Can Innovation Save the New York Times?
Posted: April 28th, 2009 in Innovation
The New York Times reported last week that it lost nearly $75MM in the first quarter of 2009. Part of this was attributed to a decline in ad sales over the last year, due in part to the severely weakened economy. The other cause—unstated in the article, but discussed in detail by online publications—is the dramatically changing world of print media. The simple fact is this: fewer people are paying to read the New York Times, and most other printed publications. They are moving, instead, to online alternatives, which provide much of the same content for free.
This shift from paper to online readership shows no signs of letting up, which leads me to wonder: what, if anything, can save newspapers? Or, more specifically, can innovation save the New York Times?
What intrigues me most about the problem facing the Times and other papers is this: since it has moved its content online, I spend far more time reading it. The problem newspapers are facing is not lack of demand for their content. Where previously I would only purchase a copy of the Times a couple of times a week, I now have access to, and read, specific sections of the paper nearly every day. Though I’d prefer my bosses not know this, this extra reading happens at work where I can quickly and surreptitiously skim an article online while taking a break from whatever I am working on at the moment. I no longer have to deal with oversized printed newspapers, which, quite frankly, are rather difficult to read without anyone noticing.
The problem then, is figuring out a way to make this transition from print to web a profitable one for newspapers. This, I believe, is where innovation can play a role. In order to innovate and survive, newspapers must look at, and more deeply understand, three aspects of their business: their competition, their customers, and the way they offer their product
1. The Competition
The world of online publications is made up of small, dedicated websites that produce some of their own content, but more effectively aggregate relevant articles from larger, traditional outlets such as the Times or the AP. Most sites have a very specific focus, whether it is politics (Politico), finance (Bloomberg), music (Pitchfork), celebrity gossip (… I don’t visit those sites), or whatever other special interest a reader is looking for. Readers who know what they want can go to these sites directly and quickly find relevant content. Traditional newspapers, on the other hand offer their product as if it were a delivered to a doorstep. Online versions of newspapers include each article in every published section, and do not effectively help readers find what they are looking for beyond the front page headlines.
2. The Customer
If the Times were to agree that its competition has changed, the next question its publishers should ask is: who are our new customers? I actually don’t think the Times’ reader base has changed so dramatically. Instead, I believe that many of the Times’ former print readers are becoming, with the rest of the market, online readers. Because the marketplace has changed and new expectations have been set, the Times must understand its former customers’ new behaviors, perceptions, and needs. To fully understand this shift, research is needed.
The fundamental questions I would want to ask is this: how are readers behaving differently when they read content online instead of in print? Additionally, in this new world of online media, how is the Times and its product perceived? What unique value could it offer readers? And finally, what are readers not currently getting from online news sources? As is often the case, when a market changes so rapidly, a new set of customer problems and needs arise. Identifying these problems and needs (before the competition), and understanding new customer behaviors and perceptions, will allow the Times to develop valued online offerings that would set it apart from competition.
3. The Product
What might this new online offering look like? The first step is to move away from the way the Times “delivers” its online product. Market research would need to confirm this, but I suspect that a reader going to the New York Times site likely has a specific interest in mind—she isn’t looking to casually browse hundreds of articles over the course of an afternoon (remember, she is likely at work). Perhaps the Times site can convert itself into a portfolio of smaller, dedicated sites, with unique content and features that are distinct from what is currently published in print. It is already moving in this direction with blogs and videos that are now available in many of its sections. But, these special features are lost in the huge amount of content that is present on the Times homepage. Moving to a smaller, dedicated portfolio of sites would more closely match with changing consumer behaviors.
The other insight that should help drive development of an effective online product is an understanding of the Times’ unique point of difference. In a marketplace with many new and unknown publications, the Times would be recognized as delivering original, high-quality content that is, above all else, credible. These are timeless qualities that should give any online offering a considerable leg up on the competition.
A recent New Yorker article about a different shifting industry (automobiles) concluded with the following thought: “incumbents in mature industries facing transformations… usually don’t come out of it the winner.” So, can innovation save the New York Times? Despite what may seem like long odds, I believe it is the only thing that can.