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News Investment

News Investment

By the Project for Excellence in Journalism

As digital transmission, the most talked-about form of which is HD TV, moves closer to reality, the bulk of investment in local television stations appears to be on technology rather than in people to gather the news.

Even as news directors reported no significant change in salaries for 2006, more than half reported increasing their budgets. Many of those dollars were put toward newer distribution platforms and getting ready for the mandated transition to digital.

News directors also reported airing more local news, as well as sharing their content with other platforms, most notably, their station Web sites.

TV News Budgets

The increase in budgets to accommodate the digital investment comes, according to most evidence, after years of holding steady or cutting back on newsroom budgets.

More than half of news directors across all market sizes report increasing their budgets, according to the latest survey conducted by Robert Papper for the Radio Television News Directors Association.1

In 2006 (the latest year of data), 54% reported heftier newsroom budgets, a third (32%) saw no change and only 8% reported any decreases. This is a slightly more optimistic picture than the year before, when less than half of news directors (46%) reported increases and 12% saw budgets fall.

Responses also signal that unlike revenues, financial investment is spread out across stations and markets, not concentrated on the major players. The bigger variation comes in independent vs. affiliated stations. While most news directors across both groups reported budget increases (67% at independent and 57% at affiliated), more news directors of the independent or unaffiliated stations (33%) reported a decrease, while affiliated ones (30%) said budget levels had remained the same.

Where is the new money going? For the most part, newscasts and employees are being spread ever thinner, while the growing demands of the Web eat up any excess dollars in the budgets.

The Shift to Digital (HD) TV

One of the biggest areas of investment in the past few years has been in preparing for the mandatory switch to digital transmission, in the short-hand referred to as HD2. On February 17, 2009, full-power television stations in the U.S. are scheduled to stop broadcasting on their current analog systems and switch to digital television as part of a federal policy introduced in 1996.3

Digital transmission means information is sent in encoded streams of data, rather than over radio waves, allowing for better quality, faster distribution and multiple digital channels in the same bandwidth that could previously hold just one analog channel. For televisions stations, this means multiple streams of data, and in many forms (audio, video or data). For example, a local television station could dedicate one stream to 24-hour local news, another to weather or sports and so on.

Newsrooms also are investing in new technology to do more with the same amount of people, and to meet the demands of a rapidly changing marketplace. New tools are needed to keep up with new distribution platforms and the transition to digital transmission.(See Online Trends.)

Editing and graphics tools are helping journalists automatically repurpose content for diverse platforms – television, Web sites, podcasts and hand-held devices – with minimal technical training.

Local stations are buying software programs that can edit, add graphics and configure content for many platforms in one go, promising digital-quality data without affecting the station’s workflow.

A live production technology company, Ross Video, has developed a software system called “OverDrive” that includes robotic cameras, tape decks and graphics devices that help a station quickly institute newscasts. The company had installed this system in 60 stations, including the NBC-owned stations, by October 2007, and another 15 to 20 are in the works.11 Other software examples include Apple’s Final Cut Studio, Avid’s Active Content Manager and the Multi-Platform Suite developed Virzt, a graphics supplier.12

According to trade publications, a station in a mid-size market will spend about $5 million for the gear needed to switch to high-definition programming – an amount that might deter smaller stations but which is seen as an inevitable business cost to the stations that can afford it.

Large numbers have already switched or are in the process of switching to HD local programming. According to Broadcasting & Cable, more than 60 stations — most owned by the Big Four networks or by the larger television groups — produced local news in high definition programming in November 2007. By the end of 2008, all 39 CBS-owned- and-operated stations plan to be all-HD and Fox Television aims to move seven of its 26 stations to the new platform.13

Amount of News on Local TV

One recent trend in local television has been to add the number of hours that stations air news.

If the audience for newscasts is declining, adding more daytime programming hours is a way to recapture those who might not be home during traditional news hours at night. That also is a way to add new revenue opportunities: If you cannot charge more for advertising when the ratings are down, or add more commercials into the programs you have, create new programs instead.

This year, we find that ratings for local news show no growth (see Audience) and that stations are adding newscasts at different times in the hopes of attracting viewers, something that might account for increasing hours.

The amount of local news aired in 2006 rose and indications are that it continued to rise in 2007. News directors of all local television stations who responded to the latest survey of the Radio Television News Directors Association reported airing an average of 4.1 hours of news on weekdays in 2006, up from 3.8 hours the year before.

Average Hours of News per Weekday

Year
Number of Hours
2006
4.1
2005
3.8
2004
3.6
2003
3.7

Source: RTNDA/Ball State University Surveys
Note: Based on survey responses of news directors

There is reason to believe the growth will continue. The majority of news directors (75%) at independent stations said they intended to add more news in 2007. And more than a third (37%) of their counterparts at the network affiliates planned to do the same.

Combined with the staffing figures, the implication of more hours of news seems a familiar one. According to the Papper data, the local television news industry is once again looking at a scenario in which the amount of news being produced is growing much faster than the number of people producing it. This stretching of resources suggests problems. It tends, according to PEJ’s earlier content work in local television, to translate into local newscasters relying more on syndicated material, non-local material, electronic press kits and anchor reads.14

Sharing Newscasts

One major change in local television is that of stations producing news for rival stations. According to estimates by Papper, about 200 stations around the country now get newscasts from other stations. The number was close to zero only a few years ago, Papper believes.

That trend continues to grow. In 2006, a third of all news directors (37%) said they share content with another local television station – up from 21% the year before.

The growth seems to be coming from the increase in content-sharing beyond the usual sources – that is, Big Four affiliates or stations that operate in the biggest markets.

At non-affiliated commercial stations, half of news directors (50%) said they had shared content in 2006, compared to none the year the before.

Also, more news directors in the smaller markets (beyond the top 25) reported sharing content than the previous year. In the smallest market block, more than double the number of news directors reported this increase – 18% in 2006, up from the 7% the year before.

Staff Size

Over all, the staffing in local newsrooms is fairly stable. The average staff per station fell slightly, to 35.8, about one person fewer than last year’s average (36.4.). But that number by itself may be slightly misleading. A big drop in mid-sized markets accounts for most of it. If one were to take the most typical staff size, or median, the number rose by two staffers in 2006.

Stations affiliated with the Big Four Networks mostly held steady, averaging 38.3 full-time staffers vs. 38.1 in 2005.

Staffing at independent stations, according to the data, jumped in 2006, but very few independent stations took part in the survey, making the figures more volatile than those for other station groups. The average increased more than 50% to 30.5 full-time staffers, up from 20 in 2005. It brings the average staff back in line with 2003 and 2004 and goes a long way to close the gap with affiliates. It is quite likely that the 2005 number was an anomaly.

Part-time staff in local newsrooms had a slight increase. News directors reported an average of 5.2 part-time employees in 2006 compared with 4.7 the year before.

Local TV Newsroom Staff Levels
1999-2006, Average Number of Full-Time Employees
Design Your Own Chart
Source: RTNDA/Ball State University Surveys
Note: Based on survey responses of news directors

The growth seems to have been more widespread among these stations than expected. Half (50%) of news directors at independent or unaffiliated stations increased staff in 2006, more than four times the number who had expected to the year before (12.5%). This seems to have overshadowed as well the fact that more news directors cut staff (25%) than had expected to (12.5%).

Changes in Staff Size
2006

Increased Same Decreased
Planned for 2006
Reported in 2006
Planned for 2006
Reported in 2006
Planned for 2006
Reported in 2006
Big 4 Affiliates
34.5%
42.6%
56%
44.9%
3.2%
12.5%
Others
12.5%
50%
75%
25%
12.5%
25%

Source: RTNDA/Ball State University Surveys
Note: Based on survey responses of news directors

For 2007, available predictions are that staffing will mostly hold steady. The majority (61%) of news directors plan no changes and only about 28% see an increase coming. Possibly more heartening for local news employees, only 5% plan cutbacks.

Salaries

If people are being asked to do more work, did it affect their pay? The answer, as it was the year before, is that local newsroom salaries in 2006 barely budged, rising less than a percent (0.6%), according to the television news directors survey. And a higher rate of inflation wiped out that minuscule gain. 15

Within the newsroom, the news director was best compensated, with a median salary of $74,000,16 slightly lower than the previous year’s $75,000. They were followed by anchors ($60,000) and executive producers ($52,000). Both positions saw a slight increase in median salary from the year before, when it was $58,500 and $49,500, respectively.

Following up on the 2005 trend, the average salary of a new hire (with no full-time experience) was $22,000 in 2006, a slight improvement over the $21,400 the year before.

Salaries over Time
Median Salaries, TV News, 2006 vs. 2005
Design Your Own Chart
Source: RTNDA/Ball State University Surveys
Note: Based on survey responses of news directors

In the past decade, news directors have consistently had the greatest increases in salary. The salaries have grown by almost half – 47% — between 1996 and 2006 (in 1996, news directors reported a median salary of $50,500).

Next in the salary hierarchy are on-air positions (news anchors, sports anchors and weathercasters), which, taken together, have had a 45% increase. For other management positions – assistant news directors, managing editors, executive producers and news producers – salaries have risen 32%.

Even though long-term trends indicate growth in salaries, the pace is not what it used to be, according to the survey’s author, Robert Papper. When seen against the cost of living and inflation, television newsroom salaries have not amounted to an increase in real wages.

News for Other Platforms

Local television stations routinely provide content to other platforms, as well – notably their own or other Web sites, local radio stations and local cable news channels. And news directors report that this cross-distribution shows no signs of slowing down.

Fully 80% of stations in 2006 reported posting their television content online, the same number as the year before. And half of all stations (49%) reported sharing content with local radio stations, a 5 percentage point increase over the 44% that did so in 2005.

At the bottom of the totem pole are cable channels, which had less than 15% of news directors reporting any shared content in 2006, about the same as the 14% of the year before. None of the non-affiliated stations reported sharing their content with cable channels.

Other Outlets Local TV News Stations Serve
2006, by Affiliation
Design Your Own Chart
Source: RTNDA/Ball State University Surveys
Note: Based on survey responses of news directors; Multiple responses accepted

Footnotes

1. The survey polled 974 television stations in the last quarter of 2006. Robert Papper, “News, Staffing & Profitability,” RTNDA Communicator, October 2007, P.29. The universe of news directors is smaller, as is the number of stations that originate news.

2. HD technically stands for “high definition” as opposed to “standard definition” or SD. Both refer to digital transmission, but HD offers better quality picture, and is the more popular selling point for consumers.

3. The analog spectrum will revert back to the government in 2009, which hopes to use it for public safety applications or auction it to wireless services companies. For more information, see www.dtv.gov, the FCC’s official Web site on the shift to digital TV.

4. Michele Greppi, “FCC Ruling Keeps Local Broadcast Stations on Analog Cable after Digital Transition,” September 12, 2007

5. Jim Puzzanghera, “Millions may miss the digital TV deadline,” Los Angeles Times, March 28, 2007.

6. Ibid.

7. Brooks Boliek, “Digital TV divide in the air,” Hollywood Reporter, January 31, 2008.

8. John Eggerton, “DTV-Education Campaign Values at $697M: NAB,” Broadcasting & Cable, October 15, 2007.

9. John Eggerton, “Stations, Cable ‘Dual’ Over Carriage,” Broadcasting & Cable, September 10, 2007.

10. It does allow cable operators that have fewer subscribers or less bandwidth to get a waiver from this rule. Michele Greppi, “FCC Ruling Keeps Local Broadcast Stations on Analog Cable after Digital Transition,” September 12, 2007.

11. Glen Dickson and Robin Berger, “In News, Money Talks,” Broadcasting & Cable, August 13, 2007.

12. See Glen Dickson, “Newsrooms Go Multiplatform,” Broadcasting & Cable, March 26, 2007.

13. See list in Michael Malone, “Stations Battle for Best Picture,” Broadcasting & Cable, November 26, 2007.

14. See PEJ’s Local TV News Projects, 1998 – 2002 (http://www.journalism.org/ra_by_media/55/61/%2A?page=1) and other Local TV studies on Journalism.org

15. Robert Papper, “Seize the Pay,” RTNDA Communicator, June 2007, P. 18.

16. Because the big stations in the top markets can raise the average salaries out of proportion, the median salary is a better measure of typical newsroom salaries.