Executive Vice President, Tactician Media
Mike Petrak is Executive Vice President of Tactician Media, which consults with media organizations. He also is Managing Partner of Prism XL, a consultancy for media, finance, education and technology. Petrak is former Publisher of the Springfield (Ill.) State Journal-Register.
They hired a guy who was a specialist in events and now they have made it a staple in that ‘other’ revenue category to roll out hundreds and hundreds of events throughout their markets across the United States, and some of them are huge money-makers, huge money-makers. So much so that it has attracted new entrants in terms of competition, in terms of other entrepreneurs that have jumped into the space. … Gannett has done a lot of those as well. So I would say event marketing has become big. And let’s talk about the Denver Post. The Denver Post, a market with which I’m very familiar, had a really nice building and had a huge auditorium. They had a view that overlooked the downtown landscape so they used those assets right on the busiest street in downtown Denver for a lot of things. They have community events because they have a huge amphitheater of about 220 seats to hold community events. They bring in speakers that are national speakers, political speakers, and then they sell events around that. They’ve also done things as small as rent space for weddings … because it looks over the mountains and it’s a downtown view and they have these huge balconies. So people looked at their assets and said what do we have here that we can monetize and events is something I would think would continue to make sense. We did that a long time ago when I was running the Kansas City Star because of our synergy. We collected all kinds of data in the newspaper and on weddings and wedding notices and engagement notices and we turned that into events where we sponsored a big kind of wedding extravaganza twice a year and then we created a magazine that’s 200 pages, a full glossy magazine that comes out twice a year and we have a database of people we communicated with and of course all the vendors because weddings have taken off and are a big, big business. So we really kind of leveraged data, relationships and sponsorships and all these kind of things. While events are kind of new, there have been some people that have really been after this business for 20 years.
These are rich philanthropic people who really care about local news and worry about the state of the free press in the United States, so they have created models that now allow local news in part to be financed through charitable trusts.
So now there are new entrants to the market that are entirely new that say we care enough about journalism and it’s important enough in our community that we will support it through charitable grants and they’ve set up new economic models to do that, Philadelphia probably being the foremost.
I think that it’s harder for local owners who don’t have scale to compete anymore, so let’s start with that. The reason that more newspapers have been sold in the last two years than any other time in history is because it’s just harder for them to compete. So let’s talk about GateHouse. They’re the largest newspaper company by both circulation, I believe, and certainly by the number of newspapers. They have 550 publications now and yet their business model is they really find economies of scale at reduced costs. ... They have created a Center for News and Design in Austin, Texas, that they essentially have taken somebody who used to make $80,000 a year as a copy editor and now they can hire somebody to do that job for multiple, multiple, multiple markets because it’s all in one place and so they’ve kind of in-sourced it, so to speak. So they’ve created a business model to really reduce costs and it allows them some competitive advantages. They also have a very good digital network that they have created and they have been very smart about that.