EXECUTIVE ROUNDTABLE

Revenue Diversification

There Is No Silver Bullet Regarding Revenue

August 22, 2014 Vail

ROUNDTABLE

There Is No Silver Bullet Regarding Revenue

Our View of the Business

Business

Focus

Optimally Manage Core Legacy Print

Aggressively Grow Digital & Diversify

Continued Cost Management

Newspaper Advertising | Circulation Volume Trends Key Reference Dates

3

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Ad Revenue Circulation Volume

iPhone Launched

Huffington Post Launched Craig’s List Classified Launched

NY Times Web Site Launched Google Launched

Yahoo Launched

Great

Recession

50% Internet

Penetration

Mobile 50%

of digital

audience

5-6 Yr.

Lag

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Ad Revenue Circulation Volume

Newspaper Industry Beliefs | Perceptions Through Secular and Economic Freefall

4

Audience declining, yet

revenue growing

Great Recession Starts 50% Internet

Penetration

Life is Good – Revenue Growth in Spite of

Audience Declines Perfect Storm

Passing

Trend How Do We Survive

Revenue falling faster

than audience

4 – 5 Year Lag

Mobile 50%

of digital

audience

New Business

Model

2001 Recession Over-

Life is Good

Life Continues to be Interesting…But…

While most public traded

companies are down less

2012 – 2013 than 2010 –

2011 these companies

were still down 3.5% YoY

– near industry average -

and many companies

had more significant

challenges than shown

here.

For some, 2Q 2014 is

looking better, for others

not so much…

(5.4%)(4.8%)

(2.9%)

(7.7%)(6.8%)

(5.3%)

(2.7%)(3.7%)

(14.3%)

(3.1%)(2.3%)

(4.6%)(4.0%)

(3.5%)

(1.1%)

(5.1%) (4.6%)

(2.0%)

(16%)

(12%)

(8%)

(4%)

0%

Gannett E. W. Scripps New York Times McClatchy Lee Enterprises AH Belo

Total Revenue YoY Change

2010 - 2011 2011 - 2012 2012 - 2013

Peer Median2010-2011 = (5.4%)2011-2012 = (3.6%)2012 - 2013 = (3.5)

-5.7%

-1.3%-1.0%

-3.2%

-4.1%

0.2%

(8%)

(4%)

0%

4%

Gannett E. W. Scripps New York Times McClatchy Lee Enterprises AH Belo

2Q 2014 Revenue YoY ChangePeer Median (2.3%)

Looking for Love in Not Enough Places

Panelist Topics

Jim Moroney | Chairman,

CEO and President of AH Belo

and The Dallas Morning News

Publisher

■ A few data points

■ The digital disconnect

■ Innovation | Business

Development

■ Leverage the Brand – can I sell

you fries with that burger…

Legacy

2.0

3.0

Print Digital Other

Digital Marketing

Services - SMB

Ad Exchanges

Social Engagement Adv

e-Commerce

Native Advertising /

Content Marketing

Digital Magazines

Display Web Advertising

Daily Deals

Sponsorships

Directory Listings

Video | Video

Advertising

Mobile Advertising

Rate optimization

E-mail Marketing

Direct Mail

Commercial Printing

and Delivery

Agency Services

Events

Internet Radio

Core Newspaper

Special Sections

TMC

Niche

Weeklies

Spanish Language

Magazines

Sunday Select

Subscriber Yield

Unique Print Options

Affinity Programs |

Consumer Database Mkt

Pay-for-Performance

Advertising Pricing |

Modeling

Day-of-Week Migration

Sponsored Content

sections

Revenue Diversity Through the Lens of Audience

Panelist Topics

John Cruickshank | President of Star Media Group

and Toronto Star Publisher

■ Leverage brand with portfolio

of #1 or #2 products in the

marketplace

■ Process to simulate, collect

and evaluate new product

ideas

Legacy

2.0

3.0

Print Digital Other

Digital Marketing

Services - SMB

Ad Exchanges

Social Engagement Adv

e-Commerce

Native Advertising /

Content Marketing

Digital Magazines

Display Web Advertising

Daily Deals

Sponsorships

Directory Listings

Video | Video

Advertising

Mobile Advertising

Rate optimization

E-mail Marketing

Direct Mail

Commercial Printing

and Delivery

Agency Services

Events 2

Internet Radio

Core Newspaper

Special Sections

TMC

Niche

Weeklies

Spanish Language

Magazines

Sunday Select

Subscriber Yield

Unique Print Options

Affinity Programs |

Consumer Database Mkt

Pay-for-Performance

Advertising Pricing |

Modeling

Day-of-Week Migration

Sponsored Content

sections

Data-Driven Dollars

Panelist Topics

Gary Farrugia | The Day

(New London) Publisher

■ Database and Marketing

content connect buyers and

sellers.

■ Targeted Town subscriber

initiative

■ Sponsored Content

Legacy

2.0

3.0

Print Digital Other

Digital Marketing

Services - SMB

Ad Exchanges

Social Engagement Adv

e-Commerce

Native Advertising /

Content Marketing 3

Digital Magazines

Display Web Advertising

Daily Deals

Sponsorships 3

Directory Listings

Video | Video

Advertising

Mobile Advertising

Rate optimization

E-mail Marketing

Direct Mail

Commercial Printing

and Delivery

Agency Services

Events 2

Internet Radio

Core Newspaper

Special Sections

TMC

Niche

Weeklies

Spanish Language

Magazines

Sunday Select

Subscriber Yield

Unique Print Options

Affinity Programs |

Consumer Database Mkt

Pay-for-Performance

Advertising Pricing |

Modeling

Day-of-Week Migration

Sponsored Content

sections

Leverage the Core…Find New Revenue Streams

Panelist Topics

Michael Klingensmith | Minneapolis Star Tribune

Publisher and CEO

■ Increase contribution from

subscriber relationship

including “all-access”

■ Ad-driven Niche products

■ Pre-print Program

Legacy

2.0

3.0

Print Digital Other

Digital Marketing

Services – SMB 4

Ad Exchanges

Social Engagement Adv

e-Commerce

Native Advertising /

Content Marketing 3

Digital Magazines

Display Web Advertising

Daily Deals

Sponsorships 3

Directory Listings

Video | Video

Advertising

Mobile Advertising

Rate optimization

E-mail Marketing

Direct Mail

Commercial Printing

and Delivery

Agency Services

Events 2

Internet Radio

Core Newspaper

Special Sections

TMC

Niche

Weeklies

Spanish Language

Magazines

Sunday Select

Subscriber Yield

Unique Print Options

Affinity Programs |

Consumer Database Mkt

Pay-for-Performance

Advertising Pricing |

Modeling

Day-of-Week Migration

Sponsored Content

sections

…and now to the panel….

CEO Panel Topics by Panel Member

Moroney | Dallas

Why general interest news metros can't rely on a combination of

revenue from digital advertising and digital-only subscriptions to

offset the decline in print related revenues.

I will point to both organic growth through sustaining innovation and

acquisitions of marketing/advertising companies via the balance

sheet as at least one solution to the declining print revenue.

I will mention that we have initiatives that both increase the revenue

we derive from current customers and we create new revenue from

new customers.

Klingensmith | Minneapolis

Subscriber yield, including subscriber pricing and all-digital access

and pay meter results.

Profitability by day of the week

Sunday Select

Cruickshank | Toronto

We look at everything through the lens of audience these days. So

I’ll talk about our experiences with innovation from that perspective.

Mission – The mission of the Toronto Star starts with ensuring we

remain relevant with the critical audiences in our market

Audiences – We have developed a process to better understand

the audiences available in our market and that process informs how

we choose to focus on some audience segments through the

various news platforms available to us.

Innovation – We have developed a formal idea generation and

evaluation process that helps gather and analyze new ideas to

ensure we have a constant flow of concepts in the pipeline

Focus on Digital and Tradition/Print revenue streams – I will share a

number of examples of new revenue diversification efforts that have

been launched in our market over the past 36 months.

Farrugia | New London

Sponsored Content Special Sections: We created a content-

generating team in the Marketing Department that produces native

advertising articles and publications. Sponsored content now

appears in the daily newspaper, online, and in special sections.

■ We took two traditional News weekly sections, HomeSource (real

estate) and Wheels (auto) and transferred them to the Marketing

team. Real estate revenues have spiked with this initiative. Auto

revenues have remained steady.

■ We developed our first digital-only magazine, Home of

Distinction, as a sponsored content platform. Distribution is

emailed to households of $250,000+ income throughout

Connecticut, and to $500,000+ income households from Boston

to West Chester County, New York. Advertiser acceptance has

pushed this to a monthly publication.

■ We are vetting an idea to merge our Custom Publications

Magazine Division, which currently is housed in News, with the

Marketing content group and making every magazine we publish

sponsored content.

■ We partnered with Nativo to provide an online native advertising

platform for theday.com. In addition to the local native advertising

we sell, Nativo provides a feed of native advertising from national

retail brands.

Targeted Consumer Revenue Growth: With our partners, Leap

Media, we are testing the targeted growth model through database

marketing vigorously for new consumer revenues. Using the

database of addresses in our market, we identified five

communities in our 20-town coverage area that matched the

demographics as best prospects for new subscriber membership. In

those five towns, we invested in more news coverage, and charged

the Newsroom with generating more town-specific stories. The

added news coverage and intensified targeted marketing have

yielded modest subscriber membership gains in each town;

reversing a decade-long steady readership decline.

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