Friday, April 2, 2010

New Tech Drives LIN's Local Expansion Through Staff Reductions

LIN Television has managed a neat trick.

At the same time it has cut costs, the station group has markedly expanded news and other local programming.

The secret is in technology that allow stations to do more with fewer people and in a renewed belief that local programming is the best way to bond with viewers.

Key to developing and implementing the strategy for the publicly traded company has been Scott Blumenthal, EVP, television, who once ran the group's largest station, CBS affiliate WISH Indianapolis (DMA 25). The group has at total of 27 full-power stations in 17 markets.

In an interview with TVNewsCheck Editor Harry A. Jessell, Blumenthal discussed the strategy, but also talked about sharing retrans revenue with the networks, the current healthy state of the business, "antiquated" ownership restrictions and the FCC's idea of taking back broadcast spectrum.

Jessell asked, I know that you have gone through a lot of restructuring at the stations to cut costs and just make the workflow more efficient. Is that work behind you now or is it a work still in progress?

Blumenthal replied, 'We have to cut costs. If you are talking about the situation whereby business wasn't as good as it used to be and we were just slashing off the top, that never really took place in our company. If you're talking about trying to make things more efficient and more productive through the use of technology and the redefinition of positions, then I don't think that will ever end. We will be constantly be looking at ways to do that."

"During the last year, we were able to cut costs substantially, triple digits, and at the same time we added 1,500 hours of local programming in our markets. So, it was not necessarily cost cutting as much as it was a more efficient operation that provided more and better quality products to the local communities."

Jessel asked, So you're suggesting that, with the evolution of technology, we might see more job cuts?

"It's very possible."

Could you sort of just elaborate very quickly on what this restructuring involved?

"LIN was on the forefront of this hub-and-spoke technology. We have been consolidating our stations into hubs. We have two primary hubs right now in Indianapolis and Springfield. We're operating 12 stations out of each. So that means we're able to move and consolidate backroom operations for master control, for traffic, AP, payroll, programming, some elements of promotion and so on."

"It just doesn't make any sense with 12 stations to record a specific syndicated program 12 times in 12 different markets when we can record it once and distribute it out to those stations. Those are the types of things that we're doing behind the scenes."

"In addition, as the production gear improves, we don't have the need for the trucks to go out on all calls anymore and we can do more editing in the field. Those are things that we think create a more efficient environment and increase not only the amount, but also the quality, of our news."

You mention 1,500 hours of local programming. Could you elaborate on that?

"We started with the first one in Providence. We call it The Rhode Show. It's an hour show. We have expanded it to Norfolk, where it's the Hampton Roads Show. It's Connecticut Style in Hartford, Indy Style in Indianapolis. We're about to premiere one in Buffalo called Winging It and so on."

"We're rolling it out in these different markets and, basically, it is a turn back to what this business lost and needs to regain and that's local programming that bonds the station with the local community. That's not only good for the television station, it's good for the community and ultimately it's good for the advertisers."

Is it also a function of the fact that you don't want to pay the big bucks for the syndicated product anymore?

"Oh, not at all. There are investments in these shows. Believe me. I could put a barter show on a lot cheaper than these shows are costing us, a lot cheaper. For these shows, we're paying hosts, we're paying producers, we're paying cameramen. We have got sets, we have got props. It's not a question of expense. It's a question of investment. We think these are the right things to invest in right now."

Of the 1,500 hours, is most of that news?

"No. Most of that are these local program developments. These shows run Monday to Friday. The news that we developed in the marketplace over 2009 was expansions into the weekends — Fort Wayne, for example, going into morning news on Saturday and Sunday and things like that."

What else is on your mind these days?

"This is going to sound very silly, but it's the honest to god truth that what is on my mind every day is what we just finished talking about: how we can make our stations better and more productive to the communities that we serve and do it in a responsible, economic fashion. That's what we think about every day."

Well, I bet you're thinking of trying to squeeze more revenue out of each of these markets. Do you have any particular strategy for doing that?

"I don't think a lot about squeezing more revenue out. I think about running an operation that's appropriate, the best-case scenario for each market. If we're doing that properly, we're going to maximize our revenue, we're going to maximize our shares."

"There's an inherent problem when all you think about is the amount of money that you're going to bring in because you do things that aren't necessarily in the best interest of your station. If you think about what is in the best interest of the market and what's the best way to sell and market your operation and if you do it properly, the money will come."

What about the local ownership rules? I don't think you're going to get much sympathy from Genachowski these days, but would you like to see them relaxed?

Scott Blumenthal, "It seems to me that if they're talking about spectrum give-backs and everything else, there has to be ways for these stations to pick up and maintain their financial viability. And right now, without some kind of ownership relief, there's going to be a lot of small stations in small markets that just aren't going to survive. They're just not going to do it."

"I appreciate the concept of not controlling a voice in a market, but that was true when there were just a few television stations and the one newspaper. There are hundreds, literally hundreds of sources for local and national news at this point in time."

"The old concept of controlling that voice because of the number of outlets is not appropriate anymore. At some point, they are going to have to look at increasing duopolies and easing the controls on them. It's an antiquated mentality that exists right now. "

"We have nine duopoly markets and I can tell you that in those markets we have increased the amount of local programming and local news."

That may be true, but the argument that comes back is even though the number of hours of news may have increased, the number of independent voices have got smaller.

Scott Blumenthal, "Like I say, if we were the only ones controlling the business or voices in the market, then that argument would make some sense. Two stations may get together in a market. In the meantime, maybe 50 websites have popped up local newspapers, bloggers, local journalists, video users. There's hundreds of sources of local content today."

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