Welcome to Strictly Business Varieties, weekly podcasts featuring conversations with industry leaders about the business of media and entertainment. I'm Cynthia Littleton, co editor in chief of Variety Today. My guest is Adam Ware, vice president and General Manager of National Networks and Platforms for Sinclair Broadcast Group, where is knee deep in the streaming wars, but rather than global domination, he's fighting for AD dollars in local markets around the country.
Sinclair is investing big in Stir, an AD supported platform that aggregates local newscasts and other content from Sinclair's nearly two hundred TV stations, where, who previously worked in distribution for Fox in its early days and for Barry Diller's nineteen nineties media ventures, shares insights from the experience of building Stir over the past two years. In our com versation.
Adam Ware, vice president and General manager of Sinclair Broadcast Groups National Networks and Platforms Group, thank you so much for joining us. You're welcome. I think the podcast is now concluded with the length of my title, and I want to start by talking about one of the services that you've run, which is called Stir and it's a
it's a streaming platform and a supported streaming platform. And why it was intriguing to me and I wanted to talk to you today was that we have the press certainly is guilty of sort of shaping the streaming wars as certainly a global race, a global chase that is unprecedented in its in its geographical scope, and it is definitely one of the things that is changing the game for the the biggest media conglomerates. But that doesn't mean that there isn't a you know, a ground game to
be had in streaming in local markets. And that is where Stir and Sinclair with its many many stations comes in.
Tell us tell us about Stir, which is, if I'm not mistaken, coming on about two years old, and tell us sort of all the all the elements that you have built in to stirre and tell us how this this AD supported business is doing in this you know, as we get here to the end of there is a it's a national service, and I think the line I like to use to explain it is it's streaming TV from your local TV station for free, so as
opposed to being sort of this national service coming from somewhere. Uh, I would love that in a focus group, if I were to ask them where is stir made, they would go, oh, that's that's from Fox right or or Como in Seattle, like, that's my from my local TV station. So at the at the core, that was putting content that was uniquely local, front and center on a platform on a service. UM. Stir is not an afronym for anything. Ster literally came
from two parts. One is the challenger side of it, like stirring it up, and the other part is as a mix of content, so stirring up the content. And at the core of this was local news as as a as a fundamental you know, uh, foundation of the service, complimented by other local programming, a complimented by the local syndicated hits that the stations owned and have the streaming
rights to in their marketplace. Uh. And then go uh and build out a free service out of that, but not not an on demand service because at the core of this was a couple a couple of sort of key factors. The first factor was, Okay, do you have to have stations the top d M A s to make this work? And the reality is that when you look at where streaming is the strongest. It doesn't match up to the top d m A right, so UM, there's a there's Nielsen put out an interesting study last year.
I think they analyze where are the strongest d m as for streaming? UM. The number one d m A for streaming I think is Austin. SE. Of that d m A streams, Cleveland watches the most amount per day on a streaming basis. UM. Austin and Salt Lake City are tied for number two among the meter markets for
the most that owned streaming devices right now. New York, l A and Chicago are up there always because they're huge populations, but it's actually it's a different footprint when you look at streaming, and Saint Claire's footprint matched up really nicely with that. So Austin we have a pretty strong TV station in Austin, UH and Salt Lake City we have a pretty strong TV station in Salt Lake
City and so on. So that served as the basis of the footprint for can we launch a national service that was locally targeted at scale and and appeal to markets where they were more likely to stream? Right? I think the second part of streaming is that um Nielsen, the same Nielsen study, I think the stat was somewhere around fifty or so. Uh watch traditional local TV news mhm. Right, So there's always assumption in streamers don't watch news at
all and don't watch TV stations. You're watching short form content produced for five cents on YouTube. That's right, That's right. And and the reality is I'm sure people are, but they're actually watching local TV news um. And so that became the basic fundamentals. Did we have the markets? Did we have a footprint that can make this work at scale in the right d M s? And the answer is yes, right, did we um? Did we have the right genres to work locally? Yeah? Right? And Stir features
a hundred thousand hours of live local news a year. Uh. Did we have a corporate owner that was willing to invest uh and not look for an immediate r o I that year because streaming takes investment. Absolutely, because Sinclair as a history of that. All those ingredients went into start. Let me ask you how does it work with the station's how did the state? How do how does the monetization work? Does the monitors that you know, if if if the COMO six o'clock News gets you know, five
hundred thousand views. How do they get Is there a process that they get credit for that? Or is that? Or do or do the stations like you know, they can sort of contribute their their news and their advertising to the greater good of the broader Sinclair Broadcast Group. Can you talk about how that works just on a business proposition with having that many stations contributing to this service? Sure? Sure so. Uh there's two parts that one part is that um, local O T T O T T revenues
UH are exploding on a local basis. And and and that's just the sale of O T T inventory. Um, you actually get a higher CPM on a local basis than you would on a national basis. It's a similar between network and local spot right, the same sort of differences. And the TV stations are have sales teams on the street talking to local TV advertisers who want to be in O T T UH in this kind of the same way. Those same aviturs way back when wanted to be in cable. But back then the TV station wasn't
selling cable, they were just selling their TV station. Well, now they're selling their TV station and they're selling O T T inventory and the conversations are within largely with endemic advertisers. Uh. Yes, in large parts about endemic advertisers. Um that want to now find campaigns across multiple platforms. But then you also see new advertisers. Um, I'll give you. I'll give you an example. Right, So in Bowie, Texas, which is located between Fort Worth and at Ardmore, I've
I've actually been there a long time ago. I've been there, and the stations in Texas we have, we have stations in San Antonio, Austin, Abilene, to Oklahoma and so on. Uh. That client is a horse auction client, and that horse auction client was buying advertising locally to get people to show up to the auction. They were using Facebook Live as a means of streaming to those that couldn't get to the auction. All of a sudden, COVID hits unless people are showing up to the auction and the station
while liking the client, while liking Facebook Live. It was like, you know, it's okay, but what more can we do? We like, we like TV. We know TV advertising is really powerful, and so what the stations in in that territory did they met with the clients, they said, let's let's brainstorm about how we can take advente of STIR And so they came up with a really cool idea to make a seven channel out of it. And so there is a channel now called the Horse Shopping Channel.
It's on stir. Uh. It features live auctions of horse auctions throughout a month, and then when that programming is it on, it features other sort of related content on that channel. And it is a completely paid for by the client channel. And so that client, that local client, instead of just buying thirty second commercials or using Facebook, they now have their own television channel. And I mean and the obviously the r o I is good enough for them to continue it, like did they see a bounce?
It has been so far, you know. I think part of how they measure their r o I is, you know, do we sell more horses? Right? That's one way. I think. The other is have they grown their brand? Have they enhanced their brand? Uh? And they have a business model that there's a lot of horse auctions out there. So part of their business model is to actually now be the conduit for other horse auctions who will then pay the end to be on this channel, right, so they're
play a little broker. So as an example, that's a completely new type of advertiser that's buying this OTT inventory. And in that scenario, do the Texas stations have any piece of the horse auction channel or is that yes, Well theyn't have a piece of the channel, but they get a ship. They get a commission on the revenue because they were the people that execute the agreement. When the inventory is sold um on stir the state. If the station is selling the package to local advertiser, they
will get their share of that package. If the if it's sold through programmatic, the station doesn't get that share because it's not the station did the local sales through programmatic. Um And then what we do is you have a second piece of this is that we also return. So that's the form of a commission. Then the other thing we do is our whole model is a revenue share.
So any partner who's on our platform there as a station or it's a third party partner, based on their delivery and based on the revenue attached their delivery, they get the revenues from Star. So that is that is the second model for them. Um uh which I guess it is a way they're selling ads. But even if they don't sell an ad, they still get if they're not the ones selling the ad, they'll still get their
share based on the popularity of programming. Most of your stations in addition to making the newscasts on STIR, if I go to Como or w j l A in d C, do most of them offer a live stream of a of a live newscast, Yeah, they do. They What the what again? Where they started? And this goes back to sort of again why they were sort of early in streaming. What they first did is they put the live stream on their website and um, people would watch it, but you know, it really wasn't the primary
people were watching the live news. They were the primaryy they were watching live news was on television. Um. Then there would be a live stream in their local app, but again the local app really was used more for
breaking news or weather or things like that. So what we did with the live news was, instead of just putting up a live stream of it, we said, all these stations do anywhere from you know, four to six hours of live local news a day, even more eight hours on the high end, live local news a day. Why don't we actually create a channel out of it. They're already on a channel right there. They have a channel, and then they're going to syndicated shows, and they go
on through network shows and so on. They have a twenty four seven channel. Why don't we do the same thing. Why don't we do this seventy three times? Because we have seventy three stations that do all this local news as part of the lineup, And so we came up with the channel called the stir City Channel. And so the stir City Channel is a localized channel. It's in the first position on the platform, it's the first position on the EPG. It's powered by the station. So in Baltimore,
it's it's stir City powered by Fox. In Seattle, it's you know, stir City powered by Como News, and the local news will run live on the TV station and on their stir City channel. Then let's use Seattle as an example. If they, let's say, have their morning news from five to seven am, and then at seven am they would go to Good Morning America. Well, on the stir City channel, we wouldn't go to Good Morning America. We go to other programming, and so Stir actually programs
out a seven channel. It's very much like an it's a network. It's the ster City network with local affiliates that put in their live local news. And the reason we did that was because we believe so firmly that linear was the way people wanted to consume uh, streaming video that so much so that there wasn't even we knew it was happening, but the industry couldn't figure out a term for it. Right, it was called a VOD So so if you had a linear a what what
what is that? And sure enough Pluto was in the linear business, Zumo was in the linear business, Stirs in the linear business, Peacocks in the linear business. And on every road who channels now in the linear business. The record Netflix in their own way, is in the linear business.
They're testing a linear channel, right, I think of France. Uh, and an auto play from one episode to the next is a linear experience, right, It's sitting on the couch doing less work, someone curating something for you and and uh And so ster City became the embodied and how we were going to take this live local news and
put it into a ster City just for clarification. If I'm sitting in UM St. Louis and I pull up STIR, I'm going to get a St. Louis focused stream of information, or I will get a pastiche of different Sinclair newscasts from around the country. In St. Louis, you will get a mixt right um. In Austin you will get a local news okay, and and that's dependent on where you
have Staying Okay, go where we have news affiliates. So that's actually the next sort of phase for US now is to add affiliates and markets where we're not in UH. And maybe that's multiple affiliates in markets where we're in right um or or filling markets where we're not in UH. That either comes from partnering with a Stay and we are in pretty advanced talks with a couple to have them come on join a STIR affiliates filling in some of the bigger markets. Um Or it comes from producing
your own news in the market. So in Ohio, for instance, we have stations and Cincinnati Columbus, so we don't have a station in Cleveland. But the idea of using that infrastructure to produce a news that would be relevant for people in Cleveland or Ohio. That's clearly a path. Do you have any national sales layer on this? Do you like do old fashioned like barter? You know, you bundle all the inventory that you have from your stations and try to sell it to National spot buyers? Do you do?
Is that a factor? So there's yes. So there's multiple pieces to it. Like one first pieces is local sales staff going into local advertisers selling the equivalent of local spot uh um O t T inventory. They're either selling stir or they're selling inventory that we've purchased from Broku for instance. UM that isn't in anything we own, but it's we're in a better position to sell that inventory
than Roku is, and so we're arbitrary in a local newscast. Right, it could be in you know, a cable networks app for instance. UM, if they have inventory, we're in a better position to sell it locally and take advantage of that.
So there is local spots sales, then there is National spots sales, and that National Spot sales goes through a company that we have that's called Compulsor t T. And what that does is we go to advertisers in New York that are interested in buying TV and O T T in San Antonio, and we we go to that agency with a package, and that agency then goes by the market and that follows the spot you know, traditional national spot business. It applies out to T as well.
Then there are advertisers that want to buy the whole the whole country, want to buy just just one ftprint, want to buy the platform and so on and uh. That can come in the form of a sponsorship of a channel or of the platform, or they own their own channel like the horse Shopping channel is a national channel as an example. UM. And and because we're linear, because stir City is actually programmed day date and time,
it fits into a network format. So we can actually sell a schedule to an advertiser based on a network basis because it's day, date and time. What is your what is your most important metric? Is it? I'm guessing it's at this point it's not just raw viewership? Is it engagement? Is it time spent with the programming? Like what what do you look to measure your growth? Um?
Organic downloads and usage versus us buying them? Um uh churn you know how many are we keeping and how how how how deep are they getting into the service? So are they spending not just that they spending a lot of time, but are they doing a lot of discovery? And when you say churn in an ad supported environment,
do you mean just engagement? Like if they go for like you would cull churn, if they don't touch the aft for a week or two or something like that, correct, they stop using it, Yeah, which is which is quite common, right, turn and turn in the subscription part or in the ad supporter part is fairly significant. And um, you'll see people in the marketplace, you know, having campaigns in rocou store or Prime Video or whatever, uh or in the
fire TV app store weekly. Right, they're constantly refreshing the churn. They're not just growing, they're refreshing the churn. And um, that's one model you know where you're you're throwing tons of money against something and you're bringing in tons of viewers and keeping them for some part and then hopefully getting them to watch a little bit more, a little bit more, but most a lot of them are going doesn't leave. That's the nature of what's happening right now.
There's a tremendous amount of sampling going on, so so as as an example of what happened with COVID, Right, everyone all of a sudden was at home. People were looking for alternatives to Netflix. Right, Netflix was no longer altern they were looking form. That was Jimmy Kimmel's joke, Right, It was like I watched I finished Netflix last last night. Right. Um, So you had people then sampling like crazy, and if
you were free, they sampled even more. And so the key question for us is we always sort of knew that that would be sort of a moment in time and what would now what would happen after, not meaning after COVID ended, but meaning after you So that spike of people looking for alternatives, we knew it would settle. And the question for us is would we go back to where we were they just come and leave, or
would we maintain some percentage of it? So for us, going back to the metrics that we cared about, we're sitting now. The peak for us was somewhere in May June forty five days I would say of late May through early July was the peak. And um, they were downloading us for all sorts of reasons, and we weren't buying anything. We had no media running during that time we had we were showing up in stores, listings and things like that, and so they were downloading us for
local news. They were downloading us because it was free TV and we had all this sampling. We got to this peak. And when that happens, your session time tanks. So on average we're at about forty minutes or so per session time. You bring in tons of downloads, your session time is going almost some drop because you've got people click and gone basically. And and now I would say we started to drop posts then and then in August September, in October we've settled out in at a
certain level. End results were about a hundred and fifty higher than we were pre COVID. Can you give me, can you give me any kind of a ballpark of what you're what that aggregated audience is sure, so you know we're doing it about forty minutes session time. We have about six million, a little bit over six billion downloads of three and a half million of them are are active. Um. That dates back from January one through uh not that not yes, I haven't done yesterday yet,
but the day before yesterday. Um, And we're in the neighborhood of you know, somewhere over a million monthly uniques. Um. Again, that will fluctuate. You'll see it go signficalarly higher, you see it go below somewhere. So I would say somewhere in that range right now, um, which if you go back and look where Pluto and Zumo and the others were with with far less competition after two years, um, we're right in line based on our understanding of where
their numbers were back then. And where does that in terms of your plane has would you say the pandemic the conditions of the pandemic hav acceller are you like ahead of ahead of war you expected to be at this point because yeah, yeah, like eighteen months ahead, so with no marketing money, right, so we we we really have yet to turn on the marketing part. And the marketing part really comes in two ways. It's it's us going in and spending money in the stores, but it's
really the local stations promoting us. And the local stations have been promoting us a little bit as relates to go to stir to watch your local news, because they're also promoting their app, they're also promoting their website they're also quoting Tonight on their own news on the station, and then we just rolled out their syndicated programming. So in Baltimore again, I think they own the rights to Judge Duty, Family Feud and maybe maybe Wheel in Jeopardy.
I forget, it's all four those shows are now available on and on demand basis in Baltimore on Stir, and they're only available on Stir. Was that a fight with those distributors to get those rights? Did you? Did you have to write a bigger check for those rights? I'm not going to comment on the terms of an agreement, right, but suffice it to say that that I think everybody walked away quite happy. Um and if anything, it was a natural evolution of the partnership between you know, syndicators
and the station group first started. Sorry, sorry, just to get very geeky syndication. Does you know Barter is a part of all big syndication shows. Does the Barter component continue into the into the Stir telecat you know, the Stir simulcast. Absolutely, it's not a Stir simulcast you said on demand, it's an on demand a stir a stir in pattern play because I like using the word in pattern versus the word simulcast. A stirt in pattern play is next, so we have the we have the rights
to do that as well. The first step of this was to roll out catch up viewing. So is it like the next day you can get the next day's episode midnight? I think ye. So yeah. Is there any tension for the stations in terms of in terms of you know, having the potential to have what you call
an in pattern telecast at you know? At the same time, is there is there a gut level of I don't want to let my signal out beyond my you know, linear station, or are your general managers like they're looking at the future and saying we've got to get We've got to be in here too. So I think, um, so,
I think just two parts. That one is I just think as a company, we're looking sort of at allways of district lution of of our station and the programming on our station and uh and then in particularly we're looking at our signals as a as a method of streaming, because that's really what ATFC three DONA is about. Next gen TV is the next generation of a broadcast signal.
It's all about streaming. So all of that is consistent thinking, right as a as A as someone who's on the line, you know, selling day in, day out, inventory and so on, so a general manager, general sales manager and so on. I think there's always a nervousness about seeing your programming, even though it's on something else you may own. There's always a nervousness that it in some way will hurt
your primary way they're viewing, which I get. But the reality is if they're not going to watch you over there, they're gonna watch someone else over there right right, and and that's what's happening. People are moving that. I mean, I gave you some stats from Nielsen, right, there's so much, so much. The viewing is now going on either on an only O T T basis, or on a O T A basis, or a combination of O T T
and streaming, UH and cable. But it's it's the viewing is no longer dominated by one single input, and you need to be in all of them. Thanks for listening. Please leave us a review at Apple Podcasts. We love to hear from listeners. Be sure to tune in next week for another episode of Strictly Business.