Re-inventing NYT: Impact of digitalization on news media

Student comments on Re-inventing NYT: Impact of digitalization on news media

1. November 20, 2017 Alec Guzov says:

   Great article! I think that the content-focused investments that NYT has pursued (TheSkimm, The Wirecutter) are smart moves, and likely point toward a logical next step for the company (as opposed to attempting to compete in technology/hardware, where NYT does not have a core competency). Similar to the model pursued by HBO, where they own premium content (which drives viewership), NYT can continue to be demanded on any platform, regardless of the form of distribution. The ability to engage with consumers, whether through NYT’s core product or through niche newsletters, is a differentiator that Amazon or a technology company cannot automate given the need for talent in journalism and content curation.
2. November 21, 2017 Andrew C says:

   Interesting read! I agree with you and Alec that the NYT should not attempt to build technology hardware as it is far from their areas of core competence. That said, I believe the NYT can continue to be successful without going into hardware by continuing to have a distinctive voice that is valued by consumers. This voice will continued to be valued no matter the format that people consume it, similar to how musicians / artists are still able to monetize their content whether it is sold on a CD or listened to via Pandora or Spotify. That said, advertising in an age of connected devices where the news is being read to us will present some unique challenges for the NYT. However, I do not believe these challenges are unprecedented – they should be able to incorporate audio advertisements like those heard on the free version of Pandora. Tactically speaking, if Alexa will read news to people in the future via the NYT Alexa app, the NYT should insert an advertisement between each article, unless that listener is a premium subscriber.

   To answer your second question, I think a move to a purely subscription based revenue model would be pre-mature at best and crippling at worst. I think the Rdio case offers two useful lessons here, specifically: i) some consumers don’t mind listening to advertisements and ii) there is value in having scale of distribution, to help defray the cost of content.

   I am bullish on the NYT’s ability to continue to monetize its content, but believe that local newspapers will continue to consolidate as they lack the scale and wherewithal to effectively distribute their content on the latest platforms (e.g., Alexa or Google Home), similar to how they have struggled to remain relevant on Facebook.
3. November 28, 2017 BC says:

   Great article! News media publishers have arguably been one of the most impacted players in the recent trend of digitization. It is clear that the NYT has recognized the severity of this issue, as demonstrated by their investment in a ‘digital innovation’ task force. As I analyze my own consumption of media, I wonder if the NYT has considered embracing user generated content. New platforms such a Medium have enable ‘everyone’ to become a content creator and engage with the ideas of others. As an existing news media site, what role could the NYT have in creating a NYT facilitated user forum? NYT may have a unique advantage over new entrants that don’t have the reach or brand recognition. The NYT will need to continue to redefine its business model and push the boundary of traditional media to stay relevant into today’s age of digitization.
4. November 28, 2017 Danny Clark says:

   Interesting read! I agree with your assessment and the assessments of others that the NYT lacks a core competency outside of creating content, which is simultaneously empowering – as Alec points out, Amazon or others cannot imitate or automate this talent – and limiting – as NYT will be unable to compete seamlessly in every new medium that people use to get their information.

   I think above all else, the NYT’s objective should be to create a product so essential to its consumers that they are willing to pay a subscription fee for the core offering of print journalism. The fun part is how to get readers “hooked” and moving down the funnel towards becoming a subscriber. Apart from cranking out top-notch journalism (a constant preoccupation), I’ve really enjoyed how the Times has started to experiment with format and delivery to adapt to evolving user tastes. For instance, NYT’s “The Daily” podcast is one of the top podcasts in terms of subscribers, and blends a combination of quick hit updates on top stories with a deeper dive into a matter of journalistic importance – all over the course of 20-25 minutes each day. It’s success makes me think about other formats that NYT could use to package and deliver its distinctive brand of journalism to meet consumers in the middle – television, film, documentary, newsletters (a la Politico Playbook). Clearly they’re already thinking about a lot of this, and it will be interesting to see how it evolves in the future.
5. November 29, 2017 yoyo0808 says:

   Thanks for the interesting read. For media companies like the NYT, producing and owning quality content is critical, and with the advent of IoT and the different platforms on which content is consumed, it’s really important for these media companies to also make sure they are 1) staying on top of the trends in how and where people are consuming content, and 2) making sure they have a presence on those different platforms. In the Alexa example, it’s unlikely that Amazon could ever fully replicate the quality and depth of the NYT’s content, but it remains to the NYT to make sure they’re staying in the game by delivering content through the right channels (e.g., email, mobile, smart devices) and in the right format (e.g., video).
6. December 1, 2017 SW says:

   I agree with the previous commenters that as the NYT I would not invest in a tech company. However, I do believe it would be smart for the NYT to partner with some of them. In the age of digital media, information – including “fake news” – travels very fast and is available almost instantaneously and ubiquitously. In such an environment even Facebook becomes a competitor for a news outlet – as far as the pure provision of information is concerned. This is why the key differentiator for a publication like the NYT has to be high-quality content. However, I believe that newspapers should continuously innovate, to make that content conveniently available (most of us now consume news on the go, on our mobile phones) and innovative using new ways to communicate. The NYT has done this for example by introducing more and more interactive exhibits, 360 degree pictures, or its daily podcast. In the future, it is likely that we will also consume news using AR and/or VR technology for instance. The NYT should partner with tech companies and use these kinds of technological innovations to enhance what it is already best at: producing content.
7. December 1, 2017 Laura Oller says:

   Interesting article! And interesting to follow how NYT will respond to such a disruption in its industry! My guess is that they have to double down on their core competence, the production of content. If on one hand they now have less control over the means through which their content is shared and monetized, on the other fake news and the abundance of information, which makes it harder to understand which content is actually relevant, strengthen the power of their brand. I don’t see NYT becoming a hardware company to find space in people’s homes, and with the shared economy and spread of the digital world, I believe it will be harder and harder to prevent leakages from subscription models.
8. December 1, 2017 Tender Greens says:

   Thanks for the article. What differentiates NYT as a news organization is its brand, quality of content, editorial voice, and credibility to the public. As a content creator, it needs to reach its audience where they are, through a diversified distribution strategy – whether it is mobile, internet, podcast, or connected devices, the latter of which is just another distribution channel. In fact, NYT shouldn’t see connected devices as a threat, they should partner with them instead to further augment its distribution. The evolution of NYT going from print to digital media is crucial for its survival, because it needs to create content for its digital-first customers. Staying innovative with content creation and distribution is what NYT should focus on, not developing or acquiring hard tech.
9. December 1, 2017 Point A to Point B says:

   Shruti,

   Thanks for the exposition on The New York Times and its future.

   Your second question around what is the appropriate business model for the newspaper going forward is quite interesting to me. As a first step, it might be helpful to visualize what the world will look like decades from now in the context of news consumption. One important difference between this “world of tomorrow” and today’s world is that the value proposition of precisely what makes the NYT valuable today will likely decline significantly. In a sense, the paper is lauded and read for its ability to find information in far away places (both geographic and secretive) and disseminate it in a relatively unbiased way to its readers. As digitalization continues its long march toward complete penetration of our lives, both public and private, I would argue that the service the paper provides (and the service other papers provide) will be less “meaningful” and in turn less valuable to us all. The arguments rests primarily on the notion that technology is increasingly allowing for the near-free flow of information around the world. As an example, the near ubiquity of smartphones in the developed world is creating the conditions of possibility for “everyperson” reporters, who provide live, high-quality access to the events and circumstances around them. One might argue that what makes newspapers valuable is not just the provision of information but also the “unbiasing” of information, i.e., the removal of noise from the signal. Here to, I fear for the NYT, technology once again has the answer in the form of machine learning and algorithmic decision making. Why employ a cohort of college-educated professional journalists, each notably with their own biases and lived experiences, to separate truth from “fake news,” when the algorithms of the future will likely be able to adjudicate truth to a far greater degree of accuracy than any team of human truth-seekers? [1]

   In this context, which would imply that the future for the “as-is” NYT is so dire, I would argue that radical change is needed sooner rather than later. I would encourage the paper to invest all of its current free cash flow in algorithmic technologies specific to the news industry. The NYT does have today a large store of news content and a large store of news experts (in the form of journalists) both of which can be used to train machine learning algorithms to get better at discerning the difference between news and opinion, between truth and lie. I think the only hope for an information company whose core product is facing dramatic price compression is to participate in precisely the mechanism that is driving this compression. Existing algorithms are already starting to get the job done, but the Times has an opportunity to do what it did to journalism more than 100 years ago: make it great again. [2]

   [1] Carl-Gustav Linden, “Algorithms for Journalism,” Journal of Media Innovations, May 2017, http://www.journals.uio.no/index.php/TJMI/article/view/2420/4150, accessed November 2017.

   [2] Kaveh Waddel, “Algorithms Can Help Stomp Out Fake News,” The Atlantic, December 2017, https://www.theatlantic.com/technology/archive/2016/12/how-computers-will-help-fact-check-the-internet/509870/, accessed November 2017.
10. December 1, 2017 Eric Blair says:

    Very interesting article! It was great to hear your views on the manner in which the New York Times is evolving in reaction to the shifting plates of digitalization. Transforming to a fully subscription based revenue model has worked for a number of UK publications, including The Times and The Telegraph, and thus doesn’t have to be stultifying for the NYT. Critically, the NYT should be able leverage its entrenched brand to convince users of the irreplaceable nature of its product. In the process, they can attract the commitment of consumers to their digital platform, irrespective of the form it assumes.
11. December 1, 2017 hedychen says:

    Shruti, thank you so much for writing this fascinating piece! I’m a huge NYT lover and long-time subscriber, so am definitely invested in its future.

    I see a lot parallels between disruption in the print industries compared to media and entertainment, and it really centers around shifts in distribution methods. I believe the future of NYT really depends on its ability to build stickiness with consumers. The focus should be on quality, and high quality will lead to loyal relationships which will subsequently lead to increased revenue. As the ability to monetize ads diminishes, this focus on quality becomes crucial. I would draw a comparison to Netflix, which does not have any ad revenue, but generates high loyalty among its consumers.

    I believe NYT can build this by strengthening its community – I love the articles on NYT that ask for reader comments and engagement. The more readers engage with the material, the more likely they are to remain subscribers, whether they are getting their information from Alexa or from the web.

    I do think that NYT should focus on subscriptions – there is more pricing flexibility in a subscription service and consumers are lazy. If a subscription price is low, they typically do not cancel it and are price insensitive. We’re living in a subscription world – what’s one more? There is an argument for subscription fatigue, but I think when you have a brand as strong as NYT, that becomes less of a concern.

    Distribution is the “easier” part – NYT can figure out how to get its news across different platforms and hardware and technology. It’s more crucial to build a loyal base first.