Wednesday, August 17, 2011

With Cincy, a quickening in GCI's pace of change; more to come amid shifting economic landscape

[New logo and tagline introduced in March]

The Cincinnati Enquirer's surprising disclosure yesterday that it's considering a dramatic reduction in print paper size is only the latest in a fast-growing list of major initiatives Gannett has launched in the past year alone. Yet, they're now aimed at a newly tumultuous marketplace in a potentially weakening economy.

There are more to come. That's according to CEO Craig Dubow's memo this month to employees, one that revealed an array of new experiments approved by the board of directors for Corporate and among the U.S. community newspapers.

That came after Dubow's company-wide advisory in March, where he wrote: "It is critical that we accelerate our internal rate of change to address the rapid rate of change taking place within our industry for consumers."

But serious obstacles remain. GCI's revenue continues to fall, most recently in the second quarter. There are fears of a slowing global economy, already pinching consumer spending. That's adding further pressure to the stock price, which has fallen 27% so far this year, and spurred only vague messages about plans for more layoffs.

Indeed, the pace of change is quickening. Consider these examples, listed in reverse chronological order -- and all since July 2010:
  • Reorganization of the U.S. community newsrooms, reportedly around a new editorial focus we've dubbed passion topics. Senior editors of the largest U.S. newspapers by revenue -- the T-31s -- reconvene this morning in the second of a three-day meeting to plan the future of their ever-shrinking newsrooms.
  • Relaunch of all U.S. community newspaper websites, plus USA Today's. This is a major initiative under David Payne, hired as chief digital officer in March.
  • DealChicken, the company's answer to the hugely successful online coupon sites Groupon and DailySocial. GCI's version is planned for more than 50 U.S. markets by the end of the year.
  • Broadcasting's digital video production center based at WXIA-TV in Atlanta.
  • Doubling of the quarterly dividend, and a buyback of stock that could total $100 million over the next 12 months.
  • Enormous job cuts -- again -- that included 700 newspaper layoffs in June. Work consolidation continues, including the latest: centralization of information technology in the Midwest Group, reported just yesterday.
  • Major new marketing effort under Maryam Banikarim, also hired in March. Her appointment came just a week after the start of Corporate's "It's All Within Reach" branding campaign.
  • National sports news network based at the company's best-known brand. The USA Today Sports Media Group is led by President Tom Beusse, hired in January. This is part of a USAT reorganization and staff reduction a year ago this month.
  • Restructuring of four regional newspaper groups, including a rare shift in leadership. Promoted: John Zidich of The Arizona Republic, to president of the West Group. Retired: Curtis Riddle of The News Journal in Wilmington, Del., from the East Group.
  • Smaller formats for The News-Star in Monroe, La., this month, and at The Times of Shreveport, La., last September. Big unknown: is yesterday's Cincinnati move a sign of more to come?
  • Consolidation of page production at virtually all the 82 U.S. newspapers to five central hubs, a project expected to reduce overall design and copy desk employment by as much as 20% at least through summer 2012.
  • More furloughs of approximately 1,000 higher-paid U.S. newspaper employees in the current quarter, and the second. These followed unpaid weeks off for nearly all newspaper workers in the first quarter.
  • Paywalls. Three Gannett papers began charging for various levels of online access in July 2010. Dubow has given only fuzzy reports on progress at those dailies: Florida's Tallahassee Democrat; South Carolina's Greenville News, and The Spectrum in St. George, Utah.
What would you add to this list? Please post your replies in the comments section, below. To e-mail confidentially, write jimhopkins[at]gmail[dot-com]; see Tipsters Anonymous Policy in the rail, upper right.


  1. There was a blurb on the Business page in this morning's Columbus Dispatch about the agreement. In it, the Dispatch states that it is also moving to the smaller format, in early 2013.

  2. 1) Did I read 10x14??? That's a manila folder!
    2) Are there more cuts related to this new change?

  3. Paywalls + Gannett = Failure.

    I have a New York Times digital subscription and I read it everyday. It's well written with lots of stories that are relatively easy to find. Gannett sites, by and large, are terrible. Occasionally there's news on the homepage, but more often than not it's a slideshow of big breasted women in low cut blouses from a nightclub or party.

    The G sites are so badly organized that if there is something there I want to read I can't find it. It's just not worth paying for access to a Gannett site. There's nothing there I can't find more easily in a better form.

  4. Wow - Craig must of had a dream - what wonderful ideas these are sure to move the company forward....

  5. Try this little test at home: lay a copy of USA TODAY in its smaller format along side the NYT and WSJ. You'll quickly realize what a poor product we are producing....and how insignificant we are becoming. And advertisers are seeing it. Trust me.

  6. There's a couple of good ideas in Jim's long list. And we could get excited about some of them were it not for our senior management team's complete lack of credibility.

  7. I believe I believe Please pass the Kool-Ade

  8. That's about what the stock is worth - a packet of Kool-Ade!

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  10. So, the company moves from slow suicide by hunger strike to full hara-kiri mode.

  11. Hey, who cares - as long as the leaders get paid.

    "You put your 15 years in. You put your 15 years out. You put your 15 years in. Then they shake all of you out. You do the leaders' bidding. You get cut and they get paid. That's what it's all about."

  12. Amazing ... shrinking ... newspaper

  13. To a long-time Gannett employee and now retiree (Just in the nick of time), here's what I see as key to the Cincy downsizing:
    1. Gannett is running away from print as fast as possible (it will take a while because print still generates quite a bit of revenue).

    2. This from one of the announcements: "Meantime, the shorter cutoff will result in up to a 33 percent reduction in newsprint consumption for The Dispatch." ... and, of course, the Enquirer. Use to be newsprint was the second highest cost after salaries, so this could be a wash as far as the additional transportation costs are concerned. And, no chance Gannett invests in a press to print Cincy, Indy and Louisville. Heck, Louisville's press is only a few years old.

    Please remember, this (Gannett) operation is now being run by non-newspaper management who are being advised by a not-so competent newpaper management staff. Not a bright outlook.

  14. “It’s all within REACH”

    If this Cincinnati based competitor (they’re in Indy and beyond too) hasn’t already played with that phrase it should now.

    Advertisers know more and more work has been outsourced, that news to readers and papers have been cut all while they’ve been forced to pay more. Those moves have increasingly forced many to question the value they get and this latest news will no doubt have them doing it more, the result of which is this: more Gannett advertisers will be “within reach” of its competitors.

  15. If Gannett wants to get out of the print business, why don't they just sell the papers off instead of crushing them and the employees who are left working for them?

  16. Cuz destroying newspapers and crushing the spirit of employees is way more fun and profitable.

  17. They need to squeeze out every penny from print as it diminishes to nothing - as they rake in bonuses for themselves and destroy careers in the process. Then the bigwigs will bail because they will have enough stashed away and don't care who is left to work freelance w/out benefits for digital pennies on awful online sites. I love technology and progress, but know that much of the news industry has skidded into hell.

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  19. Jeezum, usually it's site directors who think web redesign will solve everything....but now you have Chief Digital Officer's first major move...redesign the web sites. Ugggh. I've been in the digital business 15 years and it's the easiest damn thing to do and never produces the promised results that got it funded in the first place. Lame.

  20. all thats left is legal and inserts, nobody has to sell those ads// Gannett newspapers are over and out!!

  21. As the old saying goes, size doesn't matter. It's how you use it. The problem with the newspapers isn't the size of the paper or necessarily the size of the newsrooms (although that certainly is becoming a problem). It's the quality of journalism and the quality of design that's the problem. Sure, we'll chase the big stories, but not the ones that the community really cares about or would be interested in. Gannett newsrooms are more into self-agrandizing journalism, shallow writing, crappy editing. Act more like a truly local paper, push for more in-depth, complete stories (way too many holes these days) and newspapers will sell again, regardless of their size.

  22. I'd add the experiment with Facebook replacing anonymous comments at several Gannett newspapers.

    For good or bad, at least the company realizes change is needed. Given all the properties, experimenting here and there is a good tactic. What works can be adopted; what doesn't, abandoned.

    Sadly, the people part of all this is being ignored.

  23. Annnnnnnnnd it's 10:28, with the standard worthless comment! No specifics--just a shout for different stories and different design. How is 10:28 not running Gannett right now with helpful suggestions like that?

  24. Gannett having to resort to using Facebook's help 12:56 AM says a great deal about a core competency this company should have in creating something itself and why it continues to struggle in this space, none of which is complimentary.

  25. Thanks for the compilation list of all the exciting things going on. Gannett continues to be a media visionary. Yes, there are going to be growing pains and some legacies need to be let go. Thin the herd...been part of our existence forever. This company is on the right path...the naysayers here just want to bitch and ignore the facts.

    Ciao Haters.

  26. 3:35 is correct. Gannett is running away from print and its related costs. However, the Gannett model is also built on print revenue and my guess is they don't have an accurate plan to transition from the much larger print revenue to digital revenue which make Gannett a much smaller company. Read between the lines- A smaller company means fewer people at the top, Gannett management is milking everything while they can.

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