In 2019, we saw Gannett and GateHouse Media merge to become the largest newspaper chain in the U.S. We saw more news organizations take a stronger stance against the spread of misinformation and lies. We saw publishers stand up to tech giants like Facebook and Google in order to save digital advertising revenue. We saw political journalism grow in newsrooms around the country as they prepared for a combative election year.
If that’s what last year brought us, what will 2020 bring?
In order to look ahead, we must reflect, which is what these five news leaders did for us. Despite facing challenges, their newsrooms are experimenting with new revenue sources, pursuing new audiences, and fueling their newsrooms with energy and foresight.
What was your biggest challenge and how did you overcome it?
Jay Allred, president, Source Media Properties, Mansfield, Ohio: We had not yet launched a membership program that was effective and aligned with our values but doing so was going to be a tremendous lift for a small staff. A key to doing it was to create a cross-departmental team that brought everyone to the table and made membership everyone's job.
Brian Jarvis, president, NCWV Media, Clarksburg, W.V.: Revenue challenges have been a big problem related to pre-print and national advertising. We are still determining how to overcome it. That was high margin stuff and it is tough to replace.
Lance Knobel, publisher and co-founder, Berkeleyside, Berkeley, Calif.: A sustainable business model for local news remains a struggle for everyone in the field. Berkeleyside celebrated its 10th anniversary in 2019, which puts us among the oldest of the local news digital startups. We decided that after 10 years as a for-profit we should convert to nonprofit status as the best way to sustain our mission.
Judi Terzotis, publisher, The Advocate of Baton Rouge and The Times-Picayune of New Orleans, Baton Rouge, La.: This year we purchased the assets of the Times-Picayune and NOLA.com from Advance. The biggest challenge was integrating the business in a very short window of two months. In most acquisitions of this magnitude, the transition time is six to eight months. Our team worked tirelessly to do the impossible. Our transitional plan was well thought out and nicely executed. The team from Advance were invested in our success and critical to our successful transition.
Emily Walsh, publisher, Observer Media Group, Inc., Sarasota, Fla.: Recruitment and churn—both on the editorial and sales side. Talent is harder and harder to find. When journalists are laid off from other news organizations, or looking for more work-life balance, we find they are leaving the industry. In addition, not only are Google and Facebook eating our advertising dollars, but now they are hiring our journalists, too. So are brands, in their need to create content to drive traffic to their websites. Everyone needs content, so everyone’s hiring journalists. The industry is also challenged with a donut-hole effect: essentially, we're seeing journalists early in their career or long-standing veterans. We're struggling to maintain younger journalists in the industry. On the revenue side, there are more things to sell than a print ad these days. You might say, “Duh!” but we still find our fair share of order-takers who think working at weekly newspapers is going to be their retirement job. Our reps have to be plate-spinning, people-pleasing entrepreneurs. It takes some serious hustle, and those qualities are hard to find.
What was the most important financial lesson you learned?
Allred: That diversifying our revenue was critical, and core to that was doing it in ways that utilized our unique abilities as a news organization. We're trusted communicators, expert question-askers, possess a deep understanding of our audience, and retain the ability to convene and guide conversations to constructive ends. We rethought our revenue initiatives to leverage those abilities.
Jarvis: We cannot rely on pre-print and national advertising as a future source of revenue.
Knobel: Reader revenue from members can be a very significant, growing part of our revenues. We've added nearly 1,000 members in the last year, bringing out total members to more than 2,600 in our city of 120,000 people.
Terzotis: After working for a publicly traded chain for most of my career, I’ve come to appreciate the investment local owners can make in the products and the staffing. We are growing as a direct result of our owner’s commitment to the highest quality community journalism supported by a robust newsroom.
Walsh: This past year has created a deeply personal conflict among my family’s philosophy of giving back to the communities we serve, being stewards of change and helping those in need. With rising print and distribution costs, this year was the first year that any 100 percent in-kind advertising we offered as a sponsorship for a local nonprofit really affected profitability. In 2020, we’re moving toward a more measured approach and carefully considering causes that need our support and switching to a matching model so there’s some revenue tied to it.
What were some of your success stories from 2019?
Allred: The launch of Source Brand Solutions, our in-house content marketing agency has been crucial. It's allowed us to compete head to head for business outside of our coverage area. Sales attributed to marketing services are one of our fastest growing verticals.
Jarvis: We launched a new product called “Business Profiles” that creates content that the business maintains the rights and can distribute themselves. We run it in print and share multiple times across our social networks. It has resulted in a nice uptick in revenue.
Knobel: On the editorial side, Berkeleyside continues to provide both comprehensive and deep reporting on many of the key issues in our city. The growth of our member program and the continued growth of our ad revenue bucks some of the trends we see elsewhere in local news.
Terzotis: The Times-Picayune/NOLA.com asset acquisition was certainly a highlight for our company. But winning our first Pulitzer was the top achievement in 2019. We are proud that our series “Tilting the Scales” helped change Louisiana law from a 10-2 jury to a unanimous jury for conviction. We also won a Polk Award for the series.
Walsh: First of all, I’m going to brag. At an unnamed conference a few years ago, a speaker said, “Flat is the new up.” Not so at the Observer Media Group. Our revenues continue to grow year over year, and that includes both print and digital. No declines. But that also may be attributed to the fact that we are free weeklies that have never relied on subscription revenue. We’re really proud that we’ve made a commitment to allocate extra pages of our paper, sans advertising, for big editorial packages about issues important to our communities twice a year. It doesn’t take a lot money-wise but making those investments in content reinvigorates our newsroom and shows them that we value what they do. Also, in February 2019, we launched our Black Tie App, which has been on my to-do list for more than five years. Black Tie is our section for social coverage in the Sarasota/Manatee market in Florida. This app serves a niche of socialites in those markets who want to know what they should attend, what they should wear and who will be there. It’s been an awesome success on both the user and advertiser side.
When you look at the industry, what are you most excited about for 2020?
Allred: The innovation at the local level. While the giants race to scale their businesses and find efficiencies, hundreds of independent local and statewide organizations like Berkleyside in California, VT Digger in Vermont, and The Devil Strip in Ohio are connecting with readers again. I'm more convinced than ever that journalism will be reborn through the work of these organizations and others like them.
Jarvis: 2020 will likely yield more opportunities for us to grow our digital reach. We are growing at a 20 percent clip year over year in new users and having success getting them to provide us some information to target through ads and newsletters.
Knobel: This might sound crazy, but I'm optimistic about the future for local news. There's a growing cohort of journalistic entrepreneurs building successful local news sites, while many legacy news providers are struggling. I'm hopeful that entrepreneurial activity in local news—both among nonprofits and for-profits—will provide viable models that can be replicated in cities starved of good reporting.
Terzotis: The industry is continuing to consolidate, so I’m excited, that as a privately held company, we can react our communities and provide the coverage and marketing solutions they need and expect.
Walsh: I’m really excited about America’s Newspapers. (Full disclosure, I sit on the new board for America’s Newspapers.) The merger of SNPA and Inland is truly game-changing. Newspapers have been notorious for not marketing themselves. I’m excited to see how America’s Newspapers can change the dialogue. I hope they convey how newspapers are an important part of our democracy and relevant assets to the communities they serve on a national level. And, I want newspapers to be exciting and relevant again—because we are.
What are your goals and priorities for this year?
Allred: We want to get to a newsgathering operation that is sustainable through individual, corporate, and philanthropic support. We think we can do that in 2020, and it'll be a key to ongoing success.
Jarvis: Do better selling more items to our print and growing funnel of digital users.
Knobel: We bootstrapped Berkeleyside's start 10 years ago. We now have ambitious plans under our new nonprofit organization to build significant funds from foundations, major donors and corporate sponsorship so that we can extend our Berkeley-focused journalism and expand into underserved communities that, remarkably, abound in the Bay Area, one of the wealthiest regions in the world.
Terzotis: Continuing our growth in digital audience and revenue, leveraging the assets of our vast footprint along the 1-10 corridor in south Louisiana and our statewide digital reach as well as continuing the diversification of our revenue with our event division.
Walsh: We want to be the dominant print/online local resource in our market. To accomplish that, we’re considering launching new print and digital products and rolling out a new marketing campaign.
What is on your wish list for 2020?
Allred: That the industry itself and those who believe in journalism become even more focused on the local news ecosystem. I am certain the situation in the U.S. will become much worse before it gets better. The Knight Foundation and many others are working tirelessly to support the reinvention of the business model. To the degree that we can all be in that fight together, we need to.
Jarvis: Facebook and Google to be better than a frenemy by actually helping small market journalism pay for the content we create about the people and places we love.
Knobel: We want to see local news organizations adopt some of the innovative community-driven, non-traditional forms of engagement and storytelling that are needed to reach and serve underrepresented communities in our cities.
Terzotis: For our country to appreciate journalists, and for the current rhetoric that we are “the enemy of the state” to dissipate.
Walsh: Bigger profit margins. Although revenues continue to grow, it’s costing us more to do business. As mentioned before, printing and distribution costs continue to go up, but so has the cost of technology, insurance, people—the list goes on and on. While we continue to be profitable, margins continue to decline. So, my greatest wish is to turn that trend around.