Top takeaways, trends for small and mid-sized publishers

Each year during WAN-IFRA’s Congress, the US-based Local Media Association (LMA) holds an annual meeting of small to mid-sized publishers, and it’s inevitably a fascinating look at how news publishers typically working with small staffs and limited budgets are making the transition from print to digital.

by Brian Veseling | June 13, 2016

“Helping local media companies find sustainable business models – it’s all we do,” Nancy Lane, President of the US-based LMA, said during this year’s annual meeting on Sunday afternoon in Cartagena.

This year, Lane (at left in picture) pointed to three top trends in media transformation that she sees taking shape:

  1. Native Advertising – “Progressive local media companies are launching native advertising strategies. We believe this model is here to stay,” she said, adding that among the best examples she sees is the Victoria Advocate, a 30,000 circulation newspaper based in Victoria, Texas.
  2. Digital Marketing Services (digital agencies) – “The larger companies are making big bets in this area and the smaller companies are starting to figure it out as well – after a lot of trial and error! Reselling Facebook ads to SMBs is becoming a big part of this business,” Lane said.
  3. Events – the third leg of the media transformation stool. “The companies treating Events like a separate business are seeing 30- 50 percent profit margins,” she noted.

As part of LMA’s efforts, Lane leads an annual “Innovation Mission,” an intensive study tour that takes small and mid-sized publishers to some cutting-edge media companies (as well as the digital giants such as Facebook and YouTube) to see what lessons they have to offer.

This year’s Innovation Mission took place just a few weeks ago, and Lane pointed to four top takeaways:

  1. Core values drive culture: “It all starts with leadership,” Lane said, adding, “Obsession with mission and vision pays off. If you don’t have a great mission statement, revisit it and get your employees involved.”
  2. The next big thing? Video, video, video. Noting the group’s visit to YouTube as a specific highlight for her of the recent tour, Lane said the company now reaches 1 billion people, with 80 percent of them coming from outside the US. Four hundred hours of content are uploaded every minute on YouTube, she added. On a smaller scale, she pointed to US-based Calkins Media, which produced 22 hours of video last month (about what a small TV station would) and is aiming to hit $1 million in video revenue this year. A sizable amount for a small media company, she added.
  3. Virtual reality is coming. “Virtual reality is no longer something that is way down the road. It is here now and about to see tremendous growth,” Lane said. “If you have not experienced VR yet, purchase Google cardboard online (US$ 15) and then go to using your smart phone and you’ll find many options to experiment with.”
  4. Media transformation: “Media transformation is difficult,” she noted. “Pick the right areas of focus for your company (using data to make informed decisions) then allocate the appropriate resources to make them successful. All of these companies made significant investments. Transformation can’t happen without that level of commitment.”

Click here to see our recent interview with Nancy Lane.

GateHouse going for scale

Peter Newton, Chief Revenue Officer of GateHouse Media, the largest publisher of locally-based print and online media in the US, then took the stage and described how his company has more than doubled in size in the past two years and intends to continue to expand its US footprint through further acquisitions.

“We believe strong local news brands, at an attractive price, offer long-term opportunity,” he said.

Newton (second from right in the above picture) added that events is a big market for GateHouse and that they’ve developed four core events that are supplemented with ad hoc promotions.

In addition, GateHouse operates a separate business called Propel Marketing, of which Newton is in charge, and which develops digital solutions for small and mid-sized businesses. We’ll be writing more about GateHouse and Propel Marketing in a forthcoming blog post.

Publishers must drive digital revenues

Taking a look at broad trends over the coming 4-5 years, speaker Rick Ducey of BIA-Kelsey, USA, told participants that “It makes sense to be worried about digital revenue – that is where growth is going to come from.” He added that, today, “ ‘digital’ means ‘mobile’ 65 percent of the time” for US-based media companies.

In addition, Ducey (second from left in picture) said that while he thinks newspapers can “win” at digital, they need to get moving now and offer more video and audio content.

Furthermore, while print revenues are down, and expected to continue to decline, he said he foresees newspapers remaining an important part of the advertising mix, though that position is being challenged, which is why it is essential that publishers grow their digital revenues.

Moving readers from print to tablet in Brazil

“Our challenge is to get people to migrate from print to digital,” said Andiara Petterle, Vice President of Newspapers & Digital Media for RBS Group, Brazil.

Petterle (at right in picture) told the audience that one major way that RBS is working to achieve this is through an initiative that aims to get readers using tablets. RBS’s regional title Zero Hora (ZH) now has a new subscription model where customers get a customized tablet.

The idea came about through a simple question: “How much does it cost per year to print and deliver the newspaper per subscriber?” Petterle said it turned out the answer was almost exactly the same as it would be to buy every reader a tablet, and so that after the first year, if subscribers can be maintained, the margins should grow dramatically.

“We started this pilot project with 3,000 tablets,” Petterle told us recently see more at link below), “which we expected would take a long time to give away, but they were gone in two weeks. And then we started to redesign the operation, and we partnered with Samsung and are now developing the distribution strategy together with Samsung.

“We might end this year with about 10,000 tablet subscribers, and our idea in the next three years is to reach 40,000. If we can do that, we can really control it and deliver pretty much anything we want – and we won’t be dependent on any other platforms.”

Click here to see our recent interview with Andiara Petterle.

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