Despite differences in size, staffing, user demographics and consumption trends, there are common threads to be considered when reorganizing newsrooms. Three important considerations are multi-platform efficiency and focus, content expansion and reducing costs.
Today’s 24-hour digital news cycle means that newsrooms are changing to stay relevant. At the same time, there is a lot of truth in the aphorism about exchanging analog dollars for digital dimes. The good news is that newsrooms can evolve to serve both analog and digital audiences and remain profitable.
The current issue of MFM’s member magazine, The Financial Manager (TFM), includes a special report on “The Future of Media.” One of the three articles in this report, prepared by Jamie Spencer, looks at what TV stations (and print operations) need to keep in mind to ensure success when expanding into media consumption growth areas.
Spencer is senior vice president of Magid’s Strategy Group. He oversees the group’s research and consulting practice for local media organizations and is a recognized expert in the area. The problem, as he points out in his article for MFM members, is “digital revenue as a whole isn’t growing at a rate that will deliver sustainable revenue for most legacy media companies.”
So, what is a traditional media company to do? It’s not reasonable to assume that consumers are going to revert to their old habits of simply reading a daily newspaper and watching the evening news. To survive, companies must invest in content delivery. The good news is that Spencer sees no “one-size-fits-all solution.” Newsrooms have the chance to develop content appropriate to their unique circumstances.
Three Big Considerations
Despite differences in size, staffing, user demographics and consumption trends, Spencer sees common threads to be considered when reorganizing newsrooms. He specifies three considerations: “multi-platform efficiency and focus, content expansion, and reducing costs.”
Multi-Platform Efficiencies — There’s no question about it; newsroom staffs are stretched by the need to constantly feed so many media maws. The key is aligning the information flow and making sure everyone understands how stories are being covered and how they will manifest themselves on traditional and digital platforms. While each person in the newsroom doesn’t need to touch each platform, they do need to know how each platform will be leveraged to cover a story.
“Media companies can create significant efficiency and quality improvement by taking multiple discrete editorial processes and aligning them into a single flow,” Spencer says. Examples include taking digital copywriting responsibilities away from reporters, which frees up time to create more compelling TV content. In other instances, a reporter can quickly update social platforms, increasing audience engagement.
This also requires focus. Magid’s “most successful clients across platforms define a purpose or brand identity that helps them concentrate on the stories that are best aligned with their mission and minimize the rest.”
Content Expansion — When newsrooms identify new content delivery opportunities, they need to ensure the expansion makes good use of existing or new resources from an ROI (return-on-investment) perspective.
“Some reasons for expansion are easy to see, like the benefits of adding a newscast in a daypart that you’re already staffed to deliver,” notes Spencer. “Others, like the advantage of launching a new product for an over-the-top (OTT) platform, or increasing social capacity, beg deeper analysis to determine a return.”
Extending news content to online and mobile platforms allows broadcasters to diversify revenue while staying aligned with their core competency of video. “But an OTT strategy can’t rely on repurposed TV content. Magid research shows that consumers demand content built for the platform, delivering live news on their terms,” warns Spencer.
Reducing Costs – A major challenge for many newsrooms is operating with less revenue available to subsidize costs. As Spencer states: “Companies can no longer operate inefficiently and still deliver solid net revenue. They need to be more focused on reducing expenses.”
The newspaper industry provides case in point that, as Spencer writes, “You can’t give away your content with the expectation that revenue will simply appear in the future. Many have learned the hard way that digital display revenue can’t sustain a content business on its own.”
Likewise, social media platforms such as Facebook are a double-edged sword. While they provide opportunities to grow audience, too many brands have done so without a strategy. They have given away content without a revenue stream or even, as Spencer has found, “a plan to leverage that new audience.”
The alternative involves monetizing content directly. Spencer says some companies are having success with this approach. Newsrooms are also adopting paid subscription models. But, as he points out, this tactic requires a significant investment in resources to build out premium content that a consumer is willing to purchase.
Spencer also stresses the importance of effective communications. “News organizations aligned with the demands of today’s environment have a few common traits: they communicate effectively, get the most out of their people and keep an eye on the future.”
Improving operating efficiency though better communication begins with the relationship between journalists and their digital support team. Spencer includes the example of ensuring reporters know ahead of time if they will be expected to tweet a new story detail or update a digital report from the field, or if they can call in the information to a web producer who will communicate the update. He also encourages news directors to listen to reporters when they provide logistical insight concerning the best outcome.
As we are seeing with other facets of the industry’s digital transformation, this communication must include many other departments. Engaging the marketing department helps ensure the best promotion possible.
Cooperation between newsrooms and sales teams is also critical. As Spencer explains, “There are many opportunities for sponsorships or other monetized content that don’t impede the independence of newsrooms. And too often, these opportunities go unrealized because the sales team doesn’t recognize them until it’s too late.” Examples provided by Spencer include a focus on topic areas such as “food, events, dining and leisure activities” which are specific to the local market and can be “great opportunities for sponsored or even native content.” These aren’t news per se, but are certainly of interest to those in or visiting the area.
As Spencer concludes in his article, this re-engineering process requires examining the specific challenges and inefficiencies a newsroom is experiencing. “Even though the overall challenges likely stem from the misalignment of consumer trends and revenue streams, you can reorganize in a way that saves money while effectively delivering a strong value proposition across multiple platforms.”
If you would like to learn more about Magid’s recommendations, a good starting point would be the full text of Spencer’s article, which appears in the November-December issue of TFM and can be accessed from MFM’s website.
With more money flowing into digital media, and TV stations exploring ways to extend their news programming into new platforms enabled by the new ATSC 3.0 broadcast standard, newsroom realignment will also be a topic of discussion at upcoming events involving the industry’s financial management community. These include the 2019 MFM CFO Summit, which will be held in Fort Lauderdale, Fla., March 7-8, 2019, and Media Finance Focus 2019, MFM/BCCA’s annual conference, May 20-22, 2019, in New Orleans.
In addition to providing a macro view of the technological and consumer trends faced by today’s media organizations, MFM events such as Media Finance Focus 2019 also feature breakout sessions where front-line personnel share valuable insights on the best way to respond to new opportunities and challenges.
We hope you and your organization’s financial managers will mark your calendars and plan to join us. This is one of the best ways to ensure the re-engineering of newsrooms and other operations is aligned with the goal of creating more dollars of all kinds.
Mary M. Collins is president and CEO of the Media Financial Management Association and its BCCA subsidiary, the media industry’s credit association. She can be reached at [email protected] and via the association’s LinkedIn, Twitter or Facebook sites.