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June 13, 2016, 9:52 a.m.
Business Models

Scripps, known for local TV and radio brands, finds new strategies for national digital audiences

Digital still makes up a sliver of Scripps’ revenues, but the company is making big investments in podcasts.

Scripps is 135 years old, and in that period it’s reinvented itself plenty of times. The Cincinnati media company started out in the 1800s as a chain of newspapers, and went on to hold radio and TV licenses. It spun off its newspaper group in 2014, and in the past couple of years it’s focused not just on its local broadcast and radio stations, but on national digital properties like podcast company Midroll Media and humor site Cracked.

2012 Adam Symson wc“We see our moves in over-the-top video, and in podcasting, as entirely consistent with the history of the company,” said Adam Symson, Scripps’ chief digital officer. Symson’s role at Scripps has morphed over time, as well: He started out there in 2002 focused on investigative journalism in Scripps’ TV group, then moved through the company to take on his role today.

Digital businesses still make up just a sliver of Scripps’ overall revenues: In 2015, the company’s digital revenues were $39 million, or 6 percent of the revenue overall; the television segment, by contrast, brought in $716 million, or 85 percent of annual revenue. Still, the company is making major investments in digital: It bought podcast network and advertising company Midroll Media for $50 million in cash in 2015, and, just last week, acquired Stitcher, a podcast-streaming app, for $4.5 million. Stitcher will ultimately become part of Midroll.

“We think there are a variety of strong revenue streams for the podcast ecosystem yet to come,” Symson said.

I talked to Symson about Scripps’ podcast strategy, opportunities for local versus national podcasts, and why the company is focusing on over-the-top video. Our conversation, edited and condensed for length and clarity, is below.

Laura Owen: Last year, Scripps acquired Midroll Media; this week, you acquired Stitcher. Tell me about this interest in podcasts.

Adam Symson: We think that podcasting is going to be an important medium, particularly for younger audiences, particularly as it relates to journalism, storytelling, and entertainment for the future. You can’t really walk down the street without seeing white earbuds, and folks are filling their time with all kinds of content consumption. Oftentimes that’s streaming audio and podcasting, and so we are building, for Scripps, a business for that younger audience. Midroll and now Stitcher work really well with that strategy.

Owen: Before that, you’d acquired a single podcast, Decode DC.

Symson: It’s now a part of the Midroll brand, but Decode DC was our first toe-dipping exercise into podcasting. We acquired Decode DC after Ellen Weiss, the bureau chief for our Washington bureau, joined us, and one of the things we wanted to see was how to use our Washington bureau both to continue to provide great reporting outside of DC for our local markets, but also to develop new opportunities on scale. We started with Decode DC and that really led us to the podcasting space, understanding the space, and then from there moving forward with acquiring Midroll and Stitcher.

Owen: How are you thinking about monetization?

Symson: We love podcast advertising. Midroll is a leader in the space: We monetize not only our own podcasts, but more than 230 of the largest podcasts out there with our sales team. But we also think there’s going to emerge a premium marketplace; that’s why we launched Howl, and at some point we think Howl’s premium podcast offering and Stitcher will intersect, somewhere in the future.

We think there’s a variety of different strong revenue streams for the podcast ecosystem yet to come. There’s obviously the B2B advertising marketplace, the premium subscription model, and probably a couple of other businesses down the road that we think podcasting will be good for. At the end of the day, podcasting has already proven itself to be a really intimate experience, where host-read advertising has terrific influence on the audience. The question is, how does one see the future with that kind of advertising vehicle?

If you want to develop a loyal audience, you have to have a great product, you have to consistently deliver that product week after week or month after month, and you have to develop a local audience. In traditional media we’ve gone through an era where, because we were trying to serve everybody all the time, we sort of missed some of the niches. Now at Scripps we’re seeing that podcasting and over-the-top video can provide direct-to-consumer opportunities around news and information, where news and information might even become a little bit more niched.

If you look at podcasting, you’ve got shows along any variety of topics. If you can develop a product that’s really great and can appeal to a consumer, you can develop a large enough audience, and if you can develop a large enough audience, you’ve got a viable advertising business.

Owen: Do you think about how podcasts might meld with your local broadcast stations? Can there be more local news podcasting?

Symson: I think podcasting, in general, is a great medium to connect with all kinds of audiences. WCPO, for example, is doing some podcasting. Some of our other radio stations have been doing podcasting for a long time. The question is whether or not you can achieve a level of scale with local podcasts. I think you can, but the monetization of that local scale should be done locally.

On the national side, Midroll is a large network. We represent, like I said, more than 230 of the nation’s largest podcasts, and we get requests all the time for us to represent people’s podcasts. We’re careful to make sure that we represent the ones we know we can actually sell in the marketplace. They’ve got to have a significant amount of scale relative to downloads. They have to be focused on topics that we think national brand advertisers are going to want.

There’s allways going to be that difference between local and national. We are running some internal lessons on podcasting for our local broadcast businesses that want to get into the space. We’ve rolled out an entire curriculum on how to start a podcast that has been offered to almost everybody in the company. But at the end of the day, in order to do this right, you have to make sure to develop a product that people love listening to and that then can achieve a level of scale from loyal audiences. That can be done locally, but then you’ve got to monetize it locally.

Owen: What’s in the podcast curriculum?

Symson: We talk about best practices in production, in storytelling technique, in topic selection, in things like how often you should come out with a podcast, how long they should be — the basic hallmarks of what a great podcast can be.

Owen: You mentioned over-the-top video. You acquired [millennial-focused video platform] Newsy in 2013 and Cracked this year. How does this fit into Scripps’ digital strategy?

Symson: There are two sides to our digital strategy. On the one hand, in the local markets where we operate broadcast businesses, TV stations, and radio stations, we are building the leading digital brands in our marketplaces. We monetize those; we have large digital audiences. They’re convergent audiences with television, but they’re also unique digital audiences, and we monetize those audiences with advertising, with local advertising and marketing services, with some direct-from-consumer revenue streams. That’s an important business not only for our strategy of local journalism, but it’s also an important business for the strength of the broadcast division.

We feel very strongly that, for local broadcast businesses to be strong, they need to have very strong local digital businesses right along side of them. That’s just the way content consumption happens today.

On the national side, Scripps has been in the business for more than 135 years and we want to be in business for the next 135 years. We’ve chosen to focus on the emerging marketplaces where we see the highest organic growth. For us, that’s over-the-top video and podcasting.

Almost a year and a half ago we identified this opportunity with OTT video. We saw a marketplace emerging, and we felt like the time was right for us to take this brand Newsy and develop it. The emergence of OTT television as an ecosystem led us to that position.

Owen: Has that strategy changed at all as platforms like Facebook, especially, have become more popular places to watch video?

Symson: Facebook is a very, very important platform. With digital content today, the consumer expects you in all places, so we have a very strong social media play with our OTT businesses, like Cracked and Newsy, but we also are pushing them into these other areas.

The interesting thing about OTT television is that there is no social clickthrough. You have a lot of businesses on the web and on mobile that have really been built on the back of social media. But you can’t be on Apple TV, or Roku, or Sling, or Watchable, and depend on Facebook to drive audience. You have to build a strong brand and deliver on that brand promise all the time, and you have to develop a loyal audience. That’s how discovery works. We like that. That’s what the history of this company has been.

Facebook is extremely important; they’re a huge player in video and now live video. But when we see people sitting down and watching 30 minutes at a time of Newsy through their Roku or Apple TV [Scripps said in its 2015 annual report that “early research showed Roku users spend an average of 27 minutes per session watching Newsy content”), we recognize that there’s also a marketplace emerging where people are sitting down in the living room and watching.

Newsy will deliver more than a billion video views this year. That doesn’t include our social video views or our social audience; that’s the audience we track relative to monetization.

Owen: Media companies have consolidated a lot on the East and West Coasts. What’s it like to run a media business in Cincinnati? How do you recruit and how is the city changing?

Symson: I actually think that Cincinnati and the Midwest sensibility is Scripps’ secret weapon. I’m from Los Angeles, but the fact that we’re based in Cincinnati — that we have a leadership team that is focused on doing well by doing good in our communities — is one of the hallmarks of Scripps, and has been ever since E.W. started the Penny Press, a newspaper focused on the working class in Cleveland. That ethic permeates everything we do.

When we go to acquire companies, they’ve often even never heard of Scripps. Then we begin to have conversations with them about what drives us, about why we’re in this business, about the First Amendment, about free speech and creative expression, about serving the communities where we operate. I think people start to realize this is the kind of company they want to do business with, this is the kind of company they want to be part of. I certainly think there are challenges to not being in New York or Los Angeles, but I think they’re easily overcome today, and in fact there are advantages to being where most of America is.

Adam Symson headshot courtesy of Scripps. Cincinnati photo by joãokẽdal used under a Creative Commons license.

POSTED     June 13, 2016, 9:52 a.m.
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