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GANNETT OUT TO ‘RE-ENGINEER’ ITS STATIONS

Posted by Mort Greenberg on February 20, 2008

http://www.tvnewsday.com/articles/2008/02/19/daily.4/

EXECUTIVE SESSION WITH DAVE LOUGEE
GANNETT OUT TO ‘RE-ENGINEER’ ITS STATIONS
TVNEWSDAY, Feb. 19, 8:24 AM ET
The new head of the 23-station TV group says big changes in the media marketplace are demanding big changes in the ways that stations do business. At Gannett, that means more AEs and news producers on the street, close cooperation with the newspapers on the Web, mobile broadcasting and an interactive relationship with viewers.
News producers and account executives at Gannett TV stations take note: your new boss wants you out.

No, Dave Lougee is not planning wholesale layoffs. He simply wants more station employees on the street finding new advertisers and collecting video.

It’s part of an evolving strategy for keeping TV stations viable in a media environment that is offering consumers more and more choices.

Lougee succeeded the retiring Roger Ogden as president of Gannett’s 23-station broadcasting division last July.

Lougee joined Gannett from Belo, where he ran 19 TV stations and four cable news outlets as executive vice president/media operations.

He is one of those rare station group chiefs who came up from the news side of the business.

He was a news director at three stations, including Gannett’s KUSA Denver, before taking over as GM of Belo’s TV and cable news operations in Seattle-Tacoma in 2000. He later moved into the Belo corporate ranks.

In this interview with TVNEWSDAY Publisher Kathy Haley, Lougee talks about other parts of the Gannett strategy—stations and newspapers working together on the Web to exploit their combined 100-market footprint, a joint venture with Tribune that is creating new community sites, preserving extra digital spectrum for mobile broadcasting and developing a “true” interactive relationship with viewers.

An edited transcript:


You’ve been in charge of Gannett’s TV Station group about six months now. What is the most interesting challenge you’ve encountered so far in your role there? 

There have been a number of them, but one of the fun challenges has been taking advantage of the opportunities that technology and other tools are providing us to re-engineer the stations, both on the content and the sales side.

Re-engineer them?

As the business climate changes, it’s imperative for us to evolve the way our sales and news operations are structured. It’s not a black-and-white situation and it won’t happen overnight, but we need to evolve it.

How are you re-engineering sales? 

We have been evolving to focus less on transactional sales and more on concept selling. What we are doing now is accelerating that rate of change.

What’s the difference?

With the ability to use our Web sites, mobile and other tools, we’re able to now offer customers solutions that are more customized than just traditional 30-second spots. But to take advantage of that opportunity, we need to be structured well to do that. We need to consider what kind of talent we hire and what we pay for it.

Are you talking about cross-platform selling?

That’s part of it. But there’s a parallel, very similar content issue. We have the Information Center concept that we are rolling out across our newsrooms in the newspaper and the broadcast divisions.

These are 24/7 operations that are publishing and broadcasting out. But they are also taking advantage of the return path in.

Internally, we are training photographers on the newspaper side to shoot video. The broadcast division is providing that training, and, now, we’re sending TV reporters to that same training. It’s to improve the amount of content and journalism we can provide.

Are you talking about this idea where, instead of sending out a crew to shoot a story, you send out a reporter who does his or her own shooting and standup? 

It’s not that everyone becomes a one-man band. Newsrooms have reacted to that. They feel it means a reduction in quality. But what’s the definition of quality? If a newsroom is only sending out eight reporters on a given day, what happens if they re-engineer the workflow and can send out 24 a day?

We’re outfitting these reporters with $7,000 high-quality HD cameras. We had a reporter from a TV station just accompany a military operation to Camp Phoenix in Afghanistan.

That’s an example of where technology is letting us go. Are we a better newsgathering operation with 20 $50,000 cameras or 100 $7,000 HD cameras?

We’ve got our newsrooms actively, intellectually engaged in how to define quality journalism in a digital age, and how to utilize the tools available to us to get there.

How does it change the content?

Here’s the discussion that I have at our TV stations. I might go in and ask the general manager how many full time employees work here? In the past, you might have gotten the answer, “150 people.”

Then, I ask the general sales manager: “How many account executives do you have on the street right now? Not people back at the station clearing orders. People on the street, selling solutions.” He might say, “Six.”

And then I say, “How many reporters do you have out getting stories, not somebody producing something long-range or editing a package. How many reporters are out, working on original stories? They might say “five or four.”

So my comeback is: So out of 150 employees, only 10 are either producing original content or producing sales.

That’s an anachronistic ratio.

Our people are engaged in figuring out how to change that. They are a great group and that’s our goal—to say how do we dramatically increase the resources and aggressively change the percentage of people producing local content or selling local customer solutions?

Have you been able to see any results from this yet? 

We’re in the process. It’s not an overnight issue. This is just an acceleration of what’s already going on, but our new business development was up dramatically last year. We’re doing a company-wide training process on customer-centric selling.

In January, Gannett named a new chief digital officer, Chris Saridakis, to oversee newspaper and stations sites. What’s he trying to accomplish?

He’s leading our digital efforts. We’re in nearly 100 markets between our newspaper and broadcast divisions. We have some very strong brands in those markets and we have a national newspaper. When you start to think about scaling online advertising, and you put our Web sites together, we have a tremendous national footprint. And when you put all of the Web traffic that all of our sites have, we’re a large network. Our opportunity is to be seen more in that way.

Are the stations working more closely with Gannett’s newspapers than they have in the past?

They’ve never worked together as much as they are now, and they are doing more every day. Their people are training our people on writing for the Web and our people are training theirs at shooting digital for the Web.

We’re also working toward more uniformity on our Web sites. We’re going to have one set of advertising standards. Local stations will still have entire control over their local online content and sales, but at the TV stations, if my Cleveland station had 22-second commercial spots, it would be hard to bring together a marketplace to capitalize on that.

It’s important to have one set of ad standards so we can more efficiently and effectively market them.

Will your Web sites also have their banner advertising all in the same places, and similar branding and look?

The sites will have a more uniform look in terms of advertising, but they won’t give up any of their local content. The new look will debut shortly in a few of our markets.

On which sites?

If you call me in a couple of weeks I’ll tell you. We’re also rolling out a new video player. We’ve already purchased it, but we’re not public on that yet.

What percentage of revenue at the TV stations will come from online this year?

I don’t want to say, but it’s continuing to grow.

What are you doing online other than conventional station sites?

We’ve rolled out a Web site that focuses on new mothers. We’re in the early stages of that, and shortly we’ll announce a joint venture with Tribune that is rolling out entertainment Web sites aimed at young people.

What’s it called?

Metromix. It will offer information about local restaurants and entertainment. We’re leveraging content, like online video, and doing so very successfully.

Gannett recently acquired HighSchoolSports.net.

Yes. It’s a scheduling tool for schools and parents across the country, and it fits nicely with the pretty strong high school sports profile we already have at our newspapers and TV stations.

What are you doing in mobile?

We’re members of the Open Mobile Video Coalition. We’re very open to the opportunities that will arise from that medium.

We have different experiments going on in both newspaper and TV. We believe the opportunity is in a scaled solution. We don’t see the content being produced just on a market-by-market basis. We see a solution where products are rolled out across the nation.

But isn’t the attraction of mobile the ability for consumers to get weather and traffic alerts on their phones?

It allows for a lot of those things, but not on a standalone basis. The local content would be part of a scaled national service of offerings. The research on mobile is very compelling, and at the very top of what consumers want is local. It’s just like the model we have in traditional television, where the network offers a national service and the affiliates plug in with local programming.

Let’s talk about multicasting. Are you satisfied with NBC Weather Plus?

At our NBC affiliates, very much so. We are doing some customized weather solutions in some other markets. But we are being very careful about committing our spectrum. We believe Open Mobile is just one example of where other players are investing in technology to utilize that spectrum. So we’re less inclined to be excited about new linear channels.

What kinds of services are you anticipating?

Mobile is a good example of what I’m talking about. It’s not just a TV service. It’s a rich customer experience. The kind of products that will come out of the Open Mobile group will create a lot of opportunity for consumers. There are other people doing R&D that may more effectively utilize that spectrum for consumers and allow us to utilize that spectrum.

It’s not just a passive channel that they’re looking at. There are other opportunities to use that spectrum related to the TV space, but in a more innovative way than a passive TV service.

You mean interactive? 

Yes. I’m not being coy, but I think we would be limiting ourselves in terms of imagination and revenue if we just signed up our spectrum to linear TV services.

Open mobile, if it is successful, will take advantage of our spectrum. That’s one reason to keep it open until we see what develops.

So you are not too excited about the third-party diginets now be offered—LATV, Dot2, RTN, Mexicanal, World Championship Sports Network?

That’s an example to me of pretty unimaginative thinking for use of spectrum.

In the core business of selling advertising on TV, how’s business in the first quarter?

All forms of advertising are being affected by the uncertain times right now, but we’re pleased by how our stations are performing in that environment.

Toward the end of fourth quarter we saw some softness that will strengthen once advertisers have more confidence in the economy. It’s not surprising, the given auto and retail news that you’ve read about.

Do core advertisers pull back a little in political years? 

Buyers who buy media know when political will be a factor and they work to arrange inventory to make sure their message gets heard.

Political advertising will be a very big category for us. We have worked long and hard to use tools to get more sophisticated every year at managing and pricing our inventory so we can maximize it.

Will the new sales efforts that you spoke about, the new business development efforts, ever minimize the shortfall stations see in non-political years?

As long as elections are held every two years you‘ll never flatten out the impact of such a large category and I don’t know why we’d worry about that. It is what it is. We’ve gotten, as an industry, pretty good at managing it.

In five years, what will the ratio between national and local revenue be?

That’s a great question: I categorize it more as between transactional and direct developmental business.

There’s a lot of local business that looks and acts more like national business. It’s more agency, transactional business—the kind that is “here’s the budget that’s up in the market and how much can I get.”

And then there’s the direct, developmental business, where a rep gets to the customer early, and finds out what their marketing needs are and creates marketing solutions.

Our 30-second inventory is a big part of that equation, but our strong brand gives us a big door to local clients that ch. 82 on the dial does not have. 

Have you been able to calculate the damages from the writers strike?

Unquantifiable. When a show works or doesn’t work, you never know the reason. The strike hasn’t helped, but the impact has been overstated a little bit. It would have been a real concern if it had lasted much longer and the fall had been hit. There may be some perceptual damage at the agencies.

No hit revenue-wise?

With our strong local news position overall, our primetime isn’t the same percentage of our revenue as at other stations. The weaker the affiliates, the more it would impact them.

You have My Network TV affiliates in Atlanta (WATL) and in Denver (KTVD). What do you think of the network’s plans to cut your share of inventory from nine to seven minutes per hour?

We recognize their challenges and the best outcome for us is a strong My Network. We are working with them to achieve a solution that works for us.

You’ve been quiet on the M&A front since buying the Atlanta and Denver duopoly stations. Are you looking for additional duopoly opportunities? Stations in additional markets?

Like any company, we are in every conversation. We look at anything and everything out there but we would only make moves that make perfect strategic sense.

With the private equity players gone for a while, isn’t it a good time for established groups to buy?

Every marketplace is different. There are a lot of variables. I think that, probably, given the pullback in the credit markets, there are fewer financial-only players out there in the space and more strategic players.

If any acquisitions happen, they are more likely to be strategic and made by pure broadcasters.

Your career in television began in news and you served as news director for several major stations, including KUSA, WRC and KING. What is the most important challenge local TV news operations will face in the coming five years?

I would rephrase the question to look at the most important opportunity and that is how can we use both news distribution platforms and the return path from viewers to make our journalism even more relevant?

Are you talking about citizen journalism?

Not just citizen journalism. That is a piece of the equation, but it’s in the same genre. The point is, until the Internet came along broadcasters were left with quantitative research tools to try to understand what their customers wanted and needed.

Now, we’ve got a more sophisticated set of tools on viewers’ behavior and what they tell us allows us, through interactive engagement, to create a more relevant product.

There is absolutely no choice. The idea of being a pure broadcaster without having a return path from the customer is no longer valid. I mean to engage the customer not in token ways, not just saying, “Register your vote today.” True, active engagement.

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