In 2018, Los Andes celebrated its 135th anniversary. During the last 20 years, the newspaper industry has coped with sustainability and how to change its business models in the digital era. Globalisation of connectivity and social media companies accelerated the transformation of traditional newspaper revenues and expenses.
There are thousands of examples of these changes impacting newspapers because of people discontinuing the habit of buying a newspaper or due to accelerated digital conversion. Some companies have struggled to the point they ultimately disappeared. In other cases, media companies have reduced their presence to a bare minimum of expression.
The case of Los Andes reflects this impact on audience behaviour and economic results. In the 1990s, Los Andes was a conglomerate of companies, including cable television companies, newspapers, Internet (Argentina’s first Web site), and even a winery. The crisis in our country, along with perhaps some mistakes in management, led Los Andes to downsize and become focused only on the newspaper and Web site.
Until 2014, it was a 15% EBITDA (earnings before interest, tax, depreciation, and amortisation) company with a reshaping level close to zero. Since 2015, newspaper industry problem symptoms appeared. What were those symptoms?
- Absence of investment in generation of a printing pole or investment in new technology to improve the print product. Lower levels of maintenance.
- Basic Web site, which only allows basic products without the possibility of incorporating modern advertising formats, loginwall, or paywall options. Difficult viewability.
- Digital content was not fully integrated with newsroom staff.
- Absence of video team.
- Not aware of podcast system.
- There wasn’t a strategic plan to look for new products.
- Oversized staff (300 employees) according to international industry ratios.
- Processes were the same as 1990s. Several steps, several unnecessary controlling methods.
- Sales team focused only in newspapers ads. Absence of a mid- and long-term relation with advertisers and markets.
- Many years ago, Los Andes from Mendoza used to arrive as a newspaper beyond 100 kilometer radius and at least two nearby provinces, San Juan and San Luis. The company decided to leave this location because of loss of margin.
- Optional and collectibles areas were closed.
To add more context to this scenario, Mendoza is the fourth province in population and the fourth province in contribution to the gross product of Argentina. Most Mendoza companies look for markets outside Mendoza in other provinces and/or for exportation.
What did we do to overcome these symptoms?
While we were worried and occupied by everyday operations, we focused on setting parameters of relevance and influence of Los Andes in the province. This was our first strategic objective: to unify the offline and online newsrooms.
Thus we would gain productivity and we would have in mind as well as being effective, being efficient. Today we have a unique newsroom that deals with topics for all platforms: newspaper, specials, online, video, and podcast.
The second strategic point is to work on a structure that reflects the reality of newspaper business. It is really hard because it is a “must” to downsize staff and incorporate new skills and abilities. Los Andes today has 50% less staff than five years ago and has worked in new platforms such as video, podcast, social network analysis, etc.
The third point was to change the relation of sales team with advertisers. The company used to carry out transactions instead of generating win-win relations in the mid- and long-term to generate communication and visibility for current audiences and for probable new markets.
We merged areas, the number of managers was reduced, and we worked and worked and worked on processes — maintaining the operation as simple as possible, flexible, and dynamic.
Today the printing plant prints three different brand newspapers. The dramatic situation of the print newspaper industry made this possible. The main competitor of Los Andes decided to give up its print edition, which allowed us to gain between 5% and 10% of new copies daily. This also demonstrates that print still matters, and audiences are interested in accurate information and quality journalism.
Since 2017, Los Andes is the Web site leader in audience in Mendoza. We worked on improving generation of news, speed, and visibility.
Everything can be improved on, of coure, but what made this a healthy plan was the company tackled symptoms before they led to huge amounts of bank debt.
Reshaping these challenges. We keep on working closer and closer to our audiences. We are learning from the audience, looking for the best mix of product and customer experience. We’re focused on diversity on and off products and identifying new target audiences.
Monetisation is also a critical focus. It is hard to convert audience into money, but being relevant and an influencer helps a lot.
We’re taking advantage of having the printing plant and the company in only one building. This helps us be more effective and efficient, realising company integration is key. Our goal is to sustain EBITDA at least between 8%-10%, which allows us to try new technologies and continually re-evaluate the industry ecosystem.