THE WEB IS A DIFFERENT WORLD NOW

Way back in 1998, before most TV broadcasters fully understood what the Web was, Gary Gannaway was trying to convince them that it was their future.

In that year, Gannaway founded WorldNow to provide broadcasters, newspapers and other local media with the tools, know-how and national advertising representation that they needed to launch viable Web sites to complement their on-air service.

For nearly a decade, it has done just that.

Today, it supports 352 local media clients, mostly broadcasters. The lineup includes more than 260 TV stations belonging to such groups as Raycom, LIN, Dispatch, Gray, Journal, Landmark, Local TV, News Press & Gazette and Young. (Raycom and LIN are minority investors in the company.)

WorldNow is Gannaway’s second company. His first was Genesis Entertainment, an innovative TV syndicator, which claims to have launched every one of the 17 pilots it created. Gannaway sold Genesis to Ron Perelman in 1994 and used some of the proceeds to capitalize WorldNow.

In addition to licensing technology, WorldNow earns revenue from selling national advertising across 350 sites, 250 on the WorldNow platform.

In this interview with TVNEWSDAY Editor Harry A. Jessell, Gannaway talks about how his company has evolved, some of the issues facing broadcasters as they try to dominant local online media and what’s next for WorldNow.

An edited transcript:

You entered this business nearly 10 years ago, which is a long time in the digital age. What attracted you to the business?

Back in the late '90s, the Internet had not hit its stride and TV stations were sure not paying attention. For me it seemed TV was a one-way medium about to be stuck in a two-way medium world. 

ABC, CBS, NBC, Fox and Cox were all well invested in the online world back then, but soon each closed their doors. Those were the dial-up days. My inspiration for WorldNow along with Raycom and LIN was the belief that one day broadcasters and their local content would play a great role in the broadband digital era to come.

Back then, whether it was from a consumer or economic perspective, broadcasters had two big impediments—linearity and time. Why should the 6 o’clock news end at 6:30 p.m.? Why shouldn’t broadcasters break news online first? From an economic perspective, ratings were dropping, national advertising was shrinking, network comp was going away and 30-second spots only gave broadcasters access to 20 percent of the total local advertising market.

A few weeks back, we ran a story saying broadcasters were insisting on more control over the look and feel of their Web sites. How are you responding to that demand?

We started four years ago by opening up our front end from the back end so that we could customize their look and feel and they could attack their specific needs.

You did a great piece with David Griffin last month and he’s the perfect example. He had a Web strategy for Oklahoma City [KWTV] and Tulsa that no broadcaster to date has attempted, let alone pulled off. It was for weather sites, and we were able to build them for him.

So what you’re telling me is that broadcasters can come in and you won’t try to force them into any kind of pigeonhole.

Up until four years ago, we had 12 style sheets which basically said whatever you want—good, bad or indifferent—is OK as long as it fits into these 12 style sheets. No more. Now, we try to accommodate the needs of the station.

In the long term, aren’t broadcasters better off developing their own technology rather than relying on a third party?

No. Just look at the transformation in digital technologies. No broadcaster is building his own towers or building his own news equipment. They’re outsourcing that technology and focusing on what they do best—creating local content and monetizing the content that they create.

Take New York City. Not one station or newspaper here has built out its own video streaming technology. We at WorldNow are providing the video technology behind WABC, Channel 11 [WPIX], the Daily News and Newsday. If the major companies like Tribune and ABC are outsourcing technologies to get their video to the Web and wireless devices, why would a smaller broadcaster with less money, less resources and less experience try to pull it off?

The most popular local news-and-information site in most markets in usually the big newspaper’s. Why is that? Why have broadcasters fallen behind the newspapers?

It’s fairly simple. Newspapers have been heavily reliant on revenue from classifieds. In 2000 or 2001, there was a massive disaggregation as reader started going online for classifieds. Instead of newspapers, they were going to Monster, Realtor.com, autotrader.com and other sites. The newspapers saw their revenue going to the Internet so they simply followed.

That was an economic problem that wasn’t fathomable to broadcasters. Broadcasters were losing network comp and their ratings were going down, but the difference is broadcasters have been able to charge a higher cost per point for less ratings so that while their revenue may have slipped, it hasn’t fallen off a cliff.

WorldNow is not alone in this space. There’s also Inergize, Broadcast Interactive Media, Internet Broadcasting. Do you anticipate a shake out in the business?

Yes.

And I take it that you believe WorldNow is going to be one of the survivors.

Of course. I would argue that broadcasters want to focus on a company that has spent millions to build a broadcast-specific technology solution.

We hear broadcasters when they say, give me the technologies, give me the know-how, service me like crazy, help me with best practices that you have gleaned from other broadcasters.

Part of your business is selling national ads across all your client sites. At your panel session at NATPE, your national sales chief Adam Gordon complained that the TV reps were interfering with WorldNow national sales efforts. Can you elaborate?

Well, the three rep firms are going to the broadcasters and saying: "We would like to sell your online inventory." The concern is that if you have multiple companies—say, Petry and WorldNow—selling the same advertising, the large advertisers and their interactive agencies will see two people selling the same inventory at different prices, which only confuses and dilutes the sales process.

Ultimately, this create conflicts that either drive rates down or push the buyers back to the single URL—CNN, Yahoo, etc.—and newspaper sites they have worked with before.

Also, how are the reps going to traffic the advertising across different sites where there are different ad-serving technologies and different sizes of ads. I mean just think about that. When you buy traditional media and you’re selling a 30-second spot inside news, it’s fairly simple.

So, what’s the next big thing for broadcasters’ online initiatives? For WorldNow?

On the acquisition side, we’re integrating directly with broadcast production and asset management systems so that stations can easily leverage the full extent of content available to them. One the distribution side, we’re extending reach to mobile devices, PC to TV, and syndication partners such as YouTube and iTunes. We’ve been a little obsessed with bringing the broadcasters’ core videos assets online since way back in 2000.

For the most part, WorldNow builds news and information sites. But at the NATPE panel, online researcher Gordon Borrell said that such sites have limited audience appeal.

I disagree with Gordon. The audience on the Web for many broadcasters actually exceeds the audience of any one of their average newscasts. Let me give you an example. WNEP, our client station in Wilkes-Barre [Pa.], has one of the highest rated newscasts in the country. When its tower fell down, its traffic on the Web jumped for the month. They usually have 500,000 unique visitors. They jumped to 900,000.

What does that mean?

It means that there people who are watching the news online not only in Wilkes-Barre, but outside of Wilkes-Barre. It speaks to the power of a powerful brand like WNEP. It shows that you can build significant loyal audiences on the Web with news-and-information Web sites.

You sign a deal to be the exclusive partner for Supernanny. What is your strategy for syndicating content on the web? How do partnerships like that work into your strategy?

We are using our 260-plus TV station sites as a platform to syndicate quality lifestyle content. We are providing a unified, unparalleled opportunity for advertisers to maximize their reach to qualified niche audiences.

In the example of our newest partner, Supernanny, we are integrating content onto our lifestyle channels as well as giving an opportunity for advertisers to have a presence on the official Supernanny Web site. The options on the Web are growing. Sites like Supernanny offer audience and advertisers a powerful alternative to broader based portals.

What are the greatest challenges facing broadcasters today?

The Achilles heel of the broadcast industry are the folks in local media who believe they can develop the technology, best audience and revenue practices without help from the outside. What they’re missing is that it is extremely difficult to develop the technology, and that technology build is never done. It must be constantly enhanced.

Some major companies are going through a rebuild now, but they need to have someone run the race with them. In essence, broadcasters need to focus on their core competencies—local content and ad revenue.