Media ownership regulations and local news programming on broadcast television: an empirical analysis.

Author:Napoli, Philip M.
 
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In the vast and complex U.S. media landscape, local television news occupies an important place. The starring role of local news plays out in several interrelated ways. First, local television news continues to be the primary news source for Americans despite its decline in popularity in recent years (Pew Research Center for the People and the Press, 2004). (1) This fact speaks to the potential influence that local news can have on viewers and society at large. Local news has been regarded as both the harbinger of the abject state of television news and the bearer of hope for civic, community-centered journalism (Barkin, 2003). Good or bad, the impact of local news is unequivocally significant.

Financially, providing local news can be a lucrative business for television stations. With a profit margin commonly at 45% to 50%, local news accounts for more than 40% of the annual revenues for stations that run local news (Project for Excellence in Journalism, 2005). In addition, local news plays a crucial and peculiar role in U.S. media regulation. Partly due to the popularity of local news among audiences and its significance in informing people and forming their opinions and beliefs, the Federal Communications Commission (FCC) has traditionally associated broadcaster service in the "public interest" with the production of local news. Thus, standards of viewpoint diversity are often evaluated through news and public affairs programming, just as Iocalism is premised on the production of local content and the coverage of local events that is responsive to local needs and interests (Kang, 2005).

The predominant role of local news programming in U.S. media policy is evident in the ongoing debates surrounding media ownership regulations. For example, in relaxing the local television multiple ownership rules in 2003, the FCC assumed that the new, relaxed rules would allow the commonly owned stations to operate more efficiently by taking advantage of their combined resources, thus increasing local news and public affairs programming in the local market (FCC, 2003). In addition, to support its decisions to further increase the national television ownership cap and to lift the broadcast and newspaper ban, the FCC, citing findings from one of its internal studies, stated that network-owned stations broadcast more local news and public affairs programming than affiliate stations in markets where the two station types compete directly, and that newspaper-owned affiliate stations outperformed other affiliates in terms of the quantity and quality of their local news programming (Spavins, Denison, Roberts, & Frenette, 2002).

This study suffered from some significant methodological shortcomings (see Napoli, 2004). Consequently, the validity of the assumption that relaxed ownership regulations will contribute to the production of more local news and informational programming remains very much open to question. If the supervening norm of the public interest principle as it relates to broadcaster behavior is "practically identical to the number of hours of local news a station broadcasts" (Kang, 2005, p. 1550), it is important to thoroughly investigate the following question: How are ownership structures and market conditions related to the provision of local news programming on broadcast television?

This study is an effort to address this general question. It presents descriptive information on station provision of local news programming and examines how station ownership characteristics and market conditions are related to the amount of local news on television stations through regression analysis. The next section of this article reviews the literature focusing on the relation between market and ownership characteristics and the provision of local television news. This section is followed by a description of the methodology employed for this study, which is followed by a presentation of the results. The concluding section discusses the policy implications of the results.

Literature Review

Absent any governmental stipulation, the amount of local news that a television station airs reflects its programming choices. Previous research suggests that station provision of local news programming may be a function of a wide range of factors that are related to consumer preferences, program costs, number of competitors, and governmental policies. These factors can be organized into two broad categories: station factors and market factors.

From a theoretical standpoint, most of these factors can be associated with two perspectives. The first involves the principle of Iocalism. The underlying logic of Iocalism in communications policymaking often has been based on the assumption that better service to the local community can be achieved via a media system in which the ownership and management of media outlets is as closely tied to the local community as possible (Napoli, 2001). From this perspective, ownership structures in which owners are embedded within the local communities are likely to produce more sensitivity and commitment to the needs and interests of local communities, as are programming arrangements that favor local autonomy over national-level decision making (e.g., independent stations vs. network affiliates). The second theoretical perspective is primarily economic. Specifically, Hamilton's (2004) model of news production emphasizes four basic components: tastes, endowments, technology, and institutions. Tastes and endowments refer to the characteristics (in terms of content preferences and financial value to advertisers) of audiences; technology and institutions refer to the technological characteristics of the marketplace and the institutional factors affecting the profitability of providing a given amount or type of news good. The specific factors outlined next as potentially related to the provision of local news programming can be related to one or more of these theoretical perspectives.

Station Characteristics

Individual television stations differ in many ways, including their financial resources, production costs, and ownership characteristics. These differences may affect their capabilities and willingness to supply local news programming. For example, stations with greater financial resources may be more inclined to run local news, given the relatively high costs associated with providing local news (relative to the costs of syndicated program options). An early study has supported this assumption, finding a significant relation between station revenues and news programming (Wirth & Wollert, 1979). A more recent study, however, has produced contradictory results, finding no relation between station revenues and news programming (Napoli, 2004). As Hamilton (2004) noted, "the failure of news outlets to earn revenues from the value of better voting decisions means that news programs or products that focus on hard news will be underproduced" (p. 29). This distinctive characteristic of news as a product may help explain the unclear relation between station revenues and local news provision that has emerged to this point.

Station ownership also can affect station content output. First, as Hamilton (2004) noted, individual station owners differ in the degree that they seek profits, public goods, or partisan ends, and therefore may behave differently in providing local news or other informational programming. Napoli (2002) found that locally based owners performed better in offering public affairs programming than owners based out of market (i.e., group owners), a result that supports one of the underlying rationales for localism in media policymaking. As noted earlier, a relation such as this may reflect a local station owner's commitment to the community in which the station is located. Along related lines, some stakeholders have argued that nonlocal owners such as broadcast networks are particularly insensitive to community needs and are therefore negligent in serving the public interest (Network Affiliated Stations Alliance, 2001). This insensitivity and negligence may be reflected in these stations' commitment to informational programming (Yan & Napoli, 2006).

Ownership patterns such as station group ownership, network ownership, and duopoly ownership (in which a company owns two stations in a local television market) may influence content output (including local news programming) not only because of their potential relation with the strength of the owner's ties to the local community, but also because they may affect the cost conditions of the station and the revenue and profit levels that can be expected from the provision of local news. As Hamilton (2004) noted, news production entails high fixed costs and relatively low marginal costs, a pattern that may encourage efforts to exploit potential economies of scale across commonly owned media outlets. Consequently, station group owners, for example, may be able to convert their economies of scale into greater amounts of news and public affairs programming. This has been a common argument of advocates for greater relaxation of station ownership limits; however, empirical support for this argument has been scarce up to this point (see FCC, 2003). Wirth and Wollert (1979) found no relation between group ownership and the provision of news or public affairs programming. Yan and Napoli (2006), however, did find evidence that station owner size (in terms of percentage of the national television audience reached) was positively related to a station's decision whether to air local public affairs programming, but was not related to the quantity of such programming aired. Similarly, it is possible that stations that are owned by a national broadcast network could be better equipped to provide local news and public affairs programming if the national news and public affairs programming experience and infrastructure that these networks already possess could also...

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