Business Model Shift Gains Traction at The Dallas Morning News
The Dallas Morning News has adopted a business model that is gaining traction as the company adapts to a rapidly changing media environment.
Company Supplied -- Graphic Arts Online, October 26, 2009
DALLAS, Oct. 26 -- The Dallas Morning News, the flagship subsidiary of A. H. Belo Corporation (NYSE:AHC) , has adopted a business model that is gaining traction as the company adapts to a rapidly changing media environment. The new approach shifts and diversifies revenues and ensures robust, valuable content that appeals to loyal subscribers, who are an attractive audience for advertisers.
The new model incorporates several inter-related elements: (1) a carefully measured step involving increased home-delivery rates to migrate more reliance to subscriptions to support the paper's investment in its newsroom through growing circulation revenue; (2) commitment to the strength of the newsroom as the linchpin of the model because it enables the paper to produce what readers value most: exceptional local, relevant and unduplicated content that makes a difference in the community; and (3) a growing portfolio of products, which provides advertisers with quality audiences that can be readily targeted.
"We know that our core competency lies in the origination and publishing of relevant news and information, and we continue to align our business around it," said Jim Moroney, publisher and CEO. "Reactions from our customers confirm that this continues to be the right approach."
Rebalancing revenues
In developing its strategy, The News has emphasized serving its core of seven-day subscribers, a group who are educated, affluent, engaged and loyal. Extensive research - as well as newsroom interaction - with core readers has shown that they place great value on professional, local journalism that has an impact on their lives, and that they are willing to pay for it.
Through the evolving model, The Dallas Morning News expects home-delivery subscriptions and single-copy sales to provide as much as 40 percent of its revenues, a dramatic shift from the traditional newspaper model where 20 percent of revenues are provided by sales of the printed product. The paper's initiatives have occurred as the traditional advertiser-supported newspaper model has come under increasing pressure industry-wide from competing channels that have put downward pressure on advertising revenues.
On October 15, 2009, The Dallas Morning News filed with the Audit Bureau of Circulations (ABC), subject to audit, a Publisher's Statement for the six-month period ended September 30, 2009. Daily circulation in that period was 263,810 and 390,520 for Sunday, representing a reduction of 22.2 percent and 19.3 percent, respectively, compared with the six-month period ended September 30, 2008. Approximately 40 percent of the declines are related to the subscription rate increases, and approximately 60 percent are related to The News' ongoing strategy to tightly focus its acquisition efforts.
Investing in the newsroom
"We're pleased that during the first months of our new approach, more than 90 percent of The News' core subscribers receiving notices of our increased home-delivery price are renewing," said Moroney. "And while we knew our reported circulation would be down, the key was that we were growing circulation revenue significantly. We've listened to what our readers and advertisers tell us they value most, and we are responding to it by maintaining a robust newsroom focused on original, local reporting."
