Tuesday, December 13, 2011

New MediaNews leader declares print is dead

The new leader of MediaNews Group, John Paton, declared in San Francisco on Monday that the print business model of newspapers is “irretrievably” broken. This report in MNG’s Mercury News says the company is embracing the new age of news gathering by relying more on user-generated content. He also said that the company will become more active as a venture capitalist by acquiring tech companies. The story says that Digital First, the company that controls MNG and the Journal Register Co., has about $1.4 billion in annual revenue, with 9% of that, or $130 million, from digital. He said digital advertising is enough to cover the newsgathering costs of the Journal Register’s 18 papers. He said the same is true for MNG’s Denver Post.

4 comments:

Anonymous said...

"This report in MNG’s Mercury News says the company is embracing the new age of news gathering by relying more on user-generated content."
Reading between the lines this means doing business like Huffington Post; use bloggers and others to write for free with the promise of a wider reading audience.
BANG has already started this in Oakland where the Tribune is asking bloggers to contribute without compensation.
Oh, and I wouldn't be surprised to see more layoffs within the next few months. Why pay real reporters when you can use free untrained bloggers?

Anonymous said...

The first commenter has it absolutely right. Wade through the verbiage and what's left are uncompensated bloggers and more layoffs.

frustrated account exec said...

OK, here's the rest of the story. When Paton says that his Journal Register papers (or the Denver Post) are covering their newsgathering costs with digital revenues, that's misleading. It gives the impression they're on the verge of breaking even and that digital is successful. Not so. The sales costs at these papers have soared because advertisers who buy digital ads turnover quickly. They try an online ad program and when they realize it isn't working, they're gone. So reps are constantly having to replace customers, which raises sales costs enormously. That wasn't a problem with print. Print still works for advertisers, if the paper has good circulation. Of course we've reduced our print circulation by posting our content online. It should also be pointed out that the sales costs at the Journal Register papers exceed their newsroom costs by more than 2 to 1, so they are nowhere close to breaking even with digital. And their newsroom costs would be higher if they hadn't cut their coverage to the bone, basically ignoring the bread-and-butter, basic news in their markets. This problem of newspapers churning and burning digital advertisers hasn't been reported, but I think it may doom companies like First Digital. I work in sales at a MediaNews property and I can tell you that we've burned through so many customers that we're about to run out of prospects. We've alienated a lot of advertisers along the way, people who bought into our digital concepts only to be greatly disappointed. Paton and Mac Tully know this, but they'll be on to the next job before the problem is widely known. I really wish we hadn't destroyed our print side in order to grow our digital properties. Now our print circulation is so small due to the migration to digital that we really don't have any audience to sell.

Anonymous said...

Of course the digital side isn't working; you're giving away the newspaper for free. And as far as online advertising, several surveys concluded most readers don't click on the online ad; that says online ads are not money makers.
So, you're giving away the newspaper, ignoring the local community news and online advertising isn't generating enough money. What a winning combination.