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ISOJ 2014.

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  1. 1. The Experience in Other Industries Disruptive innovations (such as the Internet) attack existing f rms by leveling three potentially lethal blows to: Cost structure Customer Base Revenues
  2. 2. The Experience with Newspapers The Internet has attacked the business models of traditional community newspapers by f rst attacking cost, then siphoning of customer revenues. Four Ways Newspapers Are Disadvantaged: 1. Print advertising has fallen to 1950s levels 2. High f xed costs of printing and distributing 3. Habits and expectations of current and future readers shifting rapidly (PEW, UNC research) 4. Competition is tough and getting tougher
  3. 3. Developing a 21st century def nition of “community newspapers,” based on mission not circulation: National Newspapers -3 Community Newspapers 11,0 0 0 Ethnic Newspapers Small/Midsized Dailies Non-daily Newspapers Metro & Regionals -87
  4. 4. Newspapers must respond with a three-pronged strategy approach: Attack Response Destroyed barriers to entry Shed legacy costs associated with print-only era Siphoned of readers Rebuild community on many platforms Decimated advertising Aggressively pursue new revenue opportunities
  5. 5. W hat we know about shedding legacy costs • Internet attacks distribution costs directly • Value comes from content creation and aggregation • Cost drivers should be value drivers Implications: • Print/Distribution Schedule • Staf ng/Outsourcing • Content Shedding costs frees up funds for investment.
  6. 6. W hat we know about building community on many platforms • Our customer habits are changing rapidly • We must not alienate our loyal readers during the transition. Implications: • Newspapers must cover geographic communities and build communities based on special interests. Building community on many platforms is key to pursuing new revenue.
  7. 7. W hat we know about pursuing new revenue • Our advertisers are confused and look to us for answers. • Local newspapers still best advertising mediums for most local businesses. • By combining two or more mediums, advertisers signif cantly increase reach and ef ectiveness. Implications: • There needs to be a new sales strategy. • Rate Card • Compensation • Training Newspapers need to position themselves as a multi-platform medium.
  8. 8. Conclusions: It’s tough keeping three plates spinning simultaneously. SUCCESSFUL NEW SPAPERS ASKED THE QUESTION: If we were building this paper t oday, how would we do it? • How would we look to our customers, employees and shareholders? • At what processes and procedures would we excel?