Back in the 1920s, the government commandeered the airwaves, and a few years later, the Federal Communications Commission (FCC) was formed and started licensing the spectrum. At the time, the spectrum was allocated to the government and broadcast. Since then, television station owners have been granted their license at no charge in exchange for a promise that they serve the public interest, which includes free access to news, weather, sports, and entertainment by supporting it with paid advertising.
Nielsen has measured television audiences since the 1940s in the form of ratings. The measurement of a rating requires a minimum audience level, and a program’s rating is the currency of television advertising. Consequently, to maximize profits, broadcasters focus on increasing ratings. The traditional model of acquiring top-rated syndicated shows and investing in local news operations requires a tremendous amount of capital investment.
Television stations with local news operations have significantly benefited for a couple of reasons. First, the community connects with the local talent and their teams driving loyalty and brand association. According to a Pew Research study in 2019, the local community connection is the reason why 41% of Americans rely on local television news. Next, highly rated newscasts are the stations’ profit center because the station retains all the advertising inventory. According to the BIA Advisory Service database, in 2019, local television stations with news operations revenue was $15.8 billion, which was 82% of the total revenue for the local TV industry.
So what drives viewership for a news organization? Natural disasters, such as the recent hurricanes and the pandemic, cause the highest ratings as people rely on the local news to help them navigate the situation. Outside of a natural disaster or an actual crisis, broadcasters found that sensationalism lures and locks in viewers, which is known in newsrooms as the “If it bleeds, it leads.” Back in 1989, Journalist Eric Pooley used the phrase, to sum up, the degradation of local news. Newsrooms were using sensationalism as an editorial tactic focusing on events that stir an emotional response such as fear in the viewer to increase ratings and drive revenue. The damaging part of journalistic sensationalism is the lack of contextual information provided to allow the audience to come to their conclusion about the information that impacts their lives. Opinion based shows that cover breaking news on cable and late-night television shows create unbalanced and sometimes false perceptions of the story. According to Gallup, only 41% of Americans trust mass media, a number that has been steadily eroding since it was first measured in 1972.
The erosion of trust, along with an “appointment viewing model” where viewers can’t choose when they view a show or have a choice as to which device they can watch, and a lack of focus on customer experience has resulted in plummeting ratings. The Television Bureau of Advertising (TVB) is leading the effort to convert the measurement from ratings to impressions, which would enable stations to continue to monetize programs that don’t meet the minimum audience standards.
But is this enough for station owners to maintain profitability when the costs of programming and news production continue to climb? And what about that promise to provide a public service?