Business model of Gannett

Customer Segments

Gannett delivers content through multiple channels, serving a broad range of customers. These customers principally comprise:

• General Consumers, including the audiences of numerous local, national and regional publications online and in print; and
• Advertisers, including advertising agencies, brand marketers, and commercial entities.

Gannett’s publications attract advertisers of varying sizes, selling advertising space to large businesses such as Audi, PGA Tour, and Schoology, as well as with to smaller, local and regional businesses.

Gannet’s portfolio of publications and brands principally serves a US customer base. It also publishes content in the UK for local audiences, with its online media content available to customers worldwide.

Value Propositions

Gannett Provides value to its customers in the following ways:

• The quality of its content, with the Company publishing content across a wide range of well-regarded publications, with a track record for quality and reliable reporting;
• The diversity of its publications, with the Company publishing a broad range of local and national newspapers, as well as offering content on specialist subjects, particularly sports, including boxing, baseball, and mixed martial arts;
• Its extensive readership and audience, with the Company serving local, regional and national audiences across the US, as well as in the UK, with its online content available worldwide; and
• Its accessibility and distribution network, with the Company distributing print media across the US and abroad, and providing digital content across various online and mobile channels.

Channels

Gannett operates a website at www.gannett.com , through which it provides information on its various brands, services, and activities. The Company publishes numerous local and national brands, all of which operate their own online channels through which they distribute content. The Company’s various publications are available via a number of mobile channels, including iOS and Android applications, as well as through social media accounts which comprise a significant part of its publication infrastructure. The Company’s online content is available to consumers both on a subscription and free-to-use basis.

Gannett also circulates print versions of many of its publications, which it sells through retailers and distributors, as well as via mail subscriptions. The Company operates its own plants and equipment, as part of its distribution
networks. Gannett provides its advertising solutions through its own in-house sales and marketing teams, with each of the Company’s publications offering advertising solutions on an individual basis, often serving client in the same locality or related to the theme of the publication.

Customer Relationships

Much of Gannett’s content is available on a self-service process, through the Company’s numerous digital channels. Customers are able to access content from the Company’s publications, manage their subscriptions, and change their account details without interacting directly with members of the Company’s sales and marketing teams. Customers can also purchase physical subscriptions autonomously.

Gannett also establishes close relationships with customers, with its sales and marketing teams dealing directly with retail and distribution customers, and establishing long-term relationships. Similarly, the Company works closely with its advertising customers so as to establish a detailed brief covering their budget and requirements.

Gannett provides support to its existing and potential customers, who are able to submit enquiries to the Company’s support staff by post, over the phone and via email. Each of the Company’s individual publications also operates its own contact channels, as well as social media accounts, including with Facebook, Twitter, LinkedIn, Instagram, Pinterest, and YouTube.

Key Activities

Gannett operates as an international, multi-platform news and information publisher. It provides local and national content, as well as niche content, in physical form, as well as online and via mobile.

The Company’s portfolio comprises around approximately 110 daily publications, more than 400 non-daily publications, as well as digital platforms, primarily in the US – where it has operations in more than 30 states nationwide, as well as in Guam – and the UK. The Company’s portfolio includes high-profile outlets such as USA TODAY, which has a total daily circulation of approximately four million and Sunday circulation of over 3.9 million.

Gannett’s UK operations are organized under the Newsquest umbrella, which manages the activities of more than 20 daily paid-for publications. The Company’s operations also include commercial printing, marketing and data services operations.

Key Partners

Gannett collaborates with various companies and organisations in order to efficiently serve its customers. These partners include:

• Advertising and Branding Partners, principally comprising advertising agencies which assist in matching advertisers with appropriate publications from the Company’s portfolio;
• Supplier and Vendor Partners, comprising suppliers of resources, tools, and services, which support the publication and distribution of the Company’s content across multiple platforms;
• Channel and Distribution Partners, comprising distributors which assist in extending the Company’s own sales and marketing reach; and
• Discovery and technology Partners, comprising various technology companies and platforms that assist in identifying and disseminating content for the Company’s various publications.

Gannett has agreed a number of partnerships in recent years. This includes an investment in news aggregator Digg, which will help Gannett's USA Today Network reach more people; a partnership with discovery platform Taboola, which will integrate content recommendations across Gannett’s network of publications; and a deal with Kimbia to raise funds for non-profits across the US.

Key Resources

Gannett’s key resources are its content and intellectual properties, its various proprietary publications, its online and mobile platforms and its IT infrastructure, its publication infrastructure and networks – including its raw material supply chain, its sales and distribution channels, its partnerships, and its personnel.

Gannett owns and leases a number of properties as part of its operations. This includes a number of publishing centres and plants, in the US and in the UK, that are key to the publication process. The Company also owns a number of intellectual properties – including trademarks, domain names, and copyrights – that are material to the success of the Company’s operations and brand identities.

Cost Structure

Gannett incurs costs in relation to the management of its intellectual properties, the generation and acquisition of content, the maintenance of its digital platforms and IT infrastructure, the operation and maintenance of its physical publishing infrastructure – including the procurement of raw materials, the operation of its sales and marketing channels, the management of its partnerships, and the retention of it personnel.

In 2015 Gannett’s cost of sales and operating expenses amounted to $1.87 billion, and selling, general and administrative costs totaling $707.02 million. The bulk of the Company’s selling, general and administrative costs related to payroll and employee benefit costs – including the payment of salaries and benefits to its workforce of 18,700 employees – which totaled $515 million for the year.

Revenue Streams

Gannett generates revenue through the publication and distribution of various local and national publications across the US and UK. The Company’s revenue is principally categorised as follows:

• Advertising Revenue, comprising revenue derived from the Company’s provision of multi-platform advertising solutions across its various publications; and
• Circulation Revenue, comprising revenue derived from the sale of premium content and the collection of fees for both digital and physical subscriptions.

In 2015 Gannett generated operating revenue in the amount of $2.89 billion, down on the $3.17 billion recorded by the Company in 2014. The majority of the Company’s revenue was derived from its advertising solutions, which accounted for $1.61 billion in annual revenue. Revenue derived from circulation totalled $1.06 billion, with the Company’ remaining revenue attributed to other activities, such as commercial printing services.