Consumer Guide for Today's Media

Where do people go to obtain news? Likely answers could be the Internet, newspaper, and word of mouth. I agree with those choices, but what about advertising? According to a report by Hearst-Argyle Television, local television is the most effective video-advertising platform. Think about it. What ads do you remember the most? Ads that air on television.

In the survey, TV (55%) beat out the likes of the Web (26%) and print newspapers (14%). I tend to follow this survey because it seems the most logical. Imagine seeing ads without commercials on television, especially commercials that are targeted to a local audience.

I like watching local ads, (except for Spangles) and feel more connected because of its proximity to the area. Advertisers need local TV to broadcast their message to an audience to generate appeal to the neighborhood. Broadcasters can leverage this to their advantage to give the audience local content and make money in the process. Not to mention what this could do to local station programming.

Now the question is whether or not local advertisers realize how prominent and effective the video-advertising platform is. My guess is if they haven’t already then they are probably out of business with local television.

For more on the survey, visit Hearst-Argyle’s partner on the study: Frank N. Magid Associates.

CBS announced dozens of layoffs for its owned-and-operated station affiliates. This is according to Broadcasting and Cable Television. Consider it “Black Monday” for many CBS-owned stations. WBZ in Boston, WBBM in Chicago, and KPIX in San Francisco were some big stations that took some big job losses for employees. CBS owns 29 stations across the country, (16 of which are CBS affiliates). This is probably in response to CBS Corp. and its huge financial hit last year. A 14.6% decline in 4th Quarter earnings, which is a 3% fall in revenue equaling $3.76 billion.

Is this a bad thing that the network owns local TV affiliates? When other broadcast owners have rights to multiple stations they tend to keep a close eye on them. CBS has other fish to fry and aren’t always paying attention to particular stations that they own, because they have CBS affiliates all over the place. Nearly 200 in America.

WBZ lost the most; about 30 personnel members. Now, for a station to lose this amount of staff can have disastrous effects. For example, ratings can take a hit because now there aren’t as many people to cover stories. Reporters, Web producers, and sales people all are being affected and I think this could be bad for the overall station. Then again, it is Boston and people are itching to fill these positions. (I’m available).

Other cities that felt the wrath of CBS: Miami, Denver, Sacramento, Dallas, Pittsburgh and a few layoffs in New York. Overall, 1% of CBS’ news operation was cut in a round of layoffs.

Forget the Verizon Wireless slogan: “Can You Hear Me Now?” Soon it will be: “Can You See Me Now?” At the National Association of Broadcasters convention earlier this month, the TV industry hopes to go wireless. This might have something to do with a decline in ad revenue for local TV. According to the Television Bureau of Advertising, ad revenue for the Top 100 TV Stations went down 17 % in the 4th Quarter of 2007. So what’s the solution? Sending digital TV signals to cell phones and mobile devices.

The goal is to make this a reality by the time the Digital Switchover takes effect (February 2009). Mobile TV is growing, and testing in Europe and Asia proves it. In an article in LiveScience, consumers in Asia buy a cell phone then receives free broadcasting on the phone. Cell phone carriers hope this generates revenue by selling ads, and broadcasters need to profit from it as well.

I’m in favor for TV on the go. But it’s hard enough to stay focused on one channel on television as it is. I couldn’t imagine flipping through 50 channels on my cell phone and then trying to call people or send text messages. TV broadcasters hope this increases sales for the business of local TV, and it can if local stations adopt this idea with original content sent to the phone. So when February rolls around we might need to keep those rabbit ears handy, and hook it up to the cell phone. Good luck walking around with that.

Over the years local TV brought prominent revenue for those who owned them. Now local TV owners react to new economic realities and trim employees. According to a report in the Baltimore Sun, nationwide layoffs in the newsroom no longer benefit a profit margin. When stations were accustomed to a profit margin of 45-50%, business became easy for TV stations. Now, the reality is about 20-25%, and that’s still not bad, but owners want increases to grow exponentially and it’s just not possible anymore.

I would feel bad for the Channel 4 News Team if they were laid off.

So what can local TV stations do to profit in the media business? Many are turning to the Web for expansion. Earlier this year, NBC and Nexstar increased investments in local station web operations. This seems to be the best alternative to stay ahead in the technology curve. Newspapers saw quick success and TV stations hope to follow suit. And they are well on their way. Local TV online revenue rose 41% in 2006 with nearly $400 million in pockets of owners, according to the Television Bureau of Advertising.

But can TV stations cope with a shift to the online world? I think they can, but sacrifices might be made in order to do so. For instance, once a story airs on TV, the reporter can have the video on the station’s Web site. In a breaking news world, viewers want constant updates on particular stories and quite frankly don’t have time to wait for the local station to broadcast their news at 5:00, 6:00 and 10:00 PM. It’s an ever-growing battle that alters career-paths for journalists. Who knows, maybe in 20 years there might be a completely different layout for news is presented, and local television might not be an option.