In this Q&A, the president of News-Press & Gazette Broadcasting says his small-market strategy is to get into a market with a Big Three affiliate and then use it to spawn others offering Fox, CW and Telemundo.
News-Press & Gazette Broadcasting just experienced a big growth spurt.
Over the past year, the St. Louis-based, small-market broadcaster bought full-power ABC affiliates in Grand Junction, Colo. (KJCT); Colorado Springs, Colo. (KRDO); and Idaho Falls, Idaho (KIFI).
In this interview with TVNewsCheck, NPG Broadcasting President John Kueneke says that the acquisitions are more than just standalone stations. They are centerpieces for an array of broadcast and Web services that the group will be offering within their markets.
It’s a strategy that has already proved effective in the group’s four other markets: Bend, Ore. (NBC affiliate KTVZ); El Paso, Texas (ABC affiliate KVIA); Palm Springs, Calif. (ABC affiliate KESQ); and Yuma, Ariz. (Fox affiliate KECY).
An edited transcript of the interview:
You have been busy buying TV stations—three ABC affiliates in the past year. What’s the News-Press strategy?
The strategy is owning Big Three affiliates with dominant local news in fast-growing Western markets and then acquiring secondary affiliates like Fox, CW and Telemundo in the same markets. It’s a strategy to make a living in these small markets, to have these multiple stations and channels.
So, the Big Three affiliates act as anchors for clusters of stations.
Right, with a lot of local news. And then we leverage that local news across other platforms. For example, in Palm Springs, our ABC station produces news for both our Fox and Telemundo stations. So, we are doing news on three stations in Palm Springs.
To us, it’s all about local news. We are big proponents and believers in putting on local news—a lot of local news.
And you think this clustering of outlets with multiple affiliations is critical?
I do. That’s not to say a standalone station cannot survive in these small markets, but it certainly makes it a lot easier and a lot more profitable. The strategy really isn’t any different than the big guys are doing in the top 20 markets with duopolies.
Why do you bother with the low-power stations? Why not just go direct to cable?
In small markets, a low-power station, in many cases, can cover the market as well as a full-power station. This CW affiliate that we are signing on in Palm Springs covers the immediate market, which is not terribly large.
In that true in Bend, Oregon, too.
Yes, Bend is a one-county DMA so a low-power station will easily cover the market.
Is that true with the digital channels.
Oh, yes. The digital channels cover these markets like a blanket. They have more of the characteristics of full-power analog signals.
What’s your Web play?
Right now, we are using a number of vendors and our contracts with them are coming up. We have recently taken presentations from a number of vendors. We are trying to put all of our stations on the same platform with the same characteristics. We think it would make more sense and be more efficient for us to do it that way.
We are using World Now in a couple of our markets. We are using Broadcast Interactive in one and we are using yet another vendor in a couple of other markets. We are trying to standardize and take advantage of the little scale that we have. More importantly, we are taking the time to decide what we want to be on the Web. We know that our local news brand is critical to our Web growth and putting as much video on our sites as we can is also critical.
What’s the time frame for a decision on that?
Pretty soon because we want to kick off our new Web initiative by January. It’s not going to be terribly different than what we have right now. We have Web sites up and running in all but one of our markets. But they are at different levels of evolution, and we would like to get everybody up to a high consistent level.
Are you in the market for more stations?
We are probably going to take a little breather right now because of the acquisition of the Colorado stations and the need to absorb those and get them operating properly. There is a lot of upside to those stations, so we need to concentrate on that right now and get them up where we want them to be—the news leaders. That will take a little bit of time.
What about local programming beyond news?
We really aren’t doing any right now.
Do you have any overall syndication strategy?
No. That’s a market-by-market situation. Our biggest priority is local news. We have actually dropped a lot of syndicated programming over the last three or four years to add more local news in our markets. We added a local newscast in Colorado Springs a month after we bought it. They were only doing a half hour of early news at 5:30, so we added newscasts at 5 and 6, which meant we had to drop some syndication to accommodate that.
Did you see yourself acquiring stations in larger markets?
I would say that our next acquisition will not be for awhile, but when it comes it will probably be in a market the size of Colorado Springs [DMA 94] or a bit larger. We are never going to be a Top 50 broadcaster. This is kind of our niche and we understand it. The markets are competitive, but not as competitive as the larger markets.
We have an advantage because we are long-term players. We are not in this to buy them and to sell them. We have not sold any TV stations since News-Press began buying them in 1995.
Where is the upside on the revenue front?
We think that there is definitely upside in local advertising, especially in fast-growing markets where we are. That’s what’s being driven by the population growth—local retail sales. So there is inherent growth there. We also think there is a big upside on Web sales, and we have only scratched the surface there. Thirdly, the multicast opportunities are definitely there too. But it’s all about developing new business locally.
Television, historically, has not done a great job with new business development because the business has been very strong for years and national revenue was always there and the political was there every couple of years to help out.
The national business is softening up, but the good news is that in these small markets national is not as important as it is in the top 20 markets. It’s not as big a percentage of the total. We haven’t had the difficulty on the national side that some of the larger broadcasters have had.
What is at the top or your Washington agenda?
Multicast must carry is not an issue that is going away as far as the broadcasters are concerned. It’s every bit as important—or more important—in the smaller markets as it is in the larger markets. The larger the group, the greater the leverage it has in getting multicast channels on cable. Small-market stations don’t have similar leverage.
Given that weak leverage, is retransmission consent out of the question for small stations?
No, I wouldn’t say that. But right now we have been focusing on signal carriage because we have so many low-power stations and they don’t have any must-carry rights. We have used our retransmission rights to put these additional channels on the cable systems. The attractiveness of the programming—whether it’s CW or Telemundo or Fox—helps, but it isn’t a slam dunk.
You’re a member of the ABC affiliate board. Earlier this year, there was talk of using ABC’s broadband news service ABC News Now as an over-the-air multicasting channel. Is that still the plan?
We are closer to working out a deal. But that project will not be an over-the air service. It’s going to be broadband, wireless and cable. It will be a combination of local content and national content and we think that’s a win-win because there is really not a news service on cable that has that combination of local and national.
But why not make it a multicast channel? It seems perfect for multicasting.
ABC sees it more as a subscription service. They feel that the subscription model makes more sense than an over-the-air, ad-supported model.
What are you going to do with your multicasting channel, if not ABC News Now?
We will look at doing our own weather channel or news-and-weather channel with a combination of repurposed programming and new content. As we sit here today, we don’t have anything on the air.
What is your technology strategy? Are you into centralcasting?
We are not at this point. We see some possible opportunities in either centralcasting or centralizing some of our services, but we have been growing so fast that we haven’t been able to focus on it. We look at technology as a way of being more competitive in our news product. We feel that the key to winning locally is having the best news in town. That means having the best reporters and the most reporters, the most photographers and to put as many people on the street in front of the camera as possible.
So you don’t see technology as a way to lower operating costs?
It certainly does that too. But we are not looking at technology as just a way to cut our expenses. We see it as a competitive advantage. The less money we spend within the building, the more we can spend outside gathering news.