Print is dying

What if? … The NY Times ended its daily print edition

By Steve Outing

Stop the presses! (For 6 days a week!) … Yes, I’m being serious.

The recent New York Times “Innovation” report, a meant-to-be-internal strategy document proposing a (long-overdue) digital-first future for what is arguably the best newspaper and digital news operation on the planet, painted a depressing picture.

Journalism Foresight SeriesDespite beefing up its digital business and creating large technology and R&D teams to help the iconic news company lead the digital way and depend less on its print edition and more on emerging digital initiatives and opportunities, the report, produced by eight NYT employees, identified cultural and institutional barriers to getting beyond a “print-first” mentality. In other words: The company is going to falter if it doesn’t put digital first and dump the anachronistic mindset of “the print edition is still king.” (Newspaper-industry print revenues are not likely to pull out of their steep dive — ever.)

Still. In 2014. This is the situation at what many observers view to be the newspaper industry’s “digital leader.” … If the Times Co. needs help, then it’s of course likely that most other newspapers still are struggling to adapt to 2014 and beyond.

Strategic foresight is on the case

I’m going to share a “strategic foresight” (also called “future studies”) exercise with you: a “Futures Wheel” that I created which examines how a particular change might play out. In this case, the hypothetical change is for the New York Times to at some point in the near future stop printing and delivering daily printed newspapers (but retain its Sunday print edition) and focus most of its resources on digital products and services.

Here’s the futures wheel for the no-more-daily-print-edition New York Times. Start at the middle (black box, the proposed change) and go out in spokes to see the various first- and second-level consequences that this change likely will have. Green indicates positive elements likely to gain revenue; red indicates where revenue and/or jobs are likely to be lost. … Lets discuss it after you’ve had a chance to look over it. (Also know that a “futures wheel” is one of many tools in the foresight professional/futurist’s bag. It’s useful in this case to think through the consequences of a significant organizational change.)

(Click the image below to see a readable, larger, interactive version.)

nytfutureswheel-thumb

OK, you’re back? … Good. Let’s state the obvious first: That’s a lot of information to digest. But I went through this exercise to demonstrate one of the tools of strategic foresight that can be useful in analyzing a proposed change in business strategy. In this case, it’s a radical change (at least for a historic company like the New York Times). The process of projecting the consequences of such a change can give you an idea of what to expect and better inform the strategic planning process.

In this example, you’re seeing my comments based on my own knowledge of newspapers and media business models, and two decades-plus of work at the intersection of digital technology and news. A proper futures-wheel exercise would involve interviewing and surveying many affected parties within and outside of the news company.

And I took this out to two levels of consequences. If this were done for the Times as part of a paid foresight project, it also would be necessary to go out to a third level of consequences, and perhaps further.

What does the wheel say?

Since that’s a fairly information-dense visualization, I’ll make it easier on you and offer a bullet list of what this exercise indicated about the Times Co.’s likely futures if it made the bold decision to go digital-centric, kill its daily print edition, and continue publishing a Sunday edition on paper.

  • The assumption is that for the New York Times Co. to end its print-dominated culture (when print revenues and audience continue downward, and look to continue that trajectory), it must make a bold move by eliminating daily print editions; but retaining the Sunday print edition is wise because it can continue to attract significant advertising and subscriber revenues.
  • The strength of the NYT brand and customers’ loyalty suggest that a majority of existing print subscribers will stay as subscribers, either to digital + Sunday print or all-digital. But the Times will get less money from them than before.
  • An unknown percentage of print subscribers will abandon the brand because of loyalty to and preference for print; this change will be too much for them. A print-subscriber survey would provide insight into what to expect.
  • With only a Sunday print edition, a small team would be devoted to producing it; the remainder of the staff and management ranks would be free to focus on digital opportunities. (I.e., a big institution starts acting more like a digital startup.)
  • With executive focus on prying more money out of digital products and services — to make up for significant revenues lost from ending the daily print edition — expect to see growth in existing digital initiatives, and a growing number of new digital and mobile initiatives which leverage the Times’ considerable content creation and valuable archives.
  • With more human resources available to focus on digital, the company can focus on mobile products and services, which will better reflect where news audiences are getting more and more of their information. NYT needs to play mobile catch-up, and freed-up executive bandwidth will allow that.
  • Likewise, NYT editorial and business executives will look to other peripheral businesses. Times events and conferences, e-books, and a Times membership program are among the promising opportunities.
  • Investments (mostly in technology and digital-media startups) will play an enlarged role in the company’s future health. Some investments will pay off if a startup succeeds and is sold; NYT will leverage new technologies or business models from acquisitions, increasing the earnings of existing operations or allowing the company to launch new initiatives.
  • Digital and mobile advertising revenues are unlikely to make up the amount lost from daily print advertising, but a company-wide focus on digital should accelerate digital-advertising growth. “Native advertising,” while still controversial, could yet turn into a financially lucrative advertising type. And creation of products and services to serve NYT’s niche audiences should represent new, higher-rate advertising business.
  • Print advertising won’t be an immediate disaster. A renewed and revised Sunday print edition should bring in more ad revenue than before
  • All this leads to a transition period, when cutbacks and layoffs probably will be necessary until Times executives figure out how to increase digital and mobile revenues and rebuild staffing for a digital media company. In an ideal scenario, this is temporary, since NYT’s stable of talent will have more time to focus on digital revenues and a grand digital strategy. Dropping the daily print edition, after all, will be a “we’re throwing you in the deep end, so hurry up and figure out how to survive” moment.
  • NYT Co. cannot cut back on the high quality of its journalism; with this company, that’s a given. What it might do is re-evaluate all its coverage areas, trimming ones deemed non-essential. It might acquire a fantastic niche-topic blog, for instance, then use the blogger who came along with the deal in place of a NY Times reporter previously covering the same topic.
  • By reducing print to a single day a week, print-side business, circulation, and printing personnel will be reduced in number, saving significant amounts of money after buyout and pension obligations are paid off.
  • The NYT “Innovation” report identified technology-talent “brain drain” as technologists left the company or stay a short while because they do not feel respected, listened to, or get enough time to work directly with the newsroom. Dumping daily print and becoming digital-centric should reverse this disturbing trend.
  • Finally, street newspaper sales don’t have to go away. The “Sunday” edition might be sold in the New York area at newsstands and airports, seven days a week. A decision could be made for Sunday-only printing elsewhere using contract printers to supply airports and key hotels. This would be a throwback to the days of weekly newsmagazines, I suppose, but it could keep the print aficionados placated.

Watch Media Disruptus in the weeks and months ahead. I’ll be demonstrating other strategic insight techniques and tools to help us all better understand likely futures for journalism and the news industry.


Top photo: Newsboy asleep on stairs with papers, Jersey City, New Jersey, Lewis Hine; via the Open Access for Scholarly Content program of The Metropolitan Museum of Art

17 Responses to "What if? … The NY Times ended its daily print edition"

  1. james
    james 3 months ago .Reply

    Pure speculation, greatly weakened by a lack of information on just how many print papers the NYT sells daily (around 750,000, and mostly at full subscription or newsstand price). That’s a whole lot of $2.50′s.

  2. ghatch
    ghatch 3 months ago .Reply

    I truly appreciate the amount of thought you put into this. However, the real implications of scaling down a 7-day operation to a single day has a vast amount of problems. To say an unknown percentage of print subscribers will leave (could be 5%, could be 70%) is such a wide open door that it negates your opinion that a Sunday only edition will still attract advertisers and produce significant subscriber revenue. Beyond that, delivery operations are not built to run one day a week. To tell someone that you would still like them to work, but only for 1/7th of their original hours, at no additional increase in base pay rate, is not realistic. I can assure you that no major newspaper company is looking to up their rate-per-copy of delivery fees either. I can also expand this concept to your circulation, customer service, and production departments. So, really we are talking about laying people off, not re-allocating those resources.

    Do I think digital is the future? Yes. Do I think print has some life still left in it? Yes. People truly don’t like the pay wall of news, and with the ability to get it for free every day of the week from aggregated sites, I don’t blame them. However, much like the music industry, it may just be time to say that we have to do what is right for our produced material, and charge for it. I mean every paper in America go behind the pay wall and stop giving your news away for free. People grumbled and complained when Napster went away, but nobody gripes about buy songs from iTunes any longer, it has become the norm.

    We are looking at old models and paradigms of business for news, and we need to start with a clean slate in our thinking. I love this business and could talk about it all day, but there are papers to still make and sell.

  3. donn
    donn 3 months ago .Reply

    Do not kill your cash cow while it is still giving milk even if you love it a little too much.

  4. Steve Outing
    Steve Outing 3 months ago .Reply

    I did this exercise largely to demonstrate a strategic-foresight exercise that any media company should do (and there are other tools which I’ll demo in the future), the futures wheel. If NYT were to decide to do this as part of a strategic planning process, or hire a consultant to help them, they’d likely create several futures wheels with different scenarios.

    I chose as my example Sunday-only print plus digital because I think it’s well past time to take this dramatic step. I’m not the only one. Marc Andreesen urged NYT to kill its print product and focus on digital in late 2012 (http://www.reuters.com/article/2012/12/12/us-venture-andreessen-dealbook-idUSBRE8BB1GZ20121212).

    Mark Potts, recently in American Journalism Review, wrote: “…the ultimate answer for the Times and other papers may lie in the nuclear option: ditching print – or greatly minimizing it – so that we’re forced to deal with the digital issues as our primary concern, not a secondary annoyance.”

    IMHO, to not seriously consider this option (and my exercise was a demonstration of how a company like NYT can start the analysis process) is dooming the company to yet more years and years of print-first mentality as advertisers and readers continue to depart print, and digital competitors race further ahead because they have a digital-first mentality. Most of us thought that NYT was further along in making the digital shift and diminishing print-culture dominance. The internal NYT Innovation report showed that even the grand New York Times, for all its digital experiments, multimedia extravaganzas, huge technology and R&D force (for a news company), etc., still is stuck in a decade-old mindset in 2014. Forgive me if I don’t believe this latest report will change things beyond incrementally.

  5. Steve Outing
    Steve Outing 3 months ago .Reply

    ghatch: In my scenario, I included selling off NYT’s printing facility and using contract printers for the sole Sunday print edition. The same could be done for delivery. Yes, I projected laying off printing employees and drivers, acknowledging that there would be buyout and pension costs. Print (page, ad) production could be handled by a reduced (over current) staff as their work for a large Sunday edition would be spread over a week. Absolutely, we’re talking about laying off people. It’s the only way to make the transition away from buggy whips/newspapers. For the Times, the challenge is to eliminate most of the “buggy-whip positions” and try not to do damage to the most vital components of a digital-first NYT: editorial, technology, and business development staffing.

    Does print have more life in it? Sure, depending on your business. Small local newspapers: yeah, print has some more time. For NYT, specifically, it has great potential with digital/mobile to find customers/readers worldwide and nationwide, but only if its executives can focus on that without a failing print side as distraction. The longer its executives are stuck print-first and the culture stays that way, the less likely it will be competitive when the print flame finally burns out.

  6. ghatch
    ghatch 3 months ago .Reply

    I totally agree with you on where the future lies. I do like to play both sides of the fence. I have been a preacher of the “buggy/whip” lesson for years as well. Really appreciate the article and responses, keep up the good work!

  7. Art Golab
    Art Golab 3 months ago .Reply

    Even allowing for savings on printing and distribution, NYT would be out of business in a month following this advice.

    In 2013, 82 percent of circulation revenue and 76 percent of advertising revenue came from print. And in the first quarter of this year both print and digital advertising revenue was up. They’re already doing the sensible and responsible thing, milking print revenues to invest in digital.

  8. Steve Outing
    Steve Outing 3 months ago .Reply

    Art: What you suggest is wise has quite a few similarities to Kodak’s path down the tubes. Kodak didn’t ignore digital photography, it invented it; it introduced a number of digital-camera and -photography innovations, but the company’s core talents and executive focus stuck too much with the film cash cow while not moving fast enough on the digital stuff. Kodak’s digital offerings flopped in the market, because they weren’t keeping up. They got whacked because they didn’t understand that competitors were investing more and working faster to make the transition to digital photography. See http://mashable.com/2012/01/20/kodak-digital-missteps/

    NYT is doing lots of great digital experimentation and making a go of turning digital into a significant revenue slice. But its progress is still incremental, as the internal Innovations report showed. The Times’ position is even more precarious than was Kodak’s, because today technology advances and computing power are accelerating so much faster.

    Executives of successful companies like NYT and Google have big egos, deservedly so. But I bet that Google’s execs are more attuned to the threat that future technology advances could kill their cash cow and would figure out how to reinvent to survive. After reading the NYT internal report, especially the part about how technologists weren’t readily accepted or allowed to work with the newsroom, I doubt that the Times’ leadership would know how to pivot the way digital-only companies can. No one’s exempt from how quickly their business model can be wiped out these days.

    I think you put too much faith in how much milk is left in that print cow.

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