Hearst TV Surviving Slump

Company officials said the Writers Guild of America strike impacted revenue, including for the Academy Awards show, but was hard to quantify.
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Hearst-Argyle Television announced first quarter of 2008 (ending March 31) earnings per diluted share of 11 cents, compared to 5 cents and 14 cents in the first quarters of 2007 and 2006, respectively.

Of the earnings, 10 cents per share ($9.3 million) came from an insurance settlement related to Hurricane Katrina.

Total revenue of $165.1 million was down 2.6 percent compared to the year-ago quarter. That reflected a $13.7 million (9 percent) decrease in net nonpolitical ad sales and an $8.1 million increase in political revenue. The revenue also includes a 22 percent rise in net digital media revenue, to $4.9 million, and a 22 percent increase in retransmission consent revenue, to $6.3 million.

Company officials said the Writers Guild of America strike impacted revenue, including for the Academy Awards show, but was hard to quantify.

The company also claimed significant growth in its digital media efforts. Earlier this week, for example, it began broadcasting the CW network on the digital multicast channels of KHBS-TV and KHOG-TV serving Fort Smith and Fayetteville, Ark., as Arkansas CW.

On the Internet front, the average number of monthly unique visitors more than doubled over the first quarter of 2007, as page views increased 36 percent and video streams increased 66 percent to more than $20 million.

The company said it has implemented the Anystream Media Lifecycle Platform (from Dulles, Va.-based Anystream) to capitalize on both brand awareness from video-rich Web sites and new advertising models. Anystream puts live video from 11 of H-A’s 29 stations online in minutes. It preserves the metadata produced when visitors watch video on the Web and uses this information to track and repurpose content.

H-A said that where it use to take 30 minutes to move video to the Web, it now takes just three-and-a-half minutes, while preserving metadata. It’s increased the number of stories published online as much as fivefold, leading to an increase in pre-roll advertising inventory, the companies said.

Looking ahead, the company said “a significant portion” of the company’s $40 million capital expenditure budget for the year was committed to local HDTV. It also expects strong political revenues in the second half of 2008, and strong ratings for the Olympics at the company’s 10 NBC affiliates.

“Much has been reported about the housing slump, uncertain credit markets, the sluggish economy and the resulting impact on consumer confidence and spending across America,” said David Barrett, president and CEO. “A concurrent slowdown in advertising expenditures across much of the media landscape is also evident. Our first quarter results were clearly affected by these national trends. ... While we are not able to call the timing or the magnitude of an economic rebound, we remain confident that we will finish 2008 with top and bottom line growth. We are encouraged at both a fundamental level and a strategic level.”

Hearst-Argyle Television owns 26 television stations, and manages an additional three television and two radio stations owned by Hearst Corp.