Trib Has Faith in Web Ads

Jan 16, 2006  •  Post A Comment

Broadcasting and newspaper giant Tribune is expected to announce today that it has struck a deal with online services company WorldNow to expand and bolster Tribune’s online streaming and advertising efforts.

The partnership, already under way at some stations, involves WorldNow deploying its video streaming technology across Tribune’s 38 newspaper and television Web sites. WorldNow also will provide training and support to Tribune’s advertising sales staff members as they prepare to begin selling online advertising. Financial terms were not disclosed.

The Tribune-WorldNow partnership comes at a time when an increasing number of station groups are looking to the Internet as a needed source of new revenue. “Traditional media is under attack from new media,” said John Hendricks, VP of sales at Tribune’s broadcasting operation. “The hope is the [advertising] money lost to the Internet can be replaced” with advertising generated by Tribune’s bolstered online effort.

The opportunities are huge: According to a study from the Internet Advertising Bureau and accounting firm PricewaterhouseCoopers, third-quarter 2005 Internet advertising revenue hit a record $3.1 billion, up 34 percent from the previous year. For the year, IAB is estimating that Internet advertising revenue will exceed $12 billion, versus 2004’s $9.6 billion.

Tribune’s use of WorldNow’s streaming technology will vary for each station. Those with news operations-WPIX-TV in New York, WGN-TV in Chicago and KTLA-TV in Los Angeles-will likely feature content derived from the stations’ news reports, while stations without evening newscasts will probably use the technology as a promotion tool for popular prime-time WB series carried by those stations.

Mr. Hendricks said it’s unclear at this stage if non-news stations might use the video streaming technology to launch online newscasts.

Tribune hopes the WorldNow technology will create opportunities for existing advertisers to raise their presence online and offer stations the chance to do business with advertisers who don’t normally advertise on TV. For now, Mr. Hendricks said, Tribune’s existing sales staff will tackle the online duties, though he might hire people dedicated solely to online advertising if Internet ad revenue becomes significant.

So far, Tribune has 12 of its Web sites using the WorldNow technology, including KTLA, which streamed live coverage of the Rose Parade on New Year’s Day; WGN, which streamed live coverage of the Chicago White Sox World Series celebration last fall; and WPIX, which is using streaming video to webcast two-minute traffic reports that are updated every 15 minutes and feature an anchor.

The partnership with WorldNow is not Tribune’s first foray into video streaming. However, as the company looked to monetize its presence on the Web, it chose WorldNow because of the ease of its software and because of the advertising support it offers the Tribune sales staff, said Rick Felty, VP of creative services for Tribune.

“The Web is becoming a medium of its own, which creates opportunities to extend advertiser relationships,” he said, noting that Tribune’s more robust sites will now have the opportunity to pick up more at-work Web surfers. “There will be opportunities to develop unique products” for both advertisers and customers,” Mr. Felty said.

The Tribune deal represents the latest station group to enlist WorldNow’s video streaming service. Some of the company’s other clients are LIN TV, Liberty Corp., The New York Times Co.’s broadcast operation and Gray Television. WorldNow also has a deal with ABC to build an online network that will seek national advertising and provide content for TV station Web sites.

Gary Gannaway, CEO of WorldNow, said that Tribune’s decision to enlist WorldNow “validates that any media company that is going to take this seriously is going to have to find a partner. Few media companies are doing it on their own anymore.”