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Industry Insight

Paton says Put Digital People in Charge of Newspapers

In a story in GIGAOM,

By Howie Fenton
Published: December 6, 2010

In a story in GIGAOM, John Paton, CEO of the Journal Register group of newspapers, is quoted as saying, “The time for debate is over. Newspapers need to be digital first in everything they do, and more than that, they need to take the same approach to their businesses that many web-based startups have, and that means being transparent, crowdsourced, collaborative and flat.” (FYI, according to Wiki, crowdsourcing combines Crowd and Outsourcing and means the act of taking tasks traditionally performed by an employee, and outsourcing them to a group of people or crowd.)

In a speech delivered Thursday at the Transformation of News Summit in Cambridge, Mass. (sponsored by INMA – International Newsmedia Marketing Association), Paton said that the Journal Register — who took over in February — has been using these principles for the past year. The full transcript and slides are posted on Paton’s web site and goes on to say that the strategy has resulted in both revenue and profit growth for the company, which was effectively bankrupt last year and will reach about 15 percent this year.

In the story author Mathew Ingram reports that what’s most interesting about the Journal Register’s approach is it doesn’t rely on putting up pay walls, as media mogul Rupert Murdoch has done at his newspapers in Britain. Murdoch is the founder, chairman, and CEO of News Corporation, he created Fox Broadcasting Company and owns the Wall Street Journal. Ingram writes that these paywalls led to a decline in online readership of more than 90 percent — and is the same model under discussion by the New York Times. Instead, Paton is focused on expanding the relationship his newspapers have with both readers and advertisers in their local communities, and taking that online. He says it’s working even better than expected.

Also discussed was that Digital ad growth is 2 times better than the industry. The Journal Register’s digital revenue have grown from almost nothing to 11% of ad revenue in November – in less than a year. They will bill about 1,000 digital ad orders this month and has increased its revenue streams from about 13 to about 60.

The solution according to Paton? Stop listening to newspaper people.

“We have had nearly 15 years to figure out the Web and as an industry we newspaper people are no good at it. No good at it at all. Want to get good at it? Then stop listening to the newspaper people and start listening to the rest of the world. And, I would point out, as we have done at JRC – put the Digital people in charge – of everything.”

When I read this story I was reminded of one of my favorite lines from the movie Top Gun when Tom Cruise is being criticized in class for a maneuver termed “too aggressive” and his friend Hollywood says, “Gutsiest move I ever saw, Mav.” But what do you think? Is it time for newspapers to adopt a new business model, with digital people and digital business on top of the priority list?

Howard Fenton is a Senior Consultant at NAPL. Howie advises commercial printers, in-plants, and manufacturers on workflow management, operations, digital services, and customer research

Howie Fenton is InfoTrends' Associate Director of Operational Consulting. For over 25 years, he has focused on benchmarking operational and financial performance in in-plants and commercial printers. He can be reached via e-mail at Howie.Fenton@infotrends.com.

 

Discussion

By Barry Campbell on Dec 06, 2010

Howie, this is a refreshing article. We are also doing our best to evangelize the need for newspapers to put their online product first. You're right, the time for debate is over.

 

By Guy Williams on Dec 06, 2010

I agree that the future is digital but I think a bigger effort has to made in teaching small local business owners how to use their local newspaper. I believe that only 15% to 25% of local business owners are savvy marketers, the rest are just crossing their fingers.

 

By Chuck on Dec 07, 2010

It's long past time, Howie!

Newspapers need to invest in digital, expertise and infrastructure; and this should have been a very high priority for the last couple of years at least.

Paywall or no, Rupert Murdoch is making gigantic investments in digital that are going to greatly further his company's leadership role in the global industry for years to come.

They are doing absolutely amazing things at the WSJ Digital Network, which includes WSJ, Barrons, AllThingsD, MarketWatch and FINS. It's a robust global content creation and distribution network-- not "just a newspaper".

At this point all content should be targeted "digital" first, then be re-purposed for print as appropriate.

 

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