1. Kevin Mott Program Analyst, Stanton Foundation December 18, 2018
Local TV News Industry Trends: Revenue Increasing, Employment Steady, Viewership Robust
Kevin Mott
Program Analyst, Stanton Foundation
December 18, 2018

2. Executive Summary
Newspapers, particularly local newspapers, are dying off in the 21st century
Analysis of this trend often excludes local television news
Local television news is America’s primary source of local news
37% of Americans use local television news
18% of Americans use print newspapers
In fact, local television news looks economically viable
Revenue increasing
Employment stable
Viewership hanging in there

3. Baseline: Performance of Local Newspapers
Industry-wide data excluding national papers is not available  McClatchy Co. will be case study
Founded in 1857 in Sacramento, California
McClatchy acquired Knight Ridder in 2006, allowing it to grow to its size as 2nd largest publisher in nation
Data aggregated from public 10-K filings
Increased efficiency from large size of McClatchy likely masks troubles faced by smaller papers

4. McClatchy: Total Revenue
10-K filings use same classifications for revenue since 2008, so starting analysis there
Revenue decreases every year, particularly large decrease following Great Recession
Mixing importance of various revenue streams not seen in this graph
CAGR : -7.93%

5. McClatchy: Revenue Streams
Advertising revenue is decreasing in relative size
2008: 82.20% of total
2017: 55.56% of total
Audience revenue, though growing in relative size, is not large enough in absolute terms to recoup losses in advertising revenue
Similar resizing of revenue streams will be observed in local television news

6. McClatchy: Full-Time Employment
McClatchy full-time employment has been quartered in the last decade
Possibility of some losses stemming from increased efficiency after consolidation with Knight Ridder
However, since revenue and circulation are also decreasing, consolidation is likely not fully to blame
CAGR : %

7. McClatchy: Circulation
Average paid daily weekday circulation declining
Circulation in 2017 is under half of circulation
Though local television news audiences are also shrinking, it’s not nearly as dramatic as this
CAGR : -6.91%

8. Critical Comparison to Local TV News
McClatchy data make it very clear that local newspapers are not having a good decade
Contrarily, local television news is adapting well to the digital age
Revenues are increasing
Employment is stable, despite increased consolidation in the industry
Viewership is holding its own
Data sourced from Pew Research Center (PRC) State of the News Media Fact Sheet

9. Local TV News: Total Revenue
Three components of total revenue
Over-the-air revenue
Digital advertisement revenue
Retransmission revenue
Cyclic behavior is evident, despite the exclusion of political advertisement revenue
Mixing importance of various revenue streams not seen in this graph
Will be discussed in detail later
CAGR : 4.43%

10. Revenue as % of 2010 Revenue
Revenue is clearly increasing for TV, decreasing for newspapers
No cyclic behavior evident for newspapers
CAGR :
TV: 4.43%
Newspapers: -5.82%

11. Local TV News: Employment
Despite volatility, local TV news employment stable
A dip in local television news employment in has rebounded
Stable employment is despite increased consolidation in the industry
Top 5 local TV companies owned 179 stations in 2004
Owned 443 stations in 2016
This is contrasted to McClatchy employment
CAGR
TV: 0.17%
Newspapers: %

12. Local TV News: Viewership
2016 average weeknight viewership is app. 80% of 2007
This is relatively robust, given the increased preference of news consumers for online news
Viewership numbers aggregated by Nielsen for affiliates of ABC, CBS, Fox, NBC between 5-7PM on weeknights
CAGR :
TV: -2.38%
Newspapers: -7.23%

13. Local TV News Revenue: Deeper Dive
Incomplete to just say that local television revenues are increasing
In fact, the rate of increase is dependent on disaggregable revenue streams
The sustainability of local television news depends on the sustainability of this increased mixing of revenues
First step: disaggregate revenues
PRC did this in the Local Television News Fact Sheet in their 2018 State of the News Media report
Second step: analyze increasing retransmission revenues

14. Local TV News: Disaggregated Revenues

15. Local TV News: Retransmission Revenue (slide 1 of 2)
The source of this revenue is contracting behavior known as retransmission consent, defined by the FCC as:
The Communications Act requires that a television station give its consent to a cable system or other multichannel video programming distributor (MVPD) to carry its broadcast signal. Television stations and cable systems, as well as satellite carriers, negotiate for this “retransmission consent” and money or other consideration is generally exchanged between the parties in these private negotiations.

16. Local TV News: Retransmission Revenue (slide 2 of 2)
As seen in the previous chart, it’s clear that retransmission revenue is growing in total value
As seen here, it is also growing in relative size
PRC projects growth rate to taper off but remain positive
This suggests that cable providers value local television news highly, and are unwilling to market packages without

17. Conclusion
Local television news is poised to maintain its position as the de facto leader in local news coverage, thanks to
Yearly increases in total revenue
Stable employment
Robust viewership numbers
General health seems to refute calls from intellectuals that local news is going out of favor with audiences
The 2010s has proven to be a friendly decade for local television news