TVNEWSDAY celebrates its first anniversary today, an auspicious time to one-up George W. Bush with my first annual State of the TV Station Business column.

Let's get right to it: The State of the Business is OK. Not good. Not bad. Just OK.

That judgment is based mostly on the fact that the business hasn't been able to stop the erosion of non-political national spot revenue—still a third of total revenue. Oh sure, the political advertising keeps growing—it topped $2 billion in 2006 and is expected to reach new highs in 2008. But that growth masks the weakness in many of the other major ad categories and the quickening loss of network compensation.

What's also discouraging is that broadcasters have yet to discover the key to DTV riches. They made the capital investment, but after 10 years of on-and-off experimentation (remember Geocast?), none has come up with a sure-fire way to recoup the expense.

Local HD is another big expense with no obvious payoff, retrans cash is still elusive, the FCC is disinclined to award multicast must-carry rights and the newly empowered Democrats in Congress may crack down on TV violence and move to restrict advertising of pharmaceuticals (bad), fast food (worse) and political candidates (a complete disaster).

Affiliates long ago lost exclusivity to network programming, but in 2006 it seems the best of primetime was popping up everywhere on the Web. Missed last night's episode of The Office? Not to worry. Just go to nbc.com. Wait till America gets that new AppleTV gizmo that connects computers with the new 50-inch plasma in the living room.

Now, remember, I said the State of the Business is OK. That means there must be some good news to offset the bad, and, of course, there is.

Cash-flow margins for most are still extraordinarily high, and broadcasters have been able to maintain healthy margins by using technology to cut payroll and other costs. Another trick is to run two stations out of one shop—duopolies and virtual duopolies.

Validation of the business's intrinsic financial worth has come in the form of private equity funds that have lined up to buy TV station groups—Univision, Clear Channel, Bluestone, New York Times—at steep cash-flow multiples over the past several months.

And, of course, TV stations have the programming that everybody wants to watch—local news, The Guiding Light, Oprah and primetime. You might be able to see Ugly Betty on cable or Lost on an iPod, but you'll see them first on the local affiliate.

No State of the Business column would be complete without some recommendations. Here are a few:

• Be the local Web distributor of all that you broadcast. That means getting the local Web rights not only for your network shows, but also your syndicated shows. I spoke to a syndicator at NATPE last week who was amazed that broadcasters still don't demand Web rights as part of their deals. Don't fall in the trap of using your air time to direct viewers to network Web sites like nbc.com or CBS's innertube, even if you are getting a split of the revenue from those sites. Own your market in every possible medium.
•  Be the best local Web portal. Why play second fiddle to the newspaper? The richest content wins on the Web just as it does on TV, and stations, with their vast stores of video, have the richest content.
  
• Be bold, and demand retrans cash wherever you can. Don't worry about the fallout in Washington. Let NAB deal with it. That's its job.
• Sell, sell, sell. Every local marketing dollar is yours. If newspapers and yellow pages must die so you can live, so be it.
• Use a few points of those fat margins to improve local broadcast and Web products or to develop an entirely new businesses. In Executive Session today, Allbritton Communications Fred Ryan tells how his station group is pouring millions into the launch of a political Web site, Politico.com.
• Don't panic. OK is, after all, OK. What's more, I share virtually every broadcasters' belief that somebody will come up with the new killer app for DTV, the new revenue stream that will carry TV broadcasting deep into the 21st century. Sinclair's David Smith is working on mobile broadcasting on the hunch that people will pay to watch TV as they walk down the street or ride in their cars. Maybe.

Broadcasting is a powerful technology, has been for 100 years. Coupled with digital, it should be unstoppable.

Editor's note: On this, our first anniversary, my colleagues, Kaley Haley and Mark Miller, and I want to thank the thousands of broadcasters and other TV executives who have registered for TVNEWSDAY and made it part of their day. A heartfelt thanks also to the advertisers who have supported us and brought us this far. Web sites are continuing to evolve, and we are no exception. So, in 2007, look for more features, more original reporting and more insight into your business. We will keep an eye on you, if you keep an eye on us. Also, I'd like to hear your opinions on the State of the TV Station Business. Send them to me at hajessell@tvnewsday.com.