TVN Executive Session | Graham Keeps Faith In Digital, NextGen TV
Disruption’s dark cloud is waiting for broadcasters at the end of the retrains rainbow, says Catherine Badalamente, and she’s doing everything she can to be ready for it.
Badalamente, SVP and chief innovation officer of Graham Media Group, is one of broadcast TV’s most longstanding and indefatigable digital exponents. An early experimenter in almost all of its facets, she sees ongoing revenue potential in everything from digital marketing services to OTT, where she was one of the first local television flag planters.
In an interview with TVNewsCheck Editor Michael Depp, Badalamente said she’s working closely with both her digital and sales teams to regroup around the new remote working realities — and ongoing uncertainties — of operating in a coronavirus-roiled world.
She said she sees enormous long-term potential for local TV in OTT, and that Graham’s KSAT in San Antonio, Texas, is charting a course there. She’s equally optimistic on NextGen TV’s promise, especially for addressability. And she says harnessing first-party audience data remains key to cultivating stronger relationships with local TV’s more ardent viewers.
An edited transcript.
In light of the coronavirus pandemic, let’s start with how you’ve pivoted Graham’s digital operations to be on more of a war footing.
The good news is when you have a digital team, they can immediately work from home. We didn’t have to skip a beat. One of the things that we did was try to figure out how we can take away the friction of people being able to tell their stories.
We used our broadcast app, which was a joint partnership with The Washington Post that we got funding from YouTube to help support. [It gives] the ability for anyone to be able to go live from their mobile device on IOS. We had rolled it out in a number of stations, but not across the entire group. We wanted to make sure people have the ability to tell their stories from their phone and do it across every platform including Facebook.
You’ve also been working closely with sales?
From the sales side, it’s trying to figure out how I can keep people busy in a proactive way. I have spent a lot of time this week on how we can get them focused on all the things they can do instead of just watching all of their hard-earned revenue come off the books. A lot of my effort has gone into how we can help support sales.
The truth is it is an opportunity for them to sharpen their skills and dive deeper into some things that, when we are at the end of this, are going to make them just so much better. But I am trying to be sympathetic to what they are going through because big plans don’t mean much to people when they are struggling to figure out what this means to them in terms of the overall health of their families and their incomes.
Are there other digital efforts coming out of this?
In terms of innovative products, we have doctors who are health reporters doing text groups, inviting people to have a more personalized sort of experience with them. Every single market is rolling out a daily COVID-19 email, and we are seeing open rates that are phenomenal.
Before all this began, you’ve suggested that conditions are percolating for broadcasters to have their revenue disrupted just like newspapers did. What are your specific concerns about broadcasters’ vulnerabilities?
The two big ones are changes with retransmission and cord cutting. If the cable companies and the satellite companies are losing subs then that means that we are losing money. That is a conflict because of course we also want that part of our audience to grow, too. You are looking at station managers being leery of running promos telling people that we are on this other platform [OTT] because it is taking money out of their overall revenue.
Every year [retrains] felt like a gift that was going to keep on giving. We are already starting to see projections of this year getting impacted by people moving away from cable and satellite.
Your title is chief innovation officer. Is your remit to find all the alternate revenue streams that you can?
Absolutely. It’s how NextGen TV is going to affect us. It’s looking at how we are going to figure out new ways of reaching audiences on every platform, how that impacts the bigger television business as a whole. Part of the problem with having digital in my title before was that everyone thought that I cared about the digital side of our business and I didn’t care about the broadcast side. My job is to look at the entire business as a whole and figure out how we can make it stronger.
Do you think invariably that most of that change will be in the digital sphere?
Yes, for sure.
You’ve experimented with a membership model at Graham. How is that going?
What we ended up doing was as part of the Arizona State University’s Cronkite School Table Stakes effort. Our station in San Antonio [KSAT] decided that their challenge was going to be around figuring out if broadcast could do membership, so that started our path. But we had been planting the seeds on the digital side for years because we knew how important it was for us to get first-party data. It wasn’t a huge stretch for us to say this should morph into membership.
We have been trying to increase engagement with users and make sure that we have the technology there to be able to support that mission. For 10 years we have been talking about how we need to be able to get actionable insights out of our data and we are finally starting to see those things come together.
We’re trying to move [stations] off of a world of pageviews. If it is an audience that is not going to buy the products or service we are selling and isn’t going to care about the actual product that we are creating every day, I have no way of being able to have a healthy audience, website or platform.
You received a $300,000 grant from Google on this front?
It was a Google News Initiative grant. What we applied for was to help fund this broader effort for our group. We were one of only six media companies that were fully funded.
You also mentioned that for KSAT this quickly became an events-oriented endeavor and was a six-figure business?
Yes, they are doing really well, but they also are looking at the challenges of the events business, too.
The Texas Tribune built a strong business model on that.
Tim Griggs was our coach at ASU and he came from the Texas Tribune and has been building the membership project for Facebook, so we had the perfect coach.
We are trying to first build the audience and then figure out how we can actually monetize them. There are so many different ways that we can look at being able to show the audience true value. It’s not just selling them something. It’s them feeling like there is a reason why I belong to this and it is actually paying off for me to be a part of it in multiple ways.
We have been going down this path of how to get our audience to engage. How do we listen to them more? How are we using it to make our journalism better and then also how can we make it fun to come to our sites, too? There is a whole gamefication layer and badging people for doing certain things. We are really excited about exploring that.
Graham was one of the earliest, most bullish on digital among broadcasters. What percentage of Graham’s overall revenue is digital now?
It depends on the year. It makes our percentage change dramatically if we are having a really good political year. We are around the same as we have been.
Almost 10%. But then our overall revenue has gone up, too. Our revenue has gone up dramatically because the total buy from retransmission has gone up so much.
What do you say to the broadcasters who say, skeptically, nothing has changed?
I look at the total revenue that we are creating from our digital business and it’s bigger than some of our TV stations’ total revenue. I always feel like we could do a lot more and am frustrated by the overall sales organization, which I think is an industry problem for all of media right now. We are struggling with sales.
What is the struggle, specifically, that you encounter?
We still have a legacy business that does really well, and it is hard for legacy sellers to do something that takes more time and is probably more complicated as something they are not familiar with. It is that constant push and pull of trying to have them realize the value of going out and helping these clients.
I look at it as this endless opportunity for us, but if you have traditional sellers that are not asking the right questions and are not even trying to sell the product, then you are never going to get anywhere.
Digital innovators like to adopt a fail fast mentality. What have been some of the bigger failures that you would say unequivocally just didn’t work?
It’s hard for me to even look back and figure out where our failures are because I feel like it’s all part of the journey toward figuring out the ultimate solution. So many of the things that we have tried have led to something really fabulous happening.
On the sales side, we had digital-only sellers and then hybrid sellers and then changed it back. My favorite is four-legged calls, where we have a digital specialist that goes out and basically sells all of your digital. We are starting to see that coming back to have that person who can speak about digital and how it can work for our clients.
Just to clarify what you are selling, are you doing the digital marketing services, SEO and all of that and then banners, mobile ads or app sponsorships?
We are selling everything: the digital marketing services, social, email, OTT, voice. We spin up new products and we do new things, and it’s another thing for them to sell. Sometimes we get pushback from sales. For me, that would have been an amazing opportunity to go talk to somebody about something new and exciting, and they don’t see it that way.
You seem to have the support of your CEO, so this is a top-down initiative, and it is still hard.
I do. It is. But I still think that we are doing the best. It’s just that I just know the opportunity and that is what frustrates me. [CEO] Emily [Barr] is incredibly supportive. Everything that we do is because of the fact that she paved the way for us to do it.
From the day that she started, she looked at it and said I am going to attack digital and do it the best we can. It was dramatic for me because I had this small staff and we were in the corner trying to make things happen. She came over and looked at the kind of revenue that we were creating at that time and was really impressed, but then she supercharged it.
Graham was among early movers in the OTT space with KSAT going first, and you did an interesting thing with the branding, calling the app My San Antonio instead of KSAT. Does it still have that name?
It is actually KSAT-TV.
So that didn’t work.
They were looking at not using the station call letters, but KSAT is such a brand it is a tragedy not to use that.
Discoverability is tough. What have you learned about how you become a signal in the noise, marketing-wise, among so many OTT apps?
People are actually trying to find out if they can get their local stations. Because we are still so important to the TV ecosystem, we see them still finding us. There is advertising that we have to do on platform to be able to promote that we are there, and that is probably the most effective.
Do you use the TV bullhorn as the most effective tool?
Platform ads are easier for a general manager to stomach because if they are already there, we know that they have probably already cut the cord. But KSAT has taken a different approach. They promote it because they realize that it helps everything that they do when they are showcasing really innovative work. They have learned a lot of lessons.
We’ve written previously about KSAT’s innovative News at 9 newscast on OTT. The packages there are more expansive, and it seems like a more deconstructed kind of newscast. What is the upshot of doing it?
One of the best outcomes that can come out of our overall OTT efforts is what they are doing at News at 9. They are creating another hour of news, but they are doing it in a way that is different than we would see on traditional broadcast and we need experimentation in that space.
Is it a laboratory where things that are tried may go to broadcast?
That is the hope. You have this entire test space to be able to say let’s do something a new way and you are not risking your precious ratings. Hopefully, you can port over some of those great ideas to the traditional broadcast.
Does any of it carry over?
Yes. They have looked at this idea of doing more long-form and not just going through 30 stories in a matter of minutes. That is my bigger role: trying to experiment in things that we would have never before. It’s slow going because everyone is afraid of changing anything in those newscasts, and they have heard horror stories of people trying something and it not working.
The pressure that our news directors are under when it comes to making sure that ratings aren’t slipping and how competitive it is… I get why it is hard to even think about changing the model the way that it exists today.
What are you learning about your audiences on OTT?
They are still sitting in their family room leaning back. Anything that makes them have to work hard is not going to work, so try to figure out how to have a better user experience so it doesn’t feel like there is lots of clicking around.
In the early days, it was “let’s put a bunch of VOD clips on there.” People are not doing that. It’s making things flow easily. If someone discovers something that they are interested in, the idea is we create suggested content that is similar so that they can continue just to watch.
Are your salespeople finding it easier to sell OTT than other digital products?
It is a lot easier for them to sell digital video. Their eyes are opening because this is something where they are hearing from all of the major agencies that so much money is coming out of broadcast and going towards OTT so they better fight for those dollars.
Are local advertisers on board with it? Is it easier to talk to them about OTT?
Yes, because this is part of the audience that you are missing out on. You need to be here too, and they are seeing their own behavior, the behavior of their friends and employees and everybody else. It’s not the challenge that it was even two years ago. They actually see it as being an awesome opportunity because they can have tighter targeting.
How are you selling it? Is it bundled, by itself or a combination?
Any combination. OTT is an easy extension from the broadcast buy. The reps don’t mind having to go out and sell it. They understand its value.
Given that, what do you see as its revenue potential a year’s time? Is it a seven-figure business?
It’s not as high as I would like it to be because the audience numbers aren’t that huge yet. I can’t put a number on it right now because half of our stations are just trying to figure out what this is and how to best utilize it.
KSAT, again, being our best example, is somewhat frustrated by how hard they have to work in order to get the audience they are looking for. But they are looking at this being the long haul. They understand the bigger picture of what OTT is for us and what it is going to be in the future.
What about NextGen TV? There is a lot of skepticism outside the industry about it, and the NAB Show being canceled is not going to help the momentum at all.
No, there was a lot we were going to be taking advantage of at the show with announcements.
What is your realistic view of it?
I come from the digital side, so we see it as imperative that we do something like this. I am surprised at how certain broadcasters don’t understand how important this is for our future. If it allows us to have addressability that is the only way that we are getting into that space.
We have a great opportunity, and I have been pushing for us to be a part of that from day one. We need to figure out how to make it work. I have my [people] developing on the platform. We are creating an entire test environment so that we can start figuring out what that looks like. I believe in it. The industry has to come together because it is a great opportunity for us, and we need collaboration between the groups.