Frigid 2009 Forecast for Local TV

(MoneyWatch)  Widespread media malaise in 2008 hurled U.S. newspapers and magazines into a death spiral of shriveling revenues and massive layoffs. And while a slew of challenges stand to threaten -- and alter -- print media for years to come, 2009 may be the year unprecedented economic gloom sets it sights on a new victim: television, particularly local TV stations.

While political advertising helped keep many stations afloat in 2008, many local outlets stand to take big losses next year. After all, local television received up to 85 percent of all political ad spending, according to the Television Bureau of Advertising, whereas local cable and radio outlets benefited from 15 percent and 10 percent respectively.

Stations managers in several markets predict double digit drops in ad revenues in 2009, and layoffs have already begun in several markets. KPTV in Portland, Oregon recently laid off 10 sales and technician staffers. KVEW-TV in Kennewick, Washington is ending its 6 p.m. weekday newscast and will lay off 17 news employees. And KXTV in Sacramento has had more than 10 lay offs so far this year.

The trying times are forcing stations to find alternative ways to compete, whether it involves finding new advertisers, placing more resources on their online platforms, or teaming resources with other stations.

"There will be cutbacks across the board for everyone," said Sue Barnes, professor of communication and associate director of the Lab for Social Computing at the Rochester Institute of Technology. "Unfortunately, stations might have to a cut back on news programming."

KOIN-TV in Portland, for one, has professed a newfound dedication to the internet and plans to package TV and online programs on its revamped web site in order to increase revenue.

In an industry desperate to curtail costs, look for stations to mirror the move made recently by NBC and FOX in Philadelphia where the two networks are combining their video operations to service all stations owned by each company. NBC and FOX say they will expand the Philadelphia model to other major markets in early 2009.

Beyond these moves, look for unforeseen changes in network-affiliate relations.

"They are (networks) all talking about reducing subsidies and cross promotion fees," said Barbara O'Conner, director of the Institute for the Study of Politics and Media at California State University Sacramento.

Despite a dreary forecast for local TV outlets, O'Conner thinks they might be better positioned than newspapers to weather the economic storm. "They have been adjusting to the Web and cable drain of advertising longer than newspapers and have already taken many of the cuts," she says.

That shift of resources towards the internet seems like obvious move, even for an industry that has long resisted the shifting tide of media consumption. But certain numbers cannot be ignored. As many as 68 percent of advertisers recently polled in one study say they plan to increase their online spending in the next six months.