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September/October 2018
The premier resource for insight, analysis and technology
integration in newspaper and hybrid operations and production.
Since last year, the publisher has been using SendtoNews’ Smart Match,
Photo: NYDN
an AI-powered video player feature. The paper has automated the process
of publishing sports-related video content, and as a result, seen an uptick in
sports video consumption since the implementation of Smart Match, accord-
ing to STN. The vendor said NYDN has seen more than a 30 percent increase
in both page views and unique viewers.
Unfortunately for the NYDN, automation has become more of a necessity
than a luxury. In July 2018, the paper’s new owner Tronc slashed the sports
staff by 70 percent — part of a 50 percent cut to the paper’s overall editorial
staff. Prior to those cuts, the staff was at 32, and in its heyday NYDN had
about 100 people on its reporting team.
“At this point we aren’t generating the same amount of content as we were,
but we are still digging out of a huge hole trying to cover New York City sports
with a team of nine,” said Andy Clayton, senior content editor, digital sports
for the Daily News. “Smart Match helps to make that more manageable.”
NYDN began using SendtoNews’ Smart Match AI technology for sports video content last year. Automating a manual process
Although NYDN already used SendtoNews’ sports video player prior to im-
AI seems to be making inroads everywhere and newspapers are no ex-
plementing the vendor’s newer AI-powered tech, adding video to sports con-
ception. The New York Daily News is among the publishers to embrace the
tent was a fairly manual process. Before Smart Match, which STN released
technology, in its case, leveraging AI technology to provide video coverage of
New York sports teams to its approximately 200,000 daily readers. NY Daily News continued on page 9
Augmented reality is becoming a huge tool in teams prepare it for liftoff, and then actually launch
how today’s journalists tell a story because it offers the rocket in AR. Finally, users can follow as the
readers what traditional print does not. If a picture rocket’s first stage comes back to land. The app’s
is worth a thousand words, then how many words second section, and perhaps its core feature, is all
is augmented reality worth? of the above, but in real time as a rocket launches
That concept is put to the test by Florida Today from Cape Canaveral,” he said.
with their newly released app 321 Launch. The Kelly explained that by using past data, a trajec-
app uses augmented reality to bring live coverage tory can be built for the live rocket launch. The app
of rockets launching out of Cape performs with “down-to-the-second” accuracy.
Canaveral. Florida Today part- “This app is the first of its kind for journalism.
nered with USA Today to develop No other spaceflight, science, or even national
Turn to the app. It’s available to both iOS
and Android users.
publication has attempted to merge real-time hap-
penings with augmented reality. The best part,
page 37 “It’s divided into two parts,” said
Emre Kelly, space reporter at Flori-
though, is that 321 Launch still incorporates our
traditional journalism into the stream,” Kelly said.
for expanded da Today. “First, a narrated educa- “AR, whether seeing it as a stepping stone to VR, or
industry tional experience that allows users
to take a SpaceX Falcon 9 rocket
a different technology for different uses, is already
impacting journalism. It opens up more opportuni-
coverage to the pad, learn more about how Florida Today continued on page 5
2 t
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One of the biggest stories in the newspaper industry recently, the U.S. and our new business initiatives, UpCurve, GateHouse Live and Promotions,
International Trade Commission’s cancellation of tariffs hitting newsprint, performed extremely well. On the inorganic growth side, we closed four
broke on Aug. 29, well after major newspaper chains released their second transactions in our acquisition pipeline that totaled nearly $118 million in
quarter results. purchase price and our pipeline remains strong,” he said.
The industry is currently seeing a number of papers cut staff, print days or “We are thrilled with the exceptional growth trends achieved within our
pages, with many attributing their decisions to the cost of newsprint rising business initiatives. UpCurve revenue grew 47.2% over prior year, exclud-
by as much as 30 percent. Not surprisingly, the rising cost of newsprint was ing the impact of ASC 606. ThriveHive had significant wins within the auto-
cited in all the quarterly reports mentioned below. motive customer vertical, accelerated by our recent acquisition of Online
Beyond the tariff issue, the second quarter numbers reflect a familiar trend: Automotive Solutions and its tech-enabled video and data products. On
print ad and circulation revenue down, digital growing, but not as robustly the events front, both GateHouse Live and Promotions had revenue growth
as some in the industry had looked for. “After reporting Q2 earnings results, exceeding 65% over the prior year. May and June are very busy months for
it became glaringly obvious that the Times' biggest growth driver — its digital us, especially for our Best of Preps events, which celebrate outstanding high
business — isn't growing quite as quickly as investors would have hoped,” school athletes.
wrote Gary Alexander at Seeking Alpha of The New York Times. “With our four newspaper acquisitions closed in the quarter, our total ac-
“Most of the chains find themselves slipping farther and farther from rev- quisitions for the year are now in excess of $133 million. These new markets
enue growth. This headline number tells you that digital initiatives simply are all great additions to our portfolio, are within our acquisition criteria and
are not making up for overall print revenue losses,” wrote Ken Doctor in his valuation expectations, and are expected to drive further growth potential
Newsonomics column at niemanlab.org. for our new business initiatives.”
Below are a few points from the quarterly reports. The companies don’t
report uniformly, so the information differs from company to company. Com- McClatchy
ments from the companies’ leaders touting high points, special projects and McClatchy, which operates major local media companies in 30 U.S. mar-
acquisitions follow the numbers. kets, saw digital-only subscribers grow 34.5 percent to 122,400 as of the end
of the second quarter.
Gannett Audience revenues were $84.8 million, down 5.7 percent in the second
Gannett, parent of USA Today and owner of 109 local media properties, saw quarter compared to the same period in 2017, reflecting declines in print
digital-only subscriber volumes grow 46 percent year-over-year to total ap- subscribers.
proximately 413,000. Total advertising revenues were $107 million, down 14.6 percent in
The company saw same-store print ad revenues fall 19.1 percent for Q2 the second quarter of 2018 compared to the second quarter of 2017. The
2018 vs. Q2 2017, which Gannett partly attributed to the date of Easter. rate of decline in total advertising revenues in the second quarter reflects a
Same-store operating revenues declined 7.5 percent year-over-year, con- sequential improvement from the first quarter of 2018 of 2.1 percent due to
sistent with the first quarter decline of 7.2 percent, the company said. Same the improvements
store circulation revenues fell 5.0 percent from the prior year quarter, con- “In the 2018 second quarter, newspaper-industry headwinds continued
sistent with the first quarter trend. but nonetheless our digital transformation progressed despite these industry
“We are excited by the continued momentum in our digital business challenges,” said CEO Craig Forman in the July 27 earnings release.
driven by strong growth in our marketing services and national media busi- “We saw many areas of sequential improvement: our total digital advertis-
nesses,” said CEO Robert J. Dickey in the Aug. 9 earnings release. “On July ing revenues were up almost 8%, while our digital-only advertising revenues
2nd, we successfully closed the WordStream acquisition, which adds more grew more than 20%. In the first quarter of 2018 we achieved a milestone in
software-as-a-service solutions to our digital marketing services product our digital transformation that was repeated in the second quarter: total digi-
portfolio and will further propel our digital transformation that is already tal advertising revenues exceeded our print newspaper advertising revenues
well underway.” and that trend accelerated in the quarter just ended. Indeed, in May and June
“The strong margin improvement at our ReachLocal segment and the con- we met another milestone: our digital-only advertising revenues exceeded
tinued focus on driving efficiencies within our publishing and corporate our print newspaper advertising revenues. Finally, while print advertising
operations reflect strong execution on our objectives,” said Ali Engel, senior was down double digits, even in this hard-hit category, we saw improvement
vice president and chief financial officer. in the trend of our print advertising business in almost all categories.”
Forman continued, “We are gratified to have completed the refinancing
GateHouse Media (New Media Investment Group) of the vast majority of our debt earlier this month, which provides us more
GateHouse, publisher of 145 daily newspapers, 340 community publica- runway for our digital transformation,” he said.
tions and more than 570 local market websites, saw its digital-only subscrip-
tion base in Q2 grow to 121,300. That includes 32,200 digital-only subscrib- Tronc
ers from 2018 acquisitions. Excluding those acquired digital subscribers, Headquartered in Chicago, tronc operates newsrooms in ten markets with
“our growth in this category was strong at 51.9%,” the company says. titles including the Chicago Tribune, New York Daily News and The Balti-
The company saw same-store print ad revenues fall 13.3 percent for Q2 more Sun.
2018 vs. Q2 2017. Total revenues (same-store), Q2 2018 compared to Q2 Digital-only subscribers increased 89 percent to 212,000 at the end of
2017 were down 4.9 percent. Circulation revenue declined 2.1 percent on the second quarter 2018, up from 112,000 at the end of the second quarter
a same-store basis. 2017.
“The second quarter performed well across many areas of our business Second quarter 2018 total advertising revenue and digital advertising reve-
plan,” said Michael E. Reed, New Media CEO, in the Aug. 2 earnings re- nue were $111.8 million and $24.0 million, respectively, which includes the
lease. “We had a good revenue quarter, a very strong acquisition quarter, Q2 earnings snapshot continued on page 26
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ties to tell stories. Journalists did it with photography, then with radio, then work to develop the app. We also compiled trajectory information with out-
with video. Why not AR?” said Kelly. side help so our AR rocket would accurately fly to its destination in real-
Given that 321 Launch is in the vanguard in fusing these two types of sto- time,” Kelly said.
rytelling, Florida Today did not have a template to go off of during develop- Currently, the app has about 100,000 downloads, and costs nothing to
ment. Their relationship with USA Today allowed them an ample-sized team users. According to Kelly, Florida Today is still developing new educational
of individuals dedicated to creating the app. According to Kelly, the team features for the app. They are also planning on adding more rockets to the
twice toured Kennedy Space Center and Cape Canaveral Air Force Station to inventory of available live experiences.
get an understanding of how to incorporate AR. “As for what people take away, I hope they see we tried something new —
“The development team, most of which is made up of former game devel- something that involved heavy investments of time and resources. It hasn’t
opers, already knew how to code and design for AR. We used our in-house been perfect, but it’s been incredible and the overall reception we’ve received
knowledge of rocketry, commercial launch companies and how launches from this tech-savvy, space-loving audience has been positive,” said Kelly. p
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“If Alden isn’t willing to do good journalism here, it should sell The Post to
on Sept. 10, bringing to fruition plans former owners who will,” the editorial pleaded.
Denver Post Editors Larry Ryckman and Dana Alden subsequently issued orders that writers and editors were not to use
Coffield first announced in June. Ryckman the hedge fund’s name in copy about the layoffs, and Plunkett resigned in
and Coffield left The Post in March after owner May. Ryckman followed.
Digital First Media’s hedge fund owner Alden
Global Capital ordered the paper’s already dec- Aiming for deeper coverage
imated newsroom to cut one-third of its staff. The all-digital Sun, which has been publishing a newsletter dubbed The
“Today is the day we’ve been working to- Sunriser in the months leading up to the launch, is dedicated to in-depth
ward, fretting about and imagining,” Ryckman journalism that spans the state. “The Post was no longer able to do the deep
The Sun’s Editor Larry Ryckman
left his post as Denver Post wrote in a welcome letter to readers. He con- reporting the community deserves,” Ryckman told News & Tech.
editor in March. cluded the letter with, “Here comes The Sun.” While Ryckman believes other Colorado journalists are doing a great job,
The Sun marks the first success story of a he said cutbacks have made it impossible to achieve the level of reporting
news organization meant to fill a void in news the state deserves.
coverage that the Mile High City has seen “We are aimed at watchdog, investigative, deep-dive journalism — the
worsen over the past decade. That void began type of journalism that promotes understanding in Colorado,” he said. “We
when the Rocky Mountain News published its aren’t covering the Broncos or basic crime news, but we might write about
final edition on February 27, 2009. While there the intersecting of sports and society, or why the murder rate is increasing in
were hopes of a Rocky revival, first in print and Denver, for example.”
then online, neither came to fruition. Not everything will be a 100-inch story, but everything will be written to
Denver eventually embraced being a one-newspaper city, however, The have an impact, according to Ryckman.
Post’s newsroom has faced substantial cuts year after year. The paper’s news- “What we say is that we intend to break news, but not do breaking news.”
room, which once employed close to 300 journalists, is now down to approx- Case in point: The Sun in August broke a story about Colorado State Uni-
imately 60, according to Ryckman. When the last cuts were handed down versity’s resignation from a controversial research project in partnership with
in March, the remaining staff wanted to take action. On April 6, Post Editor the Bureau of Land Management. The project involved the sterilization of
Chuck Plunkett published an editorial calling for Alden to sell the paper. Colorado Sun continued on page 8
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Colorado Sun from page 6 approached Ryckman. The company uses block- ally Ryckman said The Sun will offer monthly
wild horses across the West in an effort to con- chain and cryptocurrency technologies with a subscription options ranging from $5-$30, with
trol their population. The story was subsequently goal of launching more than 1,000 publications increasing levels of access and perks.
picked up by The (Fort Collins) Coloradoan. by the end of the year. Although The Sun currently has no plans for
“They asked me if I would be interested in a print product, Ryckman said the news out-
The business model brainstorming what a new news organization let wouldn’t rule that out if it made economic
The Sun is journalist-owned — with Ryckman at might look like,” he said. sense.
its helm as editor — and community supported. The Sun has found its footing, and thanks to “We will be whatever Colorado needs us to
Besides Ryckman and Coffield, The Sun has eight Civil’s deep pockets, Ryckman feels confident the be,” he added. “We know how to put out a news-
other former Post employees on staff full time and news organization has enough runway to make paper or magazine and we all have great experi-
it also relies on freelance journalists. But Ryck- its case with readers. The Sun will not accept ad- ence in the publishing world.”
man is quick to point out that the mission is not vertising, but it is accepting sponsorships, similar The staff is excited about the future, whatever
about the journalists. to the model of a public radio station. it brings.
“This isn’t about us providing jobs,” he said. “For those that want to sponsor us, we accept “It’s been a wild ride what’s happened to news-
“We created this to serve the community and I that with the understanding that we will not write papers,” Ryckman said. “It’s risky to start some-
think people get that — and they are very enthu- about, or avoid writing about you, based on that thing new, but it’s far less risky than it was to stay
siastic.” sponsorship,” Ryckman said. “We just don’t be- employed by Alden Capital. The future seemed
The Sun’s journalist owners know the risks of lieve that advertising is the answer. Once upon a pretty dark.”
the startup, but early support has been a positive time it sustained newspapers and news organi- Recently Ryckman had the opportunity to ad-
indication that the news site is poised for long- zations, but that is getting tougher and tougher dress The Denver Film Society at a showing of “All
term success. A well-received Kickstarter cam- every day.” The President’s Men,” which famously chronicles
paign raised much more than expected — over Furthermore, Ryckman said The Sun’s success the investigative reporting of Washington Post re-
$161,000 — proving to Ryckman and his team depends on providing a positive reader experi- porters Bob Woodward and Carl Bernstein during
that the state is hungry for higher-quality journal- ence. the Watergate scandal.
ism. “Ads divert attention and alienate the readers “We are in a time where people realize that
“We had one woman send us a check for we are trying to attract,” he added. “We don’t independent journalism is important,” he said. “I
$1,000 and in the memo she wrote, ‘Bless your want to throw obstacles in the way in order to am optimistic about the future — and this is the
hearts,’” he said. “Between the News and The make a few bucks.” first time in a long time that I could say that about
Post, we once had 500-600 journalists in the state The Sun will also count on readers for financial my business. I feel like we have a fighting chance;
of Colorado and people are frustrated at the lack support, but it first wants readers to get to know we are masters of our own destiny and can make
of news coverage.” and trust its journalism. Initially, stories will be our case to the people of Colorado.” p
In late March, New York startup company Civil, available without a subscription, and eventu-
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marc... my words
Will weekly newspapers work in markets ments a community’s life and identifies its issues, while providing advertising
long served by now struggling daily newspapers? that connects consumers with local businesses.”
Would local ownership of a newspaper overcome I agree.
the problems caused by absentee ownership? I think there remains a demand in most communities for a good newspa-
“(A) new media baron has emerged in the Unit- per, whether weekly or daily.
ed States,” says a report issued by the School of But it’s far from easy or without great risk.
Media and Journalism at the University of North Too many journalist lack business skills. A newspaper is one part journal-
Carolina at Chapel Hill. “Private equity funds, ism and one part business — parts that can conflict with each other.
hedge funds and other newly formed investment I was a fool when I bought a weekly newspaper.
partnerships have swooped in to buy — and ac- I had intentionally skipped the advertising courses at my journalism school
tively manage — newspapers all over the country. These new owners… mis- because I thought advertising was the “dark side.” My journalism education
sion is to make money for their investors, so they operate with a short-term, served me well as a reporter at three daily newspapers and five bureaus of
earnings-first focus and are prepared to get rid of any holdings — includ- The Associated Press.
ing newspapers — that fail to produce what they judge to be an adequate But I had no clue about how to run a business or sell advertising.
profit.” In 1983, when I became editor-publisher-janitor of the weekly Bigfork
In many communities, the era of the new media baron is failing. Eagle, I also became the only ad sales person. I had to sell advertising or our
Newsroom staffs have been cut in half or worse. Cost-cutting has become investment would be lost.
the main, if not sole, method of generating profits. So, many newspapers So — with the help of the local merchants who wanted an advertising me-
have become less competitive at a time when media competition from digi- dium in town — I learned how to sell and produce ads at the same time that
tal companies is increasing manyfold. I covered local government, sporting events and learned how to run a “wet”
Is this current time of stress an opportunity? An opportunity for local own- darkroom, roll film, and run a little business.
ers to start weekly newspapers (with strong digital products) to fill the ever- I became a workaholic and did whatever I had to do to be successful — or
increasing void left in the wake of declining daily newspapers? at least to survive.
Owning, operating and financing your own weekly newspaper is a mas- My wife, also a journalist, was a critical player. She did most of the editing
sive challenge. and layout of the content, and did some reporting. We had two other full-
I know. I ran my own weekly newspaper for 14 years in rural Montana. time employees, and a part-time sports writer. Our circulation was 1,900.
Quite frankly, I’m not suggesting there’s much hope for weeklies in many We four times won the honor as the top weekly in Montana.
rural communities anymore. The Age of Amazon has destroyed many of the I served on the chamber board, served two terms as president of the local
businesses that advertised in the weekly I owned. My newspaper carried economic development board, and became a Mason (because my biggest
ads from a hardware store, a book store, travel agency, auto parts store, shoe advertiser asked me to).
store, department store and other stores that are long closed because they When I first arrived in Bigfork, the local Lions club invited me to dinner
couldn’t compete with prices and services offered by Amazon, big box stores on a Monday night. At the end of the dinner they asked me to join. I said I
and other competitors. couldn’t because their meetings were on Monday nights, our main produc-
But I wonder if there isn’t an opportunity to run weeklies in smaller and tion night.
medium-size cities that have long been served by now struggling dailies. “What night would you like us to meet?” they asked.
The private equity funds and hedge funds that own many small dailies “I couldn’t ask you to change your meeting night just for me.”
have often damaged the local long-serving daily. Readers notice when night “We’re all retired. We can meet anytime you want,” they said.
sports scores aren’t carried in the paper because deadlines have been moved So, I became a Lion. They changed their meeting nights to Wednesday.
up so early. They know when reporters aren’t covering city council, planning I did whatever I had to do to be successful. That meant 80-hour weeks and
board, sewer board and other meetings. They notice that the courts, police no vacations except the annual press association three-day convention.
and fire departments aren’t covered adequately. They know that local break- So I know it’s hard. Probably harder today even than back in the 1980s
ing news often isn’t adequately covered. and 1990s, although today’s technology makes it far easier to produce both
Local readers know when their local newspaper is becoming a shadow of print and digital products.
its former self. The bottom line is: There remains a need — a demand — for local journal-
And they drop their subscriptions. And advertisers lose respect for the ism, both for the good of the community and American democracy.
newspaper, and drop or reduce their advertising. I’m convinced that local ownership and management make a difference.
Absentee owners respond to the reduced subscriptions and advertising by To start your own weekly, you’d need a strong business plan, including ad-
cutting costs, which triggers more losses of readers and advertisers. equate financing. You’d need solid commitments from local merchants that
A true vicious cycle that has damaged an entire industry and cost thou- they’d support a strong weekly or twice-weekly. You’d need ownership that
sands of journalists their jobs. is equal parts of journalism and advertising and business smarts.
So, back to my earlier question: Can local journalists and investors start There’s certainly plenty of stress these days.
and successfully operate weekly or twice- or thrice-weekly newspapers in Stress creates opportunity. p
markets once served by dailies?
The UNC report noted, “Without significant fresh investment, the bond Marc Wilson is founder and executive chairman of TownNews. He’s also author of the
between newspapers and their readers and advertisers will erode. Strong recently published book, Kidnapped by Columbus, published by Floricanto Press.
newspapers enhance the quality of life by producing journalism that docu-
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News & Tech September/October 2018 u 11
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Worldwide Market
for Print 2.0
u by Kirsten Staples Contributing Writer
The Worldwide Market for Print, a study published by NPES and VDMA
and produced in collaboration with The Economist Intelligence Unit, was re-
leased for purchase in November 2017. Building on previous studies, the re-
port outlined projected results for “Global Opportunities in Publishing Printing
and Marketing and Commercial Printing 2012–2021.”
NPES is the former name of the Virginia-based Association for Print Tech-
nologies (APTech). VDMA is the Verband Deutscher Maschinenund Anlagen-
bau, the German Mechanical Engineering Association. The Printing and Paper
Technology Association within the VDMA handled this report.
The study was conducted over 26 countries, which were selected based on
size and importance within the printing industry, in addition to their likelihood
for growth. The scope of the study represents about 80 percent of global GDP
and 70 percent of the world’s population.
The study found that as of 2017, the top five markets for publishing printing
were China, the U.S., Japan, the U.K. and France.
“Asia-Pacific is by far the largest publishing printing market in the world,
accounting for 51.5% of the total market in 2016. It is the only region that pre-
sented positive average annual growth in 2012–16,” the study says.
One of the key points from the study outlines the difficulties faced by print
Ron Ehrhardt industries as many consumers move to digital platforms.
ron.ehrhardt@dcos.se “All major magazines and newspapers now have online content, and some
717 329 4231 have completely moved online, removing print from their portfolio altogether.
This trend will continue, and magazine printing and newspaper printing will
decline by an annual average of 2.3% and 2%, respectively, in 2017–21,” says
the report.
The study showed that both magazines and newspapers are seeing a steady
decline, newspapers even more so. When it comes to print, newspapers and
Community Impact Newspaper, based in The company opened a $10 million printing fa-
Pflugerville, Texas, has launched a number of pa- cility in 2016 next to its Pflugerville headquarters.
pers in the last year to bring the chain’s count to Jennifer Garrett’s interior design background was
27 papers in total by the end of September. put to use in the company’s workspace designs, so
The expanding company says it’s restructured journalists used to dusty old newsrooms might be
an antiquated model — the community newspa- surprised at what they see.
per — and “turned it into an essential tool by pro- The company’s newspaper model stresses use-
viding readers with useful, informative news.” ful news and a serious commitment to graphic de-
The free papers featuring hyperlocal content sign and rich infographics, says John Garrett, who
have websites for daily updates and a print edition spent time on the business side at the Houston
that’s mailed once a month to area readers. The Chronicle and the Austin Business Journal. “The
papers are almost 100 percent advertising driven, quality of the design really shines,” he says.
says Community Impact Newspaper co-owner The company aims to compete with “the
John Garrett. Googles and the Facebooks,” John Garrett says.
Recent launches cover Lewisville, Flower Its recent launch in Richardson, Texas, repre-
Mound and Highland Village, in the Dallas-Fort sents the company’s sixth edition in the Dallas/
Worth metro; New Braunfels, Texas; Clear Lake, Fort Worth area.
League City and Nassau Bay, in the Houston metro “The residents and business owners of Rich-
area; and most recently Richardson, in the Dallas- ardson deserve to have someone covering their
Fort Worth metro area; and Gilbert, Arizona, in city in a way that is unbiased and informative,”
the Phoenix metro area. said Christal Howard, the company’s Dallas/Fort
Owners John and Jennifer Garrett started the John and Jennifer Garrett at the launch party for Worth publisher. “We believe not just in covering
first edition of Community Impact Newspaper community Impact Newspaper's edition in New the important, newsworthy happenings; we be-
Braunfels, Texas.
in 2005 with three full-time employees covering lieve in showing up. You’ll see us all around town
Photo: Community Impact Newspaper
Round Rock and Pflugerville. The company has and at city council and school board meetings. It’s
no other investors, John Garrett says. Unlike some doesn’t rely on freelancers, but on a staff of some a responsibility we are humbled to take on and
outlets with a hyperlocal focus, the company 50 journalists and editors, Garrett says. don’t take lightly.” p
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