Newsonomics On the transformation of the news business 2016-08-22T20:40:44Z Ken Doctor <![CDATA[New York Times Shuts Down NYT Now Mobile App; Millennials A “Pscyhographic”]]> 2016-08-21T02:57:50Z 2016-08-21T02:57:50Z Read more »]]> NYT Now, once the bright offspring of a nascent Paywalls 2.0 movement, is ending its short life. That not-unexpected move tells us how much the New York Times – and the market – has changed in the brief 28 months since its 2014 launch.

Back then, CEO Mark Thompson’s still-new regime at the Times actively sought a next wave of reader-paid products. Thompson saw NYT Now, NYT Opinion and NYT Cooking as three good forays into next-wave subscription products. Each aimed to find paying readers beyond those who had signed on for full Times digital access.


First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


That plan didn’t work.

NYT Opinion closed first, failing to find enough payers or audience. Cooking, now commanding eight million monthly unique visitors, is adding new, targeted ad revenue, and in mid-July added its first new reader-revenue source, Blue Apron-like Meal Kits by NYT Cooking.

NYT Now – intended as a low-cost ($2 per week) Millennials-targeting, smartphone-native news product lasted a year as a paid product, before going free. We believe it generated a disappointing 15,000 to 20,000 separate paid subscriptions.

Yet, most at the Times itself consider the NYT Now venture to have been a resounding success – and their logic has a basis in reality. It’s an unusual tale of rapid product innovation and product–pricing adjustment.

Talking to three Times executives about the closure Tuesday, I noted that the NYT Now experiment seemed a smart exercise in a legacy company adapting the Silicon Valley “fail fast” mantra of product development.

“Less than failing fast, it was an opportunity to move fast,” said Kinsey Wilson, the Times EVP of product and technology, who inherited the product when he came to the Times in late 2014.

Language aside, the Times’ learning from its Millennials foray has been dramatic, and has helped to move the subscription needle after all – but with the Times’ “core” subscription product, not a niche one.

Meredith Kopit Levien, the Times’ chief revenue officer, explains: “We were looking to attack a different part of the demand curve and there was a thesis around having separate products … . We realized the ability to drive acceleration in the core consumer business. [There is] a higher-priced, real momentum in that business.” Indeed, The Times overall digital subscription business has seen increasing growth in recent quarters [“Behind today’s Times numbers: reader revenue”].

In short, the Times fine-tuned its main digital subscription selling machine – and we can expect another simplifying fine-tuning next year – and is getting a good flow of those Millennial-aged subscribers to its main subscription offerings. And those are worth more than two dollars a week per sign-up.

The Times’ 2015 internal study of NYT Now audience showed 45% of it in the Millennial (18-34-year-old) category. At that point, 35% of the Times core mobile apps users (both smartphone and tablet) could be counted as Millennials.

This year, says Kinsey Wilson, “50% of our core mobile app users (phone and tablet) were 18-34 years old according to Comscore Mobile Metrix.”
As it closes shop on NYT Now in September, the Times has learned that the app has been heavily used by those who are existing core New York Times digital subscribers. That’s one big reason the Times feels comfortable shutting down NYT Now. In total, 42,000 New York Times subscribers use NYT Now; fully 90,000 of them, or 39,000 subscribers, also use the Times’ core mobile app. Of those, more than 70 percent read the Times at least four days a month a month via the core app.

Curiously, that’s a pattern found by a parallel news app, The Economist’s Espresso. It, too, aimed to find new audiences for Economist. It’s been successful, The Economist tells me. That success, like the Times’ experience, is based more in retention of current subscribers than in acquiring new ones.

Add it up and there’s a fair amount of overlap between NYT Now and NYT core readers.

NYT Now had become a vestigial product and evolution is quickly taking care of it. Yet, the Times still must “discover” more Millennial readers, and for that, it is working Facebook and other social platforms.

All the numbers make a case for the announcement, but more important is the product strategy that enabled it.

When I first talked with then-starting-up NYT Now editor Cliff Levy two years ago, we talked about how he wanted to port over the casual sensibility of the local New York Today product – a morning newsletter with an online version that is updated through the day – to NYT Now.

Levy and the Times’ multiple newsroom, design, tech and marketing teams were successful, beyond what any intelligent observer of the slow-to-change Times might have expected. As I laid out in March – “Newsonomics: The New York Times Re-invents Page One — and It’s Better Than Print Ever Was” – the Times did more than loosen up. It redefined itself for this digital time, and in doing so has created a model.

Many of the innovations readers enjoy in the Times mobile app first saw light at NYT Now. Levy ticks them off: “There’s the briefings, the morning and evening briefings. Visually oriented journalism including animations on the home screen, far bigger and more vibrant photos, bulleted text to allow you to scan the news much more readily.”

The Times made much better use of the breadth of its 250 published stories a day, offering greater variety and showing off its growing storytelling abilities. The NYT Now experience gave the “main” Times permission to maintain Timesian rules, while joining the modern age.

“The tone and the sensibility” are “a little bit more relaxed, just a little bit more conversational while still being kind of rooted in the New York Times traditions and values,” said Levy, who last year was promoted to an assistant editor position on the masthead overseeing “the presentation of [the Times’] report on all platforms.”

Levy speaks to the bigger question: How does this product learning inform the next step of Times progress, as it continues to struggle with its revenue  [“Is this the bottom for The New York Times?”]

“We’re much more comfortable with experimenting in the core itself. That is a very big cultural change, not in the newsroom of the Times but I think you can argue across the entire organization.”

Certainly, in 2016, almost all digital media are going after the Millennial audience [“The Millennial Moment”]. They have to, given that at 82 million people it’s the largest generational cohort ever. Legacy media like the Times – which can count Millennials as 31% of its overall U.S. audience – now compete with the Voxs and Vices for that audience [“Which media companies are winning the battle for Millennials?”]. All companies’ base their Millennials strategies on their understanding of the market, but that’s a moving target.

As Levien puts it, “Literally behavior is changing in real time. I think some of the assumptions about being a different product to attract a younger audience have changed.”

The Times has moved from a demographic worldview to a psychographic world view. Its New York Times-targeting persona is secret internal algorithm, but we can all kind of describe that person.

In this NYT Now to NYT core journey, we can see a couple of thoughts of the digital news media moment. Products built to take advantage of modern storytelling can work well for both younger and older audiences. Hipness may be overrated; exclusive, high-quality content well-told may be underrated.

Ken Doctor <![CDATA[Which Media Companies Are Winning the Battle for Millennials?]]> 2016-08-21T03:29:31Z 2016-08-21T02:02:22Z Read more »]]> Last week marked the entry of still another new media entity into the Millennials market. What do the numbers tell us about the highly sought-after terrain?

Josh Topolsky’s The Outline, launching in the fall, aims squarely at the market, even if he eschews that precise label [“Newsonomics: Sketching in Josh Topolsky’s new “The Outline“].


First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


“To me, millennials is an age range between one number and another. It’s not an audience,” Topolsky told me. “Within that realm there are real audiences. There are people that I know. There are people that you know. I don’t think that we’re purely millennial.”

“Let’s say there’s a stretch between 20 and 40 where we’re going to be most relevant in terms of age,” he said. “But what I’ll say is that inside the village of unpacked millennials there are millennials that are like me and unlike me. You can go after all of it. You can cast this big net, which many and most publishers do. To say this is who we need, who we want.”

Thirty-eight years old himself, Topolsky has notched editor roles at Bloomberg Media, Verge and Engadget; he will lead The Outline as both editor-in-chief and CEO.

Given the convergence of Millennials coming-of-heavy-spending-age, and smartphone omniuse and social sharing of news among this demographic, marketers love Millennials. By their very youth, they make themselves more open to new brand identification than their elders. Older groups’ brand loyalties are more entrenched, and, in certain spending sectors, they find themselves less acquisitive than career-building, family-forming, identity-still-reaffirming Millennials.

Advertisers want to reach them, so grabbing Millennials has become a top priority for almost all news publishers.

That Millennials population, in all its glorious diversity, is huge. At 82 million, it’s six million greater in number than the last big population bulge, the self-analyzingest generation, the Baby Boomers.

Think Millennials and news, and you think Vice Media, Buzzfeed, Mic, Ozy, Vox Media, Fusion and Vocativ. These are the companies, in just a few years, which have laid claim to the new turf. At the same time, almost every legacy news company is setting strategy with its use of Facebook particularly, and social and messaging media more generally, to hunt Millennials as well.

Let’s look at how they are doing.

By gross audience measure, traditional news brands can claim lots of these readers and viewers.

CNN reaches the highest percentage of the Millennials cohort, a full 70%, as we can see in Comscore’s June, 2016 U.S. Multi-Platform study.

The Yahoo-ABC Network, combined for now, reaches a little less than two-thirds of it, at 63%, with Buzzfeed, the major start-up in the top 10, placing third at 60%.




USA Today, NBC News, Mail Online, Huffington Post, CBS, the New York Times and The Weather Company all place in the top 10.

Overall, Comscore says that almost 75 million of the 82 million Millennials used the Internet; it would be fascinating to understand what the other seven million are doing in any given month, but that’s another study.

Of those 75 million, 95% hit a news or information site at least monthly. (Same question as above about the remaining 3.75 million who use the Internet but don’t access news in 30 days.)

It shouldn’t be surprising that big brands can show big Millennials numbers. More interesting is how well they do relative to each other.
Check out the last column in the Comscore chart, “Composition Index UV”. Overall, Millennials can be counted as above-average (average receiving a “100” score) consumers of news and information, with a 110 score. That’s a point worth remembering the next time a Baby Boomer blabs on about the young people these days.

Of the top 25 news sites, only one pulls in a sub-100 score: Fox News, at 98. Fox News has the oldest cable TV news audience (68) and faces new issues [“Despite Murdoch claim, data shows Fox News Channel’s brand perception is way down”] revealed in YouGov’s recent BrandIndex study, on which I reported Friday. Fox, notably, struggles the most among legacy media companies to reach the audience of the future online.

Who does the best with Millennials, “over-indexing”? Appropriately enough, it’s and Mic. Vice (found at the bottom of the chart because Comscore classifies it as an entertainment, rather than news, site) earns a 223 score.

With that ranking, it leads the pack. That score means that the percentage of’s audience that’s Millennial is more than twice as large as it is for the total internet.

With 17 million Millennials reached, it nabs 23% of the total age cohort monthly. Almost two in three of its readers are 18-34.

Just behind it: Mic, Buzzfeed,, Mail Online and The Guardian.

Five-year-old Mic has laid claim to this market most vociferously [“Chris Altchek’s three magic words for Mic: videocentric millennials company”].

Fully 60% of Mic’s total visitors are Millennials; almost 10 million of them are on the site at least monthly. The other top Millennials-reachers, too, are counting Millennials as more than half their audiences.

Let’s look at those Millennials-specific sites:

• Mic can claim a purer targeting, with six in 10 of its readers and viewers in the target group. Still, the company reaches only 13% of the Millennials population. If that’s the right population – more educated, more affluent, as Mic CEO Chris Altchek aims – it may be reaching a critical threshold.

• Buzzfeed’s success is built around a magic 60% number. It reaches 60% of the Millennials audience, and 60% of its audience is Millennial. That’s scale, with 45 million unique visitors in that age group touched each month.

• finds half of its audience in Millennials, though only 8.7 million so far. (Other Vox Media sites, which range widely in content from food to real estate to tech, also vary widely in their Millennials audience composition.)

• pulls in about the same number – 8 million — as Vox, but can claim a great concentration. Fully three out of four of its readers are Millennials.In fact, its “overindexing” number can be considered better than Vice’s or Mic’s, though its results are obscured by currently being included in the overall Yahoo/ABC News accounting. By fall, Fusion, I’m told by the company, will be reported as a standalone traffic number.

• Ozy, backed by lead investor Axel Springer, is having a tough time fulfilling its Millennials mandate. Forty percent of its audience is made up of Millennials; overall it reaches just four million of them.

On the other hand, big legacy news brands show substantial audiences, but look to Millennials to make up only about a third or a little more of their overall visitors.

Thirty-nine percent of the New York Times audience is made up of Millennials. For USA Today, it’s 37% and for NBC News it’s 35%. These companies look at Millennials as a kind of blood transfusion, bringing new readers into the habit.

For those selling digital subscriptions, like the Times, Wall Street Journal, Financial Times and regional newspapers, these potentially paying readers offer a route forward, but are tougher to convert.

Big news players – print- and TV-based – can claim large numbers of Millennials. How well can they sell these audiences to advertisers? That depends on their ability to segment out the Millennials from other visitors.

The big numbers provide one level of meaning, but they are a mere entry point. It is on that segmentation of the Millennials market that media companies will rise and fall. That targeting inevitably means better use of data mining and analytics, of course.

Given the huge size of the Millennials population, there’s plenty of business to go around. Still, the Holy Grail of becoming the definitive publication of Millennials, its voice and mirror, brings in the starry-eyed.

We can see that quest as The Outline rolls out this fall.

Josh Topolsky’s passion makes that clear. I asked him why he is so fervent about serving this generation of readers.

“Because that’s the audience that I’m a part of and it’s the audience that I know and, it’s the audience that I’m interested in,” he told me last week. “It’s the audience that is now changing the world and will change the world in the future. I’m very interested in what are the publications of record for this generation that are smart, that speak to them with intelligence, that respect their appetite for changing and living in a big new world. If you were making a New Yorker, and I’m not saying we’re making something like the New Yorker, but if you were going to make a New Yorker today, what would that be? What would that look like? Who would you be trying to reach? I think that for me, and I love the New Yorker by the way, but it isn’t built for this generation. It isn’t telling a story to this generation.”

CORRECTION: An earlier version of this piece misstated the number of Mic’s Millennial readers; they number 10 million, or 60 percent of total visitors, not 60 percent of 10 million visitors. The article has been edited to reflect the change.

Ken Doctor <![CDATA[The long rise and very quick fall of Fox News boss Roger Ailes]]> 2016-08-20T20:23:53Z 2016-08-17T21:05:07Z ]]> 0 Ken Doctor <![CDATA[Tronc Awards Potential Millions to Two Top Execs; CEO, CFO Could Get Last Tronc Laugh if Gannett Buys the Company]]> 2016-08-12T05:05:27Z 2016-08-12T05:03:35Z Read more »]]> In a move of perhaps canny timing, two top Tronc executives are now enjoying enhanced pay packages – ones that will pay out millions of dollars should Tronc be sold to Gannett or another bidder.

Further, the possibility of sale – still a quite live one this summer – could be on the table again as soon as today.


First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


Tronc financial advisers Goldman Sachs and Lazard Frères will help lead a meeting in Los Angeles, involving Tronc board chairman Michael Ferro and his top Tronc C-suite level executives, as well as possibly board members. While Gannett has been publicly quiet about a third acquisition offer, after having been unceremoniously rebuffed twice in the spring, the company could well offer $18-20 per share for the company, though the timing of such an offer isn’t clear.

Tronc’s recent share price – on the anticipation of a Gannett sale – has hovered in the $15 range, the last price Gannett had offered for the company.
In an Aug. 3 Securities and Exchange Commission filing, Tronc disclosed the granting of additional restricted stock units for both CEO Justin Dearborn and CFO Terry Jimenez. The executives, who joined the company six and three months ago respectively, have been granted bundles of Tronc common shares, scheduled to vest in three equal installments on Aug. 2, 2017, 2018 and 2019. The key phrase in the grant filing has tongues privately wagging around the country, italics mine:

“The vesting of each executive’s awards will accelerate upon termination of his employment for any reason (including a resignation for good reason) other than cause, death or disability (as such terms are defined in such executive’s employment agreement) if such termination takes place upon or within two years following a change in control (as defined in such executive’s employment agreement) that occurs during the term of his employment agreement and such executive signs a general waiver and release that has become effective.”

Simple translation: If Gannett, or another company, buys Tronc, the two new executives cash out in the millions.

While such change of control clauses are not uncommon, the timing of the grant – with Tronc directly in play — is bound to further anger investors. Some of them have already publicly complained and filed lawsuits claiming poor governance and alleging company executives had illegally put their own interests before that of shareholders.

Further, Tribune–Tronc’s value has been diluted twice by board-approved private sales this year. The main case, filed in Delaware’s Chancery Court, is heading toward resolution; plaintiffs may try to add this latest stock grant to the bill of particulars.

In a statement to me today, Tronc explained the timing of last week’s grants.

“When Mr. Dearborn and Mr. Jimenez joined, the Company did not have any equity to grant top executives. In June, our shareholders approved an additional grant of our equity and a new compensation committee was formed. The compensation committee, and their independent consultant Willis Towers Watson, granted these shares to align executive interest with shareholders. The grants, which our independent consultant found were still below market median for executives, incentivize Mr. Dearborn and Mr. Jimenez to continue putting a clear strategic plan in place and to lead the organization to execute that plan.”

How much could Dearborn and Jimenez clear, in addition to the their regular compensation (salary plus bonus) that could reach $750,000 and $735,000, respectively?

Dearborn receives 375,000 shares and an additional 225,000 shares in stock options. Jimenez receives 187,500 shares and 112,500 shares in stock options. .

Consequently, Dearborn would net $5.6 million, if Gannett paid $15 a share for his “restricted shares.” If it paid $20 a share, he would net $7.5 million. In addition, for every dollar per share over $15 that Gannett paid, Dearborn would gain $225,000 for the stock options. At a $20 sales prices, those options would be worth $1.125 million.

The math for Jimenez’s payout would total half those amounts. They show a possible restricted share gain of $3.75 million, at a $20 sales price, plus an additional $562,000 for the options.

In the filing (italics mine), Tronc noted that “Messrs. Dearborn and Jimenez joined the Company earlier this year after resigning from their then-current positions with, and forgoing equity grants and greater annual cash compensation packages from, their previous employers, on the expectation and understanding of receiving compensating equity awards from the Company.”

What the filing suggests is that two were hired away from lucrative positions, and had to give up similar stock grants. If new lawsuits do eventually fly, attorneys may well compare what the executives gave up at their former employers to what the Tronc board has now granted them. The question for shareholders: How justifiable – at this time, for those two executives, one, CEO Dearborn, with no media business experience – are these grants?

The timing of the board approval is sure to win notice as well by dissenters, as the filing reports: “The awarding of the equity grants described in this Item 8.01 was delayed until stockholder approval of the Amended Plan was received at the 2016 annual meeting of stockholders. Why was it “delayed”? No reason is given in the filing.

The level of disclosure to the previous board of the compensation promise to the two executives, as they were hired isn’t clear. That board, which was newly elected in a highly Gannett-contested vote in June, had included a member or two who had questioned some of Michael Ferro’s plans.
Both executives joined Tronc (then named Tribune Publishing) after stints at IBM. IBM bought Merge Healthcare from sellers that included an investment group, headed by Michael Ferro, who now heads the Tronc board of directors.

Both Dearborn and Jimenez had previously worked for Ferro. Dearborn is a long-time Ferro associate, dating back to at least 1997.

Jimenez worked as a consultant for Wrapports, the holding company that controls the Chicago Sun-Times, which Ferro had led before buying his controlling interest in Tribune Publishing in January.

Jimenez serves as the company’s third CFO since its split from the Tribune Company two years ago. He replaced Sandy Martin, who was terminated, on short notice, by the company, after I reported the company’s legal acknowledgment of “material weaknesses” in its accounting practices in two consecutive years [“Fixing the financials at Tribune Publishing”].


These stock grants aren’t the only recent actions that have attracted the attention of Tronc shareholders and employees. Recently, Michael Ferro hosted a pricey company conclave at Lake Geneva, Wis. and threw himself a July 11 50th birthday party at the Chicago Cut Steakhouse. To fete himself, he gave guests a “Ferro-designed poker set featuring 24-carat gold cards, gold dice and gold U.S. $1 coins.”

Further, the Tronc chairman’s penchant for the better things at life, even at corporate expense, is displayed in his travel habits. According to reliable sources, a recent invoice for Ferro’s use of a corporate jet amounted to $400,000.

Then, finally, there’s the public ridicule of the Tronc name – as the company dropped long-time “Tribune” in June. In the weeks after the renaming, the web had been alive with satire of the name and the promotional videos that accompanied them. That outrage had died down – until Sunday.

On HBO’s Last Week Tonight with John Oliver, the host press [“Newsonomics: After John Oliver, the you-get-what-you-pay-for imperative has never been clearer”] he made a special point of Tronc, its renaming and its silly videos, saying he could go on for more minutes about the company, but wouldn’t.

On YouTube, his Tronc-ridiculing show has already racked up almost four million page views, still adding more than ten thousand an hour four days after the HBO airing. What’s still left to wonder about: who will have the last laugh at Tronc?


Ken Doctor <![CDATA[Newsonomics: After John Oliver, The You-Get-What-You-Pay-For Imperative Has Never Been Clearer]]> 2016-08-12T04:57:03Z 2016-08-11T09:09:45Z Read more »]]>  


Can John Oliver’s 19 minutes rivet attention as all the bolts and screws continue to come undone in the local news business?

That seems a hope against hope — and yet 3.7 million YouTube views of his Sunday evening HBO program say something. Oliver offered no new revelations, but he connected the dots as he has so expertly done week after week on Last Week Tonight since its April 2014 debut. It seems to be Tronc — the ridiculous renaming of a once meaningful Tribune brand and the company’s unintentionally self-parodying promotional videos — that sent Oliver and his merry band of writers into action. They depicted the local press landscape as an increasingly barren one.


Michael Ferro’s Tronc (X or M), of course, is only a logical progression in a local news(paper) business that has long lost its way. There are of course numerous remaining (if awfully quiet) credible publishers, but they’ve been joined in the trade by so many crude cost-cutters, charlatans, and cowardly executives. They damage the search for a real turnaround strategy.

The wider public shouldn’t need the anti-bullshit brigades parented by Jon Stewart to connect the dots of press decline, but apparently it does. John Oliver and Samantha Bee have not only emerged as leading voices in the culture — I believe they’ve emboldened journalists, from The New York Times’ Trump-checking teams to CNN’s Brian Stelter, whose incisive work is now getting the wider recognition it deserves (and whose “Fox-sent-me-on-a-date-with-a-spy” tale is now opening eyes to the resemblance between the Roger Ailes scandal and Hackgate, the major U.K. newspaper scandal Rupert Murdoch has almost buried amid concerns about his outdated management style).

As Oliver tours the ravaged newspaper landscape — from Portland’s Oregonian to the Sheldon Adelson-seized Las Vegas Review-Journal to the easy pickings of Tronc to how much TV still rips and reads local newspaper news — those of us too close to the business can newly see how far the business has fallen just this year.

Amid it all, let’s for the moment just focus on Oliver’s simple conclusion:

A big part of the blame for this industry’s decline is on us and our unwillingness to pay for the work journalists produce. We’ve just grown accustomed to getting our news for free. And the longer that we get something for free, the less willing we are to pay for it. And I’m talking to you, watching this segment on YouTube, using the Wi-Fi from the coffee shop under your apartment. You’re killing us. Sooner than later, we’re going to have pay for journalism, or we are all going to pay for it. Because if we don’t, not only will malfeasance will run amok, but the journalism movies of the future are going to look a lot more like this.

At that point, Oliver introduces Stoplight, a hilarious four-minute Spotlight parody, one that may still not seem funny enough to those in increasingly tronckified newsrooms.

That’s simple, but it’s not simplistic.

In fact, it may take a comedian to emphasize the point that is right in front of us: The decades-long subsidy of high-priced print advertising is all but over. It is now readers who must pay to keep informed. This isn’t a new notion at all — it’s one that has most eagerly seized by national and global newspaper companies, like The New York Times and the Financial Times.

All have crossed over — they receive more than half of their revenue from us, the readers. Reader revenue is helping each of them build a sustainable digital future. None is there yet, but they’re far closer to getting there than the local press, where readers pay only about 30 percent of the expenses.

Oliver focused, properly, on local newspapers. That’s all but four of the U.S.’s 1,350 or so dailies. Across an expanse of 3,000 miles, that’s where most of us used to get our news, and that’s where we’ve seen half of the newsroom workforce sent packing, including many of the most experienced journalists. Why haven’t America’s local newspapers crossed over like the Times?

That’s the logical question that pops out of Oliver’s rant.

“There is going to be a lot of experimentation and evaluation of new business models,” wrote Newspaper Association of America CEO David Chavern, in his criticism of Oliver. In fact, the newspaper industry has been saying this now for almost two decades, with Chavern, new to the industry as of a year ago, to be excused for his take. It’s not experimentation that is most needed. It’s execution, and execution based on the value of smarter, rather than dumbed-down, local journalism.

In fact, most regional publishers — the few independent publishers I’ve highlighted over the years offer the primary exceptions — have failed to apply what the Times and FT have learned. It’s true that the Times is national, and now global. Consequently, it can draw upon a large universe of potential digital subscribers. That scale, though, isn’t the only answer of why reader revenue works so well for some companies but not for the vast majority. In fact, my research shows that the Times and FT convert their audiences to paying customers at a rate of about five times better than do regional papers. So it’s not just size of audience — it’s also what you do for the audience.

Chalk up two reasons for the the Times and FT success. Both provide more value to their readers — and both are smarter about how they charge. They haven’t simply erected a paywall and put most of their content behind it. Most essentially, both still publish enough daily original reporting to maintain daily habits for subscribers. That’s the journalism that should be at the root of the journalism business. Both publications have seen cutbacks, but both maintain robust, experienced, and increasingly innovative newsrooms.

Compare that to the ungodly decline in numbers, knowledge, and know-how in so many regional newsrooms across the country. For most daily publishers, the business logic is counterintuitive — cut the news staff in half and charge twice as much for the remaining output — and consumers have responded understandably by walking away.

Further, both the Times and FT think about product. The newspaper was the “product,” though we never thought of it as one because it was so singular and so long-lasting. Our digital world, though, both offers the opportunity (and the demand) to think “product” when screen sizes, video storytelling, and social sharing open new horizons.

]In March, I highlighted the Times’ smartphone product — I believed it finally offered a copyable future for the press. My almost-eternal optimism has been dinged a bit since; I’ve seen practically no borrowing of the many good ideas the Times presents every day. How could that be? In a world so desperate for new funding — for reader revenue — how can an industry shrug its shoulders at such a compelling model of mobile engagement and proven subscription payoff?

It’s not just content and its presentation that form the building blocks of the majority-reader-revenue era we need to enter. Paywall technology providers tell me they are puzzled by how slowly publishers have been to test new niche payment schemes, potential new products, and personalization. It is an industry focused on milking short-term profits at the expense of long-term business success — and civic service.

At home and in my travels, I talk with so many former local daily newspaper readers. They have lost a habit, as their print products became shadows of themselves, and as digital products just seem to offer a bunch of headlines, not a new news experience. We can count on a few hands the number of news publishers both seeing the potential of and investing in their news products. John Oliver may exhort his viewers to become paying local news(paper) readers, but unless we see new investment and new vision, his plea will have little chance of succeeding.

The truth is too many Americans now suffer — after years of local news diminution — a loss in local news muscle memory. That’s not going to be easy to rebuild. In fact, I think it requires a new bargain. Publishers willing to invest in their communities and news companies need to provide more and ask readers to pay more. I believe they will, if the bargain is fair, real, and well executed. In truth, that may be too many ifs, but I think it’s possible. Maybe even John Oliver could lend his face and his name to such a new news deal.

Ken Doctor <![CDATA[Newsonomics: Sketching In the Details of Josh Topolsky’s New Outline]]> 2016-08-09T03:07:37Z 2016-08-09T03:07:37Z Read more »]]> Don’t call Josh Topolsky’s just-announced The Outline “a New Yorker for millennials.” Or do. The 38-year-old digital media veteran of Engadget, The Verge, and Bloomberg can see it, and explain it, both ways.

I asked the CEO and editor-in-chief of the just-announced site, launching in the fall, what he thought about that shorthand description.

“I get it. It’s not the worst description I’ve ever heard…The New Yorker for millennials in some ways makes sense, and in a million ways doesn’t,” he told me. Topolsky is a rookie CEO and he rejects marketing shorthand in favor of deep and wide editorial explanation. He believes his joint title provides competitive advantage: “There is no other business that I can think of right now, and feel free to correct me, where the editor-in-chief is the CEO. If you can find another new media business where that’s the case, that actually has the ambition that we have, I’d be delighted to hear about it and see it and talk to that person. There aren’t that many. If there are, they’re not executing. I think it needs to be different now. That’s what we’re trying to build.”

I tried another shorthand, but found that Topolsky doesn’t like to use the word “millennials” in describing his intended audience — though it targets 20- to 40-year-olds. (Millennials clock in officially as 18-34.)

“I don’t really care for the term ‘millennials’ because I don’t think it’s meaningful,” he said. “I think it’s a bunch of people who were born in a certain time period. But it’s the audience that I’m a part of, and it’s the audience that I know, and it’s the audience that I’m interested in. It’s the audience that is now changing the world and will change the world in the future. I’m very interested in what are the publications of record for this generation that are smart, that speak to them with intelligence, that respect there appetite for changing and living in a big new world.

“If you were making a New Yorker — and I’m not saying we’re making something like The New Yorker, but if you were going to make a New Yorker today — what would that be? What would that look like? Who would you be trying to reach? I love The New Yorker by the way, but it isn’t built for this generation. It isn’t telling a story to this generation.”


First published at Harvard’s Nieman Journalism Lab

Follow Newsonomics on Twitter @kdoctor


The Outline flies in the face of this moment’s conventional wisdom in the digital media business. It’s too late to start a new digital news brand, many say — the market’s oversaturated with Vices, Voxes, BuzzFeeds, Mics, and Quartzes. Google and Facebook have made the digital advertising game even tougher, data proves. Branded, destination media may be replaced by “platform reading,” though that fear seems overstated. A sooner-rather-than-later recession will kill the small players, say the soothsayers. And finally, another would-be truism: Building a significant, profitable brand is just a lot tougher than it was five years ago.

Topolsky laughs at all those stop signs. “It is very common for people in our industry to say, ‘Well, who needs another X.’ or ‘This is the wrong time because of Y.’ The reality is there’s never the perfect time to make something new, and it’s always the perfect time to make something new. If we think that the last great media brand, the last great media business has been built, if we are convinced that that is the case and that everything is going to be a part of Disney, then I guess this is my Hail Mary. But I don’t believe that.”

Topolsky and his partner-in-startup, chief revenue officer Amanda Hale, have some things going for them. RRE Ventures — a venture firm backing BuzzFeed, Business Insider, and TheSkimm — has taken the lead in The Outline’s $5 million funding; it is RRE’s 17th venture investment this year, out of 375 in total. As the company preps for launch (aiming to be up by November), I talked to the duo last week about their plans, the peculiar American digital media landscape into which they’ll launch, and about playing with Facebook, new native ad formats and The Outline’s outsider intention.

While Topolsky eschews labels of all kinds, he says The Outline will focus on a certain kind of reader. “They live in urban areas. They’ve really tech-savvy. They fund Kickstarter projects. They eat farm-to-table food. They care about politics, they’re engaged…The data is really starting to show that there are a lot of people who self-identify as smarter and savvier and less susceptible to bullshit, and are hungry for a story every day, or multiple stories every day, that talk about their world. The world that is important and valuable to them, in a way that serves their intelligence and doesn’t talk down to them. It’s not condescending. It doesn’t dumb things down. It isn’t trying to play for every possible person who might read a story.”

There’s a lot to like in that description. It’s high-minded, though it also self-defines as a blue-state special, a publication that might at times have a tough time crossing the Hudson.

On the product itself, and the kinds of tech that will drive it, Topolsky is cagey. Instead, he emphasizes storytelling and points the curious to his recent Medium piece, “Your Media Business Will Not Be Saved.”

“What I’ll say, what I think brings us back to sanity about what we can do, what journalism can do in the world: We can actually take the control and destiny, our destiny back in some significant ways, and prove it’s worth having in our hands. I want to figure out what that is. That’s what we’re trying to do.”

Topolsky says his initial staff, now being hired, will be between 20 and 30. That means a good amount of content origination in both reporting and commentary, proportion TBA. Like the most significant digital news startups of the last half-decade, it will put its most of its early funding into content and product. (While startups often budget 60 to 70 percent for content creation — to build a big audience fast, mimicking early Silicon Valley conventional wisdom — legacy companies usually devote less than 20 percent of their budgets to product and content origination.) Given its target age group, The Outline will be mobile-focused, of course. It will be browser-accessible, given Topolsky’s antipathy for closed tech like native apps.

I asked him what he liked in digital news storytelling in 2016. “Very little. That’s actually part of my frustration…The open web and digital gives us an incredible palette to paint with in terms of how you can tell a story, and I’m very interested in the how, not just the what but the how. We paint with very few of those colors.”

Topolsky is direct in his criticism of digital news media that write to the traffic, deciding their journalistic output by what Facebook wants. “I see every day, as does the audience that is increasingly numb to this stuff, things are made not for them, but to solve some exchange — some algorithmic and business exchange. I think there is a long tail that we are just starting to come up, and you’re going to see it from Facebook business stance and you’re going to see it from the stance of the audience.”

I suggested that The Outline will launch into what currently appears likely to be the post-Trump era in American life. “I think that Trump is actually this incredible avatar for a lot of what I’ve been thinking about when I think about how power and the future have converged, how popular culture and power are now meeting in really interesting ways,” says Topolsky, whose last gig as top digital editor at Bloomberg Media ended a year ago, as he tangled with the guy whose name is on building. “I do think there’s going to be some deep introspection and thinking about what are we making, what world are we making now, and how will we make it?”

That’s a strong “we,” and that’s how we return to millennials.

“I think about this generation raised on the iPhone, where it’s not a novelty. It’s been around for eight, nine years now…It’s not so much about ‘this is the cool gadget I have in hand.’ It’s like: What is the world going to be made through this thing and with these things? And what is the world that we see through them and with them? So on the future side of it, that’s the part that I think is really interesting — of interest to me even when we started The Verge.”

The Verge — which Vox Media funded and Topolsky cofounded, when he broke away from AOL’s Engadget in 2011 — won much acclaim for its innovations. If a tech-driven future serves as one focus of The Outline, it’s that future’s connection to power and culture that most intrigues him. What does power look like going forward?

“What is the next iteration of our world? And so I think Trump is the great example…I think there are big societal, cultural, social changes that are happening and there are major things happening in business, in industry, and certainly in politics that are impacted by the way we communicate, the things we use to communicate. How many scandals, how many leaders have been brought down? How many major news events have occurred in the past five years that are a direct result of how we live with technology?”

These are weighty topics, ones we see explored in places as diverse as The Atlantic and Quartz, Slate and The New York Times, and by Medium contributors, among many others. Topolsky’s belief is that The Outline can provide thought leadership, and do so in a way that will bring in millions of regular readers.



How many millions? As The Outline debuted itself with piece in The Wall Street Journal, Topolsky noted the number of 10 to 15 million monthly unique visitors as a goal. Then, he modulated that number some, as he talked to Recode’s Peter Kafka last week. Indeed, that number does seem a way’s off; Quartz — often seen as a model digital news startup — just announced it had reached 20 million unique visitors this month, four years after its founding, and it launched as the mobile web was in early expansion. Whatever that top-line audience number, it will be the engagement of those uniques that will determine The Outline’s success. He must prove to readers that they should make time for his new brand.


“Culture” — added to power and future — drives the site’s thinking, as its third narrative. “Most consumers of things aren’t sitting around going, ‘What narrow vertical does this fall into?’ They’re saying, ‘Is this a great story? Is the story told well? Do I trust the voice?’” That means competing for premium audiences who can be sold premium advertising, a general-interest variant of Quartz’s concentration on “influentials.”

Quartz has built its success in part by being a “business” publisher. How will The Outline try to distinguish itself, sans labels?

“Josh and I were talking about this the other day,” Hale said. “You have smart publications — smart opinion-leader publications like the Times, The New Yorker, The Atlantic. You have youth-oriented publications like BuzzFeed, Vice, Vox. But the smart things aren’t really cool. The cool things aren’t really smart. I think that we’re going to set the market niche that there’s a lot of demand for: stylish and smart, style plus substance. I don’t think anything really exists and I think that’s going to really help us break through.”



If Topolsky can sound more like an editor than a CEO, he’s made a good decision in picking a business partner. In landing Hale, The Outline imports a digital ad leader with both a proven track record in innovation and someone who knows how to make the most out of a less-than-giant brand. Hale is a go-getter, whose work at Talking Points Memo I wrote about two years ago. If The Outline does succeed in bringing in a definable, niche audience, Hale has experience in how to monetize it. As an early convert to branded content, Hale has emphasizes the kind relationship-building consultative selling that is now sweeping the news media business.

Hale will soon be out looking for a couple of launch sponsors, as she puts her sales team together. Then, as the audience is built, she’ll focus on a kind of branded content she believes will fetch good premium rates, even for a site with relatively smallish traffic.

One key word: “micro-native.” Does that mean we’ll see branded content at smartphone sizes? No, micro-native means native advertising and branded content that’s less resource-intensive than the kinds of campaigns that companies like the New York Times Times’ studio has won attention for. “An article, it might be native because you’re surfacing it via a story post, but how do we really slot content into the content consumption process?” Hale asks. “What’s that area between a native article, a narrative native article, and a banner ad? I think that there’s a lot of unexplored territory in that middle. We’ll be servicing lighter-touch, more turnkey native with an mid-sized in-house account management team.”

For very large projects, The Outline will partner with the full-service creative shop Code & Theory. “That partnership will allow us to turn out the very big projects in a way a no startup’s early stage creative studio could.” (Code & Theory, which designed the new when Topolsky was there, will also design The Outline’s products.)

If branded content is to win more dollars, the business execution will have to get easier. If campaigns demand too much costly weightlifting, they’ll likely only be used by the largest of advertisers.

This is a startup that will be dependent on advertising. Events, niche subscription products, and other ways to make money can be found in the far slides of the business plan, but for now, it’s making this next gen of native work.

Hale rejects the idea that the ad space is too competitive: “I think it’s absolutely the opposite. It’s competitive if you’re selling a commodity — and I have this very, very strong feeling that everyone is selling the same thing. If everyone is selling the same commodity, well, there’s no competitive differentiation, and so it’s going to be very competitive.”

(She says “everyone is selling the same oversized banners — at best, everyone is selling the same, 1,500-word, highly produced, advertising knock-offs. No one is really, truly starting from scratch, thinking about what advertisers are actually trying to do, proactively and creatively solving the problems, constantly iterating products, constantly bringing new things into the market, listening to their advertisers and solving that way.”)

Hale argues that a brand with a strong relationship with its audience can break through that commoditization. “I realized that at TPM, and I think that there are a lot of similarities between what we’re building there and the kind of audience we had at TPM.”

Despite any protestation, the market will likely first characterize The Outline as a player in that crowded millennials market. Mic, the five-year-old startup, has tried to define and seize that market, though it’s transforming its own strategy. It has an audience of almost 10 million monthly unique visitors, according to comScore’s June U.S. multiplatform study, with 60 percent of those millennials. BuzzFeed, Vice,, Mail Online, and The Guardian all also over-index millennials, and they all have massive audiences and advanced sales operations.

But Topolsky embraces the idea of being an outsider, down to his site’s name. He didn’t turn to a branding agency. “It just came to me. The first [reason] is that I think it sounds cool. The second is that when you think of an outline in the realm of illustration, the outline is the defining strokes of an image. They are the thing that, whether you embellish or not, whether you color in or not, the outline defines very clearly what that thing is. I think that’s really an interesting way to think about some of what we’re trying to do, and when we tell our stories.

“The word ‘out’ and the concept of being outside of things, to me, is very important. Being outside looking in, to me, is quite important. I think that, for the audience and also for a lot of the people involved in this, it’s a lifelong feeling of trying to make sense of a world that you’re not necessarily inside of or a part of. It’s kind of fundamental.”

Ken Doctor <![CDATA[Trump, Murdoch, Ailes: A Trifecta of Woe, By The Numbers]]> 2016-08-07T05:40:34Z 2016-08-07T05:40:34Z Read more »]]> They’ve built their business lives on numbers, and this week’s numbers measure the collective, interwoven fates of Donald Trump, Roger Ailes and Rupert Murdoch. Toting up those woes, the trio’s many critics may feel – this week at least – like they’ve won the Schadenfreude Olympics.

For two full decades, Ailes built the defining misinformation medium of its time, the Fox News Channel, serving in near-perfect measure the twin goals of his employer, Rupert Murdoch.

Fox both enabled Murdoch’s entry into American politics and fed his coffers, now bringing in 20% of 21st Century Fox’s profits. In turn, Fox’s self-parodying yet astoundingly effective “fair and balanced” shtick broke all the ground Donald Trump needed to mount a breathtaking Presidential campaign.

Fox, and Ailes, enjoyed a period of ambivalence about Trump’s rise, along the same trajectories of Ailes and Murdoch’s own nuanced relationship with the Tea Party. They built a propaganda machine that enabled the manufacture of an alternative Republicanism, an alternative that ended up throwing a wrench in the old monied elite apparatus that they had in many ways helped to create.

The Tea Party both proved out Ailes’, Murdoch’s and Fox News’ power – and greatly complicated Fox’s ability to serve and satisfy both the new Right and the old Right. In its lost esteem over the past three or four years – which we can track in its wavering reputation, quantified below – we can see the struggles of Ailes.

If Gretchen Carlson hadn’t undone him with her fearless sexual harassment charge, Ailes and the News Corp leadership would still have had to deal with a dicey positioning, come 2017.

At this juncture in the Presidential campaign – one that looks like it may be a turning point but could be just another bend – there’s no doubt that developer who would be President has built his campaign on Trumped facts. Those facts are echoed Stephen Colbert’s satirical defense of “truthiness,” which, of course, employed Fox News as its model. Without Fox’s innovation in successfully convincing millions of its own “facts,” nominee Trump would have been less possible.


First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


As Trump emerged from the Republican pack, he looked to be The Murdochian Candidate, not Rupert’s first choice – Marco Rubio and Ted Cruz offered, at various points more potential – but the last man standing with whom Rupert thought he could bargain and partner.

Now, the collective run of Trump, Murdoch and Ailes looks like it is running into a wall of its own making. That may portend substantial changes at Fox News itself, as I recently laid out (“As Fox’s Dr Frankenstein Exits Right, the Murdochs Are Left to Reboot Their Wounded Cable News Leader”) and, perhaps, a wider generational changing of the political guard.

Let’s review the week’s numbers: Donald Trump’s campaign appears to be slumping, as August polls now show double-digits opening up between Trump and Hillary Clinton. The agonizingly long American election season campaigns have driven about two-thirds of the electorate to believe that the thrice-married, four-times-bankrupted master of his own reality showman is unfit to serve as President.

For Roger Ailes, the body count of misdeeds just continues to pile up, as New York Magazine writer Gabriel Sherman unpacks more Ailes dirty laundry. In tracing Ailes’ apparent sex-for-hire and placement-on-the-Fox-payroll of Laurie Luhn, Sherman did more than add to Ailes’ shattered reputation. He revealed the company’s enabling, and knowledge, of the relationship, and in so doing indicted more of the Fox leadership still left in place after Ailes’ lightning-speed departure. Now, the question: Who knew what when, and what did they do about it? The Roger Ailes body count at Fox News is only likely to mount.

Then, there’s FNC itself.

We’ve noted the rich irony of the timing of Roger Ailes’ ejection from the den of news iniquity that he built – just three hours before Trump accepted the Republican nomination in Cleveland. What should have been a triumphant moment of Trump’s ascension, one made uniquely possible by the political climate Ailes had willed, became instead a turning point. The channel’s anchors began giving each other the silent treatment, as pro- and anti-Ailes sides lined up. And, yet, we believed its ratings would see it through, as it racked up good ones for the Republican National Convention.

But over a longer arc, Fox is increasingly losing its long-held ratings advantage to CNN. CNN has now beaten Fox News in five of the last 11 months in prime-time ratings among the most ad-sought-after 25-to-54 age group, including its win in hyperkinetic July. All cable news has chowed down on the Presidential election feast, but it’s CNN that has gotten the fattest spoils.

Ratings tell one story and brand reputation tells another, especially if it is viewed over time. While Rupert Murdoch was proclaiming that the his wayward ship was steady as she goes, Fox suffered the new indignity of seeing MSNBC’s public perception beating its own.

YouGov’s well-regarded BrandIndex summed up Fox’s toll, in a report issued Wednesday.

“Perception of the Fox News Channel brand continues to be well below its historical levels with Republican consumers, seemingly hampered by the controversial departure of its chairman and chief executive Roger Ailes, the back to back party conventions, and its relationship with its core conservative constituency,” reported the survey firm.

Fox, of course, is all about buzz – that’s the key ingredient in Roger Ailes’ genius channel-building.

And that buzz is heading farther south.

YouGov – a 16-year-old, London-based market research firm with 400 brand and agency clients globally – measures buzz through its BrandIndex product. It now finds that the Fox News’ zippiness has been zapped.

“Even looking at the general population and including all party affiliations, Fox News Channel has had a rocky ride since April 2015, well before the primary debates began,” says the BrandIndex report. In the chart below, we can see the steady general drop in Fox News’ standing.

Fox News Drops in Brand Buzz Over Three Years


Fox News Drops in Brand Buzz Over Three Years copy


How does BrandIndex do its calculations to create a Buzz score?

It asks: “If you’ve heard anything about the brand in the last two weeks, through advertising, news or word of mouth, was it positive or negative?” Scores range from 100 to -100 with a zero score equaling a neutral position.

That question – the standard in the BrandIndex methodology – measures not just what people “hear,” but how they process – and recall – it.

Over time, the firm surveys panels of 84,000 adults, 18 years and older, to formulate its trend lines. “YouGov BrandIndex does not have any cable news networks or political entities as clients,” it further notes.

The BrandIndex product tracks 57 U.S. TV networks. Says Ted Marzilli, CEO of YouGov BrandIndex, “Of the 57 networks, Fox News has the lowest score of the group.” Only slighter higher, CNN and MSNBC; the three news stations collectively own the bottom of brand perception.

That’s a good measure of the collateral damage of all media mistrust extant in the land; now it appears that Fox News has been drawn down into the muck of media mistrust it has sown.
The specific toll among “Republican consumers” makes even more of a statement about the business.
“This past February, Fox News Channel fell to its lowest perception point with Republican-affiliated adults in more than three years after a sudden month-long drop. The bigger picture has shown a slow and steady decline.

“Since hitting that February low mark, perception made some small gains but has struggled to return to its earlier loftier heights: levels are down one third from this past mid-January and by more than half from January 1, 2013.”

On January 1, 2013, Fox News Channel’s Buzz score with Republican-affiliated adults 18 and over was 49, shown in the chart below.


Fox News Brand Buzz Deteriorates with Republican Core Audience


Fox News Brand Buzz Detiriorates with Republican Core Audience copy


One year ago, shortly before the first GOP debates, the Buzz score was 38. The big drop earlier this year started on Jan. 18th, when the Buzz score fell from 36 down to 14 one month later. The highest the score has come back was 26 at the end of June. Since then, the score has slid back down again to 21.

As we can see its buzz drop among Republicans has been swift. It’s hard to tell how much of that fall is due to Fox’s own work, and the perception of it, and how much it is due to rifts within the Republican party itself that have developed in the Tea Party era.

If buzz tells us something about Fox’s issues, demographics scream more loudly. There are those troublesome 25-54-year-old TV stats.

Fox News’ demographics parallel the trio of 85-year-old Murdoch, 76-year-old Ailes and 70-year-old Trump. Fox News’ average TV viewer is aged 68; leading Fox anchor Bill O’Reilly’s typical viewer is 72.

Then there’s “digital,” everyone’s route forward, especially as multiple digital challenges will change the face of the cable TV business sooner than later.

Fox News even skews significantly older online, as we see in the June 2016 Comscore U.S. multiplatform data below. Thirty-two percent of its digital audience is 55 or older, about 10 percentage points higher than either CNN or MSNBC. Fifty-one percent are 45-plus, 11 points higher than CNN and 6 points higher than MSNBC.


Fox News’ Audience is Oldest in Cable News, 32% 55 and Older



Both the older age viewer and the digital reader demographic issues find reinforcement in that BrandIndex report. It saw a decline in buzz among all age cohorts, including Fox News’ core 50+ audience. While Fox News does enjoy the best buzz among 50+ viewers, within the cable news category, at -2 (CNN comes in at -9 and MSNBC at -7), its under-50 numbers are equally telling. It earns a -12 among those under 50, with CNN showing a -3 and MSNBC a -2.

In short, Fox News mines a niche that appears to be aging out of the market, and perhaps slowly out of the democracy.

Despite public pronouncements, we are coming to believe that the Fox News Channel, driven by business necessity and perhaps political change, will be re-thought and re-engineered, as Rupert – inevitably — turns the channel controls to his sons.

Of course, it’s just one week of numbers, and way too early to assess cause and effect, media and politics, politics and media. Yet, something’s going on here when the Democrats have wrapped themselves gloriously in the flag, and Trump protesters have seized the Constitution as their symbol, much as the Tea Party did so recently.

The wider, and more intriguing question: Are we seeing, in this time of Murdoch–Trump–Ailes adversity, a harbinger of bigger change in our media and politics?


Ken Doctor <![CDATA[Newsonomics: Tronc M, Tronc X, or Just Tronc — It’s Still in An Uncertain Position]]> 2016-08-09T04:58:05Z 2016-08-06T05:46:51Z Read more »]]> Related column: A Tronc Tomorrow: The Return of Gannett and the Uberfication of News


Anyone looking for drama in today’s Tronc second-quarter financials was disappointed. No dramatic announcements, internally or externally — and not a peep out of Gannett of its intentions to mount a new battle to buy the company. After a half-year of unusual newspaperland drama, today’s report just sets up the potential drama of the fall: Will Gannett restart its engines in pursuing Tronc, after America’s largest newspaper company found itself nonplussed by Tronc chairman Michael Ferro’s energetic defense of his company?

Today’s report — fairly ho-hum and all too consistent with the familiar downward trends of print — might give Gannett more pause. Its CEO Bob Dickey had said he would look again at a Tronc acquisition bid after seeing the company’s numbers today. He’s already taking into account an investor chill that has seen Gannett’s share price drop 16 percent since its its own Q2 financial report on July 27.

Do Gannett’s leaders and investors really see sufficient scale to justify doubling down on a financially failing industry? That’s just one of the questions it faces as it reassesses the artificial intelligence-driven Tronc that Ferro is trying to build.


First published at Harvard’s Nieman Journalism Lab

Follow Newsonomics on Twitter @kdoctor


Today’s Tronc report and call with financial analysts produced yawns. Usually on such media company calls, CEOs and CFOs get a half-dozen or so questions. CEO Justin Dearborn and CFO Terry Jimenez got only one, from a clearly skeptical analyst who wanted detail on the company’s earnings and earnings guidance.

Tronc did manage to offer two new words to its lexicon. The company now accounts for its legacy businesses (now labeled “Tronc M,” for media) separately from its digital revenue (still driven largely by the newspapers) and several ancillary enterprises. The latter now go by…Tronc X. Given that both expenses and revenues are interwoven between print and digital these days — and subject to all manner of highly subjective “allocations” — those two divisions mean less than the whole company numbers.

For those, Tronc could trumpet in its report headline: tronc, Inc. Raises Full Year Revenue and Adjusted EBITDA Guidance — Company Raised 2016 Revenue Guidance to $1.610-$1.630 billion — and 2016 Adjusted EBITDA Guidance to $170-$175 million.

Overall, then, Tronc announced a bit more profit, largely off reducing headcount. It reported similar ad woes as its peers. In other words, despite its tronckadelic claims to be reinventing the press future, this report mainly emphasizes cost control.

It’s the top-line numbers that pose the problem for Michael Ferro as he remounts his campaign to keep Tronc an independent company, away from the clutches of pursuers.

Tronc’s new management team has promised growth. It’s the key plank of Tronc chairman Michael Ferro’s strategy, and his intention to build a “billion-dollar company.”

For the second quarter, though, overall ad revenues were down 9.2 percent, apples to apples (with Tronc/Tribune Publishing’s spring 2015 acquisition of the San Diego Union-Tribune not completely cycled for a full year). One interesting comparative: Gannett was down about the same amount, 10 percent, in its most recent report. (With The New York Times down an astounding 14 percent in print advertising and 7 percent in digital for the same quarter, and with McClatchy reporting a 16.6 percent print ad drop, the accelerating decline of the print business in 2016 is clear.)

How much of Tronc’s 9 percent drop in ad revenues is print and how much digital? We don’t know, because the company doesn’t report that breakdown.

Circulation revenues helped offset that 9 percent ad drop, but not by lot. Overall, Tronc found itself 6 percent down in total revenue.

But Tronc still saw a $1 million drop in what now classifies as digital circulation revenue. Even though it could point to a 15 percent quarter-over-quarter increase in digital subscriptions (to 116,000 in total), it lost revenues in digital content syndication. Consequently, even with good digital subscription growth — up an impressive 46,000 (66 percent) in a year’s time — the company finds itself challenged to further offset lost ad income.

Finally, there’s Tronc’s cash position. Finishing last year with about $100 million in cash — considered by financial observers to be a thin cushion — the company said today it has $170 million in hand. That math seems fairly straightforward, given investor Patrick Soon-Shiong’s $70.5 million May investment in the new Tronc. Absent a Gannett takeover, how will Ferro and CEO Dearborn use their cash? As I’ve reported, an acquisition of a high-volume, low-cost content-producing company could be in the cards.

With all these numbers now in, all newspaper companies plan warily for 2017 and pray for the best third and fourth quarters they can achieve. For Michael Ferro and Bob Dickey, though, this new set of data is just prologue. Will they fuel the next mano a mano confrontation between the two execs? Or will we just hear a quiet nevermind as Gannett finds business as usual just too daunting?

Ken Doctor <![CDATA[A Tronc Tomorrow: The Return of Gannett and the Uberfication of News]]> 2016-08-06T05:47:44Z 2016-08-06T05:38:55Z Read more »]]>  

Related column: Newsonomics: Tronc M, Tronc X, or just Tronc — it’s Still in an Uncertain Position


Time for another Tronc (Tribune Publishing) quarterly financial report. Time for more intrigue. And this time, we can ask: what kind of surprise might tronc chairman and digital media impresario Michael Ferro spring on us this time? Gannett looks like it may be resuming its quest to buy tronc’s nine newspapers. Does Ferro have something up his well-used sleeve to counter that?

Might he have an August surprise – bringing in still another new investor, or announcing a new partnership, or acquiring a small company? What might his CEO Justin Dearborn be able to talk about as Tronc moves forward in the Uberization of news, applying as rapidly as possible tech to remove the many frictions (and sometimes humans) out of news production?

First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


On Wednesday, the new Tronc, renamed, rebranded, relisted and ridiculed just two months ago, releases its second-quarter earnings report. Those numbers aren’t likely to be a whole lot better than its peer companies’ reports — including the New York Times’: dismal with double-digital print-ad losses overwhelming any digital business progress.

It’s what accompanies this new set of tronc numbers that will return interest to what has only seemed like a dormant story [“The Tronc turmoil: Beyond the public quiet, pressure builds in Delaware courts, Gannett HQ and Tribune Tower itself”].

The Tronc/Michael Ferro/Gannett hostile takeover saga riveted news industry attention in the spring, as Gannett, the U.S.’s largest newspaper company, found itself confounded in its effort to buy Tribune Publishing. After a public war of words and a contest of sorts for the new Tronc board, Gannett said it would reassess its $15-a-share bid – at one point, a 99% premium over its then-share price. That reassessment, it said, would follow the release of the financials, now scheduled for Wednesday. Today, a Gannett spokesperson declined comment on a new bid.

That’s the first point of intrigue: Growing whispers of Gannett readying its next bid this week. Given that both companies – Tronc and Gannett – have competed for leverage as much in the public sphere as in the boardroom, the timing of such a bid will be one to watch. Will Gannett step on the Tronc announcement, to be released on the web after stock-market close on Wednesday and as its 5 p.m. Eastern call with financial analysts goes live? Or will it wait a day, for Tronc’s investors to absorb the revenue and profit report, swooping in with a plan to save the day? Or will it just wait further, as that still-pending case against the Tronc board and its principal officers in Delaware Chancery Court moves to resolution in Dover?

Tronc investors clearly expect another bid. TRNC, now moved to the NASDAQ from the NYSE, closed at $14.87 today, just below Gannett’s last offer. We’ve known that Gannett would move beyond that last $15-a-share price in its third bid (having started at $12.25, on April 25). The questions have been: How much and when? While Gannett CEO Bob Dickey, in his own second-quarter conference call (on his own subpar financials) didn’t speak directly of his pursuit of the Elusive Tronc, he did reiterate the company’s aim to add “15 to 30” new daily properties over “the next several years.” Tronc offers nine markets, seven of them metropolitan ones.

If a bid comes this week, expect it to be in the $18-20 range.

Yet, even such a been-there-seen-that offer requires defense. So far, Ferro’s best has been serial offense. Ferro needs to provide his CEO, Justin Dearborn, with a good story to tell on Wednesday, just as he did just a quarter ago. Spending little time on the then-Gannett bid, Dearborn then laid out the Tronc big picture, that AI machine-learning-driven strategy that has now guided the near-complete restructuring of the company, in its name and in its leadership. Then, as Gannett returned with its second bid, Ferro pulled the Patrick Soon-Shiong rabbit from his hat, announcing the L.A. billionaire’s $70.5 million investment in the company.

Announcing a further extension of that AI-driven news future may well be that next trick. As I noted two weeks ago, Ferro has talked about buying a user-generated content company, as well as expanding the numerous partnerships is developing.

One of those companies that has drawn his interest is Fresco News, I’ve learned from several sources. A two-year-old, New York City-based, venture-funded startup, Fresco News focuses on video, in theory, producing a lot of content cheaply. Its aim: “to turn bystanders into citizen journalists.” Its message to would-be contributors, fronting its website: “The world needs your camera.”

Inside Tronc, Ferro has talked about the promise of Fresco News – lots of low-cost video content that can be monetized with advertising – and how well it fits with several of the other known Tronc initiatives. Tronc now works with video producers like Wochit and widget producers like SNT Media [”Welcome to the Tronc widgeteria”]. National consolidation of local website management – and reduction of local newspaper digital staff positions – parallels that embrace of nationally produced, tech-driven content, a number of confidential sources tell me.
Is Tronc close to acquiring Fresco News, or might it simply announce a partnership with the company soon? Is Fresco News indeed for sale? Tronc declined comment on a possible acquisition and Fresco News CEO John Meyer didn’t respond to requests for comment on his company or its closeness to be sold.

Tronc isn’t alone in seeing the value of user-generated video news content. The kinds of abilities that Fresco offers are now increasingly sought by media companies globally.

Given the spate of live news events captured by civilian smartphones, there’s been a recent small boom in user-generated platforms. Stringr, NewZulu, Bambuser and SAM Inc. all ply differing parts of the territory, along with Fresco News. Media companies look to these tech companies to deal with the complexities of assignment, gathering, vetting and media company workflow.

Fresco News’s technology removes much of the “friction” in getting amateur-shot newsy video, through the process from the camcorder to a website or local TV news program. Smoothing that path means routinizing everything from uploading to image enhancement to tagging and distributing.

The Uberfication idea here: take all the complexity of that old world and tame it through an app. John Meyer, now 21, dropped out of NYU two years ago, to start the company. Says one visitor to Fresco’s downtown New York office, “he’s straight out of Silicon Valley central casting,” in other words, the image of a brilliant, brash digital entrepreneur.

It is in the local TV business that Fresco News has found its first commercial niche. In March [Techcrunch: “Fresco News teams with Fox to bring citizen journalism to local newsrooms around the U.S.”], Fresco News announced its first big deal, after testing its app numerous news organizations, including The Associated Press, Media General and Calkins Media. Now contracted with 21st Century Fox and working with eleven of its metro TV operations, Fox has itself become more impressed with Fresco News’s low-cost video-making. It, too, sources say, actively considers buying the company. 21st Century Fox declined to comment on a possible acquisition.

Fresco News doesn’t yet have much to show in revenues or profits for its seed round venture investors, who include CNN co-founder Reese Schonfeld, MediaBistro founder Laurel Touby, former Yahoo executive Ross Levinsohn, and former NewsCorp/AOL exec Jonathan Miller. They’ve put $1.4 million into the company so far.

While Fresco News aims to work with local TV and newspaper companies, the higher end of the user-gen video business has been well-developed by Storyful. Storyful’s client list of 80 includes top news brands (ABC News, NY Times, Wall Street Journal, Vice, Sky News) and bigger corporate clients, including Heineken, Toyota and Google. That acceptance speaks to the trust that its video licensing and vetting-for-authenticity business has engendered over time.

Two years ago, News Corp. – the newspaper-centric company split off from 21st Century Fox – bought Storyful.

Those who have looked at Fresco News up close credit it with a good user interface, but question the depth of its journalistic chops – that crucial ability to vet amateur-shot video for credibility.

We can see the Fresco model gestating at the Fox TV stations. What Fox – along with the rest of the legacy content-producing media — wants to do is reduce costs. Can it replace highly paid professional videographers with on-demand video takers? Can it do so in sufficient numbers to reduce its headcount?

Fresco News aims, in part, to mobilize “stay-at-home” moms, who can respond to a pin dropped on a Google map offering assignments. Get there first, get some video and amateur photographers and videographers may get paid $20-50, while local media organizations pay twice or more per photo or video; Fresco News takes about a 30% revenue share for its role as a friction-busting tech middleman.

In addition to the pin-dropping assignments that video-takers can receive via the TV stations, anyone with a camera can sign up via the Fresco News app and begin immediately submitted material.

Much of the 50-person Fresco News staff is content-oriented. That staff both reviews station assignments and community-generated video.

Fox TV news directors have publicly praised it as a good supplement to their news gathering. In Houston, as much a third to a quarter of the local Fox station’s recent storm-related video was driven by Fresco News, says Ashley Seashore, whose Arrow Public Relations does communications for Fresco. Stations also pitch their publics, via their own websites, on the new Fresco News opportunity, as seen in the crawl of the Fox Houston station above.

User-generated content was once hailed as the replacement journalism of the 21st century. While UGC has found lots of niches on the web, it hasn’t done much to replace all the lost professional local reporting. That loss now totals half the number of journalists who had worked in daily newspapers in 1990, with about 27,000 still remaining.

Interestingly, the new popularity of UGC video makes sense. First, it produces highly sought “video,” whose ad inventory still out-sells traditional display by three-to-one or more in price. Second, video doesn’t require an editorial voice as much as writing. Professional videographers — whose jobs would be threatened with mass adoption of a Fresco News-like model – certainly bring layers of journalistic judgment to their craft. As with all journalists, though, that judgment now has a number assigned to it, and in the math, their jobs have become more precarious.

What should the market make of the Tronc strategy? Many in the business separate out the potential value of the Wochits, the SNTs and the Fresco News from the outsized promises of Tronc’s leadership. Clearly, these streamlining, cost-saving technologies – well-executed – make sense. Clearly, technologies like these will become part of all digital media futures. Yet, their impact – so far and into the known future – is incremental. They effect some cost savings here, and help generate a little extra revenue there, but in today’s market, they are far from game-changing.

For Michael Ferro – a true believer in technology as a solver of business woe – such gambits offer a twofer. The tech, he believes, will change the nature of publishing; and besides, still another well-timed act of partnership, or acquisition, will reassure the market that his much-maligned strategy has a basis in business reality. That’s why, in addition to his talk of a Fresco News deal, he’s talked with associates about buying other, bigger companies. Where would he get the money, one savvy news executive wondered Monday?

So far, though, Michael Ferro’s career has proven out his ability to win investors’ confidence. We may soon see a new test in the bounds of that support.


Ken Doctor <![CDATA[Newsonomics: Is This the Bottom for The New York Times?]]> 2016-07-31T04:50:01Z 2016-07-31T04:50:01Z Read more »]]> First, the good news of the month. The New York Times has outlasted Yahoo, as an independent company. Long ago, Yahoo, valued at as much as $140 billion, seemed one of those internet companies that might completely usurp the role of legacy companies. So today, with a market cap of $2 billion, the Times busily prepares its long-term future while Yahoo grabs $4.8 billion and fades into telco land.

That’s worth keeping in mind as we quickly review a down New York Times quarterly financials report. This morning [“New York Times sees digital and print advertising decline in second quarter”], the Times had an even harder time absorbing the big print ad losses than it had in a troublesome first quarter.

First published at Politico Media

Follow Newsonomics on Twitter @kdoctor


Those print ad losses are nothing short of astounding: the Times lost one of every seven dollars in print advertising year over year, down 14%. Print advertising – which not long provided 70% plus of all revenue – now makes up only 23% of all Times revenue. Still, at that 14% print ad decline, the Times hit its lowest, recent quarterly results – down three percent in total revenue. Not helping: digital advertising’s down revenue continued from the first quarter, down 7%.

The Times made the most of its now-almost-taken-for-granted big bright spot: digital subscription growth, which the company says is actually accelerating five years after the it went “paid.” In total – its news and crossword subscribers together – it could point to “51,000 net paid digital-only” news subscribers. All totaled: 1,424,000 subscribers to digital Times products.

Yet, it was advertising – which continues to dent all that reader revenue progress – that occupied most of this morning’s Times’ call with analysts. That call featured CEO Mark Thompson, Chief Revenue Officer Meredith Kopit Levien and CFO Jim Follo, all of whom indicated that the first half of this year should be a bottom. No one used that word, but in their financial projections, and comments, the second half of the year looks distinctly better.

How much better? Single-digit growth in advertising and double-digit growth in digital advertising, said Follo this morning. How good are those projections, given the Times fell short in its 2Q forecast?

Thompson centered on the Briticism “lumpy,” as in uneven. While July is in the books, and August largely known, September – which produces 50% of the quarter’s print revenue, and the greatest plurality of its digital — is less known. As Americans would know lumpiness mainly from their mashed potatoes, let’s use that metaphor for the Times’ changing advertising recipe. As I noted a quarter ago, the Times’ advertising transformation is a leading guide to how, and how rapidly, the advertising trade is changing across North America and western Europe.

First, this print ad decline is one to behold. The Times had held its print dollars better than most regional dailies — and, still does, but not by much. Compare the Times’ 14% loss for instance to McClatchy, one of the top five regional daily chains. Its second-quarter report: an 18% drop in retail ad revenue, a 24% drop in national ad revenue and a 14% drop in classified ad revenue, or 16.6% overall.

Gannett — the largest U.S. newspaper publisher – similarly, if more opaquely, reported similar down numbers (when acquired properties’ revenue is taken out for comparative purposes) yesterday.

Print, though, isn’t the future, of course, and it is fading ever-quicker.

It is the change in digital ad mix that will make the life-sustaining difference for the New York Times – a leader in making that mix transition – and for all other news-creating companies.

When CRO Meredith Levien talks transformation, on this call and elsewhere, she is talking industrial-scale change, highlighting again this morning, a transformation in “the whole supply chain of advertising storytelling.”

One key number highlights that transformation: Traditional digital display ads (a 20-year tradition, we should note) now make up a minority of digital ad sales. “A tipping point,” Mark Thompson rightly called it this morning. What it means: This proliferation of new ad formats and forms – from branded content (native ads) to mobile to increasingly nuanced programmatic to video and virtual reality – now constitutes a majority of the Times’ digital ad business. Consider, for a moment, how new – a few years – those formats are.

That crossover point — one among several crossover points that I have tracked over the years – will be a major driver of the news business worldwide in the next couple of years.

So, if that’s part of the lumpiness – fast changing formats – another is the whole nature of selling, and buying. “Duration is changing,” said Levien today. “Think less week-to-week and month-to-month campaigns, and more longer campaigns.” Combine that ad buying change with the fact that, as Thompson put it, the Times receiving a “smaller number of larger campaigns,” and we have a fairly discrete description of how this advertising stew defies traditional preparation. Lumpy = unpredictable, though the third-quarter forecasts acknowledge actual known business in the “pipeline,’ said Thompson.

With advertising revenue sill contributing about a third of all its revenue, the Times must master the new trade. If its rest-of-the-year projections come true, then, this first half of 2016 may represent a bottom, a turning point in that ad transformation.

Amid all the ad tumult, the improving reader revenue business shouldn’t be dismissed. Circulation revenue improved three percent year over year. Even as the Times loses significant print volume (down another 6% daily and 4% Sunday), its increased print pricing and all those digital subscription sales produce positive revenue growth. How is that happening?

The Times continues to tweak its product marketing engines, and that’s helpful, with bigger changes in those marketing, product and pricing models expected in 2017.

In the end, though, it has been the Times’ consistently high level of journalism, covering one of the biggest and most dramatic news years in memory, that has cemented many of those paying relationships. Engagement is up. Giving topline credit to the news product, Thompson said pay-supporting engagement is up: “The number of people coming four times a month, and ten times a month.”

Now, as the Times negotiates another tough budget for 2017, a big challenge lies ahead. How to maintain that surpassing news product quality (and presentation of it [Newsonomics: The New York Times Re-invents Page One — and It’s Better Than Print Ever Was] as ongoing budget cuts sap resources.