Papers: Print's Not Dead Yet, But Diversify
NEW ORLEANS -- Twin themes are quickly emerging at a joint meeting of newspaper trade groups here: Companies need to diversify their revenue streams as quickly as possible, but print is far from dead.
Four major publishers emphatically declared that they had no plans to reduce their print schedules in the next five years during an "executive roundtable" discussion on Tuesday at the MegaConference, a joint meeting of the Local Media Association, Southern Newspaper Publishers Association of America and the Inland Press Association.
"In Minneapolis, no possible way," said Michael Klingensmith, publisher and CEO of the Star Tribune Media Co.
Both Larry Kramer, president and publisher USA Today and Terry Kroeger, publisher of The Omaha World-Herald and president of Berkshire Hathaway's BH Media Group, hastily agreed.
Moroney said that his readers included a core group of brand loyalists who "won't trade down" off of print to become exclusively digital subscribers. "We say in Texas, 'you're going to take my newspaper out of my cold, dead hands,'" he said, noting that moving in a digital direction has to happen without forsaking die hard print readers.
Moroney noted that between 32%-33% of the A.H. Belo Corp.-owned Morning News’ current revenue comes from its subscribers. Klingensmith said that 43% of the Star Tribune’s revenue came from subscribers in 2012.
But if publishers were adamant about keeping their print subscribers happy, they were equally bullish about diversifying their digital revenue streams. Digital agency services emerged as primary candidate for doing so.
The Morning News launched two new companies last year to that end. One, Speakeasy, targets medium- to large-sized businesses, while 508 Digital, a local iteration of Hearst Corp.'s LocalEdge product, aims for SMBs.
For publishers still hazy on the revenue potential from such services, Moroney offered a more concrete picture. He said the company had over 500 customers on 12 month contracts with an average value of $475 per month per client.
Klingensmith, whose paper was the second to white label the LocalEdge product as Star Tribune Radius, said his deals ranged from $250 to $12,000 a month, and that he was looking toward profitability from the services within 18 months.
Kramer said that USA Today owner Gannett Co., which offers its own digital services agency product, was also pushing towards diversification. He estimated that print advertising is less than half of what Gannett's sales reps are currently selling and that SMB-targeted services were key to broadening their reach.
"It's integral to [publishers'] relationship with local businesses," Kramer said.
Moroney added that content marketing was another huge opportunity worth seizing. "Dollars are going to be flowing from other areas into content marketing," he said. "Marketing has become a content war and nobody is better positioned to win a content war than a content company."
But whatever new ventures newspapers take on, Moroney also warned them not to neglect their core value. "The biggest threat to our industry is the continued downsizing of our newsrooms," he said. The whole point of diversifying revenue is to maintain the crucial scale most newsrooms still enjoy in their markets, which remains their key differentiator.