The Next Two Big Dominoes: TV and Radio

(MoneyWatch)  It's become commonplace for us here to chronicle the decline of newspapers and magazines, but two other arms of traditional media -- TV and radio -- are next in line to fall before the financial tsunami that is engulfing the entire industry.

Two new reports detail just how dire the situation has become.

Cumulus Media President Lew Dickey Jr. predicts that half of all radio companies in the U.S. will die over the next three years. Not only are ad revenues down in radio, the stock market turbulence is lowering many companies' valuations to precipitously low levels. Dickey says the industry has not seen any challenge this daunting in more than 20 years.

Meanwhile, Variety predicts that the major television networks may be forced to take "drastic" measures in coming months, due to the same factors threatening radio -- declining ad revenue and market upheaval -- plus the long-term decline in viewership share, as more and more people turn to cable TV or to the web for their video-viewing experience.

Among the changes Variety envisions is that one or more of the major networks -- NBC, ABC, CBS and Fox -- will have to drop an hour of prime time, limiting their programming window to only 8pm to 10pm, and handing the extra hour over to affiliates. This would help curtail costs, of course, and eliminate less competitive programs, but it also would be a structural change that, once made, might be difficult to ever reverse.

One of the most significant advertising categories for TV has long been automobiles, but with one or more of Detroit's "Big Three" -- GM, Ford, and Chrysler -- apparently teetering on the verge of bankruptcy, and chances for a government bailout fading, the networks are poised to take a huge hit in 2009.

Like their print industry counterparts, TV and radio execs have had years to prepare for the transformation of their sectors. Over the coming period, we'll see just how good a job of planning for the future they've done. One certainty is that those who have only started adapting recently, with the flood waters already rising around them, will not survive.

For these companies, it is already too late.

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Thanks to Michael Goodman for help with this piece.