GateHouse’s Newton: ‘We Want to Own More Local Newspapers’

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GateHouse Media is a sprawling giant among local and community news publications. It owns 125 daily newspapers and 316 weeklies with a combined 3.3 million subscribers in over 415 markets nationwide and its 530 websites reach 35 million people. But it is determined to keep growing as the centerpiece of its holding company, the expansion-minded New Media Investment Group, in a sector of the news publishing industry that appears to be coming out of a long economic swoon.

To maintain its fast pace of growth, GateHouse has created a division for new ventures and appointed as its CEO a publishing executive with deep experience in marketing and sales – Peter Newton. At the same time, Newton will continue as CEO of GateHouse’s Propel Business Services.

In this Q & A, Newton, who will be a speaker at Street Fight’s Summit 2016 in New York City on Tuesday, Oct. 25, talks about present and future change at GateHouse:

As chief executive officer of Propel Business Services, you are tasked with starting or acquiring ventures that will bring in new client business and maintain the fast growth within New Media Investment Group. What has been your progress since you took on that responsibility last January and what will be the emphasis of new ventures into 2017?
We’ve made excellent progress in continuing to grow Propel Marketing, both organically and with our acquisition of ThriveHive. ThriveHive is an award-winning guided marketing platform for VSBs (very small businesses), with a SaaS subscription offering. In addition, we’ve started a new IT Services division, helping SMBs move their tech infrastructure to The Cloud with services like Google for Work and SugarCRM.

New Media’s digital revenue – most of which is generated within GateHouse – was only 9.9% of total sales in the second quarter of 2016. Other major local newspaper groups have much higher proportions of digital sales. What do you plan to do to close the gap?
We have aggressive plans to grow our owned and operated digital business, along with our Propel Business Services product lines. We’re at the tail end of converting all GateHouse local websites to a new, mobile responsive redesign format. Early user engagement and ad performance results have been tremendous. It’s the first major step in better monetizing our own massive audience. Much more to come.

GateHouse has made one of its biggest investments in its Center for News & Design. Do you aim to make that Center a major revenue stream?
The CND’s primary focus is to serve GateHouse’s local markets, and help drive audience engagement with compelling content and design. They’ve been very successful. We’re beginning to provide outsourced services as well for non-GateHouse companies, so there is a direct revenue opportunity for the CND.

Do you expect your B2B operations to become a major revenue stream?
Yes, we do. We will grow the businesses we have, and look to complement those with new offerings that help solve for the local SMBs’ most acute pain points.

Peter Newton
Peter Newton

New Media CEO Mike Reed said he wants to double GateHouse’s portfolio of 125 dailies by 2019. What progress is the company making in that strategy?
New Media has continued its acquisition strategy in 2016, including the addition of Journal Multimedia (B2B publications), the Fayetteville (N.C.) Observer, the Columbia (Mo.) and the Rochester (N.Y.) Business Journal in the past six months. We are enormous believers in the future of local newspapers and local journalism, so of course we want to own more local newspapers. That said, there is no magic number as to how many we want to own.

How many of GateHouse’s dailies have metered paywalls? What percentage of your 35 million digital visitors do you expect to sign up as subscribers and what kind of promotions are you doing or planning to hit your target?
Every one of our 125 dailies has a metered paywall. We regularly test different offers and levels of access and all our print subscribers receive an all-access subscription to our print, digital and app products. In 2017 our target is to double our acquisition to 80,000 new subscribers. Within two years we’re confident we can sign up 200,000 new subscribers by implementing fully customizable acquisition email campaigns, including significant social and mobile promotions.

Propel Marketing’s annual revenues exceeded $31 million in 2015. That represents considerable growth since GateHouse acquired the company, but is it of enough magnitude to offset GateHouse continuing losses from print operations?
Growth in Propel Marketing and other digital businesses has been impressive, but to date, hasn’t been enough to offset print declines. We expect to show net revenue growth for the company overall, though, by the fourth quarter of 2017

Propel Marketing was recently named a Google AdWords Premier Small & Medium Sized Business Partner. What’s the meaning of that recognition?
It’s pretty prestigious. We are now one of only about 50 PSP’s globally, and the only new Premier Partner in 2016. Google recognized us not only for the extraordinary growth we’ve had in the past four years, but also for the quality of customer service we provide. It’s an excellent partnership. We’re proud to be a PSP, and Google’s an outstanding partner.

There are 28 million SMBs nationally, most of which don’t have full-time marketing departments. Are all of them potential customers of Propel Marketing and its ThriveHive marketing software?
Yes, they are. With the advent of ThriveHive and its guided marketing platform, we now have a service for even the most fledgling of businesses. And those very small businesses, like other SMB’s, need marketing help and support. They especially value that advice from someone they can trust. Propel Marketing’s built a reputation as a trusted adviser over the past four to five years; that now extends as well to ThriveHive.

GateHouse’s recent $140 million sale of the Las Vegas Review-Journal to casino magnate Sheldon Adelson produced a lot of unwanted publicity for GateHouse over how the Review-Journal was handling Adelson-related news coverage before the sale was completed. Has the company’s investigation brought closure to that controversy?
Yes, we have closure. GateHouse exited the transitional services agreement shortly after the sale of the paper [in December 2015]. We have had no input or control over editorial content and decision making at the paper. We’ve addressed the situation with our editorial leadership team and I’m confident we will continue to be a shining example of how local news is created.

The local and community news business hasn’t been getting many good headlines in this decade. How do you and GateHouse size up this business in your small and medium-sized markets?
We feel very strongly about the importance of delivering quality journalism in all our markets. The quality of our news organizations in small and medium-sized markets and our ability to leverage the resources we’ve built at the corporate level allow us to deliver great products and build profitable businesses.

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.

Later this week, “The New News” will present a Q & A with Jim Brady, whose Spirited Media recently launched its second mobile-first, millennially focused community news site, The Incline, in Pittsburgh. Brady, whose first site, Billy Penn, came to Philadelphia in October 2014, will join Newton in a panel on “The New New Local Media”at the Street Fight Summit 2016 in New York City on Tuesday, Oct. 25.