Digital First, indeed

I’m delighted by the news that Journal Register’s John Paton is spreading the digital first gospel (I’m a believer). He announced today that through a new company — Digital First Media — he will take over management of MediaNews, a much bigger newspaper company, and bring the methods used and lessons learned at JRC (and before that at ImpreMedia) to more papers.

I’m honored to be on JRC’s advisory board, along with Jay Rosen and Emily Bell.

In Paton’s blog post making the announcement, his message is that old dogs can be taught new tricks: newspapers can change and, we hope, survive. Said Paton:

Since implementing our Digital First strategy in mid 2010 our Digital audience has doubled to more than 12.3 million uniques and our entire audience has grown from 14.9 million monthly customers on all platforms to nearly 21 million customers. . . .

In Q2 of this year, 10 of JRC’s 18 dailies are up year over year in advertising or within 2% of last year’s ad revenues because of digital advertising growth. JRC newspaper digital revenue grew more than 81% year over year in Q2. That’s against an industry average of less than 10%.

Digital dimes can replace Print dollars.

And if our dailies continue on the trend they are on right now, by the end of the year they will have brought in more digital revenue than the costs of running their newsrooms.

Digital revenues can pay for newspaper newsrooms.

This is all I’ve ever wanted for the newspaper industry: brave innovation and dogged determination to update and upgrade, not hold onto the past.

What does Digital First really mean? To me, it means that digital is the future and the goal is to get there. It means that the journalists think first of serving their (larger) audience online. It means that advertisers’ digital strategies must be served. It means finding efficiencies thanks to online: consolidating repetitive work to put precious resources where they add the most value: in local reporting and sales. It means changing the relationship of a news organization to the public it serves, becoming more collaborative, working in networks, recognizing the ecosystem around us. It means that papers will stick around as long as they are helpful and profitable (which could be a long time or not … we’ll see). But it means mostly that Paton is growing a digital company as every news company must.

I’m rooting for him and am delighted that he can now bring his good ideas and experience to such papers as the San Jose Mercury and the Denver Post and provide an example to others as well.

  • http://www.seoskeptic.com/ Aaron Bradley

    It’s terribly refreshing to see an organization approach the challenge of news delivery in the digital age with such optimism and enthusiasm. It makes a welcome change from the hand-wringing and inevitable strategic equivocation that has plagued traditional print newspapers in the past couple of decades.

    Glad to see you on the advisory board: I wish you, Patton and DFM all the success in the world!

  • http://cjstem.com Christopher Stemborowski

    I couldn’t agree more Jeff. After seeing John speak at #140conf this year, I am a believer. And his passion for innovating the news industry is something we need more of. I would say “dogged determination to update and upgrade,” will benefit any industry in turmoil including the American political and financial systems.

  • David Westphal

    Good post, Jeff, and congratulations to JRC and MediaNews for a really interesting and bold move.

    One thing I puzzled over is Paton’s hope that digital ad revenue could exceed newsroom costs by the end of the year.

    Isn’t this already true at some newspaper companies? My alma mater, McClatchy, reported second-quarter digital revenue of $48 million, or about 18 percent of all operating expenses. This is only a surmise, but unless the historic relationship of news costs to overall costs has changed a lot, that would suggest digital revenue already exceeds news costs at McClatchy.

    In any case, it’s great to see Paton earn a greatly expanded platform for his message and strategy, and it’ll be fascinating to watch how it plays out in larger markets.

    • Perry Gaskill

      The Inland Press Association has been a source for some useful benchmarks on this. According to the IPA, typical newspaper newsroom costs average around 40 percent of the total. Another rule-of-thumb is that those costs tend to be generated by a need for one full-time employee in the newsroom per 1000 of circulation. And although that ratio might sound like a lot of bodies, there’s evidence showing that if you monkey with it too much bad things can happen.

      McClatchy’s 18 percent number might also be something of a red herring because total newspaper advertising revenue has dropped by 50 percent in the past five years. So you have a situation where a paper may have been pulling in, say, a total of $100 in revenue with $10 of that via online, but is now generating $50 in revenue with $10 still coming in via online.

      • David Westphal

        Forty percent? Newsrooms could only wish.

        Rick Edmonds estimated a ballpark average of 12 percent (of revenue) and Inland’s range was 8 to 15 percent.

        You’re right that print advertising has fallen a ton, everywhere. My only point was that JRC might not be first to achieve the mark of its digital revenue matching news costs.

      • Andy Freeman

        > Another rule-of-thumb is that those costs tend to be generated by a need for one full-time employee in the newsroom per 1000 of circulation.

        My rule of thumb is that a FTE costs >$100k/year (salary, benefits, other expenses including a desk). The “one FTE per 1k circulation rule” combined with my rule says that a newsroom FTE has to generate >$100/circulation each year.

  • http://601am.com Aaron Bailey

    As a (fairly new) Denverite, this is welcomed news. I’ve had an inside look at what MediaNews Group is doing on the web and it has been a series of disasters, cumulating in spending millions on a recently scrapped CMS. I’m very excited to see what some fresh perspective will bring.

  • https://plus.google.com/116408699495633556233/posts Michael Whipple

    It’s one-sided. Sustainability requires changes on the audience side, too. Who’s doing that?

  • http://www.birazoku.com Mu… c…

    It’s one-sided. Sustainability requires changes on the audience side, too. Who’s doing that?
    :)

  • Ed Personius

    This is good. It is exactly what is required of News sources, who should immediately stop referring to themselves as Newspapers and start referring to themselves and News Publications or something like that. Digital News Services, maybe. Similar product, different venue, totally re-vamped advertising gameplan so that they can indeed cover their costs. I’d like to hear more about their online monetizing strategies that seem to be working for them. What methods are similar, what methods are completely new and different?

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  • GOD

    Advertising and no quality content.
    I can find better writing at the local kindergarten class.
    JRC is a junk publication and will be gone in LESS than 5 years.