Category Archives: Revenue
Some parting words about what our industry needs to do
Folks, this may well be my last post — and I mean to try to land one more punch on the way out.
In the five years since I created MediaReset.com, I’ve tried once a month to serve up to our industry what I had learned and was continuing to learn about how to diversify our declining business and return to growth.
As I look back through the posts I’ve written, I see a rich backlog of ideas, possibilities and perspectives that still apply today, Some of these I was able to bring to fruition in my day job. Some I wasn’t, but I still believe they have important potential.
And now, for a combination of personal reasons, it’s time for me to stop.
There are two triggering causes.
First, Morris Communications, where I’ve been director and then vice president of strategy for the last 8 years, has sold its newspapers. (More about why below.)
When the sale process began early this year, my work — trying to find and implement new business strategies and initiatives for Morris Publishing Group — stopped. So I’m no longer trying to explore the margins and frontiers of the business.
Second, I’ll turn 67 in December. Retirement beckons. In January of this year, I reduced my work schedule to four days a week. Now, with the sale of the newspapers, that’s more than the company needs. So I will be reducing my work at Morris still further, going to an on-call consulting basis.
How are we doing?
As I step away from the business that’s been my career, as well as my father’s and grandfather’s, I wish I were more hopeful about its future.
There’s much that a newspaper company can be doing to diversify — to serve readers, advertisers and communities with great new solutions that could produce a growing business. But I see hardly any newspaper companies doing it fast enough to offset the steady decline of the core business.
On the content side, I believe great pioneering work could be done to make us indispensable to large and growing local audiences. But too many of our newsrooms are stuck in the news definitions of the past. See last month’s post for a recap of five years of ideas on what we can and should do to become more relevant.
The problem on the advertising side is less under our control. Now that virtually everyone in our communities is reachable digitally, ads simply don’t need news as a distribution channel. Ads can go wherever their desired audiences are, targeting individual characteristics and behaviors. Our print products and websites are still viable options for advertisers, but there are better choices out there.
We need to be making the advertising and marketing moves today to be viable in the near future, when print advertising will no longer be any business’s preferred choice.
Can digital save us?
The best newspaper companies — and I count Morris Publishing Group among them — have driven themselves hard for 20 years to get their share of the rising local and national spending on digital advertising and marketing.
The trouble is, our digital properties — websites, emails, apps, etc. — are tiny players in the vast digital space. And the digital giants, Google and Facebook, are increasing their already huge dominance.
Several years ago, the leaders in our industry pushed beyond selling only their own digital properties to selling everyone else’s, too. In our markets, we need to be the absolute best of all contenders at putting a business in front of the right potential customer, through all the most effective channels.
We can’t just be “newspaper companies” any more; we need to be the best digital marketing solutions companies our customers can find.
What should we be doing?
I’ve tried to describe this vision in many ways, and the potential arsenal of solutions we should be offering. To wit:
We could build or grow an ancillary business in events and event marketing.
We can develop digital marketing agencies, as I described here.
We can do all of the following, which I described in the linked posts: e-commerce, content marketing, data marketing, predictive analytics, in-store promotions.
If a newspaper company did all of these, could it reverse the revenue losses and actually start growing? I think it’s a real possibility. Any company that did all of this would have a much broader and more diverse revenue base, including multiple rising trend lines.
The problem is, doing even one of these initiatives requires vision and strong leadership at the top — and a big investment in people, training and technology.
Doing one or two of them seems to be about as much as most of our struggling companies can manage. The best companies might tackle three or four — and it still wouldn’t be enough.
I know this by experience, in the companies where I’ve worked. We’ve tackled as many innovations as we could, and it hasn’t been enough to reverse the declines in the core. Which brings me to the crucial strategy for closing the gap: acquisitions.
Today, many newspaper companies are still generating healthy profits, even though the dollars are shrinking every year. Any owner who is serious about returning to growth simply must plow a big share of those profits into buying related — or unrelated — businesses that are growing.
The acquisitions piece
I described that approach here, with reference to Procter & Gamble — and to Jim Moroney and the Dallas Morning News organization. Jim has been the industry leader at diversification, at least in the United States.
So, with all these strategies, could newspaper owners get those plunging revenue lines to turn upward? I think so.
But will they? I’ve seen enough to believe that most won’t. It’s a very tall order, requiring not only vision, courage and investment, but also scale.
How big is scale?
We didn’t have enough scale at The Monroe News, the single, stand-alone daily paper that my family converted to 100-percent employee ownership. Despite our best efforts to diversify revenues over a decade, we didn’t have enough resources or scale to reverse the trend. So, in 2015, it fell to me as chairman to lead the board in selling the company to GateHouse Media.
And scale is what, ultimately, we didn’t have enough of at Morris Publishing Group. Even with 11 daily papers and a long record of innovation, we weren’t able to reverse the trend. The sale to GateHouse was announced in August and closed at the beginning of October.
If you are an owner or a senior leader in this industry, I have to ask you — are you getting it done? Are you doing enough to offset the decline of the core? Can you? Will you?
In the throes of battle
When you’re fighting the good fight and you’re in the thick of it, it’s easy to believe you’re doing all you can do — and to hope it will be enough.
But if you’re not offsetting your revenue losses, I urge you to think again. Whoever said, “Hope is not a strategy” could have been talking about the newspaper industry today.
If you’re staying in the business, it’s time to double down on diversification — through content innovation, advertising and marketing innovation, and acquisitions beyond the boundaries of our declining core business.
I’ve been preaching this way for 12 years now, and I feel that I’ve done what I could. It started with the Newspaper Next project from 2005 to 2009, in which I taught new innovation strategies to more than 5,000 people in the industry in the U.S. and around the world.
It continued at Morris Publishing Group from 2009 to this year, where I got to explore and help to launch a big handful of innovative programs, products and strategies.
And for the last five years, I’ve done my best to share my learnings through Mediareset.com. I hope you and others have found these posts helpful.
Now, it’s over to you.
I’ll leave my blog up for the indefinite future, so my work here will remain available. And I’m thinking I may write one more post in a month or two, speculating on what might happen a decade or more in the future, if newspaper companies as we’ve known them cease to exist.
Until then, farewell.
To contact me: steve.gray[at]mediareset[dot]com
In Jacksonville, a new business model for the local editorial voice
Back in April, I lamented the steady decline in commitment to local editorials across the shrinking newspaper industry with this post: “Editorials: Headed for extinction?”
It’s a sad story. As ad revenues tumble and newsrooms shrink, so, too, are owners’ commitments to strong, impactful local comment in editorial pages.
Editorials lack any clear business model, so they’re vulnerable to cuts. Never mind that a strong, community-leading editorial voice can be a hallmark of our local brand and a reason we are seen as essential in the community.
In April, I hinted that I would blog on this subject again soon. One of the Morris publishers, Mark Nusbaum at the Florida Times-Union in Jacksonville, was working on an entirely new way to amplify his paper’s editorial voice and build a bold new business model around it. But it was still in development.
Last week it hit homes and businesses in Jacksonville. Read the rest of this entry
The next media disruption tool: Predictive analytics
Yeah, sure — Big Data. We get it, right?
We all know that the digital age is producing huge amounts of data about consumers and their behavior. And, sure, we know that anybody who’s in the marketing and advertising business — like local media companies — needs to get good at it. Right?
Not that we’ve quite learned how to do it yet. But surely we know — don’t we? — that we simply must master it to benefit both ourselves and our customers? And we’re working on it, right?
Well, I am. I hope you are, too.
Why? Because somebody is going to bring Big Data to Main Street. If it’s not us, Big Data will be the next big wave of disruption in our advertising and marketing business. It’s guaranteed to whittle down our local media ad revenues still further. Read the rest of this entry
Can local media find a new home in real estate?
Ah, real estate. It used to be such a wonderfully profitable sweet spot for newspapers, back in the dear, now-dead days before the Web. And now it’s just a shadow of its former self.
The real estate business itself is doing okay these days, although it always has its ups and downs. It’s print real estate advertising in newspapers that’s been deeply and permanently disrupted.
The question I’m trying to answer these days is, isn’t there another model through which local media companies can play key roles in the real estate market? Read the rest of this entry
Is the events business right for media companies?
Many local media companies are viewing events as a great way to bring in new revenues and support the future of journalism.
And the industry has seen some notable successes. Jason Taylor’s energetic advocacy has lit up many a convention stage since he started as president of the Chattanooga Time Free Press in 2007. And Brent Low, CEO of Utah Media Group in Salt Lake City, has made events a cornerstone of his diversified revenue model since he was publisher in St. George, Utah, more than a decade ago. Read the rest of this entry
Local media need to think bigger about the Big Data opportunity
Data, data, data. From every direction lately, I’m being hit with urgent reminders about the imperative for local media companies to master data.
Every day, I’m more convinced: This is the next wave of threat — or opportunity — for local media companies. That’s how disruptive innovation works — you either grab the opportunity, or you are overrun by it.
As Big Data marches down upon us, I’m reminded of Longfellow’s poem, “The Midnight Ride of Paul Revere.” It tells how, on the eve of the American Revolution, patriots gave warning of the British Army’s advance by hanging lanterns in the belfry of Boston’s Old North Church:
“One if by land, two if by sea.”
I’m hanging out three lanterns. Big Data is bearing down on us right now — by land, by sea and from every other direction. Read the rest of this entry
10 years later: Seven disruption lessons from Newspaper Next
In the fall of 2006, as the Internet was devastating the newspaper industry in earnest, the American Press Institute unveiled a new program to push back against the disruption.
We called the project Newspaper Next, and its first report was called Blueprint for Transformation.
Ten years later, what did it accomplish? And what should we still remember from that body of work? Read the rest of this entry
Thought experiments can put us ahead of the media disruption curve
Let’s try some thought experiments, in the best tradition of Albert Einstein.
The hypothesis we’ll explore is this: That the large, lucrative revenue stream that newspaper companies have enjoyed from major/national advertisers will decline to something approaching zero.
Our thought experiments will examine what we should do about that. Read the rest of this entry
See Big Data and glimpse the future of advertising
I’ve been getting a series of demos from Big Data providers as we at Morris Publishing Group work to figure out how we will offer Big Data services to local advertisers.
Just lately, we’ve been getting down into the details. For me, this brought a profound leap in comprehension.
It was like staring into a crystal ball and seeing a monumental event that’s about to change your life. Read the rest of this entry
Take a disruption lesson from Procter & Gamble
What could disrupted legacy media companies possibly have in common with Procter & Gamble — the huge and perennially successful consumer goods manufacturer?
One thing we have in common is that we both need to recognize and plan for the continuous loss of revenue from declining products.
We don’t think of P&G as needing to cope with fading products as an endemic part of its business. But 10 years ago, when I was leading the Newspaper Next project for the American Press Institute, I learned that part of their success lies in the careful planning they do to offset those declines.
We in the media business can take an important lesson from P&G’s approach. Read the rest of this entry