Reinventing a newspaper chain for the digital age is really hard — just ask Digital First Media

In hindsight, perhaps “Project Thunderdome” wasn’t such a great name for the digital-reinvention effort that Digital First Media launched in 2011, a team of digital savants based in New York who were going to help re-engineer the way the newspaper chain worked for a digital age. And yet, the images that name conjures up — of the post-apocalyptic world of the Mad Max movies, with brutal hand-to-hand combat and cars retrofitted with machine guns — make it one of the best metaphors for the newspaper world that I’ve heard in a long time.
According to media analyst Ken Doctor, the Digital First Media project has been shut down permanently and its 50 staff members are now looking for work elsewhere (Dean Starkman at the Columbia Journalism Review broke the news of layoffs at DFM on Tuesday night). In addition, Digital First Media is expected to sell off some of its newspapers, including those in California and on the East Coast. DFM’s CEO John Paton has confirmed that Thunderdome is being dismantled.

“Media changes very fast these days and nothing changes faster than digital… while our Company will continue to invest heavily in digital development, increasingly our focus will be in local where we are the news and information leader in our markets.”

Thunderdome ran out of time and/or money

The idea behind Project Thunderdome was that a team of digital experts in New York, run by former Washington Post digital head Jim Brady, would act as a kind of central resource system for DFM’s chain of small dailies and weeklies — building web tools, helping with strategy and generally working as a kind of SWAT team for digital projects. But that approach appears to have failed to generate enough momentum or revenue to satisfy the company’s financial backers, including its controlling shareholder, the closely-held Alden Global hedge fund.

One of DFM’s most recent efforts was what it called Project Unbolt: an attempt to get the newspapers in the chain to rethink every step of the entire news-gathering and publishing process, in order to try and make it more natively digital first and more efficient. Steve Buttry, who worked for DFM and Project Thunderdome as “digital transformation editor,” described what the company was trying to do in a series of blog posts that I tried to summarize (in the interests of full disclosure, I consider Steve a friend).

“We need to ‘unbolt’ Digital First newsrooms, so that they are Digital First in culture, processes and priorities. Though digital in focus, the operations should remain capable (as long as needed) of publishing print products, but the regional print operations will be what is bolted on to the core digital newsroom.”

A wave of schadenfreude

A number of media-industry insiders responded to the news about Digital First Media with expressions of outright or barely-disguised schadenfreude — about how the demise of Project Thunderdome was unsurprising, how its proponents were “Twitterati enamored by digital first talk & not looking at economics” and John Paton was clearly a “false prophet.” But as Josh Benton of the Nieman Lab pointed out, DFM’s problems are not unique, nor are they arguably the fault of a single person: instead, they are more likely a sign of how systemic and intractable the problems of the newspaper business really are.
Paton — who joined the company first as the CEO of the smaller Journal-Register Co. and then became the head of the entire chain — has been a lightning rod for criticism from within his own industry ever since he started trying to re-engineer the company in 2010, in large part because he advocated getting rid of traditional newspaper executives and replacing them with digital natives or those from outside the industry.
John Paton
Paton has also been criticized for not providing enough financial data about the results of his re-engineering plans, although he’s hardly the only CEO of a privately-held company to keep his cards close to his chest — very little is known about the financial health of other privately-held media entities. There was a similar wave of schadenfreude in 2012, when the Journal Register Co. declared bankruptcy for the second time in three years. Clearly, the critics said, this was a sign that DFM’s entire strategy was a failure. But as I tried to point out at the time, the bankruptcy said far more about the difficulty of managing change in a shrinking industry while being saddled with the legacy costs of a very different time. As Doctor put it:

“In the closing, and in other cuts at Digital First Media, we see the impact of unending high-single-digit loss in print advertising. The ongoing devastation in print is overwhelming even DFM’s relatively faster pace of digital innovation.”

Cost-cutting has now taken over

Doctor says Project Thunderdome’s demise is just part of a cost-cutting effort that will see Digital First Media try to shed as much as $100 million in costs — a relatively massive amount even for a large chain — and could involve the sale of dozens of newspapers, including properties in California, New England, Philadelphia and Texas. As Doctor notes, some of the problems that DFM ran into with Project Thunderdome were cultural, in the sense that many local newspaper editors likely didn’t respond with open arms to the idea that a centralized team was going to tell them what to do, or provide better resources than they could themselves. Similar centralization efforts have been put in place at other chains — including PostMedia in Canada, which is also backed by Alden Global — and largely failed.

“Thunderdome wasn’t universally received well within the company. Talk to the locals and you heard grumbles. Traffic to the new Thunderdome sections didn’t impress them. They didn’t like national imposition on local news judgment.”

As New York Times media writer David Carr said at one point, the newspaper business — both large and small — is in the middle of a painful transition, trying to move from the print-based room to a new digital-first room. But they can’t just turn the lights off in the former and move to the latter, because so much revenue is tied up in print. So right now they are in the long, dark hallway between those two places, and no one knows when it will end.
In his blog post, Paton said that Thunderdome provided a useful test bed for digital experiments, and that the chain’s “skills in data journalism, video production, website and mobile developments are all the better for Project Thunderdome.” Instead of being centralized in a single group, those skills will now be spread out across the chain’s newsrooms, he suggested.
Post and photo thumbnails courtesy of Thinkstock / Chung-Sung Jun