Will Telcos' Local TV News Efforts Make Them More Competitive With Cable?

Some TV stations' local TV news operations seem to be winding down and/or merging -- while new digital local TV efforts seem to be winding up.

The Wall Street Journal says Verizon has plans to launch its own local TV channel in New York City. Verizon already has a local channel in Maryland and Northern Virginia.

The cable industry -- one of the telcos' main video/TV competitors-- has dabbled in this area in the past. Time Warner and Cablevision, are two large MSOs, which have started up some local cable news channels, for example.  
For years, media executives have wondered if and when local cable MSO would head into local news programming in a big way -- all to compete with local TV stations' efforts. After all, some news operations provide TV stations up to 50% of all their ad revenues. The thinking was that cable operators would want a piece of that.

But it wasn't to be -- especially considering back then that a number of different cable operations in any given market would make it economically and structurally unfeasible.

Instead, cable operators focused on those steady subscriber fees --  as well as selling local advertising from big cable networks such as ESPN. More recently they have moved into phone and broadband services. Few wanted to juggle the big capital expenditures needed to run a news operation.

Of course, now with Canoe Ventures, some of the major cable operators realize that basic cable, digital cable, broadband, and telephone businesses may not be enough for big time growth. Rather, a spiffy, new addressable TV advertising business -- through millions of set-top boxes -- may be their future ticket.

TV stations have long held on to the brand marketing idea that local TV news programming is something no one does better -- or wants to mess with.

But one wonders if the telcos -- Verizon's FiOS and AT&T U-verse -- might figure out whether local TV news business would be a game changer, especially if they could somehow make it work digitally in this still-fractionalizing news space.

In this tough marketplace, more differentiation from cable companies -- and possible new advertising revenues -- wouldn't be so bad.

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