Fox, NBC O&Os Pool Resources as Marketplace Withers

In an unprecedented arrangement between two owned-and-operated TV groups, Fox Television Stations and NBC Local Media have turned to the established practice of pooling some of their newsgathering operations to cope with the new economic reality of their business. Beginning with Philadelphia in January and rolling out to five markets where both own stations (New York, Los Angeles, Chicago, Dallas and Washington), the groups will form a local news service (LNS) to gather and distribute general-market video coverage to participating media outlets, including competing TV stations, print, radio and digital media.

The LNS formalizes a successful trial that Fox’s WTXF and NBC’s WCAU have been conducting since the summer. “The pooling concept is as old as the AP,” said Jack Abernethy, CEO of Fox TV Stations. “The challenge was getting around the sticky issues of cooperating and competing.”

The new measure was born out of discussions Abernethy and John Wallace, president of NBC Local Media, began a year ago, about the same time their respective networks collaborated to form video Web site venture Hulu. Since then, TV stations and other local media have watched their business deteriorate dramatically. Just last week, the Television Bureau of Advertising revised downward its 2009 forecast to a drop of 7 to 11 percent.

“Like almost all other industries, we are in uncharted waters that will challenge our operations as never before,” said Chris Rohrs, TVB president. “We’re going to have to take actions that maximize whatever resources are available. This initiative fits that standard and reflects the creative energy at the leading station groups.”

For many news stories in a local market, you don’t need five helicopters tracking the same high-speed chase or five cameras recording the local mayor at a podium. “This way, we can make sure our news dollars are going into enterprise reporting,” said NBC’s Wallace.

Both Fox and NBC stations will continue to operate independently while also contributing newsgathering and transmission services to the LNS. Each day, LNS management independently identifies the stories that will be covered by the pool. Although details of the business model have yet to be worked out, LNS is likely to offer raw audio and video coverage to participating local media outlets for a fee. Each media outlet would then add its own editorial and take on the story. Execs are quietly hoping that what’s begun as a clever cost-cutting measure turns into a revenue stream.