In farewell, Digital Chief Saridakis attacks paywall strategy, saying: 'Industry going about it all wrong'

In a long memo that's part manifesto and farewell letter, departing Chief Digital Officer Chris Saridakis slams the leading paywall strategy as wrongheaded, an attack on a nascent newspaper business model that hints at a possible reason he's leaving Gannett.

"I do not believe a paid content/paywall strategy will work for newspaper companies,'' he says, in his 1,700-word overnight letter to employees. "I think the industry is going about it all wrong."

Instead, Saridakis (left) says, papers should pursue a more limited strategy of charging for content, one that sounds like the cable TV model. "I believe that newspaper companies should bundle their offerings and charge users for access to the local content in any form that the consumer wants (print, web, mobile, e-reader, mobile alerts, etc.),'' he writes.

Publishers including The New York Times Co. have announced plans to charge for online access, including via paywalls. But Gannett has not disclosed any plans of its own.

In the letter, Saridakis also suggests he never planned to stay with the nation's top newspaper publisher for long, after being appointed to his post two years ago. "The clock really started for me when I officially joined Gannett as the chief digital officer,'' he writes.

Saridakis, 41, also predicts that current research into "automated journalism" -- content like sports stories produced solely with software -- will bear fruit and come into wider use. And he praises social network Facebook. "It has totally disrupted not only how media companies keep their audience," he says, "but also, how marketers leverage that 'trusted network' to help promote products and services. This is an area of great opportunity and great risk for Gannett."

Saridakis's last day is today. Gannett has not explained the circumstances of his resignation, which the company disclosed without comment in an April 7 regulatory filing. GCI also has not named a replacement. Saridakis is leaving to become CEO of the marketing services division of e-commerce company GSI Commerce outside Philadelphia.

Full text of his remarks
Colleagues,

As you know­­, today is my last day at Gannett.

My journey at Gannett began in 2005 when a few brave people at Gannett took a bet on buying a relatively small Philadelphia-based company with big ideas. PointRoll was neither a newspaper nor a TV station. Back then it was known as an irreverent technology upstart looking to change the way in which people interact with content. The only difference was (and still is) PointRoll’s content was related to advertisements. Our vision was to develop a great platform by which Fortune 500 companies and their brands will be able to connect with end users across every website in the world. We put the microscope to user behavior and we worked with some of the smartest people to build the best experience a user can have. We then turned to the advertiser and worked closely with them to define the next generation of online advertisements. We power almost every award winning rich media ad that runs across the web. Today, PointRoll is the undisputed leader and does much more than build rich media ads. We thrive on innovation and we fuel our success with passion. Through our acquisition of ShopLocal, we are installed at the top 44 of 50 retailers. We work with the number 1, 2 and 3 company in almost every category from automotive, retail, pharmaceutical to financial and CPG. Our clients have benefited from our continued focus on innovation and the desire to challenge the status quo. We won and so did our clients, employees and Gannett. Thank you to all the dedicated PointRoll and ShopLocal employees, you are the best!

The clock really started for me when I officially joined Gannett as the Chief Digital Officer just as I was winding down my day-to-day responsibilities at PointRoll in 2008. I am proud that Gannett recognized the importance of “Digital” and chose to invest in a proper Digital division. There is much that has been accomplished in the short two years that I have joined Gannett, but there is without a doubt so much more that needs to be done. I have been fortunate to build a great team of dedicated, hard working individuals that have surprisingly changed from a “corporate” culture to a “client facing” culture. For the most part, Digital is a function of the output that comes from the print (U.S. Community Publishing and USA Today) and broadcast products. Our success is dependent upon the success of those divisions. With that, I have also been fortunate to have worked closely with some truly passionate and dedicated staff in each of those divisions. I still believe that Gannett’s core asset is the content we create and the valuable role that we play every day, in every community that we serve (locally and nationally).

I want to thank my colleagues on the Gannett Management Committee and the board of directors with whom I have the utmost respect for the jobs that they do, the obstacles they have overcome since this economic downturn and the challenges they will continue to face as this company continues to transform and adapt to a new media landscape. Furthermore, the corporate staffs, like legal, finance, corporate development and human resources is top notch and I have had the pleasure to work beside all of them on many occasions. Thank you for your help and professional advice.

I also want to thank all of the employees I have met, through my travels, at the local offices. Your continued support and kind words are what keeps me moving forward and has certainly been a point of inspiration for the Digital staff. Since many of you have emailed or spoke to me about my thoughts for the future, I thought I would take a moment of your time to address the most asked questions over the past few weeks.

Q: What advice do you have for me?

A: Gannett is a great company in a state of transition. You can choose to actively participate and help transform the company and gain a first row seat to it or you can choose to do something else that you are passionate about. For me, I chose the latter route, not because of who Gannett is, but because of what I wanted to do. I truly believe Gannett is positioned very well and has probably the best opportunity in the media industry.

Q: What are the trends, opportunities and pitfalls?

A: I always keep a list of things that I have opinions about and many people know that I am not shy and will be happy to express and debate each topic openly. Below are some areas I think Gannett should investigate. By no means are these really well thought out, nor am I really presenting a full description, but just some things I think about as it relates to this industry:

1. Paid Content – I do not believe a paid content/pay wall strategy will work for newspaper companies. I think the industry is going about it all wrong. If everyone decides to charge for content that a consumer will need to pay for based on usage, then every newspaper company will have learn how to market like a consumer packaged goods company overnight. They will have to build consumer experiences at the same level that Apple, Coca-Cola and Procter & Gamble do every day. When you ask for a share of the consumers’ wallet, the individual will not measure their return by how many pieces of content they read, but by the value that they received in greater knowledge and that value can be quantified by how many of those consumers become your best promoters. Limiting access to content through pay walls minimizes the chances a consumer has in promoting your product. It will also limit your total audience.

2. Paid Access – I do think there is a place for newspapers and other content companies to charge for “access” to great relevant content and outstanding interactive experiences. People pay to go to the movies today and they pay a lot more to watch the same movie in 3D. Why? The experience is better (for most). I am not suggesting that our newspapers be produced in 3D (although that thought has crossed my mind for a split second), but I believe that newspaper companies should bundle their offerings and charge users for access to the local content in any form that the consumer wants (print, web, mobile, e-reader, mobile alerts, etc). The experience should be new and refreshing, but also adapt to the way in which consumers want to digest this content (information, news, experience). People are more willing to pay for information that they believe will help them. In essence, charging for access has to be more than just bundling a single price for print, web, mobile, etc. The end product needs to evolve and change as technology changes. Gannett has a deep penetration in local markets and the opportunity to become an important part of a local citizen’s everyday needs to move beyond a print product and include all forms of media. Easy and convenient for the consumer.

3. Mobile – Is the next frontier, and is not that far off. In fact, having spent half my time in front of advertiser clients, the opportunity for mobile is in reach. We cannot afford to miss this one. Just like the computer, mobiles devices will get cheaper, faster, easier to use and the operating systems and applications will all become standardized. Advertisers are waiting to take advantage of this sector.

4. Automated Journalism – I am sure a topic that will spark a debate, but one that I believe will become a trend across the content production industry is robotic journalism. A small company is starting to make waves in this space, Narrative Science. They are incubated out of Northwestern University and have some strong industry innovators as backers. Narrative Science automates the creation of editorial narratives across a wide range of content verticals. Their technology application requires no human authoring or editing and can be used to generate narratives about any event that produces significant quantitative data (think sports, financial, health, community data). Here is an online article from this evening's edition of BusinessWeek on this topic and here is an example of it. There will be new, more efficient ways of producing content and Narrative Science is the first of many companies developing this platform.

5. Social – You cannot hide from the power of the consumer. As content producers, Gannett’s user base can help shape our stories. They can also add a new dimension to reporting. From an advertiser perspective, the user has more control than ever. They are also more elusive making it a true challenge to market to someone in the digital sphere. To avoid the network of social interactions and the opportunity to connect the visitors that come to Gannett’s websites with each other will be a recipe for failure. Facebook is bigger than all newspaper companies as a media tool, yet it does not produce one piece of content. It has become the world’s largest meeting place. It has also become a place of trust. This awesome network was built on the users’ desire to “connect”, “communicate” and “share” experiences. It has totally disrupted not only how media companies keep their audience, but also, how marketers leverage that “trusted network” to help promote products and services. This is an area of great opportunity and great risk for Gannett.

6. Understanding who the client is– I think the best exercise Gannett can do is determine who their client is. Is it the subscriber? The web user? The local advertiser? The global brand? How will that client/customer consume content today and in the next three years? Without addressing these questions, we cannot begin to charge anyone for content nor can we charge advertisers a premium for innovative experiences. If Gannett can answer that first question, then I am certain Gannett will be on the path of true transformation and product innovation.

I will be joining GSI Commerce next week as the CEO of Global Marketing Services. Although I will not be working “for” Gannett after today, I am looking forward to helping my clients by working “with” Gannett in many ways. I can be reached at xxxxxxxxxx@gsicommerce.com

Best regards,

Chris