Strategic Planning at the Chronicle Gazette
Table of Contents
A. Introduction B. Newspaper publishing industry today C. Why newspapers are facing declining circulations and revenues D. How companies in the publishing industry are adjusting their strategies to cope with today’s challenges E. Steps taken by the Chronicle Gazette for dealing with today’s challenges F. Conclusion
Introduction:
The Chronicle Gazette is one of today’s leading newspapers in the United States, with a circulation of 225,000 customers. Over the past few years, it has been facing a steady decline in its customer base and revenues. This is mainly due to the increase of people using the internet as their means of gathering news and information. The
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Most of the time the news content is available in real time and can be accessed anytime and almost anywhere in the world. The majority of the online news providers do not require a fee. As a result, the number of readers willing to pay for the news has gone down, causing a direct impact on the sales of the printed newspapers.
Over the last ten years there has been a significant reduction in the total number of newspaper copies circulated in the United States. The total number of newspaper copies circulated, both daily and Sunday in 2000 was 115,194,000. By 2008 this number had dipped significantly to 97,712,000. By the end of 2010 the total number of copies circulated was 43.4 million. Simultaneously, advertising revenues have also steadily declined over the years. Advertising revenues have dipped from $48,670 billion in 2000 to $24,821 billion in 2009. 2010 was relatively calm compared to the hair-raising dips in revenue of 2008 and 2009. Advertising revenues for 2010 dropped roughly 6.3 percent, to $22.8 billion. That was relatively low compared to the 26 percent drop in 2009. With the losses of the three previous years newspaper advertising is down roughly 48 percent, nearly half of what is was five years ago. Expenses continue to climb, especially for news print, where the price is running 20 to 30 percent higher than it was a year ago. Earlier rounds of staff cuts and savings from outsourcing have cycled
Tom and the USA today team faced a new rapidly developing internet information boom. News was not just becoming accessed more by digital sources, but it was being created or changed into digital sources of information. The internet had created, in the context of the news industry, a disruptive outlet to the newspaper production, sales, and distribution. Whole new infrastructures and business strategy focused on web design, rapid information updates, media outlets, and becoming more up to date with the current technological trends in news, information, and communications. With that, Tom realized that the business expand and use its core competencies in content distribution into three formats, which would allow USA today to impact different market segments with one of three particular product/service changes. With the new divisions, the overall strategy would need to become more ambidextrous to guide and coordinate the branches under a single
Jerkiewicz, who worked in the newspaper business for 15 years, said the subscriptions have fallen drastically. In 1995 the newspaper has about 24,000 copies in circulation, but in 2010, only has 9,000 copies in circulation. The readers however, had not quit reading the news, but had turned to online sources. He adds that magazines and newspapers should have a strong digital marketing plan. He thinks that traditional printing will continue to decline, but will never die out. There will still be a market, but it will just be smaller than it is now. He says that Kindle had not run print books out of business, and it never will. He adds that printing is so cheap now that printers are going out of business because falling subscription levels are leading to
Problem Statement: The advent of internet brought about both challenges and opportunities for the newspaper industry. On one hand, it required redesigning a new product suited for online customers and on the other it was an opportunity to reach to 123 million potential customers in this category. Thus to keep up with the pace of emerging digitization in every field, like all newspapers, New York Times also added online reading in their product portfolio. However it only worsened the crisis the newspaper was already going through. The operating profit declined by more than 76% from 234Mn$ in 2010 to a mere 57Mn$ in 2011. The circulations were steadily declining and the new online advertising could not compensate for print advertising
In Summary Robert’s Media’s is a publisher of an industry-leading upmarket fashion magazine, whose customer base is ‘affluent 45 to 54-year-old woman’. Currently, the business is struggling to succeed in its current market due to; the 2008 recession, competition from other magazines and a consumer movement from print to digital media. Due to this struggle the business currently has poor financial performance, which has led to a fall in the firm 's share price, thus there was a Board decision to appoint a new CEO, Harry Gardner, who has experience in marketing for a national newspaper, magazines, and a subscription television channel. Harry 's set a corporate aim to improve ROCE to at least 8% within two years, he also suggests a transformational change in strategy. This involves the migration of Roberts Media print titles to a digital format, which will result in a 20% market share.
With consolidation an era of concentration began. With fewer companies owning more they were able to share resources and become more effective in their reporting. This efficiency carried over with advertising and other sources of income for the newspapers.
There are opportunities and challenges in today’s economy that have affected and still affecting USA Today. The internet has proving to be a challenge to the traditional newspaper. The Internet has introduced an interactive and accessible delivery platform than cannot be matched by a printed newspaper. Another challenge is Google and other non-conventional advertising businesses are tapping into the growing online advertising market. With such dramatic decreases in advertising revenue, newspapers have been forced to cut costs. And staffing was the first to go. “Of the top 25 newspapers in the United States, all posted declines in circulation except for The Wall Street Journal” (Arango, 2009). Readers want instant access to news. “Newspapers
Nationwide, many companies have reduced their overall promotion budgets as they face the need to cut expenses. However, most of these reductions have occurred in the budgets for mass media advertising (television, magazines, newspapers). While overall promotion budgets are shrinking, many companies are diverting a larger percentage of their budgets to sales promotion and specialty advertising. This trend is expected to continue as a weak, slow growth economy forces most companies to focus more on
Nationwide, many companies have reduced their overall promotion budgets as they face the need to cut expenses. However, most of these reductions have occurred in the budgets for mass media advertising (television, magazines, newspapers). While overall promotion budgets are shrinking, many companies are diverting a larger percentage of their budgets to sales promotion and specialty advertising. This trend is expected to continue as a weak, slow growth economy forces most companies to focus more on
Despite the decline of the newspaper industry, USA Today has found the ways of differentiating and staying away from the commodity status of most news sources. It means that USA Today put their readers’ interests above the financial benefits. First, the paper's focus will now be on its digital operations. Furthermore, it will emphasize breaking news on its Website, aiming to post articles within 30 minutes of a breaking news event. It will create a stand-alone sports segment called USA Today Sports. Additionally, it will shift more of its resources toward making content more available in digital form, an effort to win a larger share of the tablet and mobile phone news market (Peters, 2010). Second, they deliver the innovative content that is
But a rapidly-growing public demand for almost "instant" Web coverage of breaking national news stories has forced even the largest newspapers and magazines- like the Washington Post and Newsweek-to abandon the old rule."
Opportunity is the key word for the newspaper industry right now. According to experts, neither digital advertisement revenues nor paywall subscriptions are the answer. Innovation needs to be present in order to define the future of the industry. For example, some added value needs to be present to merit the payment for content that was previously free or can be found using numerous substitute products free of charge.
1. What are the changes that the newspaper industry is going through? Where do you think the “technology” of news on paper is in its lifecycle? Where is it likely headed?
There are two possible ways for the online newspaper to make money (Ferrell & Hartline, 2014). The first being USA Today can charge a fee for their App (Ferrell & Hartline, 2014). Second, advertising, like USA Today did in the past by offering six months of free advertising with a paid six months of advertising (Ferrell & Hartline, 2014). USA Today could offer content topic providers front page one inch blocks for one day a week advertising (Ferrell & Hartline, 2014). Distribution and promotion are the third and fourth steps, how to market the online newspaper to readers of all ethnicities, and genders (Ferrell & Hartline, 2014). What better way to promote an online newspaper to varies readers than to use social media as an outlet (Ferrell & Hartline, 2014). The website HootSuite can help USA Today manage their social media accounts like Facebook, LinkedIn, and Twitter (Hendrick, 2016). HootSuite can provide insight into which post resonate with target populations (Hendrick, 2016).
With the decreasing market, the profitability of newspaper industry is declining. Newspaper revenues came from two sources: advertising and circulation representing approximately 80% and 20% of revenue, respectively. But between 2000 and 2010, annual
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