Hearst Newspapers are kicking off the new year with plans for a shared development hub, hiring 12 product and data specialists and another eight interactive graphic artists. The company says that it’s the single largest digital expansion ever for the newspaper group.
If Hearst is feeling expansive, senior vice president Jeff Johnson told me in a Zoom interview, there’s a reason: The company closed the year with more than 300,000 paid digital-only subscriptions, an increase of 100,000 or 50% from the year before. It is targeting 100,000 more this year.
The San Francisco Chronicle alone now has 140,000 digital subscribers, putting it in the top rung among regional papers with titles like The Boston Globe and Minneapolis Star Tribune.
Tim O’Rourke, who is heading what the company calls its DevHub from San Francisco, says the team will be geographically dispersed and that hiring is not expedited to be completed until midyear. The objective is to up the division’s game in data journalism and give all of Hearst’s 24 daily papers and 52 weeklies the benefit of tools developed by a team led by O’Roarke in San Francisco.
There, O’Rourke said, pilot projects have included an interactive wildfire tracker and a new tool to guide readers around the city’s restaurant scene. Hearst also put together an interactive digital guide to the frequent floods in Texas.
The New York Times, The Washington Post and Gannett’s USA Today Network all have that capacity, but it is less common among regional groups.
I have been intrigued by Hearst for some time because its newspapers represent a sort of counterpoint to the perception that the industry is all about financial distress and contraction.
Yes, print circulation and print advertising are falling as they are elsewhere, Johnson said, but “collectively, our Hearst Newsrooms are the same size as five years ago, although with much different digital skill sets.” The company is getting close to turning the corner to a 50-50 revenue split between audience and advertising, he said (pivoting over time from an 80%-plus reliance on ads).
Hearst’s relative success comes with an asterisk. Its privately-held parent company is crazy rich with a 46-story headquarters in midtown Manhattan, and historically strong magazine and local broadcast divisions. The company has also undertaken a string of diversifications through the years including investments in ESPN and Lifetime, an international software business and internal venture capital arms now including divisions targeted to women- and minority-led businesses.
Nonetheless, “we don’t get a hall pass on performance,” Johnson said. The papers are expected to turn a profit and consistently have. Even individual projects like the DevHub need to target and then measure a return on investment.
But the group is operating without debt or unfunded pension liabilities and need not report quarter-by-quarter results as public companies do, all advantages that support flexibility and internal investment.
I wrote last year about Hearst creating a pooled statewide news operation in Connecticut with its own website, CTInsider.com, fed content by eight dailies and 14 weeklies the chain assembled through the years.
“That’s a 180-plus newsroom,” Johnson said, considerably bigger than the state’s longtime leading paper The Hartford Courant, one of the Tribune Publishing group titles that was acquired by hedge fund Alden Global Capital last summer.
I asked Johnson whether Hearst was in the market for acquisitions (maybe the Courant, should it come up for sale?). Possibly, he said, but the company leans more to expanding the footprint of properties it owns.
For instance, The Times Union, which noted its own landmark of 30,000 paid digital subscriptions earlier this month, is moving from Albany, New York, into nearby Saratoga County and the Hudson Valley.
I have noticed through the years that Hearst uses a mix of internal promotions and outside hires for top jobs and goes aggressively after talent. In 2013, it brought in Nancy Barnes from The Star Tribune and Vernon Loeb from The Washington Post (both since departed) to increase the editorial ambitions of the Houston Chronicle.
After a short time as managing editor, Maria Douglas Reeve, also a recruit from The Star Tribune, became the Houston Chronicle’s first Black editor last summer.
When San Francisco Chronicle executive editor Audrey Cooper left in 2020 to lead editorial operations of New York Public Radio/WNYC, Hearst tapped Emilio Garcia-Ruiz, who had been running digital at The Washington Post, as her successor.
Quarterly and full-year 2021 financial results from public companies like Gannett and Lee Enterprises are coming in the next few weeks. I am also curious whether Hearst, for all its advantages, may be something of a bellwether.
Rapid digital subscription growth, admittedly achieved with a lot of deep discounting, seems to have become the norm. Deep newsroom cuts appear to have eased except after hedge-fund takeovers.
The qualifier is that print advertising and more recently print circulation continue to fall. Both command much higher rates than their digital counterparts. That nets out to decline, the narrative the industry is still trying to break.