Television and Radio |

In flush times, television stations are accustomed to 30 to 40 percent profit margins. But the recession is goring even these cash cows with a 14 percent drop in advertising revenue in the first quarter of this year compared to last at Bay Area TV stations, analysts say.

Ad revenue took an even bigger tumble at Bay Area radio stations, with a 27 percent decline during the same period.

The main culprit is the imploding auto industry, which provides from 20 percent to one-third of the advertising revenue for broadcasters. With General Motors and Chrysler announcing plans last week to close 1,900 dealerships during the next year, it will take years for advertising levels to recover at TV and radio outlets. “And when it does return, it will be different,” said Robin Flynn, senior analyst at SNL Kagan, who recently conducted a nationwide study of advertising on radio and TV stations and projected the 14 percent TV decline.

“All advertising-driven media have been hit hard by the recession, not just newspapers,” Flynn said. “So companies are really trying to get creative to make up for that revenue.”

Spot TV ads drop

Broadcasters in top-10 markets like San Francisco are generally still profitable, Flynn said. Outlets in large markets are more dependent on national advertisers, so they’ve taken a bigger hit than broadcasters in smaller markets. In the first quarter of 2009, spot TV advertising by the top 200 Bay Area retailers dropped to an estimated $58 million from $62 million the year before, according to regional TV estimates by TNS Media Intelligence. And Bay Area radio stations – which collectively reach 5.5 million listeners a week – saw advertising revenue decline 27 percent in the first part of the year, according to a regional study by Miller Kaplan Arase Co.

“Never seen it this bad. Never,” said Mickey Luckoff, president and general manager of KGO-AM, who has been at the station more than three decades, much of that time with the news-talk broadcaster on top of the ratings chart. “It’s as close to a depression that I’ve seen in my lifetime.”

The downturn is even hitting new-media sites, with advertising down at some political blogs nearly 50 percent in this post-election year, and 10 to 20 percent at entertainment blogs, analysts said.

Imagine that you have two copies of a movie and two television sets. One copy is on Blu-ray and you pair that with a high-definition television — an HDTV. The other copy is on standard DVD, which you’ll watch on a standard-definition television. You synchronize both videos and watch the results.

The difference in image quality between the two sets should be obvious. The HDTV’s picture should look crisper and have colors far more vibrant than the standard counterpart. We’ve reached the peak of video quality — or have we?

When we talk about HDTVs, we’re really talking about image resolution. The picture on a television set is composed of millions of tiny dots of light called pixels. Standard-definition televisions have a resolution of 480. That means approximately 480 horizontal lines from the top of the screen to the bottom generate the images you see.

High-definition televisions pack more lines of pixels to create images. On the low end of the high-definition standard in the United States you have approximately 720 lines of pixels. On the high end, you have approximately 1,080 lines of pixels. Manufacturers are slowly phasing out the 720-line models in favor of the 1,080-line ones.

Using more pixels to create an image results in a smoother picture. Imagine you’re given a stack of green and brown squares of paper. You’re told you have to build a picture of a tree using the squares exactly as they are. If the squares of paper are large, your tree is going to look blocky with lots of jagged edges. But if you have smaller squares of paper, the tree will look smoother and more natural.

That’s what high-definition television does. It’s not just the number of pixels in the image — it’s the size of each individual pixel. As you pack more pixels into a screen, you have to make the pixels themselves smaller. In turn, the television will produce smoother images.

But is 1080 the best resolution possible? Could you buy a television set that packed even more pixels together? Would it make a difference? And would you be able to find programming that conformed to the higher resolution? Let’s find out.