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Archive for September, 2009

Embracing TV talent on the tiny screen

Tuesday, September 29th, 2009

If legacy media companies were conservative parents, David and Michael Castello would be the beguiled rock stars leading the kids astray.

The hip brothers own six “city.com” domains in Tennessee, California and Florida, as well as sites like Whisky.com, Chili.com and Bootleg.com. They just scooped up weatherman Tim Ross, formerly from local NBC affiliate WSMV-TV.  Ross has joined the talent at the Castello’s Nashville.com. Once voted the most popular TV weatherman in Texas, Ross said the Castellos have “given me the freedom to stretch my creative wings.”

The sucking sound of the Internet has struck in other cities where personalities have moved from the small screen to the tiny screen.  It’s almost as if these anchors stood up, yelled “I’m mad as hell and I’m not going to take it any more!” and left.  In reality, their contracts weren’t renewed as the local TV market downsized.

Nashville.com, a Castello Property

Nashville.com, a Castello Property

In Charlotte, popular weather anchor Terri Bennett lost her job and promptly bought billboards around town to lure her audience to terribennett.com, an ad-supported site where she provides information on the weather and conservation.  In Charleston, S.C., longtime WCBD anchor Warren Peper got canned and wound up doing videos for Charleston.net, the site owned by the Charleston Post & Courier.

Back to the Castellos. These guys bear some watching. One of their sites makes more money than any locally owned media site in that market. They do it without a lick of broadcast or print cross-promotion, a base of advertisers from which to up-sell, an existing staff to sell it, or a massive bank of news, weather or sports to splay across its Web site. Hundreds of independent sites are competing heartily and doing it well, from Myrtlebeach.com to Toledo.com Branson.com to SanDiego.com.

While they often get snubbed by legacy media companies because they aren’t very attractive or don’t contain serious news, their hearts are tuned precisely to the needs of advertisers and consumers.  They are the Craig Newmarks of the city.com business.  Kinda geeky, very little design skill, and perhaps more lucky than brilliant.

How do they do it?  I’ve invited Mike and David Castello to address our conference in New York next February. They’ve graciously agreed, and I intend to let them speak about WestPalmBeach.com, PalmSprings.com, Nashville.com and the other sites they own. I also intend to grill them on whether these sites are truly making any money, or whether this is all just smoke and mirrors.

Hope to see you there. It’ll be a very interesting session.

Borrell Associates Conference Feb 8-9, 2010

Borrell Associates Conference Feb 8-9, 2010

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The “Category Killer” Strategy

Monday, September 14th, 2009

Last week’s passing of Frank Batten, the founder of Landmark Communications, reminded me of a small insight he had about the Internet back in 1996 that rings true today.

Frank was participating in a meeting that I was leading as a vice president trying to navigate this new thing called the Internet. We were strategizing what we might do with our properties – The Weather Channel, Auto Trader, Antique Trader magazine, TV stations and daily newspapers. The discussion led to all the extra money we might make at Auto Trader by charging dealers an extra $5 per listing. As we were rubbing our hands together, Frank gently weighed in.

There’s no barrier to entry on the Internet, he observed. No million-dollar printing press to prevent any fool from competing, no FCC license like you might find in TV or radio, no cable franchise to form a protective moat around your business. So in that scenario, the only strategic competitive advantage seems to be size. Frank wondered whether we might need to get big fast instead of limiting the number of listings to only those dealers who would accept the $5 fee. Placing all listings online, he suggested, might give us an immediate “category killer” for autos.

He was spot-on. Within 18 months, Autotrader.com was born. It immediately became a category killer. Today it is (by far) the No. 1 automotive Web site in listings and revenue, with more than 3 million vehicle listings and more than $600 million in revenue. While most automotive sites suffered horribly in 2008, Autotrader.com grew 20 percent and actually surpassed revenue from the Auto Trader books.

Frank’s strategy was a great one. It not only explains the success of sites such as Craigslist, which is generating more than $100 million off “free listings,” but also probably foretells the disappointment that awaits those who expect to find success as a “category killer” in local content by charging users to access it.

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