Television company Belo Corporation (BLC) reported a total revenue decrease in 2011 of $37 million, or 5 percent versus 2010, due to a $46 million decrease in political ad revenue.
Belo, one of the nation’s largest pure-play, publicly traded television companies, owns and operates 20 television stations and their associated websites.
Internet advertising and retransmission revenue, the money that cable companies pay Belo for the right to carry its content, makes up 16 percent of Belo’s total revenue. These combined revenues produced double-digit growth in 2011.
In the fourth quarter of 2011, Belo’s total revenue decreased by $26 million, or 13 percent.
The fourth quarter of 2010 included $30 million in additional political-advertising revenue.
Thus, the decline of revenue in 2011 is largely because it was an off year for elections, when TV stations make less money from political advertising.
The total spot revenue rose 3 percent.
Leo Kulp, an analyst for Citigroup, follows Belo for Citi’s advertising trend database.
He says Belo’s advertising growth has been pretty much in line with the industry over the past several years.
“This likely reflects the fact that they have a pretty broad mix of network affiliations-18 percent of Belo’s stations are ABC, 23 percent are CBS, 18 percent are NBC, five percent are FOX, 14 percent are CW, 22 percent other-and solid ratings,” Kulp said.
Belo’s affiliates reach more than 14 percent of U.S. television households in 15 highly attractive markets.
Its stations rank first or second in nearly all of their local markets.
“Since Belo has a broad mix of networks, their viewership is probably closer to average. Local news generates 40 percent of TV station ad revenue and Belo appears to have solid local news ratings,” Kulp says.
Belo also gets better reach with advertisers as it operates more than one station in three of its four top 10 markets-Dallas, Phoenix and Seattle.
Although Kulp notes TV stations are a fairly mature industry, he predicts growth in Belo’s advertising revenue by two to four percent over the next several years with total revenues growing four to five percent.
“First, Belo should probably continue to see growth in retransmission revenue. Second, TV stations in general have not done as good a job as newspapers in driving web revenue,” Kulp said.
“This could be a growth opportunity as many TV station owners are looking to gain traffic as newspapers put up pay walls.”
John Mathews, the managing partner of Pat Lobb Toyota of McKinney, Texas advertises with WFAA-TV, an ABC affiliate for the Dallas Fort Worth area owned by Belo.
“I advertise aggressively with WFAA to the tune of about $600,000 annually on the Today Show and the 10 P.M. news,” Mathews said. “These are the only two programs I buy from because of the reach of the programs and the demographics.”
Dunia Shive, Belo Corp’s president and chief executive officer, said, “The automotive category delivered its strongest quarter of the year and we’re pleased to see that momentum continue into the first quarter of 2012.”
Mathews thinks the Internet is playing a key role in this growth.
“In my opinion, Belo’s headway in automotive is mostly due to their growing proficiency on the digital side, coupled with auto dealers better understanding the cost efficiency of digital advertising,” Mathews said.
In 2008, Belo’s Board of Directors unanimously approved a plan to create separate television and newspaper businesses by spinning off the newspaper business into a publicly traded company called A. H. Belo Corporation.
[Mathews said Belo is learning that former newspaper subscribers are still aware of the news of the newspaper’s “brand,” but prefer to read it online.
For an auto dealer like Mathews, Belo might sell an ad on the local TV station as well as a banner ad on the newspaper web site.
“This is valuable as it allows the advertiser to reach a greater percentage of the consumers in the market,” Kulp said.
Shive expects Belo to have a solid 2012, helped by autos and two ad-heavy events that come around every couple of years.
“Looking forward,” Shive said, “Belo’s 2012 results will benefit from the Olympics airing on our four NBC affiliates, robust political advertising primarily in the second half of the year, and strength in the automotive category.”
