Richard Warner Online

Interesting post in Mediapost online today: that a new chapter will soon begin at local TV stations around the country. A perfect storm of recession and increased competition have cut local TV station revenues as much as 25% in less than a year. 

Prime time network shows like ER and CSI used to represent exclusive beachfront property for local stations. But now you can watch those shows anytime with limited interruption on hulu.com, through iTunes for a couple of bucks or on the networks’ own Web sites.

Stations are beginning to fire their own ammunition. A battle is emerging in Boston, where NBC affiliate refuses to carry Jay Leno’s upcoming weeknight 10pm show, because they predict it will fail, and instead run a lucrative new local 10pm newscast. 

All this will lead to uncharted territory:

- Eventually, many of the best network shows will migrate to cable networks and away from affiliates

- Local stations will band together to create prime time shows that they own and control

- Stations with strong news departments will expand the time set aside for newscasts and may even program local news around the clock on their digital channels

- Stations without strong news ratings will fold their news presence and run entertainment shows

Change is inevitable, and it’s not realistic to pine for the old days as it applies to anything in our lives.

But in the case of local television, I believe deregulation has been counterproductive. Communities suffer when radio and TV stations are allowed to do whatever they want and use the marketplace’s economic response as their sole guide. 

Yes there are many outlets to receive entertainment on radio and TV…more than ever before. Because of scarcity of the airwaves, the FCC should enforce guidelines on community involvement that once existed, and made stations much more involved in the community and responsive to their viewers’ welfare.

Interesting meeting this morning with a client: points out rule #1 of developing an online marketing strategy.

The one common thread that all interactive marketing projects contain should be a focus on the end user.

• - Have you studied what’s important to them?
• - Are you designing the site so you are attracting users who are searching on your key attributes?
• - Are you following all strategy conversations with the end user in mind?

There is a direct correlation between that…and the success of your site.

So, General Motors’ accounting firm has issued a “letter of going concern,” basically covering their backside in the event GM files for Chapter 11 bankruptcy. Such a move, which is needed, would allow a judge to toss out expensive agreements with workers and dealers, force a change in management and generally be the only way for GM to survive.

A “letter of going concern” is not new to me. In 2000, we sold our interactive company to a public firm. Over the next 18 months, the internet bubble burst and the value of the stock went from $28.00 to less than a dollar. On the morning our accounting firm came out with a letter of going concern, the stock hit .07. Bankruptcy followed quickly.

That was the day I learned that CNBC was the only live stock ticker, and that you could only refresh it 75 times in one day.

America lost an original over the weekend with the passing of Paul Harvey.

Whether you agree with his conservative politics or not, he was a master at the art of communication. Five words won’t work if you can convey the thought in four. Paul Harvey’s style was about clarity, storytelling and the art of the pause-for-effect.

It was fascinating to talk with him in person. In the mid 1980s, he paid a visit to WGST Newsradio to speak to a local group and deliver his 8:30am and 12:30pm broadcasts. He arrived before dawn and had use of the news director’s office to prepare his shows. As I recall, he wore a smock and had his own formula for gathering wire copy and newspaper clippings…arranging them in columns that related to each section of the broadcast.

Prior to going on the air, he warmed up with a comical series of vocal exercises. Imagine how “teedle-tee-teedle-tee-tee…woof one two three…” and so forth sounded in that rich voice. He sat while he read the newscast that emanated from our cluttered studio (which he called “handsome” on the air), in a voice so strong he almost didn’t need a mic.

Because of the way our engineer had to feed it to New York, Harvey’s voice boomed at full volume through speakers in the studio next door and down the hallways. But that didn’t impact his concentration.

After the 8:30am broadcast, he agreed to carve out 10 minutes for me to interview him for the show I did on WGST’s radio network. He answered in staccato phrases just as he talked on the air. “Where did you get started in broadcasting?” “Richard, I was a young man of 13 years when I first stepped into the offices of KVOO in Tulsa, Oklahoma…”) Wish I still had the tape: it disappeared shortly afterward.

From 1951 to 2009, Paul Harvey gave us a lesson in how to communicate. So straightforward…and yet so difficult.

We’re working on a documentary about the beginnings of television in Georgia, and what a ride those pioneers had launching TV stations. They made up the rules as they went, since so much was local and live (and that goes way beyond local newscasts, encompassing daily kids shows and cooking programs). 

Each city had at least one anchorman who served as a front man for not only the TV station, but because most cities had only one or two stations, for the community as well. Dick McMichael in Columbus, Ray Moore in Atlanta and Doug Weathers in Savannah, to name a few here in Georgia. 

(WTOC TV Savannah’s Doug Weathers with Richard Warner)

We’ll be in the editing phase of the documentary in coming weeks and aim to have the program finished by late spring. It’s quite an honor to be involved with this project, meeting and working with people who many of us grew up watching.

As an Apple user and stockholder — and far more important, as someone who has great respect for what Steve Jobs has accomplished — I hope he is able to recover and return to the CEO role by June 30, as stated in his letter to Apple employees.

The unfortunate news about Jobs caused me to go back and find his commencement address at Stanford University in 2005. At the time, the entire speech seemed profound, but this morning, his comments about death are even more relevant.

———

“When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything–all external expectations, all pride, all fear of embarrassment or failure–these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up, so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying, because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.

This was the closest I’ve been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because death is very likely the single best invention of Life. It is life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma–which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

One great thing about the Web is that, if you choose, you can learn the “other” point of view. And I urge you to do it. 

Are you a dedicated liberal? Check out Rush Limbaugh’s Web site for the other side of the fence. Are you a die-hard Red Stater? Check out Talking Points Memo for the rest of the story.

Do this, in particular, when there is a news story where the conclusion seems to be obvious.

Two examples: here in Atlanta, Braves fans and sports columnists are outraged that new General Manager Frank Wren wouldn’t come up with the money to re-sign career Braves pitcher John Smoltz. So what does Wren say?

There is considerable criticism over the Bush administration and Securities and Exchange Commission for failing to catch alleged con man Bernard Madoff and for being reckless with regulations. (See my post below.) Is that completely true? No. There’s more to it than that.

The other points of view may not change yours, but issues are usually more complicated than at first glance.

Screaming talk show hosts get paid to inflame you with their one-sided opinions. But with access to the Web, you’re smarter than that.

The New York Times offers an excellent op-ed piece by author Michael Lewis (”The Next Big Thing,” “Liar’s Poker”), which concludes that the collapse of Wall Street doesn’t just involve greed and a focus on the short-term. It also rests with the Securities and Exchange Commission, which is supposed to serve as a regulatory agency to police investments but has utterly failed at the task. 

One of Lewis’s points is that the SEC’s rating system used to determine the safety of investments it regulates is woefully inaccurate. Bond ratings like “Triple A” grade are based on politics, not reality.

Further, the $700 billion in TARP funds approved by congress is being doled out without oversight and doesn’t address the root of our financial problems: financial organizations and businesses that acted irresponsibly should be allowed to fail, albeit with government help to ensure an orderly sale of their healthy assets, rather that propped up with the same management and business models.

I’ve interviewed Lewis on TV and found that his positions are based on research, not personal philosophy. And his article brings me to an experience I’d like to share. 

2001: I sold my company to a firm called AppliedTheory, which was listed on the NASDAQ, and because of the amount of stock I accepted in the deal, I was legally considered an “insider,” privvy to inside information that restricted my ability to trade its stock.

But behind the scenes, what I saw involved smoke and mirrors. Every analyst who covered AppliedTheory gave us a “Buy” rating, essentially assuring investors that we were safe. As an insider, however, I knew we were coasting downhill fast. Among other things, we were classifying certain types of revenue as “recurring,” which Wall Street craved, when in reality the revenues were much less sustainable.

AppliedTheory filed Chapter 11 just after I bought back the assets I had sold them. As many other companies in the dot-com industry tanked, I figured that outrage from investors would lead to regulations designed to prevent this sort of thing from happening again.

But as Michael Lewis points out in the New York Times piece, little has changed. Lewis’s point is that lack of oversight, the politics and relentless short-term focus on profits represent a far greater danger to our financial future than the Bernard Madoff scheme that’s getting the bulk of our attention. The government can’t protect us from ourselves, but it can demand transparency so our investment decisions are based more on facts than mirrors.

Hosting a TV show that features CEOs, I am always surprised at the number of them who say salaries of their peers have gotten out of hand. Certainly, most Americans agree. Larry Ellison, who founded Oracle, made $197 million over the past year is ranked as the highest paid US executive. With options and perks, the typical CEO earns about 500x as much as the typical worker. That compares to what CEOs earned in 1970: roughly 25x the pay of the typical worker. 

You’re seething, right? Outrageous! 

Well, maybe. This brings to mind a lunch I had recently with one of my valued employees. The topic: He wants to make more money (”We all do!”, to quote Sally Struthers) because his student loans are coming due. My advice was to expand his skill set.

I explained that people don’t earn salaries…jobs pay salaries. What it all comes down to is that his pay is based on how much revenue he means to the company. 

Which brings me to the pay structure of CEOs. Whether you’re seething or not, CEOs of large companies represent quite a bit more more than 500 times the revenue of the typical employee. Their salaries are justified based on what they contribute…as long as the company is performing. 

To me, the real issue is what happens when the company doesn’t perform. If the company’s performance is poor, the pay for that CEO should be cut in proportion.

As outrageous as Bob Nardelli’s performance has been at Home Depot and Chrysler, there are other CEOs who get it. Like AFLAC’s Dan Amos, who voluntarily reduced the perks of his employment agreement by millions of dollars this fall…without even being asked by the Board.

With the rampant collapse of US newspapers (Tribune bankruptcy, most Cox papers for sale, Rocky Mountain News to stop the presses if it doesn’t find a buyer)…and the impending downsizing of local TV journalists coming in December and January, it’s fair to ask what this means to your appetite for news.

Most news originates at newspapers, since they employ the most reporters. But with 30,000 media job cuts in 2008, you’re going to see continued decline of dailies and local TV news operations…and the emergence of hyperlocal press (your neighborhood newspaper and the accompanying Web site)…and more outlets that cater to liberal or conservative viewpoints.

This is the way the British press has operated for years: we may even see growth of the (lowest common denominator) tabloid format, also popular in Britain.