Don't forget that 'local' is just a few notches away from 'individual'.
With the emergence of more and more media 'channels' or devices, potential audience numbers for any one particular channel will continue to decline.
The trend is away from 'mass' audience devices towards 'individual' audience devices. Radio, television, newspapers and magazines are giving way to iPods, computers, cell phones, and Kindles.
As audience dwindles on a per-channel or per-page basis, so does the market value of the content of those channels or pages.
Meanwhile, writers, producers, performers, salespeople, technicians and receptionists want their paychecks. For broadcasters, ASCAP, BMI, SESAC, the FCC and possibly the RIAA will get their cut. For publishers, the printing and distribution costs go nowhere but up. Everyone has to pay rent, insurance, taxes, utilities.
In many cases, the income derivable from audience support or commercial advertising for a traditional broadcast station or newspaper will ultimately prove to be insufficient for the enterprise to be self-supporting, no matter how many budgetary corners are cut. So it either goes out of business, sells out to another hopeful operator or continues as a 'labor of love'.
Only the most established, esteemed, inventive or aggressive of the old-fashioned mass media will survive. But 'survival' is a long way from what we all used to call 'success'. Even the Grey Lady and the Tiffany Network may have to call it a day at some not-too-distant point.
Ironically, it appears that the most successful business model for the new 'individual' web media is the 'mass' packaging and selling of individual 'labors of love'. How much does Google pay for those billions of website and weblog links? How does YouTube compensate its millions of video posters? How few pennies do those thousands of performers or producers get from iTunes in return for each download of their work? Facebook recently even tried to claim outright ownership of the personal data and photos freely posted by a worldwide multitude.
Remember that Google, one of the oldest and most successful of the 'new media', is only ten years old. Facebook was started in 2004. Twitter first appeared in 2006. Things are moving fast.
Clearly, the era of the professional broadcaster or publisher is suddenly on the wane. Those of us who cling to our familiar ways and means will have to bow to the inevitable pretty soon. Unanswered so far is the question of where the professionally-produced news or entertainment content of the future will come from if none of the producers can make a living at their craft. Will Google hire them after the New York Times folds?
In the short term, I think the 'old' media might have to adopt the methods of the 'new' to extend their relevance. Audience-generated or controlled content might become the norm rather than the exception. Not just because it's cool, but because it's cheap.
Associated with this trend is the subservience of the traditional media form to the new one. Some newspapers, like the Seattle Post-Intelligencer, have recently abandoned the printed page entirely in favor of the internet. In broadcast, both radio and TV increasingly direct the audience to their websites for celebrity details, expanded coverage of events, or unedited interviews. At some point, the broadcast program may serve principally as a billboard for the website. Clear Channel is clearly heading in this direction.
In the long term, physical newspapers could conceivably dwindle all the way back to simple broadsheets, turned out on platen presses for the few remaining paranoid antiquarians who refuse to expose themselves to the intrusive glare of the Internet. Broadcast radio could end up as the lonely domain of hobbyists, cranks, and preachers, fogged by digital interference and largely forgotten. This is a Twilight Zone that some AM stations have already entered into.
Nevertheless, I'm certain that as long as there are neighbors who are ready, willing and able to listen, a 'locally programmed' broadcast station will always be a good thing. However, whether it's a unique music mix or a civic-minded talk format serving the public interest, such a broadcast station will largely have to be a 'labor of love' for those who are ready, willing and able to create the programming and keep the signal on the air.