I recently attended a Thought Leader Breakfast at the Cardinal Club featuring Orage Quarles III (publisher of the N&O). Here are my notes: He’s from California, and has a marketing degree from San Bernardino Valley College. He has been in Raleigh since 2000 and was the first African-American publisher in the south. He says there’s a transformation going on at The N&O that’s wide, deep and painful. He had 1,200 employees in 2000 and now has 635. There have been tough decisions to right size the paper and maximize the use of technology. They are now at the same size they were 35-40 years ago when they operated with 600 employees. Looking back, he considers the period between 1970 and 1995 the golden age of newspapers. During that period, new presses added color and expanded sections, and revenue was funded by classified ads which grew dramatically, especially cars, real estate and help wanted - which was the biggest source of income. In 2000, when the dot com boom ended, the newspaper lost $15M in revenue - just in help wanted ads over a six month period. Last year, the N&O was the only company in the McClatchy Corporation to make its growth target in budget and revenue growth, but it started going downhill in October 2007, especially auto, real estate and help wanted, the three most important verticals. Today the N&O is 14 titles, of which six are new within the last year, including Carolina Brides, Skirt Magazine and MomstoMom.com, which is generating 80,000 unique visitors per month. Between the N&O and N&O.com, he has a 74 percent net reach in this market over a 7 day period. They see huge spikes for big local news stories, for example Duke Lacrosse and John Edwards. Two weeks ago the presidential election caught them off guard. In a management meeting the day before the election, he suggested printing 5,000 extra copies, someone else suggested 18,000. They actually had to do a second printing and sold 27,000. He felt like they missed an opportunity and he could have sold 50,000 more. Along those lines, he said he used to work for Gannett and described them as very smart people. They raised their newsstand prices in September. At the time he couldn’t understand why they would ask for midyear price increase. Well, they sold 500,000 extra papers the Wednesday after the election resulting in a huge revenue boost. His goal is to get online revenue to 20%, up from 10%. Total revenue is now driven 80% by advertising and 20% by circulation. He advised how tough it is to compete with Craig’s List in classified ads, commenting that free is hard to beat. He pointed to a great partnership that has been forged with Yahoo! and will open a new revenue stream for the N&O next year. At one time, newspapers were in 80% of the homes, that number is currently 48% and he anticipates the number will level off at 20-25% The day before the recent election, they discussed potential headlines and it was decided that if Obama won, the headline would be: OBAMA WINS. He asked what we thought the headline should have been if McCain had won, and someone in the room made a clever suggestion, “OBAMA LOSES.” His biggest challenge and where he has the most complaints is with the headlines. Headlines are written by a different editor than the reporter and typically they have about 4 minutes per story to create a headline. Sometimes they try to get too clever and the headline does not match the sub headline. He said the New York Post has the best headline writers. In September they received 2,100 letters to the editor and 2,400 in October. They usually get 1,000 per month. He said people were engaged in this election, and that some people have a lot of free time - if their candidate was not on the front page, the N&O heard from them. He said one of the best additions at the N&O in his tenure has been Ted Vaden, a former publisher who also teaches at Duke. He has open reign to write whatever he wants in his column and Quarrels has never killed anything he’s written. By the way, all editorial opinions are written by a staff of 5, and in his 9 years at the N&O, Quarrels has only stuffed one. He reads 5 every night before they go to print. In his mind, if the N&O doesn’t upset their readers every six months, they aren’t doing their job. The future for the newspaper is all about investigative reporting, especially in the state capital. He says to keep an eye out for an upcoming report on the probation system which will make readers very angry. He also feels they have an opportunity to build readership through human interest stories. He says the N&O is now #13 in US readership. In his opinion, $180/year to get something delivered every morning to your home remains a great value. His cable bill from Time Warner is nearly that each month. He’s not worried about the newspaper business – and worries more about the people who make watches.

JACK GLASURE
Chief Marketing Officer
FRENCH | WEST | VAUGHAN
 

Yesterday, I attended a Thought Leader Breakfast at the Cardinal Club featuring Orage Quarles III (publisher of the N&O).

Here are my notes:

He’s from California, and has a marketing degree from San Bernardino Valley College. He has been in Raleigh since 2000 and was the first African-American publisher in the south.

He says there’s a transformation going on at The N&O that’s wide, deep and painful. He had 1,200 employees in 2000 and now has 635. There have been tough decisions to right size the paper and maximize the use of technology. They are now at the same size they were 35-40 years ago when they operated with 600 employees.

Looking back, he considers the period between 1970 and 1995 the golden age of newspapers. During that period, new presses added color and expanded sections, and revenue was funded by classified ads which grew dramatically, especially cars, real estate and help wanted - which was the biggest source of income.

In 2000, when the dot com boom ended, the newspaper lost $15M in revenue - just in help wanted ads over a six month period. Last year, the N&O was the only company in the McClatchy Corporation to make its growth target in budget and revenue growth, but it started going downhill in October 2007, especially auto, real estate and help wanted, the three most important verticals.

Today the N&O is 14 titles, of which six are new within the last year, including Carolina Brides, Skirt Magazine and MomstoMom.com, which is generating 80,000 unique visitors per month.

Between the N&O and N&O.com, he has a 74% net reach in this market over a 7 day period.

They see huge spikes for big local news stories, for example Duke Lacrosse and John Edwards.

Two weeks ago the presidential election caught them off guard. In a management meeting the day before the election, he suggested printing 5,000 extra copies, someone else suggested 18,000. They actually had to do a second printing and sold 27,000. He felt like they missed an opportunity and he could have sold 50,000 more. Along those lines, he said he used to work for Gannett and described them as very smart people. They raised their newsstand prices in September. At the time he couldn’t understand why they would ask for midyear price increase. Well, they sold 500,000 extra papers the Wednesday after the election resulting in a huge revenue boost.

His goal is to get online revenue to 20%, up from 10%.

Total revenue is now driven 80% by advertising and 20% by circulation.

He advised how tough it is to compete with Craig’s List in classified ads, commenting that free is hard to beat.

He pointed to a great partnership that has been forged with Yahoo! and will open a new revenue stream for the N&O next year.

At one time, newspapers were in 80% of the homes, that number is currently 48% and he anticipates the number will level off at 20-25%

The day before the recent election, they discussed potential headlines and it was decided that if Obama won, the headline would be: OBAMA WINS. He asked what we thought the headline should have been if McCain had won, and someone in the room made a clever suggestion, “OBAMA LOSES.”

His biggest challenge and where he has the most complaints is with the headlines. Headlines are written by a different editor than the reporter and typically they have about 4 minutes per story to create a headline. Sometimes they try to get too clever and the headline does not match the sub headline. He said the New York Post has the best headline writers and clearly the N&O struggles with this.

In September they received 2,100 letters to the editor and 2,400 in October. They usually get 1,000 per month. He said people were engaged in this election, and that some people have a lot of free time - if their candidate was not on the front page, the N&O heard from them.

He said the best addition at the N&O in his tenure has been Ted Vaden, a former publisher who also teaches at Duke. He has open reign to write whatever he wants in his column and Quarrels has never killed anything he’s written. By the way, all editorial opinions are written by a staff of 5, and in his 9 years at the N&O, Quarrels has only stuffed one. He reads 5 every night before they go to print.

He knows the N&O has been referred to as the News and Disturber and actually seemed to like description. In his mind, if the N&O doesn’t upset their readers every six months, they aren’t doing their job. The future for the newspaper is all about investigative reporting, especially in the state capital. He says to keep an eye out for an upcoming report on the probation system which will make readers very angry. He also feels they have an opportunity to build readership through human interest stories.

He says the N&O is now #13 in US readership.

In his opinion, $180/year to get something delivered every morning to your home remains a great value. His cable bill from Time Warner is nearly that each month.

He’s not worried about the newspaper business – and worries more about the people who make watches.

JACK GLASURE
Chief Marketing Officer
FRENCH | WEST | VAUGHAN
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