Beyond the Sea

North Pacific market “more competitive than it's ever been”
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For more than two decades, KHON has dominated Hawaiian news. Veteran anchor Joe Moore is almost as familiar to viewers as their own family members. But since Emmis Communications sold the Fox affiliate to Montecito Broadcast Group in January 2006, rival stations have begun to pose a more serious challenge to the longtime leader.

HITV-owned CBS affiliate KGMB was No. 1 in the late-news slot in February, and other stations have been forging ahead online and on digital channels.

Hearst-Argyle's ABC affiliate KITV offers interactive elements like social networking, contests and blogs on its Website thehawaiichannel.com, which received 2.7 million page views the day an earthquake struck in 2006 (about what the site normally gets in a month). “We got the message loud and clear from Hearst-Argyle about digital,” says KITV President/General Manager Michael Rosenberg. “We've grown the Web, and it's a profit center for us now.”

Raycom, which owns NBC affiliate KHNL and MyNetworkTV (MNT) affiliate KFVE, is finding revenue in pay-per-view for University of Hawaii sports. The college contests are huge in Hawaii, which lacks a pro sports franchise; KFVE sells season packages for around $300, individual games for about $50 and single games online for $10.

“We've got a good platform with UH sports, so we're looking to shake things up,” says John Fink, VP/general manager of the Raycom duopoly. He's also loading up KFVE with music shows for its young-skewing viewers; the summer-Fridays program Heineken Hot Hawaiian Nights is particularly popular.

Smack in the middle of the Pacific Ocean, Honolulu is a unique market. With the nearest DMA a few thousand miles away, there's no expectation of grabbing viewers from neighboring markets. “It's just whales and dolphins out there,” says Fink.

The cost of living in Hawaii is high, given that most goods need to be shipped in. But, after a bleak economic decade in the 1990s, the market is rebounding. Tourism, as always, rings the register, and defense and construction are robust as well.

Honolulu is a lucrative battleground for stations. Though the No. 72 Nielsen market, it ranks 67th in terms of revenue, taking in $71.9 million in 2006, according to BIA Financial. KHON took the lion's share in 2005 (the most recent station numbers available), with $18.9 million, followed by KGMB ($13.1 million), KITV ($12.9 million) and KHNL ($11.23 million).

While Raycom has the MNT affiliate, Montecito carries The CW on its digital tier. Cable penetration is estimated at an extraordinarily high 90%, with Time Warner the major operator. Station managers say that satellite has made only a perfunctory effort to do business in the state.

As Raycom's Fink sees it, the market is “more competitive than it's ever been.” Still, KHON remains the clear leader. The station won morning and evening news. With its single-anchor format, the evening newscast tops the Big Three's national newscasts at 5:30 and doubles the closest competition at 6 p.m.

At KHON, three-hour Hawaii's Morning News “does gangbusters,” says News Director Lori Silva. And Joe Moore still holds sway after all these years. “He's a great anchor with good delivery and good stories,” says Silva. “People trust Joe.”

Next: St. Louis

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