Lessons Learned,” by Prof. Laurie Thomas Lee

The article is here; here are the Introduction, Part I, and the start of Part II:

Despite the sharp decline in the number of local newspapers, it’s important to understand that other legacy news-delivery platforms—particularly local TV news—have not been suffering the same degree of loss. Pew Research Center found that local TV news actually saw its audience increase across the evening and late-night timeslots in 2020, and that local TV companies earned more revenue than the previous year. In fact, local TV was deemed to be on par with or outpacing cable and network TV. Pew survey data show more Americans still prefer to get their local news from television than from any other medium, including online. Even with an increasing preference for digital delivery, “local television stations have retained a strong hold in the local news ecosystem.”

Why and how has local TV news managed to stay afloat while local newspapers close their doors? Even as we mourn the loss of local news from print media, we should not overlook its surviving sibling that continues to churn out news to small and medium markets. Why do some media survive in the face of competition from new, disruptive media technologies? What lessons might be learned? Is there a role that government might play? Yet with the loss of local newspapers, are broadcast stations and online platforms adequate substitutes for providing local news? Or is local broadcast news actually just on a slower decline compared to newspapers?

[I.] Surviving Disruption

Much of the blame for the fall of the newspaper industry rests with the rise of the Internet and online competition. For example, digital offerings have cannibalized the editorial side of the business as online aggregators. Social-media sites have become the alternate entry point for daily news as readers rapidly migrate to social media.

Newspapers have also been hit with a loss of advertising revenue to online companies like Facebook and Google. The most devasting blow is from the online siphoning of roughly $5 billion in classified ad revenues—a critically important revenue source for newspapers. Dedicated online businesses, such as Craigslist, and social-media companies, like Facebook, are able to easily provide less-expensive access to their online “Marketplace” for individuals and merchants to buy and sell goods and services.

As a result, cost-cutting ownership practices—particularly by hedge-fund owners—have led to a death spiral for newspapers. Granted, trends have shown that revenue growth from advertising expenditures had been weakening and not keeping up with inflation enough to be sustainable. But newspapers’ shrinking page counts, staff layoffs, and general financial crises are largely due to the advent of the Internet and the online business competitors it spawned.

[II.] Understanding Local Television News Success

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To understand how local television news has fared compared to local newspapers, we should examine distinguishing factors such as regulation and technology, as well as other market forces, including consumer behavior.

[A.] Regulation

Both industries have faced similar disruptive effects over the years, but the one element that most notably separates broadcasting from the newspaper industry is federal regulation and oversight. Governmental authority has shaped the broadcast industry in terms of invention, competition, and content, including how it serves local communities with news and information. It has controlled but also protected local broadcast stations in ways that may explain their continued success in the digital age.

[1.] Local and educational coverage requirements

Unlike newspapers, TV and radio stations have always been and continue to be subject to federal licensing requirements. Since broadcasting signals naturally cross state lines, the U.S. government’s authority over broadcasting comes from the Commerce Clause, which provides for oversight of interstate commerce. A period of chaotic interference by early radio entrepreneurs during the 1920s prompted calls for some sort of licensing and coordination of the airwaves akin to a traffic cop. The rationale for supporting licensing was then based on the legal premises of the scarcity doctrine and public ownership of the airwaves. Simply put, the range of frequencies in the electromagnetic spectrum that broadcasting stations use to transmit their signals is a limited resource, and that resource belongs to the public.

As a result, one regulatory distinction is the assurance that all communities are served by at least one TV station. The federal government intentionally created a system of channel allocations that would ensure small markets are served. Congress was concerned that licenses would become concentrated around major cities and would thus leave remote and less populated areas of the country without service. The Federal Communication Commission (FCC) believed that the public interest would best be served by ensuring that every community had its own television station that was locally oriented and controlled. So, a “Table of Allotments” was created that established a formula for the geographical distribution of local television and commercial FM radio frequencies across the country. These channel assignments are set. Unlike newspapers, stations cannot abandon their local communities and move to larger markets or regionalize the scope of their coverage. They must serve their local communities of license….

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