1982 usa today front page

CASE 1 USA TODAY: INNOVATION IN AN EVOLVING INDUSTRY
1. THE CASE’S SITUATION ANALYSIS
1.1 Case Summary

USA Today was first launched in 1982 as America’s first national general interest daily newspaper by Allen H. Neuharth, former Chairman of Gannett Co. Inc., back to 1989, As of today, Gannett is a global information conglomerate that publishes 82 daily and 700 non daily newspapers and affiliated websites, together with 23 broadcast television stations in operations reaching 18.2% of the U.S population. Gannett is currently the largest U.S. newspaper group in terms of circulation with its combined circulation (including USA Today) is 11.6 million readers every weekday and 12 million readers every Sunday. Apart from that, Gannett’s has taken a quarter of the total U.S. Internet audience, which roughly 52 million unique visitors per month.

In early years when USA Today was first debuted back to 1982, it achieved instant success due to its innovative format where it is written in shorter pieces and sprinkled with eye catching colorful photos, graph and charts, specifically designed for the needs of sound-byte generation / TV generation, and also the Middle America – young, well-educated Americans who were on the move and cared about current events. Its first daily issue was 155,000 copies and after a month its circulation hit 362,879 copies and after seven month, it reached 1,000,000 marks. Its readers are mostly professionals, usually managers, about 40 years old, well educated, with an income of about $60,000 a year, together with news or sports junkie.

USA Today’s mission statement was to make its news enlightening and enjoyable to the public, informative to the national leaders, and attractive to the advertisers. Each issues is presented in four sections that cover News, Money, Life and Sports. Its motto’s ‘An economy of words, A wealth of information’ suits best for its focus on brevity and clarity, short sentences and short words in its reporting despite critics that labeled USA Today as junk food journalism for its terse, brash writing style and short coverage of complex issues.

In spite of the growing trend in newspaper circulation and revenue, USA Today is faced with challenges to turn into profitability. By late 1985, circulation surpassed 1.4 million but cost also double its original price per issue. For the first ten years, USA Today incurred a loss of $600 million. Profit was only achieved by 1993 of $5 million and doubled to $10 million the following year.

Apart from growing cost, USA Today was also faced with direct competition from other national newspaper such as the Wall Street Journal, the New York Times, cable networks, nationally syndicated terrestrial and satellite radio providers such as Sirius/XM, internet sites such as Yahoo! and Google, and blogs such as Huffington Post. The competitors such as the Wall Street Journal are also targeting business readers and their product lines include newspapers, newswires, magazines, websites, indexes, television and radio. They also have strategic alliances with other information companies such as CNBC, Reuters and Smart Money.

Global economic woes had also affected newspaper’s revenue including USA Today as companies are cutting down their advertisement budget particularly in the automotive, retail and employment sectors. Technology advancement has also changed the way people access information. They now have variety of ways to get latest news i.e. through print media, 24 hours television networks, news websites, mobile devices, search engines, blogs and social media sites that provide up-to-minutes news.

As a print media, USA Today has to think hard how to sustain itself in the mainstream of media industry. Larry Kramer as the new CEO of USA Today is responsible to chart and implement a corporate strategy to focus on digital media, starting with re-launch of USA Today’s online, mobile and tablet product. USA Today must continue to use various value-added services to further enhance distribution of its proprietary content and continued product differentiation to remain successful. In the face of competition in both print and digital markets, the future of USA Today depends on its ability to continue to innovate and adapt its marketing strategies to changing needs of the market.

1.2 Strength-Weakness-Opportunities-Threats (SWOT) Analysis

1.2.1 Strengths

· Number one print newspaper in the United States, with over 1.8 million daily papers in circulation.

· USAToday.com is Internet’s top sites for on-demand news and information. It allows readers to receive up-to the moment’s news with colorful visuals a crisp audio, weather forecasts, travel information and access to the paper archive from the ‘80s to today information.

· Increased online audience – almost 24 million unique visitors per month, with a double-digit growth in unique visitors, visits, and page views per month.

· Unique, innovative format: written in shorter pieces, using colorful photos chart and graphs, practical columns and at-a-glance boxes. The paper communicates with readers clearly and directly and it also faster to read and easy to handle thanks to its slimmer pages.

· A more serious, more responsible news-oriented product by focusing more sharply on hard news rather than soft features.

· Value added features - “1-800 and 1-900 “hot-line” numbers are incorporated in the paper so that readers can call for expert information on financial planning, college admissions, minority business development, taxes and other subjects.

· A 50-inch width design makes the paper easier to read and clear in design, the pages were slimmer and easier to handle, especially for travellers in tight spaces like airplanes, trains, buses, and also more readily fit into briefcases.

· Innovative promotional activities such as the “BusCapade” & “JetCapade” promotion tour and readerships programs for college students, which help raising public awareness of the paper

· The paper offers USA Today International, which is available in more than ninety countries in Western Europe, the Middle East, North Africa, and Asia.

· “Advertising-friendly” – accept regional advertising, giving local advertisers increased flexibility, offering front page advertising space, allow advertisers to transmit copy electronically 24 hours per day etc.

· USA Today is widely distributed via newsstand retailers, large grocery store chains, bookstores, coin-operated vending machines, and directly to the consumer through home delivery. Complementary distribution occurs primarily in hotels, airport terminals, and restaurants and at the college campuses and it’s also available in e-formats from the web page, mobile phone access and e-mails updates.

· Brand Extensions – three USA Today Travel Zone retail locations in airport terminals in late 2008 and launching of USA Today Live.

1.2.2 Weaknesses

· Digital subscriptions lagging behind from two main competitors– 116,000 as compared to Wall Street Journal’s 552,000 and the New York Times’ 807,000.

· High cost of newsprint has aggravated USA Today’s falling revenues and increased cost to a greater extent as it is the number one print newspaper.

· Rely heavily on the money that came from newspaper print sales & advertising revenue.

· USA Today has always been battling the fact that many people thought it was cheap journalism, although they invested a lot in improving the quality of the content.

1.2.3 Opportunities

· Changing Technology – allows USA Today to deliver news in more cost-efficient, customizable, direct and useful ways than will ever be possible using newsprint. People are increasingly getting their news from the Internet as shown by expanded demand for update-to-the-minute news and information and also rise of social media sites, and even stronger among younger people. USA Today must attempt to attract the new and younger readers, offering more interactive and social components to take advantage of this trend, hence maintain and even expand its readership.

1.2.4 Threats

· Declines in print media – the continuing decline in newspaper readership and growing consumer demand for free online news is hurting the massive print ad revenue of USA Today newspaper.

· Low rates of newspaper’s digital subscription – USA Today is lag behind from two main competitors in its newspaper’s digital subscription, 116,000 as compared to Wall Street Journal’s 552,000 and the New York Times’ 807,000, which leads to its losing as the most widely read newspaper.

· Fierce competition in online information distribution thorough television and magazines sites, blogs, and podcasts, and also advertising market entry of Internet-based companies like Yahoo! and Google.

· Multitude of choices for both consumers and advertisers.

· High cost of newsprint – average cost per ton of newsprint consumed increased by 13% in 2011.

· The environmental movement and recycling culture have discouraged readers to subscribe to the newsprint editions.

2. STATEMENT OF THE PROBLEM (S)

The list of problems that arises from the case study are as follows:

1. Face stiff competition with direct and indirect competitors in the market

USA Today has been in the market for 32 years and labelled themselves as “The Nation’s Newspaper”, aside facing competition with other national newspapers, their direct competitor, mainly Wall Street Journal and New York Times, they also had to compete with cable networks, nationally syndicated terrestrial and satellite radio providers such as Sirius/XM, Internet sites such as Yahoo! And Google as well as blogs such as the Huffington Post.

2. Increasing Cost and Decreasing in Revenue

Being proud of their achievement of being one of the most circulated newspaper in the U.S., they actually been struggling with declining revenues and increasing cost even before the recession in 2008. Both in print and online advertising had been falling steadily, declining by over 51% since 2005. The general price of all goods increases over time and with the economic conditions, printing cost and its expenses increases. Which in turn made the company to do major changes to the circulation, finance, news divisions, as well as staffs.

3. Advancement of technology

USA Today being the innovators in their news and information delivery to the readers, tackled the baby boomers generation. Now with the advancement in technology, news are readily available in a lot of ways. Consumers now have a variety of ways to get the latest news such as the print media, 24hours television networks, news websites, mobile devices, search engines, blogs and social media sites. Internet posed the most impact on USA Today as it can be beneficial and threatening at the same time as they face yet more competition. Most of the sites on the internet offer free and up to date news to the masses.

4. Cultural changes and new trend

There are increasing cultural trend whereby people opt to get information through the internet rather than from books or newspapers. This trend is even stronger among the younger people. This force as a challenge to the newspaper industry in competing to gain new readers for their publications.

From the list of problems, we can conclude that the main problem is the struggle of USA Today to sustain in the ever-changing technologically advanced market.

3. DEVELOPMENT & EVALUATION OF ALTERNATIVES
There are a number of alternatives that can be considered to address the problem faced by USA Today:

NO.

ALTERNATIVES

EVALUATION

1

Shifting The Bulk Of Focus on The Digital Division (USAToday.com)

Digital evolution is inevitable and it is forcing the advertiser to adjust and become used to a different format.

Print will not be around forever and focusing heavily on digital is risky but it is a needed move.

2

Incorporation of More Value-Added Services in Newsprint

Since newsprint is by far the biggest profit maker, USA Today may incorporate more value-added services in their newsprint by inserting coupons, giveaways, such as CDs, posters, puzzles or anything that could possibly enhance the buying experience of newsprint.

There is an opportunity for developing the niche markets, including customized magazines which readers can creative what they want by selecting kind of content.

3

Looking for the New Partnership & Possible merger

USA Today may merge with competitors to achieve synergy. Synergy is the magic force that allows for enhanced cost efficiency of the new business. Synergy takes the form of revenue enhancement and cost savings.

By merging, USA Today may benefit from the staff reductions, achieve economies of scales, acquiring new technology, and improved market reach and industry visibility.

4. RECOMMENDATIONS
The best alternative recommended for USA Today is shifting the bulk of focus on the digital division and looking for the new partnership and merge with competitors to synergy. Things started to change in the late 1990s, Network Strategy was initiated as online reporting becoming more popular, as more and more people were going from the daily newspaper to the Internet for their daily news. They were losing their market share in the daily newspaper sales. By working with new partners and achieve synergy, USA Today not only can reduce the operating cost but can also help the company to find the new ideas on their network strategy. Managers can combine all the new ideas and to produce the best one which is the most suitable for the company and its shareholders.