Oh oh! Now the Supreme Court crushes station revenue

Oh oh! Now the Supreme Court crushes station revenue
The high court’s decision to let stand a controversial campaign finance reform law is yet another blow to broadcasters already reeling from ad revenue losses. Mediapost’s Media News Daily quotes NAB President/CEO Edward O. Fritts as saying the impact on broadcasters could be enormous.

“The decision by the Supreme Court will cause substantial changes in the manner in which federal candidates utilize broadcasting to reach the voters,” said…Fritts. “This is a complex 300-page opinion that will require extensive evaluation before its full impact is understood.”

The media industry, particularly local TV stations, are counting on a windfall in 2004 to help them improve the bottom line. TV stations in particular have been suffering this quarter from bad comparisons and, with the weak advertising economy, having a difficult time making up for the millions of dollars they raked in unexpectedly in the fall of 2002 during hotly contested state and local races. Many companies made millions — sometimes more than $10 million — on political advertising in September, October and early November 2002.

I’ve been predicting that 2005 would be the breaking point for the industry, but that was based on political advertising masking the reality of the cultural shift. This ruling may change all that. Regardless, broadcasters simply must modify their business models to incorporate multimedia production and distribution, or the shake out will be profound. Broadcasting isn’t going to die, but its place in the lives of people has already changed significantly.

Comments

  1. Hopefully, the current media scheme will collapse, opening the possibility for a return to the small, local, privately owned radio and television of the past. I eagerly await big-media’s demise.

  2. The thing is, Chris. It’s possible to do that now using Internet TV, so I think you will see such “mom&pop” entities downstream.

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