Mike Reed Sets Goals for New Gannett

[Readallover]

Gannett Sets Goal For 10 Million Paid Digital Subscriptions

 

[The Big Ragu]

The NY Times comparison was absurd.

I love when you see these kinds of grandiose goals. ... without discussion about what is going to make people subscribe.

Even so, the NY Times is basically one entity. Gannett is more than 250 distinct publications. Even with that, the NY Times has 7 times the digital subscribers that Gannett does. There is a reason for that.

The NY Times carved out a niche as a national / politics publication that spoke truth to power over the last 4 years and garnered a certain type of subscriber with a steady stream of investigative work that they were willing to pay for. That took some serious resources. Is Gannett going to (or able to with its debt situation) devote those kinds of resources to carve out a similar niche? If not, what is going to grow subscribership so dramatically over the next 5 years?

 

[Michael_ Gee]

The NY Times comparison was absurd.

I love when you see these kinds of grandiose goals. ... without discussion about what is going to make people subscribe.

Even so, the NY Times is basically one entity. Gannett is more than 250 distinct publications. Even with that, the NY Times has 7 times the digital subscribers that Gannett does. There is a reason for that.

The NY Times carved out a niche as a unique publication that spoke truth to power over the last 4 years and garnered a certain type of subscriber looking for that with a steady stream of investigative work. That took some serious resources. Is Gannett going to (or able to with its debt situation) devote those kinds of resources to carve out a similar niche? If not, what is going to grow subscribership so dramatically over the next 5 years?

The Times could break out its food/recipes section as a stand alone unit and it would generate like 5 times the digital subs Gannett has.

 

[Readallover]

So Reed wants to grow from 1 million to 10 million paid digital subscribers over the next five years? I doubt this can be achieved, even if USA Today stopped its print editions and went to a digital paywall.

 

[Alma]

Gannett has some reporting chops. It's not entirely chopped liver. Broke the Nassar story.

Where Gannett is weak - well, among the areas where it's weak - is in its look and its ability to package reporting into other, high-prestige, slobber-all-over-Twitter visual presentations. The NYT excels at that; the NYT is Apple/Taylor Swift of that. The NYT is also the worldwide leader in pumping out ****ty opinion columns with histrionic headlines. It also has the brand name it has. NYT is an experience. It's not that rewarding of a experience to me - more of a pretentious, eye-rolling one, the kind where you conspicuously read the first two pages of 1984 where everyone can see you - but that nonetheless.

Gannett's brand name is USA Today, but it doesn't know how to leverage that or use it in the same way, and it is not an experience. Its Web site - the USA Today one specifically - sucks, and of course all of them do, user-wise, but USA Today should look and feel different than all of the local ones, and it doesn't. It doesn't. It's the Olive Garden/Outback of Web sites. NYT is a modern, upscale Internet library/cafe, a nice one, that makes you think you're a pretty ******* impressive human being just for being there, which is what the NYT generally thinks of itself for showing up every day. That used to draw derision, and was a source of great derision in the Ron Howard movie 25 years ago, but it gains them subscribers now.

At any rate, USA Today is a chain restaurant.

 

[wicked]

If I want to read a lot of New York Times copy, I’ll subscribe to the Times and not (insert name of Gatehouse paper).

 

[ChadFelter]

Gannett's brand name is USA Today, but it doesn't know how to leverage that or use it in the same way, and it is not an experience. Its Web site - the USA Today one specifically - sucks, and of course all of them do, user-wise, but USA Today should look and feel different than all of the local ones, and it doesn't. It doesn't. It's the Olive Garden/Outback of Web sites.

Great point, the user experience needs to improve if Gannett is going to reach 10M. They've got to stop trying to scrounge pennies from digital ads and make the websites appeal to the potential subscribers. The content, with very little noticeable strategy, has been good enough to reach 1M already. I think 10M in five years is possible but the biggest barrier is UX.

 

[Baron Scicluna]

I love when you see these kinds of grandiose goals. ... without discussion about what is going to make people subscribe.

That has been Gannett's M.O. for the last 30 years. Come up with some useless initiative, make a huge deal about it, dump it on the poor employees, then forget all about it six months later. And then bring it back two years after that, only with a different nickname.

 

[The Big Ragu]

Great point, the user experience needs to improve if Gannett is going to reach 10M. They've got to stop trying to scrounge pennies from digital ads and make the websites appeal to the potential subscribers. The content, with very little noticeable strategy, has been good enough to reach 1M already. I think 10M in five years is possible but the biggest barrier is UX.

Saying that what they do has been "good enough to reach 1M" ignores the fact that. ... Gannett has consistently been losing money. Do they break out the revenue and income from those digital subscriptions (as in, is it profitable for them?). ... because what I do know is that quarter after quarter Gannett has been announcing that their digital subscribers are growing, and quarter after quarter they have been reporting bigger losses.

If you produce widgets for $2 and you sell them for $1, you might attract a lot of customers. It's not a winning strategy.

 

[LanceyHoward]

I have followed Gatehouse/Gannett the last couple years. I have read the 10-K's and 10-Q's and the material they release to investors. Why did I do this? Because I shorted the stock at 10 and watched it go to two.

I learned in my analysis that Mike Reed makes things up. The estimates the company releases change constantly. Next week the goal may be 20 million subscribers.

The article is misleading. It said "repaid about $647 million in debt". That was false. It refinanced $497 million in debt and repaid about $160 million. Gannett got the $160 million mostly from selling real estate. I don't know how much real estate is left to sell.

I continue to predict a trip to the bankruptcy court in 2022.

 

[ChadFelter]

Saying that what they do has been "good enough to reach 1M" ignores the fact that. ... Gannett has consistently been losing money. Do they break out the revenue and income from those digital subscriptions (as in, is it profitable for them?). ... because what I do know is that quarter after quarter Gannett has been announcing that their digital subscribers are growing, and quarter after quarter they have been reporting bigger losses.

Most of the business comes from print still, so overall revenue will keep dropping. It's tough to change your main revenue stream with a snap of a finger. But Gannett's goal, as it says in the article, is to eventually make digital subscriptions the main revenue stream. At what number of digital subscribers can that be profitable? I wouldn't know. Overall profitability also depends on how bad the losses are in other aspects of the business.

Another thing to keep in mind is that it takes time for digital subscriptions to really turn into cash. Go to any Gannett site right now and you'll see a $1 for 3 months sale. Lol. Gannett obviously isn't bringing in a lot of dough from new subscriptions in the next three months. But if most of those people stay on past three months, and then stay on for a few years, that's when it actually adds up to real money. Since they just hit 1M digital subscribers a few months ago, it's way to early to judge revenue numbers from digital subscriptions. But it's probably the most promising Gannett news since ... I don't even know.

 

[I Should Coco]

This would be yet another U-turn for Gannett ... aren't they only a few years removed from the "snap up dying newspapers and bleed them of valuable assets" strategy? The linked story noted they still have 260 print newspapers.

Maybe they can find a way to boost digital subscriptions, but their track record isn't inspiring much confidence.

 

[ChadFelter]

This would be yet another U-turn for Gannett ... aren't they only a few years removed from the "snap up dying newspapers and bleed them of valuable assets" strategy? The linked story noted they still have 260 print newspapers.

Maybe they can find a way to boost digital subscriptions, but their track record isn't inspiring much confidence.

Selling digital subscriptions doesn't inhibit them from selling off real estate and printing presses and getting rid of overhead.

 

[Sports Barf]

If Gannett wants 10 million subscribers they should do something about their epileptic fit of a website

 

[LanceyHoward]

Selling digital subscriptions doesn't inhibit them from selling off real estate and printing presses and getting rid of overhead.

True. But Gannett has 240 newspapers and just reached one million subscribers and it has taken 20 years to get to this point. So they average four thousand subscribers a paper. Wow.

To get to ten million Gannett will need to invest money in a better web site experience. And since they would need to compete nationally with the New York Times and Washington Post they will need to hire a lot of talented staff to provide something approaching the breadth of coverage those papers offer. As long as the company has to pay off a loan at 11.5% interest they will not be investing the money necessary to play in that sandbox.

 

[Shropshire Slasher]

10 million / 240 newspapers = 41,666.67 online subscribers per newspaper.

A bunch of their papers never ever had print subscription that high. They're setting up a bunch of small papers to fail. (Maybe that's the idea.)

 

[ChadFelter]

True. But Gannett has 240 newspapers and just reached one million subscribers and it has taken 20 years to get to this point. So they average four thousand subscribers a paper. Wow.

To get to ten million Gannett will need to invest money in a better web site experience. And since they would need to compete nationally with the New York Times and Washington Post they will need to hire a lot of talented staff to provide something approaching the breadth of coverage those papers do in order to compete. As long as the company has to pay about off a loan at 11.5% interest they will not be investing the money necessary to play in that sandbox.

Totally agree about the UX. They won't reach 10M unless that gets way, way better. But your math is disingenuous. It didn't take 20 years to get to this point. It took like 18 months. And that's not including USA TODAY, which doesn't have a paywall but obviously would have a greater number of potential subscribers than any local website.

10M is (very) ambitious but not impossible. The breadth of coverage could get to a competitive level if they orient their resources in an efficient way. But the UX has to be overhauled. And there will need to be some creativity in how subscriptions are offered. Bundles for multiple sites ... Bundles for one site + USA TODAY ... Modified rates to target specific topics (for example, access to all sports coverage, but not news, for a reduced price) ... you catch my drift. I've heard rumblings about new "verticals" in the works. Sports seems ripe for that sort of thing. An SEC football vertical seems like a no-brainer.

 

[LanceyHoward]

But your math is disingenuous. It didn't take 20 years to get to this point. It took like 18 months. And that's not including USA TODAY, which doesn't have a paywall but obviously would have a greater number of potential subscribers than any local website.

You are assuming that the companies had no electronic subscriptions when the merger was completed 15 months ago. But they had been selling electronic subscriptions for years before the merger. According to the website the company started with 561.ooo electronic subscribers. So since the merger the company has gone from an average of 2,300 paid electronic subscribers to about 4,200 per paper. I realize that is a basically a double since the merger but it still not a hell of a lot of subscribers for that many papers.

And I don't know the number but I would bet a lot of the circ is on reduced rate introductory subscriptions. I think the Arizona Republic is their largest paper. I just checked the website of the Republic and they are offering a $1 for three months introductory rate.

 

[superhater]

The NY Times carved out a niche as a national / politics publication that spoke truth to power over the last 4 years

LOL

The Times pretty much handed Trump the job with that irresponsible "but her emails" nonsense and did next to nothing to hold him accountable afterward. He was their meal ticket and they treated him as such.

Truth to power? GTFOH.

 

[ChadFelter]

You are assuming that the companies had no electronic subscriptions when the merger was completed 15 months ago. But they had been selling electronic subscriptions for years before the merger.

They may have sold some digital subscriptions before, but they didn’t start treating it as a main revenue stream until the summer of 2019, when a bunch of sites started putting content exclusively behind the paywall. And that’s pre-merger. I have a friend at a Gatehouse-turned-Gannett site who says her paper is going to a digital subscription model for the first time starting next week. By the looks of it, the “new” Gannett is very much still in its infancy with this business model, so to already be at 1M isn't something to sneeze at.