Stop the presses! For six 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.
Despite 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. Let’s 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.)
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.
(This article was published originally at Media Disruptus.)
Steve Outing is a media futurist, news innovator, digital-media and strategic-foresight consultant, journalist, and educator, based in Boulder, Colorado.