3) Focus on customer centricity in both print and online products through investments in innovation
It is imperative that during this time of restructuring ———— refines its existing products and establishes new revenue streams by capturing the non-reader and non-advertiser. Launching self- service sales channels and creating delivery platforms separate from the print and online newspaper, such as paid local search, lead generation, direct marketing, video advertising, and mobile solutions, are areas that can potentially be exploited. Secondly, a customer centric approach will enable ———— and its journalists to have a better understanding of what stories and topics the readers/subscribers are interested in so that content can be tailored to peoples’ lifestyles. This is not to say that investigative and hard news reporting should be abandoned, but the gathering and distribution of news and information should be performed so that it is more economical and easier to manage both internally and externally.
One way to ensure this is to develop a dedicated Innovation Center committed to R&D. A thorough analysis of ———— people, processes, and technology needs to be conducted. In order for this option to be successful, there must be a strategic alignment between these components to execute a successful customer centric product.
There is debate over niche versus mass customization. While digital printing technology is available, there are currently distribution and circulation limitations to providing mass customized daily print newspapers as well as operational challenges to developing/managing content to cater to niche markets. However, understanding these limitations will provide crucial insights into how to develop the IT infrastructure and workflow processes to create connections between various niche audiences. Initial small-scale pilot programs utilizing the current subscriber base will enable niche market groups to be developed and tested.
In addition, there needs to be a continued focus on ————. ———— and its associated websites are the future of news and information for everything Philadelphia. The number of pages viewed by these users has been growing about 40 percent a year. As the readership continues to expand, there must be ongoing new product research and development of strategies to capture value from existing Web 2.0 technologies, such as blogging and message boards. Figures compiled by Omniture, a Web analytics firm, show that the site draws 4.5 million unique visitors a month. In March 2009, when ———— dominated news coverage on the corruption trial of former State Sen. Vincent J. Fumo, ———— recorded more than 60 million page views.
Lastly, creating an internal Innovation Center will enable ———— to have a dedicated R&D department to develop an effective payment model for accessing premium, online content. A recent article from ———— pointed out that if a program was initiated to charge just two cents to view a page on ————, an additional $1.2 million of revenue could be generated in one month.
There are four main risks/limitations with pursuing this option. For one, there is a lack of capital for initial IT and hardware investment. Secondly, there are currently unknown challenges to internally managing the execution of this option. Third, there will be high switching costs. Fourth, most newspapers are currently focusing on cost-cutting measures, not revenue generation.
Recommendation
After careful consideration, we recommend option 3: focus on customer centricity in both print and online products through investments in innovation. The objective for print is to create strong demand for localized, specialized and individualized content with high editorial quality through focusing on the non-reader and through growing the advertiser base by focusing on the non-advertiser. The objective for online is to increase the amount of unique daily hits and to establish a strong internet community on ———— in order to develop more efficient uses of advertising dollars.
For the print products, there must be an incremental redesign of existing products in preparation for mass customization through investments in digital printing technology and data management systems. This new, customizable print newspaper will aggregate content for personalized news, offer a flexible pricing structure based on individually chosen content versus advertisement ratio, and will increase the relevance for both the advertiser and subscriber. We anticipate and truly believe that in the future, e-paper and e-ink technologies will be commercialized for consumer’s general, daily use. This customizable newspaper is a step in the right direction.
For the online components, there must be a better tracking of customer usage, an improvement of portal usability, and more consumer-driven content. In order to track customer usage, there should be an option to create expanded user profiles and an incorporation of tagging into the articles. As for consumer-driven content, there should be a more effective and efficient use of forums and blogs in order to create a loyal base of ———— users. One of the keys to customized content is the ability to create a relationship with customers so ———— can more effectively track usage. People will want to register because of the incentives they get (the customization). One tactic would be to offer an elite membership card to registered users – advertisers would promote themselves through the card, similar to the way Student Advantage and the Entertainment book works. This elite card would only be available to registered users on ———— and would be the “key” to Philadelphia.
Additionally, ———— needs to find ways of serving the information needs of niche segments or someone else will. Becoming more operationally efficient will enable ———— the option to transfer the cost savings over to developing new online niche segments, such as in healthcare. Providing in-depth coverage on the various facets of healthcare for Philadelphia’s large medical community represents a large untapped market.
There are approximately seven million people within ———— area of focus. On a daily basis, ———— captures 6 -7% in print readership with a weekly net reach of about 40%. Conservatively, under this strategy, we expect to initially capture 1% or 70,000 readers over a 12-month period. Considering that this strategy is two-pronged, out of these 70,000 readers, ———— needs to capture 57,991 total print subscribers and a total of 12,009 unique daily visitors to ————. Rough estimates of increased yearly revenue are $27M. Extremely rough estimates of total costs are $3.2M. While net income will be approximately $23.8M, more analysis needs to be conducted on the expected costs.
In conclusion, the future sustainability of ———— will depend heavily on its ability to produce compelling content, capturing the non-reader and non-advertiser, and realignment toward innovation-driven growth. By taking a customer-centric approach will enable ———— and its journalists to have a better understanding of what stories and topics the readers/subscribers are interested in reading. In addition, maintaining real estate on ———— will allow the journalists and editors to maintain control of the content – the top, featured stories will still be visible above the fold. A customizable print edition will enable ———— to retain and/or increase the number of print customers. The redesign and optimization of ———— will help to increase traffic. A customer-centric approach for both the online content and print products are forward looking in scope and will help ———— refine its approach to both their core business and disruptive innovation opportunities to realize long-term prosperity. Finally, ———— must leverage its strengths in local knowledge, rich content and advertising and ensure that there is alignment between its people, processes, and technology in order to provide the most optimal chance for a successful implementation of this strategy.
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