Keeping up with the Times at the New York Times
In 2013 the average human attention span was found to be shorter than that of a goldfish. With an increasing availability of succinct, captivating, free content, consumers are increasingly less willing to pay for physical newspapers and online content. How will the New York Times remain relevant and profitable?
The New York Times
Founded in 1851, the New York Times is historically thought of as a newspaper. For over 150 years, the NYT has earned its keep by providing readers with high-quality, well-researched journalism. However, with the rise of the digital age, and a proliferation of free content, the U.S. newspaper industry has seen widespread bankruptcies and significant job losses. Only a few companies that focus on traditional print publications still exist [1]. The NYT, one of the few survivors, has been forced to reinvent itself as “a global media organization focused on creating, collecting, and distributing high-quality news and information” [2].
Challenges in the Digital Era
The New York Times considers its competitive edge to be the integrity of its journalism – content worth paying for. By attracting customers to its high-quality content, the NYT also serves as an attractive advertising platform. Among other things, the NYT is known for its captivating long-form articles. However, research shows that the digital lifestyle is decreasing our ability for prolonged focus, and increasing our appetites for more stimuli. In 2013 the average human attention span was found to be 8 seconds, shorter than that of a goldfish [4]. With an increasing availability of succinct, captivating, free content on sites like The Huffington Post and Buzz Feed, consumers are increasingly less willing to pay for 1) physical newspapers and 2) online content. These trends are apparent in the NYT’s recent earnings reports. From 2013 to 2015, the NYT’s number of weekday-only print subscriptions dropped 69% from 1.9 to 0.6 million [2,3].
Paid Digital Subscriptions
So, what is the New York Times doing to stay relevant, profitable, and true to their journalistic mission? In 2011, the NYT made a bold decision to charge for its digital content. After reading 20 articles per month, readers would be asked to pay a digital subscription fee for access to the full site. In 2015, the NYT reached 1.1 million digital-only subscribers with roughly $400 million in revenue coming from digital-only subscriptions and digital advertising. The company celebrates these numbers, but also realizes that they are not enough to sustain their extensive newsroom. The NYT has set forth a goal of reaching $800 million in digital-only subscription and advertising revenue by 2020 [5].
Opportunities: Mobile, Customization, and Content Creation
In 2014, the NYT launched NYT Now: a mobile app that offered a cheaper alternative to a full NYT subscription, specifically focused on younger, more smartphone-centric readers. The app was sold for $8 a month for a year, and signed up only 20,000 users, many who already had NYT subscriptions. After a year in operation, the app became free, and after two years, NYT Now shut down. Although the app did not yield a huge number of viewers, the NYT viewed it as valuable proof that the company could innovate quickly, communicate visually, and talk to readers in a more casual way, while still being The New York Times [6].
The NYT publishes over 300 articles, interactive stories, and blogposts per day. Digital consumption gives the NYT the opportunity to guide readers through a personalized experience, tailored to their reading habits and preferences. In 2015, the NYT altered its model to select content based on a reader’s preferences for article topics (ex: politics), rather than keywords (ex: Clinton), offering a similar proportion to what the reader has self-selected in the past (ex: 60% politics). These recommendations are reflected in personalized emails, and the “Recommended for You” section of NYTimes.com [7].
In addition to providing consumers with personalized, digital content, the NYT has made significant changes to what that content is. The NYT attempts to engage our ever-shortening attention spans through visual and video storytelling, daily briefings, live blogging, and analytical analysis. The NYT made a virtual reality app for Google Cardboard, and was awarded the top two places in Innovative Storytelling at the World Press Photo Multimedia Contest for VR films, “The Displaced” and “Greenland is Melting Away”.
What’s Next?
The New York Times has created a relatively fluid connection between print and digital media for those who subscribe to their digital service. However, the ultimate failure of NYTimes Now sends a resounding message that most millennials are not willing to pay for incrementally better news content. With half of their revenue coming from paid advertising, the NYT must maintain high readership to continue attracting advertisers. As we learned from Rdio’s failure, success in digital is a numbers game, and often a free tier is necessary to gain marketshare. The NYT should maintain its existing paid digital service for premium users (mostly Baby Boomers and Gen X) and release an advertising supported app aimed at millennials. The NYT must use digital technologies to optimize today and create tomorrow.
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Sources:
[1] Anthony, Scott, “What the Media Industry Can Teach Us About Digital Business Models,“ Harvard Business Review, June 10, 2015, https://hbr.org/2015/06/what-the-media-industry-can-teach-us-about-digital-business-models, accessed November 2016.
[2] New York Times Annual Earnings Report 2015, http://s1.q4cdn.com/156149269/files/doc_financials/annual/2015/Bookmarked-2015-Annual-Report.pdf, accessed November 2016.
[3] New York Times Annual Earnings Report 2013, http://s1.q4cdn.com/156149269/files/doc_financials/annual/2013/2013%20Annual%20Report.pdf, , accessed November 2016.
[4] Microsoft Canada, Consumer Insights, “Attention Spans,” Spring 2015, file:///C:/Users/RuthH/Downloads/microsoft-attention-spans-research-report.pdf, accessed November 2016.
[5] New York Times Executive Team, “Our Path Forward,” October 7, 2015, http://www.nytco.com/wp-content/uploads/Our-Path-Forward.pdf, accessed November 2016.
[6] Ellis, Justin, “A New NYT Now: All the aggregation you enjoyed before, now for free,” May 11, 2015, http://www.niemanlab.org/2015/05/a-new-nyt-now-all-the-aggregation-you-enjoyed-before-now-for-free/, accessed November 2016.
[7] Spangher, Alexander, “Building the Next New York Times Recommendation Engine,” August 11, 2015, http://open.blogs.nytimes.com/2015/08/11/building-the-next-new-york-times-recommendation-engine/, accessed November 2016.
I was an NYTNow loyalist for the couple years that it existed, and even in its demise it represented the best of NYT: a constant willingness to experiment and improve, to go directly to readers to test their products, and to unabashedly acknowledge when what they’re doing is no longer enough or no longer relevant. I am quite glad NYT is committed to living in the digital world, and I’ve enjoyed seeing them adapt their forms of content.
That said, I am wary of the usage of digital to personalize content or curate a newsfeed. The US learned an important lesson last week, that living in an echo chamber of media defeats the purpose of media in the first place, which is to represent a well-rounded and truthful view of the world that will make people actively think and question. I don’t think the NYT is there yet, as unlike Facebook, NYT seems to only curate based on topic (e.g., politics) rather than political view (e.g., pro-Clinton). One could also argue that the NYT itself is quite biased or narrow in perspective, so even if a reader got a random sampling, their views would not be broadened (a different discussion for a different post). However, I would warn the NYT as they move towards a more personalized content feed, to be quite cautious of the echo-chamber effect. Feeding us what we like may make them money, but feeding us what we need is critical to maintaining the integrity of a free and democratic media.
Despite being one of those millennials with a short time span, I actually caved a few years ago and paid for the full NYTimes online subscription. For me, it really was the “integrity of its journalism” and “content worth paying for” that got me to finally sign up. I like your suggestion of the NYTimes creating an advertising-supported app aimed at millennials. However, I’m wondering if enough millennials would sign up in order to maintain enough revenue from advertising, since it seems that millennials often turn to other sources for news, such as Twitter, Facebook, Buzzfeed, etc. Either way, I would love to see the NYTimes succeed and figure out a way to monetize in the digital world so that it can stick around for a while!
Great post, thank you! I echo the comments above — I too wrestle with wanting to support both the NYT brand and full-length article medium, while gravitating towards the pithier sound-bytes of the Twitterverse, etc.
While the NYT and its peers certainly have their work cut out for them in retaining customers via digital content, I also wonder if technology has helped them cut costs and streamline operations internally (and if not, whether there are opportunities to do so that could take off some of the digital subscription pressure and/or open them up to new revenue streams). For example, with respect to sourcing content, managing global communication, storing data, or even a customer relationship management platform that could improve their targeted advertising? I’m not sure whether content aggregation might risk exposing us to more snafus like the polling echo chamber of Election 2016, but I’m wondering if technology can serve as an opportunity for NYT to become a bit leaner and nimbler across the value chain. Especially since seems that recent cost reduction initiatives focus on decommissioning print operations (http://fortune.com/2016/04/26/nyt-print-cuts/).