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Sustainable Growth Strategies for Newsroom Evolution

Explore the key to sustainable competitive advantage in today's news industry, emphasizing differentiated local products and revenue diversification. Learn about scaling newsrooms for success and navigating the evolving media landscape.

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Sustainable Growth Strategies for Newsroom Evolution

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  1. Paying For Newsroom Scale Jim Moroney April, 2012

  2. Strategy for Success • Differentiated and relevant products: • Local news and information • Sustainable competitive advantage: • The scale of your newsroom • Apply your scale: • Breadth and depth of local reporting

  3. The Dilemma Is Your Competitive Advantage Sustainable? Not, unless we diversifyour sources of revenue

  4. Why Our Industry Should Care 1 3 TV newsrooms win Promotion platform Exclusive prime time & sports 2 Two ubiquitous distribution systems

  5. The problem circa 2008 • Q2, 2008 = 10 • 80/20 • 80/20 • 60/40 • 50/50?

  6. One Solution • Inelasticity of home delivery pricing • Rate x Volume = Total Revenue • Increases in rate mean declines in volume, yet total revenue still goes up • Example: $240 (rate) x 300,000 (volume) = $72,000,000 • Raise Rate: $360 (+40%) x 252,000 (-14%) = $84, 672,000 Total revenue increase: +$12.6M or +18% • Total Revenue Increase: +$12.6M or +18%

  7. Results 2007 2011 Advertising 54% Advertising 78% Circulation 18% Circulation 39% Production & Distribution 7% Production & Distribution 4% $125 Million

  8. Next Logical step: Gated Premium Content Our Approach: • Web site and apps available for free • Wires and commodity news is free with unlimited access • Differentiated, relevant local news and information requires subscription

  9. Results to date • PV's and UV's decline by -35% • Authenticated 40% of print subs in first year • Digital only subscriptions continue to grow, but modest • 70% of new print subs as of October, 2011 opt in to pay for digital access • iPad replica edition sessions average 28 minutes

  10. Parting Thoughts • Print ad revenue decline is secular and permanent • Digital advertising provides revenue growth but insufficient to support present scale • Diversify sources of revenue and decrease dependency on print advertising • Home delivery pricing is a good place to start • Consider offering marketing services, especially digital/social • Two-thirds of marketing spending in the US is not advertising: it's "below the line"

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