the news frontier

You, Too, Can Own a Piece of The Onion

“America’s Finest News Source” is now franchising out its printing biz
December 7, 2010

After twenty-two years, The Onion has decided to both get out of the print business and double down on print at the same time.

The popular satirical newspaper and website has made the decision to franchise its print edition out to local partners. Franchisees will pay a weekly fee to license Onion content; they’ll sell their own ads, pay to print and distribute the papers, and keep the profits from the ads they sell. In turn, The Onion expands its readership and drives more readers to their ever-expanding website.

“It’s a win-win” deal, says Onion CEO Steve Hannah, but one that only recently started to make sense to him and his colleagues. Hannah says The Onion has received countless similar inquiries in the company’s twenty-two-year history. “We’ve always emphatically said no, because we’re incredibly protective of the Onion brand,” he says.

The Onion crew has protected that brand at each stage of its growth, maintaining the same sharp sensibility and a consistency of tone throughout its print and online text, in its bestselling books, and, most recently, the Peabody-award-winning and almost shockingly high-quality Onion News Network videos, produced daily. ONN is debuting two new weekly television shows in January: Onion SportsDome, an ESPN-SportsCenter parody, will air on Comedy Central; another one for the Independent Film Channel (IFC) will “look like Fox News on steroids,” as Hannah puts it. Both shows will also be available for viewing online after they air on television.* While just about every traditional news organization across the country was in the process of reimagining themselves as “multimedia content providers” rather than mere newspapers, The Onion is one fake news organization that was doing just that.

“We’ve never had an audience problem at all,” Hannah says. At the same time, though, the company’s print ad revenue has declined—and, as a result, the company’s rapid expansion sometimes couldn’t keep up with itself. In May 2009, it shut down its print editions in Los Angeles and San Francisco because of lack of advertising revenue. That prompted hysterical—but immediately denied—rumors that The Onion would stop printing altogether, a move that Hannah jokes would surely result in his “immediate assassination.”

“We have no intention of abandoning our print roots,” he says. “We think it’s a really great asset, it’s really complementary to what we do online, what we do on television, and probably what we’ll eventually do in the movie theater.” He adds that rather than “cannibalizing each other,” the print and web editions complement each other well. Web metrics show them there are more online readers in cities where the print papers are distributed for free. Likewise, they started to see how attractive it would be to bring their print editions to cities where they knew they already had a large online audience, without assuming the risk of operating remotely in a place where they didn’t already have relationships with local advertisers. Hence, the franchise.

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“What The Onion does best is produce content,” says Hannah. “So we said, ‘We’ll produce all the content—we have one hundred percent control over the content—and you people know how to run a business in your individual cities better than we do.’”

In exchange for a weekly licensing fee, franchisees and partners can choose from three bundles of content to sell print and geo-locational web ads against: the national “news” stories, the national A.V. Club section (consisting of non-satirical profiles and interviews with filmmakers, comedians, and musicians), and local A.V. Club listings (local events chosen and summarized by Onion-supervised editors and freelancers living in each city). But franchisees take those packages in an all-or-nothing agreement. They can’t touch the content; that’s the deal.

The first stage of the plan throughout this past year, of course, was to solicit media partnerships in the eight markets where they already distribute papers (always free, usually in boxes on the street or in bars and restaurants). The Chicago Tribune was the first big media property to respond, offering a logical partnership in a city where The Onion already has a large print circulation. Other papers followed within days: the Austin American-Statesman, the St. Paul Pioneer Press, the Wisconsin State Journal, and The Denver Post. (Similar deals in the remaining three markets—Milwaukee, Washington, D.C., and New York—will eventually follow, but are still in the talking phases.)

The second stage is to open the opportunity up to potential franchisees in new markets, where The Onion hasn’t yet appeared in print. According to COO Michael McAvoy, the most appealing markets for print expansion would be either large cities or state capitals where already gets a lot of web traffic (places like Seattle, Portland, and Columbus), or smaller cities with a lot of young people per capita because of colleges and universities (like Knoxville and Lexington). The new franchisees who sign on could be other existing newspapers, or—enticingly—individuals looking to get into business with their favorite satirical news source.

Partnering with existing media organizations was “a logical first step,” McAvoy says. Newspapers already have the financial and logistical advantages of distribution deals and sales forces in place, not to mention printing presses. “But from there we love the idea of launching new cities with a couple people who are fresh out of school, or who have been in the print business before. All those things sound great to us, as long as they are Onion fans and they want to protect the brand and build a good business.”

A press release of sorts, written in the character of “H. Cuthbert Zweibel, VP of Client Relations,” describes The Onion’s core audience to its potential franchise owners:

The typical Onion reader tends to be an almost insufferably literate and unbearably thoughtful type, the sort of person whose emotional shortcomings render them unable to face the world without filtering it through a veil of sarcasm. These spiritual cripples refer to this escapist defense mechanism as a “sense of humor,” and if they were not willing to throw money around with remarkable abandon, they would be utterly useless.

If that describes the average citizen of your almost intolerably vibrant community, you now have a chance to bleed them of cash until they are dried and withered hipster husks.

(A more straightforward, unironic FAQ is also available on the same site, for the curious.) McAvoy says they have already received hundreds of applications from all over the country, which they will begin to look through in the coming months. Those who are eventually chosen as new franchisees will be brought in for a week-long training course in Chicago. There they will learn the particulars of everything from negotiating a printing contract to running Onion-sponsored promotional events.

Hannah says he’s confident about this new venture, and confident they’ll get strong candidates to protect and expand The Onion’s brand. “It’s preferable if you know the publishing business, obviously,” he says. “But this is not rocket science. It’s sales, and then it’s printing and distribution. The most important thing is to find the right people to sell it. The right people will ‘get the joke.’”

*Update: This post originally stated that full episodes of both of The Onion‘s television programs would be available for free viewing online. The IFC program will only appear online for free in selected clips; full episodes will be available for purchase through iTunes and Amazon. The error has been corrected.

Lauren Kirchner is a freelance writer covering digital security for CJR. Find her on Twitter at @lkirchner