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Newsonomics: These are the 3 fault lines redrawing the U.S. media business
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Dec. 6, 2017, 9:44 a.m.
Business Models

The FCC is swiftly changing national media policy. What does that mean on the local level?

“It’s called local news for a reason.”

The Federal Communications Commission’s anticipated decision on net neutrality has (rightfully) garnered a lot of publicity and scrutiny. The FCC’s repeal of different regulations earlier this fall, however, could reshape a news source often left out of predictions of the industry’s future: local TV newsrooms.

The FCC, responsible for overseeing the radio, television, and phone industries in the United States, has embarked upon a broad path of deregulation charted by its chairman Ajit Pai under President Trump, as our Ken Doctor examined in a recent analysis. But when the announcement came in late October that the FCC was killing the main studio rule — no longer requiring AM, FM, and TV stations to maintain a primary studio in or near their local community of broadcast — and the November rollback of broadcast ownership rules in a shift toward greater industry consolidation, it became clear that the local news landscape could be significantly altered yet again.

“This current iteration of the FCC is on this deregulatory path,” said Christopher Ali, an assistant professor of telecommunications policy at the University of Virginia and former FCC intern. “The main studio rule was one of the last bastions of localism regulation we have…Everyone keeps saying local is important. Even the FCC keeps saying this. But they’re eliminating the rules that protect localism.”

The harbinger comes from the radio industry of the 1990s, upheaved by the Telecommunications Act of 1996 that was praised as building the “Information Superhighway” but also ushered in an era of radio consolidation. By removing restrictions on ownership in a given market, the act encouraged companies to approach broadcast radio from a national scale, narrowing opportunities for local autonomy. By 2002, Clear Channel (now iHeartMedia) had grown from owning 40 stations to 1,240 across the U.S., which was 30 times more than congressional regulation had previously permitted, says the advocacy nonprofit Future of Music Coalition. It laid off hundreds of local DJs and replaced them with hosts who broadcast to many markets at the same time, maintaining only the illusion of localness.

“The company topped out at more than 1,200 stations in 2000, just before radio ratings and ad revenue began to flatten as listeners moved elsewhere,” The Washington Post noted in a 2006 article. “As the company grew, it received unfavorable press for its size and influence on music playlists and artist development. Clear Channel was criticized for homogenizing the sound of FM radio and strong-arming acts into playing company venues in return for airplay. The criticism became so intense that the company posted a ‘myths vs. facts’ section on its Web site to answer charges.”

While the radio consolidation trend encountered the newfound hurdle of online listening, broadcast TV has already been dealing with the industry shift before this FCC decisions. A September 2017 Pew Research report points out that 50 percent of U.S. adults say they often get news from television, more than the43 percent who said the same of online sources. But the gap between TV and online had dropped from 19 percentage points to 7 in just a single year. The FCC changes could be another watershed moment in an already fraught industry.

The value of a local presence

“My initial reaction [to the main studio rule] was: Is this the end of local news?” said Nneka Nwosu Faison, a Boston-based reporter who has worked at TV stations across New England, and a 2018 Nieman Fellow.

“If all you have is a hub, you’re never going to have stories that are specific to that town or that market. New York City isn’t going to care about some news happening in Syracuse, or send a crew there,” Nwosu said, speaking of her experience at her first job at a TV station. “What our national leaders are saying on Twitter doesn’t affect what’s going on with the Johnson family in their schools and their trash pickup or snow removal.”

The National Association of Broadcasters, a lobby group for the industry, came out in favor said the main studio rule “has outlived its usefulness in an era of mobile newsgathering and multiple content delivery platforms. We’re confident that cost savings realized from ending the main studio rule will be reinvested by broadcasters in better programming and modernized equipment to better serve our local communities.” It also applauded the FCC’s changes to the media ownership rules, calling them “irrational in today’s media environment, but they have also weakened the newspaper industry, cost journalism jobs and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors.”

No story mentioning media ownership consolidation would be complete without noting Sinclair’s seemingly political aims, viewed as fuel to the FCC’s deregulatory fire. The broadcasting company, already in possession of more than 173 TV stations in dozens of local markets, has been pursuing a deal for 42 Tribune Media TV stations and is working through the Department of Justice’s approval process. As Doctor noted, it makes no secret of its conservative leanings:

It has mandated nationally produced must-carry editorials, some of them so fact-challenged as to provide ample satiric fodder for John Oliver. 6,356,541 people, as of this writing, had watched that 20-minute Oliver segment, but it’s unclear how much of a difference that makes…

Sinclair’s approval appears to be in the final stages, though it’s unclear how the heightening opposition will affect that. It may be the first of ever-bigger deals done for political as well as business reasons.

The New York Post has reported that the Sinclair–Tribune deal is inching forward with the Department of Justice by agreeing to sell off some Tribune stations, with the possibility of wrapping up in the middle of 2018’s first quarter.

Away from the policy stage, local newsrooms are sorting through their own futures.

“It’s called local news for a reason,” Ny Lynn Nichols, the news director at Nexstar-owned KAMR/KCIT in Amarillo, Texas told local reporter Jay Ricci. “A lot of what we do is about relationships. You need to know the people where you live, how the people think.”

But Ricci himself, as a reporter and anchor for the Amarillo Globe-News/Amarillo.com/AGN TV, likely knows the churning change familiar in any local newsroom that has seen its advertising dollars reduced by online platforms. Nwosu, the Boston-based TV reporter, has witnessed it as she took her first job in journalism the same year the iPhone was released. At her second job, two months after being hired at a Providence station as the first reporter to be shooting and editing video, eight photographers were laid off.

Pai has pointed to the evolution of social media as one reason the main studio regulation was no longer needed. “The public these days is much more likely to interact with stations (including accessing stations’ public files) online,” he said in a statement.

Nwosu, who is spending her fellowship researching how news organizations can better harness social video, sees the relationship between local news reporters and social media users differently. “There are times when we get news tips from social media, but we’re able to respond to the things that people say to us if we have a physical presence,” she said. “You can get in touch with a station in many ways nowadays, but to get that response and to get that looked into, you need boots on the ground.”

The hometown perspective

Journalists can and often do travel to scenes for particular stories, but those tend to be events on a national scale such as the church shooting in Sutherland Springs, Texas. But parachute-style journalism doesn’t guarantee that the reporting will be done effectively or in a way that builds trust in news organizations across the country. Austin-based Dallas Morning News reporter Lauren McGaughy drove the 90 minutes to the 600-person town after the gun had finished firing but before the wave of “hundreds of us — reporters, producers and photographers from all over the world” descended on the community. The “invasion” drove her to write an apology letter to the town’s residents for the media’s behavior in its coverage.

Jon Allsop also strategized methods for more respectful media coverage after mass shootings for Columbia Journalism Review, including relying on local partners to cover the story. The key to that, still, is having existing journalists who live in and are part of the community being reported on.

Community-based TV stations still hold a significant stake, with 37 percent of adults receiving local news via TV in August 2017, according to Pew Research (a nine percent drop from early last year).

“The majority of local Americans still get their local news from TV, particularly in a crisis. Local TV still resonates in the hearts and minds of Americans,” Ali, the media policy researcher, said. “We have a policy obligation to make sure local news is provided in the community…The free market won’t do it for us. There’s not enough advertising money in the community to support local news.”

In October, it was the main studio rule. In November, it was media ownership. December will bring the tidings of net neutrality’s next chapter, all in attempt to stop “dragging the broadcast rules into the digital age,” Pai emphasizes. But for now, there are still journalists in the field, reporting on their communities, and there are still stories to be told, and in an industry with significant investment in infrastructure, the pace of the potential changes is hard to gauge.

“I think the FCC ruling is just telling us that local TV news won’t be what it used to be,” Nwosu said. “It’s a big change and maybe people need to see that in order to realize that maybe there are better ways to produce local news and video content that isn’t made with expensive equipment…It’s an opportunity to make local news higher quality and more efficient. I think we’ll see more local news just produced in different ways.”

Photo of television news truck from Pixabay used with a Creative Commons license.

POSTED     Dec. 6, 2017, 9:44 a.m.
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