What's Missing? Optimism, That's What

Hang around any television station these days and sniff out the attitude. It's far from positive. Nearly every projection for advertising revenue is headed the wrong way. Auto dealerships, long a crucial part of every station' advertiser portfolio, are cutting back, if they're not outright locking the doors. America's most prominent broadcast companies are issuing round after round of dismal reports. Belo's President and CEO, Dunia Shive, recently penned a grim letter to shareholders, noting that the company's stock value is down over 75 percent since the first of the year.

Shive went on to explain: "Since we cannot predict the duration of the downturn, we're responding with an intense focus on cost reductions while ensuring the journalistic standards and competitive positions of our operating companies remain intact. Recent actions include the freezing of open positions Company-wide, staff reductions in certain markets, and other cost-saving measures." And, she promises, there's more of the same on the way, since "the next 12 to 18 months will be challenging for all business, including Belo."

Other examples? Sure. Why not. More stock price trends:

Sinclair Broadcasting:

One year ago -- $11.57

Today -- $2.50

LIN TV:

One year ago -- $13.71

Today -- $1.73

Entravision Communications:

One year ago -- $8.50

Today -- 87 cents

No rose-colored glasses there. A big chunk of America may be feeling that Barack Obama can turn things around, but the reality is that it's not going to happen anytime soon. I fear that, by the time something can be done, the face of modern broadcasting may be scarred forever, if it's even recognizable. There are many, many broadcast operations who don't have the resources to sustain operations when advertising revenues fail. And, given the current economic crisis, some of them can't even turn to banks for cash. Here's a quick exercise that any of you can do to prove me right or wrong. Just check the websites of your local TV stations; look for the "jobs" or "careers" link. I'd be very surprised if you find much there. I was in broadcasting for 30 years and stations are almost always in the market for sales people. Not now.

Just like you and me. Times are tough. This economic downturn is real. Look at the parking lots at your area malls. Not as full as a year ago, are they? I'm not counting cars, just eyeballing the crowd. There's an obvious difference. Will customer traffic increase as we move into the holiday season? I'm not betting any real money that it will. And that's depressing on so many levels. This is all one big circle and it only works when that circle is unbroken -- advertisers buy spots on TV, spots drive customers to the store, customers spend money, advertisers buy more spots, etc. Right now, customers aren't spending. Advertisers aren't buying. Broadcasting, as it exists now, is in trouble. TVB, the non-profit Television Bureau of Advertisers (the trade association of local broadcasters) has just revised it's advertising forecast. Two months ago, TVB predicted local spot sales would see an increase of 2 percent to a loss of one percent. Now they say there will be no gain, only losses; 4 to eight percent. National spot sales, for the networks, will drop as much as 15 percent.

I mentioned the Sinclair stock price decline above. But. Wait. There's more. Sinclair just notified staffers that it's closing its Washington News Bureau and killing the entire corporate news division (its centralized newscast production operation). Total personnel savings: about 20 people.

Hit the comments. Convince me things aren't that grim. I'd really like a bit of optimism right about now.

Comments

[stagebandman]

People are afraid of what's happening to our "public" airways system. And the coming digital change isn't going to help. There will be hundreds of thousands of people around the country and beyond who will simply cease watching TV. Do you think they're going to try to get the coupons to buy the converter boxes? Of course not. And poorer people are exactly who television is made for. Especially the broadcast networks. It's SUPPOSED to be free. Now, there will be no way for these people to get a signal. You want optimism? I see a bright future for the first lawyer to file a class action lawsuit against the federal government, and I'll be glad to sign up with them.

[Doug Krile - Huffpost Blogger]

Thanks for the comment. The DTV conversion doesn't mean ALL analog signals go away. There are hundreds of Low Power TV stations operating around the country, many providing high-quality, truly local, programming. Cable systems don't carry them, so their only audience is viewers with antennas. Many of them are not forced to switch to DTV. The other thought to consider is that rising cable/satellite costs may drive people back to free TV and they may, indeed, be willing to switch to that converter box.

[carrieanna]

Eh, I might be in the minority but the two positive things of the whole economical debacle:

1. People buying less - I like to see this b/c it seems like people buy too much crap. There's no point in building up a houseful of objects that you never use. It's great to purchase luxury goods once in a while but when a $300 iPod was considered a normal Christmas gift for a kid, that seemed crazy to me.

2. Return to independently run media - It's true that with the efficiencies of conglomerates, we do get some specialty interests that would otherwise be impossible. But I firmly believe that media is best when it's more independently run. Clear Channel is one of the worst things to happen to radio. I can't even stand to listen to the radio anymore because it's just a blur of milquetoast programming. Surprisingly, the best media these days seems to be ones that are listener supported. They seem most reactive to their audience without pandering into lack of substance in trying to appease the common denominator.

[Doug Krile - Huffpost Blogger]

I agree 100% with your comment on conglomerates. Radio (when I started in it) was incredibly fun and rewarding. The industry is a shadow of itself today. On the TV side of things, see my comment to the response just above. Community Television still plays a role in broadcasting and remains a viable, local, source of information in many communities