Race To Local HD News Turns Into A Slog

Among TV broadcasters’ many problems is they have been pouring heaps of money into massive technological projects that have so far yielded no additional revenue. I’m talking about the transition to digital TV and the upgrade to local HD news. Millions have gone in; zero has come back. That’s not how to run a business.

This is not to say digital and local HD news are bad things.

Without digital, TV stations really would be dinosaurs headed for mass extinction. Digital allowed broadcasters to lead the world into HDTV while the broadband guys were still trying to achieve VHS quality on the Web. And digital has permitted stations to experiment with second channels and mobile. Mobile, especially, has tremendous potential.

Local HD news is the logical next step for broadcasters after HD primetime. As with everything else, HD enhances the news, even when it is limited, as it often is today, to the studio. With the number of HD homes rising every day, people expect their channels to be HD, wall to wall.

But the cost of conversion to HD is considerable. Even before they get around to the HD production gear, many stations have to upgrade their basic infrastructure to handle the fatter HD signals. Many will also need new sets and lighting. If you’re starting from scratch, you’re looking at millions.

Because of the expense and the economic trouble that has hit TV hard, the once fast-moving rollout of local HD news has turned into a slog. TVNewsCheck‘s series on the state of local HD news that found the conversion rate has fallen precipitously this year.

While most news stations in the top 25 markets have made the conversion, the number begins to dwindle as the markets get smaller. In markets below DMA 100, they are few and far between.

The pace of conversion should pick up next year, but not much. Even with the Olympics and heavy political spending, broadcasters are expecting little ad revenue growth. The TVB is forecasting growth of between 3.6 percent and 6 percent.

In his interview with me last week, Sandy Schwartz, the new uber media boss at Cox, told me that he believes revenue at the Cox TV stations will rise by no more than 3 percent.

That all means that capex budgets will continue to be pinched in 2010 and, given the financial stresses that stations are under, projects that promise new efficiencies — a tangible ROI — will get priority over HD news.

Our HD news series included a piece on small markets. I’m impressed by the way small-market stations are going at it, taking the baby steps, upgrading to HD in the course of replacing worn-out gear. Slow and steady sometimes does win the race.

Of course, competition may demand action. Some stations are more flush than others. And once one station in a market goes HD, the heat is on for the others to follow. You don’t want to be hanging out there with SD when your rival is looking good in 1080i.

“The HD expenditures that we made have not resulted in any new revenue,” Earl Arbuckle, VP of engineering for the Fox O&Os, said Wednesday at the HD World conference in New York. “But if you’re not in HD in a few years there could be a negative impact. People won’t want to watch.”

Count me among them. For years, I would skip around the network evening newscasts. But when I finally got my first HD set in 2007, I locked into Brian Williams because his was the only show in HD at the time. I’ve stuck with him ever since.

The good news is that the longer a station can wait to go HD the cheaper it will get. Technological advancement and lively competition among the vendors is driving down the price of nearly everything.

At the HD World conference, technology consultant Mark Schubin suggested that buying expensive cameras is no longer necessary. And, in fact, lenses, lighting and even tripods may have more of an impact on a station’s on-air look than high-priced studio and field cameras.

So, it is unfortunate that many TV stations will not be able to step up to HD next year or even the year after. This is going to take awhile.

This fact alone should serve as a reminder to Congress and the FCC that this is not the time to lean on TV stations for more local or public affairs programming or for more recordkeeping or anything else. Every regulatory burden they lay on stations pushes off the final and full conversion of TV stations to HD. That sure doesn’t serve the public interest.

TV stations aren’t being cheap or greedy. They want to look their best. It’s just that when you spend a dollar in business, you’d like to get it back — and then some.