Digital First: The Next Step

Folks,

Today marks another important step for Digital First.

As announced earlier this morning, we have formed a new company – Digital First Media Inc. It will manage both the Journal Register Company and Media News Group and its mission will be to accelerate the transformation of both these great firms to a modern, multi-platform media company focused on local news.

And, let me tell you, it will be a powerhouse out of the gate with more than 880 products in 18 states serving more than 57 million Americans per month. More than 41 million of those customers are digital-only creating one of the largest online news networks in the country.

I will head Digital First Media as Chief Executive Officer as well as be CEO of both JRC and Media News.

Newspaper companies aren’t supposed to be able to change. Haven’t you heard?

Here’s another one: Digital dimes can’t replace Print dollars.

Then this: No one wants what we have to offer.

And then this one: Digital revenue will never be able to pay for a newspaper’s newsroom.

We are supposed to be out of ideas, out of money and out of energy. To our competitors, I say keep thinking that. It will make this transformation easier.

At JRC we have blown up a lot of that received wisdom from newspaper critics.

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.

That’s more customers for what we have to offer. A lot more.

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 battle to transform newspapers is far from over but now under the Digital First banner Journal Register Company’s employees are joined by the innovative men and women of Media News Group.

From storied titles like the Denver Post, San Jose Mercury News and St. Paul Pioneer Press an enormous amount of digital initiatives have been underway to transform Media News Group.

Now, together, we are going to accelerate that transformation.

All of us have one goal – to preserve quality journalism in the communities we serve.

And we are going to bring along the Crowd to help us. News is created and consumed very differently these days. The folks we used to call the Audience have a stake in this because they have a stake in their communities. The same communities we are dedicated to serving.

We believe without quality journalism there is no democracy. No First Amendment without a vibrant Fourth Estate.
This is the proposition we are dedicated to.

Collectively, we will harness the energy of nearly 11,000 employees in JRC and Media News to meet that challenge.
Because, we are not of out ideas, we are not out of energy.

We are just getting started.

Until next time, John.

31 thoughts on “Digital First: The Next Step

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  7. I believe digital dollars can replace traditional advertising dollars to support the mission!

    The ability to exponentially scale the digital reach of the organization seems to be a necessary condition to successfully make this a reality. Local and regional newspapers reach are inherently limited by the region they support.

    What is the Digital First strategy to achieve scale with regard to digital reach?

  8. Folks,

    Fasten your seatbelts. You’re in for the ride of your life.
    If there is one (maybe two) people who know of what they speak…
    Mr. Paton is certainly one of them. Watch for the reincarnation of news in the platform that people want…and watch for the reincarnation of journalism.

    This guy is good.

    JS

  9. Exciting news John. How does the merger help JRC? You mention some great progress in audience And revenue growth, but not much on the reason for the merger? Sounds like JRC is bailing out MNG?

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  11. … Sounds like the investors (AGC) have their eye on the future — digital — and are playing a role in making sure JRC and MNG get there regardless of mid-flight turbulence. Go get ‘em, John! The future called, and said to hurry up. You have the right “one goal.”

    If you are looking for digital media people in Denver, count me in.

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  18. Congratulations John and… I hope you will survive, as there are lots of skeptics and enemies of “digital dimes” out there.

    Here at Znak it! we developed and presented our content monetization platform back in 2008. The platform is based on the concept of pre-paid virtual tokens (“digital dimes”) users can redeem as they surf the net and access desired premium content. Znak it! is very simple to implement and use — no set up or costly system integration work is required. We even won the 2011 Florin Award for innovation in the online payment technology. Still, it’s been very difficult to interest any publisher to use it.

    What I am trying to say is: the technology is there; it’s been there for years now. The benefits of selling premium content directly to its consumers are huge both for content providers and users. But the “wait-and-see” attitude in the publishing world seems to be prevailing now. If you can change it — let the force be with you!

  19. As someone who’s inside looking out, this is goods news.

    The newspaper industry is tired and worn out. There’s a real resistance to change and change is necessary. The good old days are gone for good.

    It will require more than a spring cleaning to revitalize this industry. It’s time for radical change, new ways of thinking, new ways of operating, new faces, new ideas, risk taking and innovation.

    The things that John Payton talks about in this post are things that should have occurred across the board five years ago. If this is indeed the start of a revolution in the industry, the revolution is coming late.

    • Maybe not five years ago, but in 2007/8, there were many initiatives to help the industry take advantage of the digital space. Paywalls, nagwalls, pre-paid e-wallets, even in-app payments for tablets (then called e-readers) were there ready to be used.

      Now, when some publishers “discover” metered access or digital newsstands, the technology is moving quickly ahead into the clouds and back directly to the users, by-passing device-specific platforms and cc-based payments. I guess the industry will be surprised again, having already wasted millions on erecting paywalls, that readers do not want to “be loyal” two one or two “local/preferred” papers; that they prefer on-demand access to hundreds of sources of info including peers; that they do not want to read only, but they want to write, comment, rate the news and the journalists, recommend what they read to other users, using NFC, etc. Paywalls do not provide for this type of interaction, as as such they are already obsolete.

      • Greg,

        I started in the digital publishing business in early 2005. People were making – and continue to make money – selling digitally formatted information. Yes, we catered to a unique market (technical manuals), but the model was there. I’m glad to say that in that sector, at least, the business has only grown. Unfortunately, it’s way too late for the newspaper industry to jump on that bandwagon. That bird has flown as users now have access to almost unlimited free content.

        You hit the nail on the head when it comes to metered access and digital newsstands. It’s definitely not the way to go. The money the industry will get from these methods will be much less than the money they invest into implementing them. As you point out, readers want to be involved. Specifically, they want to be part of online social communities that allow them to share and express their own opinions.

        Paywalls work directly against the creation of an open social community. Rather than implement barriers, the industry needs to throw the doors open to their sites and digital properties.

        How do they make money on that? The same way they always have – through advertising. Of course, if I’m an advertiser and I am going to stick my sign somewhere, I want it to be where there is lots of traffic, lots of activity, and lots of people spending their time. How do you create that space in the digital world? Heed Greg’s remark about what readers want and implement them with verve.

      • I agree Rich, with one exception: money from online advertising can be doubled or tripled, if publishers use ALSO others monetization models. One does not have to exclude the others.

        Our system, for example, uses several models in one. With Znak it! users have a choice to subscribe, pay as-they-surf, one piece of content at a time, or view an ad or promo material or answer a brief survey and thus earn ad-sponsored access to paid content — all with two mouse-clicks; no registration or pesky ID/PIN numbers required.

        With an average of $0.84 per access, a quality content provider can generate a lot more revenue than from traditional advertising. More importantly, Znak it! does not require millions of uniques per month to deliver serious income. One does not even need one’s own webpage to start earning online. We can syndicate and cross-publish quality content on selected social networks, with no additional cost; no need to have any native apps or build expensive paywalls.

        Right now, we are implementing a Twitter client that uses social interactions (tweets with hyperlinks) as the primary vehicle for directing paying users to selected, peer-recommended content. There is no better “social” way to build loyalty and reach out to new users, and it is free.

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