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Tuesday, Jul 16, 2024

Local Network TV Stations Watch Revenues Grow

San Diego’s network television stations experienced a healthy 8 percent growth rate in revenue last year, outdistancing the radio industry, which was flat, and the newspaper sector, which was down, according to BIA Financial Network.

BIA Financial, a Virginia-based financial and advisory firm serving the media, estimated that revenue for the county’s 11 for-profit network stations totaled $306.5 million last year, compared with $283.9 million in 2005.

Leading the pack was KNSD 7/39, an NBC-owned station with estimated total yearly revenue of $66.5 million, up 21.7 percent from 2005. In second place was KFMB-TV channel 8, a CBS affiliate owned by Midwest Television Inc., with $64 million, an increase of 20.9 percent from the earlier year, while KGTV channel 10, an ABC affiliate owned by McGraw-Hill Broadcasting Co. Inc., was third with $50.9 million, up 16.6 percent. Local stations do not report revenues.

General managers at KNSD and KFMB were not available for comment.

The 2006 results for the county mirror the 8.2 percent revenue growth that network television achieved nationwide , for a total of $2.5 billion , and are subject to the same ups and downs and trends affecting the industry as a whole, according to Mark R. Fratrik, vice president of BIA Financial.

As a rule, cable stations’ revenue amounts to about 25 percent of the total for any particular television market, Fratrik said.

“Television continues its roller coaster cycle of on-again, off-again revenue increases due to election and Olympic year rotations,” said Fratrik. “There is no denying that the industry has benefited greatly from those two variables despite the erosion of viewers to cable, Internet and other competition.”

In 2004, an election year, local network TV stations generated an estimated $307.1 million in revenue, but in 2005, the total dropped to $283.9 million.

Looking ahead, BIA Financial projects a decline to $303.4 million in revenue for 2007 for local network TV, followed by an increase to $339.5 million in 2008.

In 2009, the company foresees a decline to $332.8 million, and in 2010, an increase to $359.4 million. But in 2011, revenue is expected to drop to $355.8 million.

Between 2001 and 2006, BIA Financial estimated that total revenue for the local network industry rose 4.8 percent. Yet the growth rate between 2006 and 2011 is expected to slow down to 3 percent.

Forecasts Differ

However, two Southern California college professors, whose resumes include experience in the broadcasting industry, paint a bleak picture.

“Clearly, television is in a downward spiral,” said John Eger, a journalism professor at San Diego State University. “The general trend is toward Internet advertising.”

He predicted that within the next five years the presence of TV on the Internet is “going to be more important than the over-the-air signal.”

“I believe this to be the case simply because of usage patterns that tell us that’s where the people are,” he said, referring to the increasing popularity of what is called “streaming video” , TV programming uploaded onto the Internet.

“There’s a tipping point, and I don’t know when the viewership shift will take place, but it definitely is within the next three to five years,” he added.

Jerry Del Colliano, a professor of music media at the University of Southern California, agrees.

“I am not optimistic about the growth in network TV, and by extension you can look no further than local news,” Del Colliano said. “The reality is that if your lead-in (show) at 10 p.m. is No. 3 in the ratings, you have a hard time being No. 1 with local news at 11, even if your local news is killer.”

In a time of transition toward the Internet as a medium for delivering both news and entertainment, “traditional media,” including television, is having a “tough time getting on the Love Train,” he said.

“It’s like the railroad,” he added. “There’s no B & O; airline. They forgot they were in the transportation business and they missed it. That’s what’s happening to newspapers and to radio, and it’s going to happen to TV in the next five to eight years.”

Countered Fratrik: “Local TV news programs still provide something very valuable to local advertisers. There’s still a massive audience. It may be smaller than it was five or 10 or 20 years ago, but it’s much larger than any other type of advertising medium.”

To underscore his point, Fratrik mentioned the many millions of dollars that both Republican and Democratic presidential hopefuls have and will continue to spend “to attract audiences and get the mass they desire” to win votes in the upcoming election.

Bigger By Contrast

“In a perverse way, the proliferation of all the various media sources actually makes local TV even more valuable because all the other ones get very small audiences, so it’s more fragmented,” Fratrik said.

As to streaming video, Fratrik said the practice may divert TV audiences to some degree, but it also has the potential of increasing interest in particular shows and generating more viewers during regular broadcast times.

Meanwhile, BIA Financial’s recent report of estimated total revenue for the county’s three daily and 20 weekly newspapers, including advertising and circulation, was $491.8 million in 2006, down from $507.5 million in 2005.

Estimated advertising revenue for The San Diego Union-Tribune in 2006 was $292.9 million, while circulation contributed $57.8 million, for a total of $386.7 million , more than all of the local network TV stations combined.

In 2005, estimated total revenue for the Union-Tribune was $400.5 million, with advertising amounting to $302 million, and circulation, $62.9 million.

“The U-T is an 800-pound gorilla, even though it’s hurting,” Eger said.

Executives of Copley Press Inc., which owns the Union-Tribune, declined to comment.

BIA Financial estimated that total revenue for the North County Times, owned by the New York State-based Lee Enterprises Inc., generated $71.4 million in revenue in 2006, including $54.4 million from advertising and $8.5 million from circulation.

That compares to the 2005 estimated total of $72.6 million, of which $55.1 million was derived from advertising and $9.2 million from circulation. Publisher Emeritus Dick High declined to cite revenues, but said that they were up for both advertising and circulation in 2006 compared to 2005.

BIA Financial also estimated that total revenue for local for-profit FM and AM radio stations, including those with towers in Tijuana, stood at $203.6 million in 2006, an increase of 0.5 percent, or basically flat compared to 2005.


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