The Globe publisher's plan for the paper (and Boston.com) was described in an email sent to staffers earlier today.
Much of what's discussed is familiar (e.g., the union negotiations and the Yahoo partnership). However, this is the first I've heard of the Globe seeking new digital revenue sources that don't compromise advertising. Finding a way to make pay without reducing traffic--and thus depressing advertiser interest--is no small challenge; it'll be very interesting to see what the Globe/Boston.com try.
Note, too, that the memo makes no direct reference to the Times Co.'s threat to close the paper. Since the concessions requested by the Times Co. still haven't been granted, I would have expected Globe management remind employees of New York's threat to shut the paper down, just to try to move things along. Then again, maybe management wants to convince staff that there's a reasonably bright future ahead if the concessions are made. Or maybe I'm reading way too much into this omission.
In any case, here's the memo in its entirety. Remember, as you read, that the Globe is reportedly on pace to lose $85 million this year:
SUMMARY
At the monthly Managers Meeting on Thursday, April 16, Steve Ainsley presented an overview of a business plan for The Boston Globe | Boston.com. The plan’s goal is to quickly improve our financial situation, and restructure the organization for the future.
The Globe’s business plan calls for significantly reducing costs in several areas – compensation, greater workforce flexibility, consolidation of facilities, and continued operational efficiencies.
Revenue initiatives include increased prices for newsstand copies of The Boston Globe, new Boston.com advertising programs, and new sources of digital revenue from consumers and advertisers.
Taken all together, these actions go a very far way to improve our financial condition. We expect, of course, that the strong work of our sales and marketing departments will continue to make the most of every revenue opportunity to maximize our top line.
COST REDUCTION
Every employee is being asked to make sacrifices in their compensation in order to bring our cost structure in line with our decreased advertising base of business. The restructuring of our contracts with each of our unions, which are currently under negotiation, is a major piece of the plan, as are the recently announced reductions in management compensation – wage cutbacks and elimination of performance incentives.
The consolidation of the Billerica plant into the plant on Morrissey Blvd. is ahead of schedule, and should be completed in June. We expect significant savings for our annual production and delivery budgets related to this action.
We also will continue to tighten up our operational expenses through improvements to productivity and efficiency throughout the organization.
REVENUE INCREASES
Circulation revenues represent a large portion of the Globe’s total revenue and have been relatively stable (a modest decline) despite drops in copies sold. To offset the current instability of advertising revenues, we are shifting our business more towards a consumer-driven model and asking our readers to provide greater financial support through higher prices for the paper. We have announced increase for newsstand papers and we expect to announce our plans for home-delivery shortly.
Although on-line revenues have slowed largely because of the recession, we have entered into a sales relationship with Yahoo! that we feel will generate new business because the combination of Boston.com and Yahoo! allows advertisers to reach about 3 out of four greater Boston on-line users. We also continue to expand our Your Town sites to target local audiences and dollars. Boston.com/Globe salespeople are actively selling this program now.
Finally, we feel that there are new revenue opportunities both from consumers and advertisers by launching new digital services and consumer-pay programs that do not eat into advertising revenues. A Digital Revenue Team has been charged with making recommendations over the next few weeks, drawing upon a great deal of analysis that has already been under way.
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