Local TV News: Fact Sheet

The gradual decline in local television viewership resumed in 2015, after a brief break the previous two years. Local TV newscasts saw their viewership drop not only in all three key timeslots, but also during some nontraditional timeslots, an area of growth in past years. Stations generated less revenue in 2015 than the year before, but the decline was around what might be expected in a non-election year. The question of local TV’s future in a digital era has not gone away, as the industry remains strategically focused on its traditional viewing platform, where its core audience is largely still found.

Audience

Viewership data collected by Nielsen Media Research shows that in 2015 network affiliate news stations (ABC, CBS, Fox, NBC) lost viewership in every key timeslot – morning, early evening and late night.

[chart id=”55797″ title=”Local TV news viewership declines in all three key timeslots – morning, early evening and late night”]

Late night, for the second year in a row, saw the greatest decline, with average viewership down 5% in 2015. Since 2007, the average audience for these late night newscasts has declined 22%. Morning and early evening viewership both decreased 2% compared with 2014.

The numbers were not that much better for nontraditional dayparts. News at midday and at 7 p.m. EST or equivalent (after the network news or early evening local news) both posted 5% declines, after two years of continuing growth. Even the very early morning news (4:30 a.m.), which posted strong gains the last seven years (when Pew Research Center began tracking stations which aired news in those hours), only enjoyed a 2% increase in viewership in 2015.

[chart id=”55948″ title=”Fox local TV affiliates posted small gains in 2015″]

Unlike the other three commercial networks (NBC, CBS, ABC) Fox affiliates do not broadcast national programming. Instead, many Fox stations air their own local hour-long newscast at 7 a.m. and 10 p.m. EST when national programming airs on the other networks. The Fox morning newscasts increased their viewership 3% on average in 2015, after a 5% increase in 2014 and a 9% increase in 2013. Since 2010, Fox morning newscasts have increased their average viewership by 16%. The hour-long night newscasts held steady, up 1% from the year before, after losing 4% of their viewership in 2014.

Pew Research Center survey data helps shed light on some of the complexity behind Americans’ reliance on local TV. U.S. adults continue to report turning to local TV in greater numbers than many other news sectors such as radio, print newspapers and network news, even for national news such as the 2016 presidential election. But, research has also found that the local TV news audience tends to skew older, with younger adults more likely to turn to digital media for their news. While local TV outlets do have a web presence, case study data suggest that the public does not turn to those sites in the numbers attracted by other news media.

Economics

Local TV station revenue typically follows a cyclical pattern of increasing in election years and decreasing in non-election years. True to this pattern, in 2015 total local TV over-the-air advertising revenue declined 7% from election year 2014, according to BIA/Kelsey, amounting to $18.6 billion. However, revenue was roughly on par with the last non-election year in 2013.

For 2015, the 833 news-producing stations (i.e. stations that have a news director and are viable, commercial and English-language¹ took in $15.8 billion in total over-the-air ad revenue, 85% of the total $18.6 billion in the industry overall.

Total online revenues for local TV stations increased 12% in 2015 (a total of $900 million) and by 2020 are expected to grow substantially to about $1.6 billion. However, they still account for a tiny portion of the total ad revenues – an estimate of just 5% in 2015, and this share is not expected to grow much over the next five years.

[chart id=”55971″ title=”Local broadcast TV advertising revenue slowed down in 2015″]

To get a sense of how much of the ad revenue at these news-producing stations comes from news programming, we consulted another dataset: Survey responses from news directors across the country indicate that about half of the revenue is generated during news programming (RTDNA surveys) – a share that has risen modestly since 2008.

[chart id=”56005″ title=”Share of local TV revenue generated by news programming has increased”]

Retransmission fees – the fees paid by cable and satellite systems to carry local channels – are increasingly contributing to local TV station owners’ bottom line. Retransmission payments have been increasing rapidly in the past decade, according to estimates from SNL Kagan. In 2015, retransmission revenue was estimated to reach almost $6.3 billion, and SNL Kagan projects that this figure will reach $10.3 billion by 2021.

[chart id=”56031″ title=”Broadcast retransmission fee revenue expected to grow”]

Another source of revenue for the local TV industry that has been growing substantially in past years has been political advertising, due to the huge influx of campaign cash from the Supreme Court Citizens United decision in 2010. In 2015, seven major publicly held local TV station companies, which own and operate 514 full-power stations, reported political advertising revenues separately from other types of revenues. All seven saw their total political advertising revenue grow since the last non-election year in 2013, according to their SEC filings. In 2014, these same companies reported a very large increase in political ad revenues compared with the previous election year of 2012: $696 million dollars overall, up from $574 million in 2012. Much of that increase in political advertising in 2014 (a midterm election year) compared with 2012 (a presidential election year) coincides with these companies acquiring more stations. For example, Sinclair increased the number of its full-power stations from 87 in 2012 to 150 in 2014.

[chart id=”56037″ title=”Political advertising revenues at local TV companies down in non-election years”]

News Investment

The average amount of weekday local TV news programming held steady in 2014. According to the RTDNA survey of news directors, stations aired 5.3 hours of news programming per weekday on average in 2014 – about the same as in 2013. The last year news programming hours increased was 2011.

[chart id=”56043″ title=”Average number of news hours per weekday holds steady in 2014″]

Staffing levels in the local TV sector were up slightly in 2014, the last year data are available, according to an annual Hofstra University survey. The survey identified 27,600 full-time jobs in local television news – up 1% or 300 jobs from 2013. Local TV newsroom salaries rose 2% in 2014, following another 2% increase in 2013.

[chart id=”56047″ title=”News staff salaries stagnant in 2014″]

Ownership

The buying and selling of local TV stations by large parent corporations ebbs and flows with activity in 2015 lower than in the previous two years. In 2015, 101 stations changed hands, at a cost of about $3 billion, according to BIA/Kelsey. This follows 169 stations that changed hands in 2014 and nearly 300 TV stations that were sold in 2013.

[chart id=”56055″ title=”Local TV mergers and acquisitions topped $3 billion in 2015″]