ImpreMedia Chief Paton Warns World Publishers: Your Turn Coming With "Broken" Biz Model

By: Mark Fitzgerald In a speech outlining how his Spanish-language newspaper and digital publishing company has survived during the Great Recession, impreMedia Chairman and CEO John Paton told the World Association of Newspapers (WAN) annual congress in Hyderabad, India, Tuesday that the problems U.S. newspapers are having with the print business model will soon affect other countries.

"The newspaper model is broken," Paton said. "And while this may not be currently true in your own country, it nevertheless will be true soon. The only difference between my country and perhaps yours, is timing. Newspaper companies solely focused on print have limited futures."

Paton said impreMedia's business plan envisions stabilizing and growing print profit, but earning 25% of total profits from non-print products by 2011, and 50% of profits from non-print by 2012.

ImpreMedia is doing that by outsourcing aggressively at its print products such as La Opinion in Los Angeles, the nation's biggest Spanish-language daily, and El Diario La Prensa, the oldest Spanish-language daily in the U.S. It is also forging content partnerships with organizations ranging from The Associated Press to ESPN and AOL to local bloggers.

ImpreMedia has also adopted a "print last" protocol for content, Paton said.

"A story is first an SMS alert," he said. "We can send those alerts across our national network or geo-target them to our subscribers. We went from zero a year ago to 1.2 million mobile impressions last month. That's 1.2 million tiny printed pages we didn't have to print, each with its own small story and ad."

Next the story goes on the Web. Then it is promoted through Twitter, Facebook and other social media sites. The story is updated and enhanced with video or audio if possible.

Only then is it published for the newspaper. And the protocol does not end there, Paton said.

"Step 6 is to re-cap, enhance and re-package for new products," he said. "Using the video we have already shot we re-package and now produce weekly TV newsmagazines in New York and Los Angeles and one national edition on our websites. We are currently negotiating with a television network to air the programs over broadcast which provides us a new audience and a new revenue stream with very few incremental costs."

ImpreMedia has outsourced all its printing and packaging for its newspapers and specialty publications, and created a wholesaler system for distribution that now turns a profit as it brokers single-copy delivery for other dailies.

After consolidating nearly all pre-press, ad makeup and some editorial design in its Los Angeles office, impreMedia recently agreed to outsource the work to Business News Group in Monterrey, Mexico. All back-end and support work for impreMedia digital products has also been outsourced to Mexico, to LatinWeb in Mexico City.

The outsourcing and cost-cutting has allowed impreMedia to greatly expand its product line.

"In 2006 the company had nine products on two platforms -- print and a weak digital presence," Paton said. "Today, with 42% fewer employees the company produces more than 97 products on seven robust platforms of web, widgets, mobile, TV/video, audio, social media and print.

"Let me clarify, that by a factor of 2 to 1 our cuts came from areas other than editorial staffing," Paton added.