Jim Dolan: CEO, DOLAN MEDIA
A strategy derived from necessity in the wake of Hurricane Katrina worked so well it’s now driving the entire company.
In the aftermath of Hurricane Katrina, Dolan Media’s New Orleans-based media properties;which includes City Business, The Daily Journal of Commerce and a $4 million-per-year custom publishing business;turned to the Internet as their primary media outlet out of sheer necessity. That strategy paid off so well that the Minneapolis-based publisher is now adopting the same "Internet first, print second" formula across its entire portfolio.
"Everything we do now we do for the Internet first, then re-sculpt for print use," says CEO Jim Dolan. "Under extreme duress it proved to be a viable business model. We’re doing it with about two or three properties per quarter and it will take us a couple years to implement it all the way through."
Dolan is hesitant to say what the specific effect on revenue has been so far. "We’re getting the same question from banks and investors, and because so many things now are combo-buys, it’s really a judgment call," he says. "Before Katrina, online was 5 to 7 percent of revenues, today online is about 18 to 20 percent. The lesson we learned is we didn’t have to replace the revenues; it’s the profits we had to replace. The margins are so much higher online, I can replace one-third of the revenues and have the same profits. If I replace half the revenue, I have bigger profits."
In New Orleans, Dolan’s City Business flagship is again profitable and has recovered two-thirds of its previous advertising volume. Last fall the company launched a newspaper called The Journal of Jefferson Parish and expanded coverage of its daily construction title. "We’ve adjusted our cost structure;not by reducing people but by producing more publications from the same shop."
Circulation has stabilized at about 14,000 and is growing about 10 percent a month. "For subscribers we’ve found there hasn’t been a single one who’s said ﾑNo, I don’t want to continue.’ However, we haven’t found about one-third of our subscribers. They’re just gone."
VITAL STATS: Before Katrina, online was between 5 to 7 percent of Dolan Media’s revenue. Today it’s 18 to 20 percent.