This is one of 186 strategies and applications that will appear in Putting Your Small Business on Steroids — 186 Strategies to Increase Your ROI, by John Gifford and Matt Hall.
Love him or hate him, Ted Turner, in the 1960’s through the 80’s, created one of the most innovative media organizations ever. His ability to create synergy across the “businesses within his business” resulted in a powerful strategy. Media cross-promotion (before ABC and ESPN made endless promotions of each other’s programs), audience multiplier effects (microwave and then satellite cable distribution), and owning content (Atlanta Braves and other sports teams and the MGM film library) that was used to fill vast sections of his programming time slots, combined to ramp up ROI in his business.
Throw in the clever cultivation of his relationship with cable system owners, use of his celebrity status, and his emphatic exploitation of direct-response ads on WTCG/WTBS (Ginzu Knives–“so sharp you can cut a can with them”), and you get a measure of how Turner expertly pieced together his media empire to make the whole greater than the sum of its parts. Small business owners would do well to study how Turner crafted together the parts of his media empire. The strategy that worked for him on the large scale can work as well with smaller-sized operations. After all, Turner embodied the prototypic entrepreneur with his ability to act quickly to take advantage of opportunity, his willingness to take on the potential of risk if the reward were great enough, and the unyielding desire to grow his company.
Inheriting in 1963 a flourishing billboard business from his troubled father (who committed suicide just before Ted took over the company), Turner moved to increase the size of his company through new acquisitions and by the mid-1960’s Turner Advertising had become the largest outdoor-advertising company in the South. Through the rest of the 60’s Turner continued his focus on billboards, although he did dabble in radio, picking up three stations: in Chattanooga, Jacksonville, and Charleston, South Carolina.
The most dramatic growth of his company did not begin until 1970 when he extended his media reach into television, which he sensed could be very lucrative. In that year, he bought a floundering UHF station, Channel 17, WJRJ in Atlanta, which had lost $900,000 the year before. Turner changed the call letters to WTCG (for Turner Communications Group, or as Turner later claimed “Watch This Channel Grow”) and ran a low-budget format of sitcom re-runs, old movies, wrestling, roller derby, and unique late-night news/slapstick programming, plus Atlanta Braves baseball and Atlanta Hawks basketball. When Turner bought Channel 17, it was in last place in viewership among the Atlanta stations, but it was a television station, and Turner maximized its impact. Unfilled spots on Channel 17 were used to tout billboard advertising opportunities; any billboards vacant of advertisers Turner used to promote his television station.
When approached in 1972 by Andy Goldman of the Alabama cable company Teleprompter to provide Channel 17’s programming to their nearly 200,000 cable subscribers, Turner jumped at the chance. Even though Turner Broadcasting didn’t receive any of the subscriber fees, Channel 17 more than doubled its viewership, which meant higher ad rates could be charged. In addition, low-cost direct advertising spots, such as the Ginzu knives and the Pocket Fisherman generated numerous calls and letters with checks from the extended audience and ultimately resulted in $1,000,000 in gross sales yearly. Soon, WTCG, the UHF channel whose signal Turner himself had trouble picking up when he bought the station, now had access to more viewers outside of the Atlanta area –others sections of Georgia, Alabama, and even Florida — than in Atlanta. And this was just the start.
The next part of the cable saga revolves around satellites and transponders. Once Turner found out about the possibility of satellite transmission, he seriously lusted after having Channel 17 go up on the satellite. When WTCG (now WTBS) went up on Satcom1 on December 17th, 1976 it enabled Turner to have national reach, and allowed dramatic increases in revenue over time in three areas: advertising sales, sales of content to the cable providers, and his mainstay, direct-response ad income.
The next “business within his business” spring-boarded off the existing satellite system in place — there was an economy of scale and Turner had his excellent relationship with cable owners to give him a head-start on selling a new station. This coincided with his desire to have dominant position in a programming niche. In short he was ready to tackle an all-news station.
Talking in 1978 to Reese Schonfeld, news guru and soon-to-be first President of CNN, Turner explained his reasoning behind launching CNN: “There are only four things that TV does, Reese. It does movies, and HBO has beaten me to that. It does sports, and now ESPN’s got that. There’s the regular series kinda stuff, and the three networks have beaten me to that. All that’s left is news!” Turner’s credibility in the news arena needed bolstering and his hiring of Schonfeld, in May 1979 and soon after that, of Daniel Schorr, long associated with CBS News, helped to convince industry leaders that he was serious about developing a professional news network.
When Turner, flanked by his prized journalists, Schonfeld and Schorr, revealed to the assembled members of the National Cable Television Association that he was going to bring on air a revolutionary all-news station on June 1st, 1980, the listeners were eager to sign up. The new station would be able to tell a story from various worldwide viewpoints, switching immediately from one geographical source to another via satellite. In addition, the live, 24 hour nature of the programming would allow an immediacy to the coverage of the story, compelling the viewer to stick with the story from beginning to end.
(Ted Turner: To be continued tomorrow)
This is one of 186 strategies and applications that will appear in Putting Your Small Business on Steroids — 186 Strategies to Increase Your ROI, by John Gifford and Matt Hall. If you would like to be notified when the book is available, please send an email with the Subject: Book Notification to johng@indysmallbiz.com.
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