Will Bachman 00:01
Hello and welcome to Unleashed the show that explores how to thrive as an independent professional Unleashed is produced by Umbrex, which connects you with the world’s top independent management consultants. I’m your host Will Bachman and I’m here today with Dr. Raj Nair, who is the Chief Financial Officer at Boston Globe media D. Raj. Welcome to the show. Hi, well, thanks for having me. So dhiraj, everybody knows the Boston Globe. But just give us a quick overview of the Boston Globe media company, some folks may not know the extent of the company.

Dhiraj Nayar 00:35
Happy to well, so we are New England’s premier media company. And we have five market facing brands. The first one is our flagship, which I think most people are should know of if they don’t, that’s the Boston Globe, which is a print and digital news site. It also includes spotlight our award winning investigative journalism brand, you may be aware of it as this brand also was behind the spotlight movie that won the Oscar in 2016. The second one is a digital site. boston.com is a free site. And it’s a lighter take on news and information than the globe. We also have stat news, which is our medicine, Life Sciences and health focused digital vertical, broke direct, which is our one stop shared direct mail marketing service. And finally club docs, as in documentaries where we present works of filmmakers. So that’s the Boston Globe, we are primarily focused in the New England region. But of course, one of some of our sites like stat news covers the health industry globally. Yeah.

Will Bachman 01:51
I actually didn’t realize that stat news was owned by the globe. Boston Globe media. Tell us a little bit more about about stat news.

Dhiraj Nayar 02:00
So stat news was started by a owner about five years back and and the thesis behind stat news and actually around some other verticals we are thinking about is that Boston is a hub, and a leader in life sciences, right? And Kendall Square, and we are in the thick of it. So we should take advantage of that. And it’s a digital only property that focuses. It’s like a b2b play that focuses on medicine, biotech, etc. And lately, they’ve been in the news a lot, actually. Because they we have some of the leading experts covering coronaviruses. And our reporters are on CNBC, on being quoted in various news, newspapers, etc. So it’s something that’s doing extremely well for us. And it’s part of our strategy to go beyond general news into deep verticals.

Will Bachman 02:53
Yeah, I’ve certainly seen it referenced quite a few times recently on Twitter. And globe docs, you say you present works of film is primary documentaries. And is this like an online thing or in theaters or

Dhiraj Nayar 03:06
the globe doc says, Yeah, it’s primarily documentaries, and are the premiere event is the globe Doc’s Film Festival, which happens once a year, but throughout the year, we have a series of events all in Boston. And we used to hold these in theaters. But now of course, things are moving online. So if you google globe, dot globe docs, I’m sure you’ll find a link to the next series of events that are taking place. Fantastic.

Will Bachman 03:33
So tell me a little bit about how the company is operating during the pandemic.

Dhiraj Nayar 03:42
Yeah, so when you think about our workforce, well, you can really think of them in three different buckets. The first is our editorial and the business side. And our offices are located in downtown Boston. We also have a printing slash manufacturing plant in Taunton, which is about an hour outside of Boston. So that’s the second group and then the third set of employees are related to our distribution business. So we not only distribute the globe locally, we also distribute some of our competitors. And we are the primary kind of the leading distributor in this region for all the newspapers and media companies. So we have three separate separate sets of workforces. Each of them is impacted differently. Our editorial and business side, which essentially work in downtown Boston, are able to work remotely, so we went remote in the middle of March. And the transition was fairly seamless, and we’ve been working pretty much 100% remote since then. The way our journalists are working is for the most part, we encouraged them to continue to cover remotely using zoom calls reaching out on the phone on occasion, where it’s warranted. We have had journalists actually do Go into the hospitals cover the ICU, etc for as it relates to COVID-19. But it’s really on an as needed basis, and they have full pp. So our first goal is to make sure that people are safe. And that’s the primary mode in which we operate. And so far, we’ve been able to have great coverage without any hiccups. So that’s our editorial, the business side is working from home, no issues there. That’s finance, HR technology. And fortunately, we had the infrastructure, and we were able to transition very easily with respect to our printing and distribution workforce. That is different because they are involved in the physical product. And they have continued to go into work seven days a week, and there was no stoppage there. So we are proud of the work they are doing, helping inform our audience. And but we are taking precautions, and I can I’m happy to talk about some of the precautions we are taking.

Will Bachman 06:05
Yeah. Yeah, love to hear about that.

Dhiraj Nayar 06:08
Yes, I mean, we are, you know, first of all, we’ve held extensive communications that it’s a personal responsibility for every employee to make sure that if they are sick, they don’t come into work at all. But once people do come in, we’ve taken basic precautions, some of which you may have heard of, we restricted entry to a single entrance, we do temperature checks. We have a daily checklist of questions as employees have to answer before they go in. We have an agreement with a local hospital that if we think the situation warrants, they can actually come and do drive thru checks on site. pt, facemask, gloves, all mandatory. In addition to normal cleaning, we have additional deep cleaning. Every day we use electrostatic sprayers, which some of which are manufacturing engineers, they’ve actually developed the solutions themselves based on CDC guidelines. And we are taking other things like sanitizers, you know, generously dispensed all throughout the plant, we’ve restricted all non essential employees, so only people who are involved in manufacturing come into the building, we’ve also changed the ventilation routine. So now in the building a lot more fresh air is circulated versus pre COVID. And things like social distancing, signage, etc. You know, all those extensive and there are some other additional measures we’ve taken, no visitors are allowed, even our drivers etc. previously used to come into the plant to pick up the paper. Now that transfer happens outside the plant. So it’s a much more controlled environment. And it’s working for us, we’ve managed to pull the paper out every day without any hiccups.

Will Bachman 07:58
That’s fantastic. Have you had any cases at all? Or had isolate people? or?

Dhiraj Nayar 08:03
Yeah, we’ve had some cases. So we do have a process in place that if if there is a case, then we have contact tracing in place, and then we quarantine everybody who’s adjacent to the person who has the case, we are not aware of any case that originated inside a plant. So we believe most of these took place outside our facilities. As you may be aware, the Boston area after New York, New Jersey is kind of the third highest in terms of density of cases. So certainly it’s there in the community. Fortunately, it’s slowing down now. So the governor actually just announced a partial opening starting Monday. So we are like two days into it.

Will Bachman 08:46
What about the distribution workforce?

Dhiraj Nayar 08:50
So even there interestingly, we haven’t had any major disruptions and we follow the same protocols that we follow here. Interestingly, distribution some of the impacts are coming from a customer sites because hundreds of locations have actually shut down right so our distribution footprint, especially where we are dropping papers of at the retail stores, those stores are no longer open. But again, no no impact so the following good practices, pp masks, gloves and social distancing and so far it’s working well for us. Okay.

Will Bachman 09:32
I am curious we we can get into finances later in the business impact but it wasn’t to mention it with with retail stores, sometimes clothes and people used to buy their morning paper, you know, at the at the coffee shop. Or have more people started subscribing to the physical paper for you to get it at their house.

Dhiraj Nayar 09:53
Yeah, so what’s happening is and I was going to touch on it perhaps later, but I can certainly talk about, you know, our business aside here, when we think about our subscriptions, we’ve got the print and digital side. On the print side, the subscription is relatively flat, we’ve had some instances where we’ve had some restrictions, for example, some elderly, people homes, right? They are restricting anybody from coming in. So it’s not so much about the product. They’re just not allowing the person distributing the paper to come in. So we’ve had cancellations there. The locations Yes, the single copy tremendous impact, as you can imagine how many retails stores are have been having have shut down and foot traffic is down. But the flip side is, on the digital subscription sell side, the audience and community is highly engaged. So we’ve actually seen tremendous growth. In the past 10 weeks, we have grown around 35%. So it took us seven years to get from to get 200,000 subscribers, and it took us 47 weeks to get to 200,000. And a lot of that growth has come in the last 10 weeks. So are the audience engagement, the subscription growth in digital is going through the roof? Anyway, the media industry, the print to digital shift was happening. And I think this is just accelerating that change.

Will Bachman 11:31
Alright. So getting back to sort of, you know, how people are working. And on the new side and and on the business side with with reporters and business working from home? Has that, you know, have there been any areas that either have been a lot more difficult than people coming into the office? Or have there been any places where you’ve actually made some innovations that that you think might you might retain in the future.

Dhiraj Nayar 12:05
So at least from the leadership perspective, what we’re finding is that we are really innovating because we are forced to and taking advantage of this remote environment. So, I mean, some of it is internal. So when we talk about communications, we used to have physical town halls once in a while, but it was a lot difficult to get hundreds of people or 1000s of people together in a single location, because, you know, it requires a lot of physical infrastructure. Now, we are having bi weekly town halls, and we have hundreds of people join every, every, every town, every virtual Town Hall. And it’s kind of dramatic that in some sense, our communication to the organization has actually improved. And we are able to share what previously used to be perhaps a brown bag lunch with 20 people now you have brown bag virtual lunch with 500 people attending, you know, and listening to our reporters from stat talk about Coronavirus. What is it they see or listening from other reporters? Talk about the community impact and the hospitals. They’ve been tubes. So yes, there is there is innovation happening, we are holding a lot more events with community leaders with the, for example, the mayor of Boston, the head of mgh they’ve they’ve attended virtual events with us. And Previously, we used to do these, but they were much more restricted. And this is really the Mac democrator. The more he tries the the process, and it’s open to everybody. So in fact, what’s happened is the the events are growing so fast that previously we had a limit of 1000 attendees for our online events, and we were blowing past and so we’ve recently actually increased our capacity to 3000 per event. So so it’s I think people are really engaged. I mean, maybe it’s short lived, because people are stuck at home, and they’re looking to do something interesting. And once they get out and about maybe the interest will die down. But we certainly think there is an opportunity here. And and part of part of what we’re doing is also engaging with our audience and communities. So last year, we had done a strategic review of what our priorities need to be. And one thing we settled on was that we need to go beyond just holding people accountable and telling the news to actually engaging the community. So community was going to be a big focus area for us. And what COVID-19 did was it actually gave us an opportunity to do just that. So we’ve done a number of things, you know, beyond the basic stuff like creating section on the side, which tells the community information about COVID-19, where to go for testing help what’s open what’s closed, we’ve taken a number of initiatives, I’ll talk briefly about three of them. The first one is called Boston hub, which was launched by boston.com. This is a peer to peer network. So essentially, rather than connecting, collecting money, and then donating it to a group, we are actually connecting people directly. So people who want to help, we have a database, and there are people who are asking for help. And we put the two parties together directly. And this way, the individual directly can connect and has an impact, and they feel really good about it. And this is not for something big. I mean, 70% of the requests coming through this Boston helps initiative is for groceries, right? So there’s a lot of hardship out there. And it’s been really successful. We’ve had 1000s of people volunteer to help. And we’ve had several 1000s of requests to ask him for help. So that’s one example we’ve engaged with the communities is the second one where so the Boston Globe, we started an initiative called serving our front lines, we partnered with local restaurants to deliver food to area hospitals, and over 5000 meals have been delivered. So we also launched an ad campaign around that on the globe, both the physical paper and the digital side. And we collected donations to fund this initiative, and part of it was funded directly by the globe. So it’s, again, engaging with the community. And the third one that we think is going really well is we started a Slack channel, targeting the small business community. So this is an opportunity for somebody who owns a restaurant or owns a small shop, to actually come on the Slack channel, engage with other similar businesses, learn from them, whether it was how to apply for the TPP loan, they also had experts come in, so accountants and lawyers and talk about what other avenues or options available to businesses, and we’ve had over 40 virtual events in this channel, too. So again, it’s an example of the community engaging us engaging with the communities, our reporters take part of it part in this Slack channel. Sometimes the engagement that’s taking place there, the topics that are coming up, actually turn into stories that our reporters then write and cover more deeply. So these are ways we engaging, we think this is something I don’t know why we hadn’t done this before. Right. So this is an innovation happening because we are forced to do this remotely. And it’s something we plan to leverage going forward.

Will Bachman 17:46
Here, it sounds like a great initiative. So where can people go to if they wanted to join that Slack channel for small businesses?

Dhiraj Nayar 17:57
I think you have to be invited, I can certainly find out and let you know later on. Whether it’s public, maybe it is public, if you just go to Boston, I do think you have to sign up somewhere, and then you get an email invite.

Will Bachman 18:12
Okay, great. Well, I’ll take a look at that. We’ll include a link in the show notes. I’m curious, to what degree are you sort of having conversations with other media companies to find out, you know, other ideas that they’re doing, you know, you kind of like your Slack channel for small businesses. Pretty interesting idea. You know, other newspapers might do that. And now hometowns what, what sort of thing, kind of what kind of conductivity or is there with other newspaper companies.

Dhiraj Nayar 18:42
So we do have regular channel channels of communications with other papers. So for example, the Boston haps idea. My understanding was was replicated in in Dallas and Houston. So they reached out once they heard about it. And similarly, in terms of our, the Slack channel, I’m not sure but on the subscription side, we talk a lot to each other, what’s working what’s not. So what we’ve done is, unlike other companies, we’ve kept our subscription paywall up, but because we have boston.com for globe.com, we kept our subscription paywall up, but for boston.com and stat news, the Coronavirus coverage is free. So we feel we are covering the spectrum. Ultimately, we do need the revenue to for long term sustainability. And for us it’s like a happy middle ground where for one of our sites, the subscription. paywall is still up, but it’s at a much more discounted rate, but, but we are able to provide free services through other properties.

Will Bachman 19:50
Any observations or innovations that you’ve seen on the more business side on the advertising side of with your salespeople? We’re working remotely, how that’s impacted your ability to interact with the advertisers.

Dhiraj Nayar 20:06
So I think what what we’re seeing is that there is more happening in what we’re calling sponsored content. So in terms of engaging with the, the actual customers, rather than face to face, I think the switch to digital is not necessarily that that difficult. I mean, it does make closing the deal a little harder. But what what we’re seeing is from a product offering point of view, we are able to innovate and find buying products that are attractive to advertisers and customers. So one interesting thing about COVID-19 is that while digital site traffic is through the roof, advertisers don’t actually want to be associated with COVID-19, because they don’t really know if the story is positive, or how negative it is, right? So they don’t want their brand associated with something which could be potentially not pleasant. So what we started doing is we’ve started creating offerings that are positive and attractive to the, to the customers, for example, we just came out with issue last week called salute to nurses, which was essentially talking about the nurses and the frontline workers and how they’re contributing and sacrificing. And that got tremendous reception in the market. And, you know, advertisers were happy to, to participate in that product.

Will Bachman 21:36
Is that a common thing in the newspaper industry, where, you know, certain advertisers can specify what sorts of stories they want their content, next to?

Dhiraj Nayar 21:48
Yes, and it’s certainly in digital in particular, that’s the case because unlike print, where when you lay out, you can control and specify much more. In the digital world, a lot of the fulfillment happens really through spot auctions, right. And so you don’t know exactly where your ad is going, unless it’s a direct sort of sponsored content. So that’s where I don’t understand the full technicalities, but the advertiser can specify that I don’t want to be associated with anything related to x on the page. And that drives down the cpms, the cost, you know, cost per 1000. So the revenue we can generate. So traffic is up a lot, which is helpful in terms of pageviews. But then the the money you can make per impression goes down.

Will Bachman 22:37
That that sparks a question that I’ve been wondering about, which is, you know, you shared how your traffic is up. And across the board, you imagine that media consumption may be up with so many people working from home and, and on their phone or but then you also have been seeing so many stories of journalists on, you know, tweeting out that they just lost their job or furlough or so forth. What is it? Is it just that advertisers and the retail stores that advertise, you know, are pulling their ads or what’s going on with advertising? And why are so many media companies having to layoff journalists.

Dhiraj Nayar 23:18
So when you think of a typical media company, and I’ll talk about or about ours, but I think it’s representative of most of the traditional media companies, there are there are four core streams of broad buckets of revenue, there’s subscription, which can be print, and digital. There’s advertising, which is print and digital. And within that you have display in direct direct sold sponsored content, etc. There is a single copy sales at the retail stores. And then there’s commercial revenue, which for us means we print actually some of our competitors in the region. And we also distribute them. This also includes globe direct brand. So when you think about each of these, right for subscriptions, as I touched upon earlier, we actually seeing a spike in subscription. Some of it is driven through promotions, but we are certainly seeing a week on week increase in revenue, especially on the digital side. Paint is flat, which is which is good on advertising. The entire industry is taking a hit view advertising was going downwards even before COVID-19. So with the shift to digital, I think there’s a stat somewhere I forget from which research entity but advertising revenue for newspaper media companies have declined by more than 67% over the last, you know, 410 12 years, and it’s mostly driven by social and search taking most of the digital advertising revenue. So what’s happened with COVID-19 is certain areas like travel, arts and culture local businesses. cetera they virtually they disappeared. Right? So we are seeing some strength in pharma and health. But overall, the declines are double digits. And so our declines are similar to those in the industry. So subscriptions up or stable advertising down, single copy down a lot, because the locations are close and commercial revenues flattish, the volume fluctuates a little bit. So depending on what the mix of the media companies in terms of these revenue buckets, that’s where, you know, they can either whether this well or not. So, historically, the majority of the revenue for most media company comes from advertising. So if you haven’t made that transition, then you are in deep trouble, and you have to take action to conserve cash. And you know, that’s where the gods come in. For us. We are fortunate that outside of the really big nationals, I think we are one of the few players where subscriptions make up the majority of our revenue, and advertising and single copy, etc, are a minority. So we’re fortunate that we started this journey many years back, and we are we are better positioned to weather the storm.

Will Bachman 26:17
That’s good to hear. What what are some other things that you can tell me just about the business impact of the Coronavirus on, you know, how you expect immediate industry to change based on it.

Dhiraj Nayar 26:35
So, it’s been really interesting, because, you know, Boston Globe being hundreds of years, more than 100 years old, is considered an all media company or although we do have pure digital products, and until recently, with the proliferation of like free websites and digital natives, sites, right, the the story was, or at least the the buzz in the market was that the traditional media companies are toast. But over the last several years, people do want well researched stories, you know, they want fact based reporting. And so traditional media is making somewhat of a comeback. And it also happens most of the digital native sites were pretty much 100% advertising supported. Right? Many, most of them didn’t have a subscription model. So right now, what you’ll see is that the traditional media that made the switch to subscription, heavy versus advertising actually doing well and thriving. If you look at the New York Times, you know, that’s a public company. So the information is available, they having record subscriber growth, record revenue growth. And and many of the recent digital natives sites are actually having challenges now, doesn’t mean that you know, that things can’t change again. But right now, it looks like customers value, good fat weights and in depth reporting. So there’s an opportunity for us, we believe, to actually take advantage of the crisis and we are proactively looking into areas of investment. So while we are tightening our belt and hunkering down somewhat, we’ve certainly not stopped investing. And one example while it predates Coronavirus is last year, we decided to enter Rhode Island’s we opened a bureau in Providence. And that’s going well, because we felt there was an opportunity there because the local media market was shrinking a little bit and we didn’t, we thought we could take advantage. And in the year we’ve been there, our subscriptions are up 300% in their market. So we’re looking at other areas to everything there could be opportunity.

Will Bachman 28:57
Now, you are a former management consultant. Can you talk a little not you know, from a newspaper industry, and I think you did not really grow up is sort of in a finance organization. Could you talk a little bit about what the why you were brought into the Boston Globe media, and what sorts of you know, initiatives you’ve been you’ve been working on?

Dhiraj Nayar 29:19
Absolutely. So well, you know, as as I’m aware, and you are very familiar with the consulting model, my my journey is very similar to many of your members. So I was an engineer for undergrad in manufacturing, then got my MBA and went into consulting and started with big firm, then medium firm and then eventually had a boutique firm of my own. And I was actually doing work for the globe in the operational operational optimization area. And I had been working there for like six months, when they asked me to consider joining them. And, you know, I felt the opportunity was was good For me, because this is a mid sized companies, industry in turmoil, lots of change, management, transformation required part of what I was doing. So we came in, when I joined, essentially, the goal was to one, variable eyes, the cost, so reduce our fixed costs. So that’s an exercise we undertook, all the way from our content management platform, to looking at our resources and seeing where it made sense to outsource or keep things in house. So typical consulting work, you know, doing the analysis, understanding, what are the fixed costs? Where are the great cost buckets, looking at procurement, looking at the growth strategy stuff? So the initiative I talked about we actually strategic initiative, we spent time with HPS for three months thinking through, who do we want to be? Where do we want to go? So it’s been fun. More specifically, you know, a lot of it is block and tackle, bringing fiscal financial discipline to the internal organization. For me itself, it was a lot of learning. So certainly want to thank my team, because I’m not an accountant or a finance person by profession. So hiring the right people into the team, bringing a new Head ftdna Head, a new controller, putting the right team in place. So the budgeting, you know, not taking anything for granted zero based budgeting, questioning everything, earning the respect of the organization that they come to us versus us chasing them down. And just streamlining things, you know, that’s been the goal. And the good thing is, I think, if not for the COVID-19 curveball, most of our costs I transfer transformation was, you know, behind us, and we were really looking towards growth. And as I said, we still hope to be doing that. In the near future.

Will Bachman 31:58
You talked about learning new things, what is surprised you about the newspaper business?

Dhiraj Nayar 32:06
Well, I started from zero, right. So I really didn’t know much, I had done some work for Information Services, companies were very different b2b. So this being a consumer facing product, it was a learning just to understand that you earn your money, and you know, 10s, and 20s, or, you know, two bucks, or three bucks, not in 10s of 1000s, or hundreds of 1000s. And, and customer care, and customer engagement, customer retention, customer experience, all super important. And so interestingly, right now, customer service also reports to me, so when I listened to some of our customer calls, it’s interesting to see

32:53
how

Dhiraj Nayar 32:55
how have habitual customers are in certain things. And if something is often a little bit, or how passionate our customers are, if they don’t like something, they’ll reach out, if a paper is not delivered, you’ll hear from them. So I think one thing to understand was that the product, of course, is important, but also the customer engagement and understanding the customer is extremely important.

Will Bachman 33:20
Tell me a little bit about the the kind of the customer calls and the types of things you’ve learned from, from, you know, running customer service and hearing some of those calls.

Dhiraj Nayar 33:30
I mean, some of them, you know, you you may take for granted, but it’s almost an I’m actually surprised we still do that, because I used to live in New Jersey, and the people used to be thrown on the sidewalk somewhere. But in this area, historically, the delivery instructions can be so specific that it’s left at your doorstep, or it’s put in your mailbox. And if it’s not you hear from the customer. And you know, that’s the way we’ve been doing it. So we continue to do it, although I do think it’s, it’s not the most efficient way. But some of it is driven by our customer constraints. So you know, the things like that. It’s important. You also hear about topics you may have covered, right? So somebody says, Hey, he wrote an article about this, and this, I don’t like this, so I’m canceling the paper. So it’s you have a whole spectrum of things. And many of the calls are actually appreciative to talk about how well they like the coverage time. Thank you, thanking us, but I think like in most customer services, the majority of the people call when there’s an issue. So you have to make sure that the team is well trained and they are aware of the product. And yeah,

Will Bachman 34:46
fantastic. What What do you see looking ahead for the next few months.

Dhiraj Nayar 34:53
So in our from our point of view, and of course, I listened to all the economists and everything else, but Everything we can tell right now is we are projecting a U turn recovery. Right. So we are in our forecast and we’ve been doing forecasts every week we are projecting that second cue is going to be bad, which is the quarter we are in right now. Then starting in June, we’re projecting some stabilization, and then gradual uptick in September, October and then by by the fourth quarter, you know, that’s what we’re hoping that things will be at least getting back to some semblance of normalcy. But we fully appreciate that there’s a lot we can’t control. Right. So as we are reopening up, if there’s a relapse or resurgence and Coronavirus, infections, then all bets are off. So the way we’re looking at it is we keep on tweaking our forecast every week we listen to the economist for the banks are saying I get the reports. we tweak our models, we make sure we have sufficient cushion and beyond making investments that perhaps the return is going to be three years out. And we continue to look for optimization opportunities, because keep in mind, there are some structural changes underway in the media industry, independent of COVID-19. Right? So Brent is declining. We think it’s going to be a premium products and has years and years to live. But we you know, our goal is to make it as efficient as possible. So we’ll continue to do that independent of COVID-19 are not so that’s the way we are thinking.

Will Bachman 36:35
Fantastic. Well dhiraj This has been a fascinating conversation. People certainly know where they can go find the Boston Globe, but I will include the link in the show notes. Nevertheless, thanks so much for being on the show.

Dhiraj Nayar 36:49
Thanks for having me. Well, and for the audience, yes, do support us Boston globe.com or start news.com Talk to you soon.