Monday's Wall Street Journal carried an interesting in-depth piece about a television station in Grand Rapids, Michigan, struggling to cope with the effects of the internet on its business model and future performance.
I wrote about this a few months ago here. In that post, I discussed the larger issue of the broadcast networks' responses to internet-based entertainment.
Now, I see by this WSJ piece, that the changes are hitting home at the local station level already. According to the article, the television station's advertising revenues and viewership are shrinking, and it is scrambling to find ways of stocking a webpage with advertising-funded content.
As I ponder the end-game of this situation, I can't help but see a parallel to the troubles and solutions of daily newspapers a decade or more ago. Papers began to share printing plants, and, essentially, become differently positioned products freelancing off of the same production assets. It would not surprise me if local television stations, including the major city stations, do the same.
The article focused on the core expense item, local news gathering. Can something like this really pay for more than one television station in a market, when the major networks can't even make it pay nationally and globally anymore? Doubtful.
Instead, I'd expect that, over the next few years, competing local broadcast stations will pool their facilities and news gathering, perhaps simply merging into one station per local market. If not the latter, then at least sharing all possible resources, save on-air staff, content selection, and idiosyncratic local programming.
What caught me a bit off-guard as I read the article is how quickly the nascent internet entertainment wave is already eroding some of the grassroots businesses in old media. My consultant friend, S, may be surprised to learn how quickly a trend she feels is years off in affecting major media behavior and consumption, is already reshaping local broadcast media in the hinterlands.
We are already seeing the beginning of old media's forced changes in the face of the rise of the new, internet-enabled digital media world.
Yet another example of Schumpeterian dynamics at work without any overt organizing entity to guide it, save technological change and consumer behavioral responses.
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That many markets will end up with only one local TV station seems almost inevitable. Right now, the local stations attempt to differentiate each other by touting their news coverage, for lack of options -- "Our UPN swill is better than their WB swill" or "our Seinfeld reruns are better than their Seinfeld reruns" aren't effective ad campaigns.
If they can't make money doing news then there's truly no future for them as independent entities. (The search for the goofiest weatherperson and the most obnoxious consumer reporter goes on, however.)
Additionally, many cable companies now do a very good job of local news coverage, further encroaching on a shrinking market -- the cable companies can and do assign an entire channel (in the case of My cable company, THREE channels) exclusively to local news/weather/traffic/events, one of them in an "interactive" format that makes accessing the local news and weather acutally faster and easier than looking it up on the Internet.
And you can get it on your cell phone, your PDA, etc.
Perhaps the solution for local TV stations is go totally aginst what seems logical and take advantage of the digital world by creating unique entertianment content -- the same Internet that is eroiding their raison d'etre might allow them to do something affordably that ten years would have been unthinkably expensive.
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