This excerpt taken from the TVL 8-K filed Jan 18, 2005.
One of the biggest challenges facing our industry today is the increase in competition for household audiences and advertisers. Advances in technology have offered audiences more choices for entertainment and information including cable TV, satellite, video on demand, videocassette recorders, personal video recorders, video games, Internet and DVDs. Advertisers are also presented with a variety of media in which to promote themselves and we compete for advertising dollars not only with local television stations in our market, but with other media including newspapers, radio, cable, outdoor and the Internet. For national sales, we compete with television broadcast networks and cable networks and print media.
We believe that our investment in digital television (DTV) is one way that will assist us in effectively competing with other media sources. Since DTV has the capacity for multiple channels, it would allow us to broadcast a combination of different channels with varying degrees of visual and sound quality, which would be of higher quality than present-day television. We could also provide interactive data services on these same channels. Since 1998 we have spent $54.8 million in capital expenditures to complete our transition to digital. While, implementation of DTV will improve the technical quality of our over-the-air broadcast television it is possible that the conversion may reduce a stations geographical coverage area. We cannot predict the precise effect that converting to DTV will have on our business.
We believe local news drives audience viewership and ultimately increases market share. Therefore, to remain competitive we continue to invest in our local news operations through improved technology such as Doppler radar, news editing systems and news helicopters. News helicopters allow our stations access to the latest breaking news stories giving stations a competitive advantage over other stations in the market. Prior to 2003, we had three helicopters serving our Norfolk-Portsmouth-Newport News, VA, Indianapolis, IN and Austin, TX markets. During 2003, we acquired two additional helicopters. One to serve our stations in Puerto Rico and one to be shared by the Providence, RI-New Bedford, MA and Hartford-New Haven, CT markets.