Cord Cutting Will Kill Local TV Stations


October 19, 2014
Pretty soon, this sort of thing might be extinct. Credit: Lars Plougmann/Flickr.

Pretty soon, this sort of thing might be extinct. Credit: Lars Plougmann/Flickr.

All of a sudden, it seems like cord cutting is gaining big momentum from content providers. HBO, CBS, Univision and event the NBA are creating plans that will allow regular folks to get their shows and games streamed online, without a cable TV plan. Exciting stuff for those of us who want to go more a la carté with our television consumption, whittling down that $120 cable bill.

But as I’ve been looking at the coverage, almost all of it is written from the networks’, the cable companies’ and consumers’ perspective. What about the television middleman, local broadcast stations? Especially the non-O&O guys who lack their networks’ deep-pocketed protection?

In just a few short years, cord cutting is going to create a financial drought for non-O&O stations. Built on the dependency of people watching a riveting episode of “The Good Wife”, and then keeping the channel on for the local news, or maybe turning it on before Letterman starts, CBS’ new streaming plan is going obliterate that long-standing system.

And advertising surrounding the news at 4:30, 5 and 10 are what have kept local stations afloat all these years. If people can get “The Good Wife” and Letterman streamed to their laptops for just $6 a month, do you think they’ll turn on the TV to watch Birmingham’s CBS42 News at 10’s Daily Pledge?

All of a sudden deals like Tribune’s $2.7 billion local TV station purchase don’t look so good.

Yes, local TV audiences have climbed a bit in the last year. And yes, local TV ad revenue has been going up, especially due to increased bi-annual political ad spending.

But local tv ad revenues are dependent on the current status quo. The networks’ growing support of cord cutting is going change everything in just a few short years.

Very soon, we’ll start to see small local TV stations closing up shop and ad spending will consolidate. There will no longer be room for three (or four) local TV news reports. Just like the merger of small daily newspapers, small TV stations will close up or join forces. And it won’t be pretty.