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1
In the United States, 50% or more of the city, county and state government reporting is done by newspaper companies.
If we go away, so does this reporting.
Not good for democracy.
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Scarcity → Abundance
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“We’re living in a world of infinite inventory. In that world, prices always trend toward zero, and that is our challenge.”
� Tony HaileFounder/CEO, Chartbeat
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To win with advertising, you have to have scale.
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Local news and information
doesn’t scale in a way that digital advertising can sufficiently pay
for newspaper newsrooms.
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The Dallas Morning News newsroom is a $30 million enterprise.
• 5 billion ads served
• $6 average cpm
• = $30 million
• Last year we served 1.2 billion ads
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19%
43%
20%
2%
16%
% of digital-only subscribers as a % of paid print subscriber base
15+% 0%
1-5%
6-10%
11-15%
Digital-only subscriptions do not appear to be a sufficient answer either.
According to our respondents, 84% had a base of digital-only subscribers that was 15% or less of their paid print subscriber base.
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Let’s use The Dallas Morning News to do the math on digital-only subscriptions:
• 250,000 paid print subscribers
• Charge $9.99/month to 15% of the subscriber base
• 37,500 digital-only subscribers$9.99/month12 months= $4.5 million/year
• That’s 5.5% of The Dallas Morning News’ annual print circulation revenues.
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Hold on!
Mobile advertising revenue.
Mobile audiences are growing like wildfire.
That’s going to be the answer.
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The good news:
Look at these growth percentages!
Paid CPMPaid CPM vs. Pr Yr
Qtr
$2.90 +1%
$2.80 +7%
$2.98 +18%
$3.44 +8%
Ad Revenue vs. Pr Yr
Qtr
Ad Imp vs. Pr Yr
QtrSell
Through
Q4 2013 +91% +67% +76%
Q1 2014 +43% +35% +80%
Q2 2014 +42% +19% +81%
Q3 2014 +50% +38% +76%
The bad news:
Look at these CPMs!!
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• Page views per month: 100,000,000
• Ads per page: 1
• Sell thru: 100%
• CPM: $3
• Annual Revenue: $3.6 million
That’s less than 2% of TDMN’s total revenue
Mobile Reality Check
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Step One:Establish a process for “sustaining innovation.”
This is different from “disruptive innovation.”
“Sustaining innovation” is the practice of improving or extending current products or launching new products you build yourself for the purpose of creating incremental revenues.
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Step Two:It is not certain that you can outrun the pace of decline of revenue related to paid print volumes only by doing sustaining innovation.
Establish a permanently staffed and funded business development unit to make acquisitions of additional channels of marketing.
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Sustaining Innovation
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Business Development
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Diversification of Sources of Revenue2010 to 2015
46%
11%
29%
5%7% 2%
Distribution of Revenue 2010
Core Print Advertising
Niche Advertising
Circulation
Commercial Printing & Dstr
Digital Adv & Mktg Svcs
Other
31%
11%30%
8%
17%
3%
Distribution of Revenue 2015
Core Print Advertising
Niche Advertising
Circulation
Commercial Printing & Dstr
Digital Advtg & Mktg Svcs
Other
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Composition of Revenue in 2010 and 2015
DecliningCore Print Advertising
Total
2010% of total
46%46%
2015% of total
31%31%
Sustaining (sort of)Niche PublicationsCirculationCommercial Print and DistributionMiscellaneous
Total
11%29%5%2%
47%
11%30%8%
3%52%
Total Revenue as Index 100 91 CAGR -1.8%
GrowthDigital Advertising + Marketing Services
Total7%7%
17%17%
Total Revenue 100% 100%
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Pinky: “Gee Brain. What are we going to do tonight?”
Brain: “The same thing we do every night, Pinky, try to take over the world.”
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“Gee Jim. What are we going to do today?” “The same
thing we do every day, Mike. Save democracy.”