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Time for the Local Media Industry to Pivot;
Our Future Depends Upon It
e are doing less and less for audiences and
charging more and more,” said industry analyst
Ken Doctor, “I’ve yet to see an industry that can
get away with that.”
Doctor opened the fifth annual Mega-Conference with
some sobering statistics and challenged the industry to
think differently. He set the stage for several days of pro-
gramming dedicated to new business models and innova-
tion on both the print and digital sides of the business.
The truths outlined by Doctor included the fact that
our industry has experienced no revenue growth for seven
years and that cost cutting has been the only way to main-
tain margins of 5-25%.
Some other observations included:
n $500MM has poured into digital-only national news
start-ups and they have hired 6,000 journalists over the
past few years at very good wages.
n Social is the x-factor; it’s the secret sauce of start-ups.
This isn’t the case for most in our industry. Most dailies
are seeing 8-12% of their traffic coming from social re-
ferrals. Deseret is the leader at 30%. But Quartz is at 60%
and BuzzFeed is at 75%.
n Mobile is the new desktop; desktop is the new print.
By 2020, desktop will account for less than 25% of time
spent online. Mobile will continue to explode; most of
the 13-15% increase in digital revenue over the next few
years will come from mobile. Tablet sales slowed to 4%
last year and will continue to do so.
n Digital paywalls have hit a bump. 52% of U.S. dailies
have a paywall but there is now increased pricing
resistance. This is a mismatch according to Doctor, “less
product for a higher price will result in a decrease of
circulation revenue over the next few years.”
n Technology will become all-pervasive. The future will
be about programmatic, social and analytics. “We are
entering the new world of little data,” said Doctor.
n We are addicted to counting the wrong things – pa-
geviews and clicks! That must end sooner rather than
n Digital news start-ups spend 60-70% of their budget
on content creation; that number drops to 12.5% for
Session topics at the 5th annual Mega-Conference, a
program designed for senior-level newspaper executives,
included programmatic, video, social, data, events, sales
structure and more. A lot of great work was showcased
at this event from a lot of smart people. But I kept asking
myself, is it enough?
I don’t think it is. I think it’s time for a major pivot per
the “Lean Startup” principles. If the local media industry
wants to develop a sustainable business model for the
long term, I think some fundamental changes are in order:
1Banner ads don’t work. BuzzFeed and Quartz don’t
even accept them on their sites. They are both in-
tensely focused on developing marketing plans that work
for their customers. Increasingly this means native adver-
tising and e-commerce. Local media companies would
be wise to develop a “customer-first” mentality when it
comes to digital and work towards replacing banner ads
with more results-oriented options.
2Forcing legacy reps to sell digital doesn’t work and
what’s more, it reduces print revenue (the source that
still pays the bills). We are incenting our sales teams to sell
lower priced advertising and we are often paying double
commissions on this business. Let traditional reps sell
legacy products. Guess what will happen? Your core busi-
ness may actually show growth! And let digital specialists
concentrate on fueling new growth.
3 We need to hire or acquire expertise. I love what The
Dallas Morning News is doing in this area with their
recent acquisitions of agencies. According to CEO Jim Mo-
roney, “we are leveraging our brand and buying expertise
to grow in areas outside of our core competencies.”
4 We need to be obsessed with shareability. People get
their news and information from social media and
that represents a huge opportunity for local media com-
panies. At Deseret, their reporters are expected to have
a minimum of 1,000 followers on Twitter. Is it a surprise
then that they are leading the industry with 30% of their
traffic coming from social referrals? I know a lot of journal-
ists that don’t tweet at all. Come on man!!
5 There needs to be an intense focus on analytics and
first party data. This requires an investment but the
payoff can be huge. Can you really afford not to do this?
6 Events need the same attention and focus that digital
has received at your company. They are that impor-
tant. Hire someone to solely focus on events and watch
your revenue grow. This is basic “transformation A” and
yet so many are not investing in this area. They are letting
out-of-towners come in and take this market share. It’s
time to take it back.
7 Digital paywalls aren’t going away anytime soon but
many progressive media companies are launching
free regional portals. These sites feature much different
content than the newspaper site and they often are more
lucrative when it comes to revenue. They are attracting a
younger audience that is never going to pay for content.
Mark Medici’s dual site strategy at The Atlanta Journal
Constitution and other Cox properties is a great example
to check out. Russmedia out of Austria has perfected this
model probably better than most (vol.at) and is another
I left Atlanta inspired by the great work going on but
also concerned about our ability to execute all of these
new strategies. It’s time to invest in our future and stop
cutting our way to profitability. I’m excited to watch it
unfold. Let the disruption continue!
By Nancy Lane
President, Local Media Association
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