Sustaining profit in the eye of a hurricane

Torry Pederson, CEO, VG, Norway

“I think we should prepare ourselves for a hurricane, Force 5,” says Mr Pederson, reflecting the current media environment and its impact on newspapers.

He should know. A graph of VG’s print circulation decline over the past several years looks like a ski slope - it dropped 20 percent since 2002.

But, at the same time, profit increased from 270 million Norwegian krone (31 million euros) to 365 million krone (41 million euros). Mr Pederson’s presentation focused on how the company managed to increase its profits in such difficult times.

“Out strategy has been twofold - continuous product diversification and improving production efficiency considerably,” he said.

“We have expanded our web presence, both with the main online newspaper but also by establishing a social network site. The newspaper has added a supplement on weekends, we’ve launched a magazine for personal finance - we’ve diversified our offering over the years and that’s significant.”

In addition to diversification, here are a few of tbe other factors that Mr Pederson believes are important for thriving in tough times:

  Pricing. “I think there is a lot to do in strategic pricing in newspapers,” he says. “There is a wonderful opportunity to take the right price from the market.”

  More marketing and effectiveness research. VG spends 10 million euros annually on examining its market, and uses a model that considers all possible factors that contribute to sales.

  Good journalism that attracts attention, on all platforms. “Don’t cut down on journalistic resources to cover the important stories,” he says.

  A wide variety of advertising opportunities for both the big spenders and the small ones. “To work a lot with space management is extremely important and will become so even more in the year’s to come.”

The Impact of Integration

Valery Levchenko, Deputy Director General, Ria Novosti, Russia

The Russian news agency Ria Novosti began working from a new integrated newsroom in January 2008. Mr Levchenko says it profoundly changed the business.

For one thing, it isn’t a news agency anymore, at least not in the classical sense. As it offers its content directly to news consumers through its digital platforms, and not only to traditional news agency customers, the focus has changed. “Instead of providing bits and pieces of news agency information, we started focusing on stories with the end user in mind,” says Mr Levchenko.

For another, “it required a change of mindset for journalists,” he says. “The idea is to think multimedia. What kind of media, what kind of combination, would suit the story best?”

That’s not as easy as it sounds. “We see a definite shortage of multimedia trained journalists,” says Mr Levchenko. More than 140 have gone through a four-day training programme, and Ria Novosti is now a partner in a multimedia journalism training programme.

Other changes include:

  A shift in corporate culture. Among other things, the average age of journalists is going down - most are in their mid- to late-twenties.

  The creation of a common technological platform and the creation of new infoscreen and mobile products.

To grow, focus on who isn’t reading the paper

Mary Lou Fulton, Vice President of Audience Development, The Bakersfield Californian, USA

Ms Fulton’s presentation showed how a relatively small regional paper can develop into a multi-media company driven by market forces and a clear strategy. The Californian, a 59,000 circulation daily, set out five years ago to develop a broad range of new products, both print and digital. At the time, 99 percent of revenues were coming from the flagship.

In five years, it created three new weekly newspapers, three magazines, 10 websites, three subsidiaries and built its own social media software.

“Before, we focused primarily on the circulation, profitability and content of our daily newspaper,” says Ms Fulton. “The essential shift in thinking was to become interested in who was NOT reading the newspaper or advertising in it.”

“Now are success measures are revenue and profitability, audience reach and advertiser reach. It’s not just how much money we make, but how we make our money that will be successful in the long term.”

The key elements included:

  Commitment to invest in new product development - at least 1 percent of revenues each year.

  New organisational structures and approaches - experimentation is encouraged.

Ms Fulton said the new products recaptured six of the eight percentage points in consumer reach lost by The Californian. It increased non-core revenue from 1 percent to 12 percent. But it hasn’t all been smooth sailing - not all the products are consistently profitably, the success has been greater with consumers than with advertisers, and the company needs to develop a greater focus on new revenue models and sales approaches.

Tips for publishing in a multi-platform environment

Mario Garcia, President, Garcia Media, USA

Dr Garcia’s presentations are always filled with nuggets of intelligence and good advice about newspaper and website design and how they contribute to audience growth. Here are some of them:

“We have to provide intelligent navigation. Intelligent navigation is done by an editor who says, ‘the reader doesn’t have a lot of time, I’m going to tell you what’s important.’”

“We like our print and online editions to share a certain look and feel. They don’t have to be brother and sister, but they have to be first cousins. They have to be similar.”

“We deal with small images on our computers and cell phones, so why don’t we transfer that to the newspaper?”

“Newspapers are something you read. The web is something you do. Once you learn this distinction, your job and the management of the newsroom will be different. The newspaper, you read. The web, you must have some kind of activity. Online allows you to get involved.”

“Is there an end for print? No. Print is very much alive. But print will assume a different role, it will have to do a very different job.”

“There are more stories to tell, and more platforms to tell them on.”

Ensuring Newspaper Growth in Print

Sandy Romualdez, President & CEO, The Philippine Daily Inquirer

The Philippine Inquirer Group is seeing 20 percent annual circulation growth across the group. Ms Romualdez’s presentation focused on the factors that prompted such spectacular increases.

“It is our credibility that has kept the loyalty of our readers,” she says. We take our role as government watchdog very seriously. Print has the ability of pressing a story until action is taken.”

But, at the same time, “readers are time-starved,” says Ms Romualdez. “How do we make it easier for readers to put us in the proper place in their news and information value chain?”

Though the group has substantial digital growth, Ms Romualdez focused her presentation on print growth “because that’s something I don’t think is worth abandoning.” Here are some of the things the Inquirer did:

  Placing “capsules” of information beside the main articles. “In The Know” explains complex issues such as a law, or the difference between a fiscal and economic crisis. “Fast Facts” provides a list of important facts. “Inquirer Monitor” presents infographics, which are also used throughout the paper, often full-page.

  Publication of at least one heart-warming story every day because people were reading less because of the perception that newspapers carried only bad news.

  A Sunday magazine printed on coated paper instead of newsprint was seen as more valuable to readers. Circulation grew 5 percent after it was introduced - and advertising revenues grew 300 percent.