We Are Not a Start-Up

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We Are Not a Start-Up L0353_COVER 4/3/01 11:10 AM Page 1 WE ARE NOT A START-UP. FISHER Communications, Inc. Annual Report 2000 L0353_COVER 4/3/01 11:02 AM Page 1 L0353_COVER 4/3/01 11:00 AM Page 2 L0353_Narrative 4/3/01 3:24 PM Page 1 WE ARE NOT JUST A RADIO AND TELEVISION COMPANY. Companies that grow have one foot in a substantial portfolio of expertise, the present and the other in the future. licenses, and infrastructure generated Fisher Communications started broad- by these legacy businesses. This foun- casting in 1926, and now owns and dation enables us to attract additional operates 26 radio stations and reaches audiences by providing localized news nearly 4,000,000 U.S. households with and entertainment through a combi- its12 television stations. The result is nation of traditional and new media. L0353_Narrative2-3 4/3/01 3:46 PM Page 2 THIS IS NOT AN OFFICE BUILDING. FISHER COMMUNICATIONS, INC. AR 2000 L0353_Narrative2-3 4/3/01 3:46 PM Page 3 AND THESE ARE NOT TENANTS. Fisher Plaza is living proof that necessity tion isn’t linear. Through continuous for “tenants” in this facility. You’ll find sparks invention. In the process of experimentation, a new and different instead pioneering enterprises like Civia, designing and building this world-class facility formed around a community Internap, TechTV and Terabeam, communications hub to accommodate of value-adding enterprises that are plus stalwarts like KOMO Television, extraordinary growth in the information actively expanding communications ABC News Bureau, and the BBC. industries, we discovered that innova- technology and services. So don’t look 2/3 AR 2000 L0353_Narrative 4/3/01 1:53 PM Page 4 FISHER COMMUNICATIONS, INC. AR 2000 L0353_Narrative 4/3/01 1:53 PM Page 5 FORGET HIERARCHY. It just doesn’t work for enterprises that choose innovation over stagnation. Beyond the talk, we’ve taken direct action to increase functional integration in the organization. Key roles, not textbook titles, are the drivers of creativity. And collaboration and accountability among co-workers and between Fisher teams and strategic partners is encouraged and expected. Who says you’ve got to be a dot-com to be nimble? 4/5 AR 2000 L0353_Narrative2-3 4/3/01 3:55 PM Page 6 THEY’RE NOT JUST WATCHING TV. While oligopolies had certain economic browse for personalized information; cell advantages for information providers, they phones, and palm pilots. This is territory offered very little choice for audiences. where real service has to be provided, Indeed, life has changed. Today the new viewing and listening loyalties are information choices are staggering: over formed, and enduring brands are built. 1,500 viewing channels, thousands of Pushing and shoving is passé. We must radio stations, music on the PC while you give audiences reasons to come to us. FISHER COMMUNICATIONS, INC. AR 2000 L0353_Narrative2-3 4/3/01 3:56 PM Page 7 OUR AUDIENCES ARE NOT PASSIVE. 6/7 AR 2000 L0353_Narrative 4/3/01 1:54 PM Page 8 L0353_Narrative 4/3/01 1:54 PM Page 9 THIS IS THE BALANCING ACT: BECOMING A FULLY INTEGRATED COMMUNICATIONS AND MEDIA COMPANY. The tasks seem clear. Efficiently oper- the parts keep moving while the plans ate and grow the legacy businesses; are being diagrammed, so it’s neces- create and sustain new enterprises sary to focus simultaneously on oper- that are based on audience needs; ations and strategy. Moreover, it’s also identify ways to derive benefits from imperative to know where we’re head- these complementary endeavors. ed as we create the strategies to take But the ongoing challenge is that us there. L0353_Narrative 4/3/01 1:54 PM Page 10 VISION “A high-performance communications and media company.” MISSION “Win the hearts and minds of our audiences.” VALUES Integrity. Community. Innovation. " DEAR SHAREHOLDER I’m convinced that the success of a business enterprise is determined largely by the achievement of two principal goals. First, it must differentiate itself from competitors by generating superior ideas, products, and financial results. THIS IS Second, it must maintain these competitive advantages over time. Of course, like many WHERE WE’RE GOING. fundamental axioms, these are more easily stated than accomplished. We’re all too familiar with the failure rate of both new and older enterprises in this fast-moving and unforgiving economy. With these demanding requirements constantly in mind, Fisher has been working hard to identify and exploit the crucial drivers that create and maintain competitive advantage. We’ve been asking ourselves a lot of questions about what can make components of the Fisher “system” most effective. As a result, the year 2000 was notable for the number and importance of decisions intended to help make the company operate efficiently in the present and prosper in the future. Among the most visible changes we’ve made are the coordinated re-naming and re-branding of the company. In keeping with our vision of becoming a “high- performance communications and media company,” we are now known as Fisher Communications, Inc. And consistent with our mission of “winning the hearts and minds of our audiences” by developing and delivering localized information and entertainment through a variety of channels, we have modified our corporate identity to reflect Fisher’s traditional strengths in broadcasting as well as the creation of new media. Finally, we have added Innovation to Fisher’s traditional values of Integrity and Community to emphasize the fundamental role this attribute will play in shaping our future. I believe Fisher Communications is well positioned to be successful. Our radio and television stations continue to produce substantial financial returns that can be used to build innovative content and delivery systems for rapidly expanding information markets. Fisher Plaza, designed and operated by our commercial properties division, is arguably one of the most technologically advanced communications hub facilities in the U.S., if not the world. And beyond infrastructure, we have resident intellectual capital devel- oped over decades of refining broadcast operations and making key acquisitions. Nonetheless, we’re also very aware that staying ahead of relentless competition and extending our advantages will not occur without fashioning a system that consistently incorporates new ideas and business alliances into new business models. Continuous FISHER COMMUNICATIONS, INC. AR 2000 L0353_Narrative 4/3/01 1:54 PM Page 11 innovation demands a highly functional organization through which information flows freely and timely decisions are made. Accordingly, much of our work over the past year has focused on the structuring and integration of these critical systems that will support " our current and future strategic business units. Fisher’s function-based restructuring has taken the form of closely aligned units that work in concert to integrate strategy and implement operational decisions. These are directed by members of an executive management team that includes: Chief Operating Officer, Chief Financial Officer, Chief Communications Officer, Chief Research Officer, Chief Information Officer, Chief Technical Officer, Chief Learning Officer, Chief Properties Officer, and Presidents of the broadcasting and media services operations. We believe this arrangement should help improve efficiencies and bolster our efforts to generate and implement more robust strategy to drive operating results. We also have concluded that the best structure to support Fisher Communications, Inc.’s business strategies consists of three operating divisions: Broadcasting, Media Services, and Properties. The manner in which we respond to market demands is equally important for our long-term growth. To that end, we’re seeking to expand our relationships with customers and audi- ences by distributing content and the Fisher brand through additional channels. And with highly capable strategic partners we are co-developing ways to repurpose and more fully utilize existing broadcast content by delivering it through alternative media channels such as cell phones, the Internet, and web-enabled personal digital assistants. In effect, we want to be able to provide our audiences with news, information, and entertainment that they want, when they want it, through communications devices of their choosing. Later in this annual report we will highlight four components of this strategy to expand our capabilities and audiences. These include Civia Networks, Fisher Pathways, Fisher Entertainment, and the aforementioned Fisher Plaza. OVERVIEW 2000 In last year’s annual report, I discussed three related activities that would occupy the attention and resources of the organization in 2000: broadening our reach; sharpening our focus; and leveraging our competencies. I’m pleased to report that we accomplished a number of tasks related to their fulfillment, but am fully aware that the improvement of our enterprise is ongoing. Acquisition of 11 television stations from Retlaw Enterprises, Inc. in June of 1999 extended Fisher’s reach into additional regions and to new audiences. Our current total of 12 stations enables us to reach nearly 4,000,000 U.S. households that we intend to serve by providing Fisher-based content through a variety of media systems. 2000 was the first full year of operation for our expanded television business and an extraordinary year for television revenue. While exceptionally strong sales were driven in large part by the national election and the consequent demand for advertising airtime in the swing states of the Northwest, the company also benefited from the greater reach provided by the additional stations and the efficiency of their operation. Industry statistics and our own assessments indicate that advertising demand in 2001 is likely to be more comparable to that of 1999. As promised, we continued to sharpen our focus by concentrating on communications and media. Fisher’s board of directors, in a special meeting on October 27, 2000, 10/11 L0353_Narrative 4/3/01 1:54 PM Page 12 authorized management to complete the sale of its flour milling and bakery products distribution businesses.
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