NEW YORK (AdAge.com) -- Flush with money from a bevy of heated political campaigns, TV-station owners likely let activity in 2010 make them forget about the savage downturns of 2009. If they were smart, however, they kept those harsh memories close at hand.
This year isn't likely to be as pleasant as the last -- though it won't be a return to the harsh recession-tinged downturns. With the elections over, 2011 will likely see a 7.9% drop in local-TV revenue, according to a forecast from media consultant BIA/Kelsey. Local stations will see traditional revenue dip to about $17 billion this year, down from about $18.5 billion in 2010. The "more pronounced decrease" in 2011 is due to an "unusually robust political campaign season" in 2010, the company said in its report.
Smart TV-station operators will make use of any surplus to fund new initiatives or improve their financial condition.
"It is a challenging time for television, but television stations are adapting and trying to extend their brand into other areas," said Mark Fratrik, VP at BIA/Kelsey. "Some people may want to retire debt, hire more staff," he suggested, or even invest in news programming for a new time period, such as the early morning. "There's not one right solution, especially in a marketplace where you have three or four strong television stations, each with a good news presence."
TV stations are enjoying comparatively good times, particularly when drawn against late 2008 and much of 2009, when their main advertisers -- auto makers and car dealerships -- pulled back ad spending sharply. Spending on local-TV advertising fell 23.7% in 2009, according to Kantar Media, but rose 27.8% in the first nine months of 2010.
BIA doesn't see TV stations developing the kind of revenue from digital sources that will equal what it takes in from broadcast operations any time soon. Digital revenue in 2010 came to $600 million, and is projected to rise to $800 million this year. By 2014, BIA projects, digital revenue for local TV stations will total around $1.2 billion, compared with broadcast revenue that year at about $19.2 billion.
At Meredith Corp., which owns 12 local broadcast stations, emphasis has been placed for some time on a number of new ideas, said Kirk Black, senior VP of Meredith's Local Media Group and general manager of its Atlanta CBS affiliate. The company has been working to streamline back-office operations across its station holdings, investing in local programming ideas that might be more relevant to specific audiences than nationally syndicated offerings and making forays into digital media, he said.
One idea that carries promise, he said, is the ability to broadcast content to portable electronic devices. He envisions a day when a viewer might tune to the local station for weather or sports, but with a tablet device or portable phone, rather than a TV set.
At least one observer remains skeptical, however, that the bulk of TV-station operations will have enough foresight to experiment and have the patience that such work demands. TV-station executives "aren't like squirrels who put away nuts for the winter months," said Ron Hill, a professor of marketing and business law at the Villanova School of Business. "They often look to me as if they take what comes around. If it's a boom cycle, they enjoy that boom cycle, and if it's a bust cycle, they just hunker down."