Call it "Localism 2.0" It's what TV stations need to focus on to grow their business in the new media age.

That was the consensus of a both the keynote speaker and a panel this morning at McGraw-Hill's 2007 Media Summit in New York.

Keynote speaker Barry Diller, CEO of IAC/InterActiveCorp and chairman of Expedia Inc., disagreed with the suggestion that TV was a "lousy business."

It's going through an enormous period of revolutionary change and there will be an enormous amount of  "creative destruction" that will require rebuilding the delivery system, Diller said. "I can't tell you that the current models will exist in 10 years.

But, Diller said, he's confident the basic model of telling stories will persist.

An infinite number of people can generate user-generated content, he said, but, in most cases, only your closest friends may care. However, he said, there's a relative handful of people who can create stories "that are so compelling that a great many people want to watch them."

Diller said that he does not think that the audience is fragmenting, but that it's migrating to new choices. Overall, he stressed, the audience is building.

George Kliavkoff, chief digital officer, NBCU, agreed with Diller. Viewers of NBC shows online are then much more likely to watch the programs off-air and become regular viewers, helping the overall mission of advertiser-driven programming.

When asked about broadcasting-cable negotiations over retransmission consent, Lynne Costantini, Time Warner Cable's senior vice president and chief business affairs officer, said that while Time Warner's "relationships with local stations are contentious at times, but...we're proud to have them on our systems. It's one of the important things that differentiates cable from other services."

What's more, she added, localism "adds value to the service," and cited the ability of viewers to vote on local polls using various technologies. She said it's a "real win-win" business for them to collaborate with stations.

Kliavkoff said NBC has 25 stations, including those of Telemundo, and added that local markets offer a "great opportunity." Of the $50 billion in newspaper ads, $40 billion of that is local—including classifieds—"and that's all up for grabs. I think a lot of that can go directly to local television station sales, particularly with new technology."

Kliavkoff went on to buttress his point of localism, saying that "one-third of all search queries on the Internet are local search queries." That fact was why, Diller said, he stuck with his citysearch.com business that was a money loser for seven years and then suddenly in the eighth year reached critical mass and recouped its investment.

And all these panelists agreed that next big technological hurdle is improving the ability to do smart searches for the media you want and for the traditional media companies to deliver it any way people want to receive it.