Nieman Foundation at Harvard
Salt Lake City’s Deseret News faces the same challenging online economics as most American metropolitan newspapers: A local web audience isn’t large enough to support the newsroom, but a national audience can get national news from anywhere. But unlike many similar news organizations, they’re doing pretty well: Digital revenue grew at over 50 percent annually for the past three years, and is now more than 25 percent of total revenue. I spoke to editor Paul Edwards and publisher Chris Lee to try to understand their approach, the core of which is this: a focused editorial strategy allows them to compete on the national stage, while a separate digital unit innovates and comes up with unique, web-only products.
I first heard of the Deseret News through an incendiary talk at the Newspaper Association of America conference in 2011, where CEO Clark Gilbert told a room full of newspaper executives that they had never worked out what it cost to produce their product — and that online-only competitors were doing it an “order of magnitude” cheaper. The company went through a “stark” reorganization in 2010, laying off 43 percent of its staff and merging with an affiliated local TV station.
The massive cuts were a chance to re-examine basic strategy. Consistent with the values of the organization, which is owned by the Church of Jesus Christ of Latter-day Saints, the merged newsroom decided to refocus on coverage of “faith and family,” which audience research suggested were underserved by national outlets. Meanwhile, a separate digital division has been busy trying out ideas that go beyond traditional journalism, such as online marketplaces, daily deals, and user-contributed content.
The core of the editorial strategy, Edwards told me, is to focus on issues not well-covered by other news organizations.
We’re not going to try to compete nationally on political news with Politico and Washington Post. And we’re not going to try to compete nationally on financial news with the Wall Street Journal and so on. But we can, we believe, put together really compelling coverage about issues surrounding faith, family, care for the poor, excellence in education, values in the media, and financial responsibility that’s as good as what anybody else is doing. And since that’s very much part of the DNA of our organization, reaching back 160 years, we’re going to specialize in those areas for content that we think reaches an underserved audience nationwide, for whom issues of family and faith are very important.
This journalism serves both local and national audiences, and hence both print and digital. But it’s not quite the old model of the omnibus news source. “We are definitely believers in less is more,” said Desert Digital Media vice president Chris Lee. “A newspaper can’t be all things to all people if it’s going to succeed online. In print, Deseret News has a travel section. Online, people go to Kayak and Travelocity. On the web, you’re one click away from the best.”
Which is why, as focused as the Deseret News’ editorial strategy may be, posting traditional journalism content online isn’t enough. Edwards stressed the importance of web-only content, produced by sister division Deseret Digital Media. Freed from the structures of a print newsroom, this unit has been inventing products that couldn’t exist on paper. Former Guardian digital editor Emily Bell has argued that such separation can be critical to success, and Edwards agrees: “I would probably muck up their innovations if I were too closely involved with that.”
Lee told me that his organization, Deseret Digital Media, focuses on their “marketplace” products, which are web-native updates of the classified advertising model. The flagship site KSL.com has several different advertising sections which are monetized in various ways. A generic classified listing is free, but you can pay $7 per day to feature it more prominently. Employers pay to post job listings, while professionals can pay to be listed in a local services directory. There’s a Deals section, much in the style of Groupon or LivingSocial, which is “a seven-figure business now for us annually,” said Lee. And of course, businesses are keen to get their ads in front of someone who is specifically searching for, say, a car.
But the old “advertising next to content” model is not dead. On the contrary, Deseret Digital runs a sophisticated display advertising business, including demographic and geographic targeting, and behavioral retargeting, serving nearly a billion ads per month. Lee also cites the success of unit that sells specifically to small businesses. “As we talk to other media companies, they are surprised. They tell us, ‘I didn’t realize we could make $400, $300, $200 sales successful over the phone.'” The unit employs about 40 people and produces “several hundreds of thousands of dollars” per month in revenue.
Lee said it’s important for a legacy news organization to understand its competition broadly:
When we frame our market by comparing ourselves to local competition, we figure we have well over 50 percent digital marketshare for all legacy media companies in Utah — print, radio, television, etc. But when you frame it around the total digital competition coming from national entrants in our market like Google and Groupon, that market share looks much smaller — 15 to 20 percent.
One of the basic advantages of the web is its ability to involve the audience in the production of media, and several Deseret digital platforms are designed around that idea, for both business and editorial reasons.
The Family Movie Guide asks Deseret’s unique audience to vote on the age-appropriateness of films (users felt The King’s Speech didn’t deserve its “R”) and whether each movie is worth watching. Apart from its home on KSL.com, the Family Media Guide already appears on other news sites, such as Lancaster Online, and has just been rebranded as ok.com in preparation for further syndication.
Deseret Digital Media has also created an unpaid contributor network, much in the style of the Huffington Post or the Guardian’s Comment is Free. Edwards explained how this fits into the editorial strategy:
We have an interface called Deseret Connect where people that want to provide content to any of these different platforms that we have…come in, they can get training, we kind of credential them, as it were, and they have to verify a few different things for us. And then, we can work with them, in a variety of ways, to get their content, and we have now, and I won’t have the precise numbers of this, but we have thousands of contributors that have contributed to millions of pageviews for us. And that includes photography, it includes some video…
Just as an example, [last week] our family section in the paper had a very nice contribution from one of these citizen journalists, who’s an expert on family dynamics, providing just really helpful advice about how to communicate with a challenging teen audience. You know, how to talk to your teenagers, essentially. And I don’t have a reporter who has counseling expertise, but through this project I can get that kind of content regularly on to the pages of Deseret News, and on to our websites.
Interestingly, Deseret News is moving its staff reporters onto the same platform. This provides seamless online analytics to reporters, and the eat-your-own-dog-food approach also ensures that the organization stays in touch with its contributor experience.
From a sustainability point of view, the results speak for themselves: While print revenue continues to be “in decline,” digital revenue has increased 50 percent per year since the inception of Deseret Digital Media in 2009 and is now “north of 25 percent” of total revenue, according to Lee.
But the money doesn’t come from news. “You notice as I talk about revenue and business model, the focus of my attention is on those marketplace products,” said Lee. “We really don’t view news as a business model. It’s awfully difficult to justify the newsroom with just display ad revenue.”
If that’s the case, I asked Lee, why have the newsroom at all? Why not just run these profitable digital businesses on their own, as so many technology-driven media organizations are doing?
That’s a great question. That’s a question everybody should be asking themselves. The answer to that is two-fold: Part of it is, journalism content does aggregate users, and creates brand awareness and affinity to brand. So it is not irrelevant — it is actually very helpful and supportive of a marketplace strategy.
But the other part of it is that organizations like ours are mission-driven. The reason the Deseret Media company exists is, in our case, it was founded in 1850 by the Church of Jesus Christ of Latter-day Saints. If you talk to most newspapers, family-run newspapers, they have a strong commitment to a community. Even if they could stop producing news and generate revenues, which I think they could in many cases, they choose to produce news because it is their mission to do so.”
Paul Edwards spoke to me for nearly half an hour about Deseret’s editorial operations. In addition to all of the above, we discussed a new syndicated paper insert product, the difference between “web-first” and “web-only,” and why someone would want to write for Deseret Connect for free to begin with. Listen to the full audio, or read the transcript below.
JS: I’m here with Paul Edwards, who is the editor of the Deseret News, in Salt Lake, right?
PE: Yes.
JS: Salt Lake City. And I’m talking with him because I think his publications has done some really interesting things transforming from a paper company into a digital company, which is not well known. So, you’re the editor of the entire editorial operation?
PE: Well, my brief is really over Deseret News proper, which is the print publication. The way our company is organized there are different divisions within, what’s called the Deseret Management Corporation. And this is where all the media properties of the Church of Jesus Christ of Latter-day Saints are located. So we have both the metro daily print, the Deseret News, we have KSL Television, KSL Radio, Deseret book, and then the websites, the affiliated websites associated with all of these properties, are actually part of the separate division called Deseret Digital Media. And I work very closely with the people in Deseret Digital Media, that operate the DeseretNews.com website, but I’m really more of a content provider to them than overseeing the overall content there. Because there’s fair amount of web first and web only content that they produce, and only if it touches issues that are quite sensitive do I get called in for editorial discussions with them.
We’re really allowing the digital space to innovate on its own, while we continue to refine what we’re doing with the editorial content of the Deseret News. And as we try to deal with what the future of the local metro daily is looking like, we’ve recognized we really need to identify unique differentiated content that’s going to play well in a national space, that can go out digitally nationwide, if we’re going to maximize the kind of online exposure and revenues that we’re hoping for.
JS: So you are putting together a national strategy to fund local news, is that right?
PE: That’s a fair way putting it. And I’d say our real mission is to reach now well beyond the state of Utah. And what we’re finding is that we’re getting 60-plus percent of our traffic online is coming from outside the state of Utah, and that’s increasing regularly, while trying still to be a leader in providing excellent coverage within our local market. So what we’ve done is we’ve decided that there are a few areas where we can really be a strong voice for values in the national media space, where we’re not going to try to compete nationally with– on political news, with Politico and Washington Post. And we’re not going to try to compete nationally on financial news, with the Washington Post– I mean, with the Wall Street Journal and so on. But we can, we believe, put together really compelling coverage about issues surrounding faith, family, care for the poor, excellence in education, values in the media and financial responsibility, that’s as good as what anybody else is doing. And since that’s very much the part of DNA of our organization, reaching back 160 years, we’re going to specialize in those areas for content that we think reaches an underserved audience nationwide, for whom issues of family and faith are very important. We can do that in the rigorous, journalistically sound way, but it reaches a much larger audience than, you know, just the Salt Lake market.
JS: But I understand you still have a print product in Salt Lake.
PE: That’s right.
JS: Is that the same audience, or different audience for you?
PE: Well, they’re overlapping audiences. So, as we’ve looked closely at what our local audience appreciates, and what the underserved audience is nationwide, there are very similar kinds of needs and interests, concerned about, like I say, where these audiences are very motivated by their faith, and their family. And so we can do in both our local coverage, in our national coverage, preserve that strong editorial voice, and reach both audiences.
But, for the local news coverage, what we’ve decided to do there, is to dramatically reduce the cost of gathering that local news. And we’re very fortunate to be able to partner with KSL Television and KSL Radio, to combine the newsrooms of those organizations, and really create the largest news room in the state, but then have that newsroom provide news to these multiple platforms. So in effect, our local coverage, we think can actually be the strongest in the state, but it’s now reaching multiple platforms instead a just a daily news print product. By focusing though on these core strengths that we think we have editorially, it’s actually produced some pretty compelling content locally. I’ll just give you an example: terrible, terrible story in the state about the Powell family. The disappearance of this one mother, terribly dysfunctional family, and there ends up being a murder suicide in this family, and makes national news coverage and it just rips apart the local community that knows this family, and has been involved. Our coverage went deeper, on that editorially than the way some other coverage approached this.
So instead of just being a sensationalistic crime story, we used our interest in issues around family, and values in the media that we’ve developed some expertise on, to probe a little deeper on the family dynamics, and actually interestingly enough the role of pornography, that there’s pornography addiction involved in this whole sordid story. And you know, to have experts that knew something about family dynamics, and sort of the desensitization that happens to some people through the use of pornographic material, and what that meant in the potential lives of this family, made for some just rare and interesting and unique coverage to us, for what some people just saw as the crime story. So again, it’s bringing that focus and energy around particular areas to bear then, on issues even in the local market.
JS: You were talking earlier, saying, telling me you distinguish between “web-first” and “web-only.”
PE: Yes.
JS: So what’s that distinction?
PE: Well, what we found, of course we want to get materials up fast for people, and so increasingly our journalists are much better at getting stuff on to the web very quickly. And then we develop it throughout the day, and we’ll pull stuff from the web for our paper product, which has of course some firm deadlines. But it can continue to grow and mature on the web, and that might be a web-first kind of strategy for us. But increasingly, we see that there is a great advantage to doing some web-only content, so we’ll develop a number of lists that play very well in terms of reception by our readers on the web. We can often do this around things that are, again, consistent with editorial voice, and those will be top producers in terms of page views and so on, but it’s something that would never work in the paper.
Another distinctive product that we have, which is actually user-generated content, that again, makes no sense in sort of a paper product, at least it doesn’t translate very well, but it’s around our area of values in the media, we have something called Family Media Guide. And we ask families that use our website and use the Family Media Guide, we just ask them two questions: is the material that they saw in a recent film appropriate for families, and is it worth their time? And we have a way of then, we actually ask them to use the MPAA scale, of G, PG, PG13, R and so on, where they would place, how they would rate it, according to their understanding of the MPAA scale. And you get, you know, some interesting differences. Best example was The King’s Speech. So King’s Speech comes out and, most of our users say: “This thing’s rated R, but it really is much more like a PG13, or even a PG film, with one scene with some coarse language. We think it’s age appropriate around the PG, PG13.” So, gives our readers that guides, but 97 percent of them, or something like that, said that’s well worth of your time.
Another film, sort of the forgettable Dinner for Schmucks, when they looked at that they said: “uhh, there’s just a lot of really coarse language, and sexual content, and innuendo. This looks almost like an R film in terms of our family values.” And so, it’s user-generated, they put it there, and is it worth your time, I think it got, you know, 20 percent. But it provides the way for the community to interact online, in a way, around two very simple questions, to provide really good feedback to one another about what make sense for family media.
So I don’t pretend that the Deseret News is going to lead in terms of the most incisive movie reviews in the world. I am going to, you know, myself, I preferred to read something like New Yorker, or the Los Angeles Times, some of the film critics there to get that sort of that incisive interesting insider look at what’s going on artistically within a film. But, given our unique audience, and what we’re trying to accomplished, that kind of web only user-generated content is supremely valuable to us.
JS: This is, I believe not the only user-generated content you have. You have something called Deseret Connect, yes?
PE: Oh that’s right. So we have an opportunity for people– this is really a citizen’s journalism effort, where we have an interface called Deseret Connect where people that want to provide content to any of these different platforms that we have. Like I say, there are about five different platforms, whether you’re considering the television, the radio, the newspaper or the websites, and through Deseret Connect, they can become citizen journalists for us. And, it provides an interface where they come in, they can get training, we kind of credential them, as it were, and they have to verify a few different things for us. And then, we can work with them, in a variety of ways, to get their content, and we have now, and I won’t have the precise numbers of this, but we have thousands of contributors that have contributed to millions of page views for us. And that includes photography, it includes some video feed, and in fact, just this last week, a wonderful — I mean just as an example our family section in the paper had a very nice contribution from one of these citizen journalists, who’s an expert on family dynamics, providing just really helpful advice about how to communicate with a challenging teen audience. You know, how to talk to your teenagers, essentially. And I don’t have a reporter who has counseling expertise, but through this project I can get that kind of content regularly on to the pages of Deseret News, and on to our websites.
JS: So how do you invite people to contribute? Like, why would I, as someone on your site, want to do this?
PE: Yeah. Well, we really are a mission-driven organization, and it’s really to participate in that mission. And so that mission is to be a trusted source of light and knowledge, reaching millions of people worldwide. And we find that there are lot of people that think that families are under-served right now in getting content that addresses their concerns as families, as members of a community, as members of a faith community, and so it’s really wanting to participate in that mission. And it’s surprising how many people will do that. And I get through that Deseret Connect opportunity, when we say citizen journalist, it will include, the article I’ve just referred to was a separate one, but another, a couple, Richard and Linda Eyre, that are New York Times best-selling authors about family dynamics. They write for me weekly, twice weekly, through the Deseret Connect, no compensation. They just identify with our mission, and they want the ever- expanding audience that we have.
Then another example, former senator Bob Bennett, from the state of Utah, who was well respected chair of the Joint Economic Committee at US Senate and House. Just has tremendous insight into political economy, into those kinds of question. He writes for me weekly through this, without any compensation. And that content is then also– not only do we have Deseret Connect, we have Deseret News Service that is then providing a very low-cost syndication opportunity for this content. And so we’re working with a lot of smaller media groups throughout the country to provide this kind of the unique family, faith-oriented content at basically our direct cost for this, they’re able to use it for syndication.
JS: And I believe you were telling me that you’re trying to use the same tools that you built for Deseret Connect for your stuff reporting, as well?
PE: Yes, exactly. As a content management system, we’re really try to integrate this so that our real content management system is just one. And what that means is that our full time journalists are using that now as their content management system, and we’re really making that a quite robust and intuitive platform. And it provides us with ways of identifying how well, it’s just nice seamless process that allows us to see how stories have performed online, allows us to keep careful records about who’s contributed when, and so on. So it’s just a nice tool for anyone that’s contributing to these Deseret Digital Media properties, and to the Deseret News.
JS: I understand that to get where you are now, you had to make some organizational changes. Can you talk a little bit about how you were organized, and how you are organized now, and how you got there?
PE: Well, there was a significant restructuring in the late summer of 2010, where, because costs had really gotten out of whack with revenues there were just some necessary changes that– and it was stark. No one pretends that this was easy, but we had to lay off over 45 percent of the staff. And that just forced us to rethink just about everything at the paper. And also, we made a conscious decision that the digital innovation would be done in a separate division from where the, where we were doing our innovation in terms of content.
So the content is, which I am working closely with, we do believe that we’ve been quite innovative, both in terms of improving of the quality and the different tools that our journalists are using, the different skill set that’s required in a 21st century newsroom. But we interact in a more modular fashion with the separate organization, Deseret Digital Management, Deseret Digital Media, that is really shepherding some significant innovation around the kind of web content that we have, and some of the marketplace tools, some of the web-only tools that are happening. So my view is that I would probably muck up their innovations if I were too closely involved with that. I can be a great partner with them by giving them superb content. But they can think of really innovative ways to package it, and market it, and monetize it. And I’m just grateful I don’t have to worry about those kinds of tough decisions. I just have to work on seeing that we have the best content in these areas that we’ve chosen to focus on.
JS: Last question, which I understand you may not have all of the numbers, but how’s the company doing? How’s this strategy working out in terms of audience, revenue, all of that stuff?
PE: Yeah, we stopped the hemorrhaging. So there were significant losses, post 2008, that really needed to, we needed stop that, and we’re really at kind of a break-even proposition now. And thankfully we have a patient owner, that is interested in reach and voice, and that allows us to do this kind of innovation, but, in the process we’ve been able to significantly increase our circulation. So within our local market circulation has been very steady, readership has gone up, but we innovated by introducing a national edition, a Sunday edition that is, curates our best content around these areas of editorial emphasis that I described. And, so really becomes a strong issues-oriented news product that goes out now to tens of thousands of readers outside the state of Utah.
So we actually have greater household penetration outside the state of Utah with that special Sunday edition, which has been a real game-changer for us, I mean it’s just, it’s effectively doubled our Sunday circulation. It also becomes a kind of insert product, specialized insert product for other small metro papers in our region, that are outside of our local distribution area, but in St. George, Utah, and Logan, Utah, in cities in southern Idaho where there are, again, people we think are interested in this content it goes to them, on a Sunday insert. And we’re also able to distribute it to some of the campuses in the, owned operated by the Church of Jesus Christ of Latter-day Saints. So they purchase it, and distribute it their students, on a kind of newspaper readership basis. So it’s just significantly changed, it’s a reinvention, if you will, of our print product by taking issues, going deeper, being more data-driven. We’ve been able to develop a whole new product that is reaching right now tens of thousands in ways that we had never hoped for a year ago. This is just one year old.
JS: How about your pure digital revenue? Where does that come from, and how is it doing?
PE: Yeah, I’d really refer you to Chris Lee, our publisher, on how that’s doing, but we’ve significantly increased the digital revenues. The interesting thing for me is that it’s not a part of my P&L statement. My profit and loss is based purely on Deseret News itself, and that paper product. DeseretNews.com is really part of this Deseret Digital Media division, and they have seen huge increases year over year, and continue to surpass their revenue, their projected revenue budgets, year after year, for the several past years. So it’s been very significant, but I can’t tell you the exact figures on that, but it’s been, you know, what we really see is that the future requires us to have an ever-increasing portion of the overall revenue, for all of these companies to come from digital, because there’s just such a tight squeeze on what’s coming out of print. And we see that print revenues are likely to continue to decline. As much as we do everything we can to keep those shored up, and increase the circulation and the effectiveness of that product, there’s just still tremendous pressure on revenue on that front.
JS: So does that mean that you’re going to be out of a job in a few years, and if so, what will you do next?
PE: No, well, there’s no, I don’t– well, one never knows, right, in this business, but I think that with our opportunity, we actually see that when we’ve done a careful market segmentation to look at under-served audiences nationally, and our understanding, if our market research is correct, is that nearly half of the American population have a number of characteristics that just aren’t reflected well in contemporary journalism. They are believers, they are highly motivated by their faith, by their families, and wanting to give back to their communities. And if they are provided with information that respects those kinds of commitments, and takes those kinds of commitments seriously, and reports on issues that they think are important to them, in those special domains in their lives, we think that there is just a huge potential for growth in this audience.
JS: In print?
PE: In print, but in digital as well. And like I said, my profit and loss, I think we can continue to see some evolution of what we do in print. And I’m not quite sure what that will look like. We also see probably tablet applications, other kinds of mobile applications and things. Believe me, there’s no one answer. We don’t pretend that we have the answer. What we do know is that the experimentation we’ve done in the last year has born fruit. And it’s allowed us to reinvent the paper product, double its circulation, increase our, the attention and traffic that’s coming nationwide, significantly increase the kind of traffic that we’re getting from search and social through some different things that we’re doing, and so, you know, we’re pleased with that. We’re not satisfied, we’re optimistic that as we continue to keep alive a real innovative DNA within the organization, that we’ll discover a good path forward. But come talk to me in a few years.
JS: Thank you Paul.
PE: Thank you.
