The New York Times Co
Content
THE NEW YORK TIMES COMPANY: A Case Study Analysis
John J. Head
WestCom Group Consulting Inc.
School of Communication
Telecommunications Management 4480
Western Michigan University
1903 West Michigan Avenue
Kalamazoo, Michigan 49008
November 8, 2012
©2012 John J Head
Source: New York Times Co.
Table of Contents
I. Historical Overview ...............................................................................................1
Early steps....................................................................................................................2
Diversification..............................................................................................................3
Challenges, changes ....................................................................................................4
II. Organizational structure .....................................................................................5
Table 1..........................................................................................................................5
III. Business Operations.............................................................................................6
Table 2..........................................................................................................................7
The flagship..................................................................................................................8
IV. Financial performance.........................................................................................9
Table 3..........................................................................................................................9
V. Future outlook......................................................................................................11
Branding ....................................................................................................................11
SWOT analysis and other risks..................................................................................12
Table 4........................................................................................................................13
Demographics.............................................................................................................15
Philosophy .................................................................................................................16
Endnotes ...................................................................................................................18
I. HISTORICAL OVERVIEW
“All the News That’s Fit to Print.”
i
Special are those instances in business when a slogan becomes so synonymous
with a company. Those words, found on the front page of every copy of every edition of
The New York Times since 1896, began as a way to define the publication to its
readership. That slogan stands to this day, but the newspaper and its parent, The New
York Times Company, have grown far beyond the reaches of New York City and its
surrounding boroughs.
The New York Times Company is a diversified media company whose core
purpose is “to enhance society by creating, collecting and distributing high-quality news,
information and entertainment.”1 It is a publicly traded company (NYTC on the New
York Stock Exchange) and publishes three major daily newspapers. It also operates eight
network-affiliated television stations and two New York City radio stations. The
company has become more global in nature through The Times Syndicate: Among the
largest syndicates in the world, it specializes in text, photos, graphics in a variety of
customized packages to more than 2,000 newspapers and other media to clients in more
than 50 countries.2
While its footprint today is global, The New York Daily Times (the word “Daily”
would be dropped in 1857) had a simple, straightforward and — at least, structurally —
humble beginning in 1851, in a rundown six-story brownstone building on Nassau Street
in New York City.3 Move forward to August 19, 1896, a Wednesday morning, and The
New York Time’s readers were greeted on page one with the following salutation:
To undertake the management of The New York Times, with its great history of
right doing, and to attempt to keep bright the luster which Henry J. Raymond and
1
George Jones have given it, is an extraordinary task. But if a sincere desire to
conduct a high-standard newspaper, clean, dignified and trustworthy, requires for
success honesty, watchfulness, earnestness, industry, and practical knowledge
applied with common sense, I entertain the hope that I can succeed and maintain
the high estimate that thoughtful, pure-minded people have ever had of The New
York Times.
It will be my earnest aim that The New York Times give the news, all the
news, in concise and attractive form, in language that is permissible in good
society, … to give the news impartially, without fear or favor … to make (it) a
forum for the consideration of all questions of public importance, and to that end
to invite intelligent discussion from all shades of opinion.4
Adolph S. Ochs, who assumed management of the newspaper in 1896 from the
newspaper’s founders, the aforementioned Raymond and Jones, penned that
announcement. Ochs’ intent was to continue the course set by his predecessors in
producing a newspaper consistent in its delivery of news unfettered by bias and scandal.
Early steps
The company’s origins date back to September 1851, when the first issue of The
New York Daily Times was published. Messrs. Raymond and Jones founded the
publication on the premise of offering the news “in a conservative and objective fashion,
in contrast to the yellow journalism of the day … .”5 The paper’s coverage of key events
— President Lincoln’s Gettysburg Address and the Battle of Bull Run among them —
made the Times the newspaper of record. Under Raymond and Jones’s guidance the
publication grew. Their subsequent deaths, in 1869 and 1891, respectively, and the
handing of the newspaper to their ill-equipped heirs nearly resulted in the paper’s failure.
2
It was near bankruptcy in 1896 when a respected, albeit little-known, newspaper editor
named Adolph Simon Ochs came on the scene.6
Despite his lack of formal schooling, Ochs had learned the newspaper business on
the job as newsboy, printer’s devil, printer, and reporter. He was 20 when he bought
controlling interest in and became publisher of the failing Chattanooga Times; hearing of
the financial troubles at The New York Times, he offered to become publisher in exchange
for a contract that would reward him should he achieve his goal of making the paper
profitable for three straight years. One of his first decisions was to add the slogan “All
the News That’s Fit to Print,” his commitment to avoidance of sensationalism and
adherence to high editorial standards;7 but of particular note was his decision to respond
to dwindling capital in 1898 not by raising the single-copy price of the paper, but rather
by reducing it, from three cents to a penny. Paid circulation tripled within a year,
advertising increased, and the paper turned a profit.8 As much to his business acumen as
to his commitment to his readership, Ochs set The Times on a path of steady growth and
profitability.
Diversification
Ochs’ ill health and subsequent death in 1935 handed the reins of the paper to
Ochs’ son-in-law, Arthur Hays Sulzberger. He improved the newspaper editorially,
financially and technically, and began what would be a series of moves to diversify and
acquire other properties, including Amo Press and Cowles newspaper, magazine,
television, and book properties.9
The diversification continued throughout the 1900s. In 1980 the company paid
approximately $100 million for the New Jersey cable television operation; in 1984 it sold
3
its book publishing operation to Random House. Five regional newspapers and two
television stations were acquired, as were the magazines Golf World and Sailing World; at
the same time the company, making little progress with cable television, sold all its cable
TV properties.12
Challenges, changes
Newspaper readership decline in the 1990s prompted the company to buy and sell
in the areas of print, broadcasting and electronic media. In 1993 NYTC purchased
Affiliated Publications, which owned the Boston Globe; in 1995 it bought a majority
interest in a video newsgathering company, Video News International. Also in 1995, the
company joined eight other newspaper companies in New Century Network, an online
news service. It also created the New York Times Electronic Media Company to develop
new products and methods of distribution.11 This sparked the beginning of a fervent
move from the print world of its origins to the rapidly growing world of digital media.
NewYorkTimes Digital, an independent business unit, was created to oversee the
company’s online presence, NYTimes.com (by this time boasting more than 10 million
registered users). Key to its plans to establish synergies between print and electronic
offerings, TheStreet.com was created as one of the top Internet providers of financial and
investment news, and related commentary. Its second business segment, the About
Group, includes websites About.com, ConsumerSearch.com and UcompareHealth.com,
among others. The company also owns equity interests in a Canadian newsprint
company, and quadrantONE LLC, an online advertising network that sells premium,
targeted display advertising onto local newspaper and related websites.12
II. ORGANIZATIONAL STRUCTURE
4
Broadly defined, The New York Times Company is in the business of disseminating
news. The Times’ group includes the International Herald Tribune and the Worcester
Telegram and Gazette, as well as related websites and businesses. Other assets include a
17-percent interest in New England Sports Ventures LLC (which owns the Boston Red
Sox, Fenway Park and adjacent property) and about 80 percent of New England Sports
Network, a regional cable network that broadcasts Red Sox games (see Table 1).13
Table 1.
Key components of The New York Times Company.
Print/Broadcast
Digital Ops
Joint Ventures
Other Assets
NYTimes Media Group
About Group
• Metro Boston LLC (49%)
• New England
• The New York Times
• About.com
• Donohue Malbaie Inc. (49%)
Sports Ventures LLC
• NYTimes.com
• ConsumerSearch.com
• Madison
• Roush Fenway Racing
• International Herald Tribune
• UcompareHealthCare.com
Paper Industries (40%)
• AK Networks
New England Media Group
• CalorieCount.com
• quadrantONE LLC
• Appssavvy
• The Boston Globe
• nyt.com (paid products)
(25%, online ad network)
• Brightcove
• BostonGlobe.com
• FM Publishing
• Boston.com
• Betaworks
• Worcester Telegram and
Gazette
• 16 regional daily newspapers
• New England
Sports Network
Source: Ward’s Business Directory, September 201214
III. BUSINESS OPERATIONS: CURRENT PRODUCTS AND SERVICES
5
While the parent company of The New York Times has grown and diversified, it has
stayed true to the principles to which the newspaper ascribed more than 150 years ago.
Those principles are uppermost in the company’s corporate governance practices and are
directly tied to the company’s journalistic roots: “The Company’s core purpose is to
enhance society by creating, collecting and distributing high-quality news, information
and entertainment.”15 These values also weigh significantly on the company’s business
philosophy by offering content of the highest quality and integrity (the basis for its
reputation and maintaining the public trust); fair treatment of employees based on
respect, accountability and standards of excellence; creating long-term stockholder value
through investment and constancy of purpose; and good corporate citizenship.16
As with any publicly traded company, shareholders’ return on investment must be
considered in the business philosophy. In the world of journalism, particularly as it
pertains to newspapers, this poses an ongoing challenge: to maintain balance between
journalistic integrity and purpose to the betterment of community (audience) and ensure
the products and services (newspapers, other media) remain profitable. In spite of a
continuing industry-wide decline in circulation — and, as a result, advertising revenue
tied to its core print products — the company has fared better than most largely through
diversification. It should be noted that while some of the company’s overall business
commitments display variety, much of its diversification has been born out of common
6
sense; that is, those business ventures tangential to the company are the result of logical
consideration of and connection to the core principles and products.
We will look at some of those products later. Here, in Table 2, is a breakdown of
the company’s operational structure. The chief executive officer of The New York Times
Company oversees the managers of the company’s 11 primary divisions. The CEO
reports to the company’s board of directors and its vice chairman. The primary division
managers in turn oversee various sublevels of the corporate structure.
Table 2.
Management structure of The New York Times Company.
Control
CFO
Assistant Control
Internal Audit
Treasurer
New York Times
International Herald Tribune
New England Media
CEO
Legal
Secretary & Assistant Legal
CIO
Vice Chairman of the Board
Board of Directors
Communication
Development
Research & Development Ops
Digital Ops/About Group
Paid Products NYTimes.com
Human Resources
Human Resources / Diversity
Compensation / Benefits
Organization Capability
Source: TheOfficialBoard.com, September 201217
As CEO, Arthur Sulzberger Jr. oversees all primary divisions of the company and
7
reports to the board of directors. The corporate structure is straightforward and caters to
the company’s focus on its core products — print media. At the same time, this makes
for a seamless connection between print and broadcast media services and the ever-more
important division of digital media.
The Flagship
The New York Times serves more than the residents of New York City: Its reach
extends nationally and globally. The newspaper boasts a print circulation of 779,731
daily and 1.26 million on Sundays. In addition, the company has found success since
venturing into the digital news dissemination domain in January 1996 with the launch of
its website, www.nytimes.com. The paper’s digital efforts since then have resulted in a
73-percent increase in overall daily circulation, print and online, year over year ending
March 2012, and a nearly 50-percent increase on Sundays.18
The Times maintains a high online profile while positioning itself for improving
revenue in this portion of the market. The newspaper had maintained free access to its
online product prior to 2011 when it began structuring online packages from which
customers could choose. At that time, the company allowed non-subscribers (to either
the print or the online version) access to up to 20 stories a month for free. In mid-March
2012, a year after its launch of paid digital subscriptions, the company reported it had
approximately 454,000 paid subscribers to its various digital packages, replica editions
8
and e-readers. Included in this number are subscribers of The International Herald. At
the same time the company announced it would cut back from 20 to 10 the number of
free articles accessible to non-subscribers.19
IV. FINANCIAL PERFORMANCE
The meteoric rise of computer use by the consumer — with particular emphasis on
smartphones and tablets — has driven an equally explosive increase in the number of
venues from which consumers can get their news. Newspapers of every size and type
have wrestled with this modern reality: that the world of print in which they long thrived
was becoming less viable. Reinvention of its method of delivery — or, at the very least,
an addendum to that delivery system — has become tantamount for survival. The New
York Times Company’s products, while certainly in better financial shape than many
newspapers to make this transition, are no less impervious to the storm. Table 3 below
illustrates a recent decline in revenues.
Table 3.
New York Times Company Business Analysis.
Revenues
Report Date
12.25.11
Currency
USD
Scale
Thousands
News Media Group
$2,212,575
About Group
$110,826
Total
2,323,401
Source: The New York Times (www.nytco.com)20
12.26.10
USD
Thousands
$2,257,386
$136,007
2,393,463
12.27.09
USD
Thousands
$2,319,378
$121,061
2,440,439
Though not reflected in this table, financials from quarter three of 2012 illustrate
— dramatically — the importance of transition to digital. The company’s net income fell
85 percent from the same period in 2011, as reported in The Financial Times. Any gains
in circulation revenue in the media group failed to offset the almost 9 percent decline in
advertising revenues from the third quarter last year.21
9
The News Media Group, which includes print and digital properties, declined
each of the past three full years back to 2009, although the drop in revenue was subtle.
This trend continues nine months into 2012: According to Business Wire, the news media
group’s total revenues for January-September 2012 were down 2.2 percent compared to
the same period in 2011. More significantly, advertising revenue — which had dropped
6.9 percent in 2011 from 2010 — continued to fall during the same period in 2012, down
9.7 percent. Of particular significance to the News Media Group during this same period
was the 9.5-percent decline in national advertising lineage, a key revenue draw that
outpaces retail and classified ad lineage nearly three to one. On a positive note, thanks to
steadily growing online subscriptions, circulation in this division increased 9.3 percent in
the first nine months of 2012, compared to a year ago. Given the company’s continuing
trend to promote its online product, as well as the stability of the brand, it is likely digital
subscriptions will grow.22
Numerous factors come into play when reviewing any newspaper’s financial
standing, advertising and circulation being the two most considered. While advertising
and total revenue declined during that three-year period, decisions to divest some of its
assets helped serve as a buffer for the company’s bottom line. As late as August 2012, the
company decided to sell the About Group, parent company of about.com and other online
sites, to InterActiveCorp for $300 million.23 This followed a December 2011 decision to
sell its Regional Media Group to Halifax Media Holdings for more than $140 million.24
V. FUTURE OUTLOOK
10
We live in an age when information is at our fingertips and instantly obtainable. If the
day of the personal computer has given way to smartphones and social media, then surely
the information dissemination model so long used by newspapers — print and advertising
— will continue to be increasingly irrelevant. That said, there are multiple factors at play
that warrant us to be optimistic, albeit cautiously, about the future of The New York
Times Company and, specifically, its publications. Many of these factors are positive in
nature; others, however, give reason for some concern as the company moves forward in
an industry where many players are on unsure financial and viability grounds. We will
look at the following as we consider the Times’ future: branding, SWOT analysis and
other risks, demographics, and philosophy.
Branding
It is difficult to put a dollar value on branding, but in the case of The New York
Times (and tangentially its parent company), the name carries much weight when
considering its future. The newspaper has a long and rich history as a member of the
Fourth Estate, particularly enriched during the 34 years when Arthur Sulzberger was at
the helm as publisher. Certainly high among his contributions was his decision in 1971 to
publish the Pentagon Papers, detailing how the U.S. government had lied about the
Vietnam War.25 The decision earned the newspaper a Pulitzer Prize, one of more than 100
the newspaper earned since 1918.26 Despite moments of journalistic scandal, including
the 2003 revelation that reporter Jayson Blair had plagiarized or made up numerous
stories, The New York Times name remains a positive in the sense of branding.27
SWOT Analysis and Other Risks
11
Newspaper executives continue to face tough personnel and staffing decisions as
they confront the industry’s transformation from print to digital. The economics of
newspapering were, at best, a roller-coaster ride during the past 20 years as the Internet
provided more options for news readers; at worst, these times saw — and continue to see
— newspapers cutting editorial staff to make up for lost print ad revenue, revenue not yet
fully realized in the online platform. According to Times’ records, the company overall
peaked in 2000 with 14,000 employees; by 2010, that number was 7,414, with staffing
declines posted each year except for two years (2002-04) when additions to the About
Group saw a slight increase.28
September 2012 saw the death of Arthur Sulzberger, but despite the love and
respect he engendered in his staff and the industry, the passing of the publisher
nicknamed “Punch” is hardly the most significant development in Times’ personnel
matters. In August 2012 Mark Thompson was named as the company’s new chief
executive officer, a position the younger Sulzberger had held on an interim basis since
2011. Thompson had been director-general of the British Broadcast Corporation (BBC)
from 2004 until March 2012, and his success with the publicly funded broadcaster helped
him secure the Times’ CEO spot. However, his possible involvement in the cancellation
of a BBC-produced investigation into a sex scandal involving Jimmy Savile — one of the
BBC’s and the United Kingdom’s most beloved celebrities — has raised questions about
his viability as Times CEO.29 Indeed, despite Sulzberger’s reassurance that Thompson
“possesses high ethical standards and is the ideal person to lead our company as we focus
on growing our business through digital and global expansion,” at least one Times senior
editor, Margaret Sullivan, said it was time to ask a number of tough questions concerning
12
Thompson’s suitability for the Times position. “It’s worth considering now whether he is
the right person for the job, given this turn of events,” she said in reference to the Savile
sex scandal.30
Thompson is scheduled to begin his duties at The Times on November 12, 2012.
It remains to be seen if his appointment, which some analysts think might have
contributed to an 85-percent plunge in third-quarter (2012) net earnings for the company,
will stand.31
In the company report dated December 22, 2011, the SWOT analysis overview
identified the following, illustrated in Table 4:
Table 4.
New York Times Company SWOT analysis overview.
Strengths
Weaknesses
Opportunities
Threats
• Multi-platform
presence by
strengthening the
digital business
• Wide reach
• Lack of significant
international presence
• Growing
consumption of digital
media
• Poor credit ratings
• Rebound in
advertisement
spending and rising
online advertisement
spending
• Monetizing the
digital business
through subscription
model
• Declining circulations
and print
advertisement
revenues
• Rising newsprint
cost
• Leaner operating
cost structure
• Intense competition
Source: MarketLine, 201232
This SWOT analysis can offer a look not only at The New York Times, but at
many newspapers, for many share similar positives and, certainly, many of the
constraints, particularly in the financial, circulation and advertising sectors. Addressing
such problems as poor credit ratings is a necessary honest approach to any company’s
business position: In the Times’ case, this review of the 2011 year recognized the
company’s credit rating increased the borrowing costs for future borrowing and also
13
limited its financing options. It also pointed a finger at the susceptibility to continued or
increased volatility or disruption in the credit markets that could adversely affect the
company’s ability to refinance existing debt. On the positive side, the company had
established a multi-platform presence by strengthening its posture in the digital business,
witnessed the growing consumption of digital media among its customers, and saw a
rebound in the advertisement spending and an increase in ad dollars spent online.
Additionally, the company launched new pay models to better profit from the growth in
digital business. The newspaper’s increase in online subscriptions in the past year gives
validity to the decision in 2010 to erect a paywall and limit the number of free stories
available to non-subscribers. In short, people are willing to pay for content online that
once had been freely accessed.33
For nearly two decades newspapers have straddled the fence between traditional
print publication and a digital or online presence. Much of that stems from a sort of
perfect storm: print circulations in decline, falling ad revenues as a result of fewer
subscribers (lower circulation numbers), and the increased competition from a variety of
news sources, including aggregation websites. The company recognizes all these factors
in its consideration of threats, and the resulting challenges are not for the timid. In its
2011 annual report, NYTC noted the launch of digital subscriptions at all three major
dailies, “with the intention of developing a new consumer revenue stream while
preserving our digital advertising business. Our ability to build a subscriber base on our
digital platforms depends on market acceptance, consumer habits, pricing, an adequate
online infrastructure, terms of delivery platforms, and other factors.”34 It further
acknowledges the “increasing number of … options available on the Internet, and other
14
news aggregation outlets, often offering their content for free. The point is well taken
that consumers in a tight and uncertain economy might place more value on when, where,
how and at what price they get their digital content than they do on the source or
reliability of the content. When much is riding on the potential for digital-framed ad
revenue, the potential loss in website traffic becomes a risk.35
Demographics
According to information obtained by Mediamark Research and Intelligence, The
New York Times was read or viewed by more than 4.5 million people during the spring of
2012. Of that number, readership by gender was 50-50, with a median age of 51 years
and median household income of $99,669. Also, about 60 percent of Times’ audience
were college graduates “plus” (bachelors or higher), 42 percent were
professional/managerial, and 13 percent were top management level.36 While these
figures are not surprising on their face, given The Times’ status and national reach, it
stresses the importance of The Times’ pushing the digital platform as both a readership
venue and a source of revenue. The audience that supplants the aging baby boomers who
are Times’ subscribers and readers increasingly are more likely to look for their news
online rather than print. To this end the company continues to transform “from a
newspaper company to a multi-platform news and information company,” according to
company documents.37 Additionally, in its effort to open the newsroom doors to the
public, NYTimes.com launched in 2010 TimesCast, a daily video report that features
interviews with editors and reporters covering major news stories, and scenes from staff
meetings among top editors discussing possible front-page content. Such interactive
structure adds transparency to what for generations had been seen, rightly or wrongly, as
15
an ivory tower mentality among members of the Fourth Estate. This interactive
discipline is seen elsewhere in The Times’ products, through online blogs written by staff
reporters and correspondents, membership packages that allow subscribers to post
commentary on stories and opinion pieces, and reporters encouraged to engage their
readers via Twitter, Facebook and other social media.38
Philosophy
Arthur Sulzberger died on Sept. 29, 2012, at age 86. He retired in 1992 and was
succeeded by his son, Arthur Sulzberger Jr. The young Sulzberger’s predecessors were
newspapermen, but Sulzberger Jr. described himself as a “platform-agnostic” multimedia
man, perhaps the perfect man for the job in a constantly transforming industry.39 As
Steve Jobs was a visionary in his field, so in some respects Sulzberger Jr. has been to The
New York Times Company. He has maintained his father’s fervent belief in the
principles that guide journalistic integrity, and has married that to the pressing needs of
newspaper survival in the digital age. He is not afraid to consider all options that might
lead to a better newspaper and an improved company. Several examples:
• In 2010, The New York Times and The Washington Post teamed up with Google
Inc. to test a new online news presentation style. The two-month experiment, according
to Martin Nisenholtz, married “Google’s purely Web-centric sensibility and the
journalistic sensibility” of the Times and the Post. Nisenholtz, The Times’ senior vice
president for digital operations, said the union created one destination page for each of
nine test storylines published in both newspapers. Dubbed “Living Stories”, the
experiment let readers filter and organize the articles by subtopic, by type, by importance
and by date. Each time a user visited the story’s page, articles they already had read were
16
grayed out, allowing them to focus on the latest news. It was a look at a different way to
organize the content, Nisenholtz said.40
• Ensuring viability in expanding technologies, in October 2012 The Times
announced a new app, featuring the newspaper’s latest content, designed and formatted
for optimal reading experience on Windows 8. This outreach to fans and users of
Microsoft-related products also included the newspaper establishing its own channel
within the Bing News app, which is pre-installed on all Windows 8 devices, including
desktop and laptop computers, and the Microsoft Surface tablet.41
In conclusion and to reiterate, the future of The New York Times Company, like
its flagship product, should be viewed with optimism, with a dash of caution added.
There remains uncertainty throughout the newspaper industry about the viability and
continuation of the traditional news delivery system, and forces from competition,
variable and /or declining print circulation numbers and advertising revenues, the need to
add to or let go of related properties or joint venture assets all figure into the mix of this
company’s future.
To be sure, for The New York Times, its dismal third-quarter net revenues sparked
cause for concern, despite its successful digital-and-print subscription model and
international expansion. In late October of this year, Rick Edmonds, writing in his blog
for Poynter.org, cautioned that, “If the top dog stumbles after a new round of advertising
setback, the rest of the pack seems even more vulnerable.” Whether it was intended as a
backhanded compliment, it speaks to both the seriousness of the issue to The Times and
how, as The Times goes, so goes the industry. Company officials blamed the loss on lack
of business confidence in many segments, but also on other factors: the lack of major
17
movie releases (entertainment), weak department store retail sales, and the lack of new
development in the New York market (real estate). Add to this, Edmonds wrote, that The
New York Times differs from many daily papers because of its greater dependence on
national advertising lineage. On the upside, he noted the company’s digital-only
subscription base continues to grow. The Times — and the industry — will need “strong
digital-only gains and income from other digital ventures” to make up for losses in retail
advertising.42
To its benefit The New York Times remains a brand to which many people relate,
and its parent company has shown an understanding of the need for its news products to
transition to a new delivery system, one that caters to today’s generation of news
consumers. It closely monitors all of its segments from both financial return and
customer benefit perspectives, giving no reason to believe it cannot survive the industry’s
turbulent waters. The company is not afraid to face challenge and adapt, a philosophy
that began with the first editions of The New York Daily Times.
In a 2005 interview with Business Week, Arthur Sulzberger Jr. said:
Within our lifetimes, the distribution of news and information is going to shift to
broadband. We must enter the broadband world having mastered the three key
skill sets — print, Internet, and video — because that’s what’s going to ensure the
future of the news organization in the years ahead.43
Endnotes:
18
1
Elmer Davis, History of the New York Times 18511921. New York Times.
http://www.questia.com/read/9199060/historyofthenewyorktimes18511921.
Retrieved Sept. 29, 2012.
2
International Directory of Company Histories, The New York Times Company.
http://bi.galegroup.com.libproxy.library.wmich.edu/global/article/GALE
%7CI2501315937/c585ac873c0eb4d4274ce94e2678c851?u=lom_wmichu.
Retrieved Sept. 29, 2012.
3
International Directory of Company Histories, The New York Times Company.
4
Elmer Davis, History of the New York Times 18511921
. New York Times.
5
International Directory of Company Histories, The New York Times Company
.
6
International Directory of Company Histories, The New York Times Company
.
7
International Directory of Company Histories, The New York Times Company
.
8
International Directory of Company Histories, The New York Times Company
.
9
International Directory of Company Histories, The New York Times Company
.
10
International Directory of Company Histories, The New York Times Company
.
11
International Directory of Company Histories, The New York Times Company
.
12
International Directory of Company Histories, The New York Times Company
.
13
Ward’s Business Directory of US. Private and Public Companies, New York
Times Company, Gale Directory Library.
http://find.galegroup.com.libproxy.library.wmich.edu/gdl/start.do?prodId=GDL.
Retrieved Sept. 29, 2012.
14
Ward’s Business Directory of US. Private and Public Companies, New York
Times Company.
15
The New York Times Company, Company business units.
http://www.nytco.com/company/business_units/index.html. Retrieved Sept. 29,
2012.
16
The New York Times Company, Company business units.
19
17
New York Times Company, Organizational Chart. The Official Board.com.
http://www.theofficialboard.com/orgchart/newyorktimes. Retrieved Sept. 29,
2012.
18
Neil Lulofs, The Top U.S. Newspapers for March 2012.
http://www.accessabc.wordpress.com/2012/05/01. Retrieved Sept. 29, 2012.
19
Eileen Murphy, NYTimes.com Pay Gate to Move to 10 Free Articles Each Month
Starting in April, BusinessWire. http://libproxy.library.wmich.edu/login?
url=http://search.proquest.com/docview/929061645?accountid=15009.
Retrieved Oct. 20, 2012.
20
New York Times Company, Business Analysis, www.mergentonline.com.
http://www.mergentonline.com/company/detail.php?pagetype=business
segments. Retrieved Oct. 27, 2012.
21
Emily Steel, NY Times hit by fall in ad dollars. Financial Times. Business
Insights: Global. http://bi.galegroup.com/global/article/GALE|
A306443729/dfa338898e28f1fea944137ffed817b?u=lom_wmich. Retrieved Oct.
27, 2012.
22
Business Wire, The New York Times Company Reports 2012 ThirdQuarter
Results. Business Insights: Global.
http://www.businesswire.com/portal/site/home. Retrieved Oct. 20, 2012.
23
Kevin Shalvey, IAC to Buy about.com from New York Times for $300M.
Investor’s Business Daily. http://search.proquest.com/docview/1035158125?
accountid=15099. Retrieved Sept. 27, 2012.
24
Zacks Equity Research, NY Times Offloads Assets. Business Insights: Global.
http://www.comtexnews.com. Retrieved Oct. 20, 2012.
25
Alex S. Jones, Arthur Sulzberger. Time.
http://search.proquest.com/docview/1095353407?accountid=15099. Retrieved
Oct. 20, 2012.
26
New York Times Company, company business units.
http://www.nytco.com/company/business_units/new_york_times_media_group.ht
ml. Retrieved Oct. 20, 2012.
27
Bloomberg Businessweek, The Future of the New York Times.
http://www.businessweek.com/stories/20050116/thefutureofthenewyork
times/html. Retrieved Oct. 20, 2012.
20
20
28
MarketLine, SWOT Analysis Overview. http://advantage.marketline.com/Product/.
Retrieved Oct. 20, 2012.
29
Keach Hagey. Corporate News: Times Co. Stands by Incoming CEO. Wall
Street Journal. http://search.proquest.com/docview/1115058910?
accountid=15099. Retrieved Oct. 20, 2012.
30
Independent (London, England), Thompson may not be right person to run New
York Times, says senior editor. Business Insights: Global.
http://www.independent.co.uk. Retrieved Oct. 20, 2012.
31
Keach Hagey. Corporate News: Times Co. Stands by Incoming CEO
. Wall
Street Journal.
32
MarketLine, SWOT Analysis Overview
.
33
Gina Lovett, The New York Times Company prepares for paywall launch. New
Media Age. http://libproxy.librarywmich.edu/login?
url=http://search.proquest.com/docview/756934331?accountid=15099. Retrieved
Oct. 21, 2012.
34
New York Times Company, 2012 Annual Report: Risk Factors. New York Times
Company. http://nytco.com/company/reports. Retrieved Oct 20, 2012.
35
New York Times Company, 2012 Annual Report: Risk Factors. New York Times
Company.
36
New York Times Company, company business units.
37
New York Times Company, company business units.
38
New York Times Company, company business units.
39
Bloomberg Businessweek, The Future of the New York Times
.
40
Abby Brownback, A WebCentric Approach to Traditional Journalism. American
Journalism Review. http://www.ajr.org/Article.asp?id=4880. Retrieved Sept. 29,
2012.
41
M2 EquityBites [EQB], The New York Times introduces new app for Windows 8.
Business Insights: Global. http://bi.galegroup.com/global/article/GALE|
A306456609/027388dc8bf19be4654dbb3de4207f1a?=lom_wmich. Retrieved
Oct. 27, 2012.
21
21
42
Rick Edmonds, What dismal earnings at The New York Times mean for the
newspaper industry. Poynter.org. http://www.poynter.org/latestnews/business
news/thebizblog/192904/whydismalearningsatthenewyorktimesareand
arentabellwetherfortherestofthenewspaperindustry/. Retrieved Oct. 27,
2012.
43
Bloomberg Businessweek, The Future of the New York Times
.
22
John J. Head
WestCom Group Consulting Inc.
School of Communication
Telecommunications Management 4480
Western Michigan University
1903 West Michigan Avenue
Kalamazoo, Michigan 49008
November 8, 2012
©2012 John J Head
Source: New York Times Co.
Table of Contents
I. Historical Overview ...............................................................................................1
Early steps....................................................................................................................2
Diversification..............................................................................................................3
Challenges, changes ....................................................................................................4
II. Organizational structure .....................................................................................5
Table 1..........................................................................................................................5
III. Business Operations.............................................................................................6
Table 2..........................................................................................................................7
The flagship..................................................................................................................8
IV. Financial performance.........................................................................................9
Table 3..........................................................................................................................9
V. Future outlook......................................................................................................11
Branding ....................................................................................................................11
SWOT analysis and other risks..................................................................................12
Table 4........................................................................................................................13
Demographics.............................................................................................................15
Philosophy .................................................................................................................16
Endnotes ...................................................................................................................18
I. HISTORICAL OVERVIEW
“All the News That’s Fit to Print.”
i
Special are those instances in business when a slogan becomes so synonymous
with a company. Those words, found on the front page of every copy of every edition of
The New York Times since 1896, began as a way to define the publication to its
readership. That slogan stands to this day, but the newspaper and its parent, The New
York Times Company, have grown far beyond the reaches of New York City and its
surrounding boroughs.
The New York Times Company is a diversified media company whose core
purpose is “to enhance society by creating, collecting and distributing high-quality news,
information and entertainment.”1 It is a publicly traded company (NYTC on the New
York Stock Exchange) and publishes three major daily newspapers. It also operates eight
network-affiliated television stations and two New York City radio stations. The
company has become more global in nature through The Times Syndicate: Among the
largest syndicates in the world, it specializes in text, photos, graphics in a variety of
customized packages to more than 2,000 newspapers and other media to clients in more
than 50 countries.2
While its footprint today is global, The New York Daily Times (the word “Daily”
would be dropped in 1857) had a simple, straightforward and — at least, structurally —
humble beginning in 1851, in a rundown six-story brownstone building on Nassau Street
in New York City.3 Move forward to August 19, 1896, a Wednesday morning, and The
New York Time’s readers were greeted on page one with the following salutation:
To undertake the management of The New York Times, with its great history of
right doing, and to attempt to keep bright the luster which Henry J. Raymond and
1
George Jones have given it, is an extraordinary task. But if a sincere desire to
conduct a high-standard newspaper, clean, dignified and trustworthy, requires for
success honesty, watchfulness, earnestness, industry, and practical knowledge
applied with common sense, I entertain the hope that I can succeed and maintain
the high estimate that thoughtful, pure-minded people have ever had of The New
York Times.
It will be my earnest aim that The New York Times give the news, all the
news, in concise and attractive form, in language that is permissible in good
society, … to give the news impartially, without fear or favor … to make (it) a
forum for the consideration of all questions of public importance, and to that end
to invite intelligent discussion from all shades of opinion.4
Adolph S. Ochs, who assumed management of the newspaper in 1896 from the
newspaper’s founders, the aforementioned Raymond and Jones, penned that
announcement. Ochs’ intent was to continue the course set by his predecessors in
producing a newspaper consistent in its delivery of news unfettered by bias and scandal.
Early steps
The company’s origins date back to September 1851, when the first issue of The
New York Daily Times was published. Messrs. Raymond and Jones founded the
publication on the premise of offering the news “in a conservative and objective fashion,
in contrast to the yellow journalism of the day … .”5 The paper’s coverage of key events
— President Lincoln’s Gettysburg Address and the Battle of Bull Run among them —
made the Times the newspaper of record. Under Raymond and Jones’s guidance the
publication grew. Their subsequent deaths, in 1869 and 1891, respectively, and the
handing of the newspaper to their ill-equipped heirs nearly resulted in the paper’s failure.
2
It was near bankruptcy in 1896 when a respected, albeit little-known, newspaper editor
named Adolph Simon Ochs came on the scene.6
Despite his lack of formal schooling, Ochs had learned the newspaper business on
the job as newsboy, printer’s devil, printer, and reporter. He was 20 when he bought
controlling interest in and became publisher of the failing Chattanooga Times; hearing of
the financial troubles at The New York Times, he offered to become publisher in exchange
for a contract that would reward him should he achieve his goal of making the paper
profitable for three straight years. One of his first decisions was to add the slogan “All
the News That’s Fit to Print,” his commitment to avoidance of sensationalism and
adherence to high editorial standards;7 but of particular note was his decision to respond
to dwindling capital in 1898 not by raising the single-copy price of the paper, but rather
by reducing it, from three cents to a penny. Paid circulation tripled within a year,
advertising increased, and the paper turned a profit.8 As much to his business acumen as
to his commitment to his readership, Ochs set The Times on a path of steady growth and
profitability.
Diversification
Ochs’ ill health and subsequent death in 1935 handed the reins of the paper to
Ochs’ son-in-law, Arthur Hays Sulzberger. He improved the newspaper editorially,
financially and technically, and began what would be a series of moves to diversify and
acquire other properties, including Amo Press and Cowles newspaper, magazine,
television, and book properties.9
The diversification continued throughout the 1900s. In 1980 the company paid
approximately $100 million for the New Jersey cable television operation; in 1984 it sold
3
its book publishing operation to Random House. Five regional newspapers and two
television stations were acquired, as were the magazines Golf World and Sailing World; at
the same time the company, making little progress with cable television, sold all its cable
TV properties.12
Challenges, changes
Newspaper readership decline in the 1990s prompted the company to buy and sell
in the areas of print, broadcasting and electronic media. In 1993 NYTC purchased
Affiliated Publications, which owned the Boston Globe; in 1995 it bought a majority
interest in a video newsgathering company, Video News International. Also in 1995, the
company joined eight other newspaper companies in New Century Network, an online
news service. It also created the New York Times Electronic Media Company to develop
new products and methods of distribution.11 This sparked the beginning of a fervent
move from the print world of its origins to the rapidly growing world of digital media.
NewYorkTimes Digital, an independent business unit, was created to oversee the
company’s online presence, NYTimes.com (by this time boasting more than 10 million
registered users). Key to its plans to establish synergies between print and electronic
offerings, TheStreet.com was created as one of the top Internet providers of financial and
investment news, and related commentary. Its second business segment, the About
Group, includes websites About.com, ConsumerSearch.com and UcompareHealth.com,
among others. The company also owns equity interests in a Canadian newsprint
company, and quadrantONE LLC, an online advertising network that sells premium,
targeted display advertising onto local newspaper and related websites.12
II. ORGANIZATIONAL STRUCTURE
4
Broadly defined, The New York Times Company is in the business of disseminating
news. The Times’ group includes the International Herald Tribune and the Worcester
Telegram and Gazette, as well as related websites and businesses. Other assets include a
17-percent interest in New England Sports Ventures LLC (which owns the Boston Red
Sox, Fenway Park and adjacent property) and about 80 percent of New England Sports
Network, a regional cable network that broadcasts Red Sox games (see Table 1).13
Table 1.
Key components of The New York Times Company.
Print/Broadcast
Digital Ops
Joint Ventures
Other Assets
NYTimes Media Group
About Group
• Metro Boston LLC (49%)
• New England
• The New York Times
• About.com
• Donohue Malbaie Inc. (49%)
Sports Ventures LLC
• NYTimes.com
• ConsumerSearch.com
• Madison
• Roush Fenway Racing
• International Herald Tribune
• UcompareHealthCare.com
Paper Industries (40%)
• AK Networks
New England Media Group
• CalorieCount.com
• quadrantONE LLC
• Appssavvy
• The Boston Globe
• nyt.com (paid products)
(25%, online ad network)
• Brightcove
• BostonGlobe.com
• FM Publishing
• Boston.com
• Betaworks
• Worcester Telegram and
Gazette
• 16 regional daily newspapers
• New England
Sports Network
Source: Ward’s Business Directory, September 201214
III. BUSINESS OPERATIONS: CURRENT PRODUCTS AND SERVICES
5
While the parent company of The New York Times has grown and diversified, it has
stayed true to the principles to which the newspaper ascribed more than 150 years ago.
Those principles are uppermost in the company’s corporate governance practices and are
directly tied to the company’s journalistic roots: “The Company’s core purpose is to
enhance society by creating, collecting and distributing high-quality news, information
and entertainment.”15 These values also weigh significantly on the company’s business
philosophy by offering content of the highest quality and integrity (the basis for its
reputation and maintaining the public trust); fair treatment of employees based on
respect, accountability and standards of excellence; creating long-term stockholder value
through investment and constancy of purpose; and good corporate citizenship.16
As with any publicly traded company, shareholders’ return on investment must be
considered in the business philosophy. In the world of journalism, particularly as it
pertains to newspapers, this poses an ongoing challenge: to maintain balance between
journalistic integrity and purpose to the betterment of community (audience) and ensure
the products and services (newspapers, other media) remain profitable. In spite of a
continuing industry-wide decline in circulation — and, as a result, advertising revenue
tied to its core print products — the company has fared better than most largely through
diversification. It should be noted that while some of the company’s overall business
commitments display variety, much of its diversification has been born out of common
6
sense; that is, those business ventures tangential to the company are the result of logical
consideration of and connection to the core principles and products.
We will look at some of those products later. Here, in Table 2, is a breakdown of
the company’s operational structure. The chief executive officer of The New York Times
Company oversees the managers of the company’s 11 primary divisions. The CEO
reports to the company’s board of directors and its vice chairman. The primary division
managers in turn oversee various sublevels of the corporate structure.
Table 2.
Management structure of The New York Times Company.
Control
CFO
Assistant Control
Internal Audit
Treasurer
New York Times
International Herald Tribune
New England Media
CEO
Legal
Secretary & Assistant Legal
CIO
Vice Chairman of the Board
Board of Directors
Communication
Development
Research & Development Ops
Digital Ops/About Group
Paid Products NYTimes.com
Human Resources
Human Resources / Diversity
Compensation / Benefits
Organization Capability
Source: TheOfficialBoard.com, September 201217
As CEO, Arthur Sulzberger Jr. oversees all primary divisions of the company and
7
reports to the board of directors. The corporate structure is straightforward and caters to
the company’s focus on its core products — print media. At the same time, this makes
for a seamless connection between print and broadcast media services and the ever-more
important division of digital media.
The Flagship
The New York Times serves more than the residents of New York City: Its reach
extends nationally and globally. The newspaper boasts a print circulation of 779,731
daily and 1.26 million on Sundays. In addition, the company has found success since
venturing into the digital news dissemination domain in January 1996 with the launch of
its website, www.nytimes.com. The paper’s digital efforts since then have resulted in a
73-percent increase in overall daily circulation, print and online, year over year ending
March 2012, and a nearly 50-percent increase on Sundays.18
The Times maintains a high online profile while positioning itself for improving
revenue in this portion of the market. The newspaper had maintained free access to its
online product prior to 2011 when it began structuring online packages from which
customers could choose. At that time, the company allowed non-subscribers (to either
the print or the online version) access to up to 20 stories a month for free. In mid-March
2012, a year after its launch of paid digital subscriptions, the company reported it had
approximately 454,000 paid subscribers to its various digital packages, replica editions
8
and e-readers. Included in this number are subscribers of The International Herald. At
the same time the company announced it would cut back from 20 to 10 the number of
free articles accessible to non-subscribers.19
IV. FINANCIAL PERFORMANCE
The meteoric rise of computer use by the consumer — with particular emphasis on
smartphones and tablets — has driven an equally explosive increase in the number of
venues from which consumers can get their news. Newspapers of every size and type
have wrestled with this modern reality: that the world of print in which they long thrived
was becoming less viable. Reinvention of its method of delivery — or, at the very least,
an addendum to that delivery system — has become tantamount for survival. The New
York Times Company’s products, while certainly in better financial shape than many
newspapers to make this transition, are no less impervious to the storm. Table 3 below
illustrates a recent decline in revenues.
Table 3.
New York Times Company Business Analysis.
Revenues
Report Date
12.25.11
Currency
USD
Scale
Thousands
News Media Group
$2,212,575
About Group
$110,826
Total
2,323,401
Source: The New York Times (www.nytco.com)20
12.26.10
USD
Thousands
$2,257,386
$136,007
2,393,463
12.27.09
USD
Thousands
$2,319,378
$121,061
2,440,439
Though not reflected in this table, financials from quarter three of 2012 illustrate
— dramatically — the importance of transition to digital. The company’s net income fell
85 percent from the same period in 2011, as reported in The Financial Times. Any gains
in circulation revenue in the media group failed to offset the almost 9 percent decline in
advertising revenues from the third quarter last year.21
9
The News Media Group, which includes print and digital properties, declined
each of the past three full years back to 2009, although the drop in revenue was subtle.
This trend continues nine months into 2012: According to Business Wire, the news media
group’s total revenues for January-September 2012 were down 2.2 percent compared to
the same period in 2011. More significantly, advertising revenue — which had dropped
6.9 percent in 2011 from 2010 — continued to fall during the same period in 2012, down
9.7 percent. Of particular significance to the News Media Group during this same period
was the 9.5-percent decline in national advertising lineage, a key revenue draw that
outpaces retail and classified ad lineage nearly three to one. On a positive note, thanks to
steadily growing online subscriptions, circulation in this division increased 9.3 percent in
the first nine months of 2012, compared to a year ago. Given the company’s continuing
trend to promote its online product, as well as the stability of the brand, it is likely digital
subscriptions will grow.22
Numerous factors come into play when reviewing any newspaper’s financial
standing, advertising and circulation being the two most considered. While advertising
and total revenue declined during that three-year period, decisions to divest some of its
assets helped serve as a buffer for the company’s bottom line. As late as August 2012, the
company decided to sell the About Group, parent company of about.com and other online
sites, to InterActiveCorp for $300 million.23 This followed a December 2011 decision to
sell its Regional Media Group to Halifax Media Holdings for more than $140 million.24
V. FUTURE OUTLOOK
10
We live in an age when information is at our fingertips and instantly obtainable. If the
day of the personal computer has given way to smartphones and social media, then surely
the information dissemination model so long used by newspapers — print and advertising
— will continue to be increasingly irrelevant. That said, there are multiple factors at play
that warrant us to be optimistic, albeit cautiously, about the future of The New York
Times Company and, specifically, its publications. Many of these factors are positive in
nature; others, however, give reason for some concern as the company moves forward in
an industry where many players are on unsure financial and viability grounds. We will
look at the following as we consider the Times’ future: branding, SWOT analysis and
other risks, demographics, and philosophy.
Branding
It is difficult to put a dollar value on branding, but in the case of The New York
Times (and tangentially its parent company), the name carries much weight when
considering its future. The newspaper has a long and rich history as a member of the
Fourth Estate, particularly enriched during the 34 years when Arthur Sulzberger was at
the helm as publisher. Certainly high among his contributions was his decision in 1971 to
publish the Pentagon Papers, detailing how the U.S. government had lied about the
Vietnam War.25 The decision earned the newspaper a Pulitzer Prize, one of more than 100
the newspaper earned since 1918.26 Despite moments of journalistic scandal, including
the 2003 revelation that reporter Jayson Blair had plagiarized or made up numerous
stories, The New York Times name remains a positive in the sense of branding.27
SWOT Analysis and Other Risks
11
Newspaper executives continue to face tough personnel and staffing decisions as
they confront the industry’s transformation from print to digital. The economics of
newspapering were, at best, a roller-coaster ride during the past 20 years as the Internet
provided more options for news readers; at worst, these times saw — and continue to see
— newspapers cutting editorial staff to make up for lost print ad revenue, revenue not yet
fully realized in the online platform. According to Times’ records, the company overall
peaked in 2000 with 14,000 employees; by 2010, that number was 7,414, with staffing
declines posted each year except for two years (2002-04) when additions to the About
Group saw a slight increase.28
September 2012 saw the death of Arthur Sulzberger, but despite the love and
respect he engendered in his staff and the industry, the passing of the publisher
nicknamed “Punch” is hardly the most significant development in Times’ personnel
matters. In August 2012 Mark Thompson was named as the company’s new chief
executive officer, a position the younger Sulzberger had held on an interim basis since
2011. Thompson had been director-general of the British Broadcast Corporation (BBC)
from 2004 until March 2012, and his success with the publicly funded broadcaster helped
him secure the Times’ CEO spot. However, his possible involvement in the cancellation
of a BBC-produced investigation into a sex scandal involving Jimmy Savile — one of the
BBC’s and the United Kingdom’s most beloved celebrities — has raised questions about
his viability as Times CEO.29 Indeed, despite Sulzberger’s reassurance that Thompson
“possesses high ethical standards and is the ideal person to lead our company as we focus
on growing our business through digital and global expansion,” at least one Times senior
editor, Margaret Sullivan, said it was time to ask a number of tough questions concerning
12
Thompson’s suitability for the Times position. “It’s worth considering now whether he is
the right person for the job, given this turn of events,” she said in reference to the Savile
sex scandal.30
Thompson is scheduled to begin his duties at The Times on November 12, 2012.
It remains to be seen if his appointment, which some analysts think might have
contributed to an 85-percent plunge in third-quarter (2012) net earnings for the company,
will stand.31
In the company report dated December 22, 2011, the SWOT analysis overview
identified the following, illustrated in Table 4:
Table 4.
New York Times Company SWOT analysis overview.
Strengths
Weaknesses
Opportunities
Threats
• Multi-platform
presence by
strengthening the
digital business
• Wide reach
• Lack of significant
international presence
• Growing
consumption of digital
media
• Poor credit ratings
• Rebound in
advertisement
spending and rising
online advertisement
spending
• Monetizing the
digital business
through subscription
model
• Declining circulations
and print
advertisement
revenues
• Rising newsprint
cost
• Leaner operating
cost structure
• Intense competition
Source: MarketLine, 201232
This SWOT analysis can offer a look not only at The New York Times, but at
many newspapers, for many share similar positives and, certainly, many of the
constraints, particularly in the financial, circulation and advertising sectors. Addressing
such problems as poor credit ratings is a necessary honest approach to any company’s
business position: In the Times’ case, this review of the 2011 year recognized the
company’s credit rating increased the borrowing costs for future borrowing and also
13
limited its financing options. It also pointed a finger at the susceptibility to continued or
increased volatility or disruption in the credit markets that could adversely affect the
company’s ability to refinance existing debt. On the positive side, the company had
established a multi-platform presence by strengthening its posture in the digital business,
witnessed the growing consumption of digital media among its customers, and saw a
rebound in the advertisement spending and an increase in ad dollars spent online.
Additionally, the company launched new pay models to better profit from the growth in
digital business. The newspaper’s increase in online subscriptions in the past year gives
validity to the decision in 2010 to erect a paywall and limit the number of free stories
available to non-subscribers. In short, people are willing to pay for content online that
once had been freely accessed.33
For nearly two decades newspapers have straddled the fence between traditional
print publication and a digital or online presence. Much of that stems from a sort of
perfect storm: print circulations in decline, falling ad revenues as a result of fewer
subscribers (lower circulation numbers), and the increased competition from a variety of
news sources, including aggregation websites. The company recognizes all these factors
in its consideration of threats, and the resulting challenges are not for the timid. In its
2011 annual report, NYTC noted the launch of digital subscriptions at all three major
dailies, “with the intention of developing a new consumer revenue stream while
preserving our digital advertising business. Our ability to build a subscriber base on our
digital platforms depends on market acceptance, consumer habits, pricing, an adequate
online infrastructure, terms of delivery platforms, and other factors.”34 It further
acknowledges the “increasing number of … options available on the Internet, and other
14
news aggregation outlets, often offering their content for free. The point is well taken
that consumers in a tight and uncertain economy might place more value on when, where,
how and at what price they get their digital content than they do on the source or
reliability of the content. When much is riding on the potential for digital-framed ad
revenue, the potential loss in website traffic becomes a risk.35
Demographics
According to information obtained by Mediamark Research and Intelligence, The
New York Times was read or viewed by more than 4.5 million people during the spring of
2012. Of that number, readership by gender was 50-50, with a median age of 51 years
and median household income of $99,669. Also, about 60 percent of Times’ audience
were college graduates “plus” (bachelors or higher), 42 percent were
professional/managerial, and 13 percent were top management level.36 While these
figures are not surprising on their face, given The Times’ status and national reach, it
stresses the importance of The Times’ pushing the digital platform as both a readership
venue and a source of revenue. The audience that supplants the aging baby boomers who
are Times’ subscribers and readers increasingly are more likely to look for their news
online rather than print. To this end the company continues to transform “from a
newspaper company to a multi-platform news and information company,” according to
company documents.37 Additionally, in its effort to open the newsroom doors to the
public, NYTimes.com launched in 2010 TimesCast, a daily video report that features
interviews with editors and reporters covering major news stories, and scenes from staff
meetings among top editors discussing possible front-page content. Such interactive
structure adds transparency to what for generations had been seen, rightly or wrongly, as
15
an ivory tower mentality among members of the Fourth Estate. This interactive
discipline is seen elsewhere in The Times’ products, through online blogs written by staff
reporters and correspondents, membership packages that allow subscribers to post
commentary on stories and opinion pieces, and reporters encouraged to engage their
readers via Twitter, Facebook and other social media.38
Philosophy
Arthur Sulzberger died on Sept. 29, 2012, at age 86. He retired in 1992 and was
succeeded by his son, Arthur Sulzberger Jr. The young Sulzberger’s predecessors were
newspapermen, but Sulzberger Jr. described himself as a “platform-agnostic” multimedia
man, perhaps the perfect man for the job in a constantly transforming industry.39 As
Steve Jobs was a visionary in his field, so in some respects Sulzberger Jr. has been to The
New York Times Company. He has maintained his father’s fervent belief in the
principles that guide journalistic integrity, and has married that to the pressing needs of
newspaper survival in the digital age. He is not afraid to consider all options that might
lead to a better newspaper and an improved company. Several examples:
• In 2010, The New York Times and The Washington Post teamed up with Google
Inc. to test a new online news presentation style. The two-month experiment, according
to Martin Nisenholtz, married “Google’s purely Web-centric sensibility and the
journalistic sensibility” of the Times and the Post. Nisenholtz, The Times’ senior vice
president for digital operations, said the union created one destination page for each of
nine test storylines published in both newspapers. Dubbed “Living Stories”, the
experiment let readers filter and organize the articles by subtopic, by type, by importance
and by date. Each time a user visited the story’s page, articles they already had read were
16
grayed out, allowing them to focus on the latest news. It was a look at a different way to
organize the content, Nisenholtz said.40
• Ensuring viability in expanding technologies, in October 2012 The Times
announced a new app, featuring the newspaper’s latest content, designed and formatted
for optimal reading experience on Windows 8. This outreach to fans and users of
Microsoft-related products also included the newspaper establishing its own channel
within the Bing News app, which is pre-installed on all Windows 8 devices, including
desktop and laptop computers, and the Microsoft Surface tablet.41
In conclusion and to reiterate, the future of The New York Times Company, like
its flagship product, should be viewed with optimism, with a dash of caution added.
There remains uncertainty throughout the newspaper industry about the viability and
continuation of the traditional news delivery system, and forces from competition,
variable and /or declining print circulation numbers and advertising revenues, the need to
add to or let go of related properties or joint venture assets all figure into the mix of this
company’s future.
To be sure, for The New York Times, its dismal third-quarter net revenues sparked
cause for concern, despite its successful digital-and-print subscription model and
international expansion. In late October of this year, Rick Edmonds, writing in his blog
for Poynter.org, cautioned that, “If the top dog stumbles after a new round of advertising
setback, the rest of the pack seems even more vulnerable.” Whether it was intended as a
backhanded compliment, it speaks to both the seriousness of the issue to The Times and
how, as The Times goes, so goes the industry. Company officials blamed the loss on lack
of business confidence in many segments, but also on other factors: the lack of major
17
movie releases (entertainment), weak department store retail sales, and the lack of new
development in the New York market (real estate). Add to this, Edmonds wrote, that The
New York Times differs from many daily papers because of its greater dependence on
national advertising lineage. On the upside, he noted the company’s digital-only
subscription base continues to grow. The Times — and the industry — will need “strong
digital-only gains and income from other digital ventures” to make up for losses in retail
advertising.42
To its benefit The New York Times remains a brand to which many people relate,
and its parent company has shown an understanding of the need for its news products to
transition to a new delivery system, one that caters to today’s generation of news
consumers. It closely monitors all of its segments from both financial return and
customer benefit perspectives, giving no reason to believe it cannot survive the industry’s
turbulent waters. The company is not afraid to face challenge and adapt, a philosophy
that began with the first editions of The New York Daily Times.
In a 2005 interview with Business Week, Arthur Sulzberger Jr. said:
Within our lifetimes, the distribution of news and information is going to shift to
broadband. We must enter the broadband world having mastered the three key
skill sets — print, Internet, and video — because that’s what’s going to ensure the
future of the news organization in the years ahead.43
Endnotes:
18
1
Elmer Davis, History of the New York Times 18511921. New York Times.
http://www.questia.com/read/9199060/historyofthenewyorktimes18511921.
Retrieved Sept. 29, 2012.
2
International Directory of Company Histories, The New York Times Company.
http://bi.galegroup.com.libproxy.library.wmich.edu/global/article/GALE
%7CI2501315937/c585ac873c0eb4d4274ce94e2678c851?u=lom_wmichu.
Retrieved Sept. 29, 2012.
3
International Directory of Company Histories, The New York Times Company.
4
Elmer Davis, History of the New York Times 18511921
. New York Times.
5
International Directory of Company Histories, The New York Times Company
.
6
International Directory of Company Histories, The New York Times Company
.
7
International Directory of Company Histories, The New York Times Company
.
8
International Directory of Company Histories, The New York Times Company
.
9
International Directory of Company Histories, The New York Times Company
.
10
International Directory of Company Histories, The New York Times Company
.
11
International Directory of Company Histories, The New York Times Company
.
12
International Directory of Company Histories, The New York Times Company
.
13
Ward’s Business Directory of US. Private and Public Companies, New York
Times Company, Gale Directory Library.
http://find.galegroup.com.libproxy.library.wmich.edu/gdl/start.do?prodId=GDL.
Retrieved Sept. 29, 2012.
14
Ward’s Business Directory of US. Private and Public Companies, New York
Times Company.
15
The New York Times Company, Company business units.
http://www.nytco.com/company/business_units/index.html. Retrieved Sept. 29,
2012.
16
The New York Times Company, Company business units.
19
17
New York Times Company, Organizational Chart. The Official Board.com.
http://www.theofficialboard.com/orgchart/newyorktimes. Retrieved Sept. 29,
2012.
18
Neil Lulofs, The Top U.S. Newspapers for March 2012.
http://www.accessabc.wordpress.com/2012/05/01. Retrieved Sept. 29, 2012.
19
Eileen Murphy, NYTimes.com Pay Gate to Move to 10 Free Articles Each Month
Starting in April, BusinessWire. http://libproxy.library.wmich.edu/login?
url=http://search.proquest.com/docview/929061645?accountid=15009.
Retrieved Oct. 20, 2012.
20
New York Times Company, Business Analysis, www.mergentonline.com.
http://www.mergentonline.com/company/detail.php?pagetype=business
segments. Retrieved Oct. 27, 2012.
21
Emily Steel, NY Times hit by fall in ad dollars. Financial Times. Business
Insights: Global. http://bi.galegroup.com/global/article/GALE|
A306443729/dfa338898e28f1fea944137ffed817b?u=lom_wmich. Retrieved Oct.
27, 2012.
22
Business Wire, The New York Times Company Reports 2012 ThirdQuarter
Results. Business Insights: Global.
http://www.businesswire.com/portal/site/home. Retrieved Oct. 20, 2012.
23
Kevin Shalvey, IAC to Buy about.com from New York Times for $300M.
Investor’s Business Daily. http://search.proquest.com/docview/1035158125?
accountid=15099. Retrieved Sept. 27, 2012.
24
Zacks Equity Research, NY Times Offloads Assets. Business Insights: Global.
http://www.comtexnews.com. Retrieved Oct. 20, 2012.
25
Alex S. Jones, Arthur Sulzberger. Time.
http://search.proquest.com/docview/1095353407?accountid=15099. Retrieved
Oct. 20, 2012.
26
New York Times Company, company business units.
http://www.nytco.com/company/business_units/new_york_times_media_group.ht
ml. Retrieved Oct. 20, 2012.
27
Bloomberg Businessweek, The Future of the New York Times.
http://www.businessweek.com/stories/20050116/thefutureofthenewyork
times/html. Retrieved Oct. 20, 2012.
20
20
28
MarketLine, SWOT Analysis Overview. http://advantage.marketline.com/Product/.
Retrieved Oct. 20, 2012.
29
Keach Hagey. Corporate News: Times Co. Stands by Incoming CEO. Wall
Street Journal. http://search.proquest.com/docview/1115058910?
accountid=15099. Retrieved Oct. 20, 2012.
30
Independent (London, England), Thompson may not be right person to run New
York Times, says senior editor. Business Insights: Global.
http://www.independent.co.uk. Retrieved Oct. 20, 2012.
31
Keach Hagey. Corporate News: Times Co. Stands by Incoming CEO
. Wall
Street Journal.
32
MarketLine, SWOT Analysis Overview
.
33
Gina Lovett, The New York Times Company prepares for paywall launch. New
Media Age. http://libproxy.librarywmich.edu/login?
url=http://search.proquest.com/docview/756934331?accountid=15099. Retrieved
Oct. 21, 2012.
34
New York Times Company, 2012 Annual Report: Risk Factors. New York Times
Company. http://nytco.com/company/reports. Retrieved Oct 20, 2012.
35
New York Times Company, 2012 Annual Report: Risk Factors. New York Times
Company.
36
New York Times Company, company business units.
37
New York Times Company, company business units.
38
New York Times Company, company business units.
39
Bloomberg Businessweek, The Future of the New York Times
.
40
Abby Brownback, A WebCentric Approach to Traditional Journalism. American
Journalism Review. http://www.ajr.org/Article.asp?id=4880. Retrieved Sept. 29,
2012.
41
M2 EquityBites [EQB], The New York Times introduces new app for Windows 8.
Business Insights: Global. http://bi.galegroup.com/global/article/GALE|
A306456609/027388dc8bf19be4654dbb3de4207f1a?=lom_wmich. Retrieved
Oct. 27, 2012.
21
21
42
Rick Edmonds, What dismal earnings at The New York Times mean for the
newspaper industry. Poynter.org. http://www.poynter.org/latestnews/business
news/thebizblog/192904/whydismalearningsatthenewyorktimesareand
arentabellwetherfortherestofthenewspaperindustry/. Retrieved Oct. 27,
2012.
43
Bloomberg Businessweek, The Future of the New York Times
.
22
