For years, the nation’s switch to digital broadcasting has been billed as the second coming for local television stations. But now that the big day has finally arrived, the digital revolution is only adding insult to injury in a deeply depressed local advertising market.

More than 1,600 of the nation’s roughly 1,770 full-power TV stations have made the leap from analog to digital broadcasting. But the federally mandated June 12 deadline for stations to cut off their old-fashioned analog signal transmissions has raised public expectations about digital TV.

With digital broadcasting, most TV stations have the bandwidth to beam out as many as three or four sub-channels in addition to their primary channel. Or a station can use much of that digital juice to beam out a single high-definition telecast.

But this vast expansion of local TV real estate is becoming a reality for stations at the worst possible time. Station operators are having a tough enough time selling spots on their mothership channels, let alone finding advertising dollars to support programming on multiple feeds.

Moreover, the June 12 cutoff of analog signals could also cost stations viewership, especially in smaller markets, where some homes are not equipped to receive digital TV. About 800 stations have already pulled the plug on their analog signals, but the remaining 1,000 or so won’t go digital-only until June 12.

“The recession and the pull-back on advertising revenues means that those sub-channels are not going to be exploited the day after the transition is complete,” says Gary Belis, spokesman for the Television Bureau of Advertising, a local TV advocacy org. “There’s no demand at the moment to put programming on them.”

If anything, the exponential growth of advertising inventory from the digital channels will only add to broadcasters’ woes.

Advertising biz analyst Jack Myers projects local broadcast TV advertising will plunge 20% this year to around $20.4 billion. The Television Bureau of Advertising’s analysis of TNS Media Intelligence numbers shows the decline was already starting last year. Comparing the fourth quarter of 2007 to 2008, ad sales dropped 3.4%, from $4.73 billion to $4.57 billion. (TVB’s figures for 2009 are not yet available.)

“We’re on the verge of a lot of advertising inventory potentially being dumped onto the market at a time when the ad market is in a trough,” says one station group exec.

And even if stations do have programming lined up for their multicast channels — MGM has been aggressive in selling a 24/7 movie service designed to run on digital sub-channels — those outlets may be essentially invisible in their markets because they cannot be found on the cable or satellite dial.

Cable and satellite operators by law have to carry local broadcast TV stations, but they’re under no obligation to carry a station’s digital sub-channels. That’s a big distribution problem for stations in major markets where more than 80% of viewers subscribe to cable or satellite service.

For cable and satellite operators, it’s an issue of bandwidth and how they prioritize the limited number of channels that they can offer. But broadcasters, accustomed to the must-carry law, are frustrated by what they see as a handicap in launching channels made possible by technology.

Broadcasters have spent upward of $10 billion during the past decade to upgrade their equipment in preparation for the digital switch — which was mandated as part of the landmark 1996 Telecommunications Act.

“(Lack of) must-carry is a huge challenge for us,” says John Lawson, exec veep of Ion Media Networks, the country’s largest station group by number of stations. Ion is multicasting at all 60 of its owned stations.

All of these stations have been broadcasting in both analog and digital for some time now. Ion stations’ secondary channels carry the lifestyle-oriented Ion Life and the “qubo” bilingual kidvid service. Both are ad-supported, and lack of cable carriage remains a major obstacle. Viewers who pay for cable, satellite or telco TV packages rarely if ever watch TV using an old-fashioned antenna.

“In some cases our channel might be competing with a channel the (cable operator) has a financial stake in,” says Lawson. “In other cases they don’t want to turn over the bandwidth. … And sometimes they say they simply don’t want to set a precedent by launching our digital services, no matter how worthy they may be.”

However, Brian Dietz of the National Cable and Telecommunications Assn. points out that there are hundreds of instances where local cable ops have agreed to pick up more than one of a broadcaster’s channels.

“If the channel is compelling and the consumers are interested in it, then the cable operators are likely to pick it up,” Dietz says. “There doesn’t need to be a government mandate.”

The myriad challenges of harnessing the potential of the switch to all-digital telecasting affects different station groups in different ways. Larger stations, including many network affiliates with robust news departments, generate more proprietary content that can be repurposed for multicast fairly easily.

A larger station’s weather reporting infrastructure easily lends itself to a 24/7 multicast channel. With their combination of Doppler radar, graphics packages and green screen, meteorologists are all expensive propositions that add up to perhaps 15 minutes of programming during the broadcast day, so it’s a no-brainer to repurpose those resources into a repeating local weather service.

NBC and its affiliates experimented with a digital weather service, NBC Weather Plus, until the Peacock bought the Weather Channel cabler last year. Fox and CBS, which both have sizable O&O station holdings as well as a strong network of affils to lean on, have yet to field aggressive multicasting initiatives.

Dave Converse, engineering veep of ABC’s O&Os, points out that his stations are “primarily content creators within their markets, and have an audience anxious to consume that content” — such as local news and information/lifestyle programming.

One station that has successfully gained cable carriage for one of its digital sub channels is WRAL, the Capitol Broadcasting-owned CBS affiliate in Raleigh, N.C. Capitol has been a pioneer in digital multicasting for several years; it was among the first to experiment with putting local sports and portions of CBS’ NCAA basketball tournament on a digital feed.

WRAL is among the dozens of local stations to license MGM’s movie service, dubbed This TV, and WRAL wrangled a deal with Time Warner Cable operator to pick up the digital movie channel, giving it a distribution boost. WRAL also puts repeats of its local newscasts on the digital channel from 7-8 p.m.

The titles on This TV, drawn from the MGM and United Artists vault, are not top tier, but broadcasters nonetheless see the Lion’s initiative as a step in the right direction. Tribune Broadcasting stations in Los Angeles, Philadelphia, Washington, D.C., and other markets are among stations carrying This TV on digital channels.

WRAL’s channel at present has no sponsorship, but general manager Steven Hammel says he expects that ads will be sold on it “shortly.”

Unlike some other broadcasters, Hammel believes the recession is a good time to be launching multicast channels. “An advertiser may not be able to spend $2,000 on a spot, but he can spend $20,” he says.

In fact, Hammel admits, $20 is not far off the mark when it comes to pricing airtime on digital sub-channels.

In this ad market every dollar counts, but it will take a tall stack of 20s to make a channel profitable — at those prices.

Cynthia Littleton contributed to this report.