The mysterious growth of the Conway Daily Sun and conclusions

At the base of the White Mountains in northern New Hampshire, Mark Guerringue has been publishing free micro-dailies for more than twenty years. 

The largest and oldest property, the Conway Daily Sun, serves a city of 10,000 with a circulation of 16,000 covering four neighboring towns. The office refrigerator - he plans to donate it to the Newseum - has been signed in Sharpie by generations of presidential hopefuls who stopped by to pitch for an editorial endorsement. 

The Great Recession depleted revenues by only about 10% and the paper has stayed mostly flat, maintaining healthy margins, since then.

But Guerrinque is well aware that his paper is an exception. He attends numerous conferences and keeps a vigilant eye out for signs any weakening in print advertising, which accounts for well more than 90% of revenues. 

But in 2019 funny thing happened. The newspaper started growing again, with YOY revenues up 10%. 

Aren’t newspapers supposed to be declining long term? What was going on?

Another of the three newspapers owned by the group, the Laconia Daily Sun, has been growing for years, but that newspaper started up only about ten years ago and hasn’t reached its potential in a larger and more prosperous area. Laconia was one of  Politicom’s top ten strongest micropolitan economies in 2018; about 25% of its revenues are tourism-related. Its local office buzz with incoming phone and email ad orders. 

But the Conway Daily Sun, at 20 years old is considered mature, and lies a smaller, sleepier community. 

Guerringue finds it hard to put his finger on an exact reason or specific initiative to account for this year’s growth. A gruff-talking New Hampshirite and no-bullshit kind of guy, he asserts that part of the secret sauce is simply being the only publication in town, plus a slight uptick in the local economy. 

He also thinks free circulation helps. One of his favorite sayings about the paper’s success is that "quite by accident, the Sun was internet-ready: Free and local."  

Less trackable is effect of improvements in the editorial product. 

“Last year we hired an editor who had spent 20 years at the Palm Beach Post. The stories are tighter. If you pick up a paper that is 28 pages, there is a lot of new stuff in it.” 

In the latest Better Newspaper Contest produced by the New Hampshire Press Association, The Conway Daily Sun took first place in General Excellence, beating out the much larger Concord Monitor and Union Leader for the state's most prestigious journalism award. Guerringue’s son, Brett, who works at the paper, won rookie journalist of the year. 

“Awards don’t mean that much,” Guerringue said. “It can be just who likes what.” 

But still, he thinks massive consolidation and gutted newsrooms have hurt the competition. 

“I ran into an editor in Dover whose staff used to be 75 and now it’s eight. We have as big a staff as that paper.” The Foster Daily in Dover is owned by Gatehouse, which has since merged with Gannett, teeing up another round of massive lay-offs.  

“People have approached us to start a newspaper there.”

The Concord Moniker and Union Leader have also gutted their newsrooms, he said. 

While a hawk on local news, Guerringue is a dove when it comes to digital transformation. 

“Conway is unabashedly print,” Guerringue says. “If you Google us, Our tagline is Seeking the truth and printing it.” 

I Googled it, and sure enough:

A couple of high margin new products do help offset the loss of inserts and national ads: A glossy Best of Conway magazine with a six-month distribution life. A revenue-producing home and cannabis show purchased a couple of years ago. 

Digital initiatives, not so much. 

“Every time we start heading into digital we find another project which has better revenues. Maybe we were too early in the game, but we've tried selling digital services, everything from web sites to programmatic banner ads, but nothing has moved the needle very much.” 

Guerringue also thinks local leadership has been important. For the past few years, he was distracted by a start-up and acquisition in nearby Portland, Maine. After these ventures came to an end, he has been in town more often, talking to editors and customers. 

“The papers that work have a publisher who is committed and connected to the community.” 

Ironically, the biggest challenge in the future may be the printing press itself. It is getting old.

“It's a perfect storm of obsolescence,” says Guerringue. "Pressmen are hard to find as it is a dying profession. So are parts for our old press and pre-press equipment, and on top of that there are fewer and fewer press mechanics to install the parts even if you can find them.” That means deciding whether or not to take on the investment of a new press. 

Even in Conway, the future of "Finding the news and printing it" is never a given. 

Conclusions

After interviewing four of these micropolitan unicorns - i.e., print-centric success stories - in different parts of the country, I started to think about a publisher who asked me in the hallway of a media conference, “What business are we even in?” if he can’t support a newspaper without other revenue models attached. What can a scattering of super-successful micro-dailies that never had to evolve a significantly changed revenue model teach larger papers in stagnating markets about local media?

So here are some ending thoughts: 

In the market versus management debate, it's clear that the market matters, maybe more than anyone understood a couple of decades ago. 

Small markets have unique, qualitative advantages: Lack of broadcast competition and less dependence on inserts and national advertising. Newspapers in growing economies clearly also do better than ones in waning economies. 

However, there also are softer, less quantifiable factors that go along with market size. 

As I was researching, a local realtor commented that he did not read the local newspaper in the St. Petersburg area - population 280,000 that includes several cities and counties - because he is from somewhere else does not really care who wrecked a car in Clearwater. He relies on national media for his news. Maybe, if you put events on the home page, the way his local TV station streams them in a thread, he said.

Would he be interested in the neighborhood news, where he bought a home? Probably, yes.

It seems that smaller areas, if cohesive, can engender a sense of community and identity that larger, more transient areas cannot. Its almost magic how this happens. A realtor engraves a large stone, Thornton Park, at the entrance to his neighborhood, the property values go up by 10% and someone puts out a newsletter.  It may even be that as the world grows more complex, and social tribes more deafening, what we perceive of as our real world community grows smaller.

On the other hand, as critic of this essay pointed out: Community newspapers have always been around and they’ve always done well. "Now we have to call them micropolitan?" He asked. 

Having run weeklies of various sizes, there are economic laws that simply favor smaller papers. Smaller SMB’s have firm whole dollar tolerances around what they will pay, without regard to CPM.

I learned this up close and personal working at a group of weeklies in Northern California that were recovering from the recession of 2001. 

The most profitable group were the community weeklies with circulations in the 6,000 to 10,000 range, but they had already been spun off to finance the rest of operations. Two of the remaining papers circulated about 20,000 issues a week, and achieved profitability in a couple of years with with some basic management changes. 

But the larger 60,000 circulation paper continued to struggle.  

It became clear that most SMB’s would pay $174 to $300 a week for 6,000 circulation, but would not pay much more for 20,000 or 60,000. 

The smaller papers higher margins, and pricing flexibility that allowed greater market share. The larger circulation newspapers priced small businesses out of market even before they discovered Facebook.

And then there is management. 

Striking to me was what I did not hear from the publishers I talked to: No one mentioned advertising systems or standards of performance. Maybe good sales managment is a given, or maybe they understand on some level that their newspaper’s market dominance is the true driver of sales. 

There was also no agreement that consumer revenues is the ultimate long term solution. Two of the four success stories use a free circulation model. 

All are frugal operations, but no one is planning to cut their way to increased profits.

To me what really stood out is how these publishers seemed absolutely clear on when to take a pass or fight for a new initiative.

They each focused the conversation around content and audience. 

Revenue initiatives that do not build on the core - content and audience - need to meet a high ROI standard.  

In fact, while 80 to 95% of their revenues are in print, the super-successful micropolitan papers are surprisingly entrepreneurial. 

Adams Publishing group started a daily in rural Idaho this summer, while opening a statewide news bureau in Boise. A group of publishers at Swift Communications are launching online-only visitor’s guides with a year or two window for significant profits. The Jackson Hole Daily News & Guide bought a local digital agency. Even the "I’m a print guy" in Conway purchased the local home and cannabis show. No one was asleep at the wheel on Main Street. 

I've been interviewing publishers for about ten years now - and these small market publishers stood out in expressing an almost messianic sense of purpose about role the local newspaper, even if they are looking over their shoulder, just a bit.  

They all consider the flexibility of private ownership as key to their success. 

The over-arching viewpoint is that consolidation by public companies - "the hundreds of newspapers model" as one publisher put it - does not create real value in communities, and that short run tactics fail to preserve long term value. 

A brief glance at the stock charts, he pointed out, show the stock price of  Gannett, McClatchy, and Gatehouse down 50% or more from a year ago. 

Perhaps the future of independently owned local media does not look as much like a long slow decline, as the ebb of a river only to reveal a variety of smaller, but thriving informational hot springs: Exclusive local news that people want and need.

You can sell it. You can run ads against it. You can raise donations for it. You can power other models with it.