Media General is the 23rd largest broadcast televison group in the United States. The Television Division operates 14 network-affiliated stations reaching over 22 percent of television households in the Southeast, and more than five percent of television households in the United States.

Annual
Report
Index

James A. Zimmerman
President
Broadcast Television Division

A I think it is fair to say we are on track. From day one, our strategy was to transition the acquired stations from the cost-containment focus of the previous owners to one of audience and revenue share growth.

By year-end 1998, we had increased the aggregate share of audience and market revenues for our stations by 12.7 and 11.8 share points, respectively.

These gains largely were a result of three initiatives. First, we completely transformed the on-air look, feel and sound for each acquired station. This also included a grass roots change in the way we packaged and marketed our stations and products. We refocused the stations by making key management changes in all critical areas. In addition, we spent nearly $20 million to upgrade our broadcast facilities and equipment.

The second initiative developed both short and long-term programming strategies for each station. Our plan leveraged our expanded size to replace under-performing programs with quality products that provided good lead-ins and lead-outs for our newscasts and network programming. To date we have replaced nearly 90% of the programming acquired with the stations.

Our third initiative changed sales practices and perceptions. As product quality issues at the stations were addressed, we aggressively worked to bring structure to commercial time sales, pricing and advertiser relationships. I believe our 11.8 revenue share point increase indicates we have done a good job. As good as this is, there is significant upside yet to be realized.

Q You mentioned leveraging your size, have there been any real advantages or cost savings due to your expanded size?

A Yes, we created the MEGA Bank to provide sharing of on-demand news graphics for all of our stations. This creates exceptional efficiencies in news content by allowing stations to focus on story development rather than the production of graphic elements.

Additionally, we established a process to share news special reports which expanded each station’s ability to create unique news content during the critical rating periods.

Many of the group syndicated program purchases generated cost savings unattainable without the leverage that fourteen stations bring to the table. We have also saved over $1.5 million through group equipment purchases managed by our affiliate, Professional Communications Systems. In addition, we have acquired a millennium advertising campaign aimed at non-traditional television advertisers at a fraction of its cost were it to be purchased on a station by station basis.

Q Are there any other successes to date?

A There are a number of success stories to date. Our CBS affiliate, WIAT in Birmingham, Alabama, rose from low to very competitive ratings since the complete rebirth of the station in February of 1998. WJTV in Jackson, Mississippi, and WNCT in Greenville, North Carolina, both moved into the number one position in their respective markets during 1998 and remain there today. Neither station had achieved this landmark in recent history.

In Jacksonville, Florida, WJWB is currently ranked fourth of six stations, ahead of the UPN and ABC affiliates. This is exceptional for a Warner Brothers affiliate and the station has been recognized with numerous WB awards for their achievements. WJHL in the Johnson City, Tennessee market scored the number one news position in the metro area for the first time in that station’s history.

Recent news research indicates that many of our other stations are increasing their news preference among viewers, which will ultimately lead to audience share growth. In some cases the growth is not happening as fast as we would like but we are, indeed, recording success stories.

Q So much is being written about the challenges of the future. What do you see as some of the opportunities?

A One of our biggest opportunities will come from the conversion to digital transmission which should be complete in all of our markets by 2002. High definition television, the multi-casting of news and entertainment programming, the transmission of high speed data to households and businesses, the leasing of our new transmission capacity and beneficial local partnerships with other communications companies will provide opportunities to develop non-traditional sources of revenue. You can be certain that we are taking the necessary steps today to ensure that we capitalize on these opportunities.

Finally, digital platforms will provide common operating systems, allowing us to effect additional operating efficiencies through automation and the sharing of assets by our Broadcast and Publishing Divisions. Our new state-of-the-art digital facility in Tampa will provide us with the developing ground for this new frontier.

While filled with alternatives yet unknown, the future offers us an exciting new age of not just television, but rather a whole new world of products to enhance and enrich the lives of our communities and benefit our customers.