Should I Spring For The Expensive Paper?

February 15, 2004

From Jim Metrock:

I am posting this from a hotel just up the street from the Broadway headquarters of Channel One News. I was in town to talk to some important people about the marketing geniuses at C1N.

I dropped by their headquarters on Friday. It was about 4:30 and I didn’t have an appointment. This was the first time I have been to this location for Channel One’s headquarters. (They don’t stay in one spot for long.) It is not a bad office building, but it is a far cry from the ritzy offices they had several years ago on Madison Avenue. I know the folks that remain at Channel One miss the old place.

I’ve been to their Madison Avenue offices a couple of times, even got a tour once.

Before Channel One was at the really nice offices on Madison Avenue, they had even better accommodations in Knoxville, TN. No, really, I know what you are thinking, “Knoxville?” Back in the good ole days for Channel One, employees worked in the splendor of “historic Whittlesburg.” That is what they called the $50 million building built by Chris Whittle in downtown Knoxville.

The trend is clear: Channel One News employees have gone from working in a palace which the company owned, to renting an entire floor in a ritzy Madison Avenue office building, to sharing a floor, with several other PRIMEDIA companies, in a standard-issue office building at 1440 Broadway.

Channel One is owned by PRIMEDIA and last week PRIMEDIA announced a change in corporate structure. I believe this change is a bad sign for Channel One employees. Channel One is now in a division called Education and Training which includes PRIMEDIA’s Workplace Learning and Films for the Humanities. All these companies are hurting. Here is what the earnings statement said:

“Education and Training Segment revenues were $34.3 million in fourth quarter 2003, down $4.4 million or 11.4% Advertising revenues, which are all from Channel One, were $15.0 million, down $0.8 of 5.1% in the fourth quarter 2003. In the Circulation and Other revenue categories, cutbacks in corporate training demand continue to pressure Workplace Learning subscription revenues and product sales. Also in the Other revenue category, declines at Films for the Humanities reflect continuing constraints on state and local education budgets.”

I listened to the conference call PRIMEDIA had with analysts. The analysts were told that this division would face challenges. What was interesting was what was NOT said. None of the PRIMEDIA people said anything about Channel One News. That is highly unusual. They often go to great lengths to put together something that sounds positive, like, “Channel One posted a 10% increase in new advertisers.” Something like that says nothing about total ad revenue or that the company may have lost more advertisers than they gained, but it was still something to say. This time – nothing.

The company now has put three struggling companies into one bag and it wouldn’t take a marketing genius to see PRIMEDIA dumping these turkeys soon.

I can imagine Channel One employees have been working on their resumes. This is a smart thing to do. The days of showing schoolchildren commercials is going to be over very soon. I would offer two suggestions about the resumes. Yes, I would spring for the more expensive, heavyweight paper. You don’t want to go “cheap” now, OK? You only have one chance to make a first impression. And second, I wouldn’t list “Channel One News” as a previous employer. Trust me on this on. It could really weaken your chances for your new job. Think about it. Would YOU hire a person who worked for a company that made their revenue by converting children’s school time into advertising revenue?

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