NAA mediaXchange 2014

Pubs: Papers Need Entrepreneurial Space

Newspapers need to be more entrepreneurial going forward and experiment with new products in an effort to stave off competition from digital pureplays, say three of the industry's leading publishers, speaking during a session at the NAA's mediaXchange on Tuesday. The panel also addressed programmatic buying and media industry ownership trends.
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DENVER -- Newspaper publishers charting their long term future need to leave themselves more entrepreneurial breathing room, even for models that disrupt their own business lines.

That was the thinking from three of the industry's leading publishers at the Newspaper Association of America's mediaXchange conference here on Tuesday as they ventured a look ahead at their industry on the fronts of programmatic buying, ownership trends and their ongoing competition with digital pureplays.

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Larry Kramer, president and publisher of USA Today, stressed the importance of creating a walled entrepreneurial group or projects within the company with the space and funding to experiment. He says the leadership at Gannett Co., which owns the paper, understands that it needs to take risks to avoid another grand-scale disruption on the order of Craigslist.

Robert Dickey, president of Gannett's U.S. Community Publishing Division, says Gannett has made funding commitments that won't waver based on quarterly reports. "Our employees now believe that we really are entrepreneurial," Dickey says.

Which isn't to say they aren't going about it responsibly, Kramer adds. "You still have to use the same value system" in pursuing projects, he says, accepting less profit in one area to fund experimentation.

"We have to be willing to take risks, testing in various markets," Dickey says, noting that Gannett has 80 from which to choose.

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Michael Klingensmith, publisher and CEO of the Star Tribune in Minneapolis, says that in contrast, "just being a single operation" has helped his paper on the experimentation front.

Having a single paper has made the company more nimble and able to try new things, he says, adding that he has brought in staffers from outside the industry to help broaden perspective.

Coming from a 30-plus-year career in magazine publishing at Time Inc., Klingensmith says he also brought his own tricks from the magazine industry that have buoyed the paper. The most important was immediately putting a pay meter in place, but he says the company also spent a lot more money on direct response and general marketing to help to sell subscriptions.

"We put much more focus back in the quality of our print product," Klingensmith says, including adding more pages and new sections to reaffirm its value position and strong brand standing with readers. The Star Tribune has also kept its staffing levels, unlike other papers beset with layoffs.

Dickey says that taking another look at print and its ongoing value for advertisers is a major initiative at Gannett. "We're not pricing to our advantage," he says, noting that the company is looking at a much better ROI on CPM advertising on a print basis going forward.

"We're missing out if we don't take advantage of the large audience that print still brings," Dickey says. Kramer notes that celebrities often go cold on doing interviews with USA Today if they aren't assured that the story will carry in print.

Another area where Klingensmith sees strong potential is programmatic buying, where he says his company has seen "tremendous success" because of a clever digital staff. That staff has used data to increase CPMs from the low dollar amounts to the $5-$6 range, he says.

"It has had a material effect on our overall revenue stream," he says.

Asked by Katharine Weymouth, publisher and CEO of The Washington Post, about the emerging ownership trend among wealthy entrepreneurs such as Jeff Bezos, Pierre Omidyar and Warren Buffett in the media industry, the publishers generally saw it as good for business.

"It's a very positive sign for the newspaper industry that quite a variety of people are interested in ownership," Klingensmith says. "It's great to have those fresh faces."

As to the industry's ongoing pressure from digital pureplays, as well as more ideologically-driven media, he says publishers need to hold the line on integrity in their voice and products. "It's not in our best financial interest to move past a line that you have to use judgement about," Klingensmith says.

But that isn't to say that papers can't start getting more expansive in their use of voice and reportorial style, where Kramer and Dickey say they are allowing more latitude.

As they looked forward, the publishers also took a step back when asked what advice they would've offered to their predecessors in the industry 15 years ago.

"At the time when we had the cash flow, we should have been much more aggressive about a product development mentality around digital," Dickey says, noting he would've begged for more collaboration across the industry.

"If you look at what we're competing against, had the industry gotten together those ideas should've been ours," he says.

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Comments (3) -

MediaBigData Nickname posted over 3 years ago
Lucid.
ischolar94 Nickname posted over 3 years ago
Great article. Every newspaper owner in the world should subscribe to this method (15 years ago)! It's very simple but for some reason, "so complex" for newspapers to understand not just the WHY it should be done (money talks right - WRONG) but the HOW. Sure, we already know you cannot run ANY business (not just newspapers & BTW, even non-profits NEED money to be in business) without cash flow & capital. The why is very easy. Because we need money, now! The better, & completely necessary question, is how. It's easy to throw up a FaB acct & tweap (I change the names for a reason) & say "look" "look at how many visitors & re-tweaps we have" but because you didn't ask the HOW question. You've just signed away a large number (percentage) of your total overall profits. The best way for me to explain the how to a publisher, ad director, classified manager (notice I didn't include the circulation director... THEY get it) and business office is this. Why don't we create a better wheel? What? Yes. Business leaders today know better than creating a better wheel, it's madness BUT the how that wheel is used is... well? Think about it. That little circle thing is all around us without even thinking about it. Computer programs are much the same way. Once the code is created,... it doesn't need to be created again BUT it can be changed & used, a trillion different ways. You don't have to use Tweater to have your own network for re-tweaters. You don't have to use FaB to have your own community of web pages (in fact, IF YOU DON'T already have a domain name network deployed at your newspaper, you better think quick on getting one set-up... if you don't know what a domain name network is, you better call me LOL). All these are simple, they are programs. That's it. You don't need to know HOW to have a great code but you need a great web developer who knows where every comma and every carrot needs to be to make it work. Ever heard of Ruby on Rails? Well that was 10 years ago, but I guarantee the programmers knows what Ruby is AND all the other new codes. How they work, who produces them & why. Here's the crazy thing publishers, directors. All of these "phenoms" you read about in YOUR newspaper (xyz high schooler sold his business "CODE" for abc billions to mpo company) are right there in your own middle school. Even elementary kids are learning code now. By the time they're in high school, they can program better than the professors at your local c.college. They know every hack for every game important to them. They know their clans by name & even create graphics in their spare time because they're awesome. They don't need to be at Stanford or Harvard. There are dozens of them right in your town. You want proof? Throw a "gaming party" some evening. Rent a local digital theater & watch how many "applicants" apply. When you tap into these young minds & GIVE them some money to accomplish tasks, you'll be amazed at the production. These "think tanks" will create a completely different level of revenue that you could not possibly imagine. When these folks are challenged with something they can't do... they figure out a way to get it done. Take a look a Lee Enterprises. Many newspapers, maybe even yours, use their operating system CMS to manage your own websites. Great huh? Why them & not you? Everything on the web, is a code & HOW it works, is only limited by our own combined imaginations. Be YOUR own networks... buyers, sellers, content providers, auctions... what else can you imagine? P.S. Don't just think content either. There are even better & very unique applications "of the future" that your "think tank" can use in thousands of different ways in your community. Create a think tank of the future! C.of Commerce are facing a similar dilemma as newspapers. Watch out! If chambers get their footing in before newspapers do; your newspaper income will all but disappear over the next decade/ Captain Kirk. OUT lol Gannett is catching up pretty quick and with varying techs. Please don't turn newspapers into magazines, horrible idea. The best part is the closing line: "At the time when we had the cash flow, we should have been much more aggressive about a product development mentality around digital," Dickey says, noting he would've begged for more collaboration across the industry. "If you look at what we're competing against, had the industry gotten together those ideas should've been ours." They WERE your ideas Dickie! My "internet" department and ALL the others we're telling anyone that would listen... The problem wasn't the ideas, the problem was no one was listening. BTW, it hasn't improved much in 15 years. There are SO MANY ways to monetize your newspapers on a local level, it's amazing how the owners AND publishers just won't listen. Craigslist is done, FaB
ischolar94 Nickname posted over 3 years ago
FaB has run it's course. All these CAN be done and should be but the future of content is how it is delivered and PULLED by the user. You have so much power on a local level that it is still astounding how the King does not know he is naked. Vanity is still so prevalent. Build an empire, not a steeple, lol.

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