Local TV may get some relief next year

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After a stormy two years, the clouds may finally start to lift a little in the local television station business next year.

According to industry research firm SNL Kagan, revenue for television stations, most of which is from commercials, will grow 5.2% to $18.5 billion in 2010, thanks in part to political advertising and the Olympics.

That’s good news for an industry that is struggling big time. This year, Kagan projects revenue for local stations to be $17.6 billion, which is a drop of 17% from 2008’s $21.7-billion figure.

Local stations have been challenged for the last few years with several major broadcasters, including Los Angeles Times parent Tribune Co., Young Broadcasting and ION Media, having filed for bankruptcy. More recently, Baltimore-based Sinclair Broadcast Group warned it too may have to file for bankruptcy protection.

Their problems are felt in Hollywood as well because it means stations have less money to spend on daytime talk shows and reruns of sitcoms and dramas.

While next year may be better, there are still major issues facing the local stations. Like the broadcast networks, they need to find new revenue streams. There is some progress on that front as more cable operators are paying local stations to carry their signals. Kagan SNL is projecting that broadcasters will take in $739 million in so-called retransmission consent fees, compared with $500 million in 2008.

But ultimately, as more content migrates online, local stations will have to become less reliant on their network partners and produce more of their own programming and use their digital spectrum to create new revenue sources.

— Joe Flint