Borrell: TV stations still behind in online revenue

The latest report from local media research firm, Borrell Associations, estimates that newspaper-run Internet operations will capture $1.14 billion this year, up from $811 million last year. Local television, while showing increases, lags far behind.

Local TV stations are on a collision course with newspapers when it comes to their Web operations. TV is growing revenues faster than the newspaper crowd, putting real estate, automotive and recruitment in their crosshairs. But their growth is relative considering their low starting point. At midyear, the stations participating in our annual survey reported Internet growth rates of 70%, right on track with their 2004 budget projections. Even with this growth, however, we are estimating they will capture less than $130 million in local Internet ad revenue. TV operators are telling us that their foray into the classified arena is faltering, but that their revenues for streaming video sponsorships and commercials is mushrooming for several types of advertisers. (Note: Our next client memo will focus on streaming video as a disruptor to local TV advertising.)

There’s more trouble for TV from the newspaper crowd. Web audiences have grown so large that some newspapers are claiming
that they will soon hold the No. 1 and No. 2 spots in local markets, stealing the second spot from TV. Lee Enterprises, operators of 44 dailies and 200 weeklies, has made it a goal … which leads us to a quote from Mary Junck, CEO of Lee, who introduced Lee’s online segment this way during the Mid-Year Review in New York in June: “Online. What a great business this has turned out to be!”

I keep hoping for the day when broadcast companies will see what’s really going on in their neighborhoods and DO something about it. Alas, old habits die hard.

Download the report

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