Alan Mutter has a message for local TV stations: What happened to newspapers is probably about to happen to you next.
Once it becomes as easy and satisfying to view a YouTube video on your 50-inch television as it is to watch “Two and a Half Men,” audiences will fragment to the point that local broadcasters will not be able to attract large quantities of viewers for a particular program at a finite point in time.
This will shatter the mass-advertising model that has served local broadcasters so well since the advent of the medium that some stations in the best of times were able to pocket pre-tax profits as high as 50 cents for every dollar of advertising they sold. While profits nowadays are running at a more modest 20% to 30%, they are well ahead of the pre-tax earnings of such corporate behemoths as Wal-Mart and Exxon.
The challenge to the lucrative local broadcasting model will have a direct impact on the quality, such as it is, of local television news – the medium that approximately 70% of the population counts as its primary source for news. This is a matter of great concern, for which no clear solution is evident.
The quote comes from the first of two posts adapted from testimony Mutter is scheduled to present at a Media Ownership Workshop being conducted Friday by the Federal Communications Commission at Stanford University. Definitely worth reading.
Photo: Creative Commons licensed from flickr user Tjflex2.