Remember meForgot password?
    Log in with Twitter

article imageNewspapers discover successful business models through innovation Special

By Anthony Carranza     Feb 11, 2013 in Technology
The Pew Research Center for Excellence in Journalism (PEJ) released a ground-breaking study about the newspaper industry. Within the report, four different American newspapers found innovative ways to discover potential business models.
The arrival of the Internet and its gradual adoption over time presented challenges to news organizations. A recent report released today by the Pew Research Center for Excellence in Journalism (PEJ) explains in spite of shrinking newsrooms along with declining revenues four specific newspapers are debunking the industry trend.
The study is the result of a follow-up report dating back to March 5, 2012 called “The Search for a New Business Model”. In the latest report titled “Newspapers Turning Ideas into Dollars” examines four American newspapers that participated in the survey, how they capitalized over time with successfully implementing innovative strategies in the digital era.
"These four newspapers offer some hope and valuable lessons for a newspaper industry that has faced enormous economic and technological disruption," said report author Mark Jurkowitz, Associate Director of the Pew Research Center's Project for Excellence in Journalism. "Our research shows that a few key traits underpin the success at these four newspapers: strong leadership, the ability to change the internal culture, and commitment to improving the editorial product - even with reduced resources."
The analysis, the interest in investigating the perils of the news industry is difficult to deconstruct since each newspaper used to enjoy the former commercial enterprise of the old media legacy structure. Some of the strategies that payed off with tangible results (according to the PEJ) were the following:
Innovations-ranging from sales force restructuring
Re-branding the print product
Web consulting for local merchants
Generate new revenue channels
Below are the four organizations specifically highlighted and whom were profiled coming from all corners of the United States. They are as follows:
"The Naples (Fla.) Daily News (weekday circulation 44,876). After the publisher and his managerial team overhauled the composition of the sales force and its operating philosophy, the paper saw overall revenue growth in 2011 and 2012 - with print revenue a key part of the success story. The paper's leadership calculates that the sales reorganization is responsible for about a 10% increase in ad revenue."
"The Santa Rosa (Calif.) Press Democrat (circulation 53,292). As part of a revamped business plan, the paper developed the Media Lab, a sophisticated digital agency that provides a full range of online marketing services to merchants. In its first year, the lab accounted for roughly 25% of the paper's digital revenue and is expected to grow revenues by about 60% in 2013."
"The (Salt Lake City) Deseret News (circulation 91,638). Former Harvard Business professor Clark Gilbert engineered a major reorganization of the Deseret Media properties, building a digital company, creating a new-and more narrowly focused-editorial identity for the newspaper and unveiling a weekly national print edition. Digital revenue has been growing at over 40% a year since 2010, while daily and Sunday circulation jumped about 33% and 90% respectively from September 2011 to September 2012."
"The Columbia (Tenn.) Daily Herald (circulation 12,744). This small, but aggressive daily in an economically hard-hit Tennessee community rolled out more than a half dozen new revenue ideas in 2012 alone, some in print, but most in digital. The resulting growth in online revenues allowed the paper to keep overall annual revenue losses well below the national average-about 2% in 2012."
The newspaper industry enjoyed years of readership, a healthy circulation, and stability in generating revenue. The signs were evident in the early 2000s that circulation was dropping and revenue sources were shifting online. All of it will not come back because the Internet today is a new frontier with new gatekeepers (Google, Facebook, Twitter, Apple, and others).
What made these four particular old newspapers succeed is a byproduct of several fundamental key factors. Jurkowitz outlined in a YouTube video three things that were found in common between the four:
A clear leadership and vision
Willingness to change the newsrooms culture toggle between old and new
Commitment to perfecting the editorial product
"There are positive takeaways here for the rest of the industry," said Amy Mitchell, Acting Director of the Pew Research Center's Project for Excellence in Journalism. "Still, these innovations are works in progress and these newspapers remain vulnerable to the economic disruption that faces the industry as a whole."
Takeaways and lessons from the study
Manage the digital and legacy businesses separately (Deseret News). Deseret News Publishing Co. CEO Clark Gilbert has a theory of media evolution. The legacy business is the crocodile, the prehistoric creature that will shrink, but can survive. The digital business is the mammal, the new life form designed to dominate the future. And they need to be managed apart. So the company created Deseret Digital Media to capture future growth, shrunk the Deseret News newsroom and reoriented the paper's editorial mission.
Keep developing niche editorial products (Daily Herald). In recent years, the Daily Herald management has rolled out a successful monthly health magazine and a new men's lifestyle magazine and plans to introduce a real estate product early in 2013-keeping many of the costs in-house. It seems an ambitious enterprise for a small operation with modest resources, but publisher Mark Palmer says the health magazine has been "very profitable" and initial results from the new publication are quite positive.
Decentralize decision-making power (Daily News). Under the sales restructuring plan, ad directors and account executives now have far greater authority to negotiate contracts on their own and the bureaucracy is more streamlined. That may sound logical, but it's not easy, according to one ad director. "It takes an incredible amount of courage and trust from the head of your business," he says. "So if someone is trying to replicate this and they don't have the courage and the trust to pass that along, it's not going to [happen.]"
Establish the digital agency as an independent business (Santa Rosa). A key decision was to set up the Media Lab digital agency as a separate entity with a separate staff to operate it. While it traded on the Press Democrat's brand as a trusted news source in the community, the idea was to make the lab an incubator for innovation. In that vein, digital director Greg Retsinas says, it was absolutely crucial to the success of the Lab that it "have a start-up feel to it and not be swallowed by the older Press Democrat brand."
Rebuild your editorial philosophy around what you do best (Deseret News). The News, which is owned by the Mormon Church, made the crucial decision to shift its editorial mission from general interest to coverage of topic areas such as faith and family. It's not likely many newspapers would or could focus around those particular issues, but Gilbert believes diminished newsroom resources should be allocated to unique editorial strengths that offer added value. You "have to be differentiated," he says. "Invest where you can be the best in the world...The failure to choose is a choice to be mediocre."
Don't give up on print. (Daily News) In Naples, where the print franchise is comparatively healthy, the publisher is bullish, saying "we are going to reinvent print" and envisioning a future where the print product could be customized for the individual consumer. At many dailies, where print revenues continue to plummet, that may seem overly optimistic. But the lesson from Naples is that in communities where conditions are favorable, a substantial bet on print can still pay off.
More about Newspapers, old newspapers, Pew research center
More news from