Political
Season Can't Save
Local-TV Sales
by Sam Schechner
Local television
stations across the country are suffering a decline in advertising revenue
in the tough economy, despite a blockbuster political season.
Buffeted
by the faltering real-estate market and shrinking auto sales, total
ad revenue for local stations nationwide fell 2.3% in the first quarter
compared with the year-earlier period, according to the Television Bureau
of Advertising, a trade group for local stations.
And the second
quarter is on pace for a 3% to 5% decline, according to Chris Rohrs,
the group's president.
While TV networks'
ad-revenue growth has stagnated amid a flurry of technological changes
and newspapers have watched advertisers flee to the Internet, local
TV stations have until recently been a relatively stable feature of
the tumultuous media landscape.
But now nonpolitical
advertising at local stations is down in the mid-to-high single digits,
by some estimates. And that poses a problem for a host of media companies
that had grown accustomed to their stations' steady, if not always growing,
profits.
The downturn could
accelerate stations' chase for new revenue streams, such as online classifieds
and streaming video, predicts Gordon Borrell, chief executive of media-research
firm Borrell Associates.
He also says it
could speed a shakeout in the business: "We don't think local markets
will be able to support four or five local broadcast-TV stations, and
we think some of the weaker ones may fail" in a few years.
The TV industry
has long relied on political advertising in election years. Local "spot"
TV ad revenue -- defined as spending in local markets by national or
local advertisers -- typically grows at least 10% in election years
and falls in off years, according to data from TNS Media Intelligence,
which tracks spending in the top 100 U.S. media markets.
This year, political
advertising pumped about $216.1 million into the local TV ad market
in the first quarter, more than double the $99.7 million in the first
quarter of 2004, the last presidential election year, according to Evan
Tracey, chief operating officer of the Campaign Media Analysis Group
at TNS.
Even so, overall
revenues are down, in comparison to the 8.7% rise in local ad revenue
the industry saw in the first quarter of 2004.
Reprinted from
www.wsj.com
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