Posted by Barry Parr Technorati Profile

It's no surprise that local television stations are under pressure, with increased competition for local audiences from cable and the current economic...um...opportunity.

Without actually citing a source, WSJ reporter Martin Peers declares that the problem is overcapacity and the solution is to let top stations in the local market merge to "reduce overcapacity":

That means shuttering weaker stations and consolidating ownership of others in individual markets to allow for greater cost-cutting. One of the biggest costs is local news operations, which can account for between 25% and 33% of net revenues. Allowing one top station to buy another top station would spread such costs across a bigger revenue base. Regulators might consider relaxing ownership limits given the industry's parlous state.

I can understand why this serves the purposes of the licensees, but it does not serve the interests of the communities they've been licensed to serve.

Consider this radical alternative: insist that to hold a local broadcast license you have to produce local programming. Can't make money doing that? Sell the license to someone who can. Enforce the conditions of the license and let the market do its magic. Keep or even reduce the limits on the number of stations a single owner can hold to lower the price even further and to keep ownership in the community.

Reducing the price of a local broadcast license would encourage innovation in programming and particularly in journalism at a time when the entire value chain of video production is under attack from smart suppliers.

Keeping the price of licenses high -- particularly at the cost of reducing the amount of journalism created in the local community -- only serves the current licensees, who've already had their payday. Maybe we can encourage them to cut their losses and put local stations back in the hand of local entrepreneurs.