Political ads saving local TV

Meredith, the 113-year-old Des Moines, Iowa-based publisher of Better Homes and Gardens, Family Circle and Martha Stewart Living, has had chances over the past few years to become the world’s biggest magazine company by combining with most of Time Inc. or buying it outright.

But Meredith’s executives have now decided that it would be much more fun to run a local television company. And really, who can blame them?

Thanks in large part to the campaign spending flood unleashed in 2010 by the Supreme Court’s landmark Citizens United ruling and the D.C. Circuit Court of Appeals’ SpeechNOW.org decision, local broadcast television remains that rare legacy media business where things are still looking up. Political advertising spending on TV is projected to hit $4.4 billion in the 2016 election cycle, up from $3.8 billion in 2012, according to Kantar Media’s Campaign Media Analysis Group, with about three-quarters of that going to local broadcast stations.

Meredith, which got about one-third of its revenue and 59 percent of its operating income in its last fiscal year from the 17 local stations it already owns, isn’t getting rid of the magazines, at least not yet. But it is combining with Media General, a former newspaper publisher (its flagship was the Richmond Times-Dispatch) with an even bigger local TV footprint.

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A political bounty awaits them during the next couple of years. But how long can this last? Political advertising remains far more concentrated on TV than other kinds of advertising, although digital is making inroads.

Product advertisers have traditionally sought out consumers in the 25-to-54 age range because they spend the most. Political advertisers are more interested in reaching people older than that because they are the most likely to vote.

It is inevitable that generational shifts will someday doom TV’s near monopoly on political ads, and political candidates who need support from younger voters to win – such as the current president in his 2008 and 2012 campaigns – are already investing heavily in non-TV means of reaching people. But the demographics of voting seem to guarantee that it will continue to be a much slower transition than with most other advertising categories. •

Justin Fox is a Bloomberg View columnist who writes about business.

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