Mike Reed Sets Goals for New Gannett

Gannett Sets Goal For 10 Million Paid Digital Subscriptions

 

The Times could break out its food/recipes section as a stand alone unit and it would generate like 5 times the digital subs Gannett has.

 

So Reed wants to grow from 1 million to 10 million paid digital subscribers over the next five years? I doubt this can be achieved, even if USA Today stopped its print editions and went to a digital paywall.

 

Gannett has some reporting chops. It's not entirely chopped liver. Broke the Nassar story.

Where Gannett is weak - well, among the areas where it's weak - is in its look and its ability to package reporting into other, high-prestige, slobber-all-over-Twitter visual presentations. The NYT excels at that; the NYT is Apple/Taylor Swift of that. The NYT is also the worldwide leader in pumping out shitty opinion columns with histrionic headlines. It also has the brand name it has. NYT is an experience. It's not that rewarding of a experience to me - more of a pretentious, eye-rolling one, the kind where you conspicuously read the first two pages of 1984 where everyone can see you - but that nonetheless.

Gannett's brand name is USA Today, but it doesn't know how to leverage that or use it in the same way, and it is not an experience. Its Web site - the USA Today one specifically - sucks, and of course all of them do, user-wise, but USA Today should look and feel different than all of the local ones, and it doesn't. It doesn't. It's the Olive Garden/Outback of Web sites. NYT is a modern, upscale Internet library/cafe, a nice one, that makes you think you're a pretty goddamn impressive human being just for being there, which is what the NYT generally thinks of itself for showing up every day. That used to draw derision, and was a source of great derision in the Ron Howard movie 25 years ago, but it gains them subscribers now.

At any rate, USA Today is a chain restaurant.

 

If I want to read a lot of New York Times copy, I’ll subscribe to the Times and not (insert name of Gatehouse paper).

 

Great point, the user experience needs to improve if Gannett is going to reach 10M. They've got to stop trying to scrounge pennies from digital ads and make the websites appeal to the potential subscribers. The content, with very little noticeable strategy, has been good enough to reach 1M already. I think 10M in five years is possible but the biggest barrier is UX.

 

That has been Gannett's M.O. for the last 30 years. Come up with some useless initiative, make a huge deal about it, dump it on the poor employees, then forget all about it six months later. And then bring it back two years after that, only with a different nickname.

 

I have followed Gatehouse/Gannett the last couple years. I have read the 10-K's and 10-Q's and the material they release to investors. Why did I do this? Because I shorted the stock at 10 and watched it go to two.

I learned in my analysis that Mike Reed makes things up. The estimates the company releases change constantly. Next week the goal may be 20 million subscribers.

The article is misleading. It said "repaid about $647 million in debt". That was false. It refinanced $497 million in debt and repaid about $160 million. Gannett got the $160 million mostly from selling real estate. I don't know how much real estate is left to sell.

I continue to predict a trip to the bankruptcy court in 2022.

 

Most of the business comes from print still, so overall revenue will keep dropping. It's tough to change your main revenue stream with a snap of a finger. But Gannett's goal, as it says in the article, is to eventually make digital subscriptions the main revenue stream. At what number of digital subscribers can that be profitable? I wouldn't know. Overall profitability also depends on how bad the losses are in other aspects of the business.

Another thing to keep in mind is that it takes time for digital subscriptions to really turn into cash. Go to any Gannett site right now and you'll see a $1 for 3 months sale. Lol. Gannett obviously isn't bringing in a lot of dough from new subscriptions in the next three months. But if most of those people stay on past three months, and then stay on for a few years, that's when it actually adds up to real money. Since they just hit 1M digital subscribers a few months ago, it's way to early to judge revenue numbers from digital subscriptions. But it's probably the most promising Gannett news since ... I don't even know.

 

This would be yet another U-turn for Gannett ... aren't they only a few years removed from the "snap up dying newspapers and bleed them of valuable assets" strategy? The linked story noted they still have 260 print newspapers.

Maybe they can find a way to boost digital subscriptions, but their track record isn't inspiring much confidence.