Five key ingredients make up what Gannett CEO Mike Reed believes the newspaper industry needs to focus on as it looks to the future. In a keynote address kicking off this week's PIVOT 2020 virtual conference, he told members of America's Newspapers: "We need to pivot as an industry."
He talked about the need to move from a traditional advertising model to a subscription-oriented model. This, he said, will produce sticky, sustainable revenue that will work to the industry's benefit over the long run. Innovating the business model will require experimentation and testing, he said. While mistakes will be made at times, he said it's important to try new things and measure the results.
Second, he said newspapers need to focus on the value that local newspapers provide to consumers and to businesses. "It's one thing to talk about pivoting from an advertising-based model to a subscription-based model," he said. But it's the value proposition that newspapers bring to consumers and businesses that will make them "pay us to be part of their lives for a long time to come." Focusing on improving that value proposition, he said, "will bring pricing power back to us and put us on the path to sustainable revenue growth."
Third, newspaper executives need to build a more diverse workforce and have that workforce reflect the skill sets that will be needed for the future. "We need more diversity," he said, "so we're thinking more like our audience." Gannett recently announced a companywide goal of achieving parity in terms of gender, racial and ethnic diversity in local newsrooms by 2025.
Next, Reed said newspaper executives must continue to look at costs and make tough decisions, including reallocating necessary resources toward investments that are needed for the future.
Finally, he said shoring up the balance sheet is important. "My strong recommendation to everyone is don't carry a lot of debt," he said. "We don't know what the next two to three years hold." He said having a strong balance sheet gives companies the runway needed to survive whatever they face.
One thing the challenges of this year have shown Reed — from COVID-19 to racial and civil unrest to an unpredictable election period ahead — is the importance of the newspaper industry. He said the way consumers have turned to their local newspapers for news and information keep him optimistic about the future.
"Local journalism is a key part of our future," he said. "We're the trusted source for local news and information and that is so important in today's world." Acknowledging that it's a crowded space that also includes many untrustworthy sources and untrustworthy platforms, he said this gives newspapers a real opportunity, as well as an important duty. "If we can't get that part right, it's going to be hard for us to create value for all the products we want to deliver to consumers."
Reed sees newspapers moving toward becoming primarily digital businesses, which will change the way they need to market their products, as well as the skill sets needed by their staffs for the future.
He also called on the industry to work together. Saying there's always a lot of fighting between public companies, private companies, family-owned companies and more, he called on industry executives to put those things aside. Instead, he said the focus needs to be on those who are "taking our content ... not giving us the value that we deserve for it and creating their own business models."
"We need to stop them," he said, and get proper credit for the intellectual property created by newspapers.