E.W. Scripps Co., one of the nation’s oldest mass media companies, has joined the growing list of content owners investing big in free streaming channels in an effort to bridge the transition to a new era of television.
As Scripps CEO Adam Symson explains to Variety podcast “Strictly Business,” it’s a matter of simple math. As many as 40% of U.S. television households, or 50 million homes, are now watching local broadcast TV free over the air seamlessly via smart TVs. As consumers shell out more monthly fees for subscription streaming services ranging from Netflix, Amazon, Hulu and Apple TV to Disney Plus, HBO Max, Peacock and Paramount Plus, viewers are going to seek out free ad-supported channels that are readily available on electronic program grids.
“We have continued to see what happens when the consumer loads up incremental costs. As they add more costs, they become aware that free over-the-air television is an efficient pairing for (SVOD),” Symson says.
Symson is an investigative journalist turned digital content strategist who took over as CEO in 2017. Since then, he’s aggressively expanded Scripps’ TV station holdings, growing from just nine four years ago to 61 outlets in 41 markets.
Buying more broadcast TV stations — as Scripps did in January with its $2.65 billion acquisition of Ion Media — would seem counter to a modernization push. But Symson said the view of local broadcast stations being outmoded by internet-delivered signals is unsophisticated.
“We don’t think the world is going to be either pay TV or OTT or over the air,” Symson says. “We really think the world is going to be a combination of all three. I think my charge is to make sure we’re well positioned to navigate the future of television no matter how the consumer watches.”
The Ion acquisition brings to Scripps more than 70 stations and a huge influx of broadcast spectrum to experiment with new channels and possibly data and connectivity services in the future.
Scripps has launched multiple digital networks on the copious bandwidth provided by its local market stations and it has plans for more. By the summer, Scripps will have no less than eight channels with broad distribution in markets like Detroit (where it owns ABC affiliate WXYZ-TV) and Denver (ABC’s KMGH-TV). As broadcast TV ratings inevitably shrink, the patchwork quilt approach of amassing market share through multiple channels helps give Scripps a strong portfolio to bring to national advertisers.
Symson’s vision got a prominent vote of confidence from none other than Warren Buffett’s Berkshire Hathaway, which contributed $600 million to help finance the deal. The Cincinnati-based Scripps is publicly traded, but still controlled by the heirs of the company’s namesake.
“Berkshire recognized the opportunities around the economics of this transaction,” Symson said. “Berkshire does like doing business with family-controlled companies. The Scripps family’s been at this 142 years. They’re incredibly committed to this company. Berkshire are long holders. They like to be invested with people who are invested in the business.”
“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. New episodes debut every Wednesday and can be downloaded on iTunes, Spotify, Google Play, Stitcher and SoundCloud.