dual transformation: two routes to resilience clark … transformation a 1. step-change reduction in...

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Dual Transformation:Two Routes to Resilience

iClark G. GilbertPresident and CEO

@ClarkGilbert

Page 2 Trusted voices of light and truth reaching hundreds of millions of people worldwide

Our Mission

The Trusted Digital Voice

Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

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Net NewGrowth

Displacement

"Overall, the newspaper industry's involvement with the Internet has been one where it had a lot to lose and it's been trying not to lose it, as opposed to starting from scratch and having a lot to win."

--President of Online Newspaper Division

Finding New Market Growth

EstablishedBusiness

DisruptiveBusiness

Growth

Starts Outside Established Business

Dual Transformation

Legacy Separate Disruptive

Transformation A Transformation B

Organization Disruptive Organization

Reposition the core around a Post-disruption “Job to be done”

Create a Separate Organization with Separate Financial Structure to Target

Create a Modular “Exchange Teams” between Legacy Core and


Job-to-be-done Structure to Target Disruptive Growth

Legacy Core and Disruptive New


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Transformation A1. Step-change reduction in content costs

Dual Transformation in Content

p g2. Differentiated Content: Invest where you can be

“the best in the world”Tranformation B1. Digital only, not digital first


2. Hire digital DNA

Step-change Cost Reductions:The Huffington Post vs. NYT

Unique Users Head Count

05

101520253035

0200400600800

100012001400

New York Huffington


0New York Times Huffington Post

New York Times

Huffington Post


4

Significantly lowering cost per story in traditional news gathering, but . . .

$250 $227

$550

$0

$50

$100

$150

$200

$ $227

$143$119

$75

$20


“The web favors things that are narrowly

comprehensive. That is everything about something.

Differentiation: Where can you be the 'Best in the World'

p y g g

Newspapers, by contrast, are variety shows;

something about everything.”

– Lisa Williams, founder, PlaceBlogger



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• Strengthening the Family

• Faith in the Community

Differentiation: Deseret News Six Areas of Emphasis

• Faith in the Community

• Care for the Poor

• Values in the Media

• Excellence in Education


• Financial Responsibility

Faith-based Segmentation of U.S. PublicSix Defining Factors Used in Segmentation

Segment 1

Tolerant

Believers

27%

Segment 2

Devoted

Denomin‐

ationalists

16%

Segment 3

Secularists

12%

Segment 4

Fence

sitters

14%

Segment 5

Humanists

18%

Segment 6

Strugglers

13%

National

Total

LDS

Sample

Factor 1: ReligiousFactor 1: Religious

Devotion5.80 5.82 2.37 4.37 3.74 4.95 4.72 6.08

Factor 2: Helping

Others5.56 5.15 3.82 3.79 5.02 4.80 4.84 5.36

Factor 3:

Commitment to

Marriage

4.79 4.42 3.47 4.22 4.82 2.95 4.26 4.79

Factor 4: Teaching

Children5.27 4.86 3.78 3.23 5.34 4.44 4.64 5.43


Factor 5: Decline in

Moral Values6.03 6.08 2.93 4.00 3.98 5.14 4.91 6.45

Factor 6: Many

Religions Lead to

Heaven

6.21 2.92 3.46 5.72 5.57 5.63 5.10 3.70

Source: DMC Research Panel, Cathy Chamberlain


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St l

56% “Niche” = Like-Minded Believers

Like-minded Tolerant Believers

27%

Devoted Denominationalists

Humanists18%

Strugglers13%

Like minded Believers


16%

Secularists12%

Fence Sitters14%

Source: DMC Research Panel, Cathy Chamberlain

Family and Faith, reported with rigor



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Deseret News Sunday National Print Edition

2012 Growth: Fastest Growing U.S. NPFastest Growing U.S. NP

80,000

100,000

120,000

140,000

160,000

180,000


‐

20,000

40,000

60,000

Transformation A1. Step-change reduction in content costs

Dual Transformation in Content

p g2. Differentiated Content: Invest where you can be

“the best in the world”Tranformation B1. Digital only, not digital first


2. Hire digital DNA


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Digital Only (Not Digital First)

120

Audience Penetration*

40

60

80

100


Source: Harvard Business School Newspaper Study*Unique Page Impressions/Circulation

0

20

0 10 20 30 40 50 60 70 80 90

Percentage of Content NOT in Newspaper

1. Digital Only, Not Digital First



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Digital Only, Not Digital First: The Rule of Thirds


•Remote Contributors - Deseret Connect

Web-Only Strategies

•User-Generated Content – KSL Classifieds, OK.com

•Web Aggregation – Linkoffs, Roundups, Web Briefs

•Photo Galleries Lists Databases Contests Quizes


Photo Galleries, Lists, Databases, Contests, Quizes


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Hire Digital DNA: DDM Team did not Come to Work for a Newspaper


Transformation A1. Step-change reduction in costs and operations2 E l d d f

Dual Transformation in Business Models

2. Explore reduced frequency3. Subscription Optimization—Print and DigitalTransformation B

1. A Digital Buyer Needs a Digital Seller


2. New Channels are the Difference between A & B

3. Digital Marketplaces (Not Digital Publishing) will win


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The Good News: Newspaper Made $ in 1950


Transformation A1. Step-change reduction in costs and operations2 E l d d f

Dual Transformation in Business Models

2. Explore reduced frequency3. Subscription optimizationTransformation B

1. New Channels are the Difference between A & B


2. A Digital Buyer Needs a Digital Seller

3. Digital Marketplaces (Not Digital Publishing) will win


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New Channels are the Difference between Transformation A and Transformation B

Legacy Media Sales Channel Revenue Has More Than Doubled Since 2009

Meanwhile, Dependence On Legacy Channels Has Been Cut By Half

100%

30%

40%

50%

60%

70%

80%

90%

$ UP% DOWN

Total $*

90%

55%

45%


2009 2010 20110%

10%

20%

2009 2010 2011*Actual Revenue Numbers Not Disclosed

A Digital Buyer Needs a Digital Seller

The Parable of

the11th Floor



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A Digital Buyer Gets a Digital Seller


Digital Services: Marketplace Companies, not Publishers are Winning



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Digital is now a foundational core businessTotal DDM Revenue

Re

ven

ue

2009 Revenue

2010 Revenue

2011 Revenue

2012 Budget


Transformation AWho We Admire

Transformation B Benchmarks

Transformation A & B



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1 2 3

Key Overall Content Takeaways

1 2 3

Dual Transformation• There are 2

Transformations, not one

Transformation A Content

1. Step-change reduction in

costs2

Transformation B Content

•New Channels Key to

Transformation Bi i


•Modular Rules around Exchange

Teams

2. Explore reduced

frequency3. Subscription

optimization

•Digital Buyer Gets a Digital Seller

•Marketplace is key to new

revenue growth

1 2 3

Key Overall Business Model Takeaways

1 2 3

Dual Transformation• There are 2

Transformations, not one

Transformation A Content

• Step-change cost reductions

• Invest where you

Transformation B Content

•Digital Only, Not Digital First

•Build Digital DNA


•Modular Rules around Exchange

Teams

can be the “best in the world”


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