It’s Secular There’s Inelasticity Get Transactional

1. It’s SecularThere’s InelasticityGet Transactional

2. It’s Secular -1.7% $47.4 -9.4% $46.6 $42.2 -17.7% $34.7 -28.6% -10%? Billions Of Dollars $24.8 YEAR Source: Newspaper Association of America

3. It’s Secular 920 60 50 0 0 (40) (210) (770) Source: Morgan Stanley Research

4. There’s Inelasticity 7-Day Subscription Elasticity -12% more VOLUME same less 40% PRICE

5. There’s Inelasticity Prior to the home delivery price increase, we strategically began to down size our TDMN audience. Eliminated all outbound telemarketing for new starts Eliminated all “Billed/Prepaid” new starts through any pressure channel Introduced mobile handheld technology in all pressure channels and accepted EZpay only starts from all vendors. Reduced all consumer facing discounts to 15%; increased save discounts to 25%.

6. There’s Inelasticity In May of 2009 TDMN increased NDM 7-day rates 43% and ONDM rates 100%. Below are 4 critical factors to consider prior to pricing: Dramatically reduced churn as the result of acquisition changes made in fall of 2008. Overall churn reduced 34% (from 61% to 41% in 7 months). Engaged the Modeller's in an exhaustive pricing study to determine “pricing cliffs” and the impact content has on a consumers willingness to pay and a consumer perception of value. Launched a live market pricing test with 1,500 subscribers 3 months prior to the market wide pricing. In the live market test we tested 3 unique rates and measured attrition results on the 3-rates. In conjunction with the price increase we increased price to all new subscribers from $30.00 to $33.95. 19% of the current TDMN base is on the “new” subscriber pricing schedule. We did this to reduce attrition in future price increases. Impact of Price on Quality Audience

7. There’s Inelasticity • Do the math: 100,000 subscribers x $3.00/per week x 52 weeks = $15,600,00088,000 subscribers x $4.20/per week x 52 weeks = $19,219,000 Circulation Revenue = + $3.6 million / + 23%

8. There’s Inelasticity p 8 • It’s rarely about price alone, though almost always about Value for the Price • Let content drive circulation revenue – it’s quite possible that over the years we’ve “cut to the quick” and inadvertently helped readers become more price sensitive • Marcom is Queen, but Content is King • Marketing communications that point out all the great things you’ve done, are doing, and plan to do can help reduce elasticity/defection • A blend of real changes and improvements in content and letting people know about them is best

9. There’s Inelasticity p 9 • Now is the time to put good, solid content back in your news products because it improves brand image and equity, reduces churn, improves elasticity and can be a significant source of increased incremental revenue. • Hire more writers and staff • Focus on the right type and amounts of content readers want most • Charge the right people the right amount for it • Deliver it in the right platform that readers want

10. There’s Inlasticity • Your newspaper price is the consumer’s baseline • Consumers will expect to pay less for digital distribution • Emerging subscription revenue opportunities in e-editions, e-books, e-pads & apps • Comment: Industry move to “paid at any price” is a mistake. Devalues the product.

11. Get transactional

12. Get Transactional • Do the math: 10 million PV’s/month x $10 CPM x 3 ad units per page x 100% sellout = $3.6 million per year

13. Get transactional 21% 57% 58% 72% Most important factors in local ad buying 84% *More than one factor could be chosen as #1 Source: Morgan Stanley Research

14. Get transactional 39% 27% 26% 21% 14% 9% 6% 4% Source: Morgan Stanley Research

15. Get transactional • ROI • Consumer purchases less volatile than ad spend • Ad dollars moving online • CPM’s under pressure • Inventory is exploding

16. What’s Ahead? • Mobile • Preprints going digital • Right content on each device for every customer. And GET PAID! • Reorganize