Hearst CEO To Broadcasters: Diversify

In a tough environment for consumer media, media companies would do well to diversify into adjacent businesses that complement their core strengths, Hearst CEO Steven Swartz told the NAB Show in Las Vegas on Monday.

Given his own company is known for its broadcast stations, newspapers and magazines, Swartz said many would be surprised to know that 25% of Hearst’s profits come from its business information and software ventures.

“These businesses have the wind at their back and they’re doing quite well,” Swartz said.

In a conversation with Rebecca Jarvis, ABC News’ chief business correspondent, Swartz said he was confident traditional media would get its own wind back eventually. In the meantime, Hearst’s investments in entities like AwesomenessTV (with Verizon and NBCU) and Vice (with Disney) are good bets. So is its majority investment in syndicator Litton Entertainment, whose founder, Dave Morgan, Swartz has known for many years.

And he added that Hearst is also open to buying more television stations “as regulations may change.”

In the wide-ranging conversation, Swartz voiced his support for the leadership of troubled cable network ESPN, in which Hearst was an early investor. “The media business is tough all over, but the ESPN management team led by John [Skipper] is second to none,” he said.

He also weighed in on platforms like Facebook, Google and Snapchat that have thus far captured the lion’s share of digital revenue. “You have to find a way to work with them, but you also have to keep finding ways to bring value yourselves,” he said, citing Hearst Magazines’ movement into video and agency work for advertisers as examples of doing that.

For local media, he said the value of local broadcasters’ and newspapers’ relationships is something whose roots consumers and advertisers will continue to appreciate.

Swartz is particularly bullish on Snapchat, with which Hearst has partnered on its Discover platform.

“We are making money with our Snapchat relationship,” he said. “They are driving a tremendous amount of consumer engagement. The way we think about it is if you’re not there, you’re missing out on a huge amount of the audience.”

Swartz is excited at the prospects offered by OTT, including those offerings emerging from older players like DirecTV and newer ones like YouTube and Hulu, which he says will infuse new ideas into the marketplace.

“It’s a great opportunity to win back lost market share,” he says.

Swartz’s embrace of OTT is of a piece with his overall outlook on digital.

“The digital revolution brings challenges and new competition but it also brings wonderful opportunities to create new businesses and make our existing businesses better,” he said.

To see all of TVNewsCheck’s 2017 NAB Show coverage, click here.