As the CEO of Journal-Register Co., a chain of small newspapers located mostly in the northeastern U.S., John Paton has been pushing an aggressive “digital first” strategy ever since he took over the company in 2010. Now he will have a national stage on which to try to prove this is the solution to the painful disruption of the traditional industry: on Wednesday, he was named the new CEO of MediaNews, the second-largest U.S. media chain with more than 150 papers across the U.S. Are Paton and his “print dollars to digital dimes” approach the savior the traditional newspaper business has been waiting for?
If the digital-first approach has a patron saint, it is definitely Paton. A Canadian who worked his way up through the editorial ranks at several newspaper chains before moving into management and acquisitions, Paton took over the Journal-Register after it emerged from bankruptcy protection — the victim not just of a declining industry, but of a crushing debt load of more than $700 million. And he made it clear from the beginning that he was going to remake the chain completely by focusing on the web first, rather than the print side of the business.
“Stop listening to newspaper people”
Other newspapers, including The Guardian in Britain, have also pushed a digital agenda (Guardian editor-in-chief Alan Rusbridger reaffirmed this policy earlier this year), but Paton has been the most aggressive. In his presentations and blog posts directed both to Journal-Register staff and to newspaper executives at large, the new Media News CEO has not been shy about telling the industry that it has been doing things all wrong for years — and that the print side, with all its entrenched management, has to yield power to those with experience on the web.
Stop listening to newspaper people. We have had nearly 15 years to figure out the Web and as an industry we newspaper people are no good at it. No good at it at all. Want to get good at it? Then stop listening to the newspaper people and start listening to the rest of the world [and] put the digital people in charge – of everything.
In a blog post about his new job, Paton reiterated some of the common criticisms about a digital-first strategy, including the idea that “digital dimes” (a phrase popularized by Jeff Zucker of NBC) won’t make up for the print dollars that newspapers give up by focusing on the web instead of their legacy businesses. But the new Media News chief executive says he is convinced — based on his experience with the Journal-Register group — that this transition can work. Says Paton:
We are supposed to be out of ideas, out of money and out of energy. To our competitors, I say keep thinking that. It will make this transformation easier. At JRC we have blown up a lot of that received wisdom from newspaper critics… Digital revenues can pay for newspaper newsrooms.
Digital dimes will replace print dollars
According to Paton, since the company implemented its digital strategy, its online audience has doubled to 12.3 million unique visitors and its audience on all platforms has grown to almost 21 million from 15 million. The Journal-Register CEO said that 10 of the company’s 18 daily newspapers have seen advertising increase or remain flat (the latter being an improvement for most newspaper companies) and the chain’s digital revenue grew by more than 80 percent in the second quarter over the same period a year earlier.
It’s difficult to tell just how much healthier Journal-Register Co. is now because of its digital-first approach, since the privately-held company doesn’t release financial results (as media researcher Chris Anderson noted on Twitter when the Media News announcement was released). The company paid out a profit-sharing bonus to its staff earlier this year because it turned a profit of $40 million, but it’s not clear how much of that was a result of simply getting rid of its massive debt load.
Paton’s ascension to the executive suite at Media News wasn’t really a surprise (he is also CEO of a new management entity called Digital First Media). Martin Langeveld — a former Media News publisher — and analyst Ken Doctor have noted recently that moving Paton into that job would make sense, not just because Media News is looking for help in transforming the company but because both it and Journal-Register Co. share an investor: Alden Global Capital, which has been buying up stakes in newspaper companies throughout North America (including the Canadian chain Postmedia, where Paton is an advisor).
Paton has also made it clear that his new approach at Media News will incorporate a crowdsourcing strategy as well, something that could involve more experiments like the “community newsroom” that one Journal-Register newspaper recently launched — which allows readers to come in and help themselves to
free coffee and free Internet access, and take part in editorial meetings. Media News has also been experimenting with crowdsourcing to a certain extent: it recently launched a mobile app called TapIn BayArea that allows readers to contribute photos and other news items.
Will Paton be able to show other newspaper owners how they can adapt to the digital transformation that is disrupting the industry, without simply throwing up walls of digital sandbags the way some newspapers like the New York Times have? He definitely has a much larger stage on which to work now — but the patron saint of “digital first” will still have to provide some miracles before he wins over any more converts.