[opendtv] News: Local TV is no longer a cash cow
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Fri, 4 Apr 2008 08:35:41 -0400
http://www.baltimoresun.com/entertainment/bal-te.to.localtv03apr03,0,3748488.story
Local TV is no longer a cash cow
Nationwide, newsrooms are facing cutbacks
By David Zurawik and Chris Kaltenbach | Sun reporters
April 3, 2008
For decades, local TV stations in cities like Baltimore were cash
cows for the companies that owned them. Even though one or two
stations with the most popular anchors often came to dominate each
market, everybody made money. Local TV was that surefire a business -
even for last-place and poorly managed stations.
But not today.
More and more, the dominant story line for local TV news is one
filled with talk of cutbacks, layoffs, lowered expectations and an
urgent need to find new ways of doing business and winning viewers.
This week, CBS announced a series of layoffs at its stations in
cities across the country, including Baltimore. And last month, the
local ABC affiliate, WMAR, laid off two producers and fired anchor
Brian Wood.
"I don't think we can sit here comfortably anymore and rely on the
fact that we've been here for years," says Mary Beth Marsden, anchor
at WMAR, Channel 2. "How do we stay relevant, that's the question.
How do we stay the providers of information that people choose to go
to? I think we're still trying to figure it out."
As part of CBS' nationwide cuts, 14 newsroom employees were fired
this week at San Francisco's KPIX, Channel 5, including four on-air
reporters.
In Boston, staff cuts at WBZ, Channel 4, were expected to reduce the
station's 220-person work force by about 10 percent.
At Chicago's WBBM, Channel 2, at least 18 employees found themselves
without a job Monday, including the station's lead anchor, lead
sportscaster and two more on-air personalities.
The toll was lighter in Baltimore, but the station still let go at
least four employees. And some employees at WJZ worry more cuts may
be coming.
"You don't know what they're going to do," said one station employee,
who did not want to be named for fear of being fired. "There are a
lot of people there who don't have contracts."
And the drastic downsizing isn't limited to stations owned by CBS.
Other media companies such as ABC and NBC also are seeing ad revenue
decline.
"There is no doubt about it, local TV stations are facing harder
times, and what you're seeing with the cutbacks and layoffs are media
companies reacting to new economic realities," says Douglas Gomery,
media economist at the University of Maryland.
One reality involves the downturn in the general economy, with
companies across the board looking to cut costs. The stations have
been particularly hard hit as struggling car manufacturers and
dealers have curtailed their advertising spending.
Automotive TV advertising fell to $7.6 billion in 2007, a drop of 8.3
percent from the year before, according to research firm TNS Media
Intelligence. The decline has been even steeper in the first three
months of 2008, according to analysts.
"Car advertising accounts for about 10 percent of TV revenue," said
Bob Papper, media studies professor at Hofstra University and author
of the Radio and Television News Directors/Hofstra annual survey of
local TV stations. "So, these cuts that you are seeing at stations
across the country are in part a reaction to a drop in that revenue."
And if the downturn continues, so could the layoffs, Papper said.
"NBC laid off at its local stations in December, and CBS is doing it
now," Papper says. I think it's reasonable to think ABC might be
doing it next - spreading out across its stations."
But there are also "media-specific forces" driving the layoffs,
Gomery said. "With a fragmenting of the audience and new strategies
to reach customers in new online media, local TV is no longer as
automatic a buy."
"More of the focus in general is toward the Internet, and so more of
the money is moving that way," says Abe Novick, an advertising agency
executive at Euro RSCG, a global advertising agency based in New
York. "And that's why the local TV news industry - as well as the
newspaper business - is going through these convulsions of cutbacks
and layoffs."
WJZ Vice President and General Manager Jay Newman, who has spent a
decade as head of the station, acknowledges the challenges faced by
local newsrooms. But he insists they can be surmounted. The key, he
says, is abandoning traditional concepts of what a local news
operation entails and who watches it.
Instead of concentrating on two or three daily news shows, he notes,
Channel 13 now broadcasts news six hours a day, stretching from 5
a.m. to 11:35 p.m. The station also updates its Web site regularly
and has an agreement to share content and personnel with The
Baltimore Examiner. WMAR has a similar agreement with The Sun.
"Years ago, people gathered around the TV set at 6 o'clock and
watched and ate dinner together," he says. "Now, people have
different expectations. ... What we need to do is to reach people
more often, at more times throughout the day, both on TV and through
multiple platforms."
There are no job cuts planned for now at WBAL, Channel 11, says
station President and General Manager Jordan Wertlieb. "It's a
competitive business," he says. "We've gone though difficult economic
times before. I think we're optimistic that we've seen the worst."
Like his counterpart at WJZ, Wertlieb says the challenge is to adapt
the station's news product to the changing marketplace. And the big
change, he says, is in the number of different places people can go
to find the news - and in the number of places advertisers can spend
their money.
"Television viewership was up in 2007 to more than four hours a day
for American adults," Wertlieb says. "It's at record levels. ... Now
you're in a pool where you have to compete for audience, so you have
to provide compelling content. You're not splitting the [revenue] pie
among three channels, you're splitting the pie among 100."
While Papper says he knows layoffs at stations lead to headlines, he
begs for a bit of context as to how "dire" things are - or are not -
for the local TV news business.
"When I worked at a TV station in Minneapolis, I remember the general
manager telling me that the owner demanded a profit margin of 45
percent," he says. "I guess if you are used to making a 45 percent
profit and now you're only making 20 or 30, it feels like you're in
the poorhouse. But in some businesses that would still be pretty
good."
chris.kaltenbach@xxxxxxxxxxx david.zurawik@xxxxxxxxxxx
Copyright © 2008, The Baltimore Sun
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