With Yahoo, others looking to white-label news content, RNN stands on cusp of an OTT opportunity

Jeffrey Thompson, RNN

Thompson

with Jeffrey Thompson, Senior Vice President & General Manager, Business Development, RNN

Providing white-label news content doesn't seem like an exciting opportunity, but the trend toward providing syndicated news to both broadcast and online video outlets is growing rapidly, with Yahoo looking to purchase a white-label syndicate, News Distribution Network, for a reported $300 million. RNN, a Rye Brook, N.Y.-based broadcaster, has been providing syndicated live local news content to partners like Verizon FiOS (NYSE: VZ) for several years now and recently doubled the size of its studio, adding a multiscreen and social component to its production facilities.

Jeffrey Thompson, senior vice president and general manager of business development, is a veteran of the broadcast and motion picture industries, serving as vice president of global business development with The Walt Disney Co. before taking on a position as SVP of digital strategy at Conde Nast and later, guiding two online video startups. Thompson recently spoke with Samantha Bookman, editor of FierceOnlineVideo, at the NAB show in Las Vegas about RNN's local news model and its potential in the OTT space.

FierceOnlineVideo: What is RNN's unique value to cable and online video providers?

Jeffrey Thompson: Our value proposition is that we've been in the broadcast business for 20 years as a broadcaster, WRNN in New York. We know how to program, we know how to do production and television (at) broadcast quality. Additionally, if we create a television news show, that show has to be exploitable across all platforms at all times, just like "Game of Thrones." Since we have always done white label B2B brand content for others, we have created news content and lifestyle program type of shows around news products that we offer to different partners. Custom packages, traffic packages, weather packages, breaking news, live news.

We have reporters in the ecosystem that started in New York. We cover the New York DMA, 7 million homes. Our biggest partner there is widely known: We have 2 channels there with Verizon FiOS (FiOS1 on Long Island and in New Jersey). That's a partnership, that content is exclusively on the FiOS platform. It's content that we create.

We've won seven Emmys. Four of them have been with content that we've created in news and lifestyle programming for Verizon FiOS. Meaning that we're giving them the ability to be a tool for them to create content that's exclusive and that actually gives them an editorial edge.

FOV: Is RNN looking to expand beyond New York state?

Thompson: I've joined the company in Los Angeles, and you can best believe we're looking at opportunities with the growth of both digital, with what Yahoo is doing, a smart play, but also in the MSO world. Everybody has to have a news strategy. What is missing when companies go to pay TV from another model? Typically what's missing is live events and breaking live news and local news. You have a lot of fragments but what's missing is those live components, especially local news in a top quality way. Consumers go over the top to a certain online portal. And RNN fills that. And that's what Yahoo from a digital perspective is going to be trying to do.

They also brought Katie Couric over from ABC News, and everybody in the news business said … why would she go to little Yahoo? When in fact, most of us that are strategists in this world say that that's where the market is going and so we all have to have an angle. What is our local news strategy across every platform, not just a TV or newspaper platform?

FOV: At NAB, Commissioner Tom Wheeler talked about the local broadcast opportunity, something RNN is taking advantage of. What is a key factor in focusing on local news?

Thompson: It sounds mundane, but … our value proposition is since we're creating the content, we have the resources to create the content on the partner's behalf--it's rights clear. And the challenge with--the reason why the industry, even if the broadcast industry wants to move forward--rights clearances and the rights picture have been so challenging that it's been hard to even get the rights to go live in the national and local market. So that's a significant advantage that our partners and we seek to expand on.

FOV: Whether broadcasters want to talk about online video or not, it's happening.

Thompson: It's going to challenge our ability to keep up regulatory-wise. With the explosion in different types of content, different streams, how people are consuming and accessing it, digital rights management--it's challenging every bit of our ecosystem. But the exciting part is that we have so many choices. I have phones, a laptop, and an iPad, let alone a television. At the end of the day there's less of a concern about how I'm getting my content as [a concern about how] I can get it to work where I want. And consumers are saying that's the choice they want to take.

So there's this broad ecosystem that happens regardless of where in the industry we grew up--traditional or digital--we have to be somewhere in the middle, we have to have the right digital strategy in the space. Consumers are demanding it. And now there's monetization opportunities that didn't exist previously.

FOV: Before RNN, you did business development for a startup called Shout Factory. What unique factors did you see in the content market then?

Thompson: Shout Factory (was a) DVD studio house (that had properties like) "Leave It To Beaver," Richard Pryor, lots of really great content that had never been exploited previously digitally. We launched four partner YouTube channels. As a good example, one channel was the James Brown estate, which wouldn't have been possible five years previously--you only would go through a catalog or third party provider. We went directly to the estate and got rights, and did a direct deal with them.

That's when you started seeing the thought process for opportunities to take the concept direct. With OTT, companies that previously had a middle group involved with their distribution can go direct. So ABC can have an over-the-top strategy to direct its content, but not necessarily have to blend or go through a middle company. At the same token, creative entities or endeavors have the ability to do the same.

MVPDs like Time Warner (NYSE: TWC) that typically bought content, now have the ability to have a direct relationship with their consumers. Some are exploring content that's made exclusively for their platform, which is where RNN comes in. It's … customized for their platform, only for their platform, which they can use to showcase to their partners and customers. So that ecosystem is developing in OTT, (along with) pay per view, SVOD, and video on demand--whether ad-supported or free--and TV Everywhere. All of those will be exploiting OTT type of content.

FOV: How does RNN use social to attract and keep online viewers?

Thompson: Social is a really important part of the business. On the different platforms, social is the glue that in many cases creates excitement and new, fresh news around that content. … When you're on a digital environment, it's hard to do cross platform marketing, because it's hard to create the excitement to leverage all these things you already have. Social is a great opportunity to do that.

Twitter is becoming much more important to our business--so much breaking news is on Twitter. We have an online platform, so all of our content goes to television and is immediately cut up at the same time, to be put on our websites and streamed to tablets and smartphones. That's an extension--when we first started, we only did television. And that'll increase because you can't argue with 100 million tablets being deployed in basically the last three years.

I think the challenge of social in the news business is that we have this contradiction of speed versus accuracy. If we have a natural disaster, that's very challenging. The speed is there. When you need an accurate accounting, which is why news is very important, it's why we have professional journalists (at RNN)--it ebbs and flows. … We preach to our partners that we are journalists. We are traditional TV people that have migrated and expanded into the digital space very quickly, because it's so important, but we have this heritage. It's an important distinction we try to make.

FOV: Retransmission consent and content licensing have been a big issue for broadcasters and providers like Netflix.

Thompson: Absolutely. Unfortunately it holds the consumer, that doesn't understand the business … the average consumer who just wants to watch Jeopardy … is held hostage in a way. You see both the distributor and the content provider doing marketing campaigns for the consumer which is sort of an oxymoron.

FOV: Does white label content resolve some of that?

Thompson: Yes. If you take on demand content … go back to news. The news has never been more popular than it is right now. Local and national. The problem is that the eyes where news is being distributed are all over the place. As we've moved to these platforms, to all-new local news that's rights cleared, that has quality and integrity behind it, it is in many cases underserving the marketplace. So the fact that we have live channels, live breaking news, and in addition to segments that are being refreshed, … the industry will catch up over time. But the industry catches up slowly.

FOV: What do broadcasters do next?

Thompson: Broadcasters are deep in the market, they know their local markets well. But information has become … the news used to be Walter Cronkite where 20 or 30 million people, a significant portion of an audience was watching. And now that model just is not a sustainable model. Time has shifted. Either that anchor type has to be exploitable everywhere and you really market that. In some of these cases the markets aren't (right) for that; you can't do a 30 minute (program). A lot of people are snacking on content, 30 seconds, 40 seconds. Options are given depending on who (the consumer) is. And the marketplace has not necessarily kept up.

We think we're in the front of what others need to be doing. We're sort of evangelizing it. But the fact that we have good people--our news director for example came over from Fox. Our technology guy came from NBC. I came from traditional media. That's exciting and it tells you something. It tells you that some of the really small guys can compete by changing their models out, and providing a service that our partners, like FiOS, DirecTV (NASDAQ: DTV) and others, will seek to take advantage of.

With Yahoo, others looking to white-label news content, RNN stands on cusp of an OTT opportunity
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