SMALL-MARKET TV: 'DIFFICULT, BUT DOABLE'

Patsy Smullin says that small-market broadcasting business ain’t what it used to be and, better than most, she knows what it used to be.

Her late father, Bill, founded the broadcast company she now runs from Medford, Ore., in 1932 when AM radio was still new media and a novelty in a lot of places. In time, Bill embraced TV and cable.

California Oregon Broadcasting Inc. now owns two NBC affiliates (KOBI and KOTI) in Medford-Klamath Falls, Ore. (DMA 141); the Fox affiliate (KLSR) in Eugene, Ore., (DMA 120); a cable system serving small communities north of Medford, Crestview Cable Communications; and a video production company specializing in HD, COBI DigitalHD.

What small-market broadcasting used to be, according to Patsy, is a lot more profitable. Now, staying in the black means strategic partnerships and relentless searches for operational efficiencies, she says.

One thing Patsy has not yet sacrificed at the altar of efficiency is service—to the industry or to her communities. She has contributed much time to industry boards, including the NAB.

And, in this interview with TVNEWSDAY Editor Harry A. Jessell, she gushes when asked about exactly what she means by “community involvement” at KOBI.

Despite the leaner P&Ls of contemporary small-market broadcasting, she not asking for any special Washington help—just a recognition by the policymakers that “small markets do still exist and that there are television stations that are incredibly responsive to the viewers.”

An edited transcript follows:

How is business these days in markets 120 and 141?

It’s difficult, but doable.

I love broadcasting. I love the localism side of it, the power of the tube to help in communities.

The days of making a lot of money are history, but as long as we can stay in the black and can afford to do new things every year, I’m happy and my managers are happy. We attract managers who love that old-fashioned community involvement.

Other than news, what else counts as community involvement in Medford?

Lots of stuff. Lots and lots of stuff. One thing we do is Academic Challenge, which is a local show that’s like the College Bowl in some ways. It results in major scholarship dollars for schools throughout Oregon. It has wonderful local sponsors involved in it.

Meth abuse has been a big problem in the I-5 corridor. Medford is just getting over being called Methford. Right now, we’re in the middle of the three-year [Southern Oregon] Meth Project. It’s one of those don’t-do-meth-not-even-once projects that has everybody involved, from the drug rehabilitation places to the police to local businesses. Our news anchor goes into schools all over our coverage area working with young kids, finding out where they want help.

Another one is Docs on Call, which has been a fantastic success. It’s once a week for a full hour. Anybody can call in with their questions on their medical care to a panel of three or four doctors. People call in from all over the coverage area, thousands of calls. The doctors love it. They can spend an hour on one call or they can spend a minute. It’s all confidential.

We do it during the news, so every few minutes the newscasters will say, “Don’t forget it’s Docs on Call night,” and they’ll flash to the video of the doctors feverishly taking their calls.

What a wonderful idea. How long have you been doing it?

The Asante medical center has been sponsoring it for six years.

Another one that’s been with us a decade is Buddy Check, which is a breast cancer awareness campaign that goes on all year. On the 25^th of every month, the TV station focuses on getting people to call their buddies and remind them to do their self exam. That’s also in partnership with the Asante medical center. We’ve been able to catch a lot of breast cancer early.

How is the economy in metro Medford.?

It’s pretty good.

What do people do there?

It’s the home of Harry & David, which employs thousands of people. Then, there’s the medical center. That’s also a huge employer. And it draws tourists because of the Rouge River that runs through the area.

The Oregon Shakepeare Festival in Ashland is pretty much No. 1 in the country now. It’s extremely well known.

So a lot of tourism.

A lot of tourism and a lot of moving from Los Angeles to here. It’s kind of the first stop in Oregon after they’ve decided to get the hell out of LA and San Francisco.

So there’s an upside in just the growth of the community.

A lot of the demos skew older; certainly those Californians do.

Your have this legacy of adopting new technology, moving into new media. What are you doing?

Primarily, we’ve been entering into more partnerships. In Eugene, we get our news from the CBS affiliate and here we deliver news to the Fox affiliate.

We are looking at many more partnerships in the upcoming year that I’m not ready to talk about just yet. Like everybody else in small markets, we’re looking to combine forces and do new things.

Do you mean new things on the Web and in other digital media?

Right.

But you don’t want to talk about it.

I guess not.

OK. We’ll stay tuned for that. You said that you are OK as long as you stay in the black, which is fine. But is there any way to really grow the business?

It’s a real struggle, but I think you can.

What are some of the tricks to that?

Having to be much more efficient than you ever thought possible, having to worry about things like, “Am I paying for this phone call or are you?” I mean it gets down to being extremely efficient, making sure that the people that you bring in to manage your stations understand that and that they’re not part of the old school where there was lots of money.

As far as I’m concerned, it’s more important than ever that you get exceptionally good people. So if you’re going to spend money, that’s where it should be.

A lot of larger broadcasters are using technology to automate and gain efficiency.

We look at it all the time, but it’s a heck of a lot of money. And we pay more than for equipment than the big broadcasters because we don’t buy it for a ton of stations.

I guess that is the rub. You can’t take advantage of the latest efficiencies in technology because you don’t have the capital.

Yes and, of course, our background was always we could never buy anything brand new. We would convert and we would build our own live trucks and all those things.

Can you see a day when you’ll be doing HD news production?

Oh, who knows?

One of the regulatory ironies is that the FCC allows duopolies—and the efficiencies that flow from them—in large markets, but not in small markets like yours. What do you think Washington could do to make your business a bit easier?

Well, it gets too complicated to go into issue after issue, but I would just want Washington to recognize that small markets do still exist and that there are television stations that are incredibly responsive to the viewers.

For instance, when you called, I was talking to several viewers who are upset that our main anchor, after 20 years, went into the banking business.

It’s not fiction. It’s fact that stations in smaller communities are working darn hard to do all those things that Congress thinks are so important in terms of staying in touch with the viewers and doing lots of localism, lots of public service.

Do you think that you get enough support from the NAB?

With the small market committee under Liz Burns of [Morgan Murphy Stations], they are trying very hard. A few years ago, there was much less representation on the NAB board for small markets, but [former NAB President] Eddie Fritts did something about it. It’s made a good positive difference. I never miss the annual NAB small market meeting. It’s nuts and bolts and it’s worth every penny.

Let’s finish up with a little retrans talk. You’re a cable operator as well as a broadcaster so it gives you special perspective. Do you see retrans as a revenue stream for you?

We’ve been working as a cable operator and with cable operators since the 1950s. We think that our broadcast stations have tremendous value and we do whatever we’re able to do. If they can pay, great. If they can’t or won’t, then you work out another way to be compensated.

You’ve heard that a thousand times, but it’s the truth. That’s what you do. We’re certainly more aggressive than in previous years. The cable companies we do business with, primarily Charter and Comcast, are strong and aggressive. Hopefully, we are as well.

As a cable operator, are you willing to pay retransmission consent fees to broadcasters?

On the cable side? The same thing goes on that I just described.

You’ll take it, but don’t necessarily want to give it.

That’s right. We’ll negotiate it. We’ll try to make our product worth paying for or worth compensating for in one way or another.

OK. That’s it for me. Anything you want to finish up with here? Is it a beautiful day in Oregon?

Oh, my god, it’s gorgeous. I was sitting outside last night at 11 o’clock, it was 80, listening to the Moody Blues who were performing here in Medford. Do you remember them? They were fabulous.