LA Paper Embraces Print in Digital World
Aaron Kushner believes he can launch and grow a print newspaper in a world gone digital.
The former greeting card executive is trying to turn the Orange County Register into a media giant in southern California, largely driven by paper and ink. The unconventional effort gets a jolt Wednesday when Freedom Communications Inc., the company Kushner bought with other investors two years ago, launches the Los Angeles Register.
The daily newspaper will be available at 5,500 locations around L.A. - at many newsstands and vending boxes where the 132-year-old Los Angeles Times is found. It's the first direct challenge on the Times' home market since the Herald-Examiner folded in November 1989.
Kushner hopes to build the newspaper's readership by differentiating it from the Times with deep coverage of local news and a political stance that's center-right.
He's pulled focus away from digital content and advertising sales, insisting that chasing low-value clicks won't matter if the print product, which accounts for 90 percent of his newspapers' revenues, cannot be turned around.
It's an unconventional move considering that the economics of the newspaper business have worsened in the last quarter century as advertising dollars and readers migrated to the Internet.
"We will sell newspapers the way every newspaper sells newspapers," he said in an interview. "There's nothing particularly magical that we need to invent that way."
"The heart of our strategy is creating a better, richer, more engaging product that leads to a cycle of long-term growth," he said.
Since taking over as Freedom's CEO in 2012, Kushner has implemented a number of changes. He has limited free access to the Orange County Register's website; nearly doubled the editorial staff to about 370; and purchased and launched smaller newspapers in the area to spread the company's ad-sales reach and dilute the cost of reporting over a wider geographic area.
Kushner says the strategy is largely working. He told a luncheon at the USC Annenberg School for Communication and Journalism in February that with combined advertising and circulation revenue from print growing in the double digit percentages, Freedom is on track to be profitable this year. The company doesn't release its financial results to the public.
Kushner has been able to do what many publishers have not: boost circulation. In the six months through September, the latest period for which results are available, the average Monday-to-Friday circulation of all Freedom's 34 publications was 362,242, a 27 percent jump from a year earlier.
The circulation gains are almost entirely due to Freedom's near doubling of the print run of weekly "branded editions," which publishers are increasingly using to spread distribution as newspaper circulation falls. The core Orange County Register, in fact, saw weekday circulation decline 8 percent to 162,600. The branded editions must publish at least weekly, represent themselves as editions of the main newspaper and contain some editorial content. The six-page Orange County Register Minute is chock full of ads and is delivered for free to every household in a certain area. More than a million branded editions hit the streets every Thursday, boosting the daily average.
Kushner acknowledged that expanding the mini editions was a key pillar of his strategy.
"That's really where we're focused on, in terms of local community-building coverage," he said.
The Los Angeles Register's launch follows Kushner's introduction of the Long Beach Register and several other small papers in the last year or so. The company announced Tuesday it would launch a dozen new community weeklies through next month, adding another half million copies to circulation every week.
Ken Doctor, a newspaper industry analyst with Outsell Inc., believes the L.A. Register could help Freedom's profits if it sells as few as 20,000 to 25,000 copies a day, especially because it is using existing staff to produce it.
Kushner believes the Register can coexist with the Times, which has a daily circulation of roughly 672,000, down 9 percent from five years ago. But he has his share of skeptics, including Gabriel Kahn, a USC Annenberg professor of journalism, who doubted the bet on print would help take advantage of the changing habits of a younger generation.
"I'm not saying he should do as everyone else has done, because everyone else has failed at this, too," Kahn said. "Have you seen the movie, `Argo'? It's kind of the best bad idea we've got."