Home' Local Media Today : February 2013 Contents 8 | LOCAL MEDIA TODAY | February 2013
Excerpted from a post by Steve Gray on his blog. Read the full article, including links
to the spreadsheet they used and other resources, at www.MediaReset.com
It was an interesting assignment: Forecast the next three years’ revenues and cash
flows based on current activities, then come up “game-changers” that could produce
significantly better results.
At Morris Publishing Group — 12 daily newspapers and dozens of digital and
non-daily properties – we came up with five that I’ll share here.
This two-part exercise was required preparation for this year’s Morris budget
meetings — a week of presentations to the Morris family by the various business
units they own.
We wanted to keep the forecast part of it fairly simple. We broke revenue into
several major categories, like display advertising, preprints, consumer revenue, plus
About a dozen of us — a mix of corporate execs and publishers — filled out the
spreadsheet individually, then we averaged the results. Some of us filled out all the
sub-categories, and some of us just filled in the bottom line of each category. Close
enough; this is just educated guesswork, not precise science.
For us, forecasting the track of our two biggest and newest revenue initiatives
was part of the exercise. These are our All-Access program involving significant price
increases for our newly combined print/digital consumer subscription products,
and our new, stand-alone digital sales division, Main Street Digital. We expect both
of these to be big revenue contributors in the next three years.
Even with those factors, the averaged forecast among our group came out very
close to flat, although there were both optimists and pessimists. Compared to the
last several years in the newspaper business, flat is good. But it’s certainly not good
enough; we need a way to return to growth. This exercise — plus forecasts from
outfits like Borrell Associates and BIA/Kelsey — show that our core business isn’t
likely to provide it.
Which brings us to the game-changers.
Our group brainstormed for 90 minutes or so, trying to figure out where we could
achieve some break-out growth. In our group, we pretty much assume — based on
plenty of evidence over the last six years — that advertising adjacent to news won’t do
it. And we assume that the All-Access program will run into upper limits on subscriber
rates in two or three years. So we knew we needed to look beyond those areas.
As a business that’s inherently local, with thousands of customers — both
consumers and businesses — and a well-known brand, what alternative business
models could we pursue?
Here’s what we came up with:
The idea of a media company selling goods and services is hardly new, but it’s been
just a small sideline business for most publishers who have done it. We pictured
attempting it at scale, as quite a few magazines have begun to do.
Yoga Journal, for example, has grown e-commerce into a $2-million a year
business that’s gone from selling digital content packages to yoga mats and clothing
to liability insurance for yoga instructors. A horse magazine is selling a roadside
towing service for equine vehicles. Some soft-crafts publications now offer catalogs
of several thousand SKUs — patterns, kits and materials. In these cases, the items
sold are right in the sweet spot of the particular passions that drive the magazines’
For newspapers, it’s hard to think of similar passions. However, we’re thinking
the e-commerce offerings might relate either to news or to local living — the latter
providing a far larger set of possibilities. We would market them through our existing
media channels, and the offerings could be digital goods (single-issue digital
publications, repackaged collections of existing content and archives), physical
goods bought by us at wholesale and fulfilled by us, or physical goods and services
sold by us but fulfilled by a retailer or service business with whom we would partner.
In our brainstorming group, Mark Nusbaum, president of TU Media and publisher
of the Florida Times Union, pointed out that we have thousands of relatively
affluent customers in our markets, and that they spend barely $20 a month with us.
In e-commerce and in several of the other ideas below, we began to focus on how
we could expand on those relationships and win a larger share of these customers’
Now we’re setting out to figure out the best way to structure the e-commerce
business, and what we might sell that would be attractive to people in our markets.
This looks like the lowest-hanging fruit among these five new business ideas.
We are pleased to have represented Freedom Communications
in this transaction.
COLORADO SPRINGS (CO)
74,841 daily circulation
CLARITY MEDIA GROUP
a subsidiary of Anschutz Corp.
Dirks, Van Essen & Murray
Santa Fe, NM t: 505.820.2700 f: 505.820.2900
Steve Gray, former managing publisher of The Christian Science Monitor and
former managing director of API’s Newspaper Next project, consults, speaks
and writes about solutions to media disruption from lifelong experience.
Since 2009, he has been a full-time consultant with Morris
Communications, coordinating a major strategic transformation in the
newspaper division, Morris Publishing Group.
for the local media
CONTINUED ON PAGE 14
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