Local Newspaper Bucks Trends and Grows Readership Using "Disruptive Innovation"

Across the U.S., newspapers continue to find themselves in dire straits. Bleeding red ink as they lose print subscribers, most cannot compete with the multitude of online news sources available to their readers. According to the Newspaper Association of America, from 2000 to 2009 the total circulation of daily newspapers dropped from 55,773,000 to 46,278,000, while the total circulation of Sunday newspapers fell from 59,421,000 to 46,850,000.

Yet one newspaper is bucking the downward trend. The Deseret News, in Salt Lake City, Utah, has just announced that its Sunday circulation grew 24 percent in 2011, and that its Salt Lake City market area readership increased 26 percent over the past year. In addition, the paper's online market share between January 2010 and September 2011, by page views and visits, far exceeds that of its three leading local competitors, according to data from Hitwise supplied by the Deseret News.

How has this small brand managed to thrive in an industry that is moribund at best?

By applying a management approach based on the theory of "disruptive innovation," developed by Harvard Business School professor and bestselling author Clayton Christensen -- who is also a member of the Deseret News advisory board. Disruptive innovation, says Christensen, is "a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves 'up market,' eventually displacing established competitors."

The Deseret News made some fundamental changes, bolstering its digital focus and streamlining the editorial emphasis of the newspaper. At the heart of the paper's disruptive innovation strategy is specialized focus on family-oriented content neglected by most other news media. It restructured around six content areas: Family, Financial Responsibility, Excellence in Education, Care for the Needy, Values in the Media, and Faith in the Community, while continuing to cover local news and sports.

"Our research indicated that we could better serve our local and national audiences by filling a void in the media market with a focused, relevant voice on issues of importance to families, both here at home and across the nation," said CEO and President Clark Gilbert, himself a former professor at Harvard Business School. "As we looked to the future and analyzed readership research, we identified these six key areas where we could be the best -- both in our local market and on a national level. ... We recognize that there is a market demand for these topics that has been overlooked in the industry."

While other newspapers might address these areas piecemeal with occasional coverage, they've tended to scale back their news operations. The Deseret News, on the other hand, has made a financial investment in producing in-depth, investigative reporting in these target editorial categories. They've added staff, shared resources with sister companies KSL-TV and KSL Newsradio, and built an online newsroom of outside contributors. As a result, the paper can dive into such issues as grown children turning to their parents for mortgage help (Financial Responsibility category) and organizations that help the poor by educating them (Care for the Needy category).

The newspaper has also been ahead of the curve when it comes to its online product. Gilbert's strategy included investing significantly in a deep digital management structure, with highly accomplished business professionals from leading Internet companies alongside those with top journalism pedigrees. The Deseret News is continually refining its online product. It has launched an iPad app, and is redesigning its website to include options for local, national and world news.

The Deseret News isn't satisfied with just making local waves, either; in fact, it is expanding its national profile. In a unique distribution relationship, the Deseret News Sunday "national edition" is being included with Church News, the national publication of The Church of Jesus Christ of Latter-day Saints. (The Deseret News is owned by Deseret Media Companies, which is a for-profit arm of The Church.) This expands the newspaper's reach to a nationwide Mormon community. There are roughly six million Mormons in the U.S.

Even though its national distribution is to the Mormon base, however, the content of the Deseret News national edition is not Church-centric; rather it largely covers the six editorial areas of emphasis, which appeal to a much broader nationwide audience. Expanding beyond the Mormon base with a national edition is a key part of the paper's strategy in growing their audited paid subscription numbers. Deseretnews.com, the online arm, is also expanding in Utah as well as nationally. Print subscriptions and online ads are combining to shore up revenue.

The Deseret News is one newspaper, at least, that has figured out how to fight the tide. By filling a void in the media market and providing a voice on issues of universal importance to families, the paper is seeing robust growth in its local market. Its unique content focus is also giving this brand the ability to expand beyond its home state of Utah. Seems like this newspaper's biggest scoop might be the story of its own success.