Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Dual Transformation: Two Routes to Resilience Clark G. Gilbert i President and CEO @ClarkGilbert

Our Mission
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Trusted voices of light and truth reaching hundreds of millions of people worldwide

The Trusted Digital Voice

Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

"Overall, the newspaper industry's involvement with the Internet has been one where it had a lot to lose and it's been trying not to lose it, as opposed to starting Finding New from scratch and having a lot to win." Market Growth --President of Online Newspaper Division

Displacement

Net New Growth

Established Business

Disruptive Business

Starts Outside Established Business

Dual Transformation
Transformation A Legacy Organization Reposition the core around a Post-disruption Job Job-to-be-done to be done Transformation B Separate Disruptive Organization Create a Modular Exchange Teams between Legacy Core and Disruptive New Create a Separate Organization with Separate Financial Structure to Target Disruptive Growth

The Trusted Digital Voice

Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Dual Transformation in Content

Transformation A p g reduction in content costs 1. Step-change

2. Differentiated Content: Invest where you can be the best in the world
Tranformation B 1. Digital only, not digital first 2. Hire digital DNA

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Step-change Cost Reductions: The Huffington Post vs. NYT

Unique Users
35 30 25 20 15 10 5 0 New York Times Huffington Post 1400 1200 1000 800 600 400 200 0 New York Times Huffington Post

Head Count

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Significantly lowering cost per story in traditional news gathering, but . . .

$550

$ $250 $200 $150 $100 $50 $0

$227 $143 $119 $75 $20

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Differentiation: Where can you be the 'Best in the World'

The web favors things that are narrowly p y g about something. g comprehensive. That is everything Newspapers, by contrast, are variety shows; something about everything. Lisa Williams, founder, PlaceBlogger

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Differentiation: Deseret News Six Areas of Emphasis

Strengthening the Family Faith in the Community Care for the Poor Values in the Media Excellence in Education Financial Responsibility

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Faith-based Segmentation of U.S. Public

SixDefining FactorsUsedin Segmentation
Factor1:Religious Devotion Factor2:Helping Others Factor3: Commitmentto Marriage Factor4:Teaching Children Factor5:Declinein MoralValues Factor6:Many ReligionsLeadto Heaven
Segment1 Tolerant Believers 27% Segment2 Devoted Denomin ationalists 16% Segment3 Secularists 12% Segment4 Fence sitters 14% Segment5 Humanists 18% Segment6 Strugglers 13% National Total LDS Sample

5.80

5.82

2.37

4.37

3.74

4.95

4.72

6.08

5.56

5.15

3.82

3.79

5.02

4.80

4.84

5.36

4.79

4.42

3.47

4.22

4.82

2.95

4.26

4.79

5.27

4.86

3.78

3.23

5.34

4.44

4.64

5.43

6.03

6.08

2.93

4.00

3.98

5.14

4.91

6.45

6.21

2.92

3.46

5.72

5.57

5.63

5.10

3.70

Source: DMC Research Panel, Cathy Chamberlain

The Trusted Digital Voice

Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

56% Niche = Like-Minded Believers

Strugglers St l 13%

Tolerant Believers 27%

Like minded Like-minded Believers

Humanists 18%
Devoted Denominationalists 16%

Fence Sitters 14%

Secularists 12%
Source: DMC Research Panel, Cathy Chamberlain
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Family and Faith, reported with rigor

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Deseret News Sunday National Print Edition

2012 Growth: Fastest Growing U.S. NP
180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000

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Dual Transformation in Content

Transformation A p g reduction in content costs 1. Step-change

2. Differentiated Content: Invest where you can be the best in the world
Tranformation B 1. Digital only, not digital first 2. Hire digital DNA

The Trusted Digital Voice

Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Digital Only (Not Digital First)

Audience Penetration*
120

100

80

60

40

20

0 0 10 20 30 40 50 60 70 80 90

Source: Harvard Business School Newspaper Study *Unique Page Impressions/Circulation

Percentage of Content NOT in Newspaper

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1. Digital Only, Not Digital First

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Digital Only, Not Digital First: The Rule of Thirds

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Web-Only Strategies
Remote Contributors - Deseret Connect User-Generated Content KSL Classifieds, OK.com Web Aggregation Linkoffs, Roundups, Web Briefs Photo Galleries, Galleries Lists, Lists Databases, Databases Contests Contests, Quizes

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Hire Digital DNA: DDM Team did not Come to Work for a Newspaper

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Dual Transformation in Business Models

Transformation A

1. Step-change reduction in costs and operations 2 Explore 2. E l reduced d df frequency 3. Subscription OptimizationPrint and Digital
Transformation B

1. A Digital Buyer Needs a Digital Seller 2. New Channels are the Difference between A & B 3. Digital Marketplaces (Not Digital Publishing) will win

The Trusted Digital Voice

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

The Good News: Newspaper Made $ in 1950

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Dual Transformation in Business Models

Transformation A

1. Step-change reduction in costs and operations 2 Explore 2. E l reduced d df frequency 3. Subscription optimization
Transformation B

1. New Channels are the Difference between A & B 2. A Digital Buyer Needs a Digital Seller 3. Digital Marketplaces (Not Digital Publishing) will win

The Trusted Digital Voice

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

New Channels are the Difference between Transformation A and Transformation B

Legacy Media Sales Channel Revenue Has More Than Doubled Since 2009 Total $* $ UP Meanwhile, Dependence On Legacy Channels Has Been Cut By Half

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2010 2011

90%

% DOWN

55% 45%

2009

2009

2010

2011

*Actual Revenue Numbers Not Disclosed

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A Digital Buyer Needs a Digital Seller

The Parable of the11th Floor

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

A Digital Buyer Gets a Digital Seller

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Digital Services: Marketplace Companies, not Publishers are Winning

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Digital is now a foundational core business

Total DDM Revenue

Revenue

2009 Revenue 2010 Revenue 2011 Revenue 2012 Budget

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Who We Admire
Transformation A Transformation B Benchmarks

Transformation A & B

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Note Presentation: Rebuild Your Core While You Reinvent Your Business Model

Key Overall Content Takeaways

1
Dual Transformation

2
Transformation A Content

3
Transformation B Content Key to Transformation B

There are 2 Transformations, not one Modular Rules around Exchange Teams

1. Step-change
reduction in costs reduced frequency

New Channels

2 Explore 2.

Digital i i Buyer Gets

a Digital Seller

3. Subscription

optimization

key to new revenue growth

The Trusted Digital Voice

Marketplace is

Key Overall Business Model Takeaways

1
Dual Transformation

2
Transformation A Content

3
Transformation B Content

There are 2 Transformations, not one

around Exchange Teams

Step-change cost reductions Invest where you

can be the best in the world

Digital Only, Not

Digital First

Modular Rules

Build Digital DNA

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