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Heartland Stations Heartier Than Most

Midwest GMs say economy “sucks less” in many mid-America markets 7/18/2009 02:00:00 AM Eastern

The Midwestern TV markets have rarely enjoyed the economic spikes that have benefited the beachy boomtowns. But when the economy tanks, executives at several heartland stations say the insulated nature of their inland markets helps them pull through the recession in considerably better shape.

Of course, it will be years before the likes of Detroit and Cleveland break free from entrenched unemployment and population exodus. But whether you chalk it up to better focus on local advertising or just an old-fashioned strong work ethic, Midwestern markets like Dayton, Omaha and Green Bay (see Market Eye, p. 14) are rolling through the recession in relatively good shape.

“We don't get the dramatic swings that what I call the 'high-desirability' markets get,” says KPTM/KXVO Omaha General Manager Randy Oswald. “Real estate here goes up 1% or 2% a year, not 12-14%. But conversely, we don't see the dramatic lows.”

Beating the recession

Of course, few are the general managers across America who are not staring at double-digit revenue drops and heavy layoffs these days. But research indicates that the Midwest as a whole has held up relatively well since the economy went south.

BIA Financial reports that a number of Midwestern markets substantially outperformed their market size in 2008 in terms of revenue. Dayton is Nielsen's market No. 64, but is No. 58 in revenue. Omaha is market No. 76 but ranks No. 66 in revenue. Madison, Wis., is market No. 85, and No. 81 in the cash race. Even No. 114 Lansing, despite Michigan's crippling unemployment, cracks the top 100 in revenue.

Other markets that over-index in revenue include Indianapolis, Fort Wayne and Davenport, Iowa. As one general manager puts it, running a station in the Midwest “sucks less” than doing so in much of the rest of the country.

As Oswald suggests, the markets that showed outsize growth in the last decade or so are taking it on the chin. The worst home foreclosure rates by state in May, according to RealtyTrac, are Nevada, California, Florida and Arizona. The states with the highest rates of combined unemployed and underemployed (part-timers looking for full-time work) residents include coastal locales Oregon (23.5%), California (20.3%) and Rhode Island (21.5%), according to the Department of Labor. Michigan is among the leaders, too.

These relatively successful Midwestern markets have both common and unique traits. Many have replaced manufacturing pasts with growth industries like health care and technology. Some, such as Columbus and Madison, benefit from relatively stable employment thanks to large universities and state-capital status—though government employees have not been exempt from furloughs and layoffs.

“We're blessed to not be in a position where we're dominated by manufacturing,” says WCMH Columbus VP/General Manager Dan Bradley. “We've got a tremendous number of colleges and universities, not just Ohio State.”

Industry watchers offer a variety of theories as to why local TV in the Midwest, minus a handful of blighted markets, is on decent footing. These include airing late news an hour earlier than the coasts, a favorable proposition as people go to bed earlier; a relative dearth of markets featuring Nielsen's ratings-chopping Local People Meters; and the notion of more-traditional media consumption among residents, compared to coastal markets that perhaps are more wired.

Pockets of pain

To be sure, BIA's 2008 figures don't fully reflect the prolonged economic slump, and plenty of Midwest-based general managers say their markets have been suitably slammed. WFRV President/General Manager Perry Kidder, for one, says Green Bay has been somewhat inoculated from past recessions, but not as much from the current maelstrom. “The pain is fairly consistent across the board,” he says.

But many believe that Midwestern stations, often snubbed by the national ad agencies, have done a better job of cultivating local revenue. With automotive pulling back ad dollars so dramatically, these outlets may feel the sting a little less. “They've become less reliant on auto,” says Frank N. Magid Senior VP Bill Hague. “When national advertising is down, everyone gets whacked. But many in the Midwest have maintained good relationships with their local advertisers.”

While it's difficult to characterize the people of a large area, several sources believe that what they call typical Midwestern values—hard work and conservative spending—serve the region well in tough times. “There are more economic problems than we've seen in some time, but I think there is that ethic,” says WISC Madison Station Manager Tom Bier. “You earn your money, then you [buy] it—instead of this assumption that the money will always be there.”

 

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