Yes, there’s that 28% decline in first quarter revenues across the board. But Fine finds a few reasons why stations might be well-poised for recovery.
Paradoxically, though, the current diminution of ad demand could help local TV stations win more attention from national advertisers. “In TV advertising, pricing has fallen more precipitously for local [stations] than [for] national [networks],” says Anthony DiClemente, an analyst at Barclays Capital (BCS). “The pricing disparity between local and national may become so wide that it’s worth it to buy targeted local ads rather than pay up for a big mainstream national campaign.”
Furthermore, Fine notes, stations may be the preferred pick among local media. As anyone in local television is quick to point out, they’re certainly better off than newspapers.
TV has historically held on to its share of the ad pie better than all other traditional media. Consider, too, the increasingly tattered state of its main competitor, the print newspaper. Does anyone think newspapers-in 2010, or 2011, or whenever the ad market turns-will be stronger than they are today? “The most effective [ad] buy for you, if you want to hit 100% of Chicago with a branding message, is [still] some slick video advertisement. And you can’t do it with cable,” says Gordon Borrell, founder of research group Borrell Associates (and a former newspaper executive). There’s also one key quirk of local advertising to consider. Faced with a crunch, executives say, smaller local advertisers can stop all spending suddenly. (Their national counterparts move more slowly, which is one reason why network TV is faring better.) In a local recovery, such shut-off switches can be snapped back on just as quickly.