves quiet.
But the word is out. Television advertising revenue is falling perilously fast at stations across the country because of changing viewer habits, declining audience and the recession.
What’s more, a prominent broadcast research company says there’s “no promise” for a reversal of fortune unless the television industry reinvents itself soon to meet the ways and means of the digital age.
BIA Financial Network of Chantilly, Va., a national media consulting firm, reports the old local TV revenue model of relying almost entirely on traditional commercials for furniture, automobiles, banks, hospitals and other goods and services is, well, insufficient for industry growth.
And, it adds, if it were not for cash-in-advance political ads during election years, the financial situation would be far worse.
Audience numbers just aren’t measuring up to local advertiser expectations — translation, fewer people are watching locally-sponsored TV programs, including the news.
And, of course, fewer local ad dollars are available for commercials as some retailers fold and others reduce their spending in response to the recession.
“Since 2003,” said BIA vice president Mark R. Fratrik, “TV revenues have held steady but are now beginning a dramatic downward shift. This corroborates our calls for transformation (to digital online and mobile) as the only path to expansion for the industry.”
So dramatic that for the first time in six years, local television industry revenue is predicted to fall below $20 billion this year — to $17 billion, according to BIA.
The forecast is based on revenue results from a survey of the top 210 U.S. markets. The study did not include network advertising revenue, but it also has dropped precipitously with the decline in audience.
In 2008, local TV revenue declined 6.6 percent to $20.1 billion from the previous year despite heavy spending by political candidates for state and national offices, including record expenditures on commercials by presidential wannabes in battleground states.
Newspapers, whose financial grief is constantly reported by themselves and TV, had annual revenue last year of nearly $38 billion from advertising, and another $8 billion or so from circulation.
What does all this mean to the traditional TV viewer?
It means diminished resources to air the local news of the day, a development that could further reduce audience because TV stations are already thinly staffed with journalists. Most of their news budget goes for anchors, production crews, cameras and editing technology so they can chase after fire sirens, police calls, car crashes and the day’s top newspaper stories.
Yet the television industry is historically reluctant to inform the public about its woes. At least a lot more unwilling than newspapers are to cover their industry’s challenges, according to a study by the Annenberg School of Communication at the University of Pennsylvania.
Reviewing news industry stories over the past nine years, researchers found 900 reports on declining newspaper readership in newspapers compared with only 22 reports on declining TV viewership on television.
Not surprisingly, the survey — which covered the top 25 newspaper markets in addition to network newscasts on ABC, CBS, NBC, PBS, Fox, CNN and CNBC — found a striking difference between how newspapers and television report on the problems of each other.
There were 38 network broadcasts on eroding newspaper readership during the study period. Only six stories aired about the large loss of audience for network newscasts.
Newspapers, however, picked up the slack. They published 95 stories about the dwindling TV audience for network newscasts, which the New York Times reports has dropped from 30 million viewers in 2000 to 23 million today.
Newspapers, by contrast, reach an estimated 110 million readers daily.
If you conclude that greater print reporting about the financial difficulties of television is a case of newspapers deriving pleasure from the misfortune of their rivals, you are wrong. It is a matter of presenting the public with the complete story of news consumption and the changing news landscape.
The economic agony of the recession and the shift of audience to digital devices are challenges everybody in the news industry faces — newspapers, television, radio and the Internet.
Still you wouldn’t know that if you consider the disproportionate number of doomsday stories about newspapers compared with the very same financial issues confronting our electronic brethren.
Yes, the media world is changing. And, yes, those who adapt best to the digital age will survive and thrive once we recover from the recession.
But, no, newspapers are not teetering on the edge of the abyss, anymore than the rest of the media who rely on advertising revenue, including television.
That’s the painful truth.
William B. Ketter is vice president of news for Community Newspaper Holdings Inc., a Birmingham, Ala.-based company with news outlets in 150 U.S. markets. Contact him at wketter@cnhi.com.
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