• The Wall Street Journal, Wednesday, February 11, 2009 9:30 AM

Local television stations dominated the TV business for more than half a century. Because the stations owned the licenses to the airwaves that broadcast TV signals, big networks couldn't distribute content without them. As a result, the stations became the vehicles for a blitz of mass-market advertising.

No more. Nationwide, TV-station ad revenue may fall 20% to 30% this year, per Bernstein Research. Last week, Walt Disney Co. reported a 15% drop in revenue at its TV stations. Executives are beginning to talk about a once-unthinkable option: Cutting local TV stations out of the picture and taking shows straight to cable, where networks can take in a steady stream of subscriber fees.

Station owners are slashing costs any way they can, including cutting budgets for syndicated series, such as "The Oprah Winfrey Show," that are not in prime time. To find new revenue, they are testing technology that will send their signals to cell phones, and beefing up their Web sites to attract online ads. Some stations are also expanding local news coverage, since it's the only original content they still have.

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