Company Insight - Hearst-Argyle Makes Digital Play: EVP Terry Mackin discusses how local TV is betting its future on convergence.
While some critics believe that local TV affiliates are on the wane-looking at them as mere vehicles for the big boys to get their content to the hinterlands-Terry Mackin saw the writing on the wall. Back in 1999, Mackin, an executive vice president at Hearst-Argyle Television who currently oversees digital media, began pushing his company, the second-largest independent owner of TV stations, into the digital age. His newest venture is a partnership with NBC Universal called the National Broadband Co. (NBBC), which syndicates local video on the Internet, allowing local stations to show NBC content on their Web sites. Hearst-Argyle holds a stake in this, as it does in another venture with NBC, the digital weather network, Weather Plus. Although it does not control network content, the firm-with 26 affiliates nationwide-has leverage and is trying to shed the old-media image that plagues the sector. While analysts are mostly upbeat about the company, Mackin knows it's up to him to execute the new-media strategy... or watch as the Street potentially pulls the plug.
Q: How crucial is a digital strategy to the survival of local affiliates?
A: I would say it's key. Whatever size your business is, you need to build up your digital strategy. Our first big push started in 2004 with the Olympics. It was the first time a network-in this case NBC-produced an Olympic site with an affiliate group. Locally, it was called the Olympic Zone. The revenue opportunity was clearly there, so NBC launched Weather Plus soon after. And as affiliates, we own 50% of weatherplus.com and Weather Plus mobile.
Q: Can Hearst-Argyle, a traditional media company, be a lead player in the digital distribution of content?
A: In our organizational chart, I am one of three executive vice presidents for the company, and I get to spend all my time building digital assets in a digital context. I am also recruiting people to aggressively build out this space. Sometimes people talk about adding a digital person to their team. For the past several years, I have been that person. I think of us as digital guerrillas-we're lean, mean and wear a lot of hats.
Q: Does content for digital or online audiences differ from the traditional tube?
A: You still have to start with the user experience. Whatever we pick, we build the brand from the user's perspective. We want to increase the amount of video on local Web sites-both in quantity and quality. We're working with search technology to make this a faster experience. On the Web, we want to offer more news and local content: what to do in your local community, and stories we know that consumers will embrace.
Q: Let's switch gears. It's the start of a long presidential season. How do you see political spending affecting Hearst-Argyle's bottom line?
A: The money is definitely starting early. And we saw in the last election that campaigns are getting smarter; looking at the Web to not only raise money but also to optimize their messages.
Q: What do you have to say to critics who say local TV stations are dead?
A: In 17 of our markets, we have The Oprah Winfrey Show, which gives people a reason to go to our networks. We have to have the same approach to the Web. The user experience has to be different, creative and appropriate to the marketplace. Hopefully, what we do offer to the consumer will be unique, and the consumer will be the judge of that.
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