Hearst's Frank Bennack Sees Opportunity For 'Legacy' Media
Frank Bennack Jr. got his start in business as the poor man's Dick Clark.
Frank, now the executive vice chairman and former CEO at Hearst, hosted a dance program called "Times for Teens" in his hometown of San Antonio. He even sold ads for it.
I asked him if he ever wanted to have a career in show business. "The short answer is not different from what I've been able to do, and that is to gather some assets from Hearst that fit the category [of entertainment] in general," he said. "Who would imagine that I would ultimately end up running a company that owned as many television stations and cable networks et cetera as we do? So, very valuable early training."
Frank was inducted into the Advertising Hall of Fame this year, so I took the opportunity in a video interview to ask him whether the legacy media business in these challenging times could see newspaper and magazine revenues stabilize and even start to revive.
Hearst's newspapers are on their fifth year of bottom-line growth, but he said, "We have to do more" than what newspapers historically have done—get subscribers to pay for delivery and advertisers to pay to reach their customers.
Frank likes the idea of using the fashion expertise of Harper's Bazaar or Town & Country for exhibitions and shows.
If they're going to return to good growth, he said, "it has to be as line extensions along with having the best product. What I tell our folks all the time is, 'Where we have the best product, we win in the marketplace. Where we don't, we don't.'"
Hearst works under the premise that "there's an inherent knowledge that nothing stays the same. That has been accelerated, of course, in recent years, and the ability to recognize how fast that's going to change and to be able to change yourself at a more rapid pace are all part of what makes the difference," he added. In fact, Frank said that more than 90% of the businesses that Hearst has today either didn't exist or weren't owned by Hearst when he became CEO in 1979.
"Part of the challenge in the modern world is to be smart enough to continue to invest in those things even though you know that 10 years from now they're not going to be as important to your business as many of the new things you're doing. But they're often the platform from which you spring to new products," Frank said.
Hearst has been especially successful with partnerships. "I learned pretty early that we could grow the company more rapidly with partners than if we had to finance it on our own, and not being public and not being interested in taking the company public, partnerships seemed fairly natural."
During Leonard Goldenson's reign at ABC, Hearst decided to get into the network cable business. "We also knew there would be significant losses along the way," Frank said. Lifetime, based on women's interests and information from Hearst magazines, was the first joint venture, followed by A&E, the History Channel and the biggest success of them all, ESPN (Hearst's share is said to be worth $10 billion).
It took a number of years for the ventures to be profitable. "And since then we've often partnered, because it puts you ahead of the game more rapidly than if you had to do it entirely on your own," he said.
Hearst invested in BuzzFeed and Netscape because "we wanted a seat at the table so we could learn what [digital] was all about, but we also wanted businesses that would shelter us from the changes in our preexisting base."
Frank is not convinced that old-line companies like Hearst "will have to play second fiddle" to companies like Amazon and Google. "There are going to be new areas of opportunity for serving people, serving constituencies, serving advertisers in the future, and we know enough about it to play in that arena that we didn't know when those companies were started," he said.
Frank isn't convinced that the internet "is a more powerful force" than TV. "There is still some challenge as to the effectiveness of the internet as an advertising medium. If you undertake to build brands, that hasn't happened on the internet in the same way that brands were built historically through television, through magazines, through newspapers."
To compete effectively in the next 100 years, Frank contends Hearst needs to be "a little smarter" about how it uses the combined power of all its media. "We're just now on first base at learning how to do that well," he said, "and we intend to come all the way around and touch home plate."